Understanding Crypto Vesting

Vesting is an essential strategy in the crypto industry. The concept has a major effect on the price of crypto assets. Protocols that utilize the strategy well have a better chance of sustaining and managing the price fluctuation of their native assets. 

Crypto projects lock up a portion of their token supply before distribution. Crypto vesting is the process of holding, locking, and distributing tokens from an Initial Coin Offering (ICO).

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Vesting Schedules

The Vesting Schedule is announced by projects that utilize crypto vesting. It defines the period during which the tokens purchased during ICO cannot be sold by stakeholders, and the intervals at which they can sell the tokens. Tokens released by the project according to the vesting schedule are called “vested tokens.”

The length of vesting schedules varies for every project, and the percentage of tokens released at each interval is set to reduce selling pressure. Sometimes, drawn-out vesting schedules may be a turn-off for early-stage investors. 

To understand vesting schedules better, we will look at one of BNB Chain’s top platforms, PancakeSwap. The network's number one Decentralized Exchange (DEX) utilizes crypto vesting for its Initial Farm Offerings (IFO). 

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PancakeSwap IFO Vesting Schedule 

PancakeSwap IFO gives investors early access to new tokens that the DEX will add to its platform. Similar to some ICOs, PancakeSwap IFOs have a vesting schedule. Let’s look at the latest IFO by the platform for Meta Apes ($PEEL), which will commence on August 4. 

The table below shows that $PEEL tokens are allocated to the team, community rewards, staking rewards, and more. However, for this article, we are interested in the IFO allocation. 

The total percentage for IFO is set at 5% (50 Million $PEEL) of the total supply (1 Billion $PEEL), and 30% will be unlocked at the Token Generation Event (TGE). Thus, only 30% of stakeholders' investment will be distributed after the IFO. At this point, holders of $PEEL token can only sell 30% of their entire allocation. This way, holders can not dump all their tokens at launch, negatively affecting the price. 

According to the schedule, the remaining 70% will be released block-by-block over 90 days. That means PancakeSwap will distribute 1/90 of $PEEL holdings to each stakeholder every day. 

Linear Vesting: In this case, the team will receive the same amount of $PEEL tokens every month for the next five years. The 6-month cliff is the lock-up period during which the team cannot sell any tokens.

In summary, for the $PEEL IFO, at launch PancakeSwap will unlock 30% of the tokens purchased by IFO investors. The remaining 70% will be released block-by-block for 90 days. Meanwhile, the team's allocation of $PEEL will be locked up for six months and then distributed over a period of five years.

Read PancakeSwap’s $PEEL IFO document for more details on the IFO sale. 

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Final Thoughts 

A good crypto vesting schedule is important for the growth of any project. As shown in this article, PancakeSwap’s IFO for $PEEL includes an unlocking schedule that aims to reduce initial selling pressure and increase the token’s value in the long run. 

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What Is PancakeSwap:

PancakeSwap is a Decentralized Exchange (DEX) built on BNB Chain. It offers users various features such as Liquidity Pools, Swapping, Yield Farming, Syrup Pools, Automated Market Maker, Initial Farm Offering (IFO), NFT profile system, and many others. 

In addition, the protocol helps users make the most out of their crypto assets by trading, earning through yield farming, and winning via lottery, prediction, and NFT collectibles. With the highest trading volumes in the market, PancakeSwap is the leading DEX on the BNB Chain.

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Where to find PancakeSwap: 

Website | Twitter | Medium | GitHub

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