Cliff (Vesting)

What Is a Cliff in Token Vesting?

A cliff is the waiting period before any vesting begins. During the cliff, tokens are allocated to the recipient but remain completely locked — zero tokens can be accessed or sold. When the cliff expires, the tokens that would have vested during that period become available all at once. For example, in a "6-month cliff, 24-month linear vesting" schedule, an investor receives nothing for 6 months, then receives 25% of their allocation (6 months worth) on the cliff date, followed by equal monthly installments over the remaining 18 months.

Why Cliffs Exist

Cliffs serve multiple purposes. They prevent team members and investors from selling immediately after a token launch, which would crash the price and undermine community confidence. They ensure that insiders have "skin in the game" for a meaningful period. They also create a natural alignment between insider financial interests and the project's success during its most critical early months.

Without cliffs, early investors who purchased tokens at heavy discounts could sell at the token generation event, profiting immediately while retail buyers absorb the selling pressure. Cliffs force insiders to wait alongside the community.

Cliff Impact on Price

The end of a cliff period is one of the most significant supply events for a token. The first cliff expiry for team and investor tokens can release 10-25% of total supply in a single event. Markets often price in this event in advance — tokens may decline in the weeks leading up to a major cliff expiry as traders anticipate selling pressure. Post-cliff, prices may stabilize once the initial wave of selling is absorbed and the market adjusts to a higher circulating supply.