A Detailed Insight into Various Crypto Token Vesting Schedules
The crypto vesting schedule is crucial to a project’s roadmap. As it allows employees, investors and other stakeholders to plan when they will receive their tokens. Besides, a normal vesting schedule debuts with a vesting start date along with multiple vesting periods of varying lengths. After the vesting start date, every period will conclude on a relative vesting end date. Additionally, after the expiry of every crypto token vesting period one can access the crypto assets allocated to him (based on the terms of the agreement). And these assets, namely tokens can now be exchanged, sold or kept in a crypto wallet as the owner desires.
Vesting Schedules Vary Based on Frequency and Size
Moving ahead, based on the frequency and size, a crypto token vesting schedule can be Linear, Graded, Or Cliff. Besides, one can use 3rd party programs (like the ones on offer by Streamflow Finance) to carry out automatic vesting.
Various Types of Crypto Token Vesting Schedules
1. Cliff Vesting Schedule
A cliff is a period from the beginning of a crypto token vesting period till the transmission of the first set of tokens. While not every token project deploys the cliff vesting schedule. It is mostly used in conjunction with linear or graded vesting schedules to issue vested tokens. Besides, no tokens are issued in this vesting schedule approach. In fact, long time frames are a common occurrence in this approach. Not only that, in case you decide to encash your funds before the passage of the agreed time. Then you stand to lose your ownership of the vested tokens. This rule is of great help when it comes to reducing the chances of pump-and-dump attacks. Where people with bad intentions make early purchases of a token at reduced prices. Only to make a sudden pull out leading to an unexpected collapse in the market value of the token.
2. Graded Vesting Schedule
As the name says, in this approach the vested tokens are released in grades, everyone being higher or lesser than the last. But there is a time gap between each release. Additionally, a specific percentage is added per grade at every time interval. This irregular release approach introduces tokens into the market at a slow pace, thereby reducing the risk of instability. In this scheme, if you make an uncertain pull-out, then you will receive a percentage that matches your waiting time.
3. Linear Vesting Schedule
In this approach, i.e., linear crypto token vesting schedule, they issue vested tokens in equal quantities over a pre-set period. For instance, one can have 20 per cent paid in the first quarter, then another 20 per cent in the coming three-month period. This way, the entire allotment process is complete within a year & three months.
Token Vesting Schedule Used By BSC
Furthermore, the vesting schedule deployed by a project on BSC is completely dependent on the project's goals, needs, and priorities. But you can use certain vesting schedules. Namely cliff vesting, reverse vesting, time-based vesting and milestone-based vesting for token vesting on BSC.
Conclusion
To sum it up, crypto token vesting is not just for investors. It targets both project teams and investors alike including contributors, partners, core team and advisors. Besides, the tokens they are getting as a reward are inbuilt into a vesting schedule. And there is no specific vesting period. Not only that, each project creates its vesting schedule based on its overall strategy. Additionally, investors need to learn in detail about the vesting schedule of the token that they are investing in. To get a clear idea regarding how and when the tokens will go public. So that they can successfully assess the potential risks and rewards of having a relationship with their investment.
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