In the cryptocurrency world, vesting refers to the temporary locking of purchased tokens to ensure long-term project stability. Most blockchain projects pre-mine their tokens and distribute them through different phases: the Seed Sale for venture funds and large investors, Private Sale for smaller funds or influencers, and Public Sale for the general audience.
Seed Sale tokens typically have the lowest price but come with high minimum investment requirements and vesting periods to prevent immediate dumping on exchanges. Private Sale tokens are more expensive but have lower entry barriers, while still incorporating vesting mechanisms to prevent large-scale sell-offs that could destabilize the market.
Without proper vesting, projects with low liquidity and incomplete development are particularly vulnerable to price manipulation and sudden value drops. As explained in the detailed guide on what is vesting in cryptocurrency, this mechanism plays a crucial role in maintaining healthy token economics throughout a project's lifecycle.
Common vesting models include linear unlocks (where equal portions are released over time) and twisted vesting (with random or customized unlock schedules). These approaches help sustain token value, manage circulating supply, and stabilize prices as the project matures and develops its ecosystem.
Today, nearly all serious cryptocurrency projects implement some form of vesting, particularly in the DeFi space. The decentralized nature of these projects makes price control nearly impossible without sufficient liquidity, making vesting an essential tool for responsible token distribution.