• Token unlocks are significant events that have the power to sway the market. CryptoSlate looked at price data for six different crypto projects to better understand how their token unlocks affected the market.
• Polygon’s MATIC token saw a 30% increase in price leading up to its unlock, but then saw a flat market following the unlock. In the month following the unlock, MATIC saw its price increase by over 80%.
• LidoDAO’s LDO token saw little positive price action leading up to its unlock, but 1.65 million tokens were unlocked and distributed on Dec. 18, 2022, leading to an increase in its price of over 30%.
Cryptocurrency tokens are a growing asset class in the digital space, which is why it is so important to understand and analyze the data surrounding token unlocks. Token unlocks are significant events that have the power to sway the market, and by looking at the data surrounding them, we can better understand how they affect the market. To better understand this, CryptoSlate looked at price data for six different crypto projects, ranging from high-cap to mid-cap.
First, we looked at Polygon (MATIC). On Oct. 26, 2019, the Polygon network unlocked 190 million MATIC. The tokens were distributed to private investors and early supporters who participated in Polygon’s funding rounds. The market was gearing up for the token unlock, creating a buying pressure that pushed its price up almost 30%. After the tokens were airdropped, increased selling pressure kept MATIC’s price relatively flat. However, in the month following the unlock, MATIC saw its price increase by over 80%.
Next, we looked at LidoDAO (LDO). Lido has seen its popularity increase significantly in 2022, as Ethereum’s transition to a PoS network made it its most valuable player. Its LDO token saw a notable uptick ahead of the Merge, so the month leading up to its December token unlock saw little positive price action. On Dec. 18, 2022, 1.65 million LDO tokens were unlocked and distributed, leading to an increase in its price of over 30%.
The Sandbox (SAND) also saw a token unlock in November of 2019. The unlock saw a total of 900 million SAND tokens released, with the majority of them going to game developers who had earned them via the Game Maker’s Reward program. The unlock led to a surge of over 30% in SAND’s price.
We also looked at 1inch Network (1INCH) and STEPN (GMT). 1INCH’s token unlock was in December of 2019 and saw a total of 150 million tokens released. This led to a surge in its price of over 20%. STEPN’s token unlock was in April of 2021 and saw a total of 100 million tokens released. This led to a surge in its price of over 40%.
Overall, token unlocks are significant events that can have a major impact on the market. All six tokens studied saw a positive price increase following their token unlocks. This demonstrates the long-term potential for cryptocurrency projects and their tokens, as the short-term volatility that comes with token unlocks can lead to long-term growth.