The cryptocurrency industry, in general, has become much more popular in recent years. This saw the development and launch of hundreds if not thousands of decentralized applications (dApps) in various fields such as DeFi, gaming, learning, trading, investing, and more.
There are many reasons for this, including but not limited to the massive bull run in 2021, the rise of non-fungible tokens, the popularity of memecoins, and more. This saw hundreds of thousands of users flocking to whatever the next trend is.
However, unlike previous cycles, this time we also saw regular users take advantage of on-chain availabilities and interact with various dApps like Uniswap, OpenSea, etc. And while this had a hugely beneficial effect on the growth and valuation of the industry, it also highlighted some very critical issues.
Blockchains like Ethereum, where most of the dApp activity takes place, struggled in terms of affordability, scalability, and even accessibility. Layer one alternatives like Solana also proved to be insufficiently effective in handling the massive load of user requests.
This brought up a topic that has been widely discussed in the cryptocurrency community for years: scalability. Now that scaling solutions have essentially become a must for the future growth of the industry, projects like Optimism have seen the light of day.
Being one of the most popular Ethereum scaling solutions, Optimism aims to solve some of the underlying problems of the network with a particular focus on scalability.
Quick facts about optimism
- Optimism mainnet launched in December 2021
- Optimism launched its native token (OP) on May 31, 2022.
- A total of 231,000 addresses were eligible to claim 214 million OP tokens.
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What is optimism?
Optimism is an Ethereum scaling solution. In essence, its purpose is to help the mainnet run smoothly by taking some of its transactional load. In technical terms, Optimism is an “optimistic summary” and it’s important to understand what summaries do before delving further.
What is a summary?
Rollups are one of multiple scaling solutions aimed at helping Ethereum achieve higher transaction performance.
The Ethereum Foundation Explain which “perform transaction execution outside of layer 1, and then the data is published to layer 1 where consensus is reached.”
The main benefit of this is that it reduces the load on the main network while ensuring the information transmitted by its native security.
There are two main types of rollups, differentiated mainly by their security models:
- Zero Knowledge (ZK) Rollups – these run the computation off-chain and then send a validity check to the chain.
- Optimistic Rollups – these assume that transactions are valid by default and only run the fraud proof calculation if there is a challenge.
Bullish falls into the second category, and as you probably guessed by now, its parent chain is Ethereum.
How does optimism work?
The big idea that makes Optimism interesting to most is Optimistic Rollup. The following is a brief explanation of the fundamental principles of the concept.
The TLDR of this though is that Optimistic Rollup is another name for a blockchain that is designed to take advantage of the security of another network acting as a parent.
block storage
All blocks in Optimism are stored within a specific smart contract that is based on Ethereum and is called CannonicalTransactionChainCannonicalTransactionChain – CTC to make it easier. They are helped within a list that is within the CTC, and it is only to be attached.
The CTC contains code that ensures that the current list of blocks cannot be altered by newer transactions on Ethereum. This guarantee can be broken if the Ethereum network itself goes through a reorganization (reorg) and the order is changed.
block production
The ‘sequencer’ is the only part that manages the production of blocks in Optimism. Help with the network by delivering the following:
- Instant transaction confirmations and status updates;
- Construction and execution of layer two blocks;
- Send user transactions to layer one.
It does not have a mempool, which means that transactions are accepted (or rejected) immediately. This happens in the order in which they are received. When someone submits a transaction, the sequencer checks if it’s valid (pays a sufficient fee) and applies it to the local state as a pending block. These pending blocks are then pooled together and periodically sent to the Ethereum network for completion.
The main purpose of this batching is to reduce overall transaction fees by spreading certain fixed costs across all transactions within a single batch. Of course, this fee may vary depending on the network load at the time the transactions were sent to the sequencer.
block execution
It is important to understand that Ethereum nodes download blocks from the Ethereum network which is peer-to-peer. Optimism nodes, on the other hand, download blocks directly from the CTC add-only contract.
There are two main components that make up Optimism nodes. These are the Ethereum Data Indexer and the Optimism Client Software.
