Key information (as of August 25, 2022):
Circulating Provide — 214,748,364 OPTotal Provide — 4,294,967,296Market Cap — $264,520,019Sector — DeFi, Layer 2 options, good contract platformToken Kind — NativeToken Utilization — Awarding grants and governance ATH — $2.21ATH Date — August 4, 2022
Optimism is a layer 2 (L2) scaling resolution constructed on prime of the Ethereum community. On account of elevated curiosity in L2 scaling options, Optimism has risen in prominence prior to now yr.
On account of congestion on the Ethereum community, customers have been in search of methods to bypass the congestion whereas additionally persevering with to make use of the safety and decentralization of the Ethereum community. That is the place L2 scaling options come into play. Whereas there are a number of sorts of L2 options, Optimism makes use of a proprietary expertise referred to as Optimistic Rollups as its methodology to enhance scalability.
Optimism permits builders and customers to make the most of the Ethereum blockchain on an L2, trying to permit customers a low-cost and tremendous fast approach to transact on an L2 scaling resolution.
Optimism Labs was co-founded by CEO Jinglan Wang and chief scientist Benjamin Jones, who additionally serves on the board of the Optimism Basis.
Complete Worth Locked
In accordance with DeFiLlama, Optimism has a complete worth locked (TVL) of $767.93 million as of August 4, 2022. The highest 3 dApps on Optimism as of August 4, 2022, are Aave V3, Synthetix, and Velodrome. There are at the moment 62 dApps on Optimism.
Up to now, Optimism claims to have saved over $1 billion in gasoline charges and donated $1 million to public items and providers. In accordance with DeFiLlama Optimism has a complete worth locked of $767.93 million as of August 4, 2022. The highest 3 dApps on Optimism as of August 4, 2022, are Aave V3, Synthetix, and Velodrome. There are at the moment 62 dApps on Optimism.
Optimism TVL. Supply: DeFiLlama
Layer 2 Chains
In cryptocurrency, there are layer 1 (L1) and layer 2 (L2) blockchains. L1 is the bottom layer and consists of the underlying infrastructure of a blockchain. Examples of L1 blockchains embrace Ethereum, Avalanche, and Bitcoin. As the bottom layer blockchain, dApps, NFTs, and L2 blockchains are constructed on prime of the L1 blockchain. The 2 major objectives of an L2 blockchain are growing the velocity of the underlying blockchain by scaling the community past its capability. Whereas this may be carried out in a wide range of methods, the 2 major options embrace rolling up transactions and conducting some L1 computation on one other layer.
In accordance with DeFiLlama, Optimism is the ninth largest chain by whole worth locked. Within the L2 area, Optimism has a number of opponents, with every chain scaling differently.
Layer 2 blockchains proceed to extend in reputation due to the rise in reputation of good contracts, cryptocurrency, and blockchain expertise. L1 blockchains comparable to Ethereum are experiencing massive will increase in transactions leading to a clogged community and better gasoline charges. An L2 resolution, like Optimism, helps liberate these logjams by providing alternate paths to validating transactions, thus assuaging the community and decreasing charges.
Fuel Charges Defined
On blockchains comparable to Ethereum, customers should pay “gasoline charges” to carry out many actions on the community. Fuel charges on the Ethereum community are used to mint NFTs, work together with DeFi protocols, in addition to ship ETH, ERC-20 tokens, and NFTs from one pockets to a different. In brief, almost each exercise carried out on the Ethereum community requires a gasoline price.
All gasoline charges on the Ethereum blockchain should be paid within the community’s native coin, Ether. Fuel charges on the blockchain are denoted in gwei. One gwei is the same as 0.000000001 ETH. Fuel charges are used on the community to incentivize Ethereum miners to prioritize transactions. Customers then “bid” for his or her transaction to be prioritized, beginning what some name a “bidding warfare.” Which means that throughout instances of excessive quantity on the community, gasoline charges can change into extraordinarily costly. Merely put, fewer transactions are pending, and fewer bidding happens, which in flip lowers charges.
How Optimism Works
On account of the excessive congestion on the Ethereum community, customers have been trying to find a approach to lower gasoline charges and enhance the scalability of the community. Layer 2 chains work to divert among the congestion onto itself, permitting for freer motion on the underlying L1 community. Optimism achieves this by putting all transaction knowledge on the Ethereum Blockchain whereas operating all computations off-chain. Nonetheless, knowledge from the transactions is proposed and validated on the Ethereum blockchain.
