UNI Price Surges 5%: Defying Token Unlock Sell-Off Fears

• Uniswap’s four-year UNI vesting schedule has ended.
• The DEX vested 40% of the minted tokens for four years.
• UNI surged nearly 5%, contrary to popular expectations.

The four-year vesting schedule for Uniswap’s UNI token has concluded, releasing all remaining tokens reserved since its 2020 launch. Crypto analysts are closely watching to see how this final unlock will affect the cryptocurrency’s price.

During its 2020 launch, Uniswap distributed 60% of the one billion minted tokens to community members. The remaining 40% was allocated to team members, investors, and advisors based on a four-year vesting plan.

Read also: CFTC Cracks Down on DeFi: Uniswap Fined for Leveraged Token Trading

Although the vesting period officially ended in September, Uniswap has implemented a 2% annual inflation rate to maintain network participation. Despite this, analysts believe the release of the remaining vested tokens could significantly impact UNI’s short-term price.

Potential Price Pressure from Token Unlocks

Typically, crypto holders sell vested tokens shortly after unlocking, capitalizing on the price appreciation during the vesting period. While this generates profits, it also increases the token supply, potentially putting downward pressure on the price.

However, UNI’s price has defied expectations, rallying instead. The decentralized exchange’s native crypto surged nearly 5% early Tuesday, moving from $6.411 to $6.638 at the time of writing, according to TradingView data.

UNI’s current price trend reflects the effect of the systematic token unlock system adopted by many crypto projects. This gradual release of vested tokens into the market helps neutralize potential supply-side pressure on the price. As a result, at the end of the token release program, prices tend to stabilize and align with the broader market trend.

UNI is one of the cryptocurrencies that surged at the beginning of 2024, with the price gaining over 190% in the first quarter. However, the altcoin lost nearly all its yearly profit after dropping below $5.00 on August 5. The recent surge puts UNI on a rebound, with users expecting the altcoin’s price trend to become more stable now that its total supply is in circulation.