The Ethereum layer 2 scaling solution, Arbitrum, is set to release over $1 billion worth of ARB tokens in March next year, initiating a phased unfreezing process for its native digital asset, according to Token Unlocks. On March 16, around 1.11 billion ARB tokens, valued at $1.24 billion at the prevailing market rate of $1.12, will be "cliff unlocked". This release constitutes about 87% of the total circulating supply of 1.275 billion tokens, with over 5 billion ARB tokens still locked at present.
Unlocks involve the gradual release of previously frozen cryptocurrencies, preventing early investors and project team members from selling significant amounts all at once. The Cliff unlock mechanism enables the immediate unfreezing of a specific token quantity after a predetermined period, followed by a linear schedule of unfreezing.
Subsequent to the March 16 release, Arbitrum will continue unfreezing a defined token quantity every four weeks for a span of four years, as highlighted by Token Unlocks in a tweet.
Unlocks serve to increase liquidity but often act as bearish triggers for the cryptocurrency's value. According to research conducted by The Tie, unlocks exceeding 100% of the average daily trading volume tend to exert downward pressure on the token's price.
As of the current moment, ARB is trading at $1.12, exhibiting a 4% decline over the course of the month, as reported by TradingView.