Map the supply
Tokenomics describes how a token is issued, distributed and used within a system. Start with circulating, total and maximum supply, then inspect allocations to users, founders, investors and reserves. Providers may classify circulating supply differently.
An unlock makes previously restricted tokens transferable under a schedule. It does not prove that every unlocked token will be sold. Equally, an allocation described as locked needs a verifiable mechanism or enforceable arrangement to support the claim.
Follow the incentive
Ask why a participant needs the token. It may pay fees, secure a network, grant governance rights or serve another application-specific purpose. These roles do not automatically create a right to company profits.
Rewards funded by new issuance increase some holders’ balances while expanding supply. A high displayed token yield can coexist with falling purchasing power. Compare the source of rewards with the dilution and operational risks.
Build a simple worksheet
Create columns for allocation, recipient group, unlock date, amount and source. Add a separate column distinguishing confirmed on-chain rules from statements in a project document.
For an illustrative token with 100 million circulating units and 900 million future units, the current price alone says little about future market conditions. Study the release schedule and actual utility rather than extrapolating a current valuation. Revisit the original documents when governance changes supply or permissions.
Calculate an unlock without predicting the price
A hypothetical network has 100 million circulating tokens and releases 10 million more. The scheduled release equals 10% of the earlier circulating amount. If the release all enters the measured circulating supply, supply becomes 110 million. It does not follow that every released token will be sold, or that price must fall by 10%.
At an unchanged reference price of $2, calculated capitalization would move from $200 million to $220 million. That arithmetic does not establish $20 million of new investment. It also depends on the data provider’s supply definition and whether the newly unlocked tokens qualify as circulating.
Read the distribution and control together
Identify recipients, vesting contracts, dates, cliffs and any power to change issuance or schedules. Distinguish an unlock, which removes a restriction, from a mint, which creates tokens, and a transfer, which moves existing tokens. A supply chart can combine events that have different economic meanings.
An attractive token-use narrative does not prove demand. Ask whether a protocol can be used without the token, whether fees reach holders, and whether holders have enforceable rights or only governance permissions. Use the actual contract and project documentation to test each claim.
Worked worksheet: a cliff is not a sale
Suppose a fictional project has 100 million circulating tokens and a one-billion maximum supply. A 10-million-token investor cliff is 10% of the starting circulation but 1% of maximum supply. A second schedule releases two million tokens each month. Record them as separate events: adding percentages calculated from different denominators would misstate the exposure.
If all 12 million units join circulating supply in that month, circulation becomes 112 million. A holder with one million tokens goes from 1% to about 0.8929% of that supply. The relative share declines by about 10.71%, although the holder still has one million tokens. This is a supply-share calculation, not a predicted price loss.
Verify the allocation document against the deployed vesting contract: beneficiary, start, cliff, duration, already released amount and permissions to change ownership or logic. OpenZeppelin’s VestingWallet documentation illustrates customizable release schedules and notes that transferring ownership can transfer an unvested economic interest. A chart marked locked therefore needs a clear explanation of what is restricted.
Record the source and check time beside each figure. Distinguish tokens that are vested, claimable, actually released, transferred to an exchange and sold; those are not interchangeable observations. A transfer to a labelled address is not sufficient evidence that a sale occurred.
Sources & further reading
- CoinMarketCap supply methodology
- Ethereum token standards
- OpenZeppelin: VestingWallet behavior and limitations
Educational content. Examples are illustrative. Protocols, products and rules can change; consult the linked documentation for current details.