How Does a Cliff Vesting Period Differ from Linear Vesting in Terms of Market Impact?

A cliff vesting period releases a large block of tokens all at once after a set time (the cliff), leading to a sudden, concentrated supply shock that can cause significant, short-term price volatility. Linear vesting releases tokens gradually over a period, leading to a more predictable and steady increase in circulating supply, which generally results in less severe, drawn-out selling pressure.

The cliff period poses a higher immediate market risk.