How does token unlocking affect cryptocurrency prices: a complete explanation of vesting

Why Investors Should Monitor Unlock Schedules

From October 2024 to January 2025, a major event will occur in the cryptocurrency market: tokens worth around $15 billion will come out of vesting. This is nearly 0.65% of the total market capitalization. For traders, this is not just a number — it’s a signal that can significantly impact price movements.

Those who invested early in Sui, Aptos, Optimism, Arbitrum, Celestia, and Worldcoin will gain access to their assets at specific times. And here arises the question: what happens next? If everyone starts withdrawing these tokens simultaneously, the market could face serious pressure.

Where the Token Lock System Came From

The history dates back to 2017, when the cryptocurrency market was swept by a wave of ICO projects. Within a few months, thousands of startups raised billions of dollars. But along with the influx of investors came confusion — there were no clear rules of the game.

The crypto community borrowed tools from traditional finance, adapting them to their needs. This is how the concept of tokenomics emerged — an economic model of a project that determines who, when, and in what quantity crypto assets are distributed.

Unlike traditional markets, where share distribution is tied to financial metrics, in crypto, the main criterion is time. That’s why mechanisms like lockups or vesting were introduced.

What is Vesting and Why Is It Needed

Vesting is a period during which token holders — (developers, early investors, founders) — cannot access their crypto assets. For example, an investor might have a one-year lockup, followed by gradual unlocking over three years.

Why is this necessary? When a project is listed on trading platforms, the circulating supply of tokens is intentionally limited. If developers and investors had immediate full access, they could instantly dump a huge volume onto the market, crashing the price.

A classic example is Pantera Capital buying Toncoin at 40% below the market price. But the company cannot just withdraw these tokens freely. They are subject to a vesting period of one year, after which the organization releases assets in small batches. This creates a healthier market dynamic.

The Two Main Unlock Schemes

Projects rarely invent something fundamentally new. Usually, they combine two proven approaches.

Linear unlock — tokens are gradually unlocked: the same amount is released daily, weekly, or monthly. It’s similar to regular drip irrigation into the market.

Cliff unlock — the opposite of linear. Tokens stay locked, and suddenly — boom! — a large volume is released at once. Like opening a sluice gate fully.

In practice, projects use hybrid models. One group of investors may have a cliff schedule, another — linear unlocking. For example, the development team might have one schedule, while strategic partners have another.

How to Track Upcoming Unlocks Yourself

Thanks to blockchain transparency, all vesting information is available in real time. Anyone can check the status of locked tokens directly on the network.

Professional investors don’t shy away from diving into technical details themselves. But for most traders, it’s easier to use specialized platforms: Token Unlock and Cryptorank.

These services show:

• Clear schedules of upcoming unlocks
• Who exactly will have tokens unlocked
• Unlock value in USD
• Percentage of the project’s circulating supply

This information helps make more informed decisions: buy before the unlock, ignore it, or wait until the selling wave passes.

The Main Point

Token unlocking is not a boring administrative process. It’s an event that can potentially lead to significant price movements. Those who carefully monitor vesting schedules gain an advantage in the market, enabling them to make more informed investment decisions.