What is a token unlock?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 4 min
In short
An unlock is the moment previously restricted tokens become transferable, adding to circulating supply. Whether they are then sold is up to the recipients and is not decided in advance.
Key points
- The point at which restricted tokens become transferable
- A direct cause of circulating supply increasing
- Dates and amounts are often published in advance
- Unlocked does not mean sold
Definition
The scheduled release of tokens that were locked or vesting, after which they can be freely transferred.
Most unlocks have a fixed date and amount. Linear schedules release a set amount each month; cliff-style ones release a block on a single day, which adds a lot to circulating supply at once. From a published vesting plan you can compute exactly what releases when.
What follows depends on the released amount relative to the depth of the market at that time. A large release into a thin book can move price noticeably even if only part of it is sold. But recipients may also keep holding, stake, or trade over the counter, so not all of it reaches the order book.
Sites that aggregate unlock calendars usually draw from project disclosures, which do not always match the contract's actual settings. For anything that matters, reading the vesting contract address directly is the reliable route.
Watch out for
- · Nobody can state in advance how price will react to an unlock
- · Calendar sites derive dates from disclosures, which can differ from the contract
- · Be wary of anything urging you to trade quickly because an unlock is near