What Is the Risk to a Project If the Vesting Schedule Is Too Short?
If the vesting schedule is too short, the primary risk is a massive sell-off by early investors, advisors, or team members immediately following the token's public release. This influx of supply can crash the token price, eroding investor confidence and potentially jeopardizing the project's long-term viability.
A short schedule signals a lack of long-term commitment from insiders.
Glossar
Short Vesting Schedule
Allocation ⎊ In the context of cryptocurrency and decentralized finance, a short vesting schedule for tokens or equity represents a deliberate design choice to accelerate the distribution of assets to participants, often aligning with project milestones or incentivizing early contributions.
Vesting Schedule
Allocation ⎊ The concept of a vesting schedule, particularly within cryptocurrency and decentralized finance (DeFi), fundamentally addresses the phased release of tokens or assets to participants, mitigating risks associated with immediate distribution.