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Optimism token falls 40%, prompting calls to bar dumpers from airdrops

Optimism’s freshly launched governance token, OP, has plunged 40% since peaking at $2.10, main members of the neighborhood to debate baring those that dumped their tokens from future airdrops.

Cointelegraph reported on Tuesday that the Ethereum layer-2 scaling resolution was overwhelmed with demand for the primary OP governance token airdrop, as 5% of the token provide was distributed to round 250,000 eligible customers.

As per CoinGecko knowledge, the token opened at roughly $1.43 earlier than surging to $2.10, however as extra customers received their fingers on the free airdrop over the day, OP dropped to as little as $1.09 earlier than climbing again to $1.18 on the time of writing, marking a 43% drop.

Following the sharp drop of OP’s value, a member of Optimism’s governance neighborhood who goes by OxJohn put forward a proposal within the Optimism governance discussion board to exclude addresses that dumped 100% of their airdropped tokens. The put up garnered a big quantity of consideration from the neighborhood, pulling in 11,200 views, 305 replies and 595 likes.

OxJohn highlighted a number of addresses that acquired no less than 32,000 OP tokens and promptly dumped them in the marketplace, arguing that their actions are “counter-productive” to the neighborhood and diluted the governance course of.

The OP hodler went on to counsel that these accounts must be barred from the following spherical of OP airdrops with “a public record of accounts that have interaction on this habits” excluded. Of their view, doing so would see the distribution of governance weight to solely those that plan to actively take part.

“Why ought to Optimism Collective proceed rewarding these sort of mercenary actors who will dump their tokens on first sight? Why ought to any future airdrops reward these addresses?”

The proposal was submitted purely for concepts and suggestions and isn’t near the stage of being voted on. The response from the governance neighborhood has been combined to date. Some customers had been in full help, others rejected the concept completely, and a few had been calling for a extra nuanced place.

Person Mohammedt75 stated, “Very legitimate factors. Incentivize individuals who care about the long term and let others who don’t care concerning the ecosystem pack and get out.”

Mgomes acknowledged that “one of many objectives of the airdrop is to incentivize individuals to make use of the chain. Even when they plan to dump it’s wonderful, as a result of they’ve used Optimism and in the event that they appreciated the chain they’ll maintain utilizing it.“

Member JustinMarx additionally highlighted an attention-grabbing counterpoint, stating that dumpers shouldn’t be penalized as “you by no means know the private circumstances of somebody who dumped their tokens.”

One of the vital high-profile Crypto Twitter customers to weigh in was Cobie, the co-host of the UpOnly crypto podcast who has almost 700,000 followers. He responded to the proposal in his typical satirical/mocking method.

Cobie submitted a prolonged counter-proposal within the discussion board titled “Extended ineligibility for future airdrops” that was briefly eliminated because of being flagged as “inappropriate” however has since been reinstated.

In it, he stated that “my lack of help for this proposal just isn’t as a result of I disagree with the sentiment. Quite the opposite, it’s as a result of this proposal doesn’t go far sufficient.”

“I suggest that we, Optimism Collective, cancel the longer term airdrops of anybody that has offered any token within the final 6 months. These individuals have a sample of undesirable habits, we will take into account them ‘potential future sellers’.”

To counter potential future sellers, Cobie urged issuing them with a debt token and likewise contemplating using “bodily violence” in opposition to them.

Nevertheless, after being prompted to offer a extra severe response to the proposal, Cobie highlighted a number of explanation why he thinks that it’s a foul thought.

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He made factors comparable to OP’s early value being irrelevant, sellers having completely different motives, the chance to promote and nonetheless have interaction with governance, the token getting used as a part of buyer acquisition prices from Optimism, and the benefit of creating a brand new tackle to keep away from restrictions.

“The one people who care are price-speculators, merchants and short-term traders. Governance actually performs the identical whether or not the worth is $1.50 or $2. Positive, in depth value adjustments might make governance assaults on Optimism cheaper, however there may be not a single point out of that within the preliminary proposal.”

“And it isn’t actually a priority given the scale of the airdrop or the short-term nature of the sell-pressure from ‘on the spot dumpers’,” he added.