Initial Coin Offering Lockups

Initial Coin Offering lockups are restrictive periods during which early investors or team members are prohibited from selling their allocated tokens. These lockups are implemented to prevent immediate market dumping, which could severely damage the project's price discovery and reputation.

By phasing the release of tokens over months or years, the project ensures that those with significant holdings remain committed to the long-term success of the protocol. This mechanism aligns the incentives of insiders with those of the broader community, as everyone benefits from a stable and growing ecosystem.

Investors analyze these lockup schedules to identify potential sell-side pressure events, often referred to as token unlocks, which can lead to temporary price volatility.