Thread by @kendrickNoble7

💢What You Need To Know About Vesting🥌

Vesting is a traditional concept of conferring power, but in the #Crypto Industry, it has a major effect on the price of the crypto asset.

Crypto Vesting is an integral/key part of Tokenomics. A good and balanced crypto vesting schedule

https://twitter.com/kendrickNoble7/status/1553476388975435776

manages price fluctuations, huge selling pressures and the overall integrity of the project. The process of holding, locking and releasing a project's token from an Initial Coin Offering (ICO) / Presale or a Crowdloan is called "VESTING".

Vesting can also be referred to as Token Lockup Period.

Protecting Private and Public investors from price volatility and massive sell-offs accompanied with ICOs is made possible with VESTING; and if the project is anchored on secured smart contracts, vesting can reduce the

opportunity for rugpulls,numerous market manipulations (pump and dump schemes), reduce the monopoly of Token holdings within investors and help in sustaining a reasonable token stability.

A good vesting schedule is important to grow and attract new investors and contributors.

Vesting can go a long way towards ensuring the long-term stability and viability of a crypto startup ecosystem by giving its developers a reason to stay in the project.
Also by controlling the tokens in Circulation, an upturn in the price of a Cryptocurrency can be achieved.

When an upturn in asset value is achieved, the possibility of the owner/team realising great profits also increases when they finally gain access to them.

There are two (2) groups of stakeholders that are automatic recipients of the distributed tokens (vested tokens) after the

Lockup Period. The first are the "Early-stage" investors (VCs, Angel Investors, Private Capitals, Hedgefunds and Highly Investing Individuals) that purchased the token crypto during the seed or private funding rounds.

Secondly, the members of the project team and its partners,

advisors, as incentives for their loyalty and contribution to the project. Most of the time the team tokens are vested, they are not to sold off on release because they tend to make investors like you and i believe in their project by being the lead ambassadors for their project.

On a second thought, it is done to ensure that the team has a drive to keep developing the project and make it successful by putting in their best and pulling important partnerships for long term sustainability.

A project without a vesting process may run the risk of its Founders selling off their share of tokens just when the price is high enough and after that abandoning the project. The vesting process also gives the development team the time, space, and peace of mind to test, refine,

improve and launch products (working products) on their platform without distraction of selling their stakes right after launching the project; hence helping them with time to build SOLID PARTNERSHIPS as "Support Base" and reach certain key milestones on their roadmap without

fear of liquidity issues as a few tokens are in Circulation.

Vesting also engenders a spirit of loyalty and committed for a project among team/community members.

💢 How Does Vesting Works? 💢

A well-managed crypto startup firm usually set aside 20-30% of its total

token supply for its management team. These tokens are then released in set intervals during the length of the vesting schedule. Intervals are spread evenly to reduce sell pressure during the length of vesting. However, early investors could be reluctant to investing in a crypto

startup with lengthy Lockup Periods and also on each release would likely sell tokens as part of long term risk management plans.

It is however important to know the differences between the circulating supply, total supply and floats (high or low).

The circulating supply is usually just a fraction of the total supply suggesting that there will be vesting tokens to be unlocked in the future.

Vesting periods can also be communicated through publicity resources such as whitepapers, news announcements on their social media

handles, newsletters and most rarely on their websites.

There is no standard crypto vesting period as each project sets its own vesting schedule.

#DEFi #Crypto #Vesting #education

@SamuelXeus @PrudentSammy @TheEwansEffect @_BillionAireSon @C_POTENS @_Quivira @shifuwealth

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