- Layer 2 activity began to surge materially over the last few months.
- OP’s price showed promise. However, network growth started to decline.
The L2 sector has shown tremendous growth over the past few years. Over time, Layer 2 activity on Ethereum grew significantly, becoming more than three times the mainnet activity. What was once a small fraction of Ethereum transactions has now gone parabolic, indicating a substantial increase in Layer 2 transactions on the network.
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The rise and fall of Optimism
Optimism[OP] was one of the first protocols to enter the space and attain a first-mover advantage. As time passed and the sector saw more growth, other competitors started to capture market share and left Optimism in the dust.
Arbitrum and Polygon have dominated the sector since the beginning of the year, showing improvements in both activity and transactions on the network. However, in the last few months, both activity and transactions on the Optimism network started to rise.
According to Artemis’ data, the number of active addresses on the Optimism network grew from 67,000 to 93,000 in the span of a few months. Even though Optimism failed to catch up with Polygon and Arbitrum at press time, things may take a turn for the better if the rising activity on Optimism continues.
State of OP
Along with the Optimism protocol’s activity, the price of the OP token also surged. Between 10 June and 14 July, OP’s price was consolidated as it traded between the $1.508 and $1.16 levels. After which, OP’s price appreciated significantly by 24.50%. At press time, OP was trading at $1.481.
The RSI for OP was at 52.72, indicating that the momentum was slightly with buyers at the time of writing. The CMF, however, was at -0.09, implying that money flow was suggesting a bearish outcome.
Realistic or not, here’s OP’s market cap in BTC’s terms
One of the reasons for the growing OP price would be the rising number of OP token holders. According to Santiment’s data, the number of OP holders grew from 723,560 to 831,000 over the last month.
However, the network growth for the token fell significantly during this period, implying that new addresses were not as interested in the token at press time.