Aptos and EIGEN lead $200 million token unlocks next week amid massive failure in low float, high FDV launches
|- The crypto market will witness token unlocks worth $200 million next week.
- APT and EIGEN will see the highest unlock volume, adding $93 million and $34 million worth of new supply to circulation.
- There is a massive failure among tokens that conducted airdrops with low float, high FDV.
Token Unlocks data on Friday revealed that the crypto market is set to experience a supply hike of $200 million in cliff unlocks, with Aptos (APT) and Eigenlayer (EIGEN) leading the way.
APT and EIGEN push next week's unlocks to $200 million
The crypto market is set for another round of token unlocks next week, with several projects adding a combined $200 million worth of new tokens into circulation.
Tokens that will participate in next week's cliff unlocks include Aptos (APT), Eigenlayer (EIGEN), Optimism (OP), Neon (NEON), Cardano (ADA) and Mode (MODE). These projects will begin adding to their current circulating supply from Monday, with APT and EIGEN holding the highest share of unlock volumes.
Cliff Unlocks October 7- 13 (Source: Token Unlocks)
Cliff unlocks are events where crypto projects release vested tokens to investors, community members or advisors after a lockup period. The heightened supply from token unlocks frequently generates negative sentiment among investors, which can trigger significant sell-offs.
APT will witness $93 million in unlocks, which may lead to a potential correction after its impressive performance in the past seven days. APT is up nearly 2% in the past 24 hours, extending its weekly gains by 10% amid the earlier market decline on October 1.
The asset's growth may be due to Franklin Templeton's recent launch of its Tokenized Money-market fund (FOBXX) on the Aptos chain. The move allows investors to begin to access the fund through Aptos's network.
EIGEN will also add $34 million worth of its tokens into circulation, accounting for 5% of its current circulating supply. The token is up nearly 7% since on Friday, despite reports of a user losing 1.6 million EIGEN to hackers.
Eigenlayer has also been the subject of controversy after community members lamented that the team distributed $6 million worth of its tokens to VCs without any prior lockup. These reactions and the upcoming token unlock could negatively affect EIGEN's price.
Other tokens that will see a hike in circulating supply include OP and NEON, which will release $19 million and $17 million worth of their tokens into circulation.
NEON is up over 9% in the past 24 hours. The project will inject more than 90% of its current supply into circulation.
OP is also up over 5%, recovering from a weekly decline of nearly 16%.
Additionally, market maker Keyrock's airdrop report noted a massive failure among projects that launched with high fully diluted valuation (FDV) and low floats, particularly after 90 days.
"Our data spans a wide range of projects, from those launching with a modest FDV of $5.9 million to those with a staggering $19 billion—representing a 3,000x difference across the 62 airdrop samples we analysed. When we map out this data, an unmistakable trend emerges: the larger the FDV at launch, the greater the likelihood of a significant price drop, irrespective of the project type, level of hype, or community sentiment," the report states.
Price change of tokens vs their starting FDV (Source: Keyrock)
However, crypto insight provider Crypto Koryo stated in a September post that the low float and high FDV sectors were among the month's three best performers.
They went further to state that if a low-float, high-FDV token performs well, unlock events could act as a "strategy."
Cryptocurrency metrics FAQs
The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.
Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value.
Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.
Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.
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