3AC and Alameda Research Expected to Take Three Years to Sell Off All WLD Tokens
The ongoing liquidation of WLD tokens by Three Arrows Capital (3AC) and Alameda Research could take up to three years, according to projections based on recent sales data. Since the linear unlocking of WLD tokens began at the end of July 2024, both bankrupt entities have been steadily selling their unlocked tokens, according to a post on X by @EmberCN. Despite the slow pace of liquidation, the significant number of tokens held by 3AC and Alameda is expected to influence market dynamics for the foreseeable future.
3AC and Alameda’s WLD Holdings and Sales
According to the data, 3AC initially acquired 75 million WLD tokens. Since the unlocking began, the firm has sold 2.538 million tokens, worth approximately $4.06 million. This slow but steady sale suggests that 3AC is liquidating its WLD holdings cautiously to avoid significant price drops in the market.
Meanwhile, Alameda Research, which acquired 25 million WLD tokens, has been selling its tokens on a weekly basis since early August. As of now, Alameda has sold 1.129 million tokens, totaling $1.8 million in value.
The sale rates for both entities indicate that, at their current pace, it will take approximately three years for both firms to completely sell off their WLD holdings. This extended timeframe is particularly notable given the sizable token allocations each entity holds, which could have broader implications for WLD’s market price and liquidity.
Linear Unlocking of WLD Tokens
The WLD token unlocking process began in July 2024, allowing token holders, including 3AC and Alameda, to gradually sell their holdings. Token unlocks typically follow a linear vesting schedule, where a certain percentage of tokens become available over a defined period, rather than all at once. This approach helps mitigate potential market volatility by preventing a massive influx of tokens into the market at a single point in time.
For 3AC and Alameda, the linear unlocking schedule has provided an opportunity to sell their WLD tokens progressively, rather than flooding the market. However, the gradual sales are likely to keep the token’s price under pressure, as both entities continue to sell their assets to cover their debts following bankruptcy proceedings.
Three-Year Liquidation Estimate
At the current rate of selling, @EmberCN estimates that it will take approximately three years for both 3AC and Alameda to sell all of their unlocked WLD tokens. The long liquidation period could have several effects on the market, including prolonged downward pressure on WLD’s price and potential concerns among investors about the continuous selling activity.
While the liquidation timeline is speculative and subject to market conditions, the extended timeframe indicates that WLD token holders and investors may need to brace for sustained selling activity from these two major players.
Impact on WLD Token Price and Market
The steady liquidation of WLD tokens by 3AC and Alameda could have a lasting impact on the token’s price. With both entities holding a combined total of 100 million WLD tokens, their continuous sales are expected to contribute to downward price pressure, particularly if the market lacks sufficient demand to absorb the ongoing supply.
Moreover, the liquidation by two prominent, albeit bankrupt, entities could influence the broader sentiment around the WLD token. Investors may remain cautious, especially as 3AC and Alameda’s combined holdings represent a significant portion of the total circulating supply.
However, the fact that the sales are occurring gradually rather than all at once provides some level of market stability. If demand for WLD tokens remains strong, the market could absorb the selling pressure over time, mitigating potential price declines.
3AC and Alameda: Fallout from the Terra Collapse
Both Three Arrows Capital and Alameda Research were major players in the cryptocurrency industry before filing for bankruptcy following the collapse of Terraform Labs and its UST stablecoin in 2022. Their respective collapses have had ripple effects across the crypto sector, leading to liquidation events like the current sell-off of WLD tokens as both entities work to repay creditors and settle their financial obligations.
Despite their bankruptcies, both entities still hold substantial crypto assets, and their liquidation activities continue to draw attention due to their potential impact on the markets in which they are active.
Conclusion: Prolonged Liquidation Period for WLD Tokens
The projected three-year liquidation period for Three Arrows Capital and Alameda Research to sell off their WLD tokens highlights the long-term market implications of the token’s unlocking process. With both firms holding significant quantities of WLD tokens and selling them steadily since July 2024, investors can expect ongoing price pressure for the foreseeable future.
As 3AC and Alameda continue to offload their WLD tokens, market participants will be closely monitoring the impact of these sales on the token’s price, liquidity, and market sentiment. How the market absorbs this supply will likely shape the future trajectory of WLD tokens over the next few years.
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