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Layer-2 scaling solution Optimism came under heavy criticism after the platform made an unannounced movement of funds, leading to rumors that its multisignature wallet had been compromised and the funds were drained from it, causing significant panic among investors.
Token Value Registers Significant Drop
As rumors about the hacking of Optimism’s multisignature wallet spread, the OP token, which is the protocol’s native token, registered a brief but significant crash, falling by 10% in a matter of minutes, according to available data. However, it was able to make a quick rebound. The drop was a result of the panic amongst investors, as the token dropped to $1.25.
Optimism Issues Statement
The transaction that led to the panic and the resulting drop in token value was made at 20:45 TSI, with tokens worth $450 million transferred to a set of different wallets. Hours after the transfer, the Optimism team issued a clarification on Discord, stating that the fund movements were pre-planned Coinbase Study-related transfers to designated investor wallets. Data from Etherscan confirmed that the value of the data transferred was around $450 million.
The team later took to Twitter to issue a clarification in an attempt to dispel the confusion that had built up while also stating that the team would announce large transfers in the future to avoid a repeat.
“We’re seeing some confusion about recent transfers of OP out of a multisig. This is expected—today, we executed a series of planned standard transfers to the Coinbase Custody wallets of various investors in OP Labs PBC. We will announce large planned transfers ahead of time to avoid further confusion going forward. To further clarify: this was not a token unlock or a change in the circulating supply--just the first L2 supported by @coinbase custody. Apologies for not communicating about this transfer beforehand.”
After the statement, the price of the OP token rebounded, rising to $1.34, only slightly below its pre-crash levels.
Users Slam Protocol
Optimism understandably came under considerable flak on Twitter, thanks to their unannounced operations, which spread panic among the community. The rumors of the hack only exasperated an already volatile situation, as users scrambled to understand if the protocol was indeed under attack. Founder of Rotkiapp, @LefterisJP, stated on Twitter,
“You are transferring $450m of tokens in a public blockchain without any notice. Guys, please make an announcement well in advance. We were all scrambling to figure out if something was wrong.”
Chris Blec also took to Twitter to criticize the protocol, commenting,
“Who is providing oversight on these massive transfers? How do OP holders know that Optimism multisig isn’t screwing them by misappropriating tokens? They just have to “trust the team”?”
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