Vesting
Vesting is a schedule that delays when allocated tokens become available to a team, investor, contributor, or other beneficiary.
✦ Key Insight
Large unlocks can increase circulating supply and change who can sell or use tokens. Understanding vesting helps readers see when previously locked allocations may enter the market and how aligned long-term participants may be.
✕ Common Misconceptions
A published vesting chart does not automatically prove tokens are locked on-chain. Check whether the schedule is contract-enforced, whether contracts can be changed, and whether ownership of a vesting wallet itself can be transferred.
Detailed Explanation
Aliases and acronyms: Token vesting; vesting schedule; token unlock schedule
Plain-English explanation: Vesting prevents an entire token allocation from becoming transferable at once. Tokens may unlock gradually, after a waiting period called a cliff, or according to another defined schedule. Vesting is commonly used for team, investor, adviser, and contributor allocations.
Analogy: It is similar to employee stock that becomes yours over several years instead of being fully available on your first day.
How it works: Tokens can be held in a vesting smart contract or controlled through another enforceable arrangement. A schedule defines a start time, duration, possible cliff, and release rate. As time passes, the beneficiary can claim the amount that has vested under those rules.
FAQs
Q: What is a vesting cliff?
A: A cliff is an initial period during which no scheduled tokens become claimable. The first unlock occurs only after the cliff condition is met.
Q: Is vesting the same as staking?
A: No. Vesting restricts when allocated tokens become available. Staking generally involves committing tokens to help secure a network or participate in a protocol.
Q: Do vested tokens always unlock linearly?
A: No. Schedules can be linear, periodic, milestone-based, or custom, depending on the contract and project rules.
Sources
In Practice
Dig Deeper
Circulating Supply
Circulating supply is the number of cryptocurrency units considered publicly available and circulating in the market. It generally excludes tokens that remain locked, permanently unavailable, or otherwise outside active circulation according to the data provider's methodology.
Token Unlock
A token unlock is a scheduled release of previously locked tokens — typically those allocated to team members, early investors, the treasury, or advisors — into the circulating supply. Unlocks are defined by the token's vesting schedule, often published at launch.
Tokenomics
Tokenomics describes how a crypto token's supply, distribution, incentives, and utility are designed to influence how the token functions over time.