Unlock
A token unlock is the moment, or process, in which previously locked tokens are released and can be moved or sold, adding to the circulating supply.
Where unlocks come from
Most unlocks follow from vesting schedules for team members, early investors and advisors. Others come from treasury or ecosystem funds being released, from staking withdrawals, or from tokens that were locked in a protocol for a fixed term. Unlocks can be continuous, a little every day or block, or arrive in large batches on specific dates, such as when a cliff ends.
Why markets watch them
An unlock does not force anyone to sell. But it makes selling possible for holders who may have acquired tokens at a small fraction of the current price. When a large unlock is due, especially one that adds a big percentage to the circulating supply, traders often anticipate extra selling pressure.
Many traders expect price weakness around large investor and team unlocks, but the actual effect varies widely. Some of it may be priced in before the date, some recipients hold or stake their tokens, and others sell gradually over weeks.
An example
Say a token has 200 million units circulating and 50 million unlock next month for early investors. That is a 25% jump in circulating supply. Even if only a fraction is sold, it is a lot relative to normal trading. A 2 million token unlock for the same project would barely register.
How to research an unlock
Look at the size relative to circulating supply and daily trading volume, who receives the tokens, at what price they originally got them, and whether recipients moved earlier unlocks to exchanges. Unlock trackers and project documentation list scheduled events, and on-chain data shows whether released tokens actually move. Remember that schedules can change, and not all unlocks are announced clearly.
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Frequently asked questions
Do token unlocks always make the price drop?
No. They increase potential supply, but the effect depends on demand, what recipients do and how much was already expected.
What is the difference between vesting and an unlock?
Vesting is the overall schedule; an unlock is a specific release event within it, or any release of locked tokens.
Where can I see upcoming unlocks?
Project documentation and token unlock trackers list scheduled releases. Check the on-chain contract where vesting is enforced there.
Related terms
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