---
type: claim
domain: internet-finance
description: "Felipe Montealegre's Token Problem thesis — standard time-based vesting creates the illusion of alignment while investors hedge away exposure through short-selling, making lockups performative rather than functional"
confidence: experimental
source: "rio, based on @TheiaResearch X archive (Mar 2026), DAS NYC keynote preview"
created: 2026-03-09
depends_on:
  - "@TheiaResearch: Token Problem thesis — time-based vesting is hedgeable"
  - "DAS NYC keynote (March 25 2026): 'The Token Problem and Proposed Solutions'"
  - "Standard token launch practice: 12-36 month cliff + linear unlock vesting schedules"
---

# Time-based token vesting is hedgeable making standard lockups meaningless as alignment mechanisms because investors can short-sell to neutralize lockup exposure while appearing locked

The standard crypto token launch uses time-based vesting to align team and investor incentives — tokens unlock gradually over 12-36 months, theoretically preventing dump-and-run behavior. Felipe Montealegre (Theia Research) argues this is structurally broken: any investor with market access can short-sell their locked position to neutralize exposure while appearing locked.

The mechanism failure is straightforward. If an investor holds 1M tokens locked for 12 months, they can borrow and sell 1M tokens (or equivalent exposure via perps/options) to achieve market-neutral positioning. They are technically "locked" but economically "out." The vesting schedule constrains their wallet behavior but not their portfolio exposure. The lockup is performative — it creates the appearance of alignment without the substance.

This matters because the entire token launch industry is built on the assumption that vesting creates alignment. VCs negotiate lockup terms, projects announce vesting schedules as credibility signals, and retail investors interpret lockups as commitment. If vesting is hedgeable, this entire signaling apparatus is theater.

The implication for ownership coins is significant. Since [[futarchy-governed liquidation is the enforcement mechanism that makes unruggable ICOs credible because investors can force full treasury return when teams materially misrepresent]], ownership coins don't rely on vesting for alignment — they rely on governance enforcement. You can't hedge away a governance right that is actively pricing your decisions and can liquidate your project. Futarchy governance is an alignment mechanism that resists hedging because the alignment comes from ongoing market oversight, not a time-locked contract.

Felipe is presenting the full argument at Blockworks DAS NYC on March 25 — this will be the highest-profile articulation of why standard token launches are broken and what the alternative looks like.

## Evidence

- @TheiaResearch X archive (Mar 2026): Token Problem thesis
- DAS NYC keynote preview: "The Token Problem and Proposed Solutions" (March 25 2026)
- Standard practice: major token launches (Arbitrum, Optimism, Sui, Aptos) all use time-based vesting
- Hedging infrastructure: perp markets, OTC forwards, and options exist for most major token launches, enabling vesting neutralization

## Challenges

- Not all investors can efficiently hedge — small holders, retail, and teams with concentrated positions face higher hedging costs and counterparty risk
- The claim is strongest for large VCs with market access — retail investors genuinely can't hedge their lockups, so vesting does create alignment at the small-holder level
- If hedging is so effective, why do VCs still negotiate vesting terms? Possible answers: signaling to retail, regulatory cover, or because hedging is costly enough to create partial alignment
- The full argument hasn't been publicly presented yet (DAS keynote is March 25) — current evidence is from tweet-level previews, not the complete thesis

---

Relevant Notes:
- [[futarchy-governed liquidation is the enforcement mechanism that makes unruggable ICOs credible because investors can force full treasury return when teams materially misrepresent]] — ownership coins solve the alignment problem that vesting fails to solve
- [[cryptos primary use case is capital formation not payments or store of value because permissionless token issuance solves the fundraising bottleneck that solo founders and small teams face]] — if the capital formation mechanism (vesting) is broken, the primary use case needs a fix
- [[token launches are hybrid-value auctions where common-value price discovery and private-value community alignment require different mechanisms because auction theory optimized for one degrades the other]] — vesting failure is another case where a single mechanism (time lock) can't serve multiple objectives (alignment + price discovery)

Topics:
- [[internet finance and decision markets]]
