Approximately $500 million in various cryptocurrencies are scheduled for unlock, potentially impacting their market due to increased supply.
The unlocked tokens will be distributed to team members and investors for ecosystem development, with some, like WLD, facing a 7% supply increase.
Historical data suggests that significant price changes might occur on average two weeks after the unlock.
Nearly $500 million worth of various tokens will be freed to investors, teams, and ecosystem advisors this week, potentially creating downward pressure on prices for these digital assets.
Over $80 million in Worldcoin’s WLD, $51 million in Arbitrum’s ARB, and nearly $40 million each of Eigenlayer’s EIGEN and Axis Infinity’s AXS are set to be released in the next seven days, TokenUnlocks data shows.
The 37 million WLD emission, representing the rate at which new tokens are created over time, will increase the token supply by 7%. The tokens will be distributed to team members, advisors, and investors. Initially, these early contributors’ WLD tokens were intended to be subject to a three-year lock-up schedule, which was extended to a five-year schedule in July.
Layer 2 network Taiko’s $18 million unlock will be the most by supply at 15% of its total.
Of the total $500 million in unlocks, the following tokens with a market value of $200 million will be released as a “cliff” – or a colloquial term for a large number of tokens released in one go.
$ARB (2.56%) – $48.97 million
$EIGEN (6.01%) – $41.40 million
$AXS (6.08%) – $41.55 million
$STRK (3.30%) – $25.00 million
$TAIKO (15.00%) – $18.24 million
$APE (2.31%) – $10.86 million
$PIXEL (7.05%) – $6.80 million
Solana’s SOL will see $80 million worth unlocked as part of an ongoing “linear” plan, where tokens are emitted and absorbed by the market.
Unlocks increase the total available supply of a certain token but don’t necessarily hit the open market immediately.
The anticipation of investors or traders expecting token receivers to sell their newly unlocked tokens can lead to a preemptive sell-off, reducing the token price before or as the tokens are unlocked.
A 2023 research from TheTie suggests most losses from unlocks typically arise after an average of two weeks from the event.
However, if the market perceives the unlock as a sign of project progress or the tokens are expected to be used for staking governance or other utility purposes that do not involve immediate selling, the price might remain stable or increase due to positive sentiment.