As has been the case time and time again with crypto airdrops, token prices quickly crash as recipients instantly sell to markets after receiving their freebies.
This week’s Optimism airdrop was controversial from the start, with the claims interface being shut down due to overwhelming demand.
The OP token, which is barely a day old, has already dumped more than 43% from yesterday’s peak price. On June 1, OP hit a high of $2.10, gaining 47% from its launch price of $1.43. However, the good times were short-lived as new token holders started dumping, causing a price crash to an intraday low of $1.09.
The Ethereum layer-two solutions provider wanted to reward early adopters, DAO voters, multi-sig signers, and Github donors, but their loyalty was not reciprocated.
This was supposed to be the first airdrop with another planned for a wider group of network users, but that may change if a new proposal gets voted for.
On June 1, Optimism community member ‘0xJohn’ initiated a proposal titled “Users who sold the initial OP airdrop should become ineligible for all future airdrops.”
In it, he expressed his annoyance at the token selloff stating:
“Have seen enough wallets collect the OP airdrop, swap it straight to Uniswap. These accounts are not playing a constructive role in Optimism governance,”
He added that there is nothing wrong with maximizing for profit but added that these accounts were “counter-productive” for the protocol’s stated goals. Optimism claimed to have airdropped tokens to almost 249,000 eligible addresses.
Yesterday was an absolute whirlwind. It wasn’t without hiccups, but to much excitement, OP was born. 🔴‿🔴
We’ll have an extensive retro on Drop Day next week. Meanwhile, we want to share some stats coming out of the launch.
With >50% of Drop 1 now claimed, let’s dive in! pic.twitter.com/oGnxB47E3f
— Optimism (✨🔴_🔴✨) (@optimismPBC) June 1, 2022
0xJohn listed four addresses that dumped the entire airdrop, with one swapping 32,421 OP for 45,894 USDC before sending it out of the ecosystem, which he described as “purely mercenary, net loss to Optimism.”
He proposed excluding such accounts from future airdrops and making a public list of wallets that engage in this behavior.
“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 majority of the 300 or so replies to the proposal agreed with it.
At the time of writing, OP was trading down 26% on the day at $1.19, according to CoinGecko.
Optimism is not the only platform to suffer an airdrop token dump. The same thing happened with Uniswap’s UNI drop and again when the Ethereum Name Services airdropped ENS tokens to Ethereum domain holders.
UNI prices halved in value a few days after their launch in September 2020, and ENS prices crashed 40% in just three days following their debut in November 2021.
Project loyalty only extends so far, especially when free money is involved, it appears.
Martin has been writing on cybersecurity and infotech for over two decades. He has previous trading experience and has been covering developments in the blockchain and cryptocurrency industry since 2017. Contact Martin: LinkedIn
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