Liquid staking protocol Lido (LDO), the Avalanche Blockchain native token (AVAX) and the token behind the Yield Guild Games DAO (YGG) are all scheduled to implement unlocks this week, increasing the supply of the tokens available in the market.
Token unlocks are staggered releases of coins previously frozen to prevent early investors or project team members from liquidating their holdings in large numbers.
Lido DAO (LDO) Unlock
The governance token for the liquid staking platform Lido is scheduled to unlock 8.5 million LDO tokens on Aug. 26, valued at $14.2 million, and equating to roughly 0.97% of the supply.
All 8.5 million tokens will be distributed to investors, who already hold more than 300 million tokens, according to TokenUnlocks.
Lido’s LDO token has declined 8.5% during the last week, and has been relatively stable in the last 24 hours, according to CoinDesk data.
Avalanche Token (AVAX) Unlock
AVAX, the native crypto of the Avalanche blockchain, has an unlock scheduled for Saturday, Aug. 26, where it will release 9.54 million AVAX tokens worth $102.86 million, amounting to 2.77% of the total circulating supply.
The last unlock AVAX went through in May and was relatively well received by the market.
“Token unlocks freak people out in general, but the upcoming Avalanche unlock has been mapped out for a while now and most sophisticated actors have adjusted for it,” Lindsey Winder, CEO of token infrastructure firm Hedgey Finance, said to CoinDesk in May.
AVAX's unlock will be split between the strategic partners, who get 2.25 million, or $24.21 million worth, the Foundation, which gets 1.67 million tokens, the team, which is allocated 4.5 million tokens, or $48.42 million, and airdrop participants who get 1.13 million tokens.
AVAX is down 13% during the last week, according to CoinDesk market data, and is down 1.8% on-day.
Yield Guild Games (YGG) Token Unlock
Blockchain-based gaming has been struggling to catch on with mainstream audiences, and Yield Guild Games, a key investor in GameFi’s, DAO token has certainly been reflecting this.
Market data shows that YGG’s token is down nearly 59% in the last year, despite a rally in the last month which temporarily brought it up 49%. During the last week it lost an additional 30% of its value, and is down 2% on-day.
YGG is scheduled to release 12.2 million YGG ($2.87 million) on Sunday, totaling 6.6% of the cryptocurrency's circulating supply. Currently, about 30% of the token’s supply has been unlocked.
Token Unlocks and Market Prices
Just how much do unlocks impact market prices?
The answer is complicated.
Although often considered bearish, the effect of token unlocks on market trends is nuanced, as CoinDesk reported in July.
Analytics firm The Tie studied over 350,000 unlock events and found that on average, coins declined in the lead-up to the event.
However, when the liquidity freed up amounted to more than 100% of the average daily volume, prices quickly rebounded before falling again within two weeks.
This pattern suggests that holders might wait before selling into the market, possibly in response to initial relief that the market was not flooded with new tokens.
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