A Whooping 56% Of OP Max Supply Not Assigned, What Does This Mean?
11 November 2023 - 11:00AM
NEWSBTC
According to Token Unlocks, a platform that tracks upcoming
unlocking events, 56% of all the OP token maximum supply is in the
to-be-discussed (TBD) allocation, meaning the community is yet to
vote and determine where these tokens will be assigned to in the
coming weeks or months. This news is a curious development,
especially for OP Mainnet, the team behind one of the most popular
Ethereum layer-2 scaling solutions, and OP token holders.
Billions Of OP Not Assigned Token Unlocks notes that roughly 2.4
billion OP, representing 55% of the max supply, remains under the
TBD allocation. So far, over 831 million OP, or slightly above 19%
of the max supply, have been unlocked. This revelation also
comes when OP prices have been trending higher, breezing past
crucial resistance levels. At spot rates, OP is changing hands
above September and October highs, temporarily retesting October
highs. The bull bar of November 10 anchors the current leg up since
it was accompanied by relatively high trading volume. Token
Unlocks defines a TBD allocation as not assigned a release timing
but will be subject to community voting. These tokens can be
distributed for governance, Retroactive Public Goods Funding
(RetroGPF), ecosystem funding, moved to advisers or partners, and
much more. RetroGPF is a funding mechanism that allows the protocol
to support projects building solutions on its general-purpose
layer-2 platform. Since it is retroactive, projects or developers
don’t have to apply for funding in advance. Related Reading: Is A
Bearish Reversal Coming For Bitcoin? This Metric May Warn So
Usually, token unlocking releases coins initially locked or vested
for a given time. Projects tend to employ this tactic to align the
incentives of investors and that of the team. This also
concurrently prevents early adopters from mass selling the coin,
driving prices lower. Even so, since all specified unlocks are done
publicly, transparency allows investors or traders to make informed
decisions. What Will Happen To OP Prices? For the token’s Mainnet’s
case, a big chunk of the max supply remains unassigned at spot
rates, which is, as it is, supportive of prices. However, once
these tokens are voted for, and the community decides the portion
of the maximum supply that can, for instance, be distributed to
advisers or used to fund ecosystem projects, then there is a
tendency for prices to fall as the unlock date approaches.
According to L2Beat, OP Mainnet is the second largest layer-2
scaling solution for Ethereum after Arbitrum One. OP Mainnet has a
total value locked (TVL) of $3.39 billion, commanding a market
share of 25%. Meanwhile, Base, a competitor backed by Coinbase, is
third with a TVL of $600 million. Related Reading: What Is Shiba
Inu: An Explainer And SHIB Price Prediction Feature image from
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