BlockchainIntermediate#Token Economics#Investment
Token Vesting
T
Definition
A schedule that gradually releases tokens to founders, team members, and early investors over time, preventing sudden sell pressure and aligning long-term incentives.
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Concept Diagram
Key Takeaways
1
Token vesting prevents insiders from dumping tokens immediately after launch.
2
Cliff periods (6-12 months) ensure team members stay committed before earning tokens.
3
Large unlock events create sell pressure — always check vesting schedules before investing.
4
Low float / high FDV is a red flag signaling massive future inflation.
Practical Example
A new DeFi token launches with 1 billion total supply but only 100 million in circulation. The team holds 300 million tokens on a 2-year vesting with a 12-month cliff. On the cliff date, 75 million tokens unlock — the price typically drops 15-30% as the team and investors sell.
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