Description: Token vesting is a mechanism used in the decentralized finance (DeFi) space that allows for the gradual release of tokens to an investor or team member over time. This process is implemented to ensure that participants in a project maintain a long-term commitment, preventing mass token sales that could negatively impact the asset’s price and stability. Typically, vesting is established through a smart contract that defines a specific schedule, where tokens are released at regular intervals, such as monthly or quarterly, until the vesting period is complete. This approach not only protects the token’s value but also aligns the interests of investors and the development team, fostering a stronger and more sustainable collaboration. Additionally, vesting may include clauses that penalize early token sales, adding an extra layer of security and trust in the project. In summary, token vesting is a key strategy in the DeFi ecosystem that promotes stability and trust among market participants.
