AltLayer’s (CRYPTO:ALT) ALT token has experienced a significant decline of over 17% since Monday, in anticipation of a major token unlock event scheduled for today.
The unlock will release approximately $100 million worth of ALT tokens into circulation.
This event will increase the circulating supply of ALT by 42.09%, introducing 684.33 million new tokens, valued at around $100.37 million.
The distribution of these tokens will be as follows: 188 million tokens (worth $27.57 million) for the team, 308 million tokens (worth $45.17 million) for investors, 83 million tokens (worth $12.17 million) for advisors, 35.5 million tokens (worth $5.21 million) for protocol development, 25 million tokens (worth $3.67 million) for the community, and 44.83 million tokens (worth $6.58 million) for the treasury.
The increase in supply could lead to considerable selling pressure on the ALT token.
Data from TokenUnlocks and DYOR indicates that venture capitalists (VCs) hold a substantial portion of these tokens, with an average unrealised profit multiple of 12.41X.
This potential for high returns may incentivise some VCs to liquidate their holdings, further driving down the ALT price.
In addition, some investors are preemptively shorting ALT, expecting continued price declines.
The current market capitalisation of ALT stands at $250 million, which is significantly lower than its fully diluted valuation of $1.5 billion.
This disparity contributes to the bearish sentiment, as reflected by the strategy of pseudonymous trader "Crypto Bully," who is focusing on shorting weaker assets while investing in stronger ones like Ethereum.
To mitigate concerns and stabilise the token’s value, AltLayer has adjusted its vesting schedule.
Following today’s unlock, the platform will implement a six-month pause before the next round of token releases, resuming on January 25, 2025.
The revised schedule includes linear monthly releases over two years for investors and strategic partners and a three-year timeline for the team and other stakeholders.
This structured release plan aims to manage the gradual distribution of the remaining 84% of the locked supply until January 2028.