Vesting Schedule

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Pronunciation

[vest-ing skej-ool or shed-yool]

Analogy

Think of a payment plan for a bonus. The 'Vesting Schedule' is the detailed contract specifying exactly when and how much of the bonus you receive – e.g., '$0 for the first 6 months (cliff), then $100 every month for the next 24 months'.

Definition

The specific timeline and rules that govern how locked tokens are released to stakeholders over time as part of a agreement. It details the duration of the lock-up, any initial period, and the frequency and amount of releases.

Key Points Intro

The vesting schedule defines the exact timeline for the gradual release of locked tokens.

Key Points

Specifies the total vesting duration (e.g., 2 years, 4 years).

Often includes a 'cliff' period (e.g., 6 months, 1 year) before the first tokens unlock.

Defines the release frequency after the cliff (e.g., linear monthly release, quarterly release, milestone-based).

Determines the rate at which locked tokens become liquid for the stakeholder.

A key component of a project's tokenomics, impacting circulating supply over time.

Example

A common vesting schedule might be: '4-year with a 1-year , followed by linear monthly unlocking'. This means tokens start unlocking only after year 1, and then 1/36th of the remaining total is released each month for the following 3 years.

Related Terms

Vesting

Cliff

Lock-up Period

Blockchain & Cryptocurrency Glossary

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