What is a token unlock? When locked-up crypto tokens are released
By SendPay Business · · 2 min read
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When a new crypto project launches, many of its tokens are often locked for the founding team, early investors and advisers. A token unlock is the moment some of those locked tokens are released and can be sold or moved.
How vesting schedules work
- A cliff: no tokens are released for a first period, often a year.
- Linear vesting: tokens are then released in regular portions, such as monthly.
- Different groups, such as the team and investors, may follow different schedules.
- The full schedule is usually set out in the project's documents.
Why unlocks matter
An unlock adds to the circulating supply. If holders who receive tokens choose to sell, it can put pressure on the price, especially when a large share of the supply is released at once. Many traders track upcoming unlocks for this reason.
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What to check
Look at what share of the total supply is still locked, when the next unlocks happen and who receives them. A project whose supply is mostly locked today may look very different once the unlocks are complete.
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Questions people ask
What is fully diluted valuation?
A token's value if every token were already circulating.
Fully diluted valuation calculator →How do burns change a token's supply?
Work out the supply after burns and new issuance.
Token burn calculator →What is a coin's market cap?
Work out market cap from price and supply.
Crypto market cap calculator →What is a crypto whitepaper?
The document that explains a crypto project's plan and design.
Crypto whitepapers →Read next
Spotted a mistake or something out of date? and we'll fix it. How our guides are made
This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. Other companies named in this guide are reference points only and are not affiliated with SendPay Business.