Tokens & Assets
Vesting
Token Vesting
Gradual release of tokens over time according to a schedule
Definition
Vesting is the gradual release of tokens over time according to a predetermined schedule. It prevents immediate selling and aligns long-term interests of team members and investors.
Example
Team tokens might vest over 4 years with a 1-year cliff, meaning no tokens are released for the first year, then 25% each year after.
What to check
Treat it as a token-design concept: inspect supply mechanics, holder incentives, redemption paths, and governance controls. The main checks are: Selling pressure after vesting; Team departures; Schedule changes.
Risks to Consider
- Selling pressure after vesting
- Team departures
- Schedule changes
Common Questions
What does Vesting mean in DeFi?
Vesting means Gradual release of tokens over time according to a schedule. The useful question is not only the definition, but how the mechanism changes risk, return, liquidity, or governance for the user.
How is Vesting used in practice?
A practical example: Team tokens might vest over 4 years with a 1-year cliff, meaning no tokens are released for the first year, then 25% each year after.
What should I check before relying on Vesting?
Check selling pressure after vesting, team departures, schedule changes. Also verify liquidity, oracle assumptions, admin controls, and whether the protocol has been tested during stressed markets.