Celestia’s token supply is set to nearly double on the heels of its upcoming unlock event.
Background
- Around 175.59 million locked-up TIA tokens — representing 80% of the current supply — are set to be released today at 2 PM UTC
- This marks the largest unlock event since the token’s launch last year
- Crypto projects typically lock a portion of the token’s supply and release it gradually
- This is done to close the window for early investors and insiders to outrightly sell right post allocations
- When tokens are unlocked, they become available to sell
- Per the thumb rule, this supply event is considered to be bearish and is accompanied by price depreciation
Why should you pay attention?
- Core contributors are set to receive 58 million TIA tokens
- Meanwhile, 65 million tokens are allocated to investors of the series A and B funding rounds and 52 million tokens to seed investors
- Seed investors are up almost 526x, while Series A and B investors are up 50x and 5x respectively
- It should be noted that the number of tokens being unlocked is several times larger than the average daily trading volume
- For context, over the past day, TIA clocked in 35 million in volume
- Given the significance of the unlock, a volatility influx can be expected
- Despite the bearish connotation associated with unlocks, the timing of the upcoming event seems interesting, given that Bitcoin is on the brink of scripting a new ATH
- Alongside, it should be noted that a significant chunk of the first unlock was sold to OTC buyers
- They hedged on perps, which ultimately sent the open interest ballistic over the past few months
- Analysts expect a lot of these shorts to continue winding down
- This will end up partially negating the spot-selling pressure
- In retrospect, the funding reset could act as a bull signal for spot buyers
Who said what?
- Taran Sabharwal, the Founder and CEO of exchange STIX chalked out that a total of 92.3 million TIA will be liquid post unlock
- This would act as the “upper bound” of overall spot-selling pressure
- He explained,
“Shorts will keep unwinding into the unlock and funding rates may reset to 0 or positive. People who missed the 9th October unstaking deadline may also have unstaked during October, causing further spot supply (ready to be sold) going into November”
- Chalking out the implication, he added,
“Either way, the supply shock is massive and it's been the most broadcasted unlocks of this cycle. That, coupled with suppressing OTC discounts, may create a lot of action for the coin”
Zooming out
- From its $21 peak registered earlier this year, TIA’s price is already down by around 80%
- At press time, it was seen exchanging hands around $5, down by 14% on the weekly window
