As the impending token unlock for the Ethereum layer 2 network, Optimism, approaches on September 30, contradictory currents have caught its native token, OP, in a precarious situation. The past week, characterized by a nearly 10% slump in its price, stirred a heavier atmosphere of uncertainty when comparing with other altcoins, which are also exhibiting parallel declinations. This recent downtrend left OP leading losses among the top 50 assets by market capitalization.
The impending unlock episode involves unwrapping 24.16 million OP tokens equivalent to roughly $31.1 million at current prices. This colossal figure represents a 3% sliver of the total circulating supply, as data from Token Unlocks reports. While the distribution plan bifurcates $15.49 million among core contributors, the remainder lies in the allocation toward investors.
Preluding to the token unlock, the evident dip in prices embodies the classic economic scenario: supply abundance tends to depress asset prices and vice versa. In the crypto universe, token unlock programs geared toward influencing supply dynamics often follow this predictive pattern.
On a broader scope, such unlock programs uphold multiple objectives, from maintaining price stability to fostering community engagement. Notably, other entities apart from Optimism such as 1inch, Yield Guild Games, and Euler are also planning their unlock maneuvers, with differing token volumes and values.
Resisting the temptation to infuse the entire token load at once, numerous contingency projects opt to roll them out gradually. This stage-by-stage approach hybrids price regulation benefits with the networking charm of permeating community participation.
Grounding its blueprint in the latter, Optimism holds an impressive regional record of community engagement initiatives in recent months. A significant manifestation of this was the July event, where the network handed the community 3.56% of its total circulating supply, an eye-opening $36.92 million at that time. An equally substantial third community airdrop rolled out 19,411,313 OP tokens, translating to about $27 million.
To further stimulate its community incorporation drive, Optimism announced a spectacular release of 570 million OP tokens for future airdrops, with allocations strategized based on factors including community participation, governance votes, and OP holdings. It remains to be seen how these expeditious moves unfold in the real-world context towards dictating industry standards and investor incentives.
Source: Cryptonews
