What is $OP Token?  Understanding the governance token of optimism

What is $OP Token? Understanding the governance token of optimism

What is $OP Token?  Understanding the governance token of optimism

IMPORTANT POINTS

  • The OP token began trading on May 31 on major exchanges
  • OP token is part of the Token House of the Optimism Collective
  • Optimism lost $15 million in OP due to a mistake

Optimism’s OP token, a Layer 2 scaling solution for Ethereum, has lost its initial momentum after the first airdrop in May, but the token could be on a tortuous road given the prospect of additional airdrops over the next four years before it can be released. destroys itself and reinvents itself.

Optimism announced a new governance system on April 26 and launched a token that creates an ongoing system of incentives for projects and users.

OP was first broadcast to the most loyal users of the Ethereum scaling solution who have been using Optimism or donating to public goods funds on Gitcoin until March 25. Users of Ethereum bridges to Layer 1 and 2 solutions are also eligible for the airdrop.

Trading of the OP token began on May 31 when the token was listed on Binance and other major exchanges.

To understand what OP does, we need to dig deeper into the Optimism Collective governance system. The governing system consists of two Houses: the Token House and the Citizens’ House.

The Token House was founded by Airdrop #1 of OP tokens where holders can vote on protocol upgrades and project incentives as part of a Governance Fund. On the other hand, the Citizen House is “the vehicle that enables the distribution of power away from any centralized organization, towards a people-centered, non-plutocratic mechanism.”

“The Citizens’ House’s primary responsibility will be to fund those public goods that have the most positive impact on the Optimism and Ethereum ecosystems. The first Citizens’ House experiment and associated Citizenship NFT collection will be the next important milestone for the Collective,” according to a blog.

The latter will be launched later in 2022, while the former is already live with the airdrop of OP tokens. The collective’s bicameral governing body will be enhanced over time, and the Optimism Foundation will serve as the collective’s steward, conducting governance experiments and powering up the ecosystem. Ultimately, however, the foundation will dissolve.

The OP Airdrop #1 isn’t the only one taking place. There will also be an “all season of airdrops”. The OP token supply is 2^32 (4,294,967,296) tokens which will be unlocked over the course of four years and the Ethereum Layer 2 solution has allocated 5% of the original OP supply for Airdrop #1.

An important thing to note is that the Optimism Collective will repeatedly destroy and reconstruct itself over the years. This has been done to ensure that the ecosystem can stand the test of time and last for decades to come.

The token is up 6% in the past 24 hours to $0.9 as of 12:10 p.m. ET, according to CoinMarketCap. After Airdrop #1 and listing on major exchanges, OP went to an all-time high of $4.57, but has since been sold off by investors. With additional airdrops rolling in, it will be interesting to see if the price action can pull back $1.

According to wallet data provided by EtherScan, the top 10 largest addresses account for 87.6% of the supply. Interestingly, these addresses are smart contracts in which OP tokens are locked.

Recently, as revealed by Optimism’s official Twitter account, attackers stole $15 million worth of OP tokens seeking to send the Layer 2 solution to a crypto market maker. However, the tokens fell into the wrong hands after the market maker, Wintermute, gave Optimism’s team the wrong blockchain address.

Taking into account the wallet details and future plans for the OP token, it seems creators want Optimism to last for decades to come.

Image shows display of cryptocurrency Bitcoin, Ethereum and Dash falling into the water Representations of cryptocurrency Bitcoin, Ethereum and Dash plunge into the water in this illustration, taken on May 23, 2022. Photo: Reuters / DADO RUVIC

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