Why is unlocking the main check for investors: how to understand the token unlocking mechanism

In recent months of 2024 and early 2025, the market is expecting a significant influx of new tokens onto trading platforms. This involves unlocking assets totaling around $15 billion, with one-third of this volume expected in January. This event could substantially influence project prices, making understanding the unlocking mechanism critically important for any participant in the crypto market.

What lies behind unlocking: a foundation for understanding

Unlocking is the process by which previously locked tokens become accessible on the open market. But why is such a system needed?

It all started with the ICO boom in 2017, when thousands of projects raised millions of dollars from investors. In an attempt to establish order in the young market, cryptocurrency projects borrowed mechanisms from the traditional capital markets but adapted them to their needs.

The central tool of this system is tokenomics, which is the complete set of rules defining how tokens are issued, distributed, and unlocked for the project. The key parameter here is time. Early investors and project developers of projects like Sui, Aptos, Optimism, Arbitrum, Celestia, and Worldcoin receive assets not immediately, but at strictly defined times to avoid price crashes due to mass sell-offs.

Vesting: freezing to create demand

Vesting is a mechanism of temporary token lock-up established separately for each participant category. Early investors usually receive tokens either completely free or at a significant discount. For example, the well-known crypto fund Pantera Capital bought Toncoin in May at 40% below the market price, but access to these tokens is limited by a one-year vesting period, after which the fund can gradually sell the coins in small batches.

This approach gives the project a temporary window: while tokens are frozen, the team can develop the product, create demand in the market, and prepare the ecosystem. When the unlocking moment finally arrives, the price should already be more stable.

The amount of $15 billion is approximately 0.65% of the total market capitalization of the cryptocurrency market (according to CoinGecko data from October 2024), but this does not mean that the impact will be insignificant for individual projects.

Two main types of unlocking

Projects choose their unlocking schedules depending on their goals. Two main approaches are used here:

Linear unlocking — tokens are released gradually and evenly: daily, weekly, or monthly. This reduces sharp price shocks, as new assets enter circulation in portions.

Cliff unlocking — a large batch of tokens is released at once after a full lock-up period. For example, waiting 6 months, then the entire amount is unlocked immediately. In practice, most projects combine both methods: some categories of holders are given a linear schedule, others a cliff.

How to independently monitor unlockings

Since blockchain is an open system, all data on frozen tokens is fully transparent. Every user can track vesting status in real-time, using analytical skills or relying on specialized market analysis services.

Special platforms not only show the schedule of upcoming unlocks but also provide detailed information: who the tokens are intended for, their value in dollars, and what percentage they represent of the project’s circulating supply. This data will help you forecast potential price movements and make informed investment decisions.

Understanding the unlocking mechanism is not just theory but a practical skill necessary for navigating the modern crypto market.