What Is Token Vesting?
Vesting is a lock plus a schedule. Team members, investors, and advisors are allocated tokens that they cannot sell on day one. A cliff might last six or twelve months with nothing released, then tokens drip linearly, monthly or daily, for years. It is supposed to keep insiders aligned. It is also a future sell wall you can put on a calendar.
How It Actually Works
- Allocations live in a contract or a custodian. At each unlock, a tranche becomes transferable. Whether it hits the market is a choice; that it can is the fact.
- Healthy designs vest years, not weeks, and publish the schedule. Unhealthy ones hide allocations in "ecosystem" wallets with a multisig the team controls.
- Vesting does not prevent insiders from hedging, selling related assets, or dumping unlocked tranches into your FOMO. It only delays the moment they can do it with the token itself.
Risks and Common Mistakes
- Buying a launch in month eleven of a twelve-month cliff. You are volunteering as exit liquidity for the first unlock, unless demand is genuinely larger than the tranche.
- Ignoring investor unlocks while staring at team unlocks. Funds have LPs to pay.
- Assuming revoked or "extended" vesting is charity. Sometimes it is. Sometimes the alternative was a revolt.
When It Matters
Before any token with a team or VC book, which is nearly all of them except Bitcoin. Read the schedule next to FDV and the emission schedule. If you cannot find one, that is the finding.
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