A significant amount of Solana (SOL) tokens, valued at nearly $1 billion and representing 13% of the circulating supply, is scheduled to be unlocked on November 10th.
A large number of Solana validators have initiated the unstaking process for 47 million SOL—worth approximately $845 million—preparing to withdraw these funds within the next 24 hours. This is the second-largest token unlock event in Solana’s history and comes at a challenging time for both the project and the broader cryptocurrency market.
Understanding the Upcoming SOL Unlock
Based on data sourced from Solana Compass, the unlocking event is set to conclude at the end of Epoch 370, expected around 4:30 PM Vietnam Time on November 10th. An epoch in the Solana network typically spans two days, during which validators lock their tokens and have the option to unstake them at the conclusion of each period.
The amount of SOL being unstaked has risen dramatically within a short timeframe, increasing from 18 million tokens in the afternoon of November 9th to nearly 50 million by the evening. This suggests growing concern among validators as SOL's price continues to decline, prompting a decision to withdraw funds. In contrast, only 1.8 million SOL (around $36 million) were staked during the same period.
Potential Impact on the Solana Network
A reduction in the amount of staked SOL can directly affect network performance and transaction processing capabilities. On the evening of November 9th, the exchange Crypto.com announced the immediate suspension of USDT and USDC deposits and withdrawals via the Solana network, although it continues to support these operations on Ethereum and Cronos. It remains unclear whether this move was a precautionary measure in anticipation of potential network instability.
Market Context and SOL Price Action
The current downturn affecting Solana appears to be triggered by a broader market sell-off, influenced heavily by the collapse of FTX and its ensuing conflict with Binance's CEO. SOL's price has been in sharp decline, falling 30% from $23 to $16.24 within a 24-hour window. The market is watching closely to see what effect the imminent token unlock will have on its price trajectory.
Furthermore, the total value locked (TVL) within the Solana ecosystem has plummeted by over 42% in the past 24 hours, according to data from DeFiLlama.
The broader cryptocurrency market is also under significant pressure. Bitcoin (BTC) hit a new 2022 low of $17,166, and Ethereum (ETH) fell 20% from $1,425 to $1,188 within 24 hours. The total market capitalization of all cryptocurrencies has fallen below the $1 trillion mark, currently resting at around $901 billion.
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Frequently Asked Questions
What does "unlocking tokens" mean?
Unlocking refers to the release of previously locked or staked tokens back into liquid circulation, making them available for trading or selling. This often occurs after a specific vesting period or at the end of a staking epoch.
Why could a large token unlock affect the price?
A large influx of tokens into the circulating supply can create selling pressure if a significant portion of the unlocked tokens is sold on the market. This potential increase in supply can outpace demand, leading to downward price movement.
How does staking relate to network security?
Staking is fundamental to Proof-of-Stake networks like Solana. Validators stake tokens to participate in securing the network and processing transactions. A large amount of unstaking can, in theory, temporarily reduce the number of active validators, potentially impacting network performance and decentralization.
What is an epoch in the Solana network?
An epoch is a fixed time period in Solana, approximately two days long, used to measure staking rewards and validator schedules. Validators can typically choose to unstake their tokens only at the end of an epoch.
Should investors be concerned about token unlock events?
While large unlock events can introduce short-term volatility due to potential selling, they are scheduled and publicly known. Long-term investors often look beyond these events to the project's fundamental utility and development progress.
How can I stay updated on future unlock schedules?
Most blockchain projects publish their tokenomics and release schedules in their official documentation. Various crypto analytics platforms also track and report on upcoming major token unlocks across different networks.