Tutorial 50: Vesting

Vesting contracts are widely used in decentralized finance (DeFi) to lock up tokens for a certain period before they can be claimed. These contracts are often employed to distribute tokens to team members, early investors, or community participants in a controlled manner. By doing so, they ensure that tokens are released gradually, aligning the incentives of stakeholders with the long-term success of a project.

However, vesting contracts can introduce significant vulnerabilities if not implemented correctly. Mistakes in the design or coding of vesting contracts can lead to security risks, including premature token release, bypassing of vesting schedules, or improper accounting of vested tokens. Such issues can undermine the integrity of the token distribution process and potentially result in financial losses for the project.

In this section, we will explore common vulnerabilities that arise in vesting contracts, such as:

  • Incorrect timing logic: This can lead to tokens being unlocked earlier than expected or not unlocked at all.

  • Lack of safeguards against reentrancy: If the contract is not properly protected, attackers can exploit reentrancy vulnerabilities to claim more tokens than they should.

  • Improper handling of cliff periods: Cliff periods are meant to delay the initial token release, but poor implementation can allow tokens to be accessed prematurely.

  • Failure to handle edge cases: Situations such as multiple beneficiaries, vesting over different periods, or tokens being transferred mid-vesting need to be handled properly to prevent logic flaws.

This section will help you understand what to look out for when reviewing or building vesting contracts to ensure secure and reliable token distribution.

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