Vesting in Crypto: What It Means and Why It Matters

Vesting in crypto refers to the process of locking or gradually releasing tokens over time to align long-term incentives and prevent early sell-offs. It plays a critical role in stabilizing token economies, building trust, and ensuring sustained commitment from project teams, investors, and advisors.

Key Ideas

Token vesting schedules such as cliff, linear, and milestone-based are used to delay token access and align stakeholder incentives.
Smart contracts automate vesting processes, ensuring transparency and eliminating human error, with leading blockchains like Avalanche and Polkadot publishing their schedules to foster community trust.

Why It Matters?

Entrepreneurs must design vesting frameworks that signal long-term commitment and prevent token dumps. Including clear vesting terms in fundraising materials and community communications can enhance credibility and attract serious investors and contributors.