In crypto, many people believe that winning or losing comes down to catching the right narrative, buying the right “good project,” or entering at the perfect timing. However, the 2024–2025 cycle has proven one thing very clearly: for projects with low circulating supply and high FDV, ignoring token unlocks significantly increases the risk that retail investors become exit liquidity for venture funds.
Token unlocks do not cause immediate price shocks like macro news or hack-related FUD. Instead, they do something quieter and more persistent: they inject new supply into the market on a continuous basis, functioning like a slow and fully legal rug pull executed by the project itself.
1. Overview of Token Unlock and Vesting
1.1 What Is Token Unlock?
Token unlock refers to the process of releasing previously locked tokens into the circulating supply. Once unlocked, these tokens can be distributed to different groups, including:
- Core team
- Venture funds and early investors such as seed or private rounds
- Community recipients such as airdrops, rewards, and incentives
- Project treasury or foundation
- Strategic partners
Token unlocks can follow a fixed schedule or be adjusted according to the project’s token issuance policy. This may include schedule changes, extended timelines, or modified distribution mechanisms during specific phases.
1.2 What Is a Token Vesting Schedule?
A token vesting schedule is a mechanism designed to release tokens gradually over time instead of introducing the full supply to the market at once. This helps prevent insiders such as teams and VCs from selling aggressively right after listing, while also stabilizing supply and demand during early stages when liquidity is thin.
Vesting also plays a critical role in aligning the long-term incentives of teams and early investors with the project’s development. It reduces the likelihood of large-scale dumping and improves transparency for investors evaluating tokenomics, especially when assessing long-term dilution risk.
Common vesting structures include:
- Cliff vesting: tokens are fully locked for a fixed period, then a large amount unlocks at once
- Linear vesting: tokens unlock gradually on a daily or monthly basis
- Step vesting: tokens unlock at predefined milestones such as quarterly intervals
1.3 The Role and Impact of Token Unlocks
Token distribution is a core component of crypto asset management and affects multiple stakeholders, including investors, teams, users, and the broader community.
- For investors, vesting schedules help identify when circulating supply will change. This allows for more informed decisions around entry and exit timing.
- For teams, token allocations serve as long-term incentives. These tokens are typically locked for a period to ensure fairness and sustained commitment to the project.
- For users and the community, token distribution builds trust and participation. In many DeFi projects, native tokens also represent governance rights, giving holders a direct voice in protocol decisions.
- For the project itself, native tokens often play a functional role in network operations. Token issuance therefore supports long-term sustainability and ecosystem activity.
2. Why Token Unlocks Matter?
Token unlocks are among the most powerful forces affecting token price because they directly increase circulating supply. While narratives and news primarily influence expectations and short-term volatility, token unlocks introduce real supply into the market. In weak liquidity conditions, increased supply exerts sustained downward pressure on price over the long term.
The highest-risk scenario occurs in projects following the low float and high FDV model, a structure that has become increasingly common for new listings. At launch, low circulating supply makes price control easier and creates an illusion of scarcity. However, most of the remaining supply typically belongs to seed, private, VC, or team allocations, which are released according to vesting schedules.
Once regular unlocks begin, new supply continuously enters the market, creating persistent sell pressure.
More importantly, token unlocks do not impact price in a one-time event. They often create a prolonged effect that lasts for months. During market downturns, unlock pressure becomes a constant headwind even if the project continues shipping products, forming partnerships, and improving fundamentals. Charts often move in the opposite direction.
This leads to a common psychological mistake. As prices fall, investors repeatedly average down, believing the asset is undervalued, while in reality they are buying directly into a structural increase in supply. They are effectively accumulating during the most aggressive dilution phase.
This is why many investors in the 2024–2025 cycle feel that their tokens never recover. They are not only fighting negative sentiment, but also a scheduled dilution process. Data from this cycle shows that many altcoin sectors, especially narrative-driven ones such as Layer 2, GameFi, and NFTs, collapsed due to low float, high FDV structures combined with extended unlock schedules. Investors eventually realized they were not buying future technology, but serving as exit liquidity for insiders.
Tracking token unlocks is no longer optional. It is the minimum requirement to determine whether a token suffers from weak demand or excessive supply.
3.Case Studies of Low Float and High FDV Models
3.1 Starknet (STRK): Low Float and Long-Term Unlock Pressure
STRK is a textbook example of the low float and high FDV model. CoinGecko has categorized STRK among large-cap assets with the lowest circulating-to-FDV ratios.
The key issue was its unlock schedule. StarkWare faced strong community backlash over an initially aggressive unlock plan and was forced to revise the schedule to reduce early unlock pressure and distribute supply more gradually over time.
