The Optimism blockchain has initiated a significant move with its recent token buyback proposal, focusing on bolstering the Optimism (OP) token. The governance community of the blockchain approved the proposal to allocate 50% of all Superchain revenue towards purchasing the network’s native token, OP, over the next 12 months. This decision is set to begin implementation in February.
What is the Optimism Token Buyback?
The buyback proposal, initially put forward by the Optimism Foundation, aims to enhance the utility of the OP token while aligning it with the Superchain’s success. The Superchain is a network of interconnected blockchains that utilize Optimism’s open-source OP stack. The proposal was passed with a 33.27% vote in favor, while 3.23% opposed, and 3.95% abstained from voting.
Revenue Allocation and Market Impact
Previously, 100% of Superchain revenue was directed to a treasury managed by the Optimism governance community. However, with the new proposal, Optimism will collaborate with an over-the-counter provider to conduct monthly conversions of Ether (ETH) to OP. These funds will be stored in the treasury alongside the remaining ETH, ensuring a consistent flow of resources for various initiatives.
According to the Optimism Foundation, based on last year’s Superchain revenue, the buyback allocation could have involved approximately 2,700 ETH, equating to around $8 million in OP at current market prices. The accumulated OP tokens are intended for a range of applications, such as token burning, ecosystem expansion, and rewarding network participants.
Expert Insights and Future Prospects
Bobby Dresser, the executive director of the Optimism Foundation, expressed enthusiasm about this development, describing it as an exciting first step in expanding the OP token’s role in the ecosystem. However, despite this strategic shift, the OP token’s price has not yet reacted positively, with a 1.9% decrease in the past 24 hours, trading at $0.26 according to CoinGecko.
The proposal’s approval marks a transformative moment for Optimism, emphasizing the governance community’s proactive approach to aligning token value with network growth.
