In the ever-evolving world of blockchain technology and cryptocurrencies, Optimism has emerged as a game-changer in the Ethereum ecosystem. By offering faster transaction speeds and reduced costs, Optimism has quickly gained traction among developers and users alike. In this comprehensive guide, we will explore the origins of Optimism, its core technology, and the impact it has had on the Ethereum network.
We’ll discuss the revolutionary OP token and its role in governance, the creative potential of Optimist NFTs, and the reasons why developers are increasingly drawn to Optimism’s capabilities. So, whether you’re a developer, crypto enthusiast, or simply curious about the future of blockchain technology, this ultimate guide to Optimism is the perfect starting point for your journey.
Table of Contents
Background
Optimism emerged on the scene in June 2019, and within a few months, they had already set up their testnet. However, it took until January 2021 for an alpha mainnet to be introduced, and it wasn’t until December 2021 that Optimism saw a worldwide release with comprehensive compatibility for Ethereum and its EVM. The company was established in 2019, led by a team of experts including Chief Scientist Benjamin Jones, CEO Jinlan Wang, and Protocol Product Manager Kevin Ho.
What is Optimism?
Optimism enhances Ethereum transactions by accelerating their speed and reducing their costs through the implementation of advanced data compression methods on a separate blockchain. The core of Optimism’s scaling strategy lies in its use of optimistic rollups, a technique that consolidates multiple transactions into a single transaction. This is then settled on an alternate blockchain, with the transaction receipts sent back to the primary Ethereum blockchain.
Optimistic rollups are a unique type of rollup that ‘optimistically’ assumes the validity of all transactions within the rollup. This approach saves time as individual transactions don’t require direct proof of validity. Validators in the rollup have a week to examine the rollup if they suspect it contains fraudulent data.
Data from a Dune Analytics dashboard reveals that Optimism slashes Ethereum transaction fees, also known as gas fees, by an impressive 129 times. DeFi platforms like Synthetix and Uniswap have embraced this technology, further showcasing its effectiveness.
How Do Rollups Work?
Optimistic rollups work by aggregating multiple off-chain transactions into large batches before submitting them to the Ethereum network. This approach allows for the distribution of fixed costs across numerous transactions, effectively lowering the fees for end-users. Additionally, optimistic rollups utilize compression techniques to minimize the data volume posted on the Ethereum blockchain.
The term “rollups” is used because these techniques bundle or roll up data from hundreds of transactions, such as non-fungible token (NFT) mints and token swaps, into a single transaction on the Ethereum mainnet (layer 1). By consolidating so many transactions into one, the blockchain transaction or “gas” fee required is reduced to just one transaction, evenly distributed among all participants.
“Optimistic” rollups get their name from the assumption that transactions are valid until proven otherwise, or “innocent until proven guilty.” A designated time window allows for the challenging of potentially invalid transactions by presenting a “fraud proof” and executing the transactions’ computations based on available state data. Optimism compensates for the gas necessary to carry out the computation of the fraud proof, ensuring the process remains efficient and transparent.
OP Token
Optimism introduced the OP token on May 31, initially distributing 214 million OP tokens for free (known as an “airdrop”) to 231,000 eligible addresses. This initial distribution represented 5% of the total supply of 4.29 billion tokens, with 95% of the supply remaining to be introduced to the market. The Dune Analytics dashboard provides information on the number of users who claimed the first airdrop.
The initial airdrop led to some dissatisfaction among the Optimism community as a few users claimed their tokens early and proceeded to sell them off.
Holding OP tokens grants individuals the right to participate in The Optimism Collective, a dual-tier governance system consisting of the Token House and the Citizens’ House. The Token House, which is currently operational, oversees technical decisions related to Optimism, including software updates. The Citizens’ House, on the other hand, is responsible for governing public-goods funding decisions.
Optimist NFTs
Optimist NFTs are fully customizable digital avatars designed to represent your personality and establish your web3 identity. With Optimist NFTs, you can create a distinctive avatar that embodies your unique character and interests.
To craft your personalized avatar and embark on your web3 journey, visit the avatar builder. Here, you can tailor your avatar to reflect your individual style and interests before minting it for the world to see.
Currently in its Beta phase, Optimist NFTs are only available for minting by voters in RetroPGF 2. Starting in early 2023, a few hundred active addresses will be invited to mint each month based on their involvement in the Optimism Collective and data logged in the AttestationStation.
If you’re interested in minting Optimist NFTs in the future, follow @OptimismFND on Twitter or explore their documentation to discover products that can help build your reputation on Optimism.
As the Optimism Collective expands to include the entire crypto community, Optimist NFTs will become widely accessible for minting and customization. In the future, new traits can be unlocked depending on your participation within the Optimism ecosystem and the reputation you’ve gained. During the initial stages of the Optimist NFT rollout, make sure to use the same device on which you minted your NFT to guarantee that your traits are accurately returned.
Why Developers Like Optimism
Optimism is highly attractive to developers due to its seamless compatibility with the layer 2 network and existing Ethereum applications. The ability to create apps on the layer 2 network and ensure smooth functionality with Ethereum has led to a growing number of users and dApps being developed, all while benefiting from Ethereum’s security. Consequently, the number of Optimism transactions has surged over tenfold in the past year.
However, Optimism isn’t competing with Ethereum; rather, it complements Ethereum’s scaling strategy, which is centered around a rollup-centric roadmap. Optimistic rollups, such as those implemented by Optimism and Arbitrum (currently the two largest Layer 2 protocols), are designed to boost Ethereum’s throughput. By processing transactions externally, they reduce the computational burden on the Ethereum mainchain, resulting in a significant increase in speed.
Conclusion
As the blockchain and cryptocurrency landscape evolves, Optimism presents itself as a notable development in the Ethereum ecosystem. As we continue to witness new advancements and adoption, it is essential to stay informed and engaged with the technologies that shape our decentralized future. By understanding platforms like Optimism and their role within the broader context, we can make more informed decisions and better anticipate upcoming trends in the blockchain space.
