Cliff Periods

A cliff period is a mandatory waiting phase within a vesting schedule during which no tokens are distributed to the recipient. This acts as a retention mechanism, ensuring that team members or investors remain committed to the project for a minimum duration before gaining access to their rewards.

If a participant leaves the project before the cliff expires, they typically forfeit their entire allocation. This structure is common in startup equity and has been adapted for tokenomics to prevent early-stage contributors from exiting prematurely.

For market participants, the expiration of a cliff period is a significant event that can lead to increased selling pressure as early contributors gain liquidity. Understanding these cliffs is vital for assessing the near-term supply dynamics of a digital asset.