Equity · Token cap tables

Token vesting: cliffs, unlocks, and what they do to supply.

The four parameters behind every unlock schedule, the difference between on-chain and contractual vesting, and how unlocks feed circulating supply and FDV.

Glide Research11 Aug 20268 min read

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In short

What is token vesting?

Token vesting is the schedule on which an allocated token becomes transferable. A cliff holds everything back until a first date, after which the remainder typically releases linearly over months or years. Unlike equity vesting, the release is often enforced by a smart contract and usually continues regardless of employment.

Cliff · linear release · enforced in contract or by promise · drives circulating supply

Key takeaways

A token unlock schedule has four parameters: start date, cliff length, total duration, and release frequency. Everything else in the schedule is computed from those.
On-chain vesting places tokens in an escrow contract that releases them mechanically. Contractual vesting is a promise in a document, with the tokens held by the issuer until someone chooses to send them.
Equity vesting is about earning a grant and forfeiting the unearned part on departure. Token unlocking is usually about timing a transfer, and commonly keeps running after someone leaves.
Circulating supply counts tokens available to trade; total supply counts tokens in existence; max supply is the eventual ceiling. Fully diluted valuation multiplies price by the larger figure, so it can be several times market capitalisation.
Unlock schedules are watched closely because they change float. Whether a specific unlock moves a price is an empirical question that is contested and depends on how much of the release actually reaches the market.
Arbitrum published a four-year lock-up with the first unlock one year after token generation and monthly releases across the remaining three years — a common shape, published in the project’s own documentation rather than inferred.
A vesting contract deployed without a revocation path cannot be stopped. That is a governance decision made at deployment, not something that can be fixed later.

The four parameters that define a schedule

Almost every token unlock schedule, however elaborately it is presented, reduces to four numbers. Once you have them you can reconstruct the entire curve, and if a project publishes a chart without them you cannot verify the chart.

The parameters, and what each one changes
Parameter	What it means	What changes if you move it
Start date	The date accrual begins — often token generation, sometimes a contributor start date, sometimes listing	Shifts the whole curve. Two grants with identical terms and different starts diverge permanently
Cliff	A period during which nothing releases; at the end, the amount accrued so far releases at once	Creates a step. A one-year cliff on a four-year schedule releases a quarter of the grant in a single moment
Duration	Total length of the schedule including the cliff	Sets the slope. Longer duration means a flatter release and a smaller monthly increment
Frequency	How often the accrued amount is actually released — per second, daily, monthly, quarterly	Changes the shape from a smooth ramp to a staircase. Monthly release concentrates supply on one date

A published example makes it concrete. The Arbitrum Foundation documented that investor and team tokens were subject to four-year lock-ups, with the first unlocks one year after the token generation event on 16 March 2023 and monthly unlocks across the remaining three years. Those four parameters — start at TGE, twelve-month cliff, forty-eight-month duration, monthly frequency — are enough to reconstruct the entire investor and team release curve without any additional information.

On-chain vesting versus a promise in a document

This distinction determines what actually happens when the schedule and the humans disagree, and it is the single most consequential design choice in a token grant.

Two ways to enforce a schedule

Two ways to enforce a schedule
Feature	On-chain vesting contract	Contractual vesting
Where the tokens sit	In an escrow contract, already allocated to the beneficiary address	With the issuer, in a treasury or foundation wallet
What triggers release	Time. Anyone can call the release function once the schedule permits	A person deciding to send a transfer
Counterparty risk to the recipient	Low — the issuer cannot withhold what the contract will release	High — delivery depends on the issuer continuing to exist and to honour the grant
Can it be stopped on departure	Only if a revocation mechanism was written in before deployment	Yes, by not sending — though whether that is permitted is a contract question
Visibility	Public. Anyone can read the schedule and the remaining balance	Private, unless the project chooses to publish it
Amendability	Generally none once deployed, absent an upgrade path built in deliberately	By agreement between the parties, like any contract

Behaviour depends on the specific contract deployed. Read the contract, not the marketing page describing it.

How unlocks feed circulating supply and FDV

The unlock schedule is not just an internal HR artefact. It is the input to the supply figures that data providers publish about a project, which are then quoted in coverage, used in comparisons, and displayed on price pages.

