Vesting and token unlocks describe how part of a TokenTokenA digital asset created with a smart contract on another cryptocurrency's blockchain, rather than on a blockchain of its own.'s supply is locked for a set period and then released gradually on a schedule decided in advance. Most often it is the share held by founders, staff and investors that is locked this way. The schedule is part of the project's TokenomicsTokenomicsThe rules for a cryptocurrency's or token's supply, issuance and distribution, and what it is used for..
How does it work?
A common setup looks like this:
- A cliff. Nothing is released for the first year, or some other set period.
- Linear vesting. After the cliff, a fixed share is released each month, for example over three years.
- One-off unlocks. Some projects release a large share on a single day.
Companies use something similar, where staff earn their share options over several years. The purpose is the same: the people building the project should benefit if it does well in the long run, but can't sell everything straight away.
Why does it matter?
When tokens unlock, they are added to the circulating supplyCirculating supplyHow many units of a cryptocurrency already exist and are in holders' hands, the figure used to calculate its market capitalisation.. If the people receiving them want to sell, and demand doesn't grow to match, the price can fall. Large unlocks are therefore usually announced in advance and watched closely.
The gap between circulating supply and total supplyTotal supplyHow many units of a cryptocurrency already exist, whether in circulation or still locked, minus any that have been destroyed. shows how much is still to be released. If only a small share is in circulation, the market capMarket capitalisationThe total value of all units of a coin in circulation, calculated as the price of one unit times the number of units. can give a misleading picture, because it only counts what is circulating. The fully diluted valuation (FDV) includes every unit.
Bitcoin has no locked supply like this. No founders or investors received a share in advance, and all new bitcoin is created as a reward for mining.
A new token's unlock schedule is often set out in the project's whitepaper, and crypto data websites publish calendars of upcoming unlocks.
Everything in Myntkaup Learn is written and regularly reviewed by the Myntkaup editorial team. It is for education and is not investment advice. Editorial policy. Updated 2 November 2026.