Analyst: OP Is Undervalued But Will Skyrocket Because Of Coinbase And Base
March 01 2024 - 1:00PM
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Adam Cochran, a partner and professor, is bullish about OP, the
native token of Optimism, the layer-2 scaling solution for
Ethereum. Taking to X, Cochran is convinced OP is
undervalued, pointing to the significance of Coinbase and the brand
it has created over the years as a crypto exchange and investor in
multiple products. In 2023, Coinbase backed the development of
Base, a layer-2 scaling solution for Ethereum that uses Optimism
infrastructure for its optimistic roll-up. OP Will Rocket
Because Of CoinBase And Base In coming up with this assessment, the
investor highlights Coinbase’s vast user base and ability to drive
retail adoption towards Base potentially. And, as aforementioned,
since Base uses Optimism, the expected adoption spike will
significantly boost OP from current spot levels. Related
Reading: Bitcoin OTC Desks ‘Dried Up To 40 BTC’: What This Means
Cochran argues that the “power of discoverability” associated with
Coinbase, a brand that facilitates billions of dollars in daily
trading, will be crucial to Optimism’s success. This is
particularly relevant when looking at OP prices when writing. When
writing, OP is stable but up 220% from October lows. The token has
been trending higher, benefiting from the broader crypto rally.
Even so, though in an uptrend, OP has not reclaimed 2023 highs of
around $4.2. To drive the point home, Cochran compares how the BNB
Chain blew up in the number of active users. In the last bull run,
the chain had an active decentralized finance (DeFi) and
non-fungible token (NFT) ecosystem. The BNB Chain’s popularity and
soft landing is because the smart contracts platform is associated
with Binance, the world’s largest cryptocurrency exchange.
Further to the point, the success of Solana, the partner argues,
lends its success to the now-defunct FTX. At its peak, FTX injected
billions to fund the development of Solana. It was also actively
involved in financing some of Solana’s active protocols. The
Great Convergence Of Supportive Events Presently, Coinbase is
streamlining its operations, recently stopping support for Bitcoin,
Litecoin, and other UTXO tokens via Coinbase Commerce.
Their focus is on Ethereum-compatible tokens, which could
provide hints that Coinbase Commerce might soon be integrated into
Base. Related Reading: Fetch.AI (FET) Surges 21%: Why This Rally Is
Just Getting Started From the protocol level, Ethereum plans to
implement upgrades to make transacting on layer-2 platforms even
cheaper. The Dencun Upgrade is scheduled for March and will see
Ethereum enhance as part of its long-term scaling roadmap. L2Beat
data on March 1 shows that Optimism has a total value
locked (TVL) of $7.8 billion, roughly half that of Arbitrum.
Meanwhile, Base has been rising up the rankings, commanding a TVL
of approximately $1 billion. Feature image from Shutterstock, chart
from TradingView
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