Ethereum Layer 2 Network Optimism Faces Price Slump Ahead of Token Unlock
Optimism, a layer 2 network for Ethereum, has experienced a significant decline in its price, dropping nearly 10% in the week leading up to the scheduled token unlock on September 30. Currently, the price of the OP token stands at $1.26, reflecting a 9.29% decrease over the past seven days. Despite a slight recovery in the last 24 hours, the token is largely influenced by the overall downward trend in the cryptocurrency market, which has seen altcoins, including Optimism, experience a decline of 15.37% in the past 30 days. In fact, OP is currently the biggest loser among the top 50 assets ranked by market capitalization, followed by Toncoin (TON) and VeChain (VET).
Token Unlock Set for September 30
The drop in OP’s market value coincides with the token unlock planned for September 30. As part of this plan, Optimism will release 24.16 million OP tokens, equivalent to approximately $31.1 million at current prices. According to data provided by the crypto platform Token Unlocks, these newly unlocked tokens represent 3% of the circulating supply of OP. Of the total, $15.49 million will be distributed to core contributors, while $14.26 million has been allocated to investors.
It is not uncommon for the price of an asset to experience a decline prior to a token unlock. While scarcity often drives up prices, an increased supply can have the opposite effect. Token unlocking programs are commonly used by crypto projects as part of their tokenomics roadmap. Rather than releasing all tokens at once, many projects opt to gradually roll them out in order to manage the price and engage with the community.
Apart from Optimism, several other projects, including 1inch, Yield Guild Games, and Euler (EUL), also have token unlocks scheduled 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.
Community Engagement Efforts by Optimism
In an effort to boost participation, Optimism, like other Ethereum layer 2 networks, has introduced community rewards. In July, the network unlocked 3.56% of its total circulating supply, amounting to approximately $36.92 million at the time. Additionally, Optimism conducted a third community airdrop, distributing 19,411,313 OP tokens worth around $27 million. The platform identified over 31,000 addresses based on their community participation, governance votes, and OP token holdings. Furthermore, it has been announced that a total of 570 million OP tokens will be distributed in future airdrops to further incentivize community engagement.
Please note that the article is based solely on the provided information and does not contain any additional details or promotional content.
