What is Optimism (OP)? Layer 2 solution aiming to become a “super chain”
Optimism is a Layer 2 solution designed to improve the performance and scalability of the Ethereum network. In addition, Optimism has the ambition to build a hyperlink ecosystem, with projects building Layer 2 based on an SDK toolkit called OP Stack. Let’s learn about Optimism through the following article!
What is Optimism?
Optimism is a Layer-2 solution designed to improve the performance and scalability of the Ethereum network. Optimism uses optimistic rollup technology to accelerate transaction processing at low cost and provide a better user experience while still inheriting security from Ethereum.
In order to speed up transactions, optimistic rollups do not calculate transactions, but use a fraud proof mechanism to ensure the validity of transactions. If a transaction is found to be fraudulent, Optimistic Rollup will perform anti-fraud checks and execute transaction verification algorithms using available data. This means that users have to wait longer for transaction verification than with ZK-Rollups because transactions are being “challenged” for verification.
Main components of Optimism
Optimism has three main components as follows:
Ethereum Mainnet: Main Platform - Layer 1 of Optimism.
Optimism Rollups: are the core of the Optimism extension.
Optimism Virtual Machine (OVM): This is an Ethereum-compatible virtual machine that helps projects run on Layer 1 similar to Ethereum. This is the environment in which Ethereum smart contracts run, so the OVM can also be considered an EVM with better scalability to support processing a large number of smart contracts in a specific time.
In addition, Optimism is ambitiously committed to building a Layer 2 ecosystem based on the new SDK toolkit OP Stack.
OP stack
OP Stack is an SDK toolkit that enables developers to easily build Layer 2 platforms on top of Ethereum. Optimism said that OP Stack is a highly extensible and modular source code, and it is not just a "rollup or optimistic solution". This set of solutions shared by Optimism will form the basis of the Modular Blockchain development roadmap.
In addition, a distinctive feature of OP Stack is atomic cross-chain interaction, allowing different chains to be easily compatible with the toolkit, thus supporting cross-chain operations. In addition, after the Bedrock update, the OP Stack has been greatly simplified, making the process of building Layer 2 simple, economical and optimal for developers.
Superchain
After the launch of OP Stack, many important players have used this toolkit from Optimism to build Layer 2 blockchains, such as Base, opBNB, Zora, Celo, and DeBank. Layer 2 built on OP Stack will be called Op-chains, and the aggregation of multiple Op-chains will form a super chain. Additionally, a16z built Magi - a Rollup client based on the OP Stack that is responsible for off-chain transaction processing before sending the results to Ethereum.
Superchain is Optimism’s long-term vision to create a decentralized, safe and reliable scaling platform to support the development of DApps on Ethereum. In addition, Optimism was renamed OP Mainnet in June 2023 and serves as a base layer to provide a solid infrastructure for Superchain.
Highlights of Optimism
High transaction processing speed and low transaction fees: Optimism uses optimistic rollup technology and can process up to 2,000 transactions per second. In addition, transaction fees on Optimism are also calculated in ETH, but are 10 times cheaper than Ethereum.
Compatible with EVM: Optimism can support any Ethereum application that uses OVM. This allows DApps built on Ethereum to easily and seamlessly integrate with Optimism.
High security and scalability: Unlike other sidechains like Ronin that work independently and have their own privacy capabilities, Optimistic Rollup like Optimism derives its security from the Ethereum mainnet. Transactions are conducted on Optimism, but transaction data is recorded and stored on Ethereum. This allows Optimism to inherit the security of Ethereum while providing scalability.
Optimism’s governance model
Optimism launches Optimism Collective - a bicameral governance system consisting of Token House and Citizen House.
Token House: This is the institution established when the first airdrop was distributed. This is where the first active members of the community can vote on protocol upgrades and incentivize project development as part of the governance fund.
Citizen's House: This is an institution that will be managed by NFT "soulbound" with the purpose of distributing and building useful products (public goods) for the community and deciding the amount of funds to be allocated to projects. “Soulbound” NFTs are non-transferable NFTs that act as decentralized identities within Optimism’s governance model.
The Optimism consensus model will create value for the following three target groups:
OP Token Holders: By participating in the governance of Token House, token holders will receive rewards from the revenue of the protocol.
Contributors and project builders: This group will benefit directly through the retroactive public goods funding program. When they contribute ideas to build a better ecosystem, they will be rewarded in the program.
Community users: This group will receive airdrops of OP tokens, as well as incentives from projects funded by Optimism.
What is the use of OP tokens?
OP is the native token of Optimism, which only has management functions for Token House under the following circumstances:
Vote for protocol updates.
Assign incentives to projects for voting as part of the governance fund.
Sponsor a project on Optimism.
Participate in project management with OP citizens.
Where can investors trade OP tokens?
Currently, investors can trade OP tokens in the following places:
Centralized exchanges (CEX): Binance, OKX, Coinbase, Bybit, etc.
Decentralized exchanges (DEX): Uniswap v3 (Optimism), WOOFi, Velodrome, etc.
In what kind of wallet can investors store OP tokens?
OP is a token that complies with ERC-20 and BEP-20 standards, so investors can store it in wallets such as MetaMask, Trust Wallet, Coin98 Wallet, etc. To facilitate trading, investors can also store it in exchange-listed wallets.
Development roadmap
As of August 2023, Optimism has completed 7 development phases including the Bedrock update. Project phases to be completed include:
Phase 8: Next Generation Fault Proofing
Stage 9: Multiple Proofs
Stage 10: Decentralized Sorter
Phase 11: L1 Governance Failure Proof
development team
The project established the Optimism Foundation to manage the Optimism Collective, conduct testing, and drive the growth of the ecosystem. In addition, the team plans to completely withdraw in the future and hand over all management rights to the community.
Prominent members of the Optimism Foundation development team include:
Jinglan Wang: Co-founder and CEO of Optimism.
Benjamin Jones: Co-founder of Optimism.
Eva Beylin: Optimism Foundation board member.
investor
Optimism has successfully raised $178.5 million through 3 rounds of financing, namely seed round ($3.5 million), Series A ($25 million) and Series B ($150 million). Investment funds participating in these three rounds of financing include: Andreessen Horowitz (a16z), Paradigm and IDEO CoLab Ventures.
Partner
Optimism cooperates with many DeFi projects to jointly develop the ecosystem, such as Uniswap, Velodrome, 1inch, etc. Optimism has also partnered with Worldcoin to launch World ID and World App on this Layer 2 mainnet.
In addition, these projects have built their own Layer 2 using the OP Stack SDK toolkit, including Base, opBNB, Zora, Celo and DeBank.
Summarize
Optimism is a Layer 2 solution designed to improve the performance and scalability of the Ethereum network. Optimism uses optimistic rollups technology to accelerate transaction processing at low cost and provide a better user experience, while still inheriting the security of Ethereum.
In addition, Optimism has the ambition to build a super chain ecosystem, and the project builds Layer 2 based on a new SDK toolkit called OP Stack. Projects that use the OP Stack SDK toolkit to build Layer 2 include Base, opBNB, Zora, Celo and DeBank. Through this article, you must have mastered basic information about the Optimism project to a certain extent to make your own investment decisions.
