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How do you structure vesting schedules for ICO founders?

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  • How do you structure vesting schedules for ICO founders?

    In ICO development, implementing solid vesting structures is crucial to align long-term incentives and prevent early token sell-offs. A standard vesting schedule starts with a cliff period (e.g., 6 months) where no tokens are released, followed by gradual vesting monthly or quarterly over a span of 2 to 4 years. For instance, founders may unlock 25% of their tokens after the 6-month cliff, with the remaining 75% distributed monthly over the next 30 months. This structure ensures team commitment and minimizes the risk of token dumps that can destabilize the market. Always use smart contract timelocks to automate vesting schedules never depend on off-chain agreements. A linear monthly unlocking mechanism provides smoother token release and helps manage market supply efficiently. Incorporate a burn or clawback clause to handle cases where a founder exits early or fails to meet performance expectations. All vesting logic should be coded into transparent, auditable smart contracts to maintain credibility. Clearly communicate these details in your ICO whitepaper and token distribution dashboard. By integrating secure and transparent vesting mechanisms during ICO development, you not only reinforce team accountability but also boost investor confidence and reduce post-launch market volatility.
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