Optimism Unleashed: Exploring the Potential Impact of Unlocking Millions of OP Tokens

Updated: 30 May 2023

Disclosure

Don’t invest unless prepared to lose all the money you invest. This is a high-risk investment, you shouldn’t expect to be protected if something goes wrong.

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Millions of OP tokens are on the verge of being unlocked in Optimism, sparking an exploration into the potential impacts they may have.

This influx of tokens into the market could decrease the price of OP. Investors need to exercise caution and assess the possible ramifications of these developments on the token’s price dynamics.

Optimism Unlocking 155 Million OP Tokens: Impact on Investors & Supply

Optimism, a prominent Ethereum Layer-2 scaling solution, will undergo a significant increase in supply. Investors highly favor Optimism’s native governance token, OP, which has gained tremendous popularity.

$OP will unlock 9% of total supply tomorrow (30th May)

This will be first unlock for i) core contributors, and ii) investors

Potential selling pressure will be ~$600m

Will release a newsletter article on likely price impact this evening pic.twitter.com/VxbtFEYzgb

— Unlocks Calendar (@UnlocksCalendar) May 29, 2023

However, this investment may soon become costly. On May 31, Optimism will unlock approximately 155 million OP tokens, representing about 3.6% of the total supply. According to data from CoinGecko, the current circulating supply of OP stands at 335,376,391. As a result, the unlocked tokens will nearly double the supply, increasing it by almost 100%.

Ethereum Layer-2 scaling projects have recently received significant attention for their efforts to make Ethereum more accessible to a broader audience. Their importance and spotlight are well-deserved, considering the impact they can have on bringing Ethereum to the masses.

The OP tokens entering the circulating supply hold a value of approximately $240 million, considering the current OP price of $1.55. TokenUnlocks data reveals that these tokens will be distributed to Optimism Labs’ seed investors and core contributors. This distribution pattern implies that retail investors will likely experience a devaluation of their holdings. This is because a portion of the unlocked tokens are expected to be sold, consequently driving down the price of OP.

Prominent Investors in Optimism Achieve Remarkable 10,285% Gains

Prominent investors, including a16z, Paradigm, and others, have realized remarkable gains of 10,285.8% on their initial investments in Optimism. Recognizing that early investors and employees may opt to hold their holdings during bear markets and await the next bull market for potentially higher profits is crucial.

This choice holds significant implications for investors and traders, allowing them to position themselves more effectively in the market by being aware of token unlocks. Understanding the actions of these key stakeholders empowers investors and traders to make informed decisions. You can adapt their strategies and capitalize on potential market movements.

Polygon zkEVM and zkSync Era Witness Soaring TVL on Ethereum Mainnet

Conversely, this year, Polygon zkEVM and zkSync Era launched on the Ethereum mainnet. This marks a significant milestone in Ethereum layer-2 scaling solutions. Since their launch in late March, both networks have witnessed a continuous surge in activity and total value locked (TVL).

Roses are red ?
Violets are blue
Poems are hard ?
Mainnet Beta is here

ON MARCH 27, Polygon #zkEVM launches the future of Ethereum scaling

????https://t.co/OqSOYTn8Uv pic.twitter.com/kpXavea3ff

— Polygon (Labs) (@0xPolygonLabs) February 14, 2023

Data from L2Beat indicates that the TVL on zkSync Era has soared to $310 million within just two months. This is an impressive growth rate. In the last 24 hours, the TVL has surged by 15%, solidifying zkSync Era’s position as the fourth-largest Ethereum rollup.

Meanwhile, Polygon zkEVM, a key competitor to zkSync Era, has amassed a TVL of $16 million. However, the figure has been experiencing substantial growth over the past few weeks. In the last 24 hours, the TVL on Polygon zkEVM has witnessed a remarkable increase of 34%, indicating its potential for further expansion and adoption.

The rising TVL on both networks demonstrates users’ growing confidence and interest in these layer-2 scaling solutions. By leveraging zkEVM technology, these networks aim to enhance scalability, reduce transaction fees, and improve the overall user experience on the Ethereum network.