Pay Contributors & Disincentivize Speculation

Eliot Couvat

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Vesting a token means locking a certain amount of tokens over a certain period as a commitment to hold the Token. It's a mechanism that allows the founding team or core contributor to prove they are highly interested in the project.

Having a token over a vesting schedule is an efficient way to protect investors, founders, and collaborators. Indeed, locking a certain amount of Token allows to disincentivize founders and early investors to sell all their tokens with early traction. It also disincentivizes contributors to come only for speculation purposes.

The "Vesting" tool on Coinvise allows you to compensate core community members and set up recurring payments for contributors easily. When the vesting period has been completed, the smart contract created by Coinvise, enforced on a blockchain, will allow the holders to withdraw their tokens.

You can find more info about Vesting Schedule here → What is Vesting Schedule?

Section 1 - How to create a vesting schedule on Coinvise?

Section 2 - Why would I want to create a vesting schedule?

Section 3 - Things to know before creating a vesting schedule

Section 4 - The Culture DAO and the case for Vesting a token

1 - How to create a vesting schedule on Coinvise?

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Note: Before starting, make sure to have a Crypto Wallet and enough Ethereum ($ETH) to pay for the transactions (there are some network fees associated with creating a vesting schedule).

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Go on Coinvise.co and click the Create Token button.

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Click the connect "Wallet button" and follow the instruction. If you don't have a Wallet or don't know how to connect it, here's a complete tutorial.

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Go to “Airdrop”, then click on the "Vest tokens" button as highlighted below.

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Select the Token you want to vest, the number of token you want to vest, the vesting period and the cliff.
Here’s where it becomes interesting. 1. Select the Token you want to vest. 2. Write the number of tokens you want to vest. 3. Select the vesting period and the cliff. Note: The "Cliff" is the time before the vesting period starts. The vesting period represents the time during which the token will be unlock linearly. For example, for 120 tokens with a 6 months cliff & a 6 months vesting period, the recipient will receive no tokens for 6 months, then receive 20 tokens/month during 6 months.
4. Add the address that will receive the vest.
Note: Currently we only support vesting for single user/recipients. You need to create multiple vests for multiple persons.

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You can also add a description to explain the recipient why the tokens are vested. Accept the terms and click on “Create”.

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You're all set. You now have vested your tokens, congrats. 🎉
Note: If you want to see your current vests, you can go on Dashboard > Manage > Vests. You can also click on details to see more details about a specific vest as shown in the second image below.

2 - Why would I want to create a vesting schedule?

The "Lockup" tool allows users to:

Compensating core community members
Set up recurring payments for contributors
Ensure the long-term commitment of contributors

3 - Things to know before creating a vesting schedule

Before creating a vesting schedule, make sure to understand what this is all about. You can find more info about Vesting Schedule here → What is Vesting Schedule?

Creating a vesting schedule makes more sense to pay (or reward) core contributors, those who will generally stay over the long term. The concept of creating a vesting schedule is to incentivize contributors to stay long enough to unlock their pay. It disincentivize them to simply come work for the DAO, get a huge amount of token and withdraw them right away. While this process incentivizes anyone to stay, as it will be executed through an automated smart contract, we still suggest you create a vesting schedule only for core contributors and pay other contributors or bounty hunters manually.

Creating a vesting schedule is also helpful to keep the power centralized until the community is strong enough to be decentralized. Indeed, when rewarding a community through Tokens, it's better if the core team managed the token supply and transactions and kept the voting power centralized. By doing so, they'll have a firmer grasp of the token prices and will be able to build a strong and sustainable community.

4 - The Culture DAO and the case for Vesting a token

Because we've always understood onboarding the next million individuals in crypto will only be possible through education and seamless user experience, we're building daily new easy-to-use tools and creating content on how to use them.

Vesting Schedule is an essential feature that allows community leaders to pay their contributors while disincentivizing speculation. By vesting (meaning blocking for a certain time) their token, community leaders also prove their commitment for the long-term to members. Let’s dig deeper into how CulturDAO leveraged the Vesting feature on Coinvise to create a thriving community.

Learn more about how CulturDAO leveraged the Airdrop tool to become a thriving community.

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