Optimism Moves Toward Decentralized Governance Structure With OP Token Launch

Source: AdobeStock / Olivier Le Moal

 

Ethereum (ETH) Layer 2 (L2) scaling solution Optimism has announced the launch of its OP token that would further help the initiative move toward a decentralized governance structure known as the Optimism Collective.

Optimism Collective is a bicameral governance system built to push the L2 solution toward a sustainable decentralized ecosystem. The collective will be governed co-equally by two entities, the Citizens’ House and the Token House.

The Token House will be governed by Optimism’s new OP token, which will be airdropped to early users. In a blog post, the L2 solution detailed that there won't be one airdrop but "an entire season of airdrops," with the first one slated to come in the second quarter of the year.

"Please triple check that you are interacting with the right token. Note that Airdrop #1 has not yet occurred, and anything claiming you can get OP tokens today is a scam," Optimism said, warning users of potential scams that could emerge.

Optimism also shared a list of criteria for airdrop eligibility, which shows that early users of the L2, early DAO voters, and even more than 24,000 Gitcoin donors, among others, will also be included. In total, over 250,000 addresses will be eligible for the first airdrop.

Optimism added that OP token holders will be able to "vote on protocol upgrades, project incentives as a part of a Governance Fund, and more."

In terms of token distribution, 5% of the coin, which has a total supply of nearly 4.3bn, will be distributed in the first airdrop - and an additional 14% has been allocated to the future airdrops. All OP tokens will unlock over the course of 4 years.

Meanwhile, the collective's other entity, the Citizens’ House, will use the revenue generated by the L2 to "distribute retroactive public goods funding." This entity will be governed by so-called “soulbound” non-fungible tokens (NFTs), also known as non-transferrable NFTs, meaning that they can't be traded.

"Together, these two houses will help direct the revenue generated from the Optimism L2 to efforts that promote public goods and help grow the collective," Optimism claimed, adding that the Citizens’ House will launch sometime in 2022.

According to the crypto research firm Delphi Digital, launching a token before Arbitrum, "its closest competitor", Optimism’s OP "could provide a first-mover advantage." 

The firm added that, 

"Optimism can utilize its tokens to incentivize protocol yields to attract [total value locked (TVL)] across all chains. It looks like Arbitrum will be facing fierce competition for its TVL soon."

Optimism is an Ethereum Layer 2 solution that uses Optimistic Rollups technology to process transactions in batches, thus reducing gas fees. Layer 1 (L1) is the base protocol (the Ethereum blockchain), while Layer 2 (L2) is any protocol built on top of Ethereum.

Since its launch in 2021, Optimism saw a burst in popularity, attracting major decentralized finance (DeFi) projects like Uniswap (UNI) and Synthetix (SNX), a protocol for synthetic crypto assets.

Optimism currently has USD 488.2m in TVL, with Synthetix accounting for 43.72% of that tally, according to Defi Llama.

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Learn more: 
- Traders Speculate that Optimism Token Could Launch After Coinbase Glitch
- How to Use Layer-2 Solutions to Save on Ethereum Fees: Optimism

- Layer 2 in 2022: Get Ready for Rollups, Bridges, New Apps, Life With Ethereum 2.0, and Layer 3
- How to Use Layer-2 Solutions to Save on Ethereum Fees