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

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Optimism’s freshly launched governance token, OP, has plunged 40% since peaking at $2.10, main members of the group 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 acquired their arms 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 group who goes by OxJohn put ahead a proposal within the Optimism governance discussion board to exclude addresses that dumped 100% of their airdropped tokens. The submit garnered a big quantity of consideration from the group, pulling in 11,200 views, 305 replies and 595 likes.

OxJohn highlighted a number of addresses that obtained at the very least 32,000 OP tokens and promptly dumped them in the marketplace, arguing that their actions are “counter-productive” to the group and diluted the governance course of.

The OP hodler went on to recommend that these accounts needs to be barred from the subsequent spherical of OP airdrops with “a public list of accounts that engage in this behavior” excluded. In their view, doing so would see the distribution of governance weight to solely those that plan to actively take part.

“Why should Optimism Collective continue rewarding these kind of mercenary actors who will dump their tokens on first sight? Why should 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 group has been blended thus far. Some customers had been in full assist, others rejected the thought completely, and a few had been calling for a extra nuanced place.

User Mohammedt75 mentioned, “Very valid points. Incentivize people who care about the longer term and let others who don’t care about the ecosystem pack and get out.”

Mgomes said that “one of the goals of the airdrop is to incentivize people to use the chain. Even if they plan to dump it is fine, because they have used Optimism and if they liked the chain they will keep using it.“

Member JustinMarx also highlighted an interesting counterpoint, stating that dumpers should not be penalized as “you never know the personal circumstances of someone who dumped their tokens.”

One of probably the most 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 as a consequence of being flagged as “inappropriate” however has since been reinstated.

In it, he mentioned that “my lack of support for this proposal is not because I disagree with the sentiment. On the contrary, it is because this proposal does not go far enough.”

“I propose that we, Optimism Collective, cancel the future airdrops of anyone that has sold any token in the last 6 months. These people have a pattern of undesirable behavior, we can consider them ‘potential future sellers’.”

To counter potential future sellers, Cobie urged issuing them with a debt token and likewise contemplating using “physical violence” towards them.

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

Related: ETH/USD buying and selling pair attracts extra merchants within the first quarter of 2022: Report

He made factors reminiscent of 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 convenience of creating a brand new tackle to keep away from restrictions.

“The only people that care are price-speculators, traders and short-term investors. Governance certainly performs the same whether the price is $1.50 or $2. Sure, extensive price changes could make governance attacks on Optimism cheaper, but there is not a single mention of that in the initial proposal.”

“And it is not really a concern given the size of the airdrop or the short-term nature of the sell-pressure from ‘instant dumpers’,” he added.