Optimism (OP) hits new ATH despite 70% transaction volume decline

Layer 2 (L2) network Optimism (OP) transaction volume has declined by over 70% to 200,000 from an all-time high (ATH) of 800,000, according to Etherscan data.

Meanwhile, despite the steep decline in its transaction volume, Optimism’s OP printed a $2.49 ATH on Jan. 25, according to CryptoSlate data.

Optimism’s transaction volume falls

Binance research pointed out that the decline in volume coincided with Optimism ending its NFT incentive program, “Optimism Quests,” on Jan. 17 — the NFT program majorly drove user engagements and transactions to the L2 network.

Optimism’s growth was inorganic in 2022 because incentives in its ecosystem fueled its growth, a Messari report said. Recent events on the network have confirmed this report.

For context, the L2 network registered over 600,000 transactions on Jan. 17 and declined by over 50% to 239,000 by Jan. 18, according to Etherscan data. Since then, the network volume has ranged between 160,000 – 200,000.

Meanwhile, decentralized finance (DeFi) analyst, DeFiyst, suggested that users participated in the incentive program because they wanted to qualify for OP’s second airdrop.

OP trades at new ATH

OP is one of the biggest gainers in the current market rally, growing by over 139% in the last 30 days. As of Jan. 1, the governance token was trading for less than $1, but its value more than doubled when the network witnessed a surge in its transaction volume on Jan. 12.

Despite ending the Quest program more than a week ago, OP’s value has increased by 21% in the last seven days..