Arbitrum, a Layer-2 blockchain network, is preparing to release $2.32 billion worth of vested Arbitrum (ARB) tokens on March 16, which marks a significant milestone for the platform. This token unlock event, highlighted by Token Unlocks, will involve a “Cliff Unlock” mechanism where tokens are released in a lump sum at the specified deadline.
According to Token Unlocks data, around 1.1 billion locked ARB tokens will be unlocked, accounting for approximately 76% of the token’s circulating supply. Of these unlocked tokens, Arbitrum plans to allocate 673.5 million tokens, valued at approximately $1.41 billion, to its team and advisers. Additionally, 438.25 million tokens, worth around $915 million, will be released for investors. The Cliff Unlock approach ensures that no tokens are initially released until the unlock date, after which a lump sum will enter the market.
Unlocks are staggered releases of cryptocurrencies that have been frozen to prevent large-scale selling by early investors or project team members. The Cliff Unlock method allows for the immediate release of a certain number of tokens after a set period, followed by a linear unfreezing schedule.
Following the March 16 release, Arbitrum will gradually unfreeze a specific amount of tokens every four weeks for the next four years, as mentioned by Token Unlocks in a tweet.
With the substantial number of tokens set to be unlocked, members of the crypto community are anticipating potential price fluctuations for ARB tokens. Some predict an increase in short positions against the token on March 16, while others have already sold their tokens in anticipation of the unlock. Unlocks are typically considered bearish catalysts for a cryptocurrency’s price, especially when they exceed 100% of the average daily trading volume, as shown by a study from crypto analytics firm The Tie.
However, crypto influencer JJcycles offered a different perspective on social media, drawing parallels to a previous token unlock by Solana. JJcycles noted that Solana’s SOL token saw a price surge following the release of vested tokens, contrary to expectations of a price decline.
In terms of market performance, Arbitrum’s ARB token has lagged behind its competitors in the Layer-2 space despite overall sector growth. In the past day, ARB experienced a decline of over 2%, making it the weakest performer among the top five Layer-2 tokens, while the sector as a whole showed an average gain of 3.8%. SpotOnchain’s analysis revealed significant sell-offs by whales, with approximately 3 million ARB tokens sold for $6 million just before the event.
Despite these challenges, Arbitrum remains the largest Ethereum-based Layer-2 network, with DeFillama data indicating a total locked asset value of $3.6 billion. At the time of writing, ARB was trading at $2.10, reflecting a 3.04% decrease in the last 24 hours.
In addition to Arbitrum, several other projects are gearing up to unlock tokens this week. Aptos is set to release around 24 million tokens valued at approximately $329 million on March 13, representing a significant portion of the project’s circulating supply. Similarly, projects like ApeCoin, Flow, CyberConnect, Moonbeam, and Euler are also preparing to release vested tokens, collectively amounting to about $53 million in digital assets.
With approximately $2.7 billion worth of tokens scheduled to be unlocked this week across various projects, the cryptocurrency space is bracing for significant developments and potential market shifts in the days ahead.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
