Ethereum-based Layer-2 network, Optimism, has seen a notable decline in its total value locked (TVL), with current figures at $643 million, the lowest since October 2023. TVL represents the total value of all cryptocurrencies locked within decentralized finance (DeFi) protocols on the network.
Why is Optimism’s TVL Dropping?
The decrease in TVL indicates that users are withdrawing their assets due to market downturns or heightened volatility. Optimism had previously reached a peak TVL of $1.05 billion on March 17, but it has been on a downward trajectory since then.
Last month alone, Optimism’s TVL fell by 18%, mirroring an overall decline in the cryptocurrency market, which stands at $2.23 trillion. The global cryptocurrency market value dropped by 12% over the past month, affecting liquidity on Layer-2 networks and reducing Optimism’s monthly revenue by 9% to $2.33 million.
How is the OP Altcoin Performing?
Currently, the OP altcoin is trading at $1.51, having declined 32% in the past month due to general market conditions. Data from a one-day price chart shows a significant downward trend for the altcoin.
However, a potential approval of the Ethereum ETF this month could result in a price surge for OP. Asset managers such as VanEck, Grayscale, and others have submitted amended registration statements for spot ETH ETFs to the U.S. Securities and Exchange Commission.
Potential Future Indicators
– Approval of Ethereum ETFs could boost OP’s value.
– Increased demand for Layer-2 networks may raise OP’s price.
– A positive correlation with Ethereum may benefit OP’s market performance.
With new funds possibly going live and renewed interest in Layer-2 solutions, OP’s price could surpass the $1.7 mark. This could mark a significant recovery for the altcoin and Optimism network as a whole.