UNI, the governance token of Uniswap, has completed a four-year unlocking cycle, which means that 100% of the token supply is now in circulation. This major development was highlighted by on-chain analyst Ember through an X (formerly Twitter) post, which indicates a considerable change in the UNI market.
UNI was launched in September 2020, and its allocation was planned to be distributed gradually, with 83% of the total supply being reserved for the team, investors, advisors, and the community treasury. As the unlocking period is over, all the UNI tokens assigned can be considered as available in the market. However, the actual flow of these tokens has been much slower and more constant.
Uniswap Distribution and Market Impact
The distribution of UNI tokens was done in a way that gave 2% of the tokens as liquidity mining incentives and 15% to early users in an airdrop which was then put into circulation. The other 83% that was distributed to the team, investors, advisors, and the community treasury has only just emerged from its four-year lockup.
The community treasury was distributed 430 million UNI, which is 43% of the total tokens; 40% was given to the team and early investors with 400 million UNI. With this, it is now important to know how much of these allocations has been brought into the market and what this implies for the price of UNI and its liquidity.
Treasury’s Slow UNI Release
The community treasury’s 430 million Uniswap tokens are fully unlocked, but only 30 million of them are available. The market has seen 2 million UNI has been injected into the market. This still leaves a rather large 399,789,850. There are still 8 million tokens remaining in the treasury, which is suggestive of a slow and steady release of these tokens into the market.
Likewise, the 400 million Uniswap assigned to the team, investors, and advisors are now unlocked. Of this, about 58.1 million UNI have been minted in the market, and the large investors like Andreessen Horowitz, a16z, has not sold most of their allocated UNI.
Even with UNI fully unlocked, the integration was able to only provide about 258.3 million Uniswap tokens, or approximately 25.83% of the total amount of the cryptocurrency in circulation, is in the market.
This limited actual circulation also does not have a severe effect on the token’s price as most of the unlocked tokens are still unused. The supply is still sitting in large holders’ wallets, so traders and investors will keenly observe further decisions on whether or not to sell. This shift to the total circulation brings about prospects and risks to the market players as they anticipate the next phase of the Uniswap life cycle.
