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Vesting in cryptocurrency has a lot of terms that can confuse crypto traders and investors. However, its meaning is vital and unique to every crypto project. Investors must know this before choosing to invest in an asset. 

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In this piece, we will learn what we need to know about vesting in cryptocurrency. 

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What is Vesting in Crypto?

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Vesting in crypto is a term that’s used to describe a token lockup, meaning that a said amount of tokens won’t be in circulation, and won’t be available for trading for a certain period. 

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Most tokens that are vested are majorly those pre-sold in the ICO stage, and those offered to the project owners as incentives for their excellent work.  

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Until a token is available to claim, they are considered “vested”. That they are tokens that will eventually enter circulation but are still subject to a vesting schedule. 

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What are Vesting Schedules 

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A vesting schedule is the agreed procedure for introducing the locked tokens into circulation, thus making them available for trading. 

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This help to keep the team motivated to continue the work on their product and protect against undue selling from any executive member who must have gotten the token in the presale, partnership, or ICO stage.

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What is Token Unlock

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Token unlock is the release of a vested token into circulation, making them available for trading. It’s often referred to as Token Generation Event (TGE), it helps to reduce the selling pressure of an asset. 

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Conclusion

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Vesting in cryptocurrency is a good strategy used to prevent massive sales of tokens by the team or inner circle members of a project. It builds harmony between the investors and the team. I hope after reading this piece you now understand what vesting in cryptocurrency means and the significant role it plays.

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