The popularity of Ethereum as the safest and most efficient blockchain for launching decentralized applications has led to network congestion and an incredible increase in gas fees. Perhaps a few years ago, it was still possible to put up with this. Still, with the significant development of the DeFi market, it becomes quite evident that Ethereum needs to somehow solve the scalability issue to remain at the head. Therefore the developers decided to switch the consensus algorithm and reveal Ethereum 2.0 to the crypto community. However, this is not the only way to combat low scalability. To date, Ethereum has many assistants in the form of Layer 2 scaling solutions. One of these will be discussed in our article. We present to your attention the Optimism project.
What Is Optimism?
Optimism is a comprehensive second-layer scaling solution compatible with an Ethereum Virtual Machine (EVM). Optimism functions on top of the Ethereum blockchain and performs transactions in the external chain (layer 2), outside of the main Ethereum network (layer 1). The data or results of these transactions are placed at layer 1 in a special smart contract (CanonicalTransactionChain). The Optimism project uses Optimistic Rollups technology to speed up transactions and reduce gas costs.
The name “rollups” speaks for itself. The essence of this technology is to combine transactions into packages and then transfer this package to the main Ethereum chain. This reduces the congestion of the main network, increases the number of transactions per second, and reduces fees. Given that Optimism is an add-on to the Ethereum blockchain, it benefits from the security of the latter. It is also crucial that the user experience in this solution is not much different from using the main Ethereum network.
The algorithm of this decision proceeds from the fact that all new transactions in the blockchain are valid if network participants within a week do not challenge them. Optimistic Rollups assumes that all miners are honest by default (hence the name — “optimistic”). That is, instead of checking every transaction, they are all considered correct if the opposite is not proven within a certain period. The time to challenge the transaction (the so-called “challenge window”) is one week. If users or validators detect fraud during this period, they can challenge the addition of transactions into the block.
As a result of using decentralized applications deployed on Optimism, the user gets an economic advantage: low-cost and lightning-fast transactions.
Even though the project has been on the market for several years, the official currency of the project was released quite recently. The airdrop of the OP token took place on June 1, 2022. The first distribution rewarded early users 5% of the initial token supply. Further airdrops have not yet been announced.
Many users called the distribution of OP tokens not so “optimistic”. Most recipients immediately sold their tokens, resulting in the OP price plummeting. One of the community members suggested excluding the addresses of those users who immediately sold tokens from the list of recipients of future airdrops. However, this decision does not suit everyone, as it contradicts the principles of democracy that the cryptocurrency has itself.
OP token holders can vote for the distribution of project incentives, protocol updates, and changes.
The use of Ethereum in the DeFi sector slows down its development — the network cannot cope with the loads yet. Therefore, shortly, it is L2 solutions that are the most likely drivers of the DeFi growth. The rollups solution is one of the most promising today. Many users mistakenly believe that after the transition of Ethereum to PoS, such solutions as Optimism will become irrelevant. Nevertheless, such solutions will be an excellent addition to Ethereum 2.0. The peculiarity of Optimism is that it is closely intertwined with the main network. If we assume that transactions in the main network will become faster and cheaper, they will be even cheaper and quicker in the Optimism network.