- Optimism (OP) has seen record growth in total transactions and daily active users since the beginning of the year.
- Activity numbers dropped after Optimism ended its Optimism Quests program, which allowed users to earn trophy badges for completing missions, sparking speculation of an airdrop.
- OP has increased over 150% since the beginning of the year. This growth may be unsustainable because only 200,000 of the 4.29 million tokens are in circulation.
Layer Two Scale Solution Optimism (OP) is perhaps the most popular cryptocurrency project since the start of the new year.
The optimistic project based on Backlog has seen record activity on the blockchain. Furthermore, the Optimism OP token has seen incredible growth over the past few weeks.
But what drives the optimism of such explosive growth? Is it sustainable in the long run?
Optimistic landing hunters sink the net
The recent growth of optimism has many industry players raising their eyebrows.
At one point, Optimism even outperformed Arbitrum – a Layer-2 competitor – in terms of transaction volumes and daily active addresses. On January 12, Optimism processed more than 800,000 transactions and, along with Arbitrum, flipped the Ethereum mainnet into aggregate transactions.
Optimism has seen significant spikes over the past month in terms of the daily active headlines. On December 22nd, there were more than 110,000 addresses transacting on the optimism. The number dropped to around 80,000 in the coming weeks but was still much larger than Arbitrum.
But the activity on optimism subsided last week. It was all related to the Optimism Missions – various tasks intended to educate users on how to use Optimism and its ecosystem projects.
Users are rewarded with a commemorative badge for each task they complete. This prompted speculation that the completion of these activities may be a requirement for the optimistic second airdrops (the first took place last year). This may also have contributed to the OP’s price increase.
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The coefficients of optimism fell off the cliff as soon as the tasks stopped yesterday. Ouch. pic.twitter.com/mZGtA0EBIq
— Westie (@WestieCapital) January 20, 2023
Unsustainable increase in the price of OP
Since the beginning of the year, OP has been one of the best performing tokens. It increased by more than 150% and reached an all-time high of $2.46 a few days ago. It is currently trading at $2.36, according to data from CoinGecko.
However, this sudden growth in the price of OP appears to be unsustainable and driven by speculation. According to TokenUnlocks, there are only 200,000 of the total 4.29 million OPs in circulation, which means that many more tokens are waiting to be released.
Moreover, $5.1 million worth of OP is issued daily, which reduces the value of the token.
It’s also worth noting that OP is a governance code. There is also no OP stabilization mechanism implemented.
on the flip side
- OP is one of the few Layer-2 tokens available to investors. Some of them are definitely long term investors who would like exposure to the second tier space.
Why should you bother
Optimism is one of the leading solutions for scaling Ethereum Layer-2. While most of the activity on the network has been driven by airdrop hunters, it’s still encouraging to see this attention given to the Layer-2 project.
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