Do you know what Token Unlocking is?
In the world of cryptocurrencies, understanding 'Token Unlocking' is essential for every investor or follower of new projects.
Token Unlock refers to the process of releasing digital currencies that have been reserved or locked for a specific period, making them available for trading or use.
Why are these tokens locked in the first place❓
When a new project is launched in the crypto market, a quantity of tokens is distributed to several parties such as:
1️⃣• The team
2️⃣• Early investors
3️⃣• Partners and advisors
4️⃣• Liquidity Pools
But these tokens are not delivered directly; they are locked for a specific period known as the Vesting Period, for reasons including:
1️⃣• Protecting the market from manipulation or sudden sales (Dump)
2️⃣• Encouraging team members to commit to the project long-term
3️⃣• Building trust among the community and investors
What is the impact of token unlocking on the market❓
When the token unlock date arrives, the reserved amounts become available to the owner, who may decide to sell or hold them.
In case of large sales, this may lead to:
1️⃣• Increase in supply
2️⃣• Downward pressure on the price
3️⃣• Market volatility
Therefore, it is very important for investors to follow token unlock schedules to know when these changes may occur.
How can these schedules be monitored❓
There are specialized platforms that provide accurate information about token unlock dates, including:
• TokenUnlocks
• CryptoRank
• CoinMarketCap (in some projects)
These tools help you plan your trades or investments and know the right time to enter or exit.
In summary:
Token unlocking is not necessarily a negative thing, but it is a pivotal point in the trajectory of any digital project. Good monitoring of token unlock dates gives you an important analytical advantage and reduces market surprises.
