Crypto Vesting Schedule: How Cliffs, Unlocks and Linear Vesting Work

When a new token launches, most of its supply is usually not for sale yet. Tokens set aside for the founding team, early investors and advisers are locked up and released gradually, on a timetable written into the project's documents or a smart contract.

That timetable is the crypto vesting schedule. It sounds like a back-office detail, but it decides how many tokens can reach the market, and when.

If you hold a token, or are thinking about buying one, the schedule tells you who could be selling next month and how much they could sell.

What vesting means in crypto

Vesting is borrowed from employee share plans. Someone is granted an allocation up front, but they only earn the right to it over time. Until a portion has vested, it cannot be sold or transferred.

Crypto vesting works the same way. A project might allocate a fifth of its supply to the team, then hold that allocation back and release it in stages over several years.

The aim is to keep insiders committed to the project and to stop them selling everything on listing day. Our guide to tokenomics covers the wider picture of supply and distribution.

Vesting is the part of that design that answers one practical question: when can each group actually sell?

Lockup, cliff and cadence: the building blocks

Most token vesting schedules are assembled from the same few parts, and the vocabulary is worth getting straight before you read one.

The vesting period is the full stretch of time over which an allocation is released. For teams and investors it is often three or four years, usually counted from the token generation event, when the token first exists on-chain.

The cliff is a waiting period at the start during which nothing is released at all. A one-year cliff is common. When it ends, everything that would have vested during that year typically becomes available in one go.

The release cadence is how often tokens unlock after the cliff: monthly, weekly, daily or even every second. Each individual release is what trackers call an unlock.

Linear vesting versus cliff unlocks

Linear vesting releases tokens in equal amounts over time. If 36 million tokens vest linearly over 36 months, about one million become available each month.

Some contracts release continuously instead, so the claimable balance creeps up every second rather than stepping up once a month. The end result is the same straight line, just drawn more finely.

A cliff unlock feels very different. Tokens pile up behind the cliff and then arrive all at once. In practice the two are usually combined: a cliff first, then linear vesting for the rest of the allocation.

The widely used OpenZeppelin smart contract library shows how simple the logic can be. Its VestingWallet contract releases funds along a straight line between a start time and an end time.

An extension called VestingWalletCliff adds the waiting period: it reports zero vested tokens until the cliff timestamp passes. Many projects use code like this, while others write their own contracts or rely on custodians.

Some schedules are tied to milestones instead, such as a mainnet launch or a product goal. These are harder to plan around, because the release date is not fixed in advance.

A real example: Arbitrum's 2024 cliff

Arbitrum's ARB token makes a clear case study. According to the Arbitrum Foundation's documentation, tokens for the team, contributors and investors vest over four years from 16 March 2023, with the first unlock on 16 March 2024 and monthly unlocks after that.

The team and contributor bucket held about 2.69 billion ARB, and investors about 1.75 billion. A quarter of each came free at the one-year cliff: 673.5 million ARB for the team and advisers and 438.25 million for investors.

That is roughly 1.11 billion tokens released on a single day. Token Unlocks data reported by Cointelegraph at the time put it at around three-quarters of ARB's circulating supply.

The remaining 75% of those allocations then started vesting in 36 monthly instalments of roughly 92.6 million ARB. One large step, followed by a long and steady drip.

That shape is common across the market. Once you have seen it laid out for one token, you will recognise it in many others.

Why unlock dates can move prices

An unlock does not force anyone to sell. It only means that tokens which could not be sold yesterday can be sold today. Whether they are depends on who holds them, what they paid and what they need.

Early investors who bought at a fraction of the current price may take some profit. Team members may sell part of their allocation to cover taxes or living costs. Others hold, stake or simply do nothing.

Large unlocks also get noticed well in advance, and some traders position ahead of them. So price moves can come before the date, on the day, afterwards or not at all.

The comparison that matters most is size. An unlock worth a small slice of a token's normal daily trading volume is easy to absorb. One that adds a big share of circulating supply overnight is a different matter.

How to check a token's vesting schedule

Start with the project's own documents. Most serious teams publish allocation tables and vesting terms in a whitepaper, docs site or tokenomics page. Note the cliff, the vesting period and the release cadence for each group.

Next, look the token up on an unlock tracker. Tokenomist (formerly TokenUnlocks), Messari and DefiLlama all publish unlock calendars for many larger tokens, showing upcoming releases and how much supply each one adds.

If vesting is handled by a public contract, you can confirm it on-chain. Search the contract address in a block explorer to see how many tokens it still holds and which releases have already gone out.

Finally, set the next few unlocks against circulating supply and average daily volume. That turns a date on a calendar into a sense of scale.

Red flags in a token vesting schedule

Short or missing vesting for insiders is the clearest warning. If the team and early backers can sell within weeks of launch, their incentives and yours may not stay aligned for long.

Watch for allocations sitting in ordinary wallets controlled by the team rather than in a vesting contract. A published schedule is only a promise unless something enforces it.

That gap matters. Several of the biggest crypto rug pulls came down to insiders who could move or dump their tokens freely.

Be wary, too, of schedules that change quietly, unlock tables that do not add up to the stated supply, and a tiny circulating supply next to huge locked allocations. That last mix can make a token look cheap today while years of new supply wait behind it.

None of this makes a token with a heavy unlock calendar a bad project. It means the price has to absorb that supply, and you should know when it is coming.

The short version

A crypto vesting schedule tells you who owns the locked part of a token's supply and when they are allowed to sell it. The cliff, the vesting period and the release cadence are the three things to find first.

Check them against the project's documents, an unlock tracker and, where you can, the vesting contract itself. Then weigh each upcoming unlock against circulating supply and trading volume before deciding what it means for you.