Vesting

Vesting is a schedule that releases allocated tokens gradually over time instead of all at once, typically applied to the allocations of a project's team, advisors, and early investors. Its purpose is alignment: insiders who must wait years to receive their tokens have an incentive to keep building, and the market is protected from a flood of insider selling at launch.

A typical structure combines a cliff and linear release. A concrete example: a founding team's allocation might have a one-year cliff — nothing is received for the first twelve months — followed by linear vesting over the next three years, releasing roughly one thirty-sixth of the remainder each month. Many projects enforce this on-chain with vesting contracts that hold the tokens and allow claims only as they unlock, making the schedule verifiable rather than a promise in a document.

For anyone evaluating a token, the vesting schedule is essential reading: it tells you when large tranches of currently locked supply will reach holders who may sell, and public trackers exist specifically to flag upcoming unlocks. A common misconception is that vesting prevents insider selling — it only delays and spreads it, and prices frequently weaken around major unlock dates as markets anticipate the new supply. Short or absent vesting for insiders is a classic warning sign, since it lets a team profit immediately whether or not the project succeeds.