According to CoinDesk data, Avalanche's native token, AVAX, underperformed the cryptocurrency market a week before to its token unlocking event.
Token.Unlocks data indicates that on Thursday, locked-up tokens valued at approximately $365 million will be released from vesting and put into circulation.
The Avalanche {{AVAX}} network's native cryptocurrency did worse than most other digital assets this week, despite the token's supply being increased by a $365 million unlocking event.
Over the previous week, AVAX fell more than 3%, while the majority of cryptocurrencies—148 out of the 173 components of the widely traded CoinDesk Market Index (CMI)—saw price increases. During the same time frame, the CoinDesk20 Index (CD20), which measures the performance of the biggest and most liquid cryptocurrency assets, increased by 6%. AVAX traded around $38, almost 23% less than its peak in December, at the time of publication.
The underperformance occurred because, according to statistics from Token.Unlocks, around 9.5 million of the $365 million worth of previously locked-up AVAX tokens will be released on Thursday, increasing the asset's circulating supply by about 2.6%.
1.67 million tokens will go to the Ecosystem Development Foundation, 2.25 million to strategic partners, 4.5 million to team members, and 1.13 million are set aside for airdrop.
On-chain data indicates that almost 58% of all AVAX tokens have been unlocked.
When an asset's supply is increased through token unlocks, previously locked-up coins—including those belonging to early investors—are released from a vesting term.
According to a report published last year by the cryptocurrency analytics company The Tie, large unlocking events typically result in price drops within two weeks as a result of the rise in supply surpassing investor demand for the asset.
#AVAXUSD #Write2Earn
#TrendingTopic #PIXEL $AVAX $STRK