What Should We Make of Avalanche's (AVAX) Initial Token Distribution?

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AVAX Initial Supply Breakdown (Source: Messari.io)

As the chart above shows, as compared to many other public blockchains, significantly less amounts of the initial supply at launch was allocated to a public sale than for Ethereum or others. A much greater percentage of initial allocation is controlled by insiders including VC firms and the Avalanche team which can be considered as a possible centralization risk in the AVAX token distribution.

The AVAX token allocation is as follows:

• 50% for staking rewards. 
• 9.26% for the Foundation. These tokens are used for various ecosystem-building initiatives including marketing, bounties, incentive programs, and more. These have a 10-year vesting period.
• 7% for Community and Development Endowment - to groups and individuals who are developing core tooling and infrastructure on Avalanche, as well as supporting Avalanche through community-building and marketing efforts. These have a one-year vesting period from the date of the award.
• 0.27% for the Testnet Incentive Program. Participants were able to complete challenges to earn up to 2,000 AVAX; tokens locked for one year.
• 5% for strategic partners, with the mandate of being distributed to groups, organizations, and enterprises building businesses using the Avalanche technology and network. These have a four-year vesting period.
• 2.5% for airdrops to various communities to onboard people into the Avalanche ecosystem.
• 10% for the founding and non-founding team members of AVA Labs. These have a four-year vesting period with the team members and founders.

Avalanche has had three funding rounds:

1. Private Seed Sale in Feb 2019 for $6 million USD
   1. VC Firms Andreessen Horowitz, Polychain Capital, MetaStable, Initialized Capital, as well as individual investors Balaji Srinivasan, Naval Ravikant, and Ramtin Naimi participated with 18 million AVAX allocated at a price of $0.33 per AVAX
2. Private Staking Round #1 Sale in June 2020 for $12 million USD
   1. Participants included Galaxy Digital, Bitmain, Initialized Capital, NGC Ventures, and Dragonfly Capital, among others. 24 million AVAX were allocated at a price of $0.50 per AVAX
3. Public Token Sale in July 2020 for $42 million USD
   1. Public sale with 72 million AVAX allocated at three options
   2. $0.5 per AVAX with a one-year vesting schedule and quarterly unlocking
   3. $0.5 per AVAX with an 18-month vesting schedule and quarterly unlocking. This option allowed purchasers to a much larger set of tokens than option
   4. $0.85 per AVAX with no lockups. A maximum check size of $5,000 USD to prevent concentration and incentivize distribution