What is Lockup Period?
A lockup period is a fixed window during which tokens that a holder already owns cannot be sold or transferred, typically applied after an airdrop, listing or delivery to limit immediate selling pressure.
Also known as: lock-up · holdback period · restricted period
In plain terms
A lockup says: you own these tokens, but you cannot move them until a certain date. It differs from vesting, which is about earning ownership over time.
Lockups are common after launches and airdrops to prevent recipients from dumping everything on the first day of trading.
How it works
The restriction is enforced either by contract — with penalties for violation — or technically, through smart contracts or transfer controls that block transfers until the date.
Lockups can be flat (everything unlocks on one date) or tiered (portions unlock progressively), and they can sit on top of vesting schedules.
Market participants track aggregate lockup expiries the same way they track unlocks, as known dates of potential selling pressure.
Example
Hypothetical: an exchange listing agreement includes a 90-day lockup for the project's team tokens: they are already vested at the TGE but cannot be transferred until day 91, when the full amount becomes movable at once.
Why it matters for founders and investors
Lockups shape the token's early float and price behavior; a large flat lockup expiry creates a single-day supply event that traders position around.
For founders, offering graduated lockups instead of one big expiry is a way to show alignment without stacking all the pressure into one date.
Common misconceptions
Lockup and vesting are not the same: vesting releases ownership gradually; a lockup freezes already-owned tokens for a period. One schedule can contain both.
A lockup does not protect the price by itself — if holders plan to sell, the selling is merely delayed to the expiry, which can make that date worse.
Frequently asked questions
How is a lockup different from a cliff?
A cliff is part of a vesting schedule — nothing has vested yet, so there is nothing to move. A lockup applies to tokens the holder already owns outright, restricting their transfer until a date.
Can lockups be enforced on-chain?
Yes, through vesting contracts, transfer restrictions or permissioned token standards that reject transfers before the unlock date. Contractual lockups rely instead on agreements and enforcement.