What is Vesting Cliff?
A vesting cliff is an initial period after the token generation event during which nothing vests. If the holder leaves or the tokens are forfeited before the cliff ends, none of the allocation vests.
Also known as: cliff · cliff period · lockup before vesting
In plain terms
The cliff is a waiting period before vesting starts. For example, a 12-month cliff on a 4-year schedule means zero tokens unlock in the first year, then vesting runs for the remaining three.
Its purpose is commitment: insiders must stay involved through the cliff to earn anything at all.
How it works
Cliff and vesting are two separate parameters. The cliff defines when the first tokens release; the vesting duration defines how fast the rest release afterwards.
Some schedules include a catch-up, releasing the accumulated cliff amount as a lump sum at the end of the cliff; others simply begin the normal monthly flow there.
Cliffs of 6 to 12 months are common for team and investor allocations, though terms are negotiated deal by deal.
Example
Hypothetical: an investor's 5,000,000 tokens have a 6-month cliff and 24 months of linear vesting. Months 1–6: zero tokens. Month 7 onward: about 208,333 tokens per month until month 30 — unless a catch-up applies, in which case 1,250,000 unlock at month 7 and 3,750,000 distribute monthly afterwards.
Why it matters for founders and investors
Cliffs concentrate unlock events: a large cliff ending can put significant supply on the market at once, which investors track as a known selling-pressure date.
For founders, cliffs are leverage in negotiations with team and investors, and a signal of long-term alignment that sophisticated buyers expect to see.
Common misconceptions
During the cliff the holder may still hold the tokens — they are just locked. A cliff does not mean the allocation was cancelled; it means it cannot be moved yet.
A cliff is not always 12 months; it can be zero, 6 months or any negotiated period, and it can differ for each allocation in the same project.
Frequently asked questions
What is a typical cliff length?
Common cliffs are 6 to 12 months for team and early investors, sometimes with no cliff for community or liquidity allocations. Actual terms are negotiated and vary by round and role.
What happens if I leave before the cliff ends?
Under a typical cliff vesting agreement, unvested tokens — which during the cliff is all of them — are forfeited or subject to repurchase. The exact consequence depends on the token purchase or advisory agreement.