I will show you in this post that no matter how low you think Crypto prices are currently, the early investors(VC) dont care and are in huge profit regardless.
This is a long read but you will learn something from this post, it also includes a trade idea at the end. (Because most will all ask anyways 😂)
I research crypto A LOT, probably to much for my own sanity, i know how the crypto market is getting manipulated and how retail is being used to make VC investors even richer.
Most in Crypto sadly dont understand this, hopefully this post will teach you something.
Thank you to TRimmis for pointing this unlock out for me🤝
In this post i am Using AltLayer as an example.
In 10 days AltLayer has a very important unlock happening, important for the early investors , this is a great example of a much larger problem happening in crypto.
While i am focusing on AltLayer for this post, AltLayer is just one of hundreds of projects that are founded, funded, launched on exchanges , all in a very similar way.
Pro VC, Anti retail.
For reference VC/VCs are venture capital/capitalists ( Investors who fund crypto projects before retail traders can buy them)
Case Study $ALT - AltLayer.
Current price - 0.1329
Current Market cap - $ 146 Million
Fully diluted value - $1.32 Billion
Circulating supply - 11%
For this post i want to focus on Investors(including advisors) and team.
I want to break down how profitable it is starting a project like AltLayer.
As shown in the image above the Team and Investors(Including advisors) have 38.5% of tokens(Total supply) allocated to them.
Team 15%
Investors 18.5%
Advisors 5%
Before we go further it is important to understand that these projects have a vesting period
A vesting period is a predetermined amount of time that tokens are locked, before this time the tokens should not be allowed to be unlocked, transferred or sold. A vesting period is supposed to protect retail investors from rug pulls and rapid inflation, vesting periods can be split into many unlocks over many years.
I underlined the word "should" because this is not always the case, in projects that are dodgy or where the project team/investors make the decisions, these unlocks can happen whenever the project team want, it was why months ago i told people to sell their PYTH tokens(And i got a lot of hate), the Pyth project team did exactly that, they unlocked their tokens prior to the vesting period to sell at a better price.
After the vesting period tokens will be unlocked and distributed as per the defined allocation breakdown, these unlocks happen in 2 ways, a linear or cliff unlock.
Linear is a slow release of tokens over time, could be days,weeks,months.
Cliff unlock is a total unlock on a certain date.
Cliff unlocks have far more impact on price as they potentially flood the market with new supply, the larger the unlock % to the current circulating supply, the larger the possible effect.
In 10 days $ALT (AltLayer) has a HUGE cliff unlock coming !👇
684 Million $ALT tokens will be unlocked, an increase of 42% of the current supply, this unlock is worth $86.7 Million
This is the breakdown 👇
I have underlined the token unlocks going to team and investors.
The $ amount of the July 25th unlock (at todays prices)
Team - $23.8 Million
Investors - $39 Million
Advisors - $10 Million
This is USD value, this is what they can sell their unlocked tokens for.
Investors and advisors are basically the same thing, so $49 million going to investors in this unlock.
In 10 days the early investors will be able to cash out this $49 Million
This is what VCs paid to invest in AltLayer.👇
Lets break this down.
The TOTAL raised for AltLayer funding was $21.6 Million.
Inicial seed VCs ($7.2M invested) paid $0.008 for their tokens( at current prices they are up 1400% ROI)
Strategic partners($14.4m Invested) paid $0.018 for their tokens (at current prices they are up 576% ROI)
Also please note this $14.4M strategic investment happen in Feb 2024, 5 months ago.
In the July 25th unlock alone the investors will unlock $49 million worth of tokens, this is just one of many future unlocks to come.
AltLayer only launched on Binance 6 months ago.
This is the first cliff unlock for investors, they are unlocking $49 million worth of value on their first unlock, total funding was $21 Million.
As the image above shows, the VCs will still recieve tokens via unlock until mid 2028, on their first unlock alone they have already more than 2x their funding investment.
$21.6 million funded($14 Million of which was 5 months ago) -> $49 million on first unlock.
For uninformed retail traders the current AltLayer prices seem low.
Why?
It is basically a PsyOP and little else.
We have slowly been manipulated to accept that the price tokens trade at in the days-weeks after launch is their fair value, or even that they are undervalued.
Because AltLayer was $0.60 or $0.50 only a couple months ago we now believe that the current price of 0.132 is an absolute gift.
The VCs on AltLayer will make $28 Million(or more) profit on their first unlock , after that they have 4 more years of profitable unlocks to come, this unlock returns their full investment and a large profit, we make it so easy for them.
95% of these projects have little real world usage, their value is solely what retail traders will pay for tokens and how much VCs can make.
Each of these projects have their own diehard fan base, for AltLayer it is probably the people who went all in at $0.50-$0.60 , now they have to tell themselves and others that it is the best project in the world.
Also note that Binance are one of the investors, not only on AltLayer but nearly all other tokens launched on the exchange, they get free/basically free % for launching the project on Binance, they make Billions off it.
Binance rarely, if ever, disclose their funding agreement with these projects, you can decide for yourself why (So i dont get banned)
There is no solution to this until most of Crypto stops supporting these projects.
The tokens from the upcoming Altlayer unlock will be dumped in the days-weeks after the unlock (Or before if they dont respect the vesting period)
The sale of these tokens give early investors a risk free and profitable investment, the next 4 years are all profit.
The problem is the VCs know that many in Crypto are becoming wiser to these VC funded, mostly garbage projects, and to the unlocks.
These tokens could be unlocked prior to the scheduled unlock, price could also be manipulated in the days before and after the unlock so the VCs and Team can get max value when they dump their tokens.
These VCs are already rich, they can afford to hold the tokens after unlock, just because they are unlocked doesnt mean they will be sold, it just makes them transferable to be sold.
With current economic/crypto price uncertainty i feel that the VCs will dump most of their tokens around this unlock.
*Edit* I included a trade idea at the end of this post that i have since removed as it is no longer valid and i dont want it to be misleading, i shorted ALT at 0.16 before the unlock and took profits when price dropped to 0.13.
If you enjoyed this post a like is always appreciated, i put a lot of time and love into these posts.🤙
Peace
#TheWolfThatWins #altsesaon #AltLayer #BinanceSquareFamily 👇
