Arbitrum, Ethereum's leading layer 2 scaling solution, is set to unlock $1.2 billion worth of ARB tokens in March 2024.
Arbitrum To Unlock $1.2 Billion ARB Token In March 2024
According to information from Token Unlocks, this move marks the beginning of a carefully orchestrated four-year process aimed at gradually unraveling its native digital asset.
Acclaimed for its ability to deliver scalable and cost-effective smart contract capabilities, the protocol will launch an unlock mechanism on March 16, bringing 1.11 billion ARB tokens to the market.
Valued at the current exchange rate of $1.12 per token, this version accounts for 87% of the circulating supply, which equates to 1.275 billion ARB tokens. As of now, more than 5 billion ARB tokens are kept securely locked.
Unlocking, which is a common practice in the cryptocurrency space, involves the gradual release of frozen tokens to mitigate potential market disturbances from the sudden release of assets.
The launch of ARB tokens on March 16 will be just the beginning of a series of carefully choreographed unlocks.
As reported by Token Unlocks, over the next four years, Arbitrum will gradually unlock a predetermined amount of tokens every four weeks.
While unlocking tokens has the potential to provide liquidity to the market, it often puts downward pressure on the price of the cryptocurrency.
This observation is supported by an analysis by analytics firm The Tie, which reveals that unlocks that exceed 100% of the average daily trading volume tend to lower the token value.
*Not investment advice.