DBR unlocks $12.31 million worth of tokens within a week, new project faces significant selling pressure test

deBridge (DBR) is about to undergo a significant token unlock. According to data from the Web3 asset data platform RootData, approximately 66.83 million DBR tokens will be unlocked at 0:00 Beijing time on January 15, valued at around $12.31 million. This scale of unlock poses a notable potential selling pressure for a project ranked 553rd by market cap with an average daily trading volume of only about $6.9 million.

How Large Is the Unlock?

The specific data for this unlock is more intuitive:

From this data, the unlock accounts for roughly 3.5% of the circulating supply. While not astronomical, considering DBR’s average daily volume is less than $7 million, the $12.31 million worth of tokens being unlocked is equivalent to about 1.7 times the daily volume, which is indeed noteworthy.

Market Environment and Risk Factors

Market Test for New Projects

DBR was listed for trading only on October 17, 2024, less than three months ago. Its recent price performance shows a 6.75% increase over the past 7 days but a 13.38% decline over the past 30 days, indicating high volatility. Projects at this stage often have relatively low liquidity, and large unlocks can significantly impact the price.

Recent Market Risks

It’s worth noting that deBridge has recently attracted attention due to its role as a cross-chain bridge during the Flow network security incident. According to Flow’s technical report, about $3.9 million of illicit assets were transferred out via cross-chain bridges, including deBridge. While this is not directly the fault of deBridge, it could influence market sentiment.

Possible Market Reactions

Short-term Selling Pressure Risks

Large token unlocks typically trigger several possible market responses. First, the unlocked tokens may be sold directly into the market, especially in projects with relatively weak liquidity. Second, market expectations may lead investors to start reducing their holdings ahead of the unlock. Historically, the week before and after a token unlock tends to be a sensitive period for price volatility.

Key Observation Points

• The identity of the recipients of the unlocked tokens (team, investors, or others) will influence the expected selling pressure.
• Whether the market has already priced in this expectation before the unlock.
• Whether the trading volume after the unlock can absorb the additional tokens.

Summary

This large-scale token unlock for DBR is a typical tokenomics event. For a new project, such unlocks often serve as a “stress test” for the market. The $12.31 million scale of the unlock is significant relative to the project’s liquidity and may lead to selling pressure in the short term. However, the ultimate market response will depend on the token’s flow post-unlock, market acceptance, and whether deBridge’s fundamentals can support the price. Monitoring the market performance in the subsequent week is highly recommended.