TIA will experience a large token unlock on October 31 with 175 million tokens or 16. 5% of the total supply to be released.
Currently, the token’s circulating market cap is at only 20% of the total supply, this raises eyebrows over consequent pressure on the price of the token.
From 1st November an extra 1,000,000 $TIA tokens will be launched daily to reach a total possible supply of $390M.
For now, let us look at $TIA’s circulating market cap, which is currently at around $870 million and accounts for only 20% of the total supply; fears of a price drop have emerged. The next major unlock of tokens is possible on October 31, which is what market watchers are waiting for.
This unlock will place 175 million $TIA tokens into circulation which is 16.5% of the total tokens. This unprecedented increase has raised concerns over possible token dilution especially given the fact that $TIA has been on an upward trajectory since its listing and is currently trading 80% down from its all-time high.
Upcoming Token Unlock and Supply Increase
The first episode is due on October 31st, but this is only the start. From November 1st, an additional one million of $TIA tokens will be released into circulation daily. At the end of this unlock cycle, the total circulation supply of $TIA tokens will have risen to around 390%.
https://twitter.com/Token_Unlocks/status/1833076383096185239
If this additional supply cannot be absorbed, there can be considerable pressure on prices. Traditionally, such token unlocks have led to a reduction in the price if there is no corresponding increase in demand to counter the enhanced supply.
One of the primary concerns in this scenario is the risk of token dilution. With a fully diluted market cap of $4.54 billion, the increase in available tokens could drive the value of individual tokens downward. Investors and traders are paying close attention to whether $TIA can sustain demand levels high enough to counterbalance the rising supply. Token dilution often leads to decreased prices unless met with corresponding growth in buying interest.
Long-Term Sustainability Measures
However, a few aspects of the $TIA token release schedule indicate longevity as part of $TIA’s strategy. This way of releasing tokens in the subsequent years instead of releasing them all at once could also alleviate the effects of dilution in the short term. In addition, governance mechanisms can constrain token flow and, thus, avoid sharp fluctuations in the market. However, the share price response to the October unlock remains critical in the $TIA’s future.
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