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Difference between revisions of "Vesting"
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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). | ||
Most usual vesting in a decent project will be 2-4 years with a cliff of 6-12 months. | Most usual vesting schedule in a decent project will be 2-4 years with a cliff of 6-12 months. | ||
A cliff or vesting with a cliff adds a delay to the initial access to the token. It removes some of the sale side pressure in the initial stages of a token launch. | === Cliff === | ||
A cliff or vesting with a cliff adds a delay to the initial access to the token. It removes some of the sale side pressure in the initial stages of a token launch. Also a cliff is called a cliff because it looks like an actual cliff if a vesting schedule were a mountain (see in a second example bellow). | |||
=== Vesting Examples === | === Vesting Examples === | ||
{| class="wikitable" | {| class="wikitable" | ||
!'''Examples''' | !'''Examples''' | ||
!Description | !Description | ||
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|'''4 year linear vesting with a 1 year cliff''' | |'''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. | |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. | ||