Token vesting refers to the schedule by which locked cryptocurrency tokens are gradually released to their holders over time. Team members, investors, and advisors in crypto projects typically receive tokens subject to vesting: a cliff period (often 6-12 months where no tokens unlock) followed by linear vesting (monthly or quarterly releases over 2-4 years). Vesting protects against short-term extraction: founders who could sell all tokens at launch would have no incentive to build long-term value. Token unlocks are significant market events: when large quantities of tokens vest and become available to insiders and early investors, they may sell, creating downward price pressure. Tracking unlock schedules is essential for traders: a token trading at a high price with 80% of supply still locked is exposed to future sell pressure from upcoming unlocks. Token Economics platforms like Token Unlocks and Vesting.finance track upcoming unlock events across hundreds of projects. Public sale tokens typically have shorter vesting (6-12 months) while team tokens vest over 3-4 years, aligning incentives with long-term project success.
Example: Example: A crypto project raises $20M from VCs at $0.05 per token, with a 12-month cliff then 24-month linear vesting. 18 months after launch, VC tokens start unlocking monthly. The token is trading at $0.50 (10x). Each monthly VC unlock represents $8M of tokens at market price. If VCs sell aggressively, unlocks create persistent selling pressure for 2 years.
Learn more: Token Unlocks – Vesting Tracker
