Optimism is a fast, cheap, and easy-to-use Ethereum Layer 2 blockchain. The platform gathers and resolves transactions on its blockchain before sending receipts to the Ethereum main net. Since its blockchain is more efficient than Ethereum, consumers experience lower gas fees, and decentralized applications (dApps) benefit from improved scalability.
Optimism employs optimist roll-up technology, which allows huge volumes of transaction data on Ethereum to be "rolled up" into a single batch of data, resulting in a single transaction cost. Transactions are handled faster and cheaper in this manner while maintaining the security of L1 blockchains. It is called "optimistic" because transactions are assumed to be true until they are proven wrong.
The Optimism token came out on May 31, 2021. The Optimism blockchain, on the other hand, has been around for about two years. The Optimism Foundation has also been around for a long time. It originated from one of the earliest Layer 2 technologies, known as Plasma. Plasma was developed by two of the cryptocurrency world's most influential developers: Vitalik Buterin, the visionary and co-founder of Ethereum, and Joseph Poon, the co-founder of the Bitcoin Lightning Network Layer 2 protocol. It took the Optimism Foundation some years to develop the Optimism network. However, shortly after its launch in 2021, it convinced Uniswap, one of the most popular applications on Ethereum, to transfer over. Since then, it has slowly made its network better and attracted more users and applications.
Optimism aids solve Ethereum's scalability problem. Scalability relates to the number of transactions per second (TPS) on a blockchain network.
Ethereum is widely recognized as one of the most secure and decentralized blockchains in existence. To keep everything working efficiently, the network is structured on three properties: decentralization, security, and scalability. However, because of the blockchain trilemma's restrictions, Ethereum can only effectively deploy two of these three qualities.
To keep the network running, the Ethereum governing body selected security and decentralization over scalability.
This is where optimism enters the picture. Optimism provides a scalable solution for the Ethereum network that speeds up transactions on Ethereum without compromising decentralization or security.
Optimism processes transactions in batches via rollups, which reduces gas costs and network congestion. In comparison to the Layer 1 protocol, rollups can help users save up to 100 times the gas charge.
The roll-up technology that Optimism Crypto uses combines hundreds of transactions on Ethereum's Layer 1 into a single transaction. Since there are multiple transactions in a bundle, the gas fee is split between all the users. While the rollup is happening on Optimism's Layer 2, transaction data is sent to Ethereum's Layer 1 to be processed.
Optimistic rollups are "optimistic" in that every transaction on Optimism's Layer 2 is presumed to be genuine, and no computations are performed. If the system detects suspicious activity indicating potential fraud, it utilizes fraud-proofing measures to verify the transaction.
There will be numerous investors purchasing OP in order to bet on the growth of the Optimism network. Besides price speculation, the token will only have one primary use. It serves as the protocol's governance token. However, the governance mechanism differs from that of most blockchains and decentralized applications.
The Optimism Foundation considers that this kind of simple token governance doesn't work because the incentives aren't right and there's too much centralization. Instead, it chose to divide its governance between two equal chambers, the Token House and the Citizens House.
The Token House (composed of OP holders) will vote on project rewards, protocol advancements, and treasury funds. The Citizens House will consist of holders of a unique non-transferable, non-fungible token (NFT). It will primarily vote on retroactive public goods funding.
DATE NEWS/EVENTS IMPACT 11/01/2023 Optimism and Arbitrum flip Ethereum in terms of the total number of transactions +20% Increase 10/11/2022 New tool mirrors Optimism NFTs to Ethereum main net for use in authenticated apps +32% Increase 22/07/2022 Optimism sees a surge in adoption after the Merge upgrade triggers Ethereum's "Rollup-Centric Roadmap" +80% Increase 09/06/2022 Optimism loses 20 million tokens after L1 and L2 confusion exploited -30% Decrease 01/06/2022 Binance and Crypto.com lists Optimism +33% Increase
Optimism took a big step toward decentralization by commencing a DAO called the Optimism Collective in April 2022. The optimism collective is a unique initiative that serves as a stepping stone for developing more unique projects that will help fund public goods and control the protocol. It is supported by a good team, a large community, and a good number of committed investors. It also began airdropping newly produced OP tokens to Optimism users and others who could contribute in the advancement of Optimism's decentralized future.
Optimism