Summary
TLDR: Token unlocks occur when cryptocurrency supply is released from vesting, causing prices to drop as demand fails to keep up with the increased supply. Research by The Tie shows a historical trend of price declines during these events.
Key Points
1. Token unlocks are a common occurrence in the cryptocurrency market, where the supply of tokens held by insiders such as early investors and team members are gradually released to the market.
2. Research by crypto analytics firm The Tie suggests that prices of cryptocurrencies often decline around token unlock events, as the sudden increase in supply outweighs the demand from investors.
3. Vesting periods are put in place to prevent insiders from dumping their tokens all at once, which could have a negative impact on the price of the cryptocurrency.