Terminology
Vesting
What Is Vesting? It’s a certain amount of tokens that are held aside for some period of time for the team, partners, advisors, and others who are contributing to the development of the project. Smart contracts usually lock a certain amount of funds until contract conditions are met.
Token vesting refers to locking up investors tokens for a specific period to maintain a stable long-term value of a particular (digital) asset.
Note
Startups that use the blockchain technology might lock a certain amount of tokens: the team can reserve a certain percentage of coins, which will be gradually released once a month/quarter/year during the project process for financial purposes. In general terms, the process of releasing these coins is called vesting. Vesting is usually used to show that the team is highly interested in the project, and will continue working on project development. Additionally, vesting lowers market price manipulations.
What Is a Cliff?
There is often a several-year “cliff”, meaning that the individual must be with the company for a couple of years to release the first increment of tokens.