Token Lockup

A token lockup is a restriction imposed on specific addresses or accounts that prevents the transfer or sale of digital assets for a set duration. Unlike vesting, which implies a gradual release, a lockup often restricts the entire amount of tokens until the expiration date.

This is frequently used during initial coin offerings or private sales to prevent early investors from selling their positions immediately upon the token launch. By limiting circulating supply, lockups help manage price discovery and reduce immediate selling pressure.

These restrictions are technically enforced via smart contracts that verify the current block height or timestamp against the unlock date. Lockups are a vital component of tokenomics design to ensure market stability during the early phases of a project.

They help prevent market manipulation by insiders.