The number of tokens trading freely is often far smaller than the number that exist. The difference is held under vesting schedules that release on dates set at launch.
Circulating supply and total supply are separate numbers
Total supply counts every token created or scheduled to be created. Circulating supply counts only those currently free to trade.
Allocations to founders, early investors, treasuries and ecosystem funds are typically locked at issuance and released gradually rather than immediately. Those locked portions exist on the ledger but cannot be moved until their release conditions are met.
Because headline valuation figures are often calculated from circulating supply, two projects with similar valuations can have very different amounts of locked stock behind them.
Cliffs and linear vesting behave differently
A cliff holds an entire allocation locked until a single date, at which point a large block becomes transferable at once. Nothing changes for months, and then a substantial share of supply becomes movable in a single moment.
Linear vesting releases in small increments over a period, spreading the same quantity across many dates instead of concentrating it. Many schedules combine the two, using an initial cliff followed by gradual release.
The distinction matters because a market absorbs a steady trickle differently from a single step change in available supply. The same total quantity can reach the market with very different effects on liquidity.
The schedule is public before the event
Unlock timetables are usually published in project documentation and enforced by code, so the dates and quantities can be read in advance.
That transparency means participants can position ahead of a scheduled release rather than discovering it when it happens.
As with any anticipated flow, part of the market response can occur before the tokens actually become transferable.
Unlocking is not the same as selling
A token becoming transferable does not mean its holder intends to sell it. Some allocations are unlocked and simply held or staked.
The unlock changes what is possible, not what is chosen. It converts a locked position into a decision that a holder now has to make.
Reading every unlock as guaranteed selling pressure confuses the removal of a constraint with the exercise of it.
Vesting exists to align incentives over time
Locking insider allocations is intended to prevent the people closest to a project from exiting immediately after launch.
Extending release over years ties their outcome to whether the project still functions later, rather than to launch-day enthusiasm alone.
Whether the mechanism achieves that depends on how long the locks run and what proportion of supply they cover, which is why the schedule is read as closely as the technology.