What Is a “Lock-up Period” in the Context of Token Vesting?

A lock-up period is a predetermined duration immediately following the token generation event (TGE) or public sale during which a specific group's tokens, such as those allocated to the team or early investors, are completely restricted from being sold or transferred. This period is the initial phase of the vesting schedule where no tokens are released.

Its purpose is to prevent an immediate large-scale sell-off by insiders, which could crash the token price, thereby protecting early investors and demonstrating long-term commitment. It is a critical component of a responsible token distribution model.