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Difference between revisions of "Vesting"
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Vesting is a mechanism that delays full distribution of a token or a coin by releasing small amounts of it over a larger period of time. | Vesting is a mechanism in [[tokenomics]] that delays full distribution of a token or a coin by releasing small amounts of it over a larger period of time. | ||
Usually projects will implement some kind of vesting for the allocation of tokens of early investors (VCs, early backers, advisors), as well as for the tokens of the protocol development team. It incentivises investors and teams to stay focused on making project a success over a longer period of time (in contrast where the team or investors can dump all of their tokens right after the public sale and just walk away). | Usually projects will implement some kind of vesting for the allocation of tokens of early investors (VCs, early backers, advisors), as well as for the tokens of the protocol development team. It incentivises investors and teams to stay focused on making project a success over a longer period of time (in contrast where the team or investors can dump all of their tokens right after the public sale and just walk away). | ||
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=== Vesting Examples === | === Vesting Examples === | ||
''' | {| class="wikitable" | ||
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!'''Examples''' | |||
!Description | |||
!Graph | |||
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|'''4 year linear vesting''' | |||
|Project A raises money from investors in exchange for the some amount of tokens with a 4 year linear vesting schedule. | |||
Meaning that through the first year investors will be gradually getting 25% of their token allocation, second year another 25% making it 50% in total and so on. | Meaning that through the first year investors will be gradually getting 25% of their token allocation, second year another 25% making it 50% in total and so on. | ||
|[[File:Linear vesting example.png|left|thumb|355x355px|4 year linear vesting]] | |||
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|'''4 year linear vesting with a 1 year cliff''' | |||
|Project B raises money from investors in exchange for the some amount of tokens with a 4 year linear vesting schedule with a 1 year cliff. | |||
Meaning that investors will be able to access 25% of their token allocation only at the end of the first year, from that moment they will be getting a gradual linear allocation similar to Example 1. | Meaning that investors will be able to access 25% of their token allocation only at the end of the first year, from that moment they will be getting a gradual linear allocation similar to Example 1. | ||
|[[File:4 year linear vesting with a 1 year cliff.png|left|thumb|356x356px|4 year linear vesting with a 1 year cliff]] | |||
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[[Category:Glossary]] | [[Category:Glossary]] | ||