Token Vesting Explained: Linear, Cliff & Custom Schedules

Token vesting is a mechanism that gradually releases tokens over a set period rather than distributing them all at once. It's commonly used for team allocations, advisor tokens, investor rounds, and community rewards. Vesting prevents large token holders from dumping their entire allocation on the market, which would crash the price. By releasing tokens slowly, vesting aligns the incentives of team members and investors with the long-term success of the project.

Linear vesting releases tokens at a constant rate over a defined period. For example, if you vest 1,000,000 tokens over 12 months, approximately 83,333 tokens become claimable each month. On Aurevaz, linear vesting works automatically through the smart contract. You set the vesting start date and end date when creating the lock. The contract calculates the vested amount in real-time, and the beneficiary can claim at any point. Best for: Team tokens, advisor allocations, marketing budgets that need a steady release.

A cliff is a waiting period before any tokens are released. For example, a "6-month cliff with 2-year linear vesting" means no tokens are released for the first 6 months. After the cliff, all tokens that would have vested during that period become available immediately, and the rest vest linearly. Cliffs are popular for employee and advisor token grants because they ensure recipients stay committed for a minimum period before receiving any tokens. To implement a cliff on Aurevaz, set your vesting start date to the end of your desired cliff period. The tokens remain locked until that date.

The best schedule depends on who receives the tokens: Team & Founders: 1-year cliff + 3-4 year linear vesting. This is the gold standard in both crypto and traditional startups. It signals serious long-term commitment. Advisors: 6-month cliff + 1-2 year vesting. Shorter than team vesting since advisor contributions are often time-limited. Private Sale Investors: No cliff or 1-month cliff + 6-12 month vesting. Investors need liquidity but shouldn't dump immediately. Community Rewards: Short vesting (1-3 months) or no vesting. Users expect faster access to earned rewards. Ecosystem Fund: 2-4 year linear vesting. Long-term sustainability is key.

When evaluating a new token, sophisticated investors always check the vesting schedule. A project where the team can access all their tokens on day one is a massive red flag. Good vesting practices show: • The team believes in the project's long-term potential • There's protection against large sell-offs that could crash the price • The team's incentives are aligned with token holders • The project has thought carefully about tokenomics On Aurevaz, all vesting schedules are enforced on-chain and fully transparent. Anyone can verify a lock's vesting parameters by looking up the lock ID on the Explorer page.