Optimism Network Activity Metrics Approach Record Levels, Propelling OP 9% Higher
May 17 2024 - 10:00PM
NEWSBTC
Layer 2 (L2) scaling solution Optimism reported a series of strong
network metrics in the first quarter (Q1) 2024, with its native OP
token surging 9% on the back of this bullish momentum. Optimism
Sees Higher Activity And Rising Transaction Fees According to a
recent Messari report, Optimism’s circulating market cap increased
11% quarter-over-quarter (QoQ) to $3.7 billion, while its fully
diluted market cap rose 1% to $15.7 billion. Despite the
broader crypto market rally, with Bitcoin (BTC) and Ethereum (ETH)
gaining 69% and 53% QoQ, respectively, OP’s market cap ranking
slipped from 26th to 39th among all blockchain networks. However,
within the Ethereum ecosystem, OP remains one of the top four
rollups by market capitalization. Driving this growth was a
significant uptick in Optimism network activity. Daily active
addresses reached 89,000 in Q1 2024, a 23% QoQ increase, while
daily transactions surged 39% to 470,000 over the same period.
These metrics approached, but did not quite reach, their all-time
highs in Q3 2023. Related Reading: Expert Sets Timeline For When
Ethereum Price Will Begin Rally To $10,000 The network’s revenue
also saw a substantial 78% QoQ increase to $16 million, driven by
higher activity and a 48% rise in the average transaction fee to
$0.42. However, this average fee dropped significantly in the
latter half of March due to the implementation of Ethereum
Improvement Proposal (EIP) 4844, which reduced L1 submission costs
by 99%. Total Value Locked Jumps 18% In Q1 Despite the fee
reduction, Optimism’s on-chain profit for Q1 2024 increased 14% QoQ
to $2 million. The network’s Total Value Locked (TVL) also grew by
18% to $1.2 billion, though its TVL ranking among all networks fell
to 11th place. Within Optimism’s TVL, the DeFi sector dominated,
accounting for 86% of active addresses. According to Messari,
non-fungible token (NFT) applications and gaming followed with 6.9%
and 6.7%, respectively. TVL’s leading protocols included
Synthetix ($307 million, +4% QoQ), Aave ($270 million, +52% QoQ),
and Velodrome ($171 million, +10% QoQ). Optimism’s stablecoin
market capitalization also grew significantly, reaching $809
million (+32% QoQ) by the end of Q1 2024. Circle’s USDC stablecoin
and Tether’s USDT made up most of this, with USDT seeing a 64% QoQ
surge to $512 million, or 63% of the total stablecoin market cap on
Optimism. OP Rebounds Alongside Crypto Market Resurgence Despite
Optimism’s strong performance across key metrics in Q1 2024, the
network’s native token, OP, did not see a corresponding price
increase at the end of Q1. Instead, OP followed the broader market
downtrend, hitting an annual low of $1.80 just one month after
hitting an all-time high of $4.84 in March. However, OP has
followed suit as the overall cryptocurrency market has seen a
resurgence of bullish momentum in the past few days. In the past 24
hours, the token has recorded a 9% price increase and a 3% uptick
in the past week, currently trading at $2.56. Furthermore,
CoinGecko data shows a 19% increase in OP’s trading volume over the
past 48 hours, reaching $290 million. Related Reading: Bitcoin To
$100,000: Infamous Head And Shoulders Pattern Appears To Signal The
Start Of Another Rally While this renewed bullish sentiment is
encouraging, OP still trades 46% below its all-time high and faces
significant resistance levels soon before a potential retest of
this milestone. The first key resistance is at $2.65,
followed by $2.90, which must be overcome before the token can push
towards the $3.00 level. Conversely, the $2.34 support level has
proven crucial and must be monitored closely in case of any bearish
resurgence. Featured image from Shutterstock, chart from
TradingView.com
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