# Tokens & Fundraising Basics

### Overview / why it matters

Projects launch tokens to fund development and build communities. Knowing token types and sale terms helps you make informed choices.

### Core concepts

* Utility token: Accesses features or services.
* Governance token: Used for voting.
* NFT: Unique token (ownership, access, loyalty).
* Soft cap: Minimum raise target.
* Hard cap: Maximum raise limit.
* Allocation model: How tokens are distributed (FCFS, pro-rata, tiered).

### Key takeaways

* Read the offer terms: price, caps, timelines.
* Allocation rules affect how much you can buy.
* Utility ≠ ownership of company profits or assets.


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