What Happens If a Token Price Drops below the Initial Investment Price after the Cliff?

If the token price drops below the initial investment price after the cliff, the tokens released at that point are considered "underwater" or at a loss relative to the initial investment cost. The investor is incentivized to hold the remaining vested tokens, hoping the price recovers, or sell at a loss to minimize exposure.

This scenario often signals a fundamental problem with the project's valuation or execution.