Vesting Schedules: Why Linear Unlocks Break Projects

The vesting release schedule isn’t just a timeline. It’s the mechanism that controls when new supply enters the market, who holds it, and how inflation accelerates.

At Tokenomics.com, we’ve audited over 750 tokenomics models and benchmarked more than 2,500. The most consistent failure point? Vesting structures copied from other projects without modeling their real impact on price, behavior, or supply dynamics.

And the worst part is always the same: linear vesting.

It’s the default for teams that want something “simple” — and it’s the reason so many tokens leak value steadily after launch. It rewards time, not progress. It pays out regardless of traction. It turns token releases into background noise until the price breaks.

We don’t evaluate vesting based on shape alone. We simulate how it would behave under real market conditions, using historical data from comparable launches to test unlocking velocity, incentive alignment, float pressure, and market absorption. Then we flag what’s fragile.

How Vesting Curves Shape Token Behavior

Every vesting curve is a release mechanism. It controls how fast tokens hit the market, how incentives flow, and how pressure builds or dissipates over time.

Linear is the most common. It’s also the most fragile.

It unlocks supply whether the product is shipping or stalled. It rewards participation by time served, not value created. And it builds steady sell pressure without any feedback loop to adoption or utility.

We’ve modeled hundreds of variations. These are the ones that actually serve a purpose, when used intentionally:

Logarithmic Vesting

Logarithmic vesting can work when early growth is needed to generate momentum, accelerate network effects and chase critical mass. But without mechanisms to capture and hold value, the model can front-load emissions and damage long-term sustainability.

Best for: Early-stage protocols chasing fast network effects

Behavior: Starts fast, slows down over time

• Unlocks a larger portion of tokens early, then tapers

• Helps bootstrap contributors when they’re needed most

• Risk: if incentives, value capture and accrual mechanisms are weak, early unlocks get dumped, and price will pop.

Exponential Vesting

This curve is ideal when token utility won’t exist immediately. It gives teams time to build, launch, and test before real unlocks begin. It also provides holders with a longer path to price stability, which can strengthen confidence in the asset.

Best for: Low-float launches that require long runway

Behavior: Starts slow, accelerates as maturity grows

• Releases a small amount of tokens during initial phases

• Increases gradually as the product, demand, and utility catch up

• Reduces early dilution and creates a longer buffer for price discovery

S-Curve Vesting

This model mirrors how actual value creation works in early-stage ecosystems. It creates alignment by delaying major investor unlocks until there is demonstrable traction, then tapers emissions as growth stabilizes. It’s particularly effective for calming exchange and community concerns around short-term dumping.

Best for: DePIN and network effects, also for Investor allocations.

Behavior: Slow unlocks, mid-phase ramp, then taper

• Starts with conservative release rates

• Accelerates once project traction and valuation justify it

• Levels off to avoid oversupply in later stages

We go in depth more about this in the our Tokenomics for DePIN Article.

Adaptive KPI-Based Vesting

Among all vesting structures, this is the one that gets it right.

When implemented properly, KPI-based vesting doesn’t just control supply. It ties token unlocks directly to real traction — user growth, network activity, protocol revenue. It rewards value creation instead of time served.

Most projects never attempt this model. Not because it doesn’t work, but because it requires actual systems thinking — and accountability.

Best for: Protocols that want performance-aligned supply

Behavior: Unlocks are triggered by ecosystem milestones

• Token release is linked to metrics like active users, revenue, or liquidity

• Requires reliable oracles and a strong incentive framework

• Allows for true coordination between tokenomics and protocol growth

KPI-based vesting systems force every unlock to be justified. If the protocol under-delivers, the supply stays locked. If the network grows, the contributors and stakeholders benefit. It’s the only model that scales supply in parallel with demand — not against it.

Core Terms

Before we model unlocks or emissions, it’s important to clarify the supply mechanics that shape token behavior from launch onward. These are the fundamentals, but they’re also the areas most frequently misrepresented in token design docs.

Cliff Period

The cliff is the initial lock-up phase after TGE (Token Generation Event), during which specific token allocations (usually to team, advisors, or investors) remain completely inaccessible.

No vesting occurs during the cliff — it’s a hard freeze. Only after the cliff ends does the actual release schedule begin.

Cliffs are used to delay early sell pressure and show long-term commitment from stakeholders.

Cliffs are also used to create ladder effects, staggering unlocks across time rather than concentrating them in a single month. This helps smooth out emissions and avoid supply shocks.

Token Generation Event (TGE)

In theory, the TGE is when a token is created.

In practice, it’s when the token enters the market and starts trading — usually on a centralized or decentralized exchange.

This is the real starting line. It’s the point where price discovery begins, and the system stops being theoretical. From that moment on, the vesting, float, volatility, liquidity, and incentives start and are live.

What happens at TGE sets the tone for everything that follows. If the float is too low, volatility spikes. If early holders unlock too much, price collapses. If liquidity is shallow, the market gets distorted.

TGE isn’t just a launch. It’s the first stress test of the tokenomics design.

The vesting schedule defines the unlock at TGE, which in other words, define the initial float and MCAP.

The best-performing projects in our database consistently show one main thing:

• Higher float at launch. Initial circulating supply averages 15.18% — more than 3x the float of typical launches (4.98%). That reduces early price distortion and cushions against dilution shocks.

In other words, they’re able to launch with a larger initial float, a more decentralized supply, and a broader set of participants actively engaged in the system. This is possible because the token model has strong utility design, effective incentive alignment, and working value accrual and value capture mechanisms. Early holders receiving TGE unlocks are integrated into the ecosystem, not just selling, but participating. The model gives them reasons to stay.

For a deeper breakdown on how value flows through a token system, see our article on Utility and Value Flow in Tokenomics Models.

Circulating Supply (ofter refered as float)

This is what’s actively tradable.

It includes tokens that are unlocked and likely to be in the market — held by users, market makers, investors, and other parties who have no contractual lock or cliff.

It does not include every token that’s been technically unlocked.

If it’s still sitting idle in a foundation wallet, or if insiders aren’t selling, it’s not circulating. Exchanges, price aggregators, and investors all look at circulating supply as the real liquidity footprint of a project.

Token Unlocks (unlocked Supply)

Unlocks refer to tokens that become available for use or transfer.

They may be eligible for trading, claiming, or utility — but not all unlocked tokens will enter circulation immediately.

This distinction matters. Many projects unlock large amounts of supply to insiders or ecosystem pools, but only a fraction of that hits the market. However, if you don’t model who’s holding those tokens and their likely behavior, you’ll misjudge risk.

Emissions

Emissions describe the rate at which new tokens are introduced into the ecosystem.

This can include staking rewards, liquidity mining incentives, or inflationary release schedules written into the protocol’s monetary policy.

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