Optimism OP Token Experiences 10% Slip Ahead of $30M Token Unlock
The price of Optimism’s native OP token has seen a decline, leading losses among the top 50 cryptocurrencies. This drop comes as the token unlock of $30 million approaches.
According to Token Unlocks, a tokenomics platform, 24.16 million OP tokens, which make up roughly 3% of the circulating supply, are set to be unlocked on September 30.
With current prices, this unlock will introduce a little over $30 million worth of OP tokens to the market, with $15.49 million allocated to core contributors and $14.26 million for investors.
Token unlocking events are a common practice among many cryptocurrency projects, allowing for a gradual release of tokens to the market instead of all at once. However, investors often view these events as potential pressure points on prices due to the increased supply of tokens.
Currently, the OP token is trading flat at $1.26, with a brief 3% rally in the past 5 hours, according to CoinGecko data.
Last week, on September 21, Optimism announced a planned sale of $160 million worth of OP tokens to private sellers.
Starting today, there will be several transactions totaling approximately 116M OP tokens. We’re sharing as a heads up to our community that these are planned transactions. — Optimism (✨_✨) (@optimismFND) September 20, 2023
On September 19, Optimism also revealed its third airdrop, distributing 19.4 million OP tokens to over 31,000 addresses that participated in delegation activities related to the network’s decentralized autonomous organization (DAO), Optimism Collective.
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Why is the OP Token Experiencing a 10% Slip?
The OP token is currently going through a 10% price decline due to an upcoming token unlock. Token unlocks occur when a certain number of tokens become available for trading or transfer, often resulting in selling pressure and potential price drops.
In the case of the OP token, 24.16 million tokens are scheduled to be unlocked on September 30. This represents approximately 3% of the circulating supply. As a result, a little over $30 million worth of OP tokens will enter the market, with different allocations for core contributors and investors.
Token Unlock and its Impact on Prices
Token unlocking events are a common practice among cryptocurrency projects. Instead of releasing all tokens at once, teams choose to gradually unlock and distribute them. While this approach helps prevent sudden sell-offs and could promote a more stable market, it also introduces the potential for increased selling pressure as new tokens become available for sale.
Investors are often cautious during token unlock periods, as the increased supply can lead to temporary price drops. However, the market has also seen instances where prices rebounded after the initial dip, indicating that the impact of token unlocks on prices may vary.
The Current State of the OP Token
As of now, the OP token is trading flat at $1.26. It experienced a brief 3% rally in the past 5 hours, according to CoinGecko data. The market will likely continue to observe the price movement of the OP token as the unlock date approaches.
Optimism’s Recent Developments
Optimism recently announced a planned sale of $160 million worth of OP tokens to private sellers. This move aims to provide liquidity and further strengthen the ecosystem surrounding Optimism technology.
In addition, Optimism conducted its third airdrop, distributing 19.4 million OP tokens to participants who engaged in delegation activities related to the Optimism Collective DAO. This airdrop aims to reward and incentivize community involvement.
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