Amid the current bear market, 1inch, a decentralized exchange (DEX) aggregator, is set to unlock 222,000,000 1INCH tokens as part of its token release schedule. The tokens, worth approximately $112 million at the time of writing, will be unlocked on December 30th.
1inch to Unlock 222M Tokens
According to the on-chain data tracking website Token Unlock, the amount of tokens that 1inch will be unlocking represents 14.8% of its total supply.
The DEX aggregator has a total supply of 1.5 billion 1INCH tokens. Currently, over 611 million 1INCH (approximately $307 million) have been unlocked. This means that more than 888 million 1INCH tokens, representing 59% of the total supply, remain locked.
What are Token Lockups?
Token lockups refer to a period when a cryptocurrency cannot be traded on the market. This feature ensures that large token holders do not sell off the token upon its entry into the crypto market, especially after an initial coin offering. That way, the asset is likely to see a price increase.
Token lockups can also be called vesting periods. The lockup period of a cryptocurrency is usually defined while the token is being launched.
In the case of 1inch, it was revealed before the launch of its token, 1INCH, that it has varying vesting periods. The team behind the aggregator platform divided its total token supply among six groups. The vesting periods defined were between one year and four years. The tokens will be released for trading on the market when the vesting period is over.
Concerns Over the Price of 1INCH
Following the revelation made by Token Unlock, members of the crypto community seem to be concerned about the effect the token unlock would have on the price of 1INCH. Some predict a significant price drop if 14.8% of the token’s supply gets released at a time
Currently, however, the token is yet to see a price drop. It trades at $0.49 at press time.
Notably, 1inch is not the only platform that uses a token lockup mechanism. Popular play-to-earn (P2E) game Axie Infinity also uses the mechanism for its utility token, AXS. On October 24, the platform unlocked 8% of its total supply.
Axie Infinity co-founder Aleksander Larsen assured worried community members ahead of the unlock that the team would not dump the tokens. Notably, the 1inch team has yet to release similar official comments regarding its upcoming unlock.
