The digital asset market is bracing for the release of nearly $900 million in vested tokens in February, with projects like Avalanche, Aptos and The Sandbox leading the charge.
Crypto vesting is the process of locking down digital assets for a predetermined time before the holders can fully access or transfer them from their wallets. The practice is designed to prevent early investors from quickly dumping their tokens for a profit and leaving the business while attempting to incentivize long-term dedication to the project.
According to data provider Token Unlocks, about $900 million of tokens will be released in February. Some of the tokens set to be released include Avalanche, Aptos, The Sandbox, Optimism (OP) and Sui (SUI).
Of the projects releasing tokens, Avalanche will unlock the biggest amount. On Feb. 22, the proof-of-stake (PoS) blockchain project is expected to release 9.5 million tokens. At the time of writing, the tokens are worth around $320 million. Token Unlocks highlighted that the tokens are allocated to the Avalanche Foundation, the project’s strategic partners, team members and an airdrop.
Layer-1 blockchain Aptos will release 24.8 million crypto tokens on Feb. 11, which are worth around $233 million at current market prices. About $180 million in tokens are allocated to its core contributors and investors, while another $39 million in tokens are for its community and foundation.
Metaverse project The Sandbox is unlocking 209 million tokens worth around $90 million. Over $40 million worth of tokens are allocated to company reserves, while the rest will be unlocked for its team and advisers on Feb. 14.
And on Feb. 29, Optimism will release 24 million OP tokens worth around $70 million, to its core contributors and investors. Meanwhile, Sui will unlock $53 million in tokens for its community access program.
Tokenomics suggests that a sudden increase in the circulating supply of a token can negatively impact the market prices of cryptocurrencies.