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Decrypting DeFi is Decrypt's DeFi email newsletter. (art: Grant Kempster)

Lots of strange things happen when your voting rights can be easily swapped for cash.

In meatspace politics, this is true and we see its symptoms regularly. We see it when powerful lobbying groups buy elected officials to shill more toothpaste or when campaigns spend tons on advertising.

But only in crypto can your vote be quite literally exchanged for money.


Just look at the various governance tokens with trading volumes in the hundreds of millions. The equivalent would be like telling someone that your one vote for U.S. president has just fallen below its 50-day moving average and is now entering a cup-and-balls formation—in trading terms, extremely bearish.

And this week the cryptosphere enjoyed yet another opportunity to dig into this dynamic when Optimism, the Ethereum scaling solution project, doled out 5% of its OP token supply in an airdrop to a variety of users.

via Optimism

Recipients of the OP token can either hold the tokens and become members of the DAO, or they can delegate their holdings to someone who has perhaps more knowledge or more time to help grow the project.

Ethereum Name Service (ENS) did something quite similar with its airdrop, creating a sort of federalized system.

Nathan van der Heyden, a crypto governance guru at Snapshot Labs, told Decrypt, “The values of the Optimism collective were clearly defined and users were able to opt in to governance, or delegate to someone who matches their view. This clear framework allows quality governance. Well-defined processes are the key to steering a community in the right direction, even more so than good values.”


And the reason the above-tiered system is used is based on the assumption that people who use Optimism and/or adjacent services (i.e. layer-2 solutions or governance in crypto) are also incentivized to see that this service continues to improve and thrive (regardless of token performance).

It’s a noble cause with good intentions. Still, crypto is a rather cynical industry.

Pretty much as soon as the airdrop officially launched, OP plummeted. CoinMarketCap shows that the token entered the market at roughly $4.50 at 1:30 p.m. EST, before dropping as low as $0.79 just a few hours later.

That’s an 82% decrease. Yikes.

What happened? People who received the OP token immediately dumped it.

op price
Price action of OP on the day of its launch. (Source: CoinMarketCap)

By collating data from both Dune Analytics and an Optimism-specific block explorer, we can see that roughly 31,800 eligible addresses had dumped their holdings by press time.

The mass selloff has drawn ire from many in the community, with critics saying that users are selling “responsibility” and ownership of the project.


But as van der Heyden told Decrypt, “People are mad at airdrop dumpers because they feel like the airdrop comes with some sort of digital handshake. ‘I’ll give you this free money, in exchange you participate in governance and you help our network grow.’”

“In reality,” he added, an airdrop “comes with no strings attached.”

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