How Does the Introduction of Token Lock-up Periods Affect the Supply-Side Dynamics of Velocity?

Token lock-up periods, such as vesting schedules or mandatory staking, directly reduce the circulating supply available for trading, which constricts the "M" (money supply) component of the MV=PQ equation. This reduction in effective supply leads to a lower calculated velocity, as fewer tokens are available to facilitate the same level of network activity.

This supply-side constraint is a deliberate mechanism to create scarcity and support a higher price.