Unboxing $587M Worth Of OP Tokens: A Guide For Investors

Key Points:

• May 31st is a big day for OP tokens ( Optimism )holders – 386M tokens worth $587M will be unlocked!
• With a current circulating supply of just 335M OP, the unlock could see the supply increase by 100%.
• But, there’s a risk of significant sell pressure due to early-stage investors holding sizable returns

More than 386 million OP tokens ( Optimism ) are scheduled to be unlocked on May 31 as the initial vesting period for early contributors and investors comes to an end.

This unlock event is one of the largest of the year, and is worth $587 million at current prices. It is sparking concerns about downward price pressure, as the circulating supply of OP tokens could potentially increase by more than 100%.

At present, the total circulating supply of OP tokens is just 335 million. This means that the upcoming unlock event could result in a significant increase in the supply of tokens available on the market. According to analysis from token unlock research firm Unlock Calendar, there is a reasonable chance that the Optimism unlock could create some significant sell pressure for the native OP token. This is due to early-stage investors sitting on sizable returns. The largest seed investors in Optimism include the crypto venture capital firms Paradigm, Andreessen Horowitz (a16z) and IDEO CoLab Ventures. These firms are currently up more than 10,000% on their initial investment, according to data from CryptoRank.

However, as a whole, it appears that the average buy-in price for the venture capital firms sits at approximately $0.24, meaning that currently, the firms are sitting on an aggregate 529% gain. This suggests that they may not feel too much pressure to sell their tokens.

Token unlocks are scheduled events where tokens allocated to early-stage investors and major development contributors are “released” after being frozen for a designated period of time. This is done to avoid large asset sales during periods of low liquidity, an event that could have a significant impact on price.

Optimism is a layer-2 scaling solution that aims to make transactions and activity on the Ethereum network faster, cheaper and more efficient. The OP token is the governance token of the Optimism network. Overall, it will be interesting to see how the OP unlock event affects the market, and whether or not investors will feel pressured to sell their tokens.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Annie

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