Optimism (OP) operates as a layer-2 Ethereum scaling option. The protocol combines a flexible optimism ecosystem with rollup technology to improve scalability for the world’s largest DeFi network. The protocol seeks to help alleviate a variety of issues currently facing Ethereum users. As such, it’s grown to be a popular project.
Optimism currently boasts some impressive stats. The network has managed to save users +$1B in gas fees. Additionally, the network now holds +$800M in on-chain value. Here are some of the reasons this advanced off-chain solution continues to see growing adoption.
What Problems Does Optimism Attempt to Fix?
Optimism provides relief to a variety of issues that are facing the market today. For one, it provides more transparency than centralized financial options. The protocol is an open-source project that leverages the efficiency of 2cd layer solutions and the security of Ethereum.
Ethereum Costs
The main purpose of Optimism is to provide Ethereum developers and users with a more cost-effective solution. Currently, Ethereum gas prices are through the roof. The network has high gas prices due to its congestion. The more congestion and the higher Ethereum fees go. As such, the DeFi movement has driven the network too expensive gas fees.
Optimism solves this solution in a creative way. It leverages rollup technology to reduce costs and improve transaction fees. It’s a fraction of the cost of sending value on the Ethereum mainnet. These reduced costs enable developers to create more immersive applications.
Censorship
Centralization often leads to other problems such as censorship. The centralized market has begun to expand its censorship campaigns. Nowadays, it’s harder than ever to send funding internationally. Optimism introduces a permissionless infrastructure that supports global value transfers at low costs.
Latency
Latency is another issue that the developers sought to address. Optimism improves transaction throughput for Ethereum users in a major way. The protocol supports near-instant transactions and scalable smart contracts as part of this strategy.
Benefits of Optimism
There are many benefits that Optimism users enjoy. The network expands Ethereum’s capabilities and improves its performance. The protocol leverages the strong security guarantees of Ethereum without the developer limitations.
Transparency
Another benefit of Optimism is that it’s completely trackable on the Ethereum mainnet. Users can witness and process the transactions on the main network in a trustless manner.
Developer Support
The team behind Optimism focused on making the protocol as developer-friendly as possible. The protocol solves many developer issues and makes it simple for Ethereum users to integrate the system. Notably, the Optimism virtual machine is identical to Ethereum. It only takes a few lines of code for developers to leverage the speed and scalability of Optimism.
Community Support
The Optimism team has already done a lot of good in the world. The project has proven to be more than just a way for people to profit. The network has donated +$1M to worthy causes around the globe. This philanthropic approach makes Optimism stand out against the drum of new DeFi protocols entering the market weekly.
Sustainability
Optimism was designed to be sustainable. The protocol leverages the latest DeFi technologies to reduce its carbon footprint. In comparison, Ethereum uses a Proof-of-Work consensus mechanism that uses a massive amount of electricity due. The electricity use comes from the use of miners.
Simplicity
Optimism was made to be simplistic from use to its coding. By using the least amount of coding possible, it’s possible to make Optimism more secure. The network has undergone multiple third-party audits. Additionally, it has been vetted by the Ethereum community.
How Does Optimism Work?
Optimism is an Ethereum-based decentralized infrastructure platform. The protocol shares many features with Ethereum directly. For example, the protocol has the same Ethereum Virtual Machine, apps, and tooling. Notably, the process of executing a transaction on Optimism is the same as on Ethereum, which makes it the ideal second layer protocol to serve the community.
Optimistic Rollups
Optimism earned its name for the use of Optimistic rollups. This technology makes it possible for multiple transactions to be rolled up into one single transaction. These blocks of transactions are then processed on another blockchain, in this case, Ethereum. Finally, the rolled-up blocks are stored on an Ethereum smart contract called the Canonical Transaction Chain.
Optimism Apps
Optimism has a vibrant Dapp community. The protocol continues to attract more developers, as it provides the perfect combination of features to help expand your Ethereum-based Dapps to the public. You can scroll through the Optimism Apps directly on the protocol’s interface. Best of all, developers can utilize other Dapps to save on creation time. It also enables developers to create multi-layered protocols to improve ROIs.
Token
The OP token is the main utility token for the network. You can use this token to cover gas prices, pay for smart contract executions, and send value. Optimism is a flexible digital asset that developers can integrate into their creations to improve functionality.
Governance
The Optimism Collective is the system in place to control the future development of the protocol. Notably, this multi-tiered governance system seeks to empower users. The Token House is the first tier of this network. It’s responsible for any technical changes. In the coming months, the developers seek to introduce the Citizens House to the governance system to further incentivize users.
Final Thought
Optimism is leading the charge toward decongesting the Ethereum ecosystem. Ethereum is the largest and most successful Dapp and DeFi network in the world. However, without protocols like Optimism, the system is limited in its capabilities. Optimism is perfectly positioned to service this community and improve the user experience.
