Cryptocurrency enthusiasts have been buzzing with excitement over recent developments in Optimism, a Layer-2 scaling solution. The first quarter (Q1) of 2024 brought about a surge in Optimism’s network metrics, leading to a 9% increase in value for its cryptocurrency, OP token.
Optimism has been gaining attention due to its increased activity and rising transaction fees. According to a recent report by Messari, the circulating market cap of Optimism grew by 11% in the previous quarter, reaching $3.7 billion. The fully diluted market cap also saw a 1% increase, reaching $15.7 billion. This growth is significant, considering the overall rally in the crypto market, where Bitcoin (BTC) and Ethereum (ETH) experienced gains of 69% and 53%, respectively. However, OP’s market cap ranking fell from 26th to 39th among all blockchain networks. Nevertheless, within the Ethereum ecosystem, OP remains one of the four largest projects by market cap.
The increase in Optimism’s market cap can be attributed to a significant rise in activities on its network. In Q1 of 2024, daily active addresses increased by 23% to 89,000 compared to the previous quarter, while daily transactions surged by 39% to 470,000. These figures are approaching the all-time highs achieved in Q3 of 2023.
Optimism’s revenue also experienced a substantial increase, rising by 78% from the previous quarter to $16 million. This growth can be attributed to the increased activities on the network and a 48% rise in the average transaction fee, which reached $0.42. However, this average fee dropped significantly due to the implementation of Ethereum Improvement Proposal (EIP) 4844 in the latter half of March. This proposal reduced L1 transmission costs by 99%.
In terms of Total Locked Value (TVL), Optimism saw an 18% increase in the first quarter, reaching $1.2 billion. Despite this growth, Optimism fell to 11th place in the TVL ranking. The DeFi sector, which represents 86% of active addresses, played a major role in driving Optimism’s TVL. NFT applications and games accounted for 6.9% and 6.7%, respectively.
Among the leading protocols, Synthetix experienced a 4% increase in TVL, reaching $307 million. Aave saw significant growth with a 52% increase in TVL, amounting to $270 million, while Velodrome recorded a 10% rise in TVL, reaching $171 million.
The stablecoin market cap on Optimism also witnessed a notable increase in the first quarter of 2024, reaching $809 million, a 32% rise from the previous quarter. This growth can be attributed to Circle’s USDC stablecoin and Tether’s USDT, with the latter experiencing a 64% increase to $512 million, accounting for 63% of the total stablecoin market cap on Optimism.
Despite Optimism’s strong performance in Q1 of 2024, its cryptocurrency, OP, did not meet the expected price increase by the end of the period. While OP reached an all-time high of $4.84 in March, it fell to a yearly low of $1.80 a month later, aligning with the downward trend in the market. However, the recent revival in the cryptocurrency market has had a positive impact on OP coin. It has recorded a 9% price increase in the past 24 hours and a 3% rise in the past week, currently trading at $2.56. Additionally, OP’s trading volume increased by 19% in the last 48 hours, reaching $290 million, according to CoinGecko data.
It’s important to note that the information provided in this article does not constitute investment advice. Investors should be aware of the high volatility and risk associated with cryptocurrencies and conduct their own research.
