Optimism passes buyback proposal to bolster OP token

The governance backing the Optimism blockchain has approved a proposal to allocate 50% of all Superchain revenue to buy back the networks token over the next 12 months, starting in February.

The proposal was initially submitted by the Optimism Foundation on Jan. 8 as part of a push to expand the utility of the Optimism (OP) token and align it with the success of the Superchain, a network of unified blockchains.

The voting period ended on Thursday, with the Optimism governance community passing the proposal with a 33.27% vote in favor, with 3.23% against, and 3.95% abstaining.

Source: Optimism

Up until the vote, 100% of Superchain revenue was allocated to a treasury overseen by the Optimism governance community.

Optimism‘s Superchain consists of a network of layer-2 (L2) chains built with the project's open-source OP stack, such as Sony’s Soneium, Unichain, Ink, and Coinbases Base. It generates income in Ether ($ETH) via sequencer revenue contributed by these L2s.

As part of the proposal, Optimism will partner with an over-the-counter provider to execute monthly conversions of Ether ($ETH) to OP. The funds will then be held in the treasury, alongside the other remaining $ETH.

Optimsim Foundation stated in its proposal that, based on last years Superchain revenue, a comparable allocation would have seen around 2,700 $ETH used for buybacks, or roughly $8 million in OP at current prices.

The Optimism Foundation said that the accumulated OP could be used for a wide range of purposes, including token burning, funding ecosystem expansion, and rewarding participants who help secure the network.

Optimism Foundation executive director Bobby Dresser said in a statement to Cointelegraph that the approval was an “exciting first step in expanding the role of the OP token” and the program “will help align the OP tokens value with the success of the Superchain ecosystem.”

Despite voting through a major shakeup to the dynamics of the OP token, the price is yet to respond positively. OP is down 1.9% over the past 24 hours to trade at $0.26, according to CoinGecko data.