Optimism, a Layer-2 scaling solution in the world of cryptocurrencies, has recently experienced significant developments that have sparked hope among investors. In the first quarter of 2024, Optimism reported a series of impressive network metrics. As a result, the network’s cryptocurrency, OP token, saw a 9% increase in value.
Increased Activity and Rising Transaction Fees Garner Attention for Optimism
According to a recent report from Messari, Optimism’s circulating market cap saw an 11% increase from the previous quarter, reaching $3.7 billion. The fully diluted market cap also rose by 1%, reaching $15.7 billion. Access the latest technology news on NEWSLINKER.
Despite the broader rally in the crypto market, where Bitcoin (BTC) and Ethereum (ETH) saw gains of 69% and 53% respectively from the previous quarter, OP’s market cap ranking fell from 26th to 39th among all Blockchain networks. However, within the Ethereum ecosystem, OP remains one of the four largest projects by market cap.
This growth can be attributed to a significant increase in activity on the Optimism network. Daily active addresses rose by 23% to 89,000 in the first quarter of 2024 compared to the previous quarter, while daily transactions increased by 39% to 470,000 during the same period. These metrics are approaching the all-time highs recorded in the third quarter of 2023.
The network’s revenue also saw a substantial increase, rising by 78% from the previous quarter to $16 million. This growth can be attributed to increased activity and a 48% rise in the average transaction fee to $0.42. However, the average fee dropped significantly due to the implementation of Ethereum Improvement Proposal (EIP) 4844 in the second half of March, which reduced L1 transmission costs by 99%.
First Quarter Sees an 18% Increase in Total Locked Value
Despite the fee reduction, Optimism’s on-chain profit in the first quarter of 2024 increased by 14% from the previous quarter, reaching $2 million. The network’s Total Locked Value (TVL) also rose by 18% to $1.2 billion. However, despite this increase, Optimism fell to 11th place in the TVL ranking. The DeFi sector, which accounts for 86% of active addresses, led Optimism’s TVL. According to Messari, NFT applications and games accounted for 6.9% and 6.7% respectively.
Among the leading protocols, Synthetix saw a 4% increase in TVL quarter-on-quarter, reaching $307 million. Aave experienced significant growth with a 52% increase in TVL to $270 million, and Velodrome saw a 10% rise in TVL to $171 million.
Stablecoin Market Cap Shows Notable Growth
Optimism’s stablecoin market cap also experienced a significant increase in the first quarter of 2024, reaching $809 million, representing a 32% rise from the previous quarter. Circle’s USDC stablecoin and Tether’s USDT played a significant role in this increase. Notably, USDT rose by 64% to $512 million, making up 63% of the total stablecoin market cap on Optimism.
OP Coin Rises Amidst Crypto Market Revival
Despite Optimism’s strong performance in the first quarter of 2024, its cryptocurrency, OP, did not achieve the expected price increase by the end of the period. In March, OP reached an all-time high of $4.84, but just a month later, it fell to a yearly low of $1.80, aligning with the overall downward trend in the market.
However, the recent upward momentum in the general cryptocurrency market has had a positive impact on OP coin. OP recorded a 9% price increase in the past 24 hours and a 3% rise in the past week, currently trading at $2.56. Additionally, according to CoinGecko data, OP’s trading volume increased by 19% in the last 48 hours, reaching $290 million.
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Disclaimer: The information in this article is not investment advice. Investors should be aware that cryptocurrencies carry high volatility and risk, and should conduct their own research.
