Over 40 crypto protocols such as Arbitrum, Optimism, Starknet, Aptos, will unlock large amounts of tokens, previously restricted to prevent early investors and team members from selling en masse.
The two largest cryptocurrencies by market cap, bitcoin and ether, have slid about 4% in the past seven days. However, the tokens with the largest unlocks in the next 30 days have dropped harder in the same period.
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Posted June 17, 2024 at 7:28 pm EST.
Over 40 crypto protocols are collectively unlocking over $740 million worth of previously frozen tokens in the next 30 days.
According to data from the vesting analytics platform Token Unlocks, several cryptocurrencies are scheduled for token releases. Leading the pack is XaI’s XAI token, with a staggering $109 million worth of tokens unlocking. Following closely are Aptos’ APT token at $85 million and Arbitrum’s ARB token at $80 million.
Other notable mentions include Immutable’s IMX token at $53 million, OP Mainnet’s OP token at $61 million, and Sui’s SUI token at $58 million. Starknet’s STRK token and Ethena’s ENA token are also in the mix, with unlocks valued at $52 million and $37 million, respectively.
“This cycle has been marked by low float, high FDV tokens, therefore tokenomics design and unlock schedule is critical for a project’s success,” wrote Decentral Park Capital’s portfolio manager, Kelly Ye, in a message to Unchained over Telegram. “When a big unlock meets meek buying power, the price impact won’t look good for a project’s long-term success.”
Token unlocks work similarly to vesting schedules of a traditional firm’s shares in that they enable the gradual release of cryptocurrencies and prevent early investors from immediately offloading in substantial quantities.
Falling Harder Than BTC and ETH
Token unlocks occur frequently. The upcoming ones come after oracle service network Pyth unlocked $736 million worth of tokens and layer 1 blockchain network Avalanche released about $369 million into the circulating supply last month.
“While unlocks create selling pressure on tokens, the actual impact depends on the market sentiment, trading volume, and specific cases for tokens,” Ye added. “The market tends to anticipate large unlock events and could price in the price impact before the unlock happened.”
The two largest cryptocurrencies by market cap, bitcoin and ether, have slid about 4% in the past seven days. However, the tokens seeing unlocks in the next 30 days have dropped harder. XAI, the cryptocurrency with the largest unlock, is down 20% in the past week, while STRK has slid about 27% in the same period. Of the aforementioned tokens, the one that had the smallest decline in price was APT at 8.4%, with ARB following behind, decreasing 8.9% over the course of seven days, data from CoinGecko shows.
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