Vesting Schedules
Learn vesting schedules in crypto: mechanics, risks, practical analysis, worked example, common mistakes and a knowledge checkpoint.
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Vesting schedules determine when previously allocated tokens become transferable or economically available. They turn a static allocation chart into a time-based supply curve.
Core concept
A vesting schedule is a set of rules governing when allocated tokens become available to recipients. Vesting may be linear, cliff-based, milestone-based, monthly, quarterly or governed by more complex release conditions.
How it works
Cliff vesting
nothing releases until a specified date, when a tranche may unlock.
Linear vesting
tokens accrue or release progressively over time.
Discrete vesting
fixed tranches unlock at monthly, quarterly or other intervals.
Revocability
some team arrangements can be cancelled or modified under employment or governance conditions.
What to inspect
Use the questions below as a compact due-diligence framework. The exact evidence varies by project, but the analytical dimensions are reusable.
| # | Question | Analytical lens |
|---|---|---|
| 1 | How many tokens become transferable in each period? | Definition and scope |
| 2 | What is the unlock amount as a percentage of current liquid float? | Demand and usage |
| 3 | Which recipient group receives the tokens? | Supply and incentives |
| 4 | Was the unlock known and anticipated by the market? | Control, liquidity and risk |
Practical workflow
Step 1
How many tokens become transferable in each period?
Step 2
What is the unlock amount as a percentage of current liquid float?
Step 3
Which recipient group receives the tokens?
Step 4
Was the unlock known and anticipated by the market?
Worked example
A 20 million-token unlock sounds small against a 1 billion maximum supply—just 2%. But if only 100 million tokens currently circulate, the event equals 20% of current circulation. Measuring the unlock against diluted supply alone would understate its potential significance.
Common mistakes and misunderstandings
- Measuring unlocks only as a percentage of maximum supply.
- Assuming vested automatically means sold.
- Ignoring token accrual during a cliff that releases as a lump sum.
- Failing to distinguish scheduled unlocks from discretionary treasury releases.
Knowledge checkpoint
Answer these without looking back. They are deliberately specific to Vesting Schedules, rather than generic crypto questions.
Q1. Why is unlock size relative to current float often more informative than relative to maximum supply?
Q2. What is the difference between vesting and actual market selling?
Q3. How can a cliff create a larger one-day supply event than a linear schedule?
FAQ
❓ Does vesting mean tokens are not part of total supply?
Not necessarily. Tokens can already exist in total supply while remaining locked or non-circulating.
❓ What is linear vesting?
A schedule where tokens become available progressively over time.
❓ Are unlocks always negative for price?
No. Expected events can be priced in, recipients may not sell, and demand can absorb supply.
❓ Where can vesting data come from?
Project documentation, token contracts, vesting wallets, disclosures and specialist data providers, each of which should be checked for methodology.
Summary
- Vesting converts allocations into a time-based supply schedule.
- Compare unlocks with current float, not just maximum supply.
- Unlocking creates sale capacity, not certain selling.
- Cliffs, recipient incentives and market expectations all matter.
Use this building block as one component of a wider research process. Token categories frequently overlap, and the same asset can carry sector, governance, utility and speculative characteristics at the same time.
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