Avalanche To Unlock $168m Worth Of AVAX Tokens In May;

Avalanche To Unlock $168m Worth Of AVAX Tokens In May;

A substantial amount of AVAX, the native token of the Avalanche network, is expected to be unlocked in the next month. According to K33 Research, formerly known as Arcane Research, this unlocking event would likely have a negative impact on the value of the cryptocurrency.

In reaction to this “discovery”, K33 Research removed Avalanche (AVAX) from its list of the most promising crypto assets in its “May Selection Review”.

9.5 million AVAX tokens will be unlocked in one month

According to data from Token Unlocks, 9,541,800 AVAX tokens – worth more than $168 million at current valuation – are expected to be unlocked in less than a month from now. The unlock event, scheduled for May 28, will release around 3% of the 327 million AVAX tokens currently in circulation.

Unlocking these tokens is expected to negatively affect the price of AVAX, as per a report by K33 Research. In that same report, the research firm disclosed its decision to “exclude” AVAX from its K33-Vinter index, which is a weighted mix of the most promising tokens among the top 30 crypto assets.


Source: K33 Survey

According to the vice president of K33, the decision to drop the native Avalanche token from this index was based on a reassessment of the token’s expected inflationary pressure and ownership concentration. He stated that AVAX received a lower score on Inflation and Ownership Concentration; hence its exclusion from the Vinter Quality Index.

Token Unlocks data reveals that more than half of the cryptocurrency’s supply is still locked. However, these locked tokens will gradually be released over the next seven years, with the last unlock projected for October 20, 2030.

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Avalanche price stable despite increased revenue and network activity

Activity on the Avalanche Network has experienced an increase in recent weeks. According to data from Token Terminal, daily activity on the blockchain has improved by 91.5% over the past month. Additionally, there has been an impressive 386% increase in platform revenue over this period.

However, it can be said that this increase in network activity and revenue did not particularly influence AVAX’s market performance last month. Over the past 30 days, AVAX has experienced a price increase of just 1.7%, according to data from CoinGecko.


AVAX trading at $17.57 | Source: AVAXUSD chart from TradingView

One of the reasons for this disappointing market run could be the imminent Avalanche token unlock. A tweet from K33 Research says that the amount of AVAX in floating circulation will increase rapidly due to the unlocking of tokens for early investors, contributors and team members.

Furthermore, the consistent and significant unlocking of AVAX tokens in the coming years is expected to increase the selling pressure of the cryptocurrency – compared to other coins. This is due to the fact that most investors would like to profit from their assets by selling a portion of their unlocks.

Featured image of Avalanche, chart from TradingView

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