Optimism To Promote 116 Million OP Tokens Through Non-public Sale: Will The Worth React?

Optimism To Promote 116 Million OP Tokens Through Non-public Sale: Will The Worth React?

Optimism has revealed its plans to promote 116 million OP tokens to seven personal consumers. In keeping with the replace, this sale is for treasury administration tokens. 

Primarily based on present costs, this sale will switch roughly $159 million price of OP tokens to the consumers. Given the sheer quantity of the sale, some traders consider it is going to possible trigger a decline in OP’s value.

Optimism Publicizes Sale OF 116 Million OP Tokens Following Third Airdrop Occasion 

Intimately, Optimism posted a group replace on September 20 on promoting roughly 116 million OP tokens. The tokens are from the unallocated portion of the OP Token treasury, and these tokens are a part of the Basis’s unique working funds of 30% of the preliminary OP provide.

In keeping with the replace, the tokens are topic to a two-year lockup. Throughout the lockup interval, the purchasers can delegate the tokens to 3rd events for on-chain governance.

Additionally, the announcement said that from September 20, a number of transactions will happen with the launched tokens. It famous that the transactions are pre-planned. 

It bears mentioning that this token sale comes a number of days after Optimism announced its third OP airdrop to reward group members for participation in on-chain governance. Optimism launched over 19 million OP tokens to over 31,000 distinctive addresses. 

In the meantime, the OP group acquired the announcement with mixed reactions, with one person expressing disappointment. He expressed considerations that the token sale will enhance Optimism’s circulating provide, impacting the value.

Optimism’s Non-public Token Sale: Will It Have an effect on OP’s Worth?

Some observers have expressed concern that the sale will have an effect on OP’s value negatively, because the consumers might dump their tokens. Nevertheless, there are a number of the explanation why that is unlikely to occur.

Firstly, the sale is personal, that means the consumers aren’t required to reveal their identities or intentions for the tokens. Due to this fact, it makes it tough for merchants to anticipate the consumers’ actions.

Secondly, the tokens are from the OP treasury’s unallocated portion and aren’t a part of the circulating provide. It implies that the sale can have a minimal affect on the supply of OP on the open market.

Moreover, the tokens are topic to a two-year lockup interval. The lockup prevents consumers from promoting them on secondary markets till not less than 2025, decreasing the chance of a sell-off that would depress value.

Total, Optimism can fund its growth by elevating capital from traders with out counting on the general public. Such motion may result in elevated demand for OP from bullish traders on the undertaking’s long-term prospects.

OPUSD price chart
OP’s value presently hovers at $1.302 within the day by day chart. | Supply: TradingView.com

Historic Information Suggests Non-public Gross sales Might Increase OP Worth

Different initiatives have held comparable personal gross sales up to now. Recall that Polygon raised $450 million final yr in a personal token sale led by Sequoia Capital India. Additionally, in 2021, Arbitrum raised $120 million in a private token sale led by Lightspeed Enterprise Companions.

In each of those instances, the personal token gross sales positively impacted the value of the respective tokens. The Polygon MATIC’s value elevated by over 50% within the two weeks following the announcement of the personal sale. 

Equally, the value of AAVE increased by 20% within the two weeks following Arbitrum’s personal sale announcement.

Due to this fact, primarily based on this historic precedent, the personal sale may gain advantage OP in the long term. Nevertheless, notice that the cryptocurrency market is risky, and OP’s value isn’t assured to extend.

Featured picture from Pixabay and chart from TradingView.com

Kent Glory Read More