Layer Two Ethereum Scaling Solution Optimism Tanks After Yesterday's Airdrop

Optimism, a second layer scaling solution similar to Bitcoin's lightning network, experienced a "turbulent" airdrop to new users on its first days. According to Optimism's whitepaper, these airdrops are granted to "instrumental as early adopters and active users of projects in the Optimism ecosystem." The token is down from $4.50 to $1.30 following its Tuesday launch. According to Optimisms website, tokens were distributed to 248,699 wallets across the Optimism and Ethereum networks. 

According to Optimism community member OxJohn, the initial selloff was driven by "accounts are not playing a constructive role in Optimism governance." The Airdrop was intended for long-term community members, and there were large numbers of short-term profit seekers instead. 

Members of the Airdrop, Optimism's Internal Governance Fund, and other external funding received 4,294,967,296 tokens, currently worth $1.30. According to their website, members of the Airdrop accounted for only 5% of the total number of minted tokens.

The launch saw unexpected large trading volumes causing "degraded performance" and "keeping archive node limitations in place until demand subsides." These limitations are still in effect according to Optimisim.io's internal status page. 

According to their most recent Twitter post, the launch was "an absolute whirlwind" and "wasn't without hiccups," according to their most recent Twitter post. This appears generous given the 70% selloff since Tuesday.

According to a moderator on the projects discord channel, some users could dump the coin, even before the official launch, by directly interacting with the smart contract while Optimism's internal team was still completing internal testing. 

These issues caused a panic selloff, seriously impacting the coin's value, forcing more sales, and a significant backlog of unprocessed orders on the blockchain. One Twitter user described it as "one of the most pathetic things I've ever seen."

Optimism is attempting to limit the future sale of the token by proposing internal governance to limit future airdrops to wallets that sold, according to 0xJohn, an Optimism community member and the submitter of the proposal.

Author: Garrett Meifert

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