Optimism's OP token crashes after botched airdrop

Optimism's OP token crashes after botched airdrop

A controversial Optimism governance proposal would bar some purses that sold the airdrop from future airdrops.

Ethereum scaling project Optimism's new OP token has dropped by over 70% after it was introduced to the community via an airdrop on Tuesday.

According to CoinMarketCap data, the token's price has dropped from $4.50 to $1.20 as many recipients of the airdrop immediately sold the freshly demanded tokens.

Assuming a total supply of 4.3 billion OP tokens, the recent trading price would imply a fully diluted market cap of $5.1 billion. Such calculations can be difficult, however, as less than 5% of the total offering is actually in the hands of investors who can trade it.

The highly anticipated airdrop was met with widespread frustration in the Optimism community, as panicked users complained that some applicants were able to claim their tokens before the official airdrop launch.

Optimism officially tweeted about the launch at 5:45 p.m. ET, hours after the smart contract was already deployed and the token began trading on both decentralized and centralized exchanges.

"At 11 a.m. (EST) we deployed and loaded our [smart contract] with the OP tokens for Drop #1," Optimism tweeted following the airdrop. "Our biggest mistake was that we failed to make this contract pausable. The claims were open and we had no way to stop them."

Later, increased activity on Optimism led to transaction delays, causing even more frustration in the community and further delaying the official announcement of the airdrop.

"We significantly underestimated the expected load on our public RPC endpoint [from deploying our claims user interface]," Optimism said in a tweet, referring to Remote Procedure Call. "We quickly moved to massively expand the available resources for our public RPC, a process that required several hours of coordination (and waiting) for the amount of load we observed."

The Optimism team added that they had learned "many lessons" from the botched airdrop and would "publish a detailed review next week."

According to data from Dune Analytics, just over 43% of eligible wallet addresses had claimed their share of the airdrop at press time.

Token Management

In response to the OP token dump, one Optimism community member, 0xJohn, submitted a governance proposal that would prohibit sellers of the initial airdrop from receiving future Optimism airdrops.

"These accounts do not play a constructive role in Optimism governance," 0xJohn wrote. "Instead of contributing to governance, they maximize their profits."

Some community members disagreed.

"People can do whatever they want with their airdrops," wrote Optimism user Mohammedt75. "Only those who are actually interested in governance should actually be involved in governance."