Layer 2 blockchains, comparable to Optimism, try to extend the scalability of the underlying Ethereum community by rolling up transactions. Put merely, Layer 2 Optimism gives to customers and builders by bridging property from one layer to a different and creating dApps on prime of Optimism, each customers and builders can transact on Optimism whereas sustaining the info on the Ethereum community.
What’s an Optimistic Rollup?
Optimism permits Ethereum to deal with extra transactions per second and reduces transaction prices by utilizing a proprietary expertise referred to as Optimistic Rollups. In brief, these work to bundle off-chain transactions and submits them in massive batches to the Ethereum community. This in flip reduces charges for customers. Optimism then compresses the info to scale back storage issues on the community earlier than posting it again to the Ethereum blockchain.
In the intervening time, Optimism’s largest competitor is Arbitrum. Each Arbitrum and Optimism use Optimistic rollups to scale the underlying Ethereum community. Whereas Optimism makes use of single-round fraud proofs, Arbitrum makes use of multi-round fraud proofs.
Whereas Optimism has 62 dApps at the moment constructed on it, Arbitrum has 109. Arbitrum has a complete worth locked of $954.1 million. Of all rollup chains, Optimism is the biggest by market capitalization, accounting for 51% of the TVL of all rollup chains. Arbitrum accounts for an additional 45%, that means that Optimism and Arbitrum account for over 96% of the TVL of all rollup chains.
Whereas this distinction might be very technical, the distinction between Arbitrum and Optimism entails how transactions are submitted to eradicate the opportunity of any fraud. Arbitrum additionally doesn’t make the most of the Ethereum Digital Machine, it makes use of the Arbitrum Digital Machine.
Concerning the OP Token
The native cryptocurrency of Optimism is the Optimism Token (OP). OP is at the moment the 102nd largest cryptocurrency by market capitalization.
Just lately, Optimism carried out an airdrop for choose customers who had engaged with the Optimism bridge earlier than the token’s launch. Presently, the OP Token is used primarily for governance. OP tokens can even be given to tasks on Optimism.
These scaling options assist customers rapidly transact with dApps and builders constructing on Optimism. Optimism is equal to the Ethereum Digital Machine, permitting builders to create dApps and instruments that work on the community.
Optimism exists to serve two major features: to extend the transactions Ethereum can deal with and to lower the gasoline charges. The OP token offers customers entry to the Optimism Collective.
Developed by Optimism Labs, Optimism is managed by the Optimism Basis, a non-profit group whose mission is to develop and seed the Optimism Chain. Optimism is ruled by the Optimism Collective which is in control of operating and upgrading the protocol. For the reason that Optimism protocol generates an excellent sum of money and crypto in income, the Optimism Collective helps allocate these funds to a wide selection of tasks, protocols, organizations, and communities which can be constructing in direction of what Optimism calls “the frequent good.”
In accordance with the Optimism structure, governance of the Optimism chain shall be managed by two equal branches often known as the Optimism Collective, with possession of the OP token permitting customers to participate in governance points on the chain.
The 2 branches are the Token Home and the Residents’ Home. The Token Home is made up of members of the group who assist allocate mission incentives, protocol upgrades, and treasury funds The Citizen’s Home offers with retroactive public items funding, and may solely be joined via non-transferable citizenship that’s awarded via a course of that entails each homes. In flip, each homes take care of community parameters and granting citizenships. This requires customers to carry OP as grounds for participation.
The Token Home and Residents’ Home. Supply: Optimism
The Launch of the Optimism Token
On Could 31, 2022, the OP token was launched because the governance and native cryptocurrency of the Optimism Chain. For the preliminary airdrop, over 230,000 addresses certified to assert over 210 million OP tokens.
Following the airdrop, the OP token noticed a large dip in its worth Since then, the worth remained considerably steady across the $0.50 worth, earlier than surging to a brand new all-time excessive of over $2.15 in early August.
The place to be taught extra about Optimism
There are various sources out there to these trying to be taught extra about Optimism, the OP Token, and utilizing the Optimism chain. Try Optimism’s official web site to be taught extra in regards to the OP ecosystem, governance, block explorer, and rather more. One other place to be taught extra about Optimism is DeFiLlama. Monitor the highest dApps on Optimism, monitor the overall worth locked on Optimism, and rather more on DeFiLlama. You may also monitor the value of OP on CEX.IO.
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