Token unlock: what it is and how vesting schedules work

A token unlock is the moment when tokens that were held back under a vesting schedule become free to move. Before the unlock, the tokens exist but their holders cannot transfer or sell them. After it, they can. Many projects launch with only part of their supply in circulation and release the rest over years, so unlocks are a normal, scheduled part of how supply grows. This entry explains how those schedules work, using SUI and ARB, and what an unlock does and does not tell you.

What a vesting schedule is

A vesting schedule is the set of rules that says how many locked tokens are released, to whom, and when. The rules are usually published by the project and, in many cases, enforced by a smart contract that simply will not release the tokens early. The Arbitrum Foundation, for example, states that its own allocation is held in a vesting smart contract wallet.

Two shapes cover almost every schedule:

• Cliff: nothing is released for a set period, then a block is released at once. A one-year cliff means a year of zero unlocks, followed by a first unlock on the anniversary.
• Linear: tokens are released in small, equal steps, monthly or even every block, until the allocation is fully vested.

Most real schedules combine the two: a cliff first, then linear monthly releases for the remaining period.

Who usually holds locked tokens

Locked supply is rarely one bucket. The usual holders are:

• Team and early contributors: the people who built the project, paid partly in tokens.
• Investors: funds that bought tokens in private rounds before launch.
• Treasury and ecosystem funds: tokens set aside for grants, incentives and future development, often controlled by a foundation or a DAO vote.
• The project company or foundation itself.

The holder matters: a treasury releasing tokens to its own balance is not the same event as early investors receiving tokens they paid for years ago.

Circulating supply, total supply and FDV

Three numbers describe where a token's supply stands:

A large gap between market cap and FDV means a large share of the supply is still waiting to be released. That is the whole reason unlock calendars exist.

Two real schedules: ARB and SUI

ARB. The Arbitrum Foundation docs say all team and investor tokens carry a four-year lockup: nothing for the first year after the token launched on March 16, 2023, then monthly unlocks for three years. The first unlock, on March 16, 2024, released about 1.11 billion ARB, 673.5 million to the team and advisors and 438.25 million to investors, according to Messari data reported by Unchained. Before it, circulating supply was roughly 1.45 billion, so a single day added supply close to the size of what was already trading. The same report put each later monthly unlock at 92.64 million ARB. The Foundation's own 7.5% allocation follows a different, purely linear shape: it unlocks evenly over four years from April 17, 2023.

SUI. The Sui docs set the supply cap at 10 billion and say the launch came with a one-year cliff that ended in May 2024, with no airdrop at launch. Since then, releases have landed on the first day of the month. The October 1, 2024 unlock, for example, was about 64.2 million SUI, 2.4% of circulating supply at the time; Unchained reported that 61% of it went to Series A and B investors, about 16% to early contributors, 20% to the Community Reserve and the rest to the Mysten Labs treasury. Tokenomist says the full SUI schedule runs into 2030.

How to look up an upcoming unlock

1. Start with the project's own docs. Look for a page called tokenomics, token distribution or vesting. Note the allocation shares, the cliff and whether releases are monthly or linear.
2. Check an unlock tracker. Sites such as Tokenomist list the next date, the amount and which allocation receives it. Cross-check them against the docs, since trackers sometimes show stale or conflicting snapshots.
3. Size it. Compare the unlock with the circulating supply, not the total.
4. Read the recipient. Team, investor, treasury or community: the same amount can carry very different selling intent.
5. Look at holders on-chain. Our holder concentration check works the same way for vesting wallets: who holds the tokens once they are free, and how concentrated is that supply?

Do token unlocks affect price?

They can, and we won't pretend to know which way any single one will go. What we can say is what the evidence looks like. Market maker Keyrock studied more than 16,000 unlock events across 40 tokens and reported that most were followed by negative price pressure, with the move often starting around 30 days before the date and settling within about two weeks after. It found team unlocks among the worst, investor unlocks slow and muted, and ecosystem unlocks the least damaging. Keyrock itself notes its method "isn't perfect", publishes no significance tests, and sells the hedging services it describes, so treat the figures as a pattern, not a rule.

The key point is that an unlock is not automatically selling. It changes who can sell, not who will. Investors may hedge, sell over the counter or hold. Treasury tokens may sit untouched for months. And unlock dates are public long in advance, so part of any effect may already be in the price by the time the date arrives. An unlock is a change on the supply side vs demand side ledger: it raises how much could reach the market, but price still depends on how much buyers want to absorb.

If you hold a token with a large unlock coming, the useful question is about your own risk, not about guessing the move. Our guide on sizing a position into an unlock date covers that.

FAQ

What is a token unlock?

It is the scheduled release of tokens that were locked under a vesting schedule. Once unlocked, the holders, usually team members, investors or a treasury, can transfer or sell them.

What is a cliff in token vesting?

A cliff is a waiting period with no releases at all, followed by a first unlock when it ends. ARB and SUI both had one-year cliffs, ending in March 2024 and May 2024 respectively.

What is the difference between cliff and linear vesting?

A cliff releases a block at once after a waiting period. Linear vesting releases equal amounts at regular intervals. Many schedules use a cliff first and linear monthly releases afterwards.

Does a token unlock mean the price will drop?

No. It means more supply is able to move. Studies have found negative pressure around many unlocks on average, but each one depends on who receives the tokens, how large the unlock is relative to circulating supply, and what buyers do.

Where can I see when a token unlocks?

Start with the project's tokenomics documentation, then check a tracker such as Tokenomist for the next date and recipient, and compare the amount with the circulating supply.