*The Hidden Dangers of Crypto Tokens with Unreleased Circulating Supply and Vesting Schedules*
The cryptocurrency market is known for its volatility and unpredictability. However, there's a lesser-known risk lurking in the shadows: tokens with unreleased circulating supply and monthly vesting schedules.
*What's the issue?*
When a project launches, not all of its tokens are released into circulation. Instead, a portion is held back, often for founders, team members, or investors. This unreleased supply can lead to:
1. *Market manipulation*: Large token holders can influence market prices by releasing or withholding tokens.
2. *Liquidity crises*: Sudden releases of unreleased tokens can flood the market, causing prices to plummet.
3. *Pump-and-dump schemes*: Insiders can artificially inflate prices, only to sell their tokens at the peak.
Monthly vesting schedules, where tokens are gradually released to team members or investors, can also pose risks:
1. *Token dumping*: Team members may sell their vested tokens, putting downward pressure on prices.
2. *Lack of transparency*: Unclear vesting schedules can conceal the true token distribution.
*What can you do to protect yourself?*
1. *Research thoroughly*: Understand the token's circulating supply, vesting schedule, and token distribution.
2. *Check the project's transparency*: Look for clear documentation and regular updates.
3. *Evaluate the team's incentives*: Ensure team members' interests align with the project's long-term success.
4. *Diversify your portfolio*: Spread investments across multiple assets to minimize risk.
5. *Stay informed*: Monitor project announcements and updates
*Red flags to watch out for*:
1. Unclear or un disclosed token distribution
2. Large token allocations to founders or team members
3. Complex or ambiguous vesting schedules
*Conclusion*
Investing in cryptocurrency requires caution and diligence. Be aware of the potential risks associated with unreleased circulating supply and vesting schedules.
Stay informed, research thoroughly