What are Unlocks in Cryptocurrency?

Unlocks in cryptocurrency refer to the process of releasing a certain amount of tokens or crypto assets that were temporarily frozen or restricted from trading.

This is often done as part of token distribution plans for developers, investors, or ecosystem participants. Once the tokens are unlocked, their holders can freely trade, sell, or use them as they wish.

Key aspects of unlocks:

⚫Vesting — This is the process of gradually unlocking tokens over a specific period. For example, the project’s development team may receive their tokens in stages to avoid a sudden sale of a large number of assets on the market.

⚫Unlocks for early investors — Often in ICOs (Initial Coin Offerings) or other forms of fundraising for crypto projects, early investors or teams are given a lock-up period for their tokens to prevent mass selling and a price crash.

⚫Impact on the market — Large unlocks can significantly impact the price of a cryptocurrency, as a sudden influx of tokens into the market may lead to selling and a price decrease.

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