How Does a Cliff Period Differ from the Overall Vesting Period?
The cliff period is the initial portion of the vesting schedule during which no tokens are released, regardless of time passing. Once the cliff period (e.g.
1 year) is complete, the first batch of tokens is released, and the remaining tokens begin to vest gradually over the subsequent overall vesting period (e.g. 3 more years).
The cliff acts as a mandatory minimum commitment period.
Glossar
Vesting Schedule
Allocation ⎊ The concept of a vesting schedule, particularly within cryptocurrency and decentralized finance (DeFi), fundamentally addresses the phased release of tokens or assets to participants, mitigating risks associated with immediate distribution.
Overall Vesting Period
Schedule ⎊ Overall Vesting Period delineates the predetermined timeframe over which allocated equity, tokens, or other assets become fully accessible to the recipient, a critical component in incentive structures.
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.