After the crypto project officially launches and the coin/token is listed in several exchanges, it’s common to see the early investors or even the project’s team selling the holding, triggering a massive drop in prices, ruining the project’s value. Token vesting refers to locking up the project’s token for a specified time to prevent a massive sell-off that leads to huge drops in price.

Reverse vesting allows investors and teams to sell off their tokens without affecting the overall token price or economy. It ensures that project teams and founders stay committed to the project for a further 2 more years before getting all their tokens. Only employees with real need for cash can sell their tokens.

Reverse vesting prevents market pump and dump and enhances the token’s market value by ensuring people are holding tokens rather than spending constantly. Remember, a decreased supply with high demand equates to increasing prices.

Unlike reverse liquidity, investors/teams have the option of selling all their tokens once they are periodically released. For instance, founders may sell out all their tokens after full release in the 2nd year and exit the project leading to a massive price drop and disrupting the project. As such, normal vesting is not as effective as reverse vesting as it’s still susceptible to pump and dump, only that it takes a while to dump the tokens.

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