How do token vesting schedules protect projects and investors?
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2 Answers
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From my experience helping early-stage crypto projects, vesting schedules keep development on track and prevent big dumps that tank price. A typical setup is a cliff (e.g., 6, 12 months) followed by gradual vesting (monthly or quarterly) over 4 years for founders and key contributors, and shorter cliffs for advisors. That way, team members only get tokens as they hit milestones, which aligns incentives with deliverables. Document it in the tokenomics and offer letters, specify accelerators for exits, and include a recovery mechanism if milestones aren’t met. In one project I helped, shifting to 1-year cliff and 4-year vesting reduced early sell pressure and gave investors confidence to participate in funding rounds.
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Token vesting protects both teams and investors by delaying liquidity until milestones, reducing runaway token minting and aligning incentives; in my experience, cliff and gradual vesting deter early sell-offs.
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