Supply Lockup refers to the temporary restriction of a portion of a digital asset’s total circulation, preventing it from being traded on open markets. This can occur through staking, vesting schedules, or inclusion in liquidity pools, reducing the immediate sell pressure on an asset. A higher supply lockup often indicates strong holder conviction or utility within a protocol. This can influence market dynamics. It is a key market indicator.
Context
News often analyzes supply lockup data for cryptocurrencies as an indicator of market health and potential future price movements. Significant lockups in staking or DeFi protocols can signal a bullish outlook or increased utility for an asset. The implications of vesting schedules for project teams and early investors are a frequent discussion point. This metric helps assess asset scarcity and demand.
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