Cliff Period
A cliff period is a specific duration within a vesting schedule during which no tokens are released to the recipient. Once the cliff period expires, a portion of the tokens, often a significant chunk, is released at once, followed by a gradual release of the remaining balance.
This structure is designed to ensure that stakeholders remain committed to the project for a minimum period before receiving any liquidity. The end of a cliff period is a high-risk event for token price stability, as it represents a sudden increase in the circulating supply.
Traders often monitor these cliff dates closely to anticipate potential sell pressure and adjust their hedging strategies accordingly. It is a common feature in tokenomics, balancing the need for incentive alignment with the requirement for long-term stakeholder retention.