Issuing Tokens

After creating a token, you need to issue (mint) tokens to investors. This guide explains how.

What is Issuing?

Issuing (or minting) creates new tokens and assigns them to an address. This is how you:

  • Give shares to founders

  • Issue equity to employees

  • Distribute tokens to investors after they fund an offering

  • Award tokens for any other reason

Prerequisites

  • Token created - You must have created a token first

  • Entity context - You must be in an entity context

  • Recipient address - Know who you're issuing to

  • Cost basis info - Know the price, currency, and date

How Issuing Works

When you issue tokens:

  1. New lot created with:

    • Recipient address

    • Quantity of tokens

    • Cost basis per token

    • Payment currency

    • Acquisition date

    • Transfer type

  2. Tokens minted to recipient's wallet

  3. Total supply increases by the quantity issued

  4. Lot appears in recipient's wallet with full tracking

Step-by-Step Guide

Step 1: Navigate to Your Token

  1. Log in and switch to entity context

  2. Navigate to Tokens

  3. Click on the token you want to issue

Step 2: Click "Issue Tokens"

Click the Issue Tokens button.

Step 3: Enter Recipient Information

Recipient Address

Enter the wallet address receiving the tokens.

Example: 0x1234567890123456789012345678901234567890

Tips:

  • Double-check the address - transactions can't be reversed

  • You can paste from clipboard

  • Recipient doesn't need to be KYC'd yet (compliance checked on transfer)

Quantity

Enter the number of tokens to issue.

Examples:

  • 1000 - 1,000 tokens (if decimals = 0)

  • 1000.5 - 1,000.5 tokens (if decimals > 0)

Notes:

  • Must be a positive number

  • Decimals must match token configuration

  • No maximum (you can issue unlimited supply)

Step 4: Enter Cost Basis Information

Cost Basis Per Token

The price per token the recipient paid (or $0 if a gift).

Examples:

  • 1.00 - $1.00 per token

  • 0.50 - $0.50 per token

  • 0 - Free (gift, grant, etc.)

Payment Currency

What currency was used for payment:

  • USDC - Most common for investments

  • ETH - If paid in ETH

  • USD - For fiat payments (off-chain)

  • None - For gifts/grants

Acquisition Date

When the recipient acquired these tokens.

Options:

  • Today (default)

  • Custom date - For backdating (e.g., vesting start date)

Transfer Type

How the recipient acquired the tokens:

  • Purchase - Bought in an offering or secondary sale

  • Gift - Received as a gift (cost basis = $0)

  • Grant - Employee stock grant

  • Exercise - Option exercise

  • Other - Custom reason

Step 5: Review and Submit

Review the issuance details:

Recipient: 0x1234...5678
Quantity: 1,000 tokens
Cost Basis: $1.00 per token
Currency: USDC
Date: 2024-01-15
Type: Purchase

Click Issue Tokens.

Step 6: Sign Transaction

  1. Transaction prompt appears

  2. Review in wallet (MetaMask/Coinbase Wallet)

  3. Sign transaction

  4. Wait for confirmation (2-3 seconds)

Gas cost: Typically $0.01 - $0.10 on Base.

After Issuing

What Happens

  1. Tokens appear in recipient's wallet immediately

  2. New lot created with all cost basis info

  3. Total supply increases

  4. Holder count increases (if new holder)

  5. Transaction recorded on-chain

Recipient View

The recipient will see:

  • New token balance

  • New lot with:

    • Quantity

    • Acquisition date

    • Cost basis

    • Payment currency

    • Transfer type

Common Scenarios

Scenario 1: Founder Shares

Context: Issuing shares to founders at formation.

Settings:

  • Cost Basis: 0 (or nominal amount like 0.001)

  • Currency: None or USD

  • Date: Formation date

  • Type: Grant

Scenario 2: Employee Stock Grant

Context: Granting equity to an employee.

Settings:

  • Cost Basis: 0

  • Currency: None

  • Date: Grant date

  • Type: Grant

Note: Add vesting compliance to the token to enforce vesting schedule.

Scenario 3: Investor Purchase

Context: Investor bought tokens in an offering.

Settings:

  • Cost Basis: Price per token (e.g., 1.00)

  • Currency: USDC

  • Date: Investment date

  • Type: Purchase

Scenario 4: Option Exercise

Context: Employee exercised stock options.

Settings:

  • Cost Basis: Strike price

  • Currency: USDC or USD

  • Date: Exercise date

  • Type: Exercise

Scenario 5: Secondary Sale

Context: Buying tokens from existing holder.

