We can see Arbitrum taking the L2 lead back from Optimism in daily transactions again in the middle of January. In fact, daily transactions on Optimism have actually declined by about 75% since mid-January's 800k high: But from where I sit, it really looks like speculation is what is driving this price increase in OP rather than actual chain usage. OP was already moving very nicely in January but it was actually the February 1st announcement that the community will be voting on the Bedrock upgrade that really sent the token skyward from $2 up over $3 in a matter of just a few days. Which in my view is actually a smarter way to release funds that are similar to grants. Which are tokens that are apparently being held for distribution to developers and startup builders who help grow the ecosystem after they have created something meaningful for the public good of the chain rather than before. In total, 17% of the tokens went to early investors (or "Sugar Xaddies") and 19% went to core contributors.ġ9% is for airdrops and the rest is for building the ecosystem and public goods funding. This is where OP investors today could possibly see price deflation if the early money looks to get out of the investment after such a marvelous increase in price. Later in 2023, we'll see the release schedule add some of the tokens from early investors and core contributors. Though just 5% of supply is in circulation from the airdrop at launch, over 30% is actually out of lockup since we're currently in Year 0. Second, if tokens that come out of lockup end up entering the market too quickly, it could drastically deflate the price of OP tokens. This is what explains the 200% surge in a little over a month. First, with less supply in circulation there is a greater chance for volatility. This has two fairly large impacts on the coin. At 5.4%, that circulating supply is preposterously low. The first thing that probably jumps out from those metrics is the circulating supply. From a token supply standpoint, there is a lot of potential dilution coming - this data is according to CoinMarketCap: This means Optimism users don't pay gas fees with OP. However, last year OP was launched as a pure governance token rather than as a traditional utility token. In the past, Optimism has operated without a native coin. The Bedrock release enables performance improvements across the board, including transaction costs, throughput characteristics, and sync speeds.Īccording to the chain's developers, the successful implementation of Bedrock on the Optimism's Mainnet will position the ecosystem as a leader in Ethereum scaling. Bedrock has successfully been implemented on the Goerli Testnet and when finished on Mainnet will bring significant techincal improvements in the L2 chain according to the team working on the upgrade: It appears the biggest catalyst that is likely creating the current price surge in OP is the impending vote for Optimism's 'Bedrock' upgrade that is expected take place on the Optimism Mainnet in the coming weeks. OP has been one of the best performing crypto assets in 2023, now up roughly 200% year to date:Īs we'll explore in this article, OP's performance seems to be more of a news-related move than a fundamental one. Optimism has integration with dozens of DeFi protocols and is home to some of the more popular applications in crypto Synthetix ( SNX-USD ), for instance. Optimism ( OP-USD) is one of the most popular layer two scaling chains built on Ethereum ( ETH-USD).
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