Crypto glossary
Simple agreement for future tokens (SAFT)
A SAFT (simple agreement for future tokens) is an investment contract in which investors pay now for tokens to be delivered once the network launches.
The SAFT was proposed in 2017 by a group of lawyers as a way to fund token projects within US securities law. Accredited investors sign a contract and send money to the developers; in return they get the right to receive tokens when the network is functional. The SAFT itself is treated as a security and sold under an exemption, while the hope was that the delivered tokens would be utility tokens.
It became the standard paper for private token rounds and is still widely used, often with discounts, lock-ups and vesting written in. Many projects pair it with equity investments or token warrants, and tokenomics disclosures frequently describe investor allocations as 'SAFT rounds'.
Its legal theory has not held up as hoped. US regulators and courts have looked at the whole scheme rather than the label, and in cases such as Telegram's TON offering, tokens to be delivered under SAFT-like agreements were found to be part of a securities offering. The structure also gives investors no claim if the token never launches.
Example
A fund signs a SAFT to invest 2 million dollars in a new protocol at 0.05 dollars per token, receiving its tokens only at the token generation event and subject to a one-year cliff.