Crypto glossary
Vesting
Vesting is a schedule that releases tokens allocated to a team, investors or advisers gradually over time instead of all at once at launch.
When a crypto project distributes its token, insiders usually receive their share under a vesting schedule enforced by a smart contract or a custodian. A typical structure has a cliff, a period such as 12 months during which nothing is released, followed by linear vesting, where tokens unlock monthly or even per block over the following years.
Vesting aligns insiders with the project's long-term success and prevents them from selling their entire allocation right after the token lists. Each scheduled release is known as a token unlock, and trackers publish calendars so the market can anticipate them.
Large unlocks can put pressure on price because recipients, especially early investors who paid far less than the market price, may sell. Investors therefore check how much of the supply is still vesting, when the cliffs end and whether schedules have been changed, which projects sometimes do through governance votes.
Example
A founder receives 100 million tokens with a one-year cliff and three years of monthly vesting: nothing is released for 12 months, after which about 2.78 million tokens unlock each month for 36 months.
Related terms
Latest articles on Vesting
- Blockaid Sounds the Alarm on UNCX as Vesting Pool Exploit Emerges
- Umbra and Streamflow Roll Out Confidential Vesting Infrastructure on SOLANA
- ETH and SOL Return to Key Support as BlockDAG’s Final Private Round is Live at $0.00025 with Zero Vesting
- Managing Vesting Schedules: How BlockDAG Holders Can Access Liquidity Sooner
- Pyrax Network: Examining Concerns Around Vesting, Transparency, and Fund Access
