Layer-2 scaling solution Arbitrum is set to release a significant amount of ARB tokens into the cryptocurrency market tomorrow, April 16th, 2024. Data from token tracking platform Token Unlock reveals this upcoming token unlock will be the largest released this week, injecting an estimated $110 million into the crypto ecosystem.
This unlock event follows a similar one that occurred exactly one month ago. On March 16th, Arbitrum released a much larger sum – 1.11 billion ARB tokens – valued at $2.09 billion at the time.
Cliff Unlock Mechanism in Play
Token Unlock highlights that this upcoming token distribution will follow a “Cliff Unlock” mechanism. This means that unlike a gradual release, no tokens are distributed until the designated “cliff” date, which in this case, is tomorrow. The entirety of the 92.65 million ARB tokens, representing 3.49% of the circulating supply, will be released at once.
Also Read: Crypto Community Rallies: Arbitrum DAO Votes on $1 Million Defense Fund for Tornado Cash Devs
Potential Price Impact and Community Anticipation
Historical data suggests that token unlock events can influence cryptocurrency prices. Increased token supply often leads some traders to take short positions, potentially causing short-term price dips. Following the last Arbitrum token unlock on March 16th, the ARB token price dropped by over 25% within four days, falling from $1.96 to $1.44 according to TradingView data. The price has since rebounded, currently sitting at $1.23 at the time of writing.
The Arbitrum community is aware of the potential market impact surrounding this upcoming token unlock. With the general crypto market dynamics also at play, the true effect on the ARB token price remains to be seen.
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