How Does a Token’s Vesting Schedule Potentially Impact Its Liquidity?

A vesting schedule locks up a significant portion of a token's supply for a set period, limiting the circulating supply. As the tokens vest and are released into the market, the sudden increase in supply can temporarily depress the price and increase selling pressure.

This influx of supply can initially increase liquidity, but it also creates price uncertainty, which may cause market makers to widen the bid-offer spread beforehand.