Token Vesting Cliff

Overview

Meaning and scope

Token Vesting Cliff is an initial period during which a beneficiary accrues no transferable vested tokens or cannot claim any of the allocation. At the cliff date, a defined portion may vest at once or linear vesting may begin.

How it works

The cliff is one part of a vesting schedule and is not the same as the full vesting duration or an individual unlock event. Operationally, agreements and contracts should specify start date, cliff timestamp, amount released at the cliff, post-cliff schedule, revocation, acceleration, termination treatment, and beneficiary transferability. The principal risks are that incorrect timestamps, timezone assumptions, upgradeable contracts, or unclear employment and investor terms can cause unexpected release or forfeiture.

Operational checks and limits

A cliff delays vesting or release until an initial specified point. Rules after the cliff may provide an immediate portion and continued gradual vesting.

Practical example

A grant has a 12-month cliff: the worker receives no vested units during the first year and then begins receiving scheduled allocations.

Distinctions

A cliff is one feature of a vesting agreement; an unlock calendar displays the broader schedule.

How to evaluate it

Supply and release figures are meaningful only with a definition and a measurement point; for Token Vesting Cliff, distinguish what has been minted, what may ever be created, what can be transferred now, and what remains subject to vesting or contractual restrictions. When evaluating Token Vesting Cliff, compare reported numbers at the same block or reporting date; otherwise an apparent discrepancy may be a difference in timing or measurement basis rather than an accounting error. Related concepts: Unvested Token Supply; Vested Token Supply; Token Unlock Calendar.