Optimism Airdrops $30M in OP Tokens, Loses $148M in Market Cap

On February 9, Optimism airdropped $30M in OP tokens to 300k addresses. The market did not react well to the airdrop, and the OP token lost $148M in market cap since the hours leading up to the airdrop.

Optimism is one of the "big 2" layer-2 scaling solutions for the Ethereum network, with $1.8B TVL and 32% market share among Ethereum L2s.

Optimism's first OP airdrop was a phenomenon, with many early adopters reportedly getting $1k+ of OP tokens for free. That airdrop was in May 2022 and planned during the bull run. Optimism gave away 200M OP tokens to 250k addresses. This airdrop, Optimism's second, is much smaller, with only 11.7M OP tokens being distributed to 300k addresses. So that’s about 20x fewer OP tokens distributed to 20% more people this time.

Optimism's current growth strategy is pretty airdrop-centric, and only about 5% of all OP tokens are in circulation. The OP token is still up 93% in the last month, but I wouldn't want to hold a token long-term with that many future airdrops guaranteed in the future.

The entire crypto market was a bit jumpy around the time of the OP airdrop, but the market is also way up this year and many tech and crypto assets were seeing their first consecutive red days of the year. You’d think a lot of airdrop recipients would want to ride it out for a bit instead of instantly dumping their free tokens.

It's hard to tell if this particular market made OP airdrop recipients jumpy, or if we can expect massive dumps every time OP does an airdrop. Looking back at Optimism's first airdrop, there was also a massive price drop following the airdrop... right around the time Terra/LUNA collapsed.

So we don't have the best data for OP airdrops, but we do know that there are going to be 20x more OP tokens minted than what's currently in circulation.