OP-Token Unlocks reveals 56% of the total token supply remain under TBD allocation, meaning the community has yet to vote and decide on the allocation of these tokens in the coming weeks or months.
This news marks a strange development, especially for OP Mainnet, the team behind one of the most popular Ethereum Layer-2 scaling solutions and OP token holders.
Billions of OP tokens are yet to be allocated, with about 2.4 billion OP, accounting for 55% of the maximum supply, remaining under TBD allocation. Thus far, over 831 million OP, or just over 19% of the maximum supply, have been unlocked. This revelation comes as OP prices have been trending upwards and breaking crucial resistance levels. The cash price of OP has been trading above the September and October highs and even re-testing the October highs temporarily. The bull market on November 10th anchored the current rise, as it came with relatively high trading volume.
Token Unlocks defines a TBD allocation as one where no release date is allocated, but it is subject to community voting. These tokens can be distributed for governance, retroactive public goods funding (RetroGPF), ecosystem funding, to advisors or partners, and more. RetroGPF is a funding mechanism that allows the protocol to support projects developing solutions on its universal Layer-2 platform. As it is retrospective, projects or developers do not need to apply for funding in advance.
Typically, releasing tokens means unlocking coins that were originally locked or non-relinquishable for a certain amount of time. Projects tend to use this tactic to align the incentives of investors and the team, also preventing early adopters from making mass sell-offs, which would drive down prices. However, given that all specified unlocks are public, the transparency allows investors or traders to make informed decisions.
In the case of the token's Mainnet, a large portion of the maximum supply remaining unallocated at cash prices affects prices. However, once these tokens are voted for and the community decides on, for instance, which part of the maximum supply will be distributed to advisors or used to fund ecosystem projects, the tendency is for prices to fall as the release date approaches.
According to L2Beat, OP Mainnet is the second largest Layer-2 scaling solution for Ethereum after Arbitrum One, with a total value (TVL) of $3.39 billion and a market share of 25%. Meanwhile, Base, a Coinbase-backed competitor, ranks third with a TVL of $600 million.
This news provides a crucial insight into the future distribution and impact of OP tokens in the market and the broader Ethereum ecosystem. As the community's decisions on the allocation of these tokens unfold, the market will watch closely.
