Token unlock data shows the crypto market will experience a $200 million supply increase from cliff unlocks, with Aptos (APT) and Eigenlayer (EIGEN) leading the way.
Tokens that will participate in cliff unlocks next week include Aptos (APT), Eigenlayer (EIGEN), Optimism (OP), Neon (NEON), Cardano (ADA), and Mode (MODE). These projects will begin increasing their current circulating supply from Monday, with APT and EIGEN accounting for the largest share of unlocked volume.
A cliff unlock is an event where crypto projects release tokens that have been vested in investors, community members, or advisors after a lockup period. The increase in supply from token unlocks often creates negative sentiment among investors, which can trigger significant sell-offs.
APT will see $93.76 million worth of tokens unlocked, which could lead to a correction after its impressive performance over the past seven days. APT has gained 10% in the past 24 hours, with weekly gains reaching 9.3% amid the market decline on October 1.
The asset’s growth can be attributed to Franklin Templeton’s recent launch of a Cryptocurrency Money Market Fund (FOBXX) on the Aptos blockchain. The move allows investors to access the fund via the Aptos network.
EIGEN will also add $34 million worth of tokens to circulation, representing 5% of its current circulating supply. The token gained nearly 6% on Friday, despite reports of a user losing 1.6 million EIGEN, about $6 million, to a hacker attack.
Eigenlayer has also been the subject of controversy after community members complained that the team distributed $6 million worth of tokens to venture investors without any lockup period. These reactions, along with the upcoming token unlock, could negatively impact the price of EIGEN.
Other tokens that will see an increase in circulating supply include OP and NEON, which will release $19 million and $17 million worth of tokens into circulation, respectively.
NEON has increased by more than 5% in the past 24 hours. This project will add more than 90% of the current circulating supply to the market.
OP has also increased by more than 5%, recovering from a nearly 16% drop last week.
Additionally, data from Keyrock has noted a major failure of airdrop projects with high fully diluted valuations (FDV) and low circulating supply, especially after 90 days of launch.
However, Crypto Koryo news site noted in a September post that sectors with low circulating supply and high FDV were the best performers of the month.
They also said that if a token with low circulating supply and high FDV performs well, unlocking events can be viewed as a “strategy,” and Sui blockchain is one such example.