How Does a “Cliff” Period Affect a Token Vesting Schedule?
A cliff period is an initial duration, typically six to twelve months, during which no tokens are released to the recipient, even if they continue to contribute to the DAO. Once the cliff period is successfully completed, the recipient receives the tokens accrued up to that point (the "cliff drop"), and the regular linear vesting schedule begins thereafter.
The cliff serves as a crucial mechanism to ensure long-term commitment before any significant token distribution occurs.
Glossar
Cliff Period
Trigger ⎊ The ‘Cliff Period’ within cryptocurrency derivatives, particularly options, denotes a timeframe immediately preceding a significant event ⎊ expiration, vesting, or a scheduled parameter adjustment ⎊ where delta, gamma, and theta exhibit heightened sensitivity.
Linear Vesting Schedule
Allocation ⎊ A linear vesting schedule, within cryptocurrency and derivative markets, dictates the phased release of tokens or equity over a predetermined period, typically employed to align incentives between project teams and stakeholders.
Token Vesting
Schedule ⎊ Token vesting, within cryptocurrency and derivative markets, represents a predetermined release of assets ⎊ typically tokens ⎊ over a defined period, aligning incentives between project teams, investors, and stakeholders.