A token unlock is the scheduled moment when restricted tokens become transferable, adding to float and often affecting market liquidity.

How it works

At token generation, most insider and investor tokens sit in vesting contracts — cliff plus linear release. Each unlock tranche hits wallets on defined dates; dashboards and data providers publish unlock calendars for major protocols. Cliffs commonly run six to twelve months post-TGE; vesting continues monthly or quarterly thereafter.

Unlock size relative to daily trading volume matters. A unlock worth 50% of weekly volume may pressure price unless absorbed by demand or OTC desks. Some projects coordinate market makers or buyback programs around large unlocks — with mixed results and disclosure obligations.

Equity lock-up concepts parallel token unlocks but enforcement is on-chain and public, so front-running and sentiment shifts happen faster.

Why it matters

• Founders: Align team unlocks with milestones where possible. Sudden insider selling damages community trust even if legally permitted.
• Investors: Fund NAV tied to tokens requires unlock-aware risk management. Partial sales into liquidity before major unlocks are common GP tactics.

Common mistake

Assuming unlocks are priced in perfectly because dates are public. Thin markets still gap down on heavy supply days when macro sentiment is weak.

Related ideas

See also token allocation, lock-up, cliff vesting, and circulating supply.