- Interest in optimism is growing, but several factors threaten the growth.
- Bedrock’s upgrade proposals could revive waning interest in the optimism protocol.
The optimism token, OP, has seen an increase in its trading volume over the past few days. This increase in interest indicates that the optimism protocol is becoming increasingly popular. It is further highlighted by the dominance of OP in Uniswap trading pairs.
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According to data from Messari, three of the top five trading pairs on Uniswap V3 include OP as one of the trading pairs, which is an important development.
However, OP’s dominance may not last long, as several factors may negatively affect the future of Optimism Protocol and its token.
How might increases in volume affect APR/APY from the supply side?
Three of the five largest trading pairs with 30-day trading volume @employees @employee v3 instance of it OP$ token in their pair pic.twitter.com/TMrDZUSjxf
– Messari (MessariCrypto) February 4, 2023
More than meets the eye
One such factor is the decrease in L2 gas utilization. This reduction in gas usage could lead to lower activity on the Optimism network, which could negatively affect the protocol.
Source: Dune Analytics
Another factor that could affect the protocol is the end of the Optimism Quest NFT pool. The fundraiser, which was a four-month incentive program, succeeded in attracting many users to the Optimism Protocol, but after it ended, the protocol had difficulty attracting new users.
This resulted in a decrease in the number of unique active users who optimistically exchange NFTs, which is something to worry about.
Source: Dune Analytics
The decrease in the number of users and activity on the Optimism Network has resulted in a decrease in revenue from the protocol.
According to data from the token terminal, optimism’s gains have fallen by 48.6% over the past 24 hours. This drop in revenue is a sign that the protocol’s growth may be slowing.
Impact on tokens
It should be noted here that the growth of the OP token network declined after February 2nd. OP holders who plan to go away should take this as a major sign of concern.
In addition, the number of daily active addresses decreased. This drop in token activity could signal a bearish outlook for OP going forward.
Source: feeling
However, there is still hope in Optimism Protocol. The recently proposed core upgrade can improve the protocol and attract new users. Thus helping to change public opinion in favor of the protocol.
If the bedrock upgrade is successful, it could help Optimism Protocol bounce back from its downward state.