Steemit Crypto Academy Contest / S11W6 - Token Unlock

Hello esteemed members of wonderful community hope you are doing great, i am also good. Today i am going to explore my knowledge about another Interesting topic that is Steemit Crypto Academy Contest S11W6 Token Unlock

Use your own words to define what an unlock token is? And in your opinion, why do some projects choose to lock a quantity of these tokens?

As the name, it referred to the the process of releasing the coins or assets which had been locked, seized or kept restrict to the circulatory system of crypto market.

Moreover, term token unlock is implied to the release of the token which were banned from the circulation in the market. While when the token are unlocked they obviously greatly affect the trending volume, price range, liquidity and obviously market shows clear dynamics.

As the token are being locked for certain time period and it has schedule vesting period during which they are released for circulation in crypto market.

Why are tokens locked?

As the lock of token is used to restrict the transfer of time foe certain time period uless the desired milestones are achieved.

Now, why they are lock by some project perhaps the aim is to incentivized for the purpose of long-term investment and hence it would be helpful for promotion of stability and ultimately the grow of the project and its investors too in long term.

Since Locking coin brings an agreement between the company and investors and their agreement is to achieve the success by locked the coin for certain time period.

Furthermore, locking up token is useful for maintaining the price range of token.

Clearly explain the method(s) by which these tokens are locked and then how they are released.

Its very crucial to know about the token the vesting schedule for an investor or company, because its responsible for affect the voting, liquidity and strategy of investment. I am going to be give brief review about the considerations of vesting schedule of a token. These are as below.

Time-based vesting This is one of most common type of vesting during which coins or token are locked up for specific time period and then these are released as the criteria met. For example if an investor received about 30% of the coin upfront and remaining 70% after the 2 years, obviously he is very well aware of the time scale during which coun will be relased and at which percentage.

Performance-based vesting This type of vesting is set accoring to certain goals, performance, or target which have to be achieved. For example if investor has set a target he will wait to achieve it and realaed the token as the revenue will he get. As the investor understand the matrices of the performance and it would urge him to release the token because he has achived his milestones which he has set.

Cliff period This type of vesting of coin is used during which no token are being released, it might be due to agreement of investors to specific project for long time era. Moreover the investor is very well aware from the cliff period and how it may effect the liquidity of the token in the crypto market.

Lock-up period This vesting strategy is being used where investor had locked the token for the time period he may not sold or transfer the coin or token. Hence the investor has set the time limit and knew when he will release the coin which would be suitable for the strategy of investment too.

Tokenomics As an investor then try to finalize about the how much supply of token, its distribution and the use case of the coin can be evaluated. These findings may very helpful for the investor to make decisions about the market value of token and its overall potential.

So, all above mentioned vesting scheduled has strong impact on the investment of an investors to knew about the potential value of the token and risk whch are associated with it.

What is the impact of an unlock token on the price of a crypto and how is it monitored? Give an example.

Its obvious when token are released into circulation system it would has stron impact on the price range of the given token.

If large number of token are released all of sudden it would increase the supply of token from the desired limit and in response it caused a sharp reduction in price range, liquidity and stability. This situations may happened due to high selling pressure.

While if the token are released in slower it has helpful in maintaining the price value of tokenand prevent the drop of token value all of sudden.

When a large number of tokens are unlocked at once, it can flood the market and create an oversupply, leading to a drop in price. On the other hand, a slow and steady release of tokens can helpful in maintain a stable price and prevent sudden drops in value. It may become the major cause of markets dynamics of the particular token.

The BitDAO is regarded as one of the decentralized autonomous organization which is give support to the DeFi projects either with the help of token swapping or grant. BitDAO released $53 millions BIT on the 15 January, 2023. It wss about 10 times higher than the market volume. It had significant impact on the price of the token in the market sudden drop as it can be seen in the graph.

Do you think that all cryptocurrency ecosystems have developed this kind of lock? Steem.Inc Among them? If yes or no, do you think it is or will be beneficial if used or added to its ecosystem? For what?

In my point of view cryptocurrency ecosystem has been using locked coin. The locking of coin is ocuured in some cases, might be in order to decrease the supply of coin in the market which may stable the price of token in crypto market

Steem. Inc is also lock up tokens it may either in the form of steem power. We do power up and in this we lock our steem power, this process further decrease the supply of token in the crypto market.

Its a good initiative and and good impact for steem inc. As the circulation of the token in the market may effect price and definitely it would be rise positively. For steemit platform in long term its a good initiative as the steem coin price will be get high in coming days.

List the risks and benefits of unlocking tokens in a simple and understandable way.

There are benefits of unlocking the coins few are as follows.

• It caused the stability of token in the market.

• It reduce the pressure of oversold of token in the market.

• Its helpful in buil up of confidence among company or investors.

Few of the risk of unlocking tokens are

• in case of unlocking coin there would be risk of increase in price of that token that is inflation of token.

• The price of token may also decrease

• Unlocking of token may cause sudden rise in supply of token

Its all about my today's post, i would like to invite my dear friends @suboohi, @m-fdo and @ashkhan to take part in the contest.

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