Liquidity Unlock

Definition ∞ Liquidity unlock describes the event when previously restricted digital assets become available for trading or transfer. This typically occurs after a vesting period, token lock-up, or the conclusion of a staking program, releasing a substantial volume of tokens into the open market. The sudden availability of these assets can significantly influence market supply dynamics and potentially impact price stability. Project teams often implement these schedules to manage token distribution and control inflation.
Context ∞ Crypto news frequently reports on upcoming liquidity unlocks as these events can cause considerable market volatility for specific digital assets. Investors closely monitor unlock schedules to anticipate potential selling pressure or supply shocks. The management of tokenomics and the timing of these unlocks are key factors influencing market sentiment and a project’s long-term value proposition.