Revealing the token release schedule of a major lending protocol can be quite daunting for many. Over the coming months or even a year or two, tokens locked by seed rounds, private placements, teams, and advisors will be gradually unlocked—an unavoidable reality.

The problem is—these tokens were acquired at extremely low costs, and now the market price has already given them hundreds or even thousands of times in paper gains. Such a large profit margin hanging overhead, combined with the selling pressure from unlocks, is essentially like holding a "Sword of Damocles" above the token price.

The market is clearly digesting this expectation. Each time a major unlock window approaches, panic often triggers a wave of decline. This is not just a matter of token price; it has deeper implications for the protocol itself: if the price continues to decline, community morale will suffer, the incentive effects of the tokens will weaken, and even the treasury’s value may shrink. As a result, the overall attractiveness of the ecosystem diminishes.

To break this deadlock, the team needs to find ways to hedge against this inevitable "flood release." There are basically three approaches: First, genuinely improving the fundamentals, such as explosive growth in protocol revenue to support the price; second, establishing a strong deflationary mechanism, using buybacks and burns to absorb selling pressure; third, designing innovative locking incentive schemes to give token holders a reason to hold.

If none of these are implemented, the token economy can easily fall into a vicious cycle—decline triggers panic, panic leads to more selling, and selling further depresses the price. This is deadly for any project.