The way Token Unlock works is closely related to the following two things:
1. Smart Contract and Timed Release
Token unlocking is done automatically through smart contracts that function as programmatic software to execute the terms set out in the project agreement. Smart contracts will ensure tokens are released at predetermined time intervals, or when certain conditions are met, without the need for human intervention. As such, token release occurs securely and efficiently, maintaining the integrity of the distribution process.
2. Cliff and Vesting
Two key concepts in token unlock are cliff and vesting. A cliff is an initial period of time where the tokens are completely locked and inaccessible to anyone. After the cliff period ends, the vesting process begins, where tokens are gradually released in specific amounts over a period of time. Both concepts are designed to prevent sudden bulk sales by early investors ensuring a more even distribution of tokens, and maintaining token price stability in the long run.