Over 386 million Optimism (OP) tokens — worth $587 million at current prices — are expected to be unlocked on May 31 when the initial empowerment phase for early contributors and investors ends. end – raising concerns about downward price pressure.
The OP Unlock on May 31 is one of the biggest scheduled unlock events this year. With a current total circulating supply of just 335 million OP tokens, unlocking has the potential to increase the circulating supply by more than 100%.
According to analysis from Unlock Calendar, there is a reasonable possibility that unlocking Optimism could create some significant selling pressure on the native OP token, largely because early stage investors are reaping the rewards. pretty big.
The biggest seed investors in Optimism include crypto venture capital firms Paradigm, Andreessen Horowitz (a16z) and IDEO CoLab Ventures. According to data from CryptoRank, the investors participating in the Seed round – Paradigm and IDEO – are now up over 10,000% from their initial investment.
Overall, however, it seems that the average buy-in price of venture capital firms sits at approximately $0.24, meaning that currently, the companies are seeing a total gain of 529%.
Token unlocks are scheduled events where tokens are allocated to early stage investors and key development contributors are “released” after being locked for a certain period of time. Cryptocurrency projects often ensure that tokens are “locked in” to avoid large asset sales during periods of low liquidity, an event that can significantly impact prices.
Optimism is a layer-2 scaling solution that aims to make transactions and operations on the Ethereum network faster, cheaper and more efficient. OP is the governance token of the Optimism network.
On June 1 of last year, Optimism launched its first airdrop, distributing OP tokens to nearly 250,000 addresses associated with the network’s early users. On February 9, 2023, the second major Airdrop took place, distributing over 11 million OP tokens to 307,000 unique addresses.
While the airdrops caused a short-term spike in trading activity, the price of the OP token has been on a general downward trend over the past few months. It also took a significant short-term push ahead of the unlock event, currently trading for $1.51, down 8.5% over the past 24 hours.
According to data from CoinGecko, OP is down 53% from the all-time high of $3.54 it reached on Feb. 24.