Optimism Activity Plummets After NFT Incentives End
OP Rallies To All-Time High
By: Aleksandar Gilbert •DeFi News
Transaction volumes on Optimism, a Layer 2 scaling solution for Ethereum, have plummeted after the end of a “learn-to-earn” incentives program last week.
Even as users abandon the blockchain, however, Optimism’s native OP token hit an all-time high Sunday.
Daily transactions on Optimism are down almost 75% since hitting an all-time high on Jan. 12. But its governance token has surged 168% since the beginning of the year. Only three other tokens – Aptos, Threshold and STEPN – have performed better in 2023, according to CoinMarketCap.
Daily Transactions on Optimism
The drop in daily transactions coincides with the end of Optimism’s Quests program. The first series of quests began in September and ended on Jan. 17.
“Just by reading about different apps and completing a short quiz and task, users will be able to mint a commemorative NFT that represents the completion of the respective quest,” a guide on Optimism’s website reads.
The program worked as intended.
Even as the number of transactions on Optimism’s main competitor, Arbitrum, fell through the final two months of 2022, those on Optimism soared.
Daily Transactions on Optimism and Arbitrum
Daily transactions on Optimism hit an all-time high of 800,000 on Jan. 12. The seven-day moving average peaked five days later at more than 690,000.
By every available metric, however, usage of the platform has since fallen off a cliff.
Optimism registered more than 600,000 transactions on Jan. 17, the last day of Quests. On Jan. 18, that figure fell to 239,000. On Jan. 19, it was just over 165,000, a three-month low.
The number of daily “app actions,” a metric measuring the use of applications in the Optimism ecosystem, is down 76% since its all-time high earlier this month. Transaction fees collected have dropped 71% since hitting a two-month high on Jan. 14.
Optimism Transaction Fees
A pair of Optimism representatives are yet to respond to a request for comment from The Defiant.
Self-proclaimed DeFi analyst DeFyist noted that Quest users were likely hoping their interaction would qualify them for Optimism’s second airdrop, which has yet to be announced.
Data collected by pseudonymous crypto analyst J.Hackworth bears this out. About two-thirds of Optimism users participated in Quests in January.
“In my opinion, L2s activity is due to airdrop speculation,” they wrote.
But a decline in Optimism’s user base has had little effect on the blockchain’s native token, OP.
OP Hits ATH
Amid a broader crypto rally spurred by positive inflation data from the U.S., OP has soared in recent weeks, according to data from The Defiant Terminal.
Investors seem undeterred by its relatively low float, or the amount of circulating OP relative to the total supply of the token.
Roughly 200M OP tokens were in circulation Wednesday, with a market capitalization of more than $500M. Optimism intends to eventually unlock more than 4B, giving the project a fully diluted valuation (FDV) of over $10B at current prices.
OP Token Supply. Source: Token Unlocks