What is Optimism (OP)? All the most important about the crypto project

Introduction

Optimism (OP) is a new blockchain project that seeks to revolutionize the way people interact with decentralized applications and protocols. By utilizing Layer 2 scaling solutions, Optimism offers users a faster, more secure, and more cost-effective way to interact with the blockchain. The project also provides a platform for developers to create and deploy decentralized applications quickly and easily. With the help of the Optimism team, developers will have access to the latest features and innovations in blockchain technology, making it faster and easier to develop and deploy decentralized applications. Additionally, the team is dedicated to creating a secure, reliable, and user-friendly environment for users to interact with their applications and protocols.




What is optimism?


EthereumAltcoins

What is optimism?


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Main

  • Optimism is a second layer (Layer2, L2) solution that is designed to increase the speed and scalability of the Ethereum network.
  • The Optimism blockchain uses the Optimistic Rollups technology, which reduces transaction fees by a factor of ten compared to the first level (L1) of the Ethereum network and at the same time makes it easy to deploy any smart contracts and decentralized applications written in the Solidity language on the second level network.
  • The performance of the Optimism L2 network ranges from 200 to 2000 transactions per second.
  • According to DefiLlama, Optimism is one of the leaders among L2 networks in terms of the number of protocols launched (over 60) and the amount of liquidity blocked (over $1 billion as of August 2022).

Who created and funded Optimism?

The Optimism protocol was developed by Optimism PBC (later renamed OP Labs PBC), founded in 2019 in New York. The startup was opened by Jinglan Wang, Kevin Ho and Carl Floersch, who were previously developers of Ethereum.

During its operation, the project attracted investments in the amount of $178.5 million in three investment rounds.

To manage the funds raised and stimulate the development of the ecosystem, the non-profit organization Optimism Foundation was founded. It was led by the co-founders of Optimism, as well as Eva Bailin (Director of the Graph Foundation), Abby Titcomb (Head of the Radicle Community) and Brian Avello of the Maker Foundation.

The fund is scheduled to further share its mandate with the decentralized governance organization Optimism Collective. The OP Labs PBC team launched the Optimism protocol testnet in October 2019, the mainnet alpha in January 2021, and the final EVM-enabled mainnet release is in December 2021.

How is the Optimism tokenomics structured?

L2 network Optimism has a native governance token OP, which was launched on May 31, 2022.

The total supply of OP is 4.3 billion tokens, which will be distributed as follows:

  • 20% for members of the Optimism Collective;
  • 25% reserved for ecosystem funds;
  • 19% will be distributed to users in the form of airdrops;
  • 17% are for early investors;
  • 19% – to the team and developers.

The first airdrop of the token turned out to be one of the largest in the history of the crypto industry: from May 31, 2022 more than 248 thousand users Optimism Ecosystems received 251M OP, representing 5% of the total token supply. It is planned that another 14% of the emission will be distributed among users in the form of several retrodrops.

According to the Optimism documentation, the OP token has the following features that will be added gradually:

  • funding for the development of the Optimism ecosystem;
  • participation in voting for protocol updates and distribution of funds from funds;
  • participation in project management in the Optimism Collective.

How does Optimism work?

To increase performance and minimize transaction costs, the Optimism protocol uses Optimistic Rollups technology. The essence of the technology is that the processing of transactions and the execution of smart contracts takes place in the second-level network, while the main Ethereum network is entrusted with the task of generating blocks and ensuring security.

What is Optimism (OP)?

The Optimism network has its own Optimistic Virtual Machine (OVM), which allows you to run smart contracts and decentralized applications written for Ethereum without changes in the L2 network.

To increase the speed of transaction processing, OVM works on the principle of “optimistic execution”, without checking each transaction for authenticity. That is, unlike the main Ethereum network, in the Optimism L2 network, any transaction is considered genuine until proven otherwise. This allows for performance of 200 to 2000 transactions per second compared to 10 transactions per second on the Ethereum network.

For security purposes (for example, to avoid double spending), OVM allows network participants to challenge the authenticity of transactions.

