https://public.flourish.studio/visualisation/13964128/

Why a Vesting Schedule is important?

*In the world of cryptocurrency, a vesting schedule refers to the timeline over which tokens are distributed to investors, team members, or other stakeholders. This schedule is crucial for a number of reasons, but one of its most important roles is to maintain consistent buy pressure and prevent excessive sell pressure on the token. But why is this?*

Mitigating Sell Pressure

A vesting schedule prevents tokens from being unexpectedly flooded into the market in significant numbers. Sell pressure is the term for the phenomena that occurs when sizable sections of a token's entire supply become available and are sold off all at once. If the sell-off is severe enough, this might cause a market crash.

Encouraging Long-term Commitment

Vesting schedules encourage a long-term commitment to the project. Whether tokens are allocated to team members, investors, or partners, the fact that these tokens will only be fully available over a certain period encourages holders to think long-term. This mentality aligns with the project's goals and discourages speculative short-term trading.

Maintaining Buy Pressure

Vesting schedules help to maintain buy pressure by limiting the availability of tokens on the open market. With fewer tokens available for sale, the demand for buying tokens remains high. This steady demand can support and potentially increase the token's price over time.

For instance, in the case of the SMY token, careful consideration has been given to the allocation and vesting schedule. This balance helps maintain a steady buy pressure, minimizes sell pressure, and ensures the sustainability of the SMY token price.