Optimism(OP) Ecosystem: From an L2 solution to an ecosystem
The Layer-2 solution race is hotter than ever since multiple solutions have been put forward to solve the recurrent limits of the Ethereum blockchain. Optimism OP is one of the race participants. It was incubated by Paradigm and boosted by a16z.
This article will introduce the overview of Optimism and dig deeper into the ecosystem to find potential opportunities. So let’s explore the potential of Optimism!
Optimism(OP) Overview
What is Optimism(OP)?
Optimism is the Layer 2 Rollup scaling solution on top of the Ethereum blockchain to enable faster transactions with lower gas fees. In simple terms, it allows most transactions and tasks to be processed off-chain in an L2 protocol and lets the Ethereum Network verify them on-chain.
- Ethereum Network faces some limitations as the gas fee and transaction time are too high for users’ tolerance.
- Optimistic Rollups (ORs) run independently from the Ethereum Network. The L2 scaling solution will improve the performance and increase the throughput with lower latency than Ethereum.
- Optimistic Virtual Machine (OVM) allows Ethereum-based Decentralized Applications (Dapps) to run on ORs without complex code conversion. This feature makes Optimism Rollups EVM-compatible.
How does Optimism work?
Optimism uses a technology called rollups, specifically Optimistic rollups.
They’re called rollups because they roll up (or bundle) the data about hundreds of transactions – non-fungible token (NFT) mints, token swaps … any transaction! – into a single transaction on Ethereum mainnet (layer 1). When so many transactions are rolled up into a single transaction, the blockchain transaction, or “gas,” fee required to pay comes down to only one transaction, conveniently distributed across everyone involved.
And they’re called Optimistic rollups because transactions are assumed to be valid until they are proven false, or in other words, innocent until proven guilty. There’s a time window during which potentially invalid transactions can be challenged by submitting a “fraud proof” and running the transactions’ computations with reference to available state data. Optimism reimburses the gas needed to run the computation of the fraud proof. (Here’s a more technically detailed explanation of the process.)
How do you use Optimism (OP)?
For users, Optimism feels pretty much the same as Ethereum mainnet. Your Optimism address is the same as your Ethereum mainnet address, which begins with 0x. Optimism’s blockchain explorer is identical to Etherscan, Ethereum mainnet’s blockchain explorer.
Optimism supports a bunch of decentralized finance (DeFi) wallets, including MetaMask, the most popular choice.
Although you can manually configure your wallet for Optimism, there’s a much easier way: Just go to a DeFi app like SushiSwap (SUSHI) and indicate Optimism as your network (top-right corner in the case of Sushi). Your website selection will force your MetaMask to add the network and switch to it. Welcome to Optimism!
But, of course, just like Ethereum mainnet, Optimism requires ether (ETH) to cover gas fees. So to begin using Optimism, you’ll need to send ETH to your MetaMask from another chain, such as Ethereum mainnet or other layer 2s like Avalanche. To send funds from another chain, you can use any of the bridges that support Optimism.
You can also use a centralized cryptocurrency exchange to fund your Optimism address with ETH. But before attempting to send funds to a layer 2 from your centralized exchange, always make sure that it can support withdrawal to that chain. If you send funds to an address that your exchange doesn’t support, your funds may be irrecoverably lost. As of this writing, Binance, Bybit and Huobi allow withdrawals to Optimism.
What is OP, Optimism’s token?
Optimism launched its OP token on May 31. A total of 231,000 addresses were eligible to claim 214 million OP tokens for free (known as an “airdrop”). That accounts for 5% of the total 4.29 billion supply, meaning 95% of the supply has yet to hit the market. You can track how many users claimed the first airdrop on this Dune Analytics dashboard.
- Token Name: Optimism
- Ticker: OP
- Blockchain: Optimism
- Token Standard: ERC-20
- Contract: 0x4200000000000000000000000000000000000042
- Token Type: Governance
- Total Supply: 4.294.967.296 OP
- Circulating Supply: 214.748.364 OP
Token Allocation Optimism
Ecosystem Fund: 25%
Retroactive Public Goods Funding: 20%
User Airdrops: 19%
Core Contributors: 19%
Sugar Xaddies: 17%
Token Release Schedule
OP Token Use Cases
There is currently little information about the use cases of the OP token; however, according to Optimism’s announcement, the OP token is primarily used in Token House for governance purposes such as:
- Vote for protocol updates.
- Vote for the distribution of incentives for projects as a part of the Governance Fund.
- Project funding on Optimism.
- Participate in project management with OP Citizens.
Team, Investors, and Partners
Team
To achieve the above goals, the project established the Optimism Foundation which acts as the steward of the Optimism Collective, runs the experiments, stimulates the ecosystem, then will eventually dissolve, and give the Optimism community complete control.
The Optimism Foundation will be led by Optimism co-founders Jinglan Wang and Ben Jones, together with Eva Beylin (Director of Graph Foundation), Abbey Titcomb (Head of Community of Radicle), and Brian Avello from Maker Foundation.
In addition, Optimism PBC has also been renamed OP Labs PBC, Liam Horne – formerly Head of Engineering for Optimism PBC, will take over as the new CEO of OP Labs PBC.
Investors
The project most recently raised $150 million from a Series B round led by a16z and Paradigm, and the previous funding rounds include:
- January 15, 2020, Seed Round ($3.5 million): Paradigm, IDEO Colab Ventures.
- February 24, 2021, Series A ($25 million): Andreessen Horowitz, Paradigm, IDEO Colab Ventures.
- March 17, 2022, Series B ($150 million): Paradigm, Andreessen Horowitz. The current valuation is $1.65 billion.
Roadmap
- 2022 – Next Gen Fault Proof
- 2023 – Sharded Rollup
- 2023 – Incentivized Verification
- 2023 – Decentralized Sequencer
- 2024 – L1 Governed Fault Proofs
Conclusion
The sole purpose of this post was to provide you with an overview of the Optimism blockchain and the interaction between Optimism and Ethereum. More about optimism and its mechanism will be covered in upcoming posts.
Social
✅ Website: https://www.optimism.io
✅ Discord: https://discord-gateway.optimism.io
✅ Twitter: https://twitter.com/optimismFND
Disclaimer: This post is not investment advice. You will be 100% responsible for your investment decisions.
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