Token Lockup

Token lockup, also known as a vesting period, denotes a specific timeframe during which users are restricted from trading, selling, or transferring a set of cryptocurrency tokens. Implementing a lockup mechanism helps prevent investors who participated in an Initial Coin Offering (ICO) from quickly selling their assets for immediate profits when the market becomes active. Lockups are designed to manage sell-side pressure on an asset, avoiding sudden selloffs. They can also release predetermined amounts of tokens according to a predefined schedule, ensuring a controlled and gradual distribution.