Optimism Plunges 9.29% Ahead of $30 Million Token Unlock -What’s Going On?
Ethereum layer 2 network Optimism faces headwinds as its price slumps nearly 10% in the week ahead of the planned token unlock on Sept 30.
At press time, the price of OP exchanges hands at $1.26 falling by 9.29% over the past seven days. After a sharp fall slightly above 3% yesterday, the token significantly regained its momentum in the last 24 hours.
Despite this, the token is caught in the middle of sliding crypto prices declining 15.37% in the past 30 days as other altcoins fall in similar numbers.
Token unlock in a few days
The sharp decline in OP in the market comes within days of its scheduled token unlock. The plan will see the project unlock 24.16 million OP tokens about $31.1 million in current prices.
According to data from the crypto platform Token Unlocks, the 24 million OP tokens account for 3% of its circulating supply.
Per the planned tokenomics, $15.49 million would be distributed to core contributors while $14.26 million has been earmarked for investors.
The recent decline in prices to the build-up of the token unlock can be expected because while scarcity drives up prices, increased supply can affect the price of an asset.
Most crypto companies rely on token unlocking programs to achieve many things relating to the supply as it is part of the tokenomics roadmap.
Rather than pump all tokens at once, most projects prefer to roll them out in phases for price and as a way of community engagement.
Aside from Optimism, several other projects like 1inch, Yield Guild Games and Euler (EUL) will unlock tokens in the coming days. 1inch will unlock 15,000 tokens worth $38.8 million while Yield Guild Games and Euler will unlock 12.4 million tokens worth $2.6 million and 153,000 tokens worth $410,000 respectively.
Optimism community engagement
Optimism is among the Ethereum layer 2 networks that have rolled out community rewards in a bid to boost participation in the last few months.
In July the network unlocked 3.56% of its total circulating supply worth approximately $36.92 million at the time.
The project also rolled out a third community airdrop of 19,411,313 OP tokens about $27 million. The platform mapped out over 31,000 addresses based on their community participation, governance votes, and OP holdings.
Today Optimism is announcing OP Airdrop #3.— Optimism (✨🔴_🔴✨) (@optimismFND) September 18, 2023
19M OP allocated to over 31k unique addresses to reward positive-sum governance participation in the Collective.
Read on for details on eligibility criteria and allocations.
To boost community interaction it has been disclosed that 570 million OP tokens will be distributed in future airdrops.