Ethereum ‘layer-2’ dumps after massive crypto unlocking

Optimism (OP) has had a red week. On May 31, 386 million OP tokens were issued unlocked. It seems that at least part of this was sold, causing the optimism price to drop significantly in value.

Crypto Unlocked 386 Million Tokens

The so-called fortress period for early investors has ended. This will now release their tokens. In this case, that is 386 million VP that was worth more than half a billion dollars on the day of unlocking.

Before unlocking, only 335 million VP were in circulation. With the unlock the OP grew supplies so in one fell swoop with 114%. Based on the principle of supply and demand, such growth can have a negative effect on the price.

And that was the case. The OP price is down 14.5% in value this week. If we zoom out further, the loss is even greater. Optimism has been down more than 34% since the beginning of May.

Optimism price chart
Last month’s Optimism (OP) price took a big plunge. Source: CoinMarketCap

Situation will remain difficult

And Optimism will continue to struggle, Blockworks analysts expect. In a recent podcast they explain that the layer 2-solution for Ethereum (ETH) will unlock 0.5% of the total supply each month. And that will last until sometime in 2027.

This constant growth can put lasting pressure on the crypto price. However, upcoming updates can have a positive effect. But “Is this enough to cause a bounce after unlocking, (…) or will they be a little too much over time, as liquidity is pretty dry right now?” the researchers wonder.

Recently it was read in the crypto news that a big name is building on the network, namely crypto exchange Coinbase. The major American exchange is building its own blockchain based on Optimism’s technology.

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