The Ethereum ecosystem comprises dozens of Layer-2 (L2) blockchains, each regularly unlocking millions of dollars’ worth of its native tokens. These significant unlock events can create substantial selling pressure, potentially leading to price drops over time as private investors look to sell off their assets. In this context, crypto expert Vinicius Barbosa highlights two tokens to watch out for due to their upcoming unlock events.
Pay Attention to Arbitrum and Starknet Unlock Events!
According to TokenUnlock data, two popular Ethereum L2s are set to unlock around $100 million worth of tokens this week. Notably, Arbitrum (ARB) and Starknet (STRK) are responsible for $74.69 million out of the $116.86 million in tokens set to be released from 13 different cryptocurrencies over the next seven days starting from September 14. This represents a 2.7% and 3.6% increase in circulating supply for ARB and STRK, respectively.
Specifically, Arbitrum will unlock 92.65 million ARB tokens worth $49.17 million by September 16, making it the leader in this week’s unlocks. Meanwhile, Starknet will release 64 million STRK tokens valued at $25.52 million by September 15, placing it among the key altcoin projects that traders and investors should keep an eye on.
The Ethereum Layer-2 Scaling Debate
In 2018, Ethereum creator Vitalik Buterin argued that the future of cryptocurrencies would depend on Proof-of-Stake (PoS) and Sharding. Buterin noted that blockchain technology with PoS and sharding would become thousands of times more efficient, making the trade-offs of storing assets on a blockchain increasingly acceptable.
However, Ethereum’s core development has shifted from this vision toward layered scaling solutions after struggling for years to implement functional sharding technology. Meanwhile, other blockchains, such as MultiversX (EGLD), have successfully implemented all three types of sharding. Justin Bons, the founder and CIO of Europe’s oldest crypto fund, described this achievement as “the technological Holy Grail of crypto” during a discussion hosted by Laura Shin on Unchained.
Repeated Unlocks and Inflation Risks in Arbitrum (ARB)
As mentioned by Justin Bons, the tokenomics of Ethereum L2s often face conflicting financial incentives. Private allocations from VCs, who are compelled to sell at higher prices, have their tokens unlocked through vesting contracts. Bons described this dynamic as “predatory” and highlighted how Arbitrum has suffered from repeated unlock events leading to monthly losses. For instance, the 92.65 million ARB tokens unlocked in June were valued at $85.37 million, while July’s unlock was worth $65 million, resulting in 42% and 24% losses, respectively.
Disclaimer: The views and predictions mentioned in this article are those of the expert and do not constitute investment advice. The Bit Journal encourages readers to conduct their research before investing.
