Linear Vesting

The defining feature is a linear, non-accelerating release curve. The total grant amount is divided evenly across the vesting period, with tokens becoming accessible at each block or timestamp interval. This creates a predictable, transparent schedule calculable with the formula: Vested Amount = (Total Grant * (Current Time - Start Time)) / Vesting Duration.

Often paired with a cliff period, an initial duration during which no tokens vest. Upon cliff completion, a significant portion (e.g., the first year's allocation) vests immediately, with the remainder following the linear schedule. This aligns incentives by requiring a minimum commitment before any tokens are claimable.

• Example: A 4-year vest with a 1-year cliff. After 1 year, 25% vests; the remaining 75% vests linearly over the next 3 years.

Smart contract-based linear vesting is self-executing and trust-minimized. The release logic is codified, removing reliance on a central entity to distribute tokens. Beneficiaries can typically claim their vested tokens via a transaction, with the contract calculating the available balance based solely on the block timestamp and the immutable schedule parameters.

Supports highly customized parameters for precise alignment:

• Start Timestamp: The genesis block for the schedule.
• Vesting Duration: Total period over which tokens unlock.
• Cliff Duration: Optional delay before vesting begins.
• Slice Period Seconds: The frequency of vesting increments (e.g., daily, monthly, per block).
• Revocable vs. Irrevocable: Determines if the grantor can cancel unvested tokens.

Linear vesting is a foundational tool for long-term incentive alignment in Web3:

• Team & Advisor Allocations: Prevents immediate dumping post-TGE.
• Investor Lock-ups: Ensures sustained commitment after fundraising rounds.
• Protocol Rewards & Airdrops: Distributes incentives to users or liquidity providers over time to encourage continued participation.
• Employee Equity (Token Grants): Serves as the crypto-native equivalent of traditional stock option vesting.

Contrasts with alternative vesting structures:

• vs. Cliff-Only: Linear provides continuous access after the cliff, not a single bullet payment.
• vs. Graded Vesting: Releases specific percentages at set dates (e.g., 25% yearly) rather than a continuous drip.
• vs. Milestone-Based: Unlocks based on achieved goals (e.g., product launch) rather than purely on elapsed time. Linear vesting is valued for its simplicity and predictability.

A cliff period is an initial lock-up phase where no tokens vest. After the cliff expires, a large initial grant (often a full period's worth) vests, followed by regular linear releases.

• Purpose: Aligns long-term incentives by ensuring a minimum commitment period.
• Example: A 4-year schedule with a 1-year cliff. No tokens vest for the first year, then 25% vests immediately at the 1-year mark, with the remainder vesting linearly over the next 3 years.

The vesting start date (or grant date) is the timestamp from which the vesting schedule's duration is calculated. It is the t=0 point for the cliff and the linear vesting period.

• Fixed vs. Event-Based: Typically a fixed calendar date (e.g., employment start). In DeFi, it can be triggered by an on-chain event like a token generation event (TGE) or governance vote.

The vesting duration is the total length of time over which the entire allocation becomes fully vested. This is the core parameter defining the slope of the linear release.

• Calculation: Determines the per-second or per-block vesting rate. For example, a 1,000 token grant over 4 years vests at a rate of ~0.019 tokens per hour.
• Common Durations: Ranges from months for early contributors to 4+ years for core team and investor allocations.

These are the two key state variables tracked in a vesting contract.

• Unvested Balance: The portion of the total grant not yet released. This amount is typically non-transferable and may be forfeited under certain conditions.
• Vested Balance: The portion that has accrued based on elapsed time. This amount is often held in a separate, claimable balance by the beneficiary.

The sum of unvested and vested balances equals the total grant amount.

Acceleration clauses are contractual provisions that can modify the vesting schedule, causing tokens to vest faster than the original linear timeline.

• Single-Trigger: Typically occurs upon a specific event like a change of control (acquisition).
• Double-Trigger: Requires two events, such as a change of control followed by termination of the beneficiary, to protect both company and employee interests.

These parameters define conditions under which unvested tokens can be reclaimed by the grantor.

• Forfeiture: The loss of right to future unvested tokens. Common triggers include termination for cause or voluntary departure before the cliff.
• Revocation: The active clawback of unvested tokens by the grantor, often enforced via a smart contract's admin functions or multi-sig.
• Good Leaver/Bad Leaver: Policies that define different forfeiture rates based on the circumstances of departure.

