Token Vesting & Unlock Schedules

Not All the Tokens Exist Yet

When a crypto project launches, it usually doesn't release all its tokens at once. Instead, large portions are allocated to the team, early investors, the treasury, and the community, but locked up and released gradually over months or years according to a vesting schedule. Vesting means tokens are earned or unlocked over time rather than being immediately available — a concept borrowed from traditional startup equity, where founders and employees vest their shares over several years. The purpose is alignment: locking up insiders' tokens is meant to stop the team and early investors from dumping everything immediately and to keep them committed to building long-term value. So at any given moment, many of a project's tokens may exist in principle but not yet be freely tradable.

Circulating vs Fully Diluted

This creates a crucial distinction that trips up many newcomers. Circulating supply is the tokens actually available and trading right now. Fully diluted supply (or fully diluted valuation, FDV) accounts for all tokens that will eventually exist, including the locked ones not yet released. These can differ enormously: a token might have a modest-looking price and market cap based on its small circulating supply, while a huge number of locked tokens are scheduled to unlock later. When those locked tokens eventually hit the market, they increase the available supply — which, all else equal, is selling pressure. So understanding a token means looking not just at what's circulating today, but at how many tokens are locked, and when they're scheduled to unlock — because the future supply matters as much as the present.

• Projects usually lock up team/investor/treasury tokens and release them gradually (vesting)
• Vesting is meant to align insiders long-term and prevent immediate dumping
• Circulating supply = tradable now; fully diluted = all tokens that will ever exist
• Locked tokens unlocking later add to supply — this matters as much as today's price