9 ♥ · Incentive · Draft
Vesting
Tokens promised to a person are released in portions over time, so they stay to collect them.
How it works
The DAO grants a person a fixed number of tokens but does not hand them over at once. A contract holds the tokens and follows a schedule. Often nothing is released during a first period called the cliff, for example one year. After the cliff, a fixed share is released every month or every block until the full amount is out. The person can claim only what has been released so far. If they leave early, the unreleased tokens usually return to the treasury.
Use it when
- You pay founders, staff, or investors in tokens and want them to stay for years.
- Prevent a large grant from being sold on the market the day it lands.
Watch out for
- A cliff date can trigger a wave of selling when many schedules end at once.
- People who have stopped caring still collect, unless the DAO can cancel the schedule.
Example
Uniswap. Uniswap put its 2020 team and investor UNI allocations on four-year vesting schedules, so insiders received tokens only as the years passed.