How Does a ‘Cliff’ Mechanism Work in a Vesting Schedule?
A 'cliff' is an initial period within a vesting schedule, often 6 or 12 months, during which no tokens are vested or released, even if the team member or investor is technically vesting. Only once the cliff period is complete does the first batch of tokens unlock, and the regular vesting schedule begins.
It ensures that recipients remain committed for a minimum period.
Glossar
Regular Vesting Schedule
Schedule ⎊ A regular vesting schedule defines the predictable, time-based plan for the phased release of restricted tokens or equity to designated recipients, typically following an initial cliff period.
Cliff Period
Trigger ⎊ A Cliff Period, within cryptocurrency derivatives, denotes a predetermined point in time or price level where a substantial, often linear, vesting of tokens or options occurs.