2 - 4 minute read
Avalanche Blockchain Set to Increase Total Supply by 1.2%
The native cryptocurrency of the Avalanche blockchain, AVAX, is set to increase its total supply by 1.2% with the unlocking of 9.3 million tokens on Sunday, May 27. The tokens, worth around $130 million, will be distributed to the Avalanche Foundation, strategic partners, Ava Labs, and an airdrop. According to Patrick Sutton, Avalanche’s communication chief, the tokens from the unlock will not automatically be put to use but will be at the discretion of the Foundation.
AVAX is an essential component of the Avalanche smart contract ecosystem and is used for securing the blockchain via staking. Despite the upcoming token unlocks, the cryptocurrency’s value has remained stable, standing at $14.20, according to CoinDesk data.
Token unlocks can often cause concern among traders, but Lindsey Winder, CEO of token infrastructure firm Hedgey Finance, noted that the upcoming Avalanche unlock has been mapped out for a while, and most sophisticated actors have adjusted for it.
According to data from crypto analytics firm Token Insights, 358.55 million AVAX remains locked. However, Sutton disputes the figure, stating that the actual number of remaining locked tokens is 96.06 million, which is roughly a quarter of Token Insights’ figure.
The unlocking of AVAX tokens is a significant development for the Avalanche blockchain ecosystem, and traders will be keen to know the implications of this event.
The Bottom Line
With the unlocking of 9.3 million AVAX tokens, the total supply of the cryptocurrency is set to increase by 1.2%. While this event may cause concern among some traders, it has been anticipated and mapped out for a while, and most sophisticated actors have adjusted for it. The distribution of the tokens to the Avalanche Foundation, strategic partners, Ava Labs, and an airdrop may provide opportunities for traders to capitalize on the market. However, traders should remain vigilant and keep an eye on any potential risks that may arise from the unlocking of these tokens.
