What Is the Purpose of a ‘Reverse Vesting’ Clause?
A reverse vesting clause is a mechanism, typically used for founders or core team members, where the project or company retains the right to buy back the individual's tokens (or shares) at the original purchase price if they leave the project before the vesting period is complete. The purpose is to ensure that early contributors remain committed and to protect the project's ownership structure.
It functions similarly to a standard vesting schedule but gives the project the right of repurchase.
Glossar
Reverse Vesting Clause
Provision ⎊ A contractual clause, often within founder or early investor vesting agreements, that mandates the forfeiture or return of unvested tokens if specific adverse conditions occur post-launch.
Original Purchase Price
Acquisition ⎊ The Original Purchase Price in cryptocurrency, options, and derivatives contexts represents the initial capital outlay for an asset, establishing a baseline for subsequent performance evaluation and risk assessment.
Reverse Vesting
Allocation ⎊ Reverse vesting, within the context of cryptocurrency derivatives and options, represents a contractual mechanism wherein the full allocation of tokens or assets is not immediately granted to a recipient, but rather distributed over a predetermined period contingent upon the fulfillment of specific performance milestones or time-based schedules.
Vesting Schedule
Schedule ⎊ Vesting Schedule is the predefined timeline dictating the rate and conditions under which allocated tokens are gradually released from lockup contracts to team members, advisors, or early investors over a set period.