A token unlock is the moment when previously locked or vested tokens become transferable. Teams, investors, foundations, and ecosystem funds often receive allocations that cannot move until a cliff or vesting schedule releases them. On that date, circulating supply can rise even if no new mint occurs at the protocol level.
Why it matters
Unlocks are a supply event traders can calendar. Large unlocks relative to daily volume can pressure price if recipients sell. They can also pass quietly if holders stake, transfer OTC, or simply hold. The desk mistake is treating a thin float as permanent scarcity while a known unlock wall sits on the calendar.
Read the allocation tables, cliffs, and linear vesting lines. Fully diluted valuation (FDV) already prices the idea that locked supply may circulate later. Unlock days test whether that future supply meets willing buyers. Headline market cap on a small float can look cheap until unlocks land.
Not every unlock equals market-sell pressure. Some recipients are long-term aligned. Still, liquidity planning matters. If unlocked size is several times average daily volume, order books can feel heavier for days. Watch exchange inflows and unlock trackers alongside the narrative that said the float was scarce.
Simple example
A token trades tightly because only a small share is circulating. Next month, early investor tokens equal three days of typical volume become transferable. Even if half the unlock is held, the other half can soak bids. The chart did not change overnight because of news. The float did.
Unlock trackers help, but primary docs beat screenshots. Confirm wallet addresses, cliff dates, and whether unlocked tokens face further transfer restrictions before you treat a calendar row as hard sell pressure.
Related terms
See fully diluted valuation, circulating supply, tokenomics, and liquidity. Browse more in the crypto glossary.