It is designed to rebuild the optimistic blockchain from blocks that are posted to the CTC contract. It is also called the data transport layer.
This looks very similar to Geth, which means that Optimism, in general, is very close in design to Ethereum. This is also because Optimism shares the same Ethereum Virtual Machine (EVM), as well as the same account and status structure and gas metering mechanism and fee schedule.
failure tests
Using an Optimistic Rollup means that state commits are published on the Ethereum network in a direct way without asking for any proof of the validity of these commits. Failure tests are requested when a state commitment is challenged. If successfully challenged, it will be removed and eventually replaced by another.
This document provides a more detailed and technical explanation of the terms and the general process described above.
How to join assets between layers
With layer two scaling solutions like Optimism, it’s obviously of the utmost importance to be able to swap assets between different layers.
There are several ways to do it. First of all, you can go to the official website and use the bridge provided there. This would only require you to have a Web3 wallet like MetaMask.
From there, you need to select the network from which you want to connect the tokens. This is the supported list:
There are also options to connect from centralized exchanges, but it’s critical to note that this happens via providers that Optimism has simply linked to, which means there’s no backing, and you should proceed with caution and after due diligence. thorough diligence.
From there, the process is particularly easy, as all you need to do is confirm the amount and sign the transaction in your wallet.
To join assets of Optimistically, there are a couple of options. You can use a third-party bridge or use the official bridge instead. The following is an example of the latter, but keep in mind that moving from Optimism to Ethereum takes seven days.
All you need to do is click on the arrow between the value boxes, and this will change the previous transaction. If you haven’t added Optimism to MetaMask, this will handle that for you as well. From there, you just have to confirm the amount and sign the transaction:
Governance: Optimism Model
The native cryptocurrency of the Optimism ecosystem is the OP token.
Optimism is governed by the so-called Optimism Collective. According to the official website, the collective is:
“…a group of businesses, communities, and citizens working together to reward public goods and build a sustainable future for Ethereum.”
That being said, the governance of the Optimism Collective itself will consist of two separate houses: The Token House and Citizens’ House. Let’s break it down.
the house of chips
The launch of the OP token and Token House marked the beginning of the governance of Optimism. OP itself was distributed to hundreds of thousands of addresses, which engaged in community-oriented behavior through the first airdrop (more on that later).
In any case, the members of Token House are in charge of deliberating, presenting and voting on the various proposals. To do so, OP holders can vote directly or choose to delegate their voting power to a third party.
In essence, Token House votes on proposals of the following types:
- protocol u grades
- inflation adjustment
- treasury allocations
- rights protection
- Governance Fund Grants
The House of Citizens
In essence, the House of Citizens is an experimental attempt at a non-plutocratic model of government. It is responsible for the retroactive financing of public goods.
The above brings us to our next point, which is the OP token.
Introducing the OP Token
The OP token was launched via an airdrop that distributed a total of 5% of the total supply.
That being said, qualified users included:
- DAO voters
- Multi-sig signers
- Repeat Optimism Users
- Gitrcoin Donors
If you suspect you are eligible, you can check any associated wallet on the official claims page.
Many wonder if there will be a new airdrop, and the short answer is: yes. The team has made it clear that it plans to allocate a total of 19% of the offer to this end. This is what OP’s general tokenomics looks like:
For a more comprehensive look at the economics behind the Optimism ecosystem, be sure to visit the official website.
Conclusion
Optimism has quickly become one of the most popular Ethereum scaling solutions. Most recently, the Optimism Foundation released a proposal to upgrade the Optimism mainnet to Bedrock, which is a new generation of decentralized digest architecture developed by Optimism Labs. Speaking on the matter, the team said:
“We are confident that the post-Bedrock experience will be a positive change for developers in the Optimism ecosystem and have received consistent enthusiasm for the update from our partners. We are committed to making this upgrade a success and look forward to seeing the results in the months and years to come.”
It is also very interesting to monitor how the different layer twos fare in the coming years as the battle between the bullish summaries and the ZK summaries continues.
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