Lockup Period
A lockup period is a set time when certain tokens cannot be sold, transferred, or claimed after a launch, investment, or allocation.
A lockup period is a predetermined stretch of time during which tokens are restricted from being sold, transferred, or sometimes even accessed. It is common in token launches, private sales, team allocations, advisor grants, staking programs, and airdrops. The restriction is usually enforced by smart contracts, vesting contracts, or legal agreements, and it often ends gradually through a vesting schedule rather than all at once.
Lockups matter because they shape token supply and market behavior. By delaying when large holders can sell, a project can reduce immediate sell pressure after launch and better align insiders, investors, and contributors with longer-term development. For example, a founding team might receive tokens that are locked for 12 months, then released monthly over three years. This is similar to employee stock vesting in traditional startups: the assets are promised, but access is spread over time to encourage commitment and make supply changes more predictable.
Other terms in Tokenomics & Launches
Airdrop
A token distribution method where a project sends free tokens to users, often to reward early activity or broaden ownership.
Cliff (Vesting)
A cliff is the initial waiting period in a vesting schedule before any allocated tokens can be unlocked or claimed.
Emission Schedule
A plan that defines how and when new tokens are created, released, or unlocked into circulation.
Fair Launch
A token launch model that aims to give the public equal initial access, with no special early allocations for insiders or private investors.