The central theses

  • Many recipients of Optimism’s new OP token have began to dump their holdings and switch them again to the Ethereum mainnet.
  • The exodus has triggered a scarcity of liquidity within the bridges connecting Optimism to the Ethereum mainnet, leading to sluggish and failed transfers between the 2 networks.
  • The OP token’s worth is down 70% because the begin of buying and selling – not a completely uncommon consequence for preliminary token airdrops.

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The optimism token can also be down over 70% because the begin of buying and selling yesterday.

Customers money out of optimism

Optimism airdrop recipients deliver their income again to Ethereum.

Bridges connecting Ethereum to the Layer 2 Optimism community are going through efficiency points in the present day as customers who obtained the community’s token airdrop are sending their income again to the Ethereum mainnet.

Hop Protocol, the most important bridge from Optimism to Ethereum, reported Wednesday morning on Discord that the bridge is seeing “a serious surge in quantity” and that transfers again to mainnet could be disabled pending extra USDC and ETH liquidity launched. Customers of Synapse and Throughout Protocol, two competing bridges, have additionally reported sluggish or failed Optimism withdrawals. In accordance with a dev help account on the Throughout Protocol Discord server, the protocol noticed numerous transfers from Optimism to the Ethereum mainnet. “That is inflicting some near-term liquidity shortages in goal chains and a few transfers could also be delayed. Any late transfers ought to be accomplished inside 2 hours,” they mentioned.

Optimism is a Layer 2 community designed to scale Ethereum. Yesterday, over 249,000 early Optimism customers who met sure standards obtained an airdrop of the community’s newly launched OP token. Though the Optimism staff tried to ship tokens to energetic and engaged community customers as an alternative of those that want to farm the airdrop, many recipients select to transform their OP tokens into ETH and ship their funds again to the Ethereum mainnet.

On account of the exodus, the OP token worth was hit exhausting. Shortly after the airdrop went stay, OP began buying and selling at round $4.52, bringing the totally diluted worth of the token to over $19 billion. Nonetheless, as extra customers claimed their airdrop, the worth of the token dropped. The worth of the OP token seems to have stabilized and is presently altering palms at $1.34, down over 70% since its inception.

OP/USD chart. Supply: CoinMarketCap

The sharp drop in OP token wasn’t completely sudden. Earlier airdrop tokens, like these of ParaSwap and CoW Protocol, skilled related declines shortly after launch. However, final yr’s Ethereum Title Service airdrop was in a position to get well briefly from its preliminary stoop. As threat urge for food fades within the broader crypto market, it seems to be like it may be an uphill battle for OP token bulls going ahead.

Disclosure: On the time of writing this text, the writer owned ETH and a number of other different cryptocurrencies.

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, Layer 2 bridges clog when Optimism Airdrop receivers go away the community

, Layer 2 bridges clog when Optimism Airdrop receivers go away the community

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