Optimism price analysis reveals the governance token of optimism network OP has fallen by 45.6 percent after the price last peaked at $2.10. The steep plunge in price came after the traders started to dump the number of tokens they got in airdrops that were rewarded to selected user addresses who have been the early adopters and are still active on the network amounting to 250,000 eligible wallets.
According to the white paper issued by Optimism network regarding airdrop, five percent of its tokens will be distributed to the above mention group of users, while another 14 percent of tokens will be distributed in the future airdrops. Whereas the rest of the OP tokens will be utilized for rewarding public goods and funding the ecosystem and to be utilized by private investors off-course.
Optimism is a layer-2 solution for scaling, based on Ethereum which increases transaction speeds and lowers the costs of transactions by combining different transactions into one pack and sending this through Ethereum as one transaction. Layer-2 solutions are already preferred by developers as they provide the security features of Ethereum and help avoid network slowdowns and higher fees associated with these transactions.
OP/USD 1-hour price chart: selling pressure continues despite the high demand before the airdrop
The Optimism price analysis at this time is difficult to interpret as Optimism is a famous network for developers and was overwhelmed with the demand before the airdrop. However, the price started to fall after the very first hour of airdrop yesterday. During the first hour the price was recorded racing as high as $3.29 after opening at $1.43, however, if observed on the regular 4-hour time period then it dropped down to $2.16 at the end of the fourth hour.
Currently, the price has come down to $1.132 at the time of writing, but it can be seen in the above chart that the volatility of the token has decreased notably as the Bollinger bands have narrowed down extensively due to lesser price oscillations in any direction.
Optimism price analysis: Why the OP token plunged so steep
The Optimism price analysis on technical terms alone may not be able to justify the downfall in price, the reason behind this sharp drop of the freshly launched OP token is considered to be due to the traders dumping the airdrop reward as they get it. The optimism community is raising the question of why to reward those who will dump the token as soon as they get it. Even some are suggesting a ban on those who sold the token for future airdrops.
Optimism collective also addressed that they are analyzing their first airdrop for Sybil attacks. Sybil attack or airdrop farming is a term used for the process in which a user tries to use multiple wallets to get multiple airdrop rewards, however, these kinds of attacks are quite common in the industry. However there are voices in the community who still oppose the idea of punishing airdrop dumpers as they see it as a punishment for those who used the OP network itself and doing so will only strengthen the competitors, as these users will rush to the competitor networks which will be counter-productive for OP.
Optimism price analysis conclusion
As discussed above, with the fresh launch of the OP token and the drama associated with its dumping and overwhelming demand prior to airdrops, the Optimism price analysis is suggesting a continuous decrease in price. However as mentioned above the volatility of the token has decreased to a good degree and the downfall has been contained, which is visible on the price chart. OP token will go up or down? will be confirmed in the coming days, and factors like a crackdown on Sybil and the banning of wallets involved may also play a part in defining the price value of the token.
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