Worldcoin switches sides in L2 war, picks Optimism Over Polygon
- Worldcoin decided to move its World App from the Polygon blockchain to Optimism’s OP Mainnet.
- Despite OP’s price decline, it remains a profitable asset.
Worldcoin, a cryptocurrency project founded by Sam Altman, has partnered with Optimism [OP] Collective to move its World App from the Polygon blockchain. As part of its efforts to support Optimism’s Superchain, the first step will be to bring World ID, a decentralized identity protocol, to OP Mainnet, followed by Worldcoin’s World App.
— Worldcoin (@worldcoin) May 11, 2023
Read Optimism (OP) Price Prediction 2023-24
According to the project’s press release:
“With more than 1.6 million sign-ups in beta and 500,000+ monthly active World App users, the deployments on OP Mainnet will expand access and help Worldcoin reach a values-aligned ecosystem of developers and users.”
Worldcoin said its “alignment” with the Optimism ecosystem dates back to December 2020, when it began work on Hubble.
Hubble was an optimistic rollup specifically designed for simple payments, at a time when “Ethereum rollups were still far from being mainstream.”
Following the initial launch of the World App beta through Hubble, it migrated to Polygon’s Proof-Stake network. This was because “Optimism and Arbitrum were too expensive given the project’s scale.”
However, when World App launched officially four days ago, Worldcoin confirmed that the full version would run on an Ethereum rollup, whose name was not disclosed before the announcement on 11 May.
Further, Worldcoin and the Optimism Collective collaborated to jointly contribute to EIP-4844 about a year ago.
Worldcoin's imminent move to OP Mainnet is the next step in a partnership that's been over a year in the making. Together with @BuildOnBase & @OPLabsPBC they made joint contributions to EIP-4844 which will significantly reduce the costs of Ethereum L2s.https://t.co/tzxfp8hMbw
— Optimism (✨?_?✨) (@optimismFND) May 11, 2023
This EIP is expected to reduce L2 fees significantly and will likely be included in the next hardfork of Ethereum.
OP price declines, but still remains profitable
According to data from CoinMarketCap, Optimism’s governance token OP exchanged hands at a one-month low of $1.51 at press time. In the last 30 days, the alt’s value declined by 32%.
The drop in OP’s value in the last month mirrored the decline experienced by the general cryptocurrency market. Data from CoinGecko revealed a 9% drop in global cryptocurrency market capitalization in the last 30 days.
With key indicators trending downwards on a daily chart, OP was significantly oversold at press time. For example, its Relative Strength Index (RSI) and Money Flow Index (MFI) were spotted far from their neutral regions at 22.59 and 21.53, respectively.
Likewise, the alt’s Chaikin Money Flow (CMF) registered a negative value of -0.14 at the time of writing. This indicated a large volume of liquidity exit as new demand for OP continued to drop.
Interestingly, despite the price decline and the negative sentiment that trailed the crypto asset, an assessment of its Market Value To Realized Value (MVRV) ratio revealed that most of its holders still held at a profit.
Realistic or not, here’s OP’s market cap in BTC terms
According to data from Santiment, OP’s MVRV ratio was 161.13% at press time. It is, however, trite to point out that this has declined since 16 April.
Without a change in sentiment and an increase in new demand for OP, the token’s MVRV might cross the center line into the negative territory to put holders at a loss.