OPOCOS tokens sliding more than most major cryptocurrencies

64
4
OPOCOS tokens sliding more than most major cryptocurrencies

OP Circulating supply set to double.

As of this week, Optimism's token is sliding more than most major cryptocurrencies, as holders can sell parts of their allocations. The circulating supply of OP is forecast to double as a result.

The OP is down by nearly 15% on the week, the second biggest drop among the top 100 digital assets. The market is predicting that there isn't enough demand for tokens of the second-largest scaling platform for Ethereum as part of its supply vests.

Core contributors and investors will be able to sell nearly 5% of their OP allocation on Tuesday, according to a dashboard from Token Unlocks. That is about 9% of the total supply of OP tokens.

After the unlock, OP circulating supply will rise from 335,376,391 to 644,159,767.35 after the lock, according to a pinned post in Optimism's Discord.

Token Unlocks founder Tanawat said the unlock of OP is 'quite huge' compared to other recent releases of vested tokens.

The OP token is released at a time when OP tokens have received sign-ons from major crypto projects - Coinbase has committed to using Optimism's technology to develop its own rollup, a name for a scaling technology that resolves transactions on Ethereum. The controversial Worldcoin project also announced plans to use Optimism's mainnet for its identity solution this month.

Bedrock, which both Coinbase and Worldcoin will use, will be released on June 6 at a later date.

Vesting in digital assets is a continued release of tokens to parties like investors, core team members, and advisors. It's a common practice often used to motivate long-term commitments on the part of individuals who received token allocations.

Optimism has a 'cliff' where many tokens are released at once. Some, such as DeFi's leading decentralized exchange, Uniswap, are slowly emitting tokens after an initial airdrop.

The trading platform dYdX had earlier this year delaying unlocks, which can enhance investor sentiment around a token, as the selling pressure is delayed.

The liquidity mining tools that tokens use are not the only way tokens' supplies continue to increase - liquidity mining mechanisms where tokens are provided to incentivize certain user behavior, also increase tokens' circulating supplies.

While the demonstrations of support from market leaders motivate confidence, the dynamic around the token is causing ripples of unrest as a significant amount of OP tokens remain locked or not yet distributed by the project's foundation.

A well-known researcher in the crypto industry, Polynya, a well-known researcher, was angered by criticism from the Optimism Foundation, a company that stewards Optimism's management, for 'underselling' the OP creating a dynamic of impending sell pressure.

It's a big week for token unlocks in general - more than 16% of 1INCH, the tokens of the decentralized exchange aggregator by the same name, is also set to unlock. Despite the unlock, 1INCH has been more robust than OP, despite the unlock bringing in nearly $100M worth of tokens.

Other unlocks this week include HBAR, the token of the blockchain-like network Hedera. It has been worth $67.4 million as of May 30.

Over $60 million of SUI, the token of the eponymous blockchain, will also be released. Token Unlocks notes that under 6% of the SUI token is unlocked, indicating that there's a huge amount of impending selling pressure for the token.

More than $13 million of DYDX is expected to be released this week, which represents less than 1% of the supply.

The valuation of tokens for rollups like Optimism and Arbitrum also occupy a bleak space, as The Defiant has explored previously.

Investors received 17% of the overall OP supply, while core contributors received 19%.

0xGeeGee, a pseudonymous trader, thinks investors are more likely to sell their tokens than core contributors to the project. I gonna laugh for half an hour straight, they told The Defiant.

0xGeeGee estimates that it would be surprising to see Optimism's core contributors sell their tokens, which would give a negative signal about the rollup's long-term prospects.