1. Digital coins or tokens that are given to a particular group of people for free
2. When a Blockchain company holds an ICO or Token Sale, they are using this mechanism to raise funds to operate the business, organization, or foundation. For projects that do not need funding, but that will benefit from widespread usage, they may give the coins to interested parties to use in the system. Some will choose to sell them and will therefore set the value of the coin on the open market.
In most cases, the coins are used to incentivize users to participate in a particular project or ecosystem