On June 21, Chainlink (LINK) vesting contracts unlocked 21 million non-circulating tokens worth nearly $300 million. This amount represents significant supply inflation, with notable economic effects that may impact its price as a sell-off occurs.
According to a SpotOnChain report, the team sent 18.75 million of the unlocked amount to a Binance deposit address. Hence, showing intent to sell nearly 88% of the inflated supply immediately, at a $265 million market value by reporting.
Moreover, the contract sent 2.25 million LINK to the multisig wallet 0xD50f, currently holding over 6 million LINK. This non-circulating supply address still has 391.5 million LINK for future unlocks, worth $5.4 billion, representing a threat.
Chainlink non-circulating supply address overview. Source: SpotOnChain
Chainlink non-circulating supply unlocks over the years
Notably, Chainlink has been unlocking and selling relevant amounts of its tokens since August 2022. In total, it unlocked 127 million LINK and deposited 107.7 million LINK to Binance in the past two years.
With a currently 608.10 million circulating supply, the unlocks have resulted in a 26.4% two-year inflation.
Interestingly, the period had eight “unlock and deposit to Binance” events. These sell-offs involved amounts ranging from 6.1 million to 18.75 million, with non-noticeable effects on price.
Chainlink non-circulating address deposits to Binance. Source: SpotOnChain
Chainlink price analysis
As of this writing, Chainlink was trading at $13.78 with a remarkable 127.6% gain year-over-year. The Oracle protocol’s exchange rate in June 2023 was $6 per token, displaying a good performance and growth capacity despite the supply inflation.
Therefore, this suggests LINK has been able to generate enough demand throughout these years. It is worth noting that Chainlink’s Oracle solution provides a valuable service for the surging real-world assets (RWA) narrative.
Chainlink (LINK) year-over-year price chart. Source: Finbold
Traditional finance giants like BlackRock (NYSE: BLK) and Franklin Templeton have shown interest in the tokenization of RWA. Thus, related projects can pick up steam as these narratives take form and institutional capital inflows into the cryptocurrency market.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