Settings:

  • Cost Basis: Purchase price

  • Currency: USDC

  • Date: Purchase date

  • Type: Purchase

Batch Issuing

Need to issue to multiple recipients?

Option 1: Manual (Small Batches)

Issue tokens one at a time through the UI.

Good for: < 10 recipients

Option 2: Contact Support (Large Batches)

For: > 10 recipients

Contact support@capsign.com with:

  • Token address

  • CSV file with recipient addresses, quantities, cost basis

We can help with bulk issuance.

Option 3: Smart Contract (Advanced)

Call createLot directly on the token contract.

For: Developers comfortable with smart contracts

See Token Architecture for technical details.

Compliance Considerations

Transfer Restrictions

If your token has compliance rules (lockup, vesting, etc.):

  • Restrictions apply immediately after issuance

  • Recipients can't transfer until restrictions lift

  • Lot metadata includes restriction info

Accreditation

If your token requires accredited investors:

  • Issuance itself doesn't check accreditation

  • Accreditation checked on transfer

  • Recipient must complete KYC + accreditation attestation to transfer

Securities Laws

Issuing tokens = issuing securities. Ensure you:

  • Have proper legal documents (subscription agreement, etc.)

  • Comply with Reg D, Reg S, Reg A+, or other exemptions

  • File required paperwork (Form D, etc.)

  • Maintain investor records

Consult legal counsel before issuing securities.

Troubleshooting

"Only admins can issue tokens"

Problem: You don't have admin role on the token.

Solution: Ensure you're the entity that created the token or have been granted admin role.

"Insufficient gas"

Problem: Not enough ETH for transaction fees.

Solution: Send ETH to your entity wallet.

"Invalid address"

Problem: Recipient address is malformed.

Solutions:

  • Ensure it's a valid Ethereum address (0x...)

  • Check for typos

  • Try copying again from source

"Token paused"

Problem: Token has been paused by admin.

Solution: Unpause the token in token settings before issuing.

Best Practices

Record Keeping

  • Document issuances - Keep records matching on-chain data

  • Update cap table - Reflect issuances in your internal cap table

  • Legal agreements - Have signed subscription agreements before issuing

  • Audit trail - Save transaction hashes for all issuances

Cost Basis Accuracy

  • Use correct values - Accurate cost basis is critical for taxes

  • Match legal docs - Cost basis should match subscription agreement

  • Currency consistency - Use the same currency for all issuances in a round

  • Date accuracy - Use the actual investment/grant date

Security

  • Verify addresses - Always double-check recipient addresses

  • Test first - Issue a small amount first if uncertain

  • Use checksummed addresses - Prevents some typos

  • Confirm receipt - Ask recipient to confirm they received tokens

Communication

  • Notify recipients - Let them know tokens have been issued

  • Provide wallet address - Share your token's contract address

  • Explain lots - Help recipients understand lot-based accounting

  • Set expectations - Explain any transfer restrictions

Advanced Topics

Custom IDs

You can assign custom IDs to lots for easier tracking:

createLot(
  owner,
  quantity,
  paymentCurrency,
  costBasis,
  acquisitionDate,
  uri,
  data,
  customId  // e.g., 1, 2, 3...
)

Custom IDs are useful for matching lots to internal records.

Lot Metadata

Store additional data in the lot:

  • Subscription agreement hash

  • Investor ID

  • Series/round information

  • Custom notes

Adjusting Lots

Made a mistake? You can adjust a lot:

  1. Navigate to the lot

  2. Click Adjust

  3. Enter new quantity or cost basis

  4. Old lot is invalidated

  5. New lot created with corrected info

Note: This creates an audit trail - the old lot remains visible as "invalidated."

FAQs

Q: Can I issue tokens to myself? A: Yes, but be mindful of tax implications. Consult your accountant.

Q: What if I issue to the wrong address? A: Contact the recipient and request they transfer back. Issuances can't be reversed.

Q: Can I issue more tokens after initial issuance? A: Yes, you can issue additional tokens anytime (no maximum supply).

Q: Do I need to issue all tokens at once? A: No, issue as needed (after investments, employee grants, etc.).

Q: Can different lots have different cost basis? A: Yes! Each issuance creates a new lot with its own cost basis.

Q: What if the recipient doesn't have a CapSign account? A: They can receive tokens at any Ethereum address. They'll need to create an account to view lot details.

Next Steps

After issuing tokens:

Need Help?

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