Has optimism revealed are planning to sell 116 million OP tokens to seven private buyers. According to the update, this sale concerns tokens for treasury management.
Based on current prices, this sale will transfer approximately $159 million worth of OP tokens to buyers. Considering the sheer amount of sales, some traders believe this is likely to cause a decline in OP’s price.
Optimism announces the sale of 116 million OP tokens after the third Airdrop event
In detail, Optimism Posted a community update on September 20 when selling approximately 116 million OP tokens. The tokens come from the unallocated portion of the OP Token treasury, and these tokens are part of the Foundation’s initial working budget of 30% of the initial OP supply.
According to the update, the tokens are subject to a two-year lock-up. During the lock-up period, the buyers can delegate the tokens to third parties for on-chain governance.
The announcement also stated that several transactions will take place with the released tokens from September 20. It noted that the transactions are pre-planned.
It’s worth noting that this token sale comes a few days after Optimism announced its third OP airdrop to reward community members for participating in governance in the chain. Optimism has released over 19 million OP tokens to over 31,000 unique addresses.
Meanwhile, the OP community received the announcement with mixed reactions, with one user expressing disappointment. He expressed concern that the token sale will increase Optimism’s circulating supply, impacting its price.
Optimism’s Private Token Sale: Will It Affect OP’s Price?
Some observers have expressed concerns that the sale will negatively impact OP’s price as the buyers may dump their tokens. However, there are a number of reasons why this is unlikely to happen.
First, the sale is private, meaning the buyers are not required to reveal their identities or intentions for the tokens. Therefore, it makes it difficult for traders to anticipate the buyers’ actions.
Second, the tokens come from the unallocated portion of the OP treasury and are not part of the circulating supply. It means that the sale will have minimal impact on the availability of OP on the open market.
Furthermore, the tokens are subject to a two-year lock-up period. The lockup prevents buyers from selling them on secondary markets until at least 2025, reducing the chance of a sell-off that could drive down the price.
Overall, Optimism can finance its development by raising capital from investors without depending on the public. Such a move could lead to increased demand for OP from investors optimistic about the project’s long-term prospects.
Historical data suggests that private sales can increase the OP price
Other projects have held similar private sales in the past. Think of that polygon Raised $450 million last year in a private token sale led by Sequoia Capital India. Also, in 2021, Arbitrum raised $120 million in a private token sale led by Lightspeed Venture Partners.
In both cases, the sale of private tokens had a positive impact on the price of the respective tokens. The price of the Polygon MATIC increased by more than 50% in the two weeks after the announcement of the private sale.
The same applies to the price of AAVE increased by 20% in the two weeks after the announcement of the private sale of Arbitrum.
Therefore, based on this historical precedent, the private sale could benefit OP in the long run. However, keep in mind that the cryptocurrency market is volatile and the price of OP is not guaranteed to increase.
Featured image from Pixabay and chart from TradingView.com