How Do Vesting and Lock-up Periods Affect a Token’s Circulating Supply?

Vesting and lock-up periods restrict the release of allocated tokens, directly limiting the circulating supply. During a lock-up, the circulating supply is unaffected by that specific token pool.

As tokens vest, they are gradually released into the market, increasing the circulating supply over time. This controlled release is crucial for preventing sudden, massive selling pressure that could destabilize the token price.

Investors track the vesting schedule to anticipate future supply increases and potential price impact.