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Leading DeFi, NFT, and metaverse projects are set to unlock millions of tokens this month. Previous unlocks have been bearish in the short term, so how will this play out?
Token unlocks have become a popular way to slowly release locked assets into the market over a set period of time.
The theory is that the process aligns incentives for all project investors and stakeholders. However, the reality is that it often causes short-term volatility and price dumps.
Several large projects will be unlocking large chunks of tokens in April. These include derivatives exchange dYdX, NFT collective ApeCoin, Metaverse game Axie Infinity, ByBit DAO BitDAO, and the Ronin Network.
According to the Token Unlocks tracker, $7.2 million worth of tokens will be unlocked this week.
Token Unlocks Galore
This week will see 1inch, Galxe, and Tornado Cash unlock tokens. The following week is the turn of Moonbeam, dYdX, Aptos, and Euler, among other smaller projects.
On April 11, decentralized derivatives exchange dYdX will unlock 6.5 million tokens worth around $15.8 million. The chunk is equivalent to around 0.65% of the total supply, so the price impact should be minimal.
dYdX unlocks are scheduled every month until July 2026. Furthermore, from December 2023, the amount released increases substantially for the team and investors.
On April 17, 15.6 million APE tokens worth around $67 million at current prices will be released. This works out at 1.56% of the total supply so there could be some short-term downward momentum for prices. In February, APE prices tanked 10% following the release of 7.3 million APE coins onto the market.
Additionally, ApeCoin tokenomics are heavily slanted towards the team, treasury, and Yuga Labs, the firm behind the BAYC collection.
Short Term Volatility Expected
Also on April 17, Axie Infinity will unleash 3.9 million AXS tokens. These are currently valued at around $32 million and represent 1.45% of the total supply.
This is also expected to have a negative impact on short-term AXS market momentum.
The Aptos token unlock is scheduled for April 12, when 4.5 million APT tokens flood the markets. The tranche is valued at $51 million and represents 0.45% of the total supply.
Aptos is heavily venture capital controlled, with around half of the token supply dedicated to the team, foundation, and investors.
DeFi gaming platform ImmutableX will unload 18 million IMX tokens on April 22. They represent 0.9% of the total supply and are valued at $18.7 million.
Holders of these tokens are advised to be aware of short-term price volatility during unlocking periods.