A Simple Agreement for Future Tokens (SAFT) is a legal contract used in the cryptocurrency space to raise funds for a project before the development of the actual tokens. Investors purchase the SAFT, which represents a promise to receive tokens once the project is fully developed and the tokens are functional. The SAFT acts as a sort of investment contract, outlining the terms and conditions of the investment, including the price of the tokens, the timeline for development, and the rights of the investors.
Once the tokens are ready, they are delivered to investors who originally purchased the SAFT. The SAFT structure is often used by projects that are planning an Initial Coin Offering (ICO) but want to comply with securities laws by offering a security to accredited investors. This structure provides a way for projects to raise capital while still abiding by regulations.
Overall, the SAFT provides a way for cryptocurrency projects to raise funds in a compliant manner, giving investors confidence that they will receive tokens in the future once the project is completed.
