Understanding Vesting

Vesting means that the asset you are selling will be incrementally released to the buyer over the duration of the vesting period you enter.

This is similar to when people participate in ICOs. In an ICO, sometimes the token issuer applies a vesting schedule to the tokens you buy, which is normally a reflection of how early you were in the ICO and the quantity you purchased.

As a general rule of thumb, if you are very early in an ICO (buying at a discount rate compared with if you were to buy later) and purchase a large number of tokens, you might be subject to a vesting schedule of several months or more. In contrast, if you are late to the ICO and only purchase a small number of tokens, there probably won't be any vesting applied.

In short, vesting is typically used by token issuers to ensure that a large number of tokens don't suddenly enter the market (and get sold) when the token is very new and still building up momentum. Why? Because selling a large number of tokens when a market is very new and yet to establish good trading volume and liquidity can be very detrimental to the price, i.e., push it down considerably.

The reason we provide a vesting setting is the same, it can be very advantageous to token issues and large holders who want to sell tokens but reduce the risk of causing a price crash.

Vesting Schedule

Vesting doesn´t affect you as the maker of an offer, you will receive the total quantity they paid right away - the proceeds will go to your wallet.

However, it does affect the buyer (and potentially, the token market) so if you choose to use the vesting setting it´s worth being tactical.

When to use Vesting?

You can use the vesting setting for any asset, and enter as many days as you like. However, its worth considering the following points before using the vesting setting so as to ensure your offer is attractive to other traders.

Before using the vesting setting, it would be wise to ask yourself the following question:

Does the asset you are selling have a highly liquid market? i.e., it is listed on multiple exchanges and has decent order book depth and trading volume?

If it is highly liquid and you only intend to sell a small amount, then applying vesting is probably not the best move.

If it is highly liquid and you intend to sell a very large amount, then it might be tactical to apply a vesting schedule. In this case, you might also consider using the “Discounts & Premiums” setting - learn more about this below.

If it is NOT highly liquid, i.e., it is difficult to buy elsewhere without affecting the price, then you might want to consider using the vesting setting, especially if the asset you are selling is quite new and/or the amount you intend to sell is substantial in comparison to the total market cap.

In this case you might also consider using the “Discounts & Premiums” setting - learn more about this below.