Back

Token lockup is a period during which tokens cannot be sold or traded, stabilizing the market.

Token lockup is a predefined period during which certain tokens are restricted from being sold or traded. This mechanism is used by projects to prevent large sell-offs that could destabilize the market. Typically, lockups are applied to tokens allocated to team members, advisors, or early investors. This ensures long-term commitment to the project’s success. Once the lockup period ends, the tokens become available for trading or sale. Lockups can enhance investor confidence by demonstrating a commitment to the project's longevity. They are a common feature in initial coin offerings (ICOs) and other fundraising models in the crypto space.