This illustrates the core of the unlock trap:
- Tokens are listed with low circulating supply, making prices easier to sustain
- Future supply is concentrated among early contributors, investors, and the team
- Scheduled unlocks create long-term dilution, especially when altseason liquidity no longer spills over
AltLayer (ALT): Unlock Pressure Leading to Vesting Suspension
AltLayer demonstrates how unlock pressure can force projects to modify tokenomics mid-cycle.
After the first unlock on July 25, 2024, AltLayer announced a six-month vesting pause from July 26, 2024 to January 24, 2025. During this period, no additional tokens were unlocked for investors, the team, advisors, or the treasury. Despite this, $ALT price performance did not meaningfully recover.
Subsequently:
- The next unlock occurred on January 25, 2025
- Investor tokens vested linearly over two years
- Team, advisor, and treasury tokens vested linearly over three years
STRK and ALT clearly reflect the defining pattern of the 2024–2025 cycle. As the market became less forgiving, unlock pressure turned into a critical survival variable. When projects are forced to pause vesting, it signals that unlock pressure alone can break price structure even if the narrative remains intact.
4. The Unlock Landscape in the 2024–2025 Cycle
The 2024–2025 period marked a major structural shift in crypto markets.
More projects were listed, but many launched with low float and high FDV at elevated valuations without mature products. The result was continuous price deterioration.
In previous cycles, the familiar pattern was Bitcoin up, then Ethereum up, followed by broad altseason. In this cycle, capital became far more selective and less rotational. Newly listed tokens no longer benefited from spillover liquidity.
Many projects entered the market with strong narratives and high valuations, but token issuance structures heavily favored low float and high FDV. Initial scarcity pushed prices early, while most supply remained locked with seed, private, VC, and team allocations. Once vesting began, periodic unlocks injected new supply into secondary markets while liquidity remained insufficient.
This produced a market environment where prices struggled to rally and continued to bleed.
The key observation is that the 2024–2025 market did not lack technology or products. Prices weakened primarily due to systemic supply pressure from unlock schedules. As listings became more frequent and competition for liquidity intensified, capital fragmented across many new tokens instead of concentrating in altcoins.
The result was a liquidity drought across altcoins. Tokenomics became the decisive factor. Projects with light unlock schedules, balanced allocations, or real demand driven by usage and cash flow performed relatively better. Projects with heavy unlock schedules suffered continuous dilution and often turned late investors into exit liquidity for insiders.
5. Platforms for Tracking Token Unlocks
Most general crypto data platforms such as CoinMarketCap, CoinGecko, and SoSoValue provide basic unlock information. However, for deeper insights into unlock dynamics, specialized platforms are more effective.
Typical unlock tracking tools display:
- Project name and ticker
- Market cap and fully diluted valuation
- Circulating supply and maximum supply
- Unlock dates, unlock amounts, and USD value
5.1 Tokenomist
Tokenomist, formerly TokenUnlocks, is one of the most widely used platforms for tracking token unlock schedules, especially among altcoin investors. Key features include:
- Clear separation between cliff and linear unlocks
- USD valuation of unlocked tokens by day or month
- Market cap and FDV comparisons to identify low float and high FDV structures
- Unlock schedules segmented by allocation group such as team, VC, community, and treasury
- Watchlists and alerts for major unlock events
5.2 CryptoRank
CryptoRank is a strong crypto data platform with a focus on funding and tokenomics. It is particularly useful for identifying which stakeholders are unlocking and potential future sell pressure. Features include:
- Dedicated Token Unlock and Vesting sections for major projects
- Timeline views showing remaining locked supply and unlocked amounts
- Integration with funding round data to identify seed and private investors
- Tabular views for filtering upcoming large unlocks
DropsTab
DropsTab is a portfolio tracking and market data platform that includes a straightforward token unlock and vesting section. It is suitable for quick checks on upcoming unlocks. Features include:
- Token unlock schedules by project and timeline
- Upcoming unlock summaries for quick filtering
- Simple UI integrated with watchlists and portfolios
- Price and supply data to assess dilution impact
5. Conclusion
Token unlocks are one of the most influential variables in investment outcomes, yet they are often overlooked because their impact unfolds slowly over time. This gradual nature makes monitoring unlock schedules more important than ever.
The 2024–2025 cycle, and likely future cycles as well, will be characterized by strong market polarization. Many altcoins will face persistent liquidity shortages, especially projects following low float and high FDV models with dense vesting schedules. As capital no longer rotates broadly, unlock supply becomes a long-term drag, preventing price recovery even when projects continue to build and ship.
Understanding token unlocks is no longer an advanced skill. It is a baseline requirement for anyone investing in crypto assets.
Disclaimer: This content does not constitute investment, tax, legal, financial, or accounting advice. MEXC provides this information for educational purposes only. Always do your own research, understand the risks, and invest responsibly.
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