Unit 1 · Level 4 · Token design
Cliff diving
Locked tokens don't stay locked. A typical deal: a 12-month 'cliff' during which insiders can sell nothing, then a huge batch unlocks at once, then monthly drips for years. Whole websites exist just to track these unlock calendars. When hundreds of millions of euros in tokens go liquid on a known date, charts feel it.
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What you get asked
In a vesting schedule, what exactly is a 'cliff'?
Before the cliff, insiders hold nothing they can sell. The day it hits, a mountain of tokens becomes liquid at once.
Arrange the classic unlock-cliff story in order
Insiders selling was always the plan. The scandal is buyers who never checked the calendar.
After the cliff, tokens usually release in equal monthly chunks, called linear ___.
Linear vesting spreads the sell pressure out instead of dropping it all at once: gentler, but still constant new supply.
Why do experienced traders check a token's unlock calendar before buying?
An unlock is one of the few supply shocks you can see coming weeks ahead. Ignoring it is voluntary blindness.
Does the price always dump on the unlock date itself?
Markets front-run public information, so the slide often comes before the date, or never arrives at all if buyers absorb it. The unlock changes supply for certain; the price reaction is never guaranteed. 🐜
The rest of this unit
Supply schedules, emissions, and the fine print that decides who gets paid.