A well-known crypto analyst shared his disappointment with the on-chain performance of the L2 project he has been following for a long time. He advised altcoin investors not to make the same mistake.
PaoloRebuffo warns altcoin investors against this bug
Twitter’s @PaoloRebuffo expressed dissatisfaction with the on-chain performance of Layer 2 project Optimism. His critique focuses on the on-chain performance of the project rather than the technical issues. In a recent tweet, the analyst accuses himself of making poor judgment on investing in perspective. He called his action a mistake, as the community likes pumps triggered by airdrop hunting, not organic growth.
1/2 I have to say I fell for it, I had mistaken the growth of transactions executed on @optimismFND as organic growth, instead it was the 'usual' race to get an airdrop (RetroPGF ended 17 Jan. 2022).
Charts from: @DuneAnalytics pic.twitter.com/ZM8KXylHY0
— funnyking.eth zkHODLER 🦦🐛🦈 (@PaoloRebuffo) January 21, 2023
To support his idea, the analyst shared a screenshot of an on-chain analysis of daily transactions compared to Optimism’s competitor, Arbitrum. He also published the sum of the amount of gas spent on Ethereum for the period studied by the Layer 2 project. His research shows that the increase in Optimism in 2022 could be directly linked to the exercise of the airdrop. Since the airdrop period has ended, all major indices have fallen, suggesting that airdrop hunters may have been selling the tokens for profit.
Cryptocurrency projects use airdrops as marketing tools to raise awareness and deliver their tokens to real users. Participants in airdrops must complete various tasks to promote projects and receive tokens as a reward in return.
Optimism is not alone
Most projects prefer airdrop hunters to keep and use their tokens on their platforms. This is not always the case, as the results show that many participants will exchange the received tokens for more established cryptocurrencies or sell them for fiat. Some hunters use bots to play with the system, accumulating more tokens that need to be allocated to single accounts and throwing them into the markets.
According to PaoloRebuffo, Optimism fell below its main competitor Arbitrum in the number of daily transactions. In his tweet, he expressed his regret, saying that he was caught up in the excitement around Optimism. However, contrary to PaoloRebuffo’s statement, Optimism (OP) was one of the best performing cryptocurrencies in 2023. The OP started 2023 with an opening price of $0.917 and has been rallying ever since. It is trading at $2,368 at the time of writing. It has gained around 20% today.
Meanwhile, according to a tweet posted by crypto analytics firm Delphi Digital on Jan. 16, Optimism continues to collect high trading volume. As the data showed, only the leading altcoin Ethereum had higher trading volume.
Daily transactions on @arbitrum and @optimismFND combined were only 16K transactions short of Ethereum's total daily transactions on January 7th. pic.twitter.com/toXJqNH53i
— Delphi Digital (@Delphi_Digital) January 16, 2023
Dune Analytics’ analysis of daily transaction data provides a clearer picture of Optimism’s recent volume. Since December 2022, daily transactions are in an uptrend and are trading above the seven-day Moving Average. However, the fact that the transaction volume in January surpassed last year shows that the scaling network is used more frequently.
cryptocoin.com We have included details about Optimism in this article. Santiment’s data turned out to be at levels comparable to OP’s last observed levels in November and September. As a result, Optimism is quickly picking up its gains in recent months, while the overall market is on the upswing.
