Interpreting Messari's Token Unlock Report: New 5% Increase in Circulating Supply Could Significantly Impact Price, Largest Unlock Occurs in First Week of November
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Interpreting Messari's Token Unlock Report: New 5% Increase in Circulating Supply Could Significantly Impact Price, Largest Unlock Occurs in First Week of November
Some trends are worth noting—for example, the highly anticipated large-scale unlock could trigger unexpected market reactions.
Navigating Web3 tides with focused insightsAuthor: Stacy Muur
Translation: TechFlow
A few weeks ago, Messari released their in-depth report titled "Don't Look Down: Navigating Markets Around Cliff Unlocks," analyzing the impact of increased circulating supply on markets.
This article summarizes the key findings from their research and provides context and recommendations for tracking unlock events.
Messari Report: Key Highlights
Messari analysts examined data from 619 unlock events across 41 assets to identify patterns in market reactions to increases in circulating supply. Most events involved less than a 2.5% increase in circulating supply, with fewer than half exceeding 5%.
Data source: Token Unlocks, data as of September 16
Crypto tokens rarely trade in isolation—their prices are influenced by market sentiment, new product launches, shifting narratives, and other factors. While token unlocks typically have a negative effect on token prices relative to BTC, this is not always the case.
However, several trends stand out:
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Unlocks representing at least 5% of circulating supply tend to significantly impact token performance;
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Tokens often underperform in the seven days before and after an unlock event;
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New product launches, strong sector performance, and other catalysts can influence typical behavior around unlock dates;
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Highly anticipated large-scale unlocks may trigger unexpected market reactions;
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Tokens with heavy monthly unlocks struggle to outperform other altcoins over the long term;
Tracking Unlock Events
When tracking unlocks, I commonly use the Messari dashboard. Other notable tools include Token Unlocks and DefiLlama.
Upcoming major unlock events on Messari include:
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$ONDO: 268% supply increase over 3 months;
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$OMNI: 154% supply increase over 7 months;
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$PRCL: 121% supply increase over 7 months;
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$JITO: 108% supply increase over 2.5 months;
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$TNSR: 96% supply increase over 7 months;
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$TIA: 83% supply increase over 1.5 months;
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$PYTH: 58% supply increase over 8 months;
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$PORTAL: 15.7% supply increase over 2 weeks;
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$MAV: 14.5% supply increase over 3 weeks;
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$ZETA: 11% supply increase over 2 weeks;
DefiLlama highlights the following:
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$BIGTIME: 61% supply increase over 3 weeks;
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$CYBER: 69% supply increase over 1 month;
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$HOLD: 38% supply increase over 2 months;
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$LVL: 19% supply increase over 3 months;
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$BB: 100% supply increase over 7 months;
Monitoring Inflation
Another important metric is daily token issuance and changes in issuance rates. Here again, Messari offers valuable resources, particularly their Daily Linear Issuance Rate Max Change dashboard.
Key events that will increase inflation:
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$TIA will begin issuing tokens within 1.5 months;
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$JITO will increase daily issuance by 8x within 3 months;
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$DYM will increase daily issuance by 3.8x within 4.5 months;
Key events that will reduce inflation:
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UNI will halt new issuance this week, similar to RON and $XVS (which will stop next week);
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$WOO will reduce issuance by 75% within 1.5 months;
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$NEAR will reduce issuance by 38% within 1 month;
According to Token Unlocks, the first week of November will see the highest new issuance volume, with an estimated $1.4 billion entering the market.
Conclusion
Token unlocks are just one of many factors to consider when making investment or trading decisions. Other critical elements include new product launches, overall market sentiment, and liquidity. Often, the impact of an unlock is already priced into the market, making shorting a token around its unlock date an unreliable strategy.
The most significant impacts occur when unlock sizes exceed 5% to 10% of circulating supply, especially when there are no upcoming catalysts or limited attention on the token.
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@stacy_muur
