Inside Optimism’s [OP] new partnership, dwindling metrics, and more

• Coinbase could play an instrumental role in providing revenue to Optimism.
• Optimism’s token OP suffered as network growth and velocity declined.

Optimism [OP], over the last few weeks, lost its spotlight in the L2 space as Arbitrum’s [ARB] new AirDrop has taken all the attention. With increasing competition from other L2 chains, Optimism could lean on Coinbase [BASE] for assets to grow its ecosystem.

Read Optimism’s [OP] Price Prediction 2023-2024

In this partnership, Coinbase and Optimism will work together to launch the former’s L2 solution, known as Base, on the network. As a result, Coinbase has allocated a part of the sequencing fees collected by Base to Optimism’s Retroactive Public Goods Funding (RPGF)

The RPGF is a fund used by Optimism to further developments on its network. The assets allocated to the fund directly depend on the revenue generated by the Optimism protocol.

Falling behind the competition

According to data provided by Artemis, the revenue generated by Optimism has been declining. Compared to other solutions, such as Polygon [MATIC] and Arbitrum, Optimism has also lagged behind in terms of revenue collection, which could be attributed to the protocol’s falling TVL.

According to Defi Llama, the TVL of Optimism declined from $989 million to $900 million over the last few days, indicating a drop in value stored on smart contracts on the network.

Source: Artemis

However, things could change for the protocol soon as the daily activity on Optimism has started to rise at press time. Accompanied by the rising daily activity, the number of active developers on the network has also increased, according to Token Terminal.

Source: token terminal

The growing activity on Optimism’s network, coupled with the prospect of new upgrades on the protocol due to high development activity, could make the crypto community look favorably towards the Optimism network.

Realistic or not, here’s OP’s market cap in BTC’s terms

Do OP holders need to be worried?

These developments could also help the Optimism protocol’s token, OP see growth in the future. At press time, however, that was not the case, as OP’s network growth and velocity were declining. This indicated that there was low interest from new users, and the frequency of OP’s trades had fallen.

The rising prices of OP could soon be impacted further due to these factors.

Source: Santiment