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Lockup Meaning

A period of time during which certain tokens or assets cannot be sold, traded, or moved. Lockups are common for project founders, early investors (VCs), and team members to ensure they have "Skin in the Game" and don't "dump" their tokens as soon as the project launches.

A "Lockup Schedule" (or Vesting Schedule) describes when these tokens will be "unlocked." For example, a founder might have a 4-year lockup with a 1-year "cliff" (nothing for the first year, then monthly releases). Investors watch these schedules closely, as a "Large Unlock" event can lead to a sudden increase in supply and a drop in price.

Lockups are also used in "Staking" or "Governance." You might "lock" your tokens for 6 months to earn a higher interest rate or more voting power.

This "Time-Weighted" commitment shows the network that you are a long-term stakeholder rather than a short-term speculator.

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