What is dressing?

One of the concepts that we usually see in cryptocurrency and token projects that are under development is vesting. This concept refers to a vesting period, in which tokens, cryptocurrencies or NFTs (depending on the nature of the project), are blocked.

This blocking period usually begins after the pre-sale phase (either through a ICO, IEO or any other form of advance sale) and is applied for a period of time and under conditions that are generally defined in detail in the whitepaper of the project.

Utility and operation of vesting

The main reason to apply vesting in a crypto project is to maintain a tokenomics healthy that facilitates project value development. But to understand this more clearly, you need to know how vesting works in the first place.

The vesting process in cryptocurrency projects seeks to make the acquisitions made during a pre-sale period spread evenly over a period of time prudent (which can be months or even years) for its proper development. In this way, it is intended limit the circulation of a token/cryptocurrency in the market, preventing its massive trade from collapsing the value of that token/cryptocurrency, which could threaten its economic development.

Basically, vesting is a way of protecting projects against a pump and dump strategy, in which certain players could buy the token in the pre-sale phase, cause the price to rise rapidly, and then flood the market with said tokens, walking away with their profits while the rest are left at a loss.

Types of clothing

Now, vesting can be applied to a project using different strategies or types, as they are commonly known. These are the most common:

linear dressing

When we talk about linear vesting, we are dealing with a strategy that releases tokens/cryptocurrencies/NFTs during a period of time and for a well-defined and regular amount.

For example, if a project pre-sale 1 million tokens and has proposed a monthly vesting of 10%, it means that during the 10 months following the pre-sale, 10% of that million tokens will be released. until 100% release is achieved.

Projects like MINA or Stargate Finance use this vesting scheme for their releases. In fact, in the following image you can see the linear vesting scheme of Stargate Finance.

gradual dressing

Gradual vesting is a modification of linear vesting. The idea is that buyers can access parts of your purchase in times that may vary, but which in turn can increase or decrease the allocation of tokens/cryptocurrencies.

For example, suppose a cryptocurrency project has launched an ICO with 100 million tokens, and these will be released under the following proposal:

1. 5% of these tokens will be released 3 months after the presale.
2. 10% of the tokens will be released 6 months after the last release. At this point, there is already a cumulative of 15% and a cumulative time of 9 months.
3. 35% will be released after 1 year from the last release. The accumulated in this case reaches 50% and the time elapsed is 1 year and 9 months from the ICO.
4. The other 50% is released in two equal parts (25%) that occur with a 1 year difference between one and the other. At the end of this period, 100% of the tokens would have been released and 3 years and 9 months would have passed since the pre-sale.

This model is quite common in cryptocurrency projects with a long term vision. A good example is Year Finance, which scheduled its release with a gradual vesting scheme that affected its treasury managers and main contributors to the project.

Cliff Vesting

Cliff vesting is by far one of the most used schemes within the crypto ecosystem. As its name suggests, cliff vesting is a sudden release of tokens within the ecosystem, which can be followed by a gradual or linear release of them.

Projects like LIDO, Tornado Cash, Galxe, LooksRare, Sandbox or Hop Protocol use this type of vesting for their projects. In the following image, you can also see an example of this type of scheme, this time used by APE Coin or APE Token.

Advantages of dressing

Estos son los de algunos expected benefits that vesting offers to projects that use it as a tokenomic strategy:

1. Protects token holders from large price fluctuations, since early investors will have to wait a specific period before they can sell their assets.
2. Locking tokens allows time for develop and launch a product, especially if there is no prototype yet.
3. Allows those interested in the project, assess your progress and decide if they want to keep their tokens or exchange them for another cryptocurrency.

As you can see, vesting is a very useful resource for projects and users. If you want to know more about the vesting strategies that apply to each project, a good resource for that information is TokenUnlocks.

B2M vesting

Now that we know what it is, how it works and the types of vesting that exist, let's analyze the vesting dynamics applied to the token. B2M. A quick analysis of the B2M white paper offers us a graph as relevant as the following:

A look at the graph puts us in the situation: B2M is planned to be released using a strategy of cliff vesting. The idea is add some level of liquidity and circulation of tokens, so that it begins to have the expected utility and is operated by those who have been interested in its acquisition. Thus, let us remember that this release or vesting initially applies to:

1. Private sale (subject to 6 months of blocking from July 1, 2021 and with an end of lock-up on January 1, 2022). The release of the tokens of this phase will take place over 6 months in equal parts.
2. public sale. It is divided into Phases I to III, which were subject to blocking from the end of the Phase III offer and with a staggered unlocking. In fact, it's unlock was done using this strategy:
   1. Phase III, with a single lock and release 1 month later of the realization of Phase III.
   2. Phase II, with a block of three months and a monthly phased release which began on January 1, 2022 (end of Phase II lock-up).
   3. Finally Phase I, with a six-month lock-up and a monthly gradual release that began on April 1, 2022 (end of Phase I lock-up).
3. In this way, the vesting of the Public Sale ended in September 2022, releasing with it the 25% of all B2M supply. In addition to the 10% assigned from the private sale that would be released from January 2022 to June 2022.

The rest of the vesting that is seen in the graph corresponds to the tokens that were assigned to different functions within the token ecosystem. For example, Reserves (30% of Supply) are being released according to the schedule and graph shown above (full release by September 2023). In addition to the Advisors categories, R&D (Research and Development) join this release schedule that will end in October 2024, leaving the 5 billion tokens distributed respecting the graph given in the white paper.