Arbitrum (ARB) to Unlock $1.2B Tokens in March 2024; What Does it Mean?

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Token Unlocks, a crypto management platform, revealed that Arbitrum, the Layer 2 scaling solution for the Ethereum (ETH) blockchain, will release over $1 billion worth of ARB tokens in March next year.

As per the announcement on August 16, Arbitrum will release the tokens on March 16, 2024, in an effort to initiate a four-year period of staggered unfreezing of its native digital asset. Token Unlocks claimed Arbitrum will “cliff unlock 1.11 billion ARB tokens worth $1.24 billion at the going market rate of $1.12”.

Arbitrum Gears Up to Release $1.2 Billion ARB

Cliff unlocks refer to the release of tokens held in a locked state on a specific date. A certain percentage of the token’s total supply is released at a specific date. The amount to be released will be equal to 87% of the token’s circulating supply of 1.275 billion.

The announcement also noted that following the March 16 release, Arbitrum (ARB) will continue to unfreeze a certain amount of tokens every four weeks for four years. Token Unlocks wrote,

“Starting from that day, every 16th of the month, more unlocks will happen over the next 4 years.”

Despite the recent announcement, there is no immediate movement in the ARB price. According to CoinMarketCap, the digital token is down 1,52% over the past 24 hours to hover around $1.12. Meanwhile, ARB has witnessed a steeper downtrend in the previous seven days, falling more than 4%.

Arbitrum Gears Up to Release $1.2 Billion ARB

Token Unlocks Explained

Token unlocks refer to the release of previously locked or restricted tokens into the market. These tokens become available for trading, buying, and selling after the end of their vesting period. In other words, tokens under the vesting period are inaccessible to anyone, meaning they cannot be bought, sold, or traded in the open market. 

When the vesting period ends, the tokens can be accessed by those to whom they were initially assigned. This period is referred to as token unlocks. As the name suggests, token unlocks allow one to interact with previously “locked” tokens. 

These locked tokens stabilize cryptocurrency prices because some early backers or project team members might sell their tokens as soon as they are available. These tokens also encourage developers to continue working towards the projects’ long-term goals without worrying about the value of their tokens on the market.

Token Unlocks Explained

How do tokens unlocks Affect Crypto Prices?

Once unlocked, these tokens increase the circulating supply of a cryptocurrency project which can lead to a fall in price if the demand remains the same or does not increase proportionally. This is because the recipients of the tokens may choose to sell them, increasing the supply in the market.

Token unlocks can also lead to higher trading volumes, potentially influencing market dynamics and price volatility. However, a cryptocurrency’s price might not be affected during token unlocks if the number of coins set to be released is not large enough to disrupt the project’s circulating supply.


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