Token unlock

The scheduled release of units held back at issue - typically from a team, early backers or a treasury - into circulating supply.

Example

58,000,000 units releasing evenly over four years is 14,500,000 a year, which is 34.524% of a 42,000,000 circulating supply.

Important

At an unchanged value for the whole network the price per unit falls as units arrive: 42,000,000 / 56,500,000 is 74.336% of today's price after one year. Nothing has to go wrong for that to happen.

Related terms

• Circulating supply — The units of a digital asset currently in holders' hands, as distinct from the total number that will eventually exist.
• Token issuance — New units of a digital asset created by the protocol itself and distributed under its own rules.
• Dilution — The reduction in your percentage ownership of a company when it issues new shares to someone else.

Lessons that explain it

• Seven questions about one specific asset — What it does, who can issue more of it, who already holds it, how deep the book is, whether the rules can be changed, where you would keep it, and what would tell you that you were wrong. (14 min)

All 578 terms in the Investing glossary