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Will Investors Sell Their OP Tokens When Optimism Unlocks $587 Million Worth of Value?

2023-05-30 16:30:50

On May 31, more than 386 million OP tokens will be made available, more than tripling the current circulating supply.


As the first vesting period for early participants and investors comes to a conclusion on May 31, more than 386 million Optimism (OP) tokens, worth $587 million at present levels, are slated to be unlocked. This raises worries about downward price pressure.

One of the biggest scheduled unlocking occasions for this year is the OP unlock on May 31. With just 335 million OP tokens in circulation as of right now, unlocking may result in a circulating supply rise of more than 100%. There is a risk that the Optimism unlock might significantly increase sell momentum for the native OP token, in large part because early-stage investors are holding on huge gains, according to data by token unlock research firm Unlock Calendar.

The venture capital companies Paradigm, Andreessen Horowitz (a16z), and IDEO CoLab Ventures are the biggest seed investors in Optimism. Investors Paradigm and IDEO who took part in the Seed round are already up more than 10,000% on their initial investment, according to statistics from CryptoRank. The average buy-in price for venture capital companies, however, looks to be around $0.24, which means that the businesses are currently sitting on an overall gain of 529%.

Token unlocks are planned occasions where tokens given to early-stage investors and significant development contributors are released following a certain amount of time being locked up. Typically, cryptocurrency projects make sure that tokens are locked up to prevent huge asset sales during times of low liquidity, an occurrence that might have a big influence on price. Optimism is a layer-2 scaling solution that promises to speed up, reduce the cost, and increase the effectiveness of transactions and activity on the Ethereum network.

Major ‘Bedrock’ Update For Optimism Scheduled For June 6

Optimism launched its first airdrop on June 1 of last year, sending OP tokens to almost 250,000 addresses connected to the network's early adopters. The second significant Airdrop, which sent more than 11 million OP tokens to 307,000 different addresses, took place on February 9, 2023.

Optimism (OP) price movement in the last 30 days. Source: CoinGecko

While trading volume briefly increased as a result of the airdrops, there has been a general decreasing trend in the price of the OP token over the past few months. Prior to the unlocking event, it has also had a large short-term decline; it is presently selling at $1.51 per coin, down 8.5% over the previous day. OP is down 53% from its all-time high of $3.54, which it attained on February 24 of this year, based on data from CoinGecko.

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