How Does Accelerated Vesting Impact a Project’s Circulating Supply and Market Capitalization?
Accelerated vesting increases the rate at which tokens are released, immediately increasing the circulating supply. This puts downward pressure on the token price, potentially lowering the market capitalization.
While the Fully Diluted Valuation (FDV) remains unchanged, the increased supply can signal a lack of confidence or a desire for early exit by stakeholders, which often leads to negative market sentiment.
Glossar
Accelerated Vesting
Mechanism ⎊ Accelerated Vesting represents a contractual provision allowing for the immediate or expedited transfer of ownership rights for tokens or equity, bypassing the original time-based schedule.
Circulating Supply
Distribution ⎊ Circulating supply within cryptocurrency represents the total number of coins or tokens that are publicly available for trading and transfer, excluding those held in reserve by the issuer or locked in smart contracts.
Fully Diluted Valuation
Dilution ⎊ Fully Diluted Valuation, within cryptocurrency and derivatives, represents the total potential value of a company or project if all convertible securities and options were exercised, providing a comprehensive view beyond current market capitalization.
Downward Pressure
Momentum ⎊ The concept of downward pressure, particularly within cryptocurrency derivatives and options markets, fundamentally reflects a shift in aggregate investor sentiment towards a bearish outlook.