Vesting and token unlocks
Vesting is a schedule that releases tokens held by the team, investors and funds gradually rather than all at once. An unlock is the moment the next batch of those tokens becomes available.
How it works
At launch most tokens are usually locked. A vesting schedule often has a "cliff", a period when nothing unlocks, say 12 months, and then tokens release in equal parts every month or quarter. The schedule is set in the tokenomics or in a smart contract.
Vesting exists so early backers cannot dump everything on day one. For a buyer, though, it is future supply: each unlock adds tokens to the market that were acquired very cheaply. If demand does not grow, price often sags before or after an unlock.
To gauge the pressure, compare the unlock size with circulating supply and daily trading volume. An unlock of 1% of supply usually changes little, while 10–20% at once can hit the price hard. Not every recipient sells right away, but the market often prices it in early.
200 million tokens circulate at $0.50, a $100 million market cap. Next week 40 million tokens bought by investors at $0.05 unlock. That is +20% supply, and even if half get sold, 20 million tokens worth $10 million hit a market with, say, $8 million of daily volume.
A common mistake is buying a token with a small circulating share based only on market cap, without checking the unlock schedule. In six months supply can multiply. Check the FDV, the unlock calendar and the price early investors paid.
Questions and answers
What is vesting in simple terms?
It means tokens are handed out in parts on a schedule instead of all at once. That stops the team and investors from selling everything on day one.
Why does price drop on token unlocks?
New tokens reach the market, often acquired very cheaply. If holders sell and demand stays the same, the price falls.
Where can I see a token's unlock schedule?
In the project's docs and tokenomics and on unlock calendar sites. Check it against the smart contract itself when you can.
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Updated: 2026-10-19