coindesk.com
Ethereum layer 2 scaling solution Arbitrum will release over $1 billion worth of ARB tokens in March next year, kicking off a four-year period of staggered unfreezing of its native digital asset, according to data source Token Unlocks.
On March 16, the protocol designed to offer scalable and low-cost smart contract capabilities will "cliff unlock" 1.11 billion ARB tokens worth $1.24 billion at the going market rate of $1.12. The amount to be released equates to 87% of the token's circulating supply of 1.275 billion. At press time, over 5 billion ARB tokens remain locked.
Unlocks are staggered releases of cryptocurrencies that had been frozen to prevent early investors or project team members from selling in large numbers. The Cliff unlock method allows for unfreezing a certain number of tokens immediately after a predetermined period, after which unfreezing happens in a linear schedule.
Following the March 16 release, Arbitrum will continue to unfreeze a certain amount of tokens every four weeks for four years, Token Unlocks noted in a tweet.
Unlocks free up liquidity and are considered bearish catalysts for the cryptocurrency's price. A study by analytics firm The Tie shows that unlocks representing more than 100% of the average daily trading volume tend to weigh over the token's price.
As of writing, ARB changed hands at $1.12, down 4% for the month, according to data source TradingView.