Arbitrum Set to Unlock 92.65 Million ARB Tokens in ‘Cliff Unlock’ Event

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On April 16, 2024, Arbitrum, a prominent layer-2 blockchain platform, has announced another significant milestone called “Cliff Unlock.” During this event, around 92.65 million ARB tokens, equivalent to 3.49% of the circulating supply, will be released. Currently, this amount translates to roughly $116.73 million in market value.

At this event, the release of tokens is being referred to as a “mass token unlock.” This signifies that no tokens will be made available before a particular date, which is also known as the “unlock date.” A significant amount of tokens will flood the market simultaneously upon reaching this date.

Arbitrum unlock progress and countdown to next unlock. Photo: Token Unlocks

 Effects of the ‘Cliff Unlock’

Events of this nature can significantly impact markets, increasing volatility and boosting trading action. Traders attempt to profit from anticipated price fluctuations by speculating on such occasions. For instance, ARB’s market reaction following the Token Unlock was substantial. The token price experienced a noticeable decrease initially but subsequently surged again.

Anticipation builds among cryptocurrency enthusiasts as they await the “Cliff Unlock,” speculating about its potential impact on market trends. Investors closely monitor price fluctuations, bracing for possible significant shifts due to the massive release of ARB tokens that may follow. Opinions within the community are divided: some believe prices will surge post-unlock, while others exercise caution, recognizing the increased risk of market volatility.

Lessons from Previous Arbitrum ARB Unlocks

The Token Unlock event held by Arbitrum, where 1.11 billion ARB tokens were made available, provides valuable insights into potential market reactions. Initially, following the event’s launch, the ARB token price saw a significant decrease. However, it subsequently rebounded. This trend implies that the unlocking of tokens could lead to short-term price fluctuations. Yet, it remains uncertain what impact this event will have on the token’s worth in the long term.

For four consecutive days after the most recent Token Unlock event, ARB’s price experienced a significant decrease, resulting in over 25% value loss. According to TradingView, the price of the asset associated with Arbitrum’s layer-2 blockchain decreased from $1.96 on March 16 to $1.44 by March 19.

This week, several projects besides Arbitrum are preparing to make token releases. For example, Axie Infinity will unveil around 10.87 million AXS tokens on April 16, which equates to 7.6% of the project’s current supply and is valued at approximately $1.055 billion. Similarly, Immutable X is planning to put 34.19 IMX, worth around $76.59 million, into circulation this week, representing 2.4% of their circulating supply.

Originally, these tokens were assigned for different uses such as funding the project’s establishment, benefiting the community, rewarding core team members, and attracting investors.

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2024-04-15 18:18