Seven crypto and decentralized finance (DeFi) platforms will perform token unlocks this week. Token prices don’t usually react well to supply dilution.
On May 1, the 1inch exchange will be the first major protocol to unlock tokens this week. However, with just 21,429 tokens being released, there is unlikely to be any major impact on token prices.
Token Unlocks This Week
The 1INCH token unlock is worth less than $10,000 at current prices of around $0.463. According to Token Unlocks, 37% of the total supply of around 1.4 billion tokens remains locked.
Furthermore, its tokenomics are massively weighted towards the team and investors. There are 1.29 billion tokens vested for them in a release schedule that runs until December 2024.
Also on May 1, the Polkadot-based web3 finance platform Acala will release assets. Around 27.4 million ACA tokens valued at roughly $2.3 million will be unlocked. These represent 2.74% of the total supply, so there could be some downward pressure on token prices.
Acala tokenomics are a little more event spread, with 34% allocation to crowd loan participants, 29% for strategic partners, and 12% for the reserve. The vesting and unlock schedule runs until March 2028. ACA is trading down 97% from its peak at $0.087.
On May 3, Nym will unlock almost 7.4% of its total supply. Around $16.3 million worth of NYM tokens will be released to expect downward pressure on prices this week.
The Trader Joe DEX releases tokens every couple of days, and the next one is on May 3 with 108,000 JOE tokens.
May 5 will see token unlocks for Liquity (LQTY) and Galxe (GAL). Meanwhile, on May 7, Tornado Cash will unlock 175,000 TORN tokens worth around $1.3 million.
The theory is that the process aligns incentives for all DeFi project investors and stakeholders. However, the reality is that it often causes short-term volatility and selling pressure.
Crypto Market Outlook
Crypto markets have turned red during the Monday morning Asian trading session. Total capitalization has shrunk by 1.7% on the day, falling to $1.23 trillion.
BTC is down 2% at $28,595, while Ethereum (ETH) has lost 2.7% in a slide to $1,848. The only crypto asset in the top 20 bucking this trend is Binance’s BNB, which has notched up a 4.4% gain to reach $335 at the time of writing.
The correction appears to be resuming, so those projects with token supply releases this week could suffer heavier losses.
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