• What are Op tokens?

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    The Op token, short for Optimism token, is primarily associated with the Optimism layer 2 solution on Ethereum. It is designed to have value beyond governance and can function within the ecosystem in several critical ways:

    1. Decentralizing Sequencers: The Op token gains value beyond governance when Optimism starts decentralizing sequencers. Sequencers handle transaction bundling and ordering, benefiting from maximally extractable value (MEV), which then flows to Op token stakers as incentives 1.

    2. Proof of Stake: As Optimism moves towards a proof-of-stake (PoS) system, staking Op tokens will be essential for becoming a block validator. Transaction fees paid by users are funneled to Op stakers, similar to how Ethereum's PoS system works with Ether 1.

    3. Public Goods Funding: A significant amount of Op tokens is allocated to funding public goods within the ecosystem. This aims to support projects and services that benefit the overall community. For example, Optimism has allocated a large portion of its tokens for such purposes, encouraging healthy ecosystem development 2 3.

    4. Incentivizing Ecosystem Participants: Tokens are distributed to various elements of the ecosystem, including builders, liquidity providers, and users, to ensure sustainable development and active participation. For instance, each app on Optimism receives a share of Op tokens to distribute to its users 4.

    Op tokens are thus instrumental in driving the decentralized function of the Optimism network, promoting public goods, and incentivizing the ecosystem’s key stakeholders.

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