Optimism Proposes to Allocate Half of Revenue for OP Token Buybacks

The Optimism Foundation has introduced a plan to allocate 50% of its upcoming Superchain revenue for monthly buybacks of OP tokens, starting in February 2026. This marks a significant change in the network's tokenomics approach.

Key Takeaways

Revenue Allocation: Optimism plans to use 50% of Superchain revenue for monthly OP token buybacks starting February 2026.
Token Transformation: OP is shifting from being a governance token to a token that supports Superchain growth.
Execution: The Foundation will partner with an OTC provider for ETH to OP conversions, starting with January's revenue.
Growth Strategy: The buyback plan is part of an overall strategy to maintain competitiveness within the rapidly evolving Layer-2 ecosystem.
Governance Vote: A governance proposal will be voted on, requiring approval to proceed with the buyback plan.

Optimism Proposes Using Half Its Revenue to Buy Back OP Tokens

This initiative transforms the OP token from merely a governance asset to one that is closely tied to the growth of the Superchain, which currently controls 61.4% of the Layer-2 fee market and processes about 13% of all cryptocurrency transactions.

The buyback process will utilize revenue from sequencer operations across various chains, including Base, Unichain, Ink, World Chain, Soneium, and OP Mainnet. Together, these chains contributed 5,868 ETH to Optimism's treasury in the past year.

As estimated from last year's revenue, the buyback program is expected to allocate approximately 2,700 ETH, roughly translating to $8 million at current prices, pending a governance vote scheduled for January 22.

Understanding the Revenue-Driven Token Evolution

The Foundation plans to collaborate with an over-the-counter (OTC) provider to convert ETH to OP tokens monthly, starting with revenue collected in January and executed in February.

These conversions will be completed within specific time frames, regardless of market pricing. However, the program will pause if the monthly revenue dips below $200,000 or if the OTC provider cannot fulfill transactions due to high fees.

The tokens acquired through this initiative will be added back to the collective treasury. Eventually, these tokens could be either burned, allocated as staking rewards, or used to promote further ecosystem growth.

Initially modest, this buyback mechanism is intended to expand alongside the growth of the Superchain, where every transaction across participating networks enhances the buyback potential and increases demand for OP tokens.

The proposal also allows the Foundation to manage the remaining ETH in the treasury to generate additional profit, which supports ecosystem development and reduces the governance overhead that has previously limited treasury activities.

Although governance will still oversee how capital is allocated, this strategy aims to help the Superchain remain competitive against peers that are more flexible in their financial maneuvers.

The Role of the Superchain in Growth Strategy

This buyback initiative occurs during a time of great consolidation in the Layer-2 space, where Base, Arbitrum, and Optimism collectively handle almost 90% of all Layer-2 transactions.

Base has captured over 60% of market share by late 2025, while the activity levels of smaller rollups have declined by 61% since June, with many now labeled "zombie chains" due to their lack of user engagement.

Despite intense price wars fueled by the Dencun upgrade—resulting in fee cuts of up to 90%, leading many rollups to operate at a loss—Base managed to earn about $55 million in profit throughout 2025.

The Superchain model builds on this concentration of activity, where member chains share portions of their sequencer revenue with Optimism. This creates a cycle where increased usage leads to revenue, which funds further development, ultimately driving even more usage.

At the same time, Optimism is focused on building a resilient infrastructure for future growth. In December, it named Ether.fi as its strategic partner for liquid staking on OP Mainnet, following an extensive request-for-proposal (RFP) process.

This partnership has yielded 80.03 ETH through staking, with the aim of enhancing OP Mainnet’s appeal as a secure, liquid, and trustworthy environment for decentralized finance (DeFi).

Governance Discussions and Implementation Timeline

The proposal has faced some scrutiny from delegates who feel that combining two distinct policy issues into one vote might be problematic.

Community member Gonna.eth has suggested that the buyback mechanism be separated from the Foundation's treasury management powers. They argue that merging these elements could lead to approvals based on anticipated OP price increases rather than an objective appraisal of treasury governance.

Optimism OP Buy Back - Gonna's Comment Screenshot

The governance proposal is set to be voted on during Special Voting Cycle #47, requiring a 60% approval rate from the Joint House.

If the proposal is passed, the Foundation will swiftly establish contracts with the OTC provider and create an execution dashboard to track the details of monthly conversions.

This buyback program will run for a year before a reassessment occurs, with initial operations carried out by the Foundation under specific conditions, minimizing discretion.

As the program matures, there is a potential for it to transition towards more on-chain operations through Protocol Upgrade 18, which will ensure all sequencer revenue from OP Chains is collected on-chain without requiring Foundation oversight.

As of this article’s publication, OP is trading at $0.31, representing a decline of 1% in the last 24 hours.