Posted on

Market Downturn? Not For Optimism: A16z’s Major OP Purchase Sends Price Skyrocketing By 9%

In a month marked by a challenging correction in the crypto market, Layer 2 (L2) blockchain protocol Optimism has emerged as a standout performer. Within the past 24 hours, Optimism’s native OP token skyrocketed by 9%, positioning it as the best-performing token among the top 100 cryptocurrencies. 

Behind this surge lies venture capital firm a16z, which has reportedly invested around $90 million in Optimism’s OP token, signaling further institutional support for the layer 2 protocol. 

OP Receives Major Investment

Sources familiar with the matter have revealed to Unchained that a16z has acquired a significant stake in Optimism’s OP token. 

The investment, which comes with a two-year vesting period, underscores a16z’s interest in the Layer 2 protocol and aligns with its growing involvement in crypto. Notably, a16z’s portfolio already includes crypto exchange Coinbase. 

The investment by a16z comes amidst notable activity and growth within the Optimism ecosystem. Optimism’s OP Stack has experienced increased usage, further validating its value proposition. The protocol’s ability to increase scalability and reduce fees on the Ethereum blockchain has also garnered significant attention. 

Optimism’s spokesperson expressed enthusiasm for the investment, acknowledging the energy and momentum surrounding the protocol. The partnership with a venture capital firm like a16z is expected to fuel further development and innovation within the Optimism ecosystem.

On March 7, the Optimism Foundation disclosed the sale of approximately 19.5 million OP tokens, valued at nearly $90 million, to an undisclosed buyer. 

These tokens were reportedly sourced from a 30% pool of OP’s original treasury, dedicated to the foundation’s working budget. Reports indicated that the buyer could delegate their tokens to third parties, enabling them to participate in Optimism’s governance.

The foundation clarified that, due to the private nature of the sale, specific details regarding the terms and purchaser were not disclosed. 

Key Levels To Watch For Optimism

Despite the recent surge in the Optimism ecosystem and its native token OP, the token still trades well below its all-time high (ATH) reached on March 6, 2024, currently down over 47% from that level.

However, OP’s trading volume has experienced a notable surge, indicating continued interest in the token. According to CoinGecko data, the OP trading volume has increased by over 113% compared to the previous trading day on April 30, amounting to nearly $600 billion in 24 hours.

Optimism

Key levels to monitor for the token soon include OP’s significant resistance at the $2.62 price mark and a potential retest of the $3 zone. 

However, a clear indication of a positive trend for the Optimism token would require a successful consolidation above the $3.92 zone, marking the end of the month-and-a-half downtrend structure.

Conversely, the $2.37 zone has proven to be a crucial support level for OP, as it has held for the past five days and prevented further price decline for the token. 

Digging deeper, the $2.25 mark is also a key support, with the most critical support level at $2.11. This level holds the key to Optimism’s macro bullish structure, as it initiated the token’s current uptrend.

Featured image from Shutterstock, chart from TradingView.com 

Posted on

This New Development Could Stop The Optimism (OP) Price Dead In Its Tracks

Optimism (OP) looks to be on a good recovery path so far in the month of September. This is thanks to the increasing positive user sentiment around the Ethereum Layer 2 network. However, the most recent development on the network could pose a threat to this recovery trend.

Optimism Announces Third Airdrop

After completing two rounds of airdrops already this year, the Optimism network has moved on to its third airdrop. This time around, the network is looking to reward loyal Optimism users who have delegated their OP to be used to participate in governance on the network.

In its announcement, the team revealed that the latest iteration of its airdrop reward system would see 19 million OP tokens distributed to 31,000 unique addresses on the network. The airdrop distribution began on Monday, September 18, with the tokens being sent directly to the wallets of eligible users.

The requirement was to have delegated OP tokens between January 20 to July 20 to receive the airdrop. To sweeten the pot, the airdrop applies a 2x multiplier to those who had delegated their tokens to individuals who were active voters.

As for those who were ineligible to receive the latest round of airdrops, the team assured the community that more would be coming as 19% of the total OP token supply is dedicated to airdrops.

Will This Affect OP Price?

The value of the total OP tokens being distributed in the third airdrop comes out to around $26 million. This means that $26 million worth of tokens are making their way into the open market. Only half of the participants selling their allocation could see a $13 million selling pressure on the price of the digital asset.

Now, if there is not enough demand to suck up this new supply, then the sellers will win and the OP price will drop drastically. This is already being manifested in Optimism’s performance in the last day which is already moving into the red with 0.24% losses. As more users receive and access their tokens, the selling pressure could climb rapidly.

However, given that users are being rewarded for holding and delegating their tokens, it could spark an urge to hold onto the OP tokens among those who receive them in an effort to qualify for future airdrops. In such a case, the OP price will hold firmly and shake off any bear pressure.

OP is already seeing increased interest which has translated to a 40% increase in its daily trading volume, according to data from CoinMarketCap. Its price is also holding tentatively at $1.40 as investors wait for the market to react.

Optimism (OP) price chart from Tradingview.com