Optimism’s airdrop yields these results; can OP manage to recover?

  •  19 million OP tokens distributed to over 31,000 addresses, incentivizing governance participation.
  • 24.50% price drop, declining social activity, but high user retention offers hope for the future.

In the midst of a bearish market, the Optimism[OP] protocol has been on the rise, and it’s seized the moment to make a significant announcement for an airdrop.

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Airdrops at the right time?

This airdrop, which was the third OP airdrop, allocated a whopping 19 million OP tokens to over 31,000 unique addresses. These tokens were intended to reward those who have actively participated in the protocol’s governance, embracing a positive-sum approach within the Collective.

This third airdrop specifically targeted addresses that have delegated the voting power of their OP tokens during the period from 20 January to 20 July 2023. This move aims to strengthen the community’s involvement and incentivize governance participation.

The impact of this airdrop on OP is a double-edged sword. On the one hand, it can be viewed as a positive step, as it rewards and encourages governance participation, fostering a sense of community ownership. Such initiatives often promote a healthier and more engaged ecosystem.

However, there’s also a potential downside. The influx of supply could impact the sentiment around the token.

OP token sees some red

The price of OP tokens saw a significant drop and plummeted over the last few days. While this correction was substantial, it failed to firmly establish a clear price trend. The Relative Strength Index (RSI) suggested that some buying momentum exists, but the Chaikin Money Flow (CMF) indicated a substantial decrease in money flow. This signified a dwindling interest.

OPUSD 2023 09 19 18 30 33

Source: Trading View

The social activity surrounding OP also took a hit. Social mentions dropped by 79.8% over the last week, accompanied by a 91% drop in engagement. Such declines in social activity can often lead to reduced interest and participation, which could counteract the intended benefits of the airdrop.

Screenshot 2023 09 19 at 6.31.26 PM

Source: Lunar Crush

State of the protocol

Additionally, the protocol’s activity and revenue faced challenges. Active users declined by 22.7% last month, while revenue dropped by 53.1%. However, an interesting trend emerged: the Optimism protocol demonstrated a remarkable ability to retain users. According to Token Terminal, it has managed to retain 30% of its mainnet users over the past 30 days.

Screenshot 2023 09 19 at 6.27.46 PM

Source: token terminal

Realistic or not, here’s OP’s market cap in BTC’s terms

This high retention rate, despite recent challenges, can be seen as a testament to the protocol’s underlying value and potential. It suggested that even during challenging times, Optimism held the interest of a substantial portion of its user base.

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