More than 386 million Optimism (OP) tokens, valued at $587 million at current prices, will be unlocked on May 31, when the initial vesting period for early contributors and investors ends, which raises fears of downward pressure on prices.
The OP unlock on May 31 is one of the biggest this year. With a offer With a total circulation of only 335 million OP tokens, the unlocking could increase the supply in circulation 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
Optimism will unlock 9% of the total $OP offer tomorrow. This is the first unlock for major contributors and investors. At the current price of the token, there is potential selling pressure of approximately $600 million.
According to him analysis from token unlocking research firm Unlock Calendar, there is a reasonable chance that unlocking Optimism could create significant selling pressure for the native OP token, largely due to early stage investors seeing sizable returns.
Among the largest early investors in Optimism are cryptocurrency venture capital firms Paradigm, Andreessen Horowitz (a16z), and IDEO CoLab Ventures. According to data According to CryptoRank, the investment firms that participated in the initial round – Paradigm and IDEO – are currently above 10,000% of their initial investment.
However, taken together, It appears that the median purchase price of VC firms is about $0.24, which means that currently the firms have an aggregate profit of 529%.
Token unlocks are scheduled events in which tokens allocated to early investors and major development contributors are “released” after being frozen for a set period of time.. Cryptocurrency projects often ensure that tokens are “locked in” to prevent large asset sales during periods of low liquidity, an event that could have a significant price impact.
Optimism is what is known as a Layer 2 scaling solution that claims that the transactions and activity on the Ethereum network faster, cheaper and more efficient. The OP token is the governance token of the Optimism network.
On June 1 of last year, Optimism went live with its first launch, delivering OP tokens to nearly 250,000 addresses. associated with the first users of the network. On February 9, 2023, the second major launch took place, distributing more than 11 million OP tokens to 307,000 unique addresses.
Although the launches caused brief spikes in trading activity, the OP token price has followed a general downward trend in recent months. It has also taken a significant short-term hit ahead of the unlock event, currently trading at $1.51 a unit, down 8.5% over the last 24 hours.
According to data from CoinGecko, OP is down 53% from its all-time high of $3.54 reached on February 24 of this year.
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