A cliff period is the initial phase of a vesting schedule during which no tokens are released to the recipient. At the end of the cliff, a lump sum of tokens is typically unlocked, followed by regular ongoing releases.
Cliff periods are commonly used for team and investor token allocations. A typical cliff ranges from 6 months to 2 years. The purpose is to ensure that key stakeholders remain committed to the project for a minimum period before receiving any tokens.
The end of a cliff period can create significant selling pressure, as a large batch of tokens becomes available simultaneously. Monitoring cliff unlock dates across the market helps traders anticipate and prepare for potential price impacts.