Avalanche Prepares for Major Supply Increase as Millions of AVAX Tokens are Unlocked

Millions of AVAX tokens, the native cryptocurrency of the Avalanche blockchain, are set to be unlocked and distributed to key players within the ecosystem, resulting in a significant increase in the total supply. On Sunday, 9.3 million AVAX tokens worth approximately $130 million at the time of the announcement will enter circulation.

According to Patrick Sutton, Avalanche’s communications chief, the tokens will be allocated to various recipients, including the Avalanche Foundation, strategic partners, Ava Labs, and through an airdrop. However, it should be noted that the unlocked tokens do not automatically come into immediate use. The Foundation has the discretion to determine when and how to utilize them.

AVAX serves as the fuel for Avalanche’s smart contracts ecosystem and plays a crucial role in securing the blockchain through staking. Despite the influx of tokens, AVAX has maintained stability, with its price standing at $14.33 over the past 24 hours.

Source: Token Unlocks

While token unlocks often raise concerns among investors, the Avalanche unlock has been planned well in advance, and most sophisticated actors in the crypto space have already adjusted their strategies accordingly. Lindsey Winder, CEO of token infrastructure firm Hedgey Finance, stated that the upcoming unlock has been anticipated, and data from crypto analytics firm Token Insights indicates that 358.55 million AVAX tokens remain locked. However, Sutton contests this figure, stating that the actual number of locked tokens is 96.06 million, which is roughly a quarter of Token Insights’ estimate.

As the distribution of AVAX tokens takes place, stakeholders and participants within the Avalanche ecosystem will be closely watching how these additional tokens are put to use. The strategic allocation and utilization of these tokens can have implications for the further development and growth of the Avalanche blockchain.

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