Token unlocks will start affecting the market in the first day of September. In a traditionally bearish month, new token inflows will put a strain on available liquidity.
The crypto market faced the challenge of absorbing the unlocks of low-float tokens. Most assets survived and their protocols continued to draw in traffic and produce fees. In September, a new batch of token unlocks is expected, possibly changing the trading profile of several prominent tokens.
The first week of September will come with more than $360M in nominal value unlocked. September unlocks will be more subdued compared to previous months, possibly to avoid causing additional bearish pressure. The second week will see the bulk of unlocks for the month, valued at more than $405M. During the same period, projects will have more than $118M in cliff unlocks, testing the liquidity of the market.
The month of September will continue with the usual linear unlocks for most low-float tokens. Linear unlocks are valued at close to $280M per week. As usual, the market will have to absorb unlocks from prominent L2 networks, including ARB, OP, SUI, MANTA, STRK, and others.
In the case of SUI, the unlock will grant access to tokens from the earlier private sale.
Taiko expands supply with community airdrop tokens
The most significant unlocks in absolute value terms and in supply inflation belongs to Taiko. The Taiko L2 network aims to reach speeds similar to Base, while retaining a high-profile positioning.
Taiko has been around for only 90 days since its launch, but has heavily subsidized both its social media profile and on-chain presence. The platform is one of the biggest users of blobs on Ethereum, paying top fees for the additional block space.
The Taiko unlock will in fact add the tokens of the Trailblazer airdrop, which incentivized the community in June and July. The airdrop will expand the TAIKO token supply by 15.8%, giving more tokens to all wallets that interacted with the protocol through daily tasks like bridging.
TAIKO may feel significant price pressure, as currently only about 7% of its total supply is in circulation. Since June and the peak of the airdrop campaign, TAIKO also slid by about 50%, trading at $1.49.
In total, the Taiko Labs team, early investors, and the Taiko Foundation hold around 47% of all tokens, to be unlocked gradually over time. The community has access to less than 10% of the tokens, meaning whales and the Taiko Foundation also can control liquidity, distribution and voting on protocol issues.
Immutable unlocks tokens for development
The other big unlock coming September 6 is for Immutable (IMX). The unlocks will bring $40.92M in new tokens, but the assets are earmarked for project and ecosystem development.
IMX has already unlocked 79% of the supply and will add only 2% to circulating tokens. As with other assets, absorbing the supply led to price pressures, leaving IMX trading in a range. IMX peaked above $9.52 shortly after launching, and has not made a new high since then. The news of the unlock saw IMX slide further, to $1.25.
Data on token unlocks differ between researchers. Cheelee is listed as the biggest September unlock, with its next event unlocking more than $388M in tokens. Cheelee is a very low-float project, with no listings on the most influential centralized exchanges.
Cheelee has been backed by relatively unknown entities, including VC Sila and Veligera Capital. The project has planned cliff unlocks almost weekly, predominantly for community rewards. The Cheelee project is an on-chain social media, rewarding its users for watching content.
The other unlock with a big dilution effect will be for MODE, coming on September 5. MODE will expand its supply by more than 38.4%, starting from a free float of 13%. The self-reported supply of MODE is 1.3B tokens, with a total supply of 10B tokens. The unlock may be bearish for MODE, as the token has been sliding since its launch in May, to trade at $0.012.
Eigen Layer is the other curious token to join the unlocks for September. EIGEN tokens are still in the pre-trading stage, with only 5% in circulation. EIGEN plans to expand its airdrop with another $28M in nominal value from September 10. The last months of 2024 will also bring a series of EIGEN unlocks for early airdrop farmers.
Cryptopolitan reporting by Hristina Vasileva
