Layer-2 Optimism (OP) Token Soars Amid Second Airdrop Speculation: Is Growth Sustainable?

• Optimism (OP) sees record-breaking growth in total transactions and daily active users since the start of the year.
• Activity numbers plummeted after Optimism ended its Optimism Quests program, which allowed users to earn commemorative badges for completing tasks, fueling airdrop speculation.
• OP has increased over 150% since the start of the year. This growth may not be sustainable as only 200,000 of the 4.29 million tokens are in circulation.

The Ethereum Layer-2 Optimism (OP) scaling solution is perhaps the most popular crypto project since the start of the new year.

An optimistic rollup based project sees highest activity on its blockchain. Apart from that, Optimism native token OP has also experienced tremendous growth over the past few weeks.

But what is driving Optimism for such massive growth? And is it sustainable in the long term?

Airdrop Hunter Optimism Floods the Network

The recent growth of optimism has made many industry players raise eyebrows.

At one point Optimism even overtook Arbitrum – a Layer-2 competitor – in terms of transaction volume and daily active addresses. On January 12, Optimism processes more than 800,000 transactions and, together with Arbitrum, flipped the Ethereum mainnet in a merge transaction.

Optimism saw some big spikes over the last month in terms of daily active addresses. On December 22, more than 110,000 addresses transact on Optimism. The number drops to around 80,000 in the coming weeks but is still significantly larger than Arbitrum.

But Optimism activity fell off a cliff last week. It all relates to Optimism Quest – various tasks aimed at educating users on how to use Optimism and its ecosystem projects.

Users are rewarded with a commemorative badge for every quest they complete. This fueled speculation that completing this activity may be one of the conditions for a second Optimism airdrop (the first was conducted last year). This might also have contributed to the increase in OP’s price.

Unsustainable Increase in OP Prices

Since the beginning of the year, OP has been one of the best performing tokens. It has risen over 150% and hit an all-time high of $2.46 a few days ago. Currently trading at $2.36, according data from CoinGecko.

However, it appears that this sudden growth in OP prices is unsustainable and driven by speculation. According to TokenUnlocks, there is only 200,000 of the total 4.29 million OP in circulationmeaning a lot of tokens waiting to be released.

Additionally, $5.1 million worth of OP is being issued daily, further depleting the value of the token.

It’s also worth mentioning that OP is a governance token. There is also no OP betting mechanism implemented.

On Flipside

• OP is one of the few Layer-2 tokens available to investors. Some of them are definitely long term investors looking to gain exposure to the Layer-2 space.

Why You Should Care

Optimism is one of the two leading Ethereum Layer-2 scaling solutions. While most of the activity on the network is driven by airdrop hunters, it is still encouraging to see such attention being paid to Layer-2 projects.

You May Also Like:

Layer-2s Arbitration and Optimism (OP) Flip Ethereum (ETH) in Joint Transactions