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A Simple Agreement for Future Tokens (SAFT) lets investors fund blockchain projects now in exchange for future cryptocurrency tokens, working much like a pre-sale agreement in the UAE's digital economy. It helps startups raise capital while following local Virtual Asset regulations and VARA guidelines for token offerings.

Under UAE law, SAFTs protect both parties by clearly defining when and how investors will receive their tokens once the blockchain platform launches. The agreement typically includes key details like token allocation, vesting periods, and compliance requirements - making it easier for UAE companies to navigate the growing crypto landscape while staying within regulatory bounds.

Use a Simple Agreement for Future Tokens when launching a blockchain project in the UAE that needs early-stage funding but isn't ready to issue tokens immediately. This agreement works perfectly for startups developing new platforms who want to secure investment while staying compliant with VARA regulations.

The timing is crucial - implement SAFTs during your initial fundraising round, before your token's actual creation or distribution. This helps avoid regulatory issues that come with direct token sales, gives investors clear legal rights, and provides your project with immediate capital while maintaining flexibility in token development and distribution timelines.

• Basic SAFT: Straightforward agreement with standard token allocation and vesting terms, commonly used by UAE tech startups
• Hybrid SAFT: Combines token rights with equity-like features, offering investors additional protection under UAE securities laws
• Project-Specific SAFT: Tailored for specific blockchain use cases with customized performance milestones and VARA compliance terms
• Institutional SAFT: Enhanced governance and reporting requirements for deals involving UAE institutional investors or regulated entities
• Multi-Stage SAFT: Structured with phased token distribution based on development milestones and regulatory clearances

• Blockchain Startups: Issue SAFTs to raise early-stage capital while developing their token-based platforms in the UAE
• Angel Investors: Provide funding through SAFTs to get future tokens at preferential rates once the project launches
• Legal Counsel: Draft and review agreements to ensure compliance with UAE virtual asset regulations and VARA guidelines
• Project Developers: Set milestones and development timelines that trigger token distribution obligations
• Compliance Officers: Monitor SAFT implementation to maintain alignment with UAE cryptocurrency and securities laws

• Project Details: Document your token's technical specifications, utility, and planned distribution mechanism
• Investment Terms: Define token price, allocation amounts, and vesting schedules aligned with UAE market standards
• Regulatory Compliance: Confirm VARA registration requirements and obtain necessary permissions for token offering
• KYC Documentation: Gather investor identification and verification details as per UAE anti-money laundering rules
• Development Timeline: Outline clear project milestones and token delivery dates
• Risk Disclosures: Prepare comprehensive risk statements covering technology, market, and regulatory factors

• Token Rights: Clear description of future tokens, including quantity, price, and delivery conditions
• Investment Terms: Purchase amount, payment method, and vesting schedule following UAE virtual asset guidelines
• Trigger Events: Specific conditions that initiate token distribution or terminate the agreement
• VARA Compliance: Required disclosures and regulatory statements under UAE virtual asset laws
• Risk Factors: Comprehensive disclosure of project, market, and regulatory risks
• Governing Law: Explicit reference to UAE jurisdiction and applicable DIFC or ADGM regulations
• Dispute Resolution: Clear arbitration or mediation procedures aligned with UAE legal framework

Simple Agreement for Future Tokens (SAFT) and Simple Agreement for Future Equity are both startup funding tools, but they serve different purposes in the UAE's investment landscape. While both help raise early-stage capital, their underlying mechanisms and regulatory frameworks differ significantly.

• Asset Type: SAFTs promise future cryptocurrency tokens, while SAFEs convert to equity shares
• Regulatory Framework: SAFTs fall under VARA's virtual asset regulations, while SAFEs follow UAE Companies Law
• Exit Mechanism: SAFTs convert upon token launch or platform completion; SAFEs typically convert during equity funding rounds
• Investor Rights: SAFT holders receive tokens with utility value, while SAFE holders gain potential ownership stakes
• Risk Profile: SAFTs carry specific cryptocurrency market risks, whereas SAFEs face traditional equity investment risks