The liquid staking protocol Lido (LDO), Avalanche blockchain's native token (AVAX), and Yield Guild Games DAO's governance token (YGG) are all scheduled for major token unlocks this week, significantly increasing circulating supply.
Understanding Token Unlocks
Token unlocks represent the phased release of previously locked tokens, designed to prevent mass liquidation by early investors or project team members. These events often create volatility in crypto markets.
Lido (LDO) Unlock Details
- Date: August 26
- Amount: 8.5 million LDO ($14.2 million)
- Percentage of Supply: 0.97%
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All unlocked LDO tokens will be distributed to investors holding over 300 million tokens. Market data shows LDO declined 8.5% last week but stabilized in the past 24 hours.
Avalanche (AVAX) Major Unlock
- Date: August 26
- Amount: 9.54 million AVAX ($102.86 million)
- Percentage of Supply: 2.77%
The allocation breakdown:
- Strategic partners: 2.25 million ($24.21 million)
- Foundation: 1.67 million
- Team: 4.5 million ($48.42 million)
- Airdrop participants: 1.13 million
AVAX prices dropped 13% last week amid anticipation of this event.
Yield Guild Games (YGG) Unlock
- Date: August 27
- Amount: 12.2 million YGG ($2.87 million)
- Percentage of Supply: 6.6%
Despite a 49% monthly surge, YGG has fallen 59% annually and 30% last week, reflecting GameFi's struggle for mainstream adoption.
Market Impact of Token Unlocks
Research analyzing 350,000+ unlock events reveals:
- Prices typically decline before unlock dates
When liquidity exceeds 100% of average daily volume:
- Short-term rebound occurs
- Followed by decline within two weeks
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This pattern suggests holders may delay selling, creating temporary price stability before eventual downward pressure.
FAQ: Token Unlocks Explained
Q: Why do projects implement token locks?
A: To prevent market flooding by early investors and maintain price stability during project development.
Q: How can investors prepare for unlock events?
A: Monitor unlock schedules, assess percentage of circulating supply, and review historical price action around previous unlocks.
Q: Do all unlocks cause price declines?
A: Not necessarily - well-communicated unlocks with strong fundamentals may have minimal impact, especially when distributed to long-term holders.
Q: What percentage of supply unlock is considered significant?
A: Events exceeding 1% of circulating supply typically warrant close attention from traders.
Q: How long do price effects typically last?
A: Most volatility occurs within 2 weeks before and after the unlock date.
Q: Where can I track upcoming token unlocks?
A: Specialized platforms like TokenUnlocks provide comprehensive calendars and analysis.