Optimism’s OP token price has dropped by nearly 15% on the week, the second biggest drop among the top 100 digital assets.
The price drop comes ahead of a major token unlock on Tuesday, when core contributors and investors will be able to sell roughly 25% of their OP allocation.
The unlock will more than double the circulating supply of OP tokens, from 335,376,391 to 644,159,767.35. This has led to concerns that there will be too much supply and not enough demand, which could drive the price of OP down even further.
The OP token unlock comes at a time when Optimism is facing increased competition from other Layer 2 scaling solutions, such as Arbitrum and zkSync.
These platforms are also planning to launch major token unlocks in the coming months, which could further put downward pressure on the price of OP.
Despite the recent price drop, Optimism remains a popular Layer 2 scaling solution for Ethereum. The platform has seen significant growth in recent months, with the number of active addresses on Optimism increasing from 10,000 in January to over 100,000 in May.