As per Optimism, 396 million OP tokens worth $587 million would be unlocked on May 30. However, the move has set the stage for concerns revolving around downward price pressure. The recently announce given by optimism about its unlock event is deemed to be the largest planned unlocking event of this year so far. The current supply of OP tokens is 335 million, and the unlock could increase the supply by more than 100%.
Optimism will unlock 9% of total $OP supply tomorrow
This is the 1st unlock for core contributors & investors
At current token price, potential selling pressure ~$600M pic.twitter.com/g7sg1vXMkM
— Token Terminal (@tokenterminal) May 29, 2023
Based on data shared from Unlock Calendar, a token unlock research firm, the possibility of the Optimism unlock creating selling pressure for the native OP token could surge towards the higher side. Furthermore, the largest seed of investors in Optimism includes a number of venture capital firms that are Paradigm, Andreessen Horowitz, and IDEO CoLab Ventures. Based on the data shared by CryptoRank, it is shown that these participants are currently up by approximately 10,000% on their initial investments.
The Journey of Optimism Summed Up
Back in June last year, Optimism went live with its first airdrop that handed out OP tokens to more than 250,000 addresses associated with the early users of the network. Similarly, in February this year, Optimism initiated the second round of its airdrop, which distributed more than 11 million OP tokens to almost 307,000 unique addresses.
It is a fact that airdrops tend to result in a brief spike in trading activity, but the price of the OP token has been declining for a while now. At the same time, the token has also been a victim of a short-term hit prior to the unlocking event. At the time of writing, OP has declined by 7.92% in the previous 24 hours. The decline has pushed the trading price down to $1.52 and the market cap currently stands at the $510 million mark.
Token unlocks can be classified as events where tokens designated to early investors and contributors are released after being locked up for a designated period of time. A number of crypto projects ensure that tokens are locked up in hopes of avoiding increased asset sales during times of low liquidity, which might greatly affect the overall price. Optimism is a layer 2 scaling solution that aspires to make transactions faster, more reliable, and cheaper on the Ethereum network.
