Layer 2 (L2) scaling solution Optimism reported a series of strong network metrics in the first quarter (Q1) of 2024, with its native OP token up 9% on the back of this bullish momentum.
Optimism sees higher activity and higher transaction fees
According to my recent path a reportOptimism's traded market cap rose 11% quarter-on-quarter to $3.7 billion, while its fully diluted market cap rose 1% to $15.7 billion.
Although wider Crypto market risingWith Bitcoin (BTC) and Ethereum (ETH) rising 69% and 53% QoQ respectively, OP's market cap ranking dropped from 26th to 39th place among all blockchain networks. However, within the Ethereum ecosystem, OP remains one of the four largest aggregators by market capitalization.
This growth was driven by a significant rise in Optimism Network activity. The number of daily active addresses reached 89,000 in Q1 2024, an increase of 23% quarter-on-quarter, while daily transactions rose 39% to 470,000 during the same period. These metrics came close to their target, but they didn't quite reach it All-time highs In the third quarter of 2023.
Related reading
Network revenue also saw a significant 78% increase QoQ to US$16 million, driven by increased activity and a 48% rise in average transaction fees to US$0.42. However, average fees dropped significantly in the latter half of March due to the implementation of Ethereum Improvement Proposition (EIP) 4844, which reduced L1 rendering costs by 99%.
Total value locked jumps 18% in Q1
Despite the fee reduction, Optimism's cross-chain revenue for Q1 2024 increased 14% QoQ to $2 million. The network's total value (TVL) also grew 18% to $1.2 billion, although TVL's ranking among all networks fell to 11th place.
Within the TVL of optimism, the Decentralized finance sector dominate, accounting for 86% of active addresses. According to Masari, non-fungible token (NFT) apps and games followed at 6.9% and 6.7%, respectively.
Leading TVL protocols included Synthetix ($307M, +4% QoQ), Aave ($270M, +52% QoQ), and Velodrome ($171M, +10% QoQ).
Optimism's stablecoin market capitalization also grew significantly, reaching $809 million (+32% QoQ) by the end of Q1 2024. Circle's USDC stablecoin and Tether's USDT accounted for most of this, with USDT saw a 64% rise QoQ to $512 million, or 63% of the total. Stablecoin market capitalization On optimism.
OP rebound along with the return of the cryptocurrency market
Despite Optimism's strong performance across key metrics in Q1 2024, the network's native token, OP, did not see a corresponding increase in price at the end of Q1. Instead, the OP went with the broader scope Downtrend of the markethitting a yearly low of $1.80 just one month after hitting an all-time high of $4.84 in March.
However, OP has followed suit as the overall cryptocurrency market has seen a return of bullish momentum in the past few days. Over the past 24 hours, the token registered a 9% price increase and a 3% increase in the past week, and is currently trading at $2.56.
Moreover, CoinGecko Data It shows a 19% increase in OP trading volume over the last 48 hours, reaching $290 million.
Related reading
While this Renewed bullish sentiment Encouragingly, OP is still trading 46% below its all-time high and is facing significant resistance levels shortly before a potential retest of this milestone.
The first major resistance lies at $2.65, followed by $2.90, which must be overcome before the token can push towards the $3.00 level. On the contrary, the $2.34 support level has proven to be crucial and should be closely monitored in case of any downward rally.
Featured image from Shutterstock, chart from TradingView.com