6 mins readOptimism is a type of layer 2 blockchain that helps Ethereum scale. The EVM-equivalent architecture of Optimism is meant to allow Ethereum apps to make the most out of the faster and cheaper transactions of the chain without technical hurdles. OP or Optimism Token serves as a governance tool and there is no need to pay for gas fees or use Optimism.
Credit: optimism.io
Optimism Overview
As an L2 or Layer 2 blockchain, Optimism helps the Layer 1 or base layer Ethereum to scale through faster and cheaper transactions and inherit Ethereum’s security at the same time. Optimism was meant to be simple to launch projects compatible with EVM.
Credit: 10x.pub - Optimism Architecture
Optimism is also an Optimistic Rollup allowing the network to have faster processing of transactions. They piggyback off secure of the Ethereum network as the base layer. This is similar to house construction in gated and safe communities. You no longer need to get guard dogs or install security cameras since the area itself is already very safe.
Layer 2 blockchains serve as scaling solutions for L1 or Layer 1s. Optimism in this case is Ethereum’s scaling solution. Layer 1 blockchains are the base level or main blockchains. Layer 2 or L2 chains allow the processing of transactions from the Layer 1 chains on a different blockchain.
This way, the original chain will only require keeping a summary of all completed actions. It results in a significant reduction of the blockchain’s demands that help lower its gas fees and improve scalability.
Optimism is run by the nonprofit organization Optimism Foundation. The Optimism Collective is the two-tier governance structure of Optimism that includes the Citizen’s House and the Token House. Owners of OP can take part in the Token House.
How Optimism Works
As an EVM-equivalent blockchain, Optimism erases the need for translations between the rest of the EVM blockchains. Anything works on Optimism as long as it also works on Ethereum.
After the submission of the transaction data to Optimism, it will then be rolled up in batches to the Ethereum mainnet. Being an optimistic rollup, Optimism’s optimistic descriptor is due to the way blockchain validates the transactions.
Optimism is depending on the consensus protocol of its L1 rather than implementing a consensus mechanism of its own, which is the Proof-of-Stake mechanism in this case. It also takes advantage of the proven and tested security of Ethereum. Optimism can also be cheaper and faster compared to the base chain.
Aside from these, a single computer known as the sequencer also bundles the groups of transactions together. It dramatically lowers the cost of transactions which is often around 1% to 10% of the Ethereum mainnet cost. Meanwhile, a challenge mechanism guarantees an honest sequencer.
All transactions of Optimism are posted to Ethereum, an L1 blockchain. It inherits Ethereum’s strong security guarantees along the way. There is an allotted time window for others to dispute the validity of the transaction after the validators added their assertion to the L1 blockchain. This is not done on the L2 but on the base chain instead.
How to deposit?
Credit: 10x.pub - Optimism Architecture
How to withdraw?
Credit: 10x.pub - Optimism Architecture
Main Uses of Optimism
Optimism is a type of Ethereum-scaling platform that specifically focuses on smart contract applications and DApps. Aside from the blockchain uses, this is also a sustainable ecosystem funding experiment.
Optimism is part of the philosophy of Ethereum scaling which believes that scale comes from developers that build on Layer 2s wherein the base chain provides the security.
- Optimism DeFi
DeFi or Decentralized Finance is a term used for describing the financial services operating on blockchain technology. Some of the common services are borrowing, earning interest, trading, and lending. Fast, permissionless, and trustless transactions are all possible thanks to DeFi.
- Optimism DApps
DApps or decentralized apps are blockchain-integrated websites where you’re required to approve and connect every transaction with your wallet signature.
- Optimism NFTs
NFTs or Non-Fungible Tokens are unique digital items whose ownerships are managed by blockchains. Ownership records for physical assets, crypto domain names, virtual reality items, collectibles, and digital art are all good examples of NFTs.
Optimism NFTs
The Optimism NFTs are NFTs traded or minted onto the Optimism blockchain. The Ethereum compatibility and fast speed of Optimism make it a favorite blockchain for many NFT projects.
NFTs can include digital artworks such as memberships, in-game assets, digital works of art such as PFPs, or other types of digital goods.
The NFTs on the Optimism blockchain have similar technical standards as those on the Ethereum blockchain. It means that you can easily deploy and use Ethereum apps in the ecosystem of Optimism NFTs.
Optimism is also the first Layer 2 chain that was able to reach 10 million NFTs that were minted in its ecosystem. One of the most interesting things about the Optimism blockchain projects right now is that only a small number of these are PFP projects.
NFT Marketplaces on Optimism
Optimism saw the emergence of a wide range of NFT marketplaces in a matter of months. Some of them have already gone through ups and downs. The Ethereum giant OpenSea is the only one that didn’t show signs of financial hurdles. It is partly because of the volatile user activity and high costs of infrastructure for the past several months.
FAQ
What is Bedrock?
Optimism made a tentative plan of releasing Optimism Bedrock in the first quarter of 2023. This roll-up upgrade promises to improve the speed and safety of Optimism.
How are gas fees paid on Optimism?
Users use Optimism ETH to pay for gas fees or also called transaction fees on Optimism. It is not mandated to pay for gas fees even if Optimism has its token.
What sets Optimism apart from the rest of the L2s out there?
The one thing that sets Optimism apart from the rest lies in the way it deals with disputes. A disputed transaction on a non-optimistic roll-up is resolved first on the L2 blockchain before it is sent for final resolution to the L1 blockchain. But with Optimism, all disputes are completely resolved and addressed on the L1 blockchain.
