Article No: 8
Date:19/10/22
Topic: Whether vesting should apply only to investors or should also extend to funds raised by the project team
Hi everyone for today our topic funds discussion, we are looking at whether vesting should apply only to investors or should also extend to funds raised by the group's team.
Vesting simply means locking up your token or fund, and releasing them to you in pieces, either monthly, quarterly, etc. To prevent you from dumping it all or running away with the funds if they were given to you all at once. It is a common practice in presales.
💡 Vesting is a practice used to ensure the gradual release of tokens or funds to individuals or groups based on preset duration or agreed milestones.
Many believe that vesting should be two-way. This means that both the bought token by the investor and the fund raised by the team should be vested to ensure adequate security. They think that the team fund should be released gradually after investors that participate in its presale have accessed it, and agreed that they are meeting up with tasks and milestones in their roadmap.
Well, it’s beneficial for the project to engage or practice the 2WayVesting as that will even guide the token from the rapid dump, that is if it’s a project with great potential.
And most times, it is often one-way, after the project raised funds, they are given all the amount they raised at once so that they can start the project. But investor tokens are locked up and released gradually over a long period. Sometimes, it could be up to 36 months.
But for a 2wayvesting, both project fund, and investors token are vested.
Some launchpads are fully decentralized and do not interfere in any way with the raised fund. Team funds are accessible all to them once sales end.
However, the question is not about whether it is still in practice.
It is about which of the practice you like or prefer. Which of them do you think benefits a project or its investors the more?
The problem with these vestings is that the point of raising these funds is so that the team could have something to keep building the project and moving forward, but if they are all vested how would that be done?
🤔 Do you think that withholding the funds raised by a project during presale and releasing them in bits based on its investor agreement could fund a lack of funds for the team which could hamper project development?
❔Should the investor's tokens and team fund both be vested and do you think that 2WayVesting is more beneficial for both a project and investors?
❓Does project's the project more secure by preventing developers the s running away with raised funds does it hamper a project development due to limited funds released to the project team at a particular time?
Thanks for reading this article!
