A vesting schedule is the timeline that decides when equity or tokens you have been promised actually become yours, and startups and crypto projects use nearly the same structure to very different ends.
Ask anyone who just signed an offer letter at a startup, or bought a token before its "TGE," and they'll tell you the number that actually matters isn't the headline grant. It's the schedule. What is a vesting schedule? It's the timeline that decides when equity or tokens you've been promised actually become yours, and in both startups and crypto, getting that timeline wrong is how people end up owning far less than they thought.
The mechanics look almost identical on paper. You're granted a chunk of equity or tokens. You don't own all of it immediately. Instead it releases over a set period, and if you leave, get fired, or the project collapses before that period ends, you walk away with whatever vested and nothing else. That's the whole idea in one sentence. Everything else is detail, and the detail is where startup equity and crypto tokens start to look very different from each other.
In startup equity, the default is remarkably uniform: four years total, with a one year cliff. Nothing vests for the first twelve months. Hit the one year mark and 25% of your grant vests all at once. After that, the remaining 75% vests monthly, in equal chunks, for the next three years. Carta, the cap table software company that now tracks equity for a large share of venture-backed startups, has published data for years showing this exact structure as the overwhelming default across its client base. It isn't law. It's convention, inherited largely from early Silicon Valley practice and cemented by how standard Y Combinator's own template documents made it for a generation of founders.
The cliff exists for a blunt reason: it stops someone from joining, doing nothing useful, and leaving three months later with a slice of ownership. Founders themselves usually vest on the same schedule, sometimes with credit for time already worked before the vesting agreement was signed, a practice known as reverse vesting since the founder technically already owns the shares and is agreeing to earn back the right to keep them. Some companies now offer monthly vesting from day one with no cliff, particularly for senior hires who negotiate it, but the four year, one year cliff structure remains what a new hire should assume until told otherwise.
Not every company sticks to the even 25% a year split, either. Amazon's RSU vesting schedule is famously back-loaded: 5% in year one, 15% in year two, then 40% and 40% in years three and four. A new hire comparing a $200,000 Amazon offer against a startup's evenly vesting equivalent needs to know that most of the Amazon grant's value doesn't show up until year three, not spread evenly like the standard startup model implies.
If your grant includes stock options rather than RSUs, there's a second clock running alongside the vesting schedule that catches almost everyone off guard: the 83(b) election. File it within 30 days of an early exercise and you lock in today's low valuation for tax purposes. Miss the window and there's no fixing it later, cliff or no cliff. It's a separate mechanism from vesting, but it moves on a deadline just as unforgiving.
Acquisitions add another wrinkle. Many offer letters now include "double trigger" acceleration, meaning your unvested shares only speed up if the company is acquired and you're also let go or your role changes materially within a set window afterward. Without that second trigger, an acquirer can absorb the company and simply let your original four year clock keep ticking under new ownership, cliff intact.
Token vesting explained: crypto copied the model, then broke it
Token vesting works on the same skeleton, applied to a very different animal. Instead of one company deciding when your equity unlocks, a crypto project sets a public, on-chain schedule for when team tokens, investor allocations, and advisor grants unlock, and that schedule is usually visible to anyone before they buy in. Uniswap's UNI token, launched in September 2020, is a clean example: team and investor allocations vested over four years through an on-chain TreasuryVester contract, mirroring startup equity almost exactly, while a portion of tokens went straight to users through the retroactive airdrop with no vesting at all.
That's the crucial difference. A crypto token unlock schedule doesn't just govern who gets paid. It governs the entire circulating supply of the asset, and every unlock is a potential wave of new sell pressure hitting a market that has nowhere to hide. When Arbitrum unlocked roughly 1.1 billion ARB tokens in March 2024, over 90% of them earmarked for the team and early backers, the token dropped sharply in the days around the release as the market priced in the incoming supply. Aptos saw something similar in January 2023, when its first major unlock coincided with a steep price decline, and Axie Infinity's AXS token went through repeated bouts of the same pattern through 2022 as staking rewards and team allocations unlocked on a fixed monthly cadence. Neither event was a scandal. Both schedules had been public since launch. The people caught off guard were the ones who never checked the calendar.
That's the part startup equity doesn't have to deal with. A startup's cap table isn't public, and a departing employee's unvested shares don't crater the company's valuation on the day they'd have unlocked. A token's unlock schedule is printed for the whole market to read, and sophisticated traders read it closely. Sites like Token Unlocks and DefiLlama's unlock tracker exist specifically because retail investors kept getting blindsided by cliffs they never checked, and market makers routinely position ahead of large scheduled unlocks precisely because the date and size are known in advance.
Why the unlock date is the number that matters
For an employee evaluating a startup offer, the cliff protects the employer. For a crypto investor evaluating a token, the unlock calendar protects them, if they actually look at it. Before buying into any token, the question worth asking isn't just how much is vested now but how much unlocks next month, and who's holding it. FTX and Alameda Research's collapse in November 2022 is the extreme version of this lesson: large, concentrated token holdings tied to insiders with vesting cliffs became a systemic risk the moment the entities holding them needed cash, and the unwind dragged down prices across tokens Alameda held large positions in.
Cliff vesting in startup equity and crypto token vesting solve the same underlying problem, keeping people committed past the point where walking away is easy, but they protect different parties. A startup's cliff is a retention tool aimed inward, at the team. A token's vesting schedule is a market signal aimed outward, at everyone who might buy the asset. If you're joining a startup, read your grant agreement and know your cliff date, your exercise window, and whether your acceleration is single or double trigger before you negotiate anything else. If you're buying a token, pull up its unlock schedule before you check its chart. Both numbers tell you when the promise you were given actually becomes real.
Also read: How Vesting Schedules Work for Startup Founders and Employees and How to Negotiate Yours • SaaS Customer Segmentation Is the Lever Most Founders Pull Too Late • How to Build a Startup Financial Model That Doesn't Lie