Special computing nodes called sequencers combine hundreds of transactions made on the L2 network into compact “rollup packets” that are included in blocks on the main Ethereum network.

Another type of nodes – verifiers – within one week can challenge the authenticity of transactional offers sent by sequencers. If the transaction is disputed by the verifier, then the entire package is checked by comparing the root states before and after the transaction.

If the verification shows that the offer is fraudulent, the entire batch of transactions and the corresponding block are rejected, the vigilant verifier is rewarded, and the sequencer is penalized. Thus, verifiers are rewarded for exposing unscrupulous participants, while sequencers are only rewarded for sending correct transaction proposals.

Since each package contains hundreds of transactions, the gas fee is distributed among all users. According to the l2fees.info service, in August 2022, the fee for transferring ETH on the Optimism network fell below $0.04, and for the exchange of tokens – below $0.07, which is up to 30-100 times cheaper than fees on the Ethereum network.

What is included in the Optimism ecosystem?

More than 60 decentralized protocols, inter-network bridges and other blockchain projects are currently working on the basis of Optimism. The network is supported by the most popular Web3 wallets: MetaMask, Trust Wallet, Coinbase Wallet and others. The largest stablecoins are also issued on the Optimism blockchain: USDT, USDC, DAI, FRAX, USDD, etc.

According to DefiLlama, the top 5 apps in terms of blocked liquidity (TVL) powered by Optimism are:

  • Aave landing protocol;
  • derivatives platform Sinthetix;
  • decentralized exchanges Velodrome and Uniswap;
  • gaming platform PoolTogether.

To support the development of the ecosystem, the Optimism Foundation distributes grants to developers and teams that run dApps and Web3 services on the Optimism protocol. In November 2021, the first round of “retroactive financing” was held, during which $1 million was divided among 58 projects.

The Optimism ecosystem pays great attention to the development of NFT projects. Among the interesting NFT collections, experts name Optipunks, Optimistic Bunnies, Optimistic Loggies, Dope Wars, oe40, tofuNFT, Quixotic, Circular Art.

As with other blockchain platforms, there are several major incidents associated with applications on Optimism. In June 2022, a hacker “intercepted” 20 million OP worth about $17 million, which the Optimism Foundation sent to the market maker Wintermute, but then returned the funds to the recipient.

Less than a month later, Optimism’s largest NFT marketplace, Quixotic, was hacked.

How is Optimism developing?

As of August 2022, the Optimism protocol has already saved users over $1 billion due to low transaction costs.

The main efforts of the team are now focused on building a new L2 network management system, in which powers will be distributed between the Optimism Foundation and members of the Optimism Collective.

According to the concept published in April 2022, Optimism Collective is a decentralized autonomous organization for digital democratic governance, created to ensure the rapid and sustainable growth of a decentralized ecosystem.

The Optimism Collective will consist of two governing chambers:

  • The Citizens House – includes owners of non-transferable “soul bound” NFTs tied to a specific address;
  • The Token House – Includes OP token holders and operates like a traditional DAO.

Scheduled for September 2022, The Merge event, which completes Ethereum’s transition to Proof-of-Stake, is expected to have a huge stimulating effect on the Optimism protocol. First of all, this will happen due to the implementation Rollup-Centric Roadmap — an unofficial Ethereum roadmap focused on working closely with L2 solutions to increase scalability.

At the end of July 2022, the Optimism team introduced an Ethereum transaction automation system called Drippie.

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Conclusion

Optimism (OP) is an exciting crypto project that has the potential to revolutionize the way we interact with decentralized finance. With its focus on scalability, security, and user experience, OP is working towards making decentralized finance more accessible and more secure for everyone. With its focus on development and scalability, Optimism has the potential to become a leader in the space and set the standard for the future of decentralized finance.

FAQ

What is Optimism (OP)?

Optimism (OP) is a decentralized finance (DeFi) protocol that leverages Ethereum-based smart contracts to provide a layer of trustless, transparent and secure infrastructure for cross-chain trading and asset management. The protocol allows users to securely trade digital assets across different blockchains, manage their funds, and access a variety of decentralized applications (DApps).

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