INTRODUCTION

Being a layer 2 chain, optimism runs on top of the Ethereum mainnet. Although transactions happen on Optimism, the transaction data is uploaded to the mainnet where it is verified. It is comparable to using a highway's security while driving down a less congested side street. According to Defi Llama, optimism is the second-largest Ethereum layer 2 with $313 million locked inside its smart contracts as of this writing. First place goes to Arbitrum with $1.32 billion. Early in November, the cost of Optimism (OP) dropped rapidly, from highs around $1.30 on November 6 to as low as $0.79 on November 9. Prices have risen in the following weeks, reaching $1.19 on December 14 for OP.

Bounty:

The price of Optimism (OP) fell sharply in early November, dropping from highs above $1.30 on November 6 to as low as $0.79 on November 9. In the weeks since, prices have been on the rise, with OP hitting $1.19 on December 14.

Analyze the network and diagnose some possible reasons for the sudden drop, and slow climb, of OP price in recent weeks. Are there any notable trends in users, transactions, or any other metrics that could explain these events? Note any patterns or outliers you see.

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FTX Collapse

After it was discovered that Alameda had been utilizing FTX customers' funds to cover trading losses, the cryptocurrency exchange failed. Between all of FTX worldwide, FTX US', and other subsidiaries, "the proprietors of the corporation could actually run free-rein."

DATA and METHODOLOGY: Analysis

The data used for this analysis is obtained from the core table of Optimism from the Flipside data. Several tables such as price, transfers, etc are analyzed to get enough visualizations to perform the analysis. Hence as mentioned in the bounty the time between November 6 and December 14 is considered a drop period. Thus, initially, the active users in the optimism over time as well as the count of the activity in transactions is charted. Then the influence of the new users on Optimism is charted here. Then the top events that occurred in the Optimism network during the same time are also considered with both transactions and users. Now the price of the tokens is also addressed in the statistics. This has the comparison of OP, WETH, and BTC tokens along with the change that happened in the price of the tokens over time. Then the NFT sales that happened in the network are also considered and charted here so that the influence on the NFT sales could be estimated by seeing the surge in the buyers and the sellers. Finally, the inflow and outflow from the CEX wallets over time is also considered. Hence with these visualizations, the trend in the mentioned activities of the Optimism network. Nb: Stakes and swaps are not included here.

Initially here charted the active users in the Optimism Network over the whole time since the beginning of the year and the period mentioned above is also charted here and it is seen that in the recent days the trend has been increasing and also during the sudden drop the number of active users tends to follow the increasing trend.

To the right, given the activities in the Optimism network over the period to see if the particular drop has any effect on the activity and it is seen that the trend has been increasing and the two drops during the time is quite anologous to the normal trend seen on the other days.

The new users in the optimism network are charted here and it is seen that there is a slow climb in the increase in the overall trend it is also clear that there is a sudden hike in the new trend with two drops too.

Analysis result:

The drop in the FTX has no big impact on the activity and users of the Optimism!

The token price is compared here and just visualized two charts and it is seen that during the mentioned time, there is a drop in the OP price but this is evident in other tokens too and hence can be mentioned that all three tokens followed the same trend even though in different scales.

Also, the drop in the price over time is charted here for all three tokens and it is evident from this too.

The NFT sales in the Optimism network are charted here and it is seen that though it slightly followed an increasing trend as the overall activity it is seen that there is a decrease during the meantime and it might be an effect of the drop in the price or also the collapse of the FTX.

This is also evident from the below charts, of course, fewer users mean fewer trades.

This is the final chart but it is an important one as it is seen that the hike in the flow of the tokens into the protocol from the CEX wallets was the highest on November 12, 2022, and it is seen that there is a huge inflow on that day. Other days’ trend is considerable and follows the usual statistical trend of inflow and outflow.

INFERENCE

This dashboard efficiently looked into the causes of OP's price changes from the beginning of November without a large number of visualizations. According to the descriptive study, OP's price declined in line with that of other tokens impacted by the FTX crash. After the fall, however, OP bounced back considerably quicker than the market leaders ETH and BTC. The research shows that while the FTX collapse precipitated a significant decline in OP's pricing, the remainder of OP's operations were unaffected. Blockchain transactions and active users demonstrate the blockchain's ongoing development, which naturally raised the demand for OP and facilitated recovery.

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