Supply has three numbers, and they don't mean the same thing
Every token has (up to) three supply figures, and conflating them is one of the most common mistakes newer market participants make.
Circulating supply is the number of tokens currently tradeable in the open market — the ones that could be sold today. Total supply is everything that currently exists, including tokens minted but locked, held in treasury, or not yet distributed. Max supply is the hard cap the protocol will ever mint, if one exists; some tokens have no cap at all and inflate indefinitely.
Market cap headlines almost always use circulating supply times price. That's reasonable for pricing what's tradeable right now, but it says nothing about what's coming. A token trading at a $200 million market cap on circulating supply, with a $2 billion fully-diluted valuation (price times max supply), has ten times more tokens still to enter the market than are currently out there. That gap is not a footnote — it's close to the single most important number in the entire tokenomics picture, and it's often skipped by people looking only at the market cap they see on a price chart.
The practical check: look up circulating supply as a percentage of max (or total, if max is uncapped) supply. Below 20-30% circulating means the majority of dilution is still ahead of the token. Above 80-90% means most of the supply overhang has already been absorbed by the market, for better or worse.
Where the supply actually goes
A token's genesis allocation is usually broken into categories, disclosed (with varying honesty) in a tokenomics document or blog post. The common buckets:
- Public/community allocation — tokens sold in public sales, airdropped, or earned through usage/mining. These went to the open market from day one, no lockup.
- Team allocation — reserved for founders and employees, almost always vested.
- Investor/VC allocation — sold to venture funds and private backers, usually at a steep discount to any eventual public price, almost always vested.
- Treasury/foundation — held by the project entity for future operations, grants, or discretionary spending.
- Ecosystem incentives — reserved for liquidity mining, staking rewards, partnerships, and similar programs, released over time as those programs run.
The number worth calculating is simple: what fraction of total supply sits in team plus investor allocations, relative to what went to the public? A project where insiders hold 35-40% of supply against a 15% public allocation has a very different incentive structure than one where the public holds the majority. It's not automatically disqualifying — building a project costs money, and investors take real risk funding pre-revenue teams — but a large insider allocation means a large fraction of the token's eventual price appreciation is, by design, flowing to people who bought in long before the public did, usually at a fraction of the price the public will ever see. Worth knowing whose exit liquidity you might be.
Vesting cliffs and release schedules, mechanically
Vesting exists to solve a trust problem: if a founding team or early investor received a huge token allocation and could sell all of it the day the token starts trading, nothing would stop an immediate dump. So allocations are locked and released on a schedule instead of all at once.
A cliff is a period — commonly 6 to 12 months from token generation — during which zero tokens from that allocation unlock. None. It's a binary gate, not a gradual taper. The stated purpose is to force insiders to stay invested in the project's success for a meaningful stretch before they can cash out at all, weeding out anyone who joined purely to flip.
After the cliff ends, tokens release on a vesting schedule, typically one of two shapes:
- Linear vesting — a fixed portion unlocks continuously (often monthly or even daily) over some multi-year period, spreading the sell pressure out.
- Stepped vesting — larger discrete chunks unlock at fixed intervals (say, 25% of the remaining allocation every quarter), producing sharper, more concentrated release events.
The mechanical detail that matters most: none of this is discretionary. It's coded into a smart contract or governed by an off-chain agreement with a known date. That means the entire future supply schedule is, in principle, public and calculable years in advance. Anyone willing to do the arithmetic knows exactly how many tokens unlock, and roughly when, long before it happens.
Why a known future event still moves price
If unlock dates are public and known well in advance, an efficient market should have already priced them in. In practice, crypto markets are efficient about this only partially, and the unlock event itself still tends to correlate with price weakness in the surrounding weeks. A few reasons this holds up:
- The incentive to sell is close to unconditional. Team and investor tokens were typically acquired at a small fraction of the current market price — sometimes single-digit percentages of it. For a holder sitting on that kind of unrealized gain, taking some profit at unlock makes sense at almost any price the token happens to be trading at. The recipient doesn't need the token to be a good buy today; they just need it to be worth more than what they paid, which after a cliff of a year or more is nearly always true even in a down market.
- Size relative to daily trading volume matters more than size relative to total supply. A large unlock hitting a token with thin daily volume can represent several days' worth of normal turnover arriving at once. Even partial selling into that liquidity moves price meaningfully.
- Sophisticated participants front-run the date. Traders who track unlock calendars often reduce exposure or short into a known unlock, which itself contributes to pre-event weakness independent of whether recipients sell immediately.
None of this is guaranteed — some unlocks pass with no visible price impact, particularly when the unlocked amount is small relative to volume, or when recipients are contractually or reputationally motivated to hold. But as a base rate, "large unlock approaching" belongs in the same category as "earnings date approaching" for a stock: a scheduled event with asymmetric downside risk that's worth checking before you enter, not after you're already positioned.
Where to actually find this information
This is not hidden data, but it's rarely surfaced in the places people usually look (price charts, social feeds). Reliable sources:
- The project's own tokenomics page or whitepaper — usually the original source for allocation percentages and the intended vesting structure, though these documents are sometimes vague on exact dates and occasionally get revised without much fanfare.
- On-chain unlock trackers — third-party sites and dashboards that parse vesting contracts directly and publish calendars of upcoming unlock events by token, including size and percentage of circulating supply.
- Block explorers — for tokens where vesting is enforced by a visible smart contract, the unlock logic and scheduled release amounts can be read directly off-chain, which is the most reliable source when it's available since it can't be quietly revised.
Cross-checking the project's own claims against an independent tracker is worth the extra five minutes. Tokenomics documents describe intent; on-chain data describes what the contract actually does, and the two don't always match.
Factoring an unlock into a position decision
The unlock calendar is not a reason to avoid a token permanently. It's a timing input, no different from checking a stock's earnings date before deciding whether to hold through it.
Before opening or adding to a position, check the next scheduled unlock date and its size as a percentage of current circulating supply. A quarterly unlock releasing 1-2% of circulating supply is background noise. An unlock releasing 15-20% of circulating supply in a single event — common at the first post-cliff release, when a full year of accrued team and investor tokens hits at once — is a different situation entirely, and worth planning around explicitly: entering after the unlock rather than before it, sizing the position smaller going into the date, or simply setting the expectation that a few weeks of weakness centered on that date isn't a signal about the project's fundamentals so much as a scheduled, calculable supply event finally arriving. A composite score that only looks at price action and momentum won't catch this — it lives in the tokenomics document, not the chart.