Optimism’s OP Token in Roller Coaster Mode after a ‘Turbulent Launch’
OP token by Optimism, a second layer scaling solution for Ethereum (ETH), went on a roller coaster following a “turbulent launch” that led to unprecedented demand and caused delays on the Optimism blockchain mainnet.
The token, after briefly plunging to as low as USD 1.38, hit an all-time high of USD 2.10 in the early hours of its debut, and subsequently started a correction. At 7:35 UTC on Wednesday morning, OP is trading at USD 1.77, up by 23.8% over the past 24 hours, according to CoinGecko.
The Layer 2 (L2) scaling solution launched the much-anticipated airdrop of its OP token on late Tuesday, distributing free tokens among early users of the project who had interacted with the network before June 23, 2021, as well as early DAO voters, more than 24,000 Gitcoin donors, and others. The drop did face some issues, however, which the team said they were able to solve.
At 11am (EST) we deployed and loaded our MerkleDistributor contract with the OP tokens for Drop #1. Our biggest mistake here was failing to make this contract pausable. Claims were open, and we had no way to stop them.
— Optimism (✨🔴_🔴✨) (@optimismFND) June 1, 2022
Pandora's box was OPened (gotta love immutability)!
While the L2 solution initially intended to include 248,000 addresses, it later removed 17,000 addresses that were considered to be airdrop farmers or sybils, those who create multiple wallets and execute small trades to increase their total earnings when an airdrop occurs.
“All of the OP recovered will be redistributed proportionally to other recipients of Airdrop #1. It’s like an extra mini airdrop,” Optimism said in late May.
A number of crypto exchanges, including OKX, LBank, MEXC, and AAX, have announced plans to list the Optimism token. Most recently, US-based crypto exchange Coinbase revealed that it would “add support for Optimism (OP) on the Optimism network.”
New Asset: Coinbase will add support for Optimism (OP) on the Optimism network only. Do not send this asset over Ethereum or other networks or your funds may be permanently lost. pic.twitter.com/yuNTp40PlL
— Coinbase Assets 🛡️📞 (@CoinbaseAssets) May 31, 2022
Nevertheless, Optimism experienced an unprecedented demand following the launch of its governance token, causing delays on the Optimism blockchain mainnet and remote procedure calls (RPCs).
An RPC is a software communication protocol that one entity, such as MetaMask, can use to request a service from another protocol, like L2 blockchains. With Optimism’s RPCs going down, users could not buy or sell OP tokens since they were not able to access the Optimism blockchain.
“We have NOT officially announced yet, but we’re already experiencing an all-time high demand … We’re working to heavily provision more capacity before our official announcement—in the meantime, the public RPC may respond slowly,” Optimism said in a Twitter post.
Polynya, a pseudonymous Ethereum researcher, argued that despite the “botched” airdrop, the Optimism chain and the sequencer, the party in charge of block production, operated fine with “100% liveness throughout.”
They said that at peak, the L2 solution had more traffic than the Ethereum mainnet, yet used less than 5% of mainnet gas. “This is *scaling* – let’s be very clear about it,” the researcher added.
The researcher explained that what failed was “public infrastructure – i.e. RPC that users can talk to, to submit transactions.” They said that Optimism should have prepared better since they knew the number of airdrop participants and that overall public interest was high.
“They should also have had multiple RPC endpoints prepared and worked with [node providers] Alchemy, Infura etc. to give users multiple options. Although this didn’t come into play today, also need to think about how fee markets and congestion work for rollups,” Polynya said.
As reported, Optimism announced the launch of its governance token OP in late April, which would further help the initiative move toward a decentralized governance structure known as the Optimism Collective.
Optimism Collective is a bicameral governance system that will be governed co-equally by two entities, the Citizens’ House and the Token House.
The Token House will be governed by OP token holders while the collective’s other entity, the Citizens’ House, will use the revenue generated by the L2 to “distribute retroactive public goods funding,” Optimism said in a blog post in late April.
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Learn more:
– Optimism Moves Toward Decentralized Governance Structure With OP Token Launch
– Ethereum and Uniswap Tank Despite Optimism News
– 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
