Crypto glossary
Token unlock
A token unlock is a scheduled release of previously locked tokens, usually held by teams or investors, into the circulating supply of a project.
Many crypto projects lock a large share of their tokens at launch. Allocations for founders, employees, early investors and ecosystem funds are typically subject to vesting rules written into smart contracts or legal agreements, and they become transferable only on set dates. Each of those dates is a token unlock.
Unlocks come in two main forms. A cliff unlock releases a large block at once, often 12 months after launch, while linear unlocks release small amounts daily or monthly over several years.
Traders watch unlock calendars because new supply can create selling pressure, especially when recipients bought at much lower prices. The gap between a token's market cap and its fully diluted valuation shows how much supply is still waiting to be unlocked.
Example
If a project with 100 million tokens in circulation unlocks 20 million tokens for early investors on a single day, circulating supply rises by 20%. If those investors sell part of the allocation, the price can fall even when nothing else has changed.
Related terms
Latest articles on Token unlock
- LayerZero, Plasma and Humanity Lead $793.6M Token Unlock Week
- Hyperliquid Faces $1.2B Token Unlock as 14.2M HYPE Tokens Hit the Market
- These 3 Token Unlocks Could Drive Big Price Moves in the First Week of August
- Pump.fun (PUMP) Soars 12% Despite a Massive Token Unlock: Here’s Why
- Sui Under Pressure as Token Unlocks Threaten Critical Support Levels