Supply measures, as defined by a major data aggregator
Measure	Definition	Why it differs from the others
Circulating supply	The best approximation of tokens circulating in the market and in the general public’s hands	Excludes tokens that are locked, reserved, or otherwise unable to be sold on the public market
Total supply	The total amount of tokens in existence now, minus any verifiably burned	Includes locked and reserved tokens that circulating supply excludes
Max supply	The best approximation of the maximum tokens that will ever exist	Includes supply not yet minted; undefined for tokens with open-ended emission
Market capitalisation	Price multiplied by circulating supply	Reflects only the float that can trade today
Fully diluted valuation	Price multiplied by the full eventual supply	Can be a large multiple of market capitalisation early in an unlock schedule

Definitions per CoinMarketCap methodology documentation, accessed 11 August 2026. Other providers define these terms slightly differently, which is itself a reason to publish your own definition.

The gap between market capitalisation and fully diluted valuation is a direct function of how much supply remains locked. A project one month past launch with a twelve-month cliff on its contributor and investor buckets may have a small fraction of supply circulating, which makes the two numbers look wildly different. Neither figure is wrong; they answer different questions, and quoting one without the other is where most confusion originates.

Unlock dates are tracked publicly by several services, and market participants pay attention to them. It is tempting to go a step further and assert that unlocks push prices down. The honest position is narrower: an unlock increases the tokens that are able to trade, and what happens next depends on how much of the released supply is actually sold, who received it, and what demand exists at the time. Published research on the price impact of unlocks does not point in a single direction, and nothing on this page should be read as a forecast about any token.

Reading a schedule you did not write

Five checks on any published unlock schedule

These are due-diligence questions about the completeness of a disclosure, not investment analysis.

Find the four parameters
Start, cliff, duration, and frequency, per bucket. If a project publishes a chart but not the parameters, you cannot verify the chart against the contract.
Check whether the schedule is enforced on-chain
Ask for the vesting contract addresses. A schedule enforced by a deployed contract is verifiable; a schedule described in a blog post is a statement of intent.
Look at what happens after the cliff
A monthly release concentrates supply on twelve dates a year; a per-second stream spreads the same amount continuously. Same total, materially different shape.
Reconcile the buckets to total supply
Add the published buckets. If they do not sum to the stated total, something is unallocated, undisclosed, or double-counted, and it is worth asking which.
Ask how circulating supply is defined
Specifically: how are market-maker loans, unclaimed airdrops, bridged supply, and treasury holdings treated? Reasonable people define these differently, and the definition changes the headline number.

One last point that connects this page to the rest of the cluster. A contributor at a token project usually has two clocks running: an equity vesting schedule on the company cap table and a token unlock schedule on the token cap table, starting on different dates and behaving differently on departure. Modelling one without the other gives an incomplete picture of what that person is owed. That divergence is the subject of /equity/dual-cap-table.

Frequently asked questions

What is the difference between token vesting and a token unlock?

They are often used interchangeably. Where people distinguish them, vesting refers to earning the entitlement over time and unlocking refers to the tokens becoming transferable. In most token grants the two happen on the same schedule, which is why the terms collapsed together.

What is a typical token vesting schedule?

Common shapes observed in public launches include a one-year cliff followed by monthly or continuous release over a further two to three years. Arbitrum published exactly that pattern. It is a widely-copied shape rather than a standard, and there is no authority setting one.

Do token unlocks make the price go down?

An unlock increases the supply that is able to trade, which is why the dates are tracked. Whether price responds depends on how much of the released supply is actually sold and what demand exists at the time. Published analysis is mixed, and no reliable general rule exists.

What happens to my unlocking tokens if I leave the project?

It depends on the grant documents and on whether the vesting contract has a revocation mechanism. Unlike equity, which forfeits by default, many token vesting contracts continue releasing on schedule with no way to stop them.

Why is fully diluted valuation so much higher than market cap?

Because most of the supply has not unlocked yet. Market capitalisation uses circulating supply; fully diluted valuation uses the eventual full supply. Early in a schedule the two diverge sharply, and the gap narrows as unlocks progress.

Can a vesting schedule be changed after launch?

A contractual schedule can be amended by agreement. An on-chain schedule generally cannot, unless an upgrade or revocation path was deliberately built in before deployment. That is why the decision has to be settled before the contract ships.

Sources

ARB airdrop eligibility and distribution specifications — lock-up terms — Arbitrum FoundationChecked 11 Aug 2026
Supply: circulating, total, and max — CoinMarketCapChecked 11 Aug 2026
Market capitalisation methodology — CoinMarketCapChecked 11 Aug 2026
Introducing UNI — four-year vesting on team, investor, and advisor allocations — Uniswap LabsChecked 11 Aug 2026

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Glide Research

Payments research

Glide Research maps payment rails, FX corridors, and banking access so travellers, freelancers, and treasury teams can move money without legacy wire tax.

Published: 11 Aug 2026

Glide · Equity