What is crypto vesting?
Crypto vesting is the controlled release of a token allocation over time, enforced by a smart contract. Rather than delivering a full allocation at once, the contract holds the tokens and releases them on a schedule, so holders receive their tokens gradually. This post focuses on the mechanics, how unlocks are actually computed and claimed. For the models, standard schedules and best practices, start with token vesting 101.
The important idea is that vesting is math, not a promise. The contract knows the start time, the cliff, the total allocation and the release rate, and from those it can compute exactly how much is unlocked at any moment. That computation is what the rest of this guide unpacks.
How does a token unlock actually work?
A token unlock works by the contract computing a vested amount from elapsed time, then releasing the difference between what is vested and what was already claimed. There is no scheduled transaction that "pushes" tokens on an unlock date. Instead, the unlocked balance grows continuously according to the formula, and a holder claims it whenever they choose.
Concretely, when a holder claims, the contract does three things: it calculates the total vested so far based on how much time has passed, it subtracts the amount already claimed, and it transfers the remainder. Because the calculation is deterministic and on-chain, no one can release tokens ahead of schedule, and anyone can read the contract to verify the current unlocked amount. That verifiability is a core reason on-chain vesting is trusted.
What is a cliff, mechanically?
Mechanically, a cliff is a conditional in the contract: if the current time is before the cliff date, the vested amount is zero, full stop. Nothing is claimable, no matter how much time has passed within the cliff. The moment the cliff date is reached, the amount that accrued during the cliff becomes claimable at once, and normal vesting continues from there.
This is why a one-year cliff means a holder gets nothing for twelve months and then a meaningful tranche unlocks on the anniversary. The cliff is a commitment gate: it ensures no tokens are earned until a minimum time has passed, which is why it is standard for team allocations and common for investors.
How does linear vesting calculate the unlocked amount?
Linear vesting calculates the unlocked amount as the total allocation multiplied by the fraction of the vesting period that has elapsed. If V is the total allocation, t is time elapsed since the start, and T is the total vesting duration, then the vested amount after the cliff is V multiplied by t divided by T. On-chain, t is usually measured in seconds, so the unlocked amount increases smoothly rather than in jumps.
Here is a worked example. Take 1,000,000 tokens on the standard four-year schedule with a one-year cliff:
- During year one (the cliff): 0 unlocked.
- At the one-year cliff: 25% unlocks at once, so 250,000 tokens become claimable.
- The remaining 750,000 then release linearly over the next three years, about 20,833 tokens per month.
- At 2.5 years: 250,000 plus 18 months of linear release (375,000) equals 625,000 tokens, or 62.5%.
- At four years: the full 1,000,000 is unlocked.
The contract computes this continuously, so a holder claiming at any instant gets exactly what the formula says is vested.
Linear vs graded (monthly) unlocks
The difference between linear and graded vesting is continuous release versus discrete steps. Linear vesting unlocks a tiny amount every block, producing a smooth supply curve. Graded or monthly vesting unlocks in chunks, for example one tranche per month, producing a stair-step curve. Both are enforced identically by the contract; the only difference is the shape of the release.
| Unlock type | Release pattern | Supply curve |
|---|---|---|
| Cliff | Lump at the cliff date | Step at the cliff |
| Linear | Continuous, per second | Smooth ramp |
| Graded (monthly) | Tranche each period | Stair-step |
| Cliff plus linear | Lump, then continuous | Step then ramp |
Most real schedules are "cliff plus linear": a lump at the cliff, then a smooth ramp to full unlock. Linear release is the most common structure overall, used by roughly 70% of projects.
How holders claim vested tokens
Holders receive vested tokens by claiming them through a portal, not by waiting for the project to send them. The holder connects a wallet, the vesting contract reports how much has unlocked, and the holder claims that amount in one transaction. They come back as more vests, claiming the newly unlocked portion each time.
This pull model is efficient: the project does not have to run a transaction for every holder on every unlock date, and tokens that are never claimed simply stay in the contract. Pairing vesting with a token claim portal gives holders a single branded place to see their schedule and claim what is due.
How to read a vesting schedule
To read a vesting schedule, look for four numbers: the total allocation, the cliff length, the total vesting duration, and the release shape (linear or graded). Together they tell you when supply unlocks and how fast. A schedule described as "4-year, 1-year cliff, linear" means a quarter unlocks at year one and the rest ramps smoothly to year four.
When you read a project's tokenomics, map every allocation this way and add up the unlock curves. The combined curve shows you when sell pressure could arrive. Designing that curve well is the heart of good tokenomics, covered in token vesting 101. When you are ready to run it, on-chain vesting enforces the schedule for you.