Token Unlocks Explained: Cliffs, Vesting Schedules and What They Do to Supply

When a token launches, most of its supply is usually not for sale. It is allocated to the team, early investors, a treasury and future rewards, and held under a vesting schedule that releases it over months or years. Each release is a token unlock.

Unlocks are the main way circulating supply grows, so they are worth understanding before you look at a price.

The vocabulary

• Cliff. A period with no releases at all, followed by a single large one. "A 12-month cliff" means nothing unlocks for a year, then a block of supply arrives at once.
• Linear vesting. Supply is released steadily, per block, per day or per month, over the vesting period.
• TGE unlock. The share released immediately at the token generation event, the launch.
• Emissions. New tokens created over time as rewards, as opposed to pre-allocated tokens being released.

A typical allocation might read: "investors 20%, 12-month cliff, then 24 months linear". No investor tokens move for a year; after that they arrive in equal parts over two years.

Why unlocks matter

An unlock does not force anyone to sell. It makes selling possible. Recipients who received tokens at a far lower price have an obvious reason to realise some of that gain, and the market has to absorb whatever they sell.

Size is what counts, measured against two things: the circulating supply (an unlock equal to 30% of what currently trades is a large event; 0.5% is not) and the token's normal trading volume (supply worth many days of volume cannot be sold quickly without moving the price).

How to read an unlock schedule

1. Find the allocation table in the project's documentation: who gets what percentage.
2. Find the cliff dates. These are the step changes in supply.
3. Work out the monthly release after the cliff and compare it with circulating supply.
4. Check it is enforced on-chain. A schedule in a PDF is a promise. A schedule in a vesting contract is code. Look for the locked tokens sitting in a contract with a release function, not in an ordinary wallet.
5. Check whether it can be changed. Some vesting contracts let an admin alter or cancel the schedule.

How locked supply appears in holder data

Locked tokens have to sit somewhere, so vesting contracts and treasuries show up among a token's largest holders. That is a problem for any raw "top 10 holders" figure: it counts supply nobody can currently sell alongside wallets that can sell today.

FraudCoins handles it by classifying the ten largest holders first. Addresses labelled as treasury, vesting or foundation holdings are set aside, with the wallets named on the coin page and in our corrections list, and we report the share held by the largest private wallets.

That correction has a limit we state on every page where it is large: excluded supply is not harmless supply. Burned tokens are gone for good, but treasury and vesting holdings can reach the market when they unlock. A low private-wallet figure today is not the same as low future sell-side pressure. Reading the two together, current concentration and scheduled unlocks, gives a fuller picture than either alone.

For the valuation side of the same issue, see FDV vs market cap.