The market for alternative cryptocurrencies (altcoins) may see an extra dose of volatility this week, as the impending token unlock schedule will release billions of dollars worth of supply for several coins, including Ondo Finance's ONDO token.
A new calendar from Tokenomist has highlighted that the upcoming token unlock schedule will see several decentralized finance (DeFi) tokens clocking billions of dollars’ worth of new supply.
The calendar, which includes names like Ondo Finance's ONDO, Arbitrum's (ARB) and zkSync's (STRK) governance tokens, shows that the total value of the weekly unlocks is set to cross $3 billion – the highest since November.
Among the bunch, the largest impending unlock belongs to DeFi token ONDO, used by decentralized tokenization-focused platform Ondo Finance.
On Jan. 18, the project will see 1.94 billion ONDO tokens, currently valued at $2.23 billion, get unlocked. This is over 130% of the circulating supply of the token, which stands at 1.4 billion. The impending ONDO unlock is also several times bigger than its daily trading volume, which has recently ranged between $250 million to $300 million.
After an initial period of being frozen to prevent early investors or project team members from liquidating coins at once, these planned token unlocks are typically staggered over a set period of time. The gradual releases are designed to help avoid rapid price swings and market instability.
However, we occasionally get to see unlocks like ONDO's that are bigger than the token's circulating supply or average daily volume, which could inject volatility into the market. According to research by The Tie, tokens facing unlocks equivalent to 100% of the average daily volume experience volatility in the lead-up to and following the event.
At press time, ONDO was trading down 5% on the day at $1.14. This marks the lowest price for the token since Dec. 2. The token has lost nearly 15% so far in January, with prices in a downtrend since hitting record highs above $2.10 on Dec. 16, as per TradingView data.
This story was originally covered by Coindesk
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