What Is the Risk to the Treasury If Vesting Tokens Are Not Properly Accounted for in the Circulating Supply?
If vesting tokens are not accurately tracked, the treasury might underestimate the true circulating supply and the potential sell pressure that will hit the market upon release. This can lead to poor financial planning, overestimation of the token's market capitalization, and ineffective liquidity management.
When the tokens suddenly unlock, the unexpected supply shock can cause a significant price drop, devaluing the treasury's remaining holdings.
Glossar
Vesting Tokens
Asset ⎊ Vesting Tokens are native protocol assets that have been allocated to a specific recipient, such as a team member or early investor, but are contractually locked and not yet available for transfer or trading.
Potential Sell Pressure
Source ⎊ Potential Sell Pressure originates from the anticipated future release of tokens currently held in lock-up periods, vesting schedules for team and investors, or large treasury allocations awaiting distribution.