Optimism (OP) and Sui (SUI) Decline While Waiting For Respective Token Unlocks Soon

The layer-two Ethereum scaling solution, Optimism, and layer-one Move-based blockchain, Sui, see a decline in prices due to the upcoming token unlocks, respectively. The token unlock events will increase the circulation of respective token supplies.

While Optimism faces selling pressure worth $600 million ahead of the token unlock, Sui looks to counter the high FDV due to low supply. Avalanche Tokenomics also unlocked $130 Million worth of tokens on May 28 but the price seemingly remained unfazed.

Insights Into Upcoming Optimism Token Unlock

Optimism protocol is heading for its third token unlock following community allocation unlocking a year ago. Wednesday’s unlocking event would be the first for early investors and contributors. It’s expected to double the current circulation supply, with more than 386 million OP Tokens to enter according to the schedule. Additionally, the total supply is expected to be in circulation by June 2026.

Current Price and Market Dynamics

In contrast to the impending unlock size, Optimism’s trading volume and supply circulation are pretty small. Currently, Binance and CoinDCX accounting hold significant portions, keeping its daily average trading volume to $70 million.

The Ethereum scaling solution will see a price impact due to low demand to absorb the unlocked tokens. Further, the volume disparity will lead to tremendous selling pressure among holders.

Scimitar Capital analyst Alex shared their opinion on Twitter,

“Optimism has a massive unlock this week with over 114% of the current circulating supply unlocking. All else held equal, this means the token should trade much lower than it is now, as the price is a function of supply and demand. More supply = lower price.”

Sui’s Token Distribution Plans

Sui blockchain is looking forward to a comparatively smaller than Optimism’s token unlocking event. It will enhance its supply volume by 13% by adding 61 million tokens on June 3. The circulation supply may double by November as regular unlocks arise in the network.

Sui’s unlocking event is one aspect of their Community Access Program, where the tokens will get delivered to the retail users. Currently, Sui is airdropping farmers to invite them to the event.

DeFiSquared (fictitious name) trader said,

“Sui feels very similar to when Aptos had an 11-figure valuation, where it has little to show right now in terms of real products, but a high FDV mostly due to low supply, so this unlock seems important. At the same time, we are also seeing OP sell off heavily today just one day before it also has large unlocks, confirming that the sell-the-unlock narrative is strong right now.” 

According to CoinMarketCap data, Optimism(OP) and Sui(SUI) are among the daily greatest losers list as they experience a downfall of 4.85% and 4%, respectively.

Optimism and Sui’s unlocking event come after Avalanche’s Token unlock last week, with 1.3% of AVAX token’s total supply in the market.

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