Token “unlock” refers to the process of unlocking tokens. For many people, the “unlcok” process in some altcoin projects is quite important. Here are the unlock dates for some coins…
What is “unlocking” in altcoin projects?
Before the coins are due to be unlocked, we need to understand what this means. Token unlocking refers to the process of unlocking blocked tokens under the terms of any funding round or other fundraising program of the project. Each project carefully plans its tokenomics to avoid undue pressure from sellers during the unlocking process and to avoid a drop in token price. Additionally, most of the funding comes from early investors who buy tokens at the lowest prices. The project team sets several properties for the upcoming unlock to prevent a dump:
- Cliff: The period for which coins purchased after being listed on the exchange will be locked;
- Vesting: Token distribution period. For example, 5 percent of tokens will be released each month, so vesting will equal 18 months and so on.
Can the coin price drop?
Information on token unlocking can be found in the project’s public whitepaper and in the token economy. There is also the Internet resource Vestlab, where developers configure information about unlocking processes in special tabular form. Here are some factors that risk triggering a significant drop in price once the token is unlocked:
- Low entry price and high current margin at opening time for investors;
- Weak liquidity of the trading pair and few buy orders;
- Large amount of unlocks for market value;
- Funds with a bad reputation that sell their coins immediately after the token is unlocked.
There are many instances where a project’s token drops a lot after unlocking. For example, in February 2022, GLMR investors instantly received 100 million tokens worth $400 million at the time of unlocking their wallets. While the price of GLMR dropped 30 percent in an hour, some users made a profit by selling short.
Which coins are unlocked in 2023?
So, which cryptocurrency projects are unlocked in 2023? According to a table by Messari, the coin that will be unlocked among major cryptocurrencies is 1INCH. On February 6, they will unlock 33 percent of the total circulating supply. On the other hand, on February 2, DYDX will open 107 percent of the total circulating supply, and on February 2, SAND will open 22 percent. LOOKS will unlock 15 percent on January 9, and AXS will unlock 17 percent on April 23. For GLMR, OP and APE, these amounts are 10 percent, 72 percent and 9 percent, respectively. GLMR will announce this development on January 10, OP on May 30, and APE on March 17.