Compass Investments

OP token holders have approved an initiative that could direct millions of dollars of protocol revenue to token buybacks. The vote, which ended Wednesday, met with about 84% support from the voting public, which included about 450 stakeholders, including seven network representatives in Optimism’s Superchain and the five applications involved.

the Optimism Foundation first announced the buyback concept earlier this month as part of its strategy to

align the OP token with Superchain, which is Optimism’s largest Tier 2 Ethereum network built on Optimism’s technology and includes significant blockchains such as Base, OP Mainnet, Unichain, Soneium, Worldchain and others.

In its filing, the fund said that Superchain generated revenue of 5,868 ETH over the past year, which is more than $17.5 million at current prices. The open market buyback will begin in February, and OP tokens will go into the shared vault along with the remaining ETH received through Optimism’s sequencer.

Against the backdrop of the overall market decline, with bitcoin down 2.2% and ETH down 2.9% (according to The Block’s price list), OP was down more than 8% overnight.

Thanks to these measures, Optimism will join a number of successful crypto projects like Hyperliquid and Pump that are redistributing a portion of protocol revenues to support their native tokens. This is also the first major Ethereum Layer 2 project to experiment with such a scheme: other leading L2 projects like Arbitrum and Polygon have so far avoided direct buyouts.

The exchange of ETH to OP using January’s proceeds will tentatively take place between T 25-35 starting February 1, the fund said. After the first month, the conversion will be done on a monthly basis at the same time slot. OTC execution is a temporary solution until we migrate execution fully to blockchain within the next ~6 months.