Liquid staking protocol Lido (LDO), the Avalanche Blockchain native token (AVAX) and the token behind the Yield Guild Games DAO (YGG) are all scheduled to implement unlocks this week, increasing the supply of the tokens available in the market.
Token unlocks are staggered releases of coins previously frozen to prevent early investors or project team members from liquidating their holdings in large numbers.
Lido DAO (LDO) unlock
The governance token for the liquid staking platform Lido is scheduled to unlock 8.5 million LDO tokens on Aug. 26, valued at $14.2 million, and equating to roughly 0.97% of the supply.
All 8.5 million tokens will be distributed to investors, who already hold more than 300 million tokens, according to TokenUnlocks.
Lido’s LDO token has declined 8.5% during the last week, and has been relatively stable in the last 24 hours, according to CoinDesk data.
Avalanche Token (AVAX) unlock
AVAX, the native crypto of the Avalanche blockchain, has an unlock scheduled for Saturday, Aug. 26, where it will release 9.54 million AVAX tokens worth $102.86 million, amounting to 2.77% of the total circulating supply.
The last unlock AVAX went through in May and was relatively well received by the market.
“Token unlocks freak people out in general, but the upcoming Avalanche unlock has been mapped out for a while now and most sophisticated actors have adjusted for it,” Lindsey Winder, CEO of token infrastructure firm Hedgey Finance, said to CoinDesk in May.
AVAX's unlock will be split between the strategic partners, who get 2.25 million, or $24.21 million worth, the Foundation, which gets 1.67 million tokens, the team, which is allocated 4.5 million tokens, or $48.42 million, and airdrop participants who get 1.13 million tokens.
AVAX is down 13% during the last week, according to CoinDesk market data, and is down 1.8% on-day.
Yield Guild Games (YGG) token unlock
Blockchain-based gaming has been struggling to catch on with mainstream audiences, and Yield Guild Games, a key investor in GameFi’s, DAO token has certainly been reflecting this.
Market data shows that YGG’s token is down nearly 59% in the last year, despite a rally in the last month which temporarily brought it up 49%. During the last week it lost an additional 30% of its value, and is down 2% on-day.
YGG is scheduled to release 12.2 million YGG ($2.87 million) on Sunday, totaling 6.6% of the cryptocurrency's circulating supply. Currently, about 30% of the token’s supply has been unlocked.
Token unlocks and market prices
Just how much do unlocks impact market prices?
The answer is complicated.
Although often considered bearish, the effect of token unlocks on market trends is nuanced, as CoinDesk reported in July.
Analytics firm The Tie studied over 350,000 unlock events and found that on average, coins declined in the lead-up to the event.
However, when the liquidity freed up amounted to more than 100% of the average daily volume, prices quickly rebounded before falling again within two weeks.
This pattern suggests that holders might wait before selling into the market, possibly in response to initial relief that the market was not flooded with new tokens.
All writers’ opinions are their own and do not constitute financial advice in any way whatsoever. Nothing published by CoinDesk constitutes an investment recommendation, nor should any data or Content published by CoinDesk be relied upon for any investment activities. CoinDesk strongly recommends that you perform your own independent research and/or speak with a qualified investment professional before making any financial decisions.
Recommended Content
Editors’ Picks
Is Altcoin Season here as Bitcoin reaches a new all-time high?
Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.
Shanghai court confirms legal recognition of crypto ownership
A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.
BTC hits an all-time high above $97,850, inches away from the $100K mark
Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: New high of $100K or correction to $78K?
Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.