Token Unlocks, Cliffs and FDV

How a Schedule Is Built

At launch a project mints a genesis supply and divides it between buckets: community and treasury, team, investors, advisors. Only part of that is liquid on day one. Team and investor allocations normally sit behind a cliff, conventionally a year, during which precisely nothing can move.

Arbitrum's published schedule shows it plainly: team, contributor and investor tokens unlock over four years starting 16 March 2023, with the first unlock on 16 March 2024 and monthly releases after that. The year between those two dates is the cliff. The same document lists a foundation allocation with no cliff at all, trickling out from the start, which is a useful reminder that two buckets in one project can behave nothing alike.

Market Cap and FDV Are Different Denominators

Circulating supply is whatever is not locked. Market capitalisation is price multiplied by circulating supply. Fully diluted valuation multiplies price by a bigger number instead.

Which bigger number depends entirely on who is doing the counting, and this trips up almost everyone. CoinGecko defines it as price times total supply. Other trackers use maximum supply. For a token with no maximum the figure is somewhere between undefined and decorative. Before comparing two projects on FDV, find out whether you are comparing the same thing.

What an Unlock Does and Does Not Do

An unlock moves tokens from the locked column to the circulating one. It does not change fully diluted valuation, because that number was already counting them. What changes is float: the supply actually available to be sold. A cliff can double the tradable float overnight while demand sits exactly where it was, which is the entire reason anyone watches these dates.

It is not a sale, though. Vesting only makes tokens transferable, and what recipients do next depends on their own positions, deals struck privately months ago, and hedges already in place. The market also tends to get there first: prices often sag in the weeks before a cliff rather than on the morning of it.

The practical rule: read the schedule from the project's own documentation rather than a countdown site, note which buckets are cliffed and which stream continuously, and treat fully diluted valuation as a comparison tool rather than a prophecy. Describing it as "the market cap once everything unlocks" quietly assumes the price survives the dilution, which is the one thing nobody can promise.