Optimism's OP Token Faces Downturn Before Release of $30 Million in Locked Assets
Optimism's OP token drops 10% ahead of a $30 million token release; potential market oversupply looms.
Thu, 28 Sep 2023, 08:44 am UTC
Optimism’s native OP cryptocurrency has witnessed a decline, dropping about 10% within a week, just days ahead of the planned release of assets valued at roughly $30 million.
As detailed by TokenUnlocks, a platform focusing on tokenomics insights, about 24.16 million OP tokens will be made available for trading by the end of September. This amount corresponds to nearly 3% of all OP tokens currently in circulation. Based on current market values, the released tokens will introduce over $30 million into the market. This will be divided, with $15.49 million allocated to principal contributors and the remaining $14.26 million reserved for backers.
Such token release events are common in the cryptocurrency world. Most digital currency projects strategically opt for periodic releases of their tokens over time rather than flooding the market all at once. However, these release events are often perceived by the investment community as potential triggers for a drop in token prices. This is because as more of the currency is made available, it can result in an oversupply, putting downward pressure on its price.
Today, the OP token's value remains relatively stable, being traded at about $1.26. This stability, following a modest rise of 3% in the preceding few hours, showcases the cryptocurrency's resilience amidst market shifts, as per the financial figures from CoinGecko.
Market analysts are keenly observing the trends, noting that while immediate impacts of such unlocks are visible, the long-term ramifications remain a topic of debate.
A week ago, on September 21, Optimism disclosed their intention to offload OP tokens worth $160 million in a proposed sale targeting select buyers. This move, seen by some as a strategy to bolster the company's financial standing, drew attention from industry insiders and potential investors alike.
Earlier, on September 19, the company unveiled their third token distribution event. They pledged 19.4 million OP tokens to a notable number of over 31,000 digital addresses.
These participants were engaged in tasks associated with Optimism Collective, the company's decentralized autonomous organization. This gesture was received as a testament to Optimism's commitment to rewarding active community involvement and fostering decentralized operations.
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