Token Unlock Events
Token unlock events are specific dates when previously restricted tokens become tradable on the open market. These events are often pre-programmed into smart contracts and represent significant milestones in a token's lifecycle.
As the circulating supply increases during an unlock, the price may face downward pressure unless there is a corresponding increase in demand. Traders often hedge against these events using derivatives or adjust their positions to mitigate exposure to potential volatility.
Detailed calendars of these events are essential for risk management, as they provide clarity on the upcoming supply schedule. Many projects now provide transparency regarding these unlocks to allow the market to price in the supply increase effectively.