How VestingTokens work

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Wrapping mechanism

Vesting tokens are ERC20 tokens that represent a claim to your project’s native tokens. These native tokens are locked until the vesting period is complete.

While vestingTokens can be transferred, they have a different ERC20 address than the native tokens and cannot be used on exchanges like Uniswap or in applications that require the native tokens. To access the underlying tokens, users must burn their vestingTokens as the vesting schedule allows.

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Claiming

As tokens vest, the amount of vestingTokens that can be burned to get unlocked tokens increases. This allows Unvest to support linear vesting schedules, meaning you can claim at any time, and the vestingToken smart contract will burn the correct number of vesting tokens.

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Transfers

VestingTokens can be transferred between users while maintaining accurate claimable balances, preventing users from bypassing the vesting schedule by transferring the tokens between wallets.

VestingTokens can be bought, sold, and transferred like any other ERC20 token, with a 2.5% protocol transfer fee being routed to the Unvest DAO with every transfer. This fee can be waived for all transfers of a given token with a one-time payment of UNV tokens, which unlocks additional use cases for VestingTokens.

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Benefits

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Invisible to users

The Investor Dashboard and claim page of Unvest have been designed to provide an easy-to-use experience for users, regardless of their level of technical expertise. Regular users do not need to understand the underlying vestingToken technology, as they can simply claim their tokens as they vest. However, as vestingTokens follow the ERC20 standard, more advanced users can interact with them and trade them on secondary markets.

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Gas efficient

Using vestingTokens to distribute both locked and unlocked tokens can help you save on gas costs, especially on high cost networks like Ethereum. The vestingToken smart contracts have been designed for optimal gas efficiency.

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Composabiltiy

Composability refers to the ability of different software components to work together in a seamless and interoperable manner. In the context of vestingTokens, this means that they can be easily integrated into other applications and protocols, allowing for a wide range of possibilities for their use. For example, vestingTokens could be used as collateral in a decentralized lending platform, or as rewards in a staking pool.

Because vestingTokens follow the ERC20 standard, they can be easily integrated into other Defi protocols and applications, making them highly versatile and useful in a wide range of contexts.

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Token economics

Users can sell their locked tokens on OTC markets at a higher price than their initial entry price. When these tokens eventually unlock, the floor price (corresponding to the initial entry price) will be higher, potentially reducing sell pressure.

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Migration

Migrating vested allocations of tokens between networks or to updated token contracts is made easier with vesting tokens, as they include built in chain-migration and token-migration features. This is in contrast to alternative methods, which may be more complex in the event of migrations or hacks.