What Is a Token Lockup?

A token lockup is a period of time during which tokens are restricted from being traded or sold. This restriction can be imposed by the issuer, such as an initial coin offering (ICO) company, or it may be part of the terms and conditions set out in a smart contract. The purpose of this type of lockup is to protect investors and ensure that they have enough time to evaluate their investment before selling off their holdings. It also helps prevent market manipulation by preventing large amounts of tokens from entering circulation at once.

Token lockups typically last for several months up to one year after the ICO has been completed. During this period, only certain individuals with special permission will be able to access and trade these tokens on exchanges or other platforms. After the lockup period ends, all holders will then have unrestricted access to their tokens and can freely buy/sell them on any platform they choose. Token lockups help create stability in markets while allowing investors more control over when they decide to enter or exit positions in digital assets like cryptocurrencies.

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