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Tokenomics guide
Token vesting and unlock schedules explained
Learn about token vesting schedules, cliff periods, lock-up expirations, token unlocks, and how they affect crypto price and airdrop claiming strategy.
Guide intro
Token vesting and unlock schedules explained
Token vesting and unlock schedules are critical factors in tokenomics. They determine when vested tokens hit the market, potentially affecting price and creating selling pressure windows.
Section 1
What is a vesting schedule?
A vesting schedule dictates when and how tokens are released from locked allocations. This includes team tokens, investor tokens, ecosystem funds, and sometimes airdrop allocations.
Section 2
Cliff periods explained
A cliff is an initial period where no tokens are released. After the cliff ends, vesting begins according to the schedule. Cliffs prevent early dumping and align incentives.
Section 3
Linear vs stepped vesting
Linear vesting releases tokens continuously over time. Stepped vesting releases in batches at specific dates. Linear is more predictable for markets; stepped can cause sudden selling pressure.
Section 4
How unlocks affect price
Large unlocks can create sell pressure as vested holders seek liquidity. Markets often price in expected unlocks, but surprises can cause volatility. Watch unlock calendars carefully.
Guide FAQ
Why do projects use vesting schedules?
Vesting aligns long-term incentives, prevents immediate dumping, ensures team and investor commitment, and manages token supply to support price stability.
Guide FAQ
Are airdrop tokens always vested?
Not always. Some airdrops are immediately liquid, others have partial or full vesting. Vesting in airdrops reduces immediate sell pressure and rewards long-term holders.
Guide FAQ
How do I find a project's vesting schedule?
Check the project's whitepaper, tokenomics documentation, official announcements, or third-party token unlock trackers. CMC, CoinGecko, and Etherscan often display vesting information.
Guide FAQ
Should I sell before a big unlock?
This depends on your strategy. Some traders reduce positions before large unlocks to avoid sell pressure. Others hold if they believe in long-term fundamentals. Research the unlock size relative to trading volume.
Guide FAQ
What is FDV vs market cap?
FDV (Fully Diluted Valuation) is market cap if all tokens (including vested) were circulating. Market cap is based on circulating supply only. A high FDV/market cap ratio indicates significant future inflation.