Linear vesting releases tokens according to a straight-line function, typically defined by a cliff period (an initial lock-up with no release) followed by a linear release over time. For example, a 4-year vest with a 1-year cliff means no tokens are claimable for the first year, after which 25% vests immediately, and the remaining 75% vests linearly each second for the next 3 years.

A primary security function is to prevent token dumping, where large holders sell their entire allocation immediately upon receipt, which can crash the token's price. By enforcing a gradual release, linear vesting aligns long-term incentives between project teams, investors, and the community, reducing sell-side pressure in early stages.

Smart contract vulnerabilities are a critical risk. Common issues include:

• Logic flaws in the vesting schedule calculation.
• Access control errors allowing unauthorized withdrawals.
• Upgradeability risks if the contract uses proxy patterns.
• Timestamp manipulation if the schedule relies on block timestamps. Audits by reputable firms are essential before deploying a vesting contract.

Secure configuration requires careful setting of these immutable parameters:

• Beneficiary: The address receiving the vested tokens.
• Start Timestamp: The point from which the vesting schedule begins.
• Cliff Duration: The initial lock-up period.
• Vesting Duration: The total period over which tokens vest linearly.
• Revocability: Whether the grantor can cancel unvested tokens (common for team allocations).

For project teams, vesting is a governance and operational tool. Considerations include:

• Tax implications of vesting events, which may create taxable income.
• Multi-sig management of the treasury wallet funding the vesting contract.
• Transparency: Publicly verifiable vesting schedules build community trust.
• Liquidity planning: Ensuring the contract holds sufficient tokens to fulfill all future vesting obligations.

While 'linear' is the base model, variations are common in practice:

• Cliff-then-Linear: The standard model (e.g., 1-year cliff, 3-year linear).
• Fully Linear: No cliff; vesting begins immediately from T=0.
• Stepped Vesting: Releases in discrete chunks (e.g., quarterly), which is simpler but less smooth than true linear. These are often encoded in Token Vesting Smart Contracts on platforms like Ethereum and Solana.

A period at the start of a vesting schedule during which no tokens are released, followed by the commencement of the regular vesting schedule. This is often combined with linear vesting.

• Purpose: Ensures a minimum commitment period before any benefits are received.
• Example: A 1-year grant with a 6-month cliff and 4-year linear vesting means no tokens vest for the first 6 months, then 25% vests immediately, followed by linear vesting of the remaining 75% over the next 3.5 years.

A vesting schedule where tokens are released in discrete, pre-defined chunks or tranches at specific time intervals (e.g., quarterly, annually), rather than continuously.

• Contrast with Linear: While linear vesting is a smooth, continuous function, graded vesting creates a step-function release pattern.
• Common Use: Often used in traditional equity compensation and some token launches where releases are tied to milestone dates.

A provision that causes a portion or all of the remaining unvested tokens to vest immediately upon the occurrence of a specific trigger event.

• Triggers: Common triggers include a change of control (acquisition), termination without cause, or the achievement of a performance milestone.
• Mechanism: This modifies the original linear (or other) schedule, providing security or reward under defined conditions.

The overarching contract or smart contract logic that defines the rules, timing, and conditions under which locked assets become available to a beneficiary.

• Components: It specifies the start date, cliff period, vesting curve (linear, graded), vesting duration, and any acceleration clauses.
• Smart Contract Role: On-chain, this is enforced by a vesting contract that holds the tokens and releases them according to the encoded schedule.

A period during which tokens are completely non-transferable, often applied to early investors or team allocations after a token generation event (TGE).

• Key Difference from Vesting: A lockup is a binary state (locked vs. unlocked), whereas vesting defines a release schedule. Tokens are typically locked until a vesting schedule begins.
• Typical Structure: Team tokens might have a 12-month lockup, followed by a 36-month linear vesting period.

A real-time, continuous vesting model where tokens are accrued on a per-second or per-block basis, providing the most granular and fluid release possible.

• On-Chain Implementation: This is the native form of linear vesting in smart contracts, where the beneficiary's claimable balance updates with every new block.
• Advantage: Eliminates the need for manual claims at discrete intervals; the vested amount is always precisely calculable and available.