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On-chain data | FLOW's first unlock day, what other factors should be considered?

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On-chain data | FLOW

The blockchain Flow, created by Dapper Labs, the developer of CryptoKitties and NBA Top Shot, will unlock its first batch of public sale lock-up chips for a year on October 16 at 23:00 Taiwan time. The public sale cost was only $0.1 on September 23 last year, reaching a historic high of $46.16 in April this year, representing a growth of over 400 times. As of the deadline, it is still at $17. Despite the remarkable gains on paper for public sale investors, the market will see a large release of chips on the unlock date, making the performance of FLOW token's market fair price a focus of attention. For a detailed review of the fundraising, please see this article.

Flow announces the unlock time:

This article will elaborate on the chip-side factors for investors to reference:

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  1. Quantity and actual circulation on unlock day
  2. Institutional investors or node pledging needs
  3. Estimated pledged unlock chips, not a one-time surge
  4. CoinList offers promotions to retain customers
  5. Uncertainties in networks and exchanges
  6. FLOW investor Benson's perspective

16th FLOW Unlocking Quantity and Actual Circulation

Firstly, the circulation estimate table provided on the Flow official website needs to be corrected, as the actual distribution after Flow staking has begun differs from expectations. A recalculation of the staking rewards over the past 12 days totals 69,486,695 Flow, originally estimated at 78,089,200. Therefore:

  • At 11:00 PM on the 16th, the pre-unlocking circulating supply is 68,486,695 FLOW, as calculated by CoinGecko at 68,150,078 and by CoinMarketCap at 64,444,582.
  • At 11:00 PM on the 16th, 237,407,080 FLOW will be unlocked, including 50% unlocked for early institutional investors, 50% for public sale, 100% for auction, and partial unlocking for the development team.
  • As of the 16th, the total supply is 1,329,449,172 FLOW.

The 237,407,080 FLOW, calculated at 17.4, is currently valued at approximately $4.13 billion. Early institutional investors with 50% should have 82,000,000, accounting for 35%; public sale with 50% unlocking has 92,907,080, accounting for 39%; auction with 100% unlocking has 25,000,000, accounting for 11%; and development team linear unlocking accounting for 16%:

Institutional Investors or Node Staking Demand

According to on-chain data, the current staked FLOW is 689,796,818, accounting for 52% of the total supply, with 506,067,838 staked by nodes and the remaining 183,728,980 participating in equity delegation.

Nodes of different functionalities have varying staking requirements: Execution 1.25 million FLOW, Consensus 500,000 FLOW, Collection 250,000 FLOW, Verification 135,000 FLOW. Based on the current number of node types, the required staked FLOW amount is 153,630,000.

If some of the early institutional investors' chips are used to participate in node operation, it may alleviate some selling pressure. Additionally, according to sources, major investors such as a16z and AppWorks do not plan to sell FLOW in this round.

Estimation of Staked Chip Unlocking, Non-One-Time Surge

As staked chips require 14 days to be unstaked and released, those intending to sell on the night of the 16th need to submit an unstaking request by 10/5. Between 9/28 and 10/5, the staked FLOW decreased by approximately 278 million, but those motivated to unstake should include "chips unstaked before unlocking" and "chips to be sold by 10/16."

According to data as of the 16th on Flowscan, there are 1,942,687 FLOW requested to be unlocked in the next period on 10/19, with a one-week release period. There are 8,786,742 FLOW scheduled to be unlocked and released on 10/19. Therefore, there are still some unlocking chips that will not circulate until after the 16th.

CoinList Offers Incentives to Retain Users

CoinList has informed FLOW stakers that if they re-stake the newly unlocked tokens, they will receive additional Karma points used on CoinList to prioritize participation in fundraising activities. Whether this can retain chips remains to be seen.

Uncertainties in Network and Exchanges

The primary trading markets for FLOW are on Binance and Huobi, but many staked retail investors choose to use CoinList or Blocto accounts, with Blocto having the most staked users.

While CoinList has an exchange, its trading volume is extremely small, and it is uncertain whether there will be slippage or token transfer delays; in the early hours of the 16th, the platform even experienced a brief outage. Furthermore, the Flow blockchain has experienced network halts in the past, and if there is a significant transfer of tokens during this unlocking, stability will also be tested.

Regardless, a significant unlocking of FLOW will inevitably create a certain amount of market selling pressure. However, the expected downturn is also becoming a focal point for various trading players to strategize, and the stakeholders in the Flow blockchain will need to consider their strategies during this period.

FLOW Investor Benson's Perspective

Benson believes that most unlocking stakers may choose to trade and sell on platforms that support this functionality, such as Kraken, OKEx, CoinList, and BloctoSwap AMM. Calculated at the current price of $17, the maximum supply after unlocking will push FLOW to a market value of over 20 billion, which is not low.

For those looking to buy at a lower price, they can try their luck on platforms with relatively low liquidity to obtain favorable slippage. However, due to CoinList's platform load restrictions, they had stopped FLOW orders at the time of submission. Another approach could be to join the FLOW trading pair liquidity in BloctoSwap AMM when FLOW reaches an ideal price to profit as an LP.