New: Wallet recovery made easy with Ledger Recover, provided by Coincover

Get started

Up your Web3 game

Ledger Academy Quests

  • Test your knowledge
  • Earn POK NFTs
Play now See all quests

Vesting Period Meaning

May 21, 2023 | Updated Jul 19, 2023
A vesting period in crypto refers to a predetermined time frame during which certain tokens or assets are restricted and become accessible or transferable over time.

What is a Crypto Vesting Period?

In the crypto industry, the vesting period is the phase when a project restricts the sale of its early investor tokens. These tokens are acquired by early investors, project stakeholders, and contributors during the pre-ICO stage. The project’s vesting determines how long these tokens will be “locked” and the intervals at which they will be released. 

It is a mechanism designed to gradually release or unlock tokens over time, often as a means to incentivize long-term commitment, discourage immediate selling or dumping of tokens, and promote stability within the crypto ecosystem. The vesting period allows token holders to gain access to their tokens gradually, ensuring a more controlled and measured distribution of assets within the network.

The vesting model is not unique to cryptocurrencies and has been in use in traditional financial markets for decades such as employee stock options or restricted stock units (RSUs). For instance, companies grant employees stock options as a form of compensation. These stock options give employees the right to purchase company shares at a predetermined price within a specific period. The vesting period determines when the employee can exercise these options and acquire the company’s shares. Typically, employees need to work for a certain period of time before their stock options fully vest and become exercisable.

Hash Rate

A hash rate is a measure of the computational and processing power of a cryptocurrency network.

Full definition

All Time High (ATH)

All-Time High (ATH) refers to the highest price that a financial asset has ever reached. The term is used to analyze traditional financial assets like stocks and bonds, as well as digital assets like Bitcoin.

Full definition

Dencun

Dencun is an upgrade on the Ethereum blockchain aimed to improve its performance by optimizing execution efficiency and data availability within the network.

Full definition