Vesting (Token Vesting)
A schedule that gradually releases tokens to team members, investors, or community over a set period.
Explained Simply
Token vesting locks tokens and releases them over time according to a predefined schedule. This prevents insiders from dumping all their tokens immediately after launch. A typical vesting schedule might include a 1-year cliff (no tokens released) followed by 2-3 years of linear vesting. Large vesting unlocks can create significant selling pressure — token prices often drop around major unlock dates as early investors take profits. Always check a project's vesting schedule before investing.
Example
A project gives team members 10% of token supply with a 1-year cliff and 3-year linear vesting — they receive nothing for year one, then equal portions monthly for years 2-4.
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