How Do Token Vesting Schedules Aim to Prevent Rug Pulls?

A vesting schedule is a pre-determined timeline that dictates when and how founding team tokens and early investor tokens are released. By locking up a significant portion of the supply and releasing it gradually over months or years, it prevents developers from immediately dumping all their tokens.

This mechanism aligns the team's financial incentive with the long-term success of the project, significantly reducing the incentive and ability to execute a rug pull.