Optimism (OPT) — fast-growing and "purposeful" Layer-2
What Optimism is and how it works
Optimism is a Layer-2 (Layer-2 or L2) network or sidechain for scaling Ethereum. The Optimism network ranks 6th among blockchain platforms regarding the number of crypto-assets blocked in the protocol (TVL), behind only leading L2 networks Polygon and Arbitrum. According to one popular monitoring service, Optimism's TVL is around $579 million, more than quadrupled in two years.
Optimism is powered by some of the largest and most popular decentralized protocols in the DeFi environment:
- DEX exchange Uniswap;
- Aave credit protocol;
- Synthetix synthetic asset exchange;
- Stargate cross-chain bridge for transferring digital assets between networks.
Ironically, it is Synthetix ($138.16 million), not Uniswap ($38.15 million) or Aave ($67.95 million), that leads this network in terms of TVL.
Ethereum was the first blockchain to introduce smart contracts — autonomous programmes that enable bilateral transactions without intermediaries. However, the Ethereum network was not designed for many users. The influx of users led to long transaction delays and high fees.
The first solution to correct this situation was Polygon, followed by Optimism and Arbitrum. In essence, these blockchains are similar: they process transactions at the "second layer", collect them into packets ("convolutions") and then send them to the "first layer" of the Ethereum network for confirmation. This approach significantly reduces the load on the underlying network without compromising security, but Ethereum validators still have the final say on transaction validation.
Optimism uses Optimistic Rollups, which powers many Layer 2 solutions, including Arbitrum and Mantle. The technology at the core of Optimism provides compatibility with the underlying Ethereum network, making it easier to develop smart contracts and decentralized applications (DApps). While Optimism is similar in architecture to Ethereum's "parent blockchain", we note some differences, chief among them the lack of its own consensus mechanism such as Proof-of-Work.
In June 2023, the project team renamed the blockchain to OP Mainnet after activating the BedRock update. The new name reflects the global goal of the project, namely to create a "supernet". This super blockchain will be an ecosystem of multiple networks. The BedRock update symbolizes the beginning of the "era of Ethereum compatibility", but most importantly, it provides developers with the tools to create layer 2 shells on top of OP Mainnet.
OP token
OP is the key token of the OP Mainnet ecosystem. It is a management token through which holders participate in voting to develop the OP Mainnet ecosystem.
Unlike Polygon, which uses a native MATIC token to pay for gas, on OP Mainnet, users pay fees in wrapped ETH tokens rather than OP — just like Arbitrum currently does. More OP is being used to reward active network members, specifically to offset gas costs.
Despite the bear market, the OP token did not "sag" much in price: after listing, the token traded at around $1.44. In 2023, the rate reached an all-time high of $3.09 during the cryptozyme — all this indicates high interest from investors. After that, the price started to decline and is now at $1.18.
OP tokens can be bought on centralized (CEXes) and decentralized (DEXes) exchanges, such as Uniswap or via DEX aggregator 1inch. You will need wrapped ETH tokens to pay for the gas, so it is optimal to buy them first. After that, you can use the ETH to purchase OP tokens on the DEX exchange.
You can also receive tokens as a reward as part of airdrops by being active online and participating in various quests from the project. This is a perfect earning opportunity for users with a small cryptocurrency portfolio.
OP Mainnet's strengths
Along with other second-tier blockchains, the Optimism network offers all the advantages of such networks and even more. Let's highlight the main advantages of the OP Mainnet blockchain:
- High speed of transactions, which are confirmed in just a few seconds;
- Low cost of gas fees;
- Participation in DAO ecosystem management;
- Transaction cost reimbursements;
- Possible eidrops or free token giveaways for active network participants. Drophunters are actively "hunting" for the rewards of this blockchain.
Outlook
According to research, Arbitrum wins in terms of transaction fees, and OP Mainnet wins in terms of speed of confirmation. In any case, the cost of commissions remains relatively low on both networks, especially compared to Ethereum, at just a few cents.
According to our observations, OP Mainnet looks like a promising blockchain, which may well claim to be one of the leaders among second-tier solutions. Regarding TVL, Optimism is less than $100 million behind Polygon and has a chance to overtake it soon. Only for the last year, the growth rate was about 50%. It will be more difficult to catch up with Arbitrum, whose TVL exceeds $1.6 bn, which is growing rapidly.
