- Uniswap’s UNI token has been fully unlocked, yet only 25% of the total supply is circulating, with the majority held by major addresses like a16z and Union Square Ventures.
- This limited circulation, combined with whale activity, could lead to significant price volatility or stability in the future.
Uniswap’s governance token, UNI, has recently reached a significant milestone: the entire supply has been fully unlocked. Despite this, only 25% of UNI is currently in circulation, leaving the market to ponder the token’s future trajectory.
Unlocking History and Current Circulation
Uniswap, which launched its governance token in 2020, completed its full unlock on September 18, 2023. This process released a total of 227,040 UNI tokens daily over the past year. However, as of now, only 25% of UNI’s maximum supply of 1 billion tokens is actively circulating in the market. The data from on-chain tracker EmberCN highlights that the community treasury received a substantial 430 million UNI tokens. Yet, a mere 7% of these have entered circulation, indicating a substantial portion remains dormant.
Whale Activity and Market Dynamics
The influence of major holders on UNI’s price cannot be understated. The top six addresses, including prominent venture firms like a16z and Union Square Ventures, continue to hold onto their UNI tokens. Their reluctance to sell could mean either anticipation of future gains or strategic market positioning. Such whale activity can significantly sway UNI’s market value, depending on whether these entities decide to accumulate or distribute their holdings.
Price Movements and Future Prospects
As of Wednesday, UNI’s price saw a decline of over 3%, trading at $6.528. The limited circulation of UNI contributes to relatively low selling pressure, which could explain the price’s current stability despite market fluctuations. However, this could also mean that any sudden large-scale selling by major holders might lead to significant price volatility.
What Lies Ahead for UNI?
Uniswap’s token could either rally or experience further declines based on several factors. The large proportion of UNI held by top addresses implies potential for significant market movements if these holders decide to release their tokens. Conversely, sustained holding by these entities could stabilize UNI’s price, provided there is continued demand from smaller investors and traders.
The future of UNI will largely depend on the actions of these major holders, market sentiment, and broader cryptocurrency trends. With a substantial amount of UNI still in cold and exchange wallets, the market awaits to see if these tokens will eventually enter circulation, potentially impacting UNI’s price dynamics.
While Uniswap’s token has been fully unlocked, the slow release of UNI into the market and the significant holdings by major addresses present both opportunities and risks. Investors should closely monitor whale activities and market trends to gauge UNI’s potential movements.
