A period when tokens are locked up from usage to protect the cryptocurrency, usually after an Initial Coin Offering (ICO).
A token lockup, also known as a vesting period, refers to a specific period where the developers of a cryptocurrency ‘lock’ tokens so that users cannot trade them. This period is usually brief but may be long. However, the objective of this lockup is to put a check on users selling off their tokens immediately after obtaining them. Such a situation would drive down the prices of the cryptocurrency and it will take extra effort to get these prices to rise.
Token lockups are a reliable safeguard against the possibility of a tanking cryptocurrency. Thus, due to the imposed period of waiting, the crypto asset is able to gather momentum and grow.