Optimism (OP)
Optimism is a layer 2 blockchain solution designed to enhance the Ethereum network. This scaling solution efficiently processes multiple transactions on its blockchain and consolidates them into batches for posting on Ethereum. This process ensures fast transaction speeds and reduced fees. Optimism allows for seamless communication between smart contracts on Optimism and Ethereum, enabling asset transfers, including ERC-20 tokens, across the two networks.
Overview of Optimism
| Ticker | OP |
| Category | Smart Contract Platform |
| Website | https://app.optimism.io/governance |
| @Optimism | |
| Contract Addresses | |
|---|---|
| optimistic-ethereum | 0x42...42 Copied! |
Optimism functions as a scaling solution for layer 1 networks through a process known as rollup. It gathers transaction data from the main chain, aggregates it into batches, and then settles them. These data batches are transmitted back to Ethereum's mainnet, where they are validated as additional data blocks. By bundling numerous transactions into these batches, Optimism effectively minimizes settlement fees compared to executing each transaction individually on the Ethereum network. Optimism employs Optimistic Rollups, a cryptographic technique that acts as a bridge between layer 1 (L1) and layer 2 (L2) using smart contracts. This technique includes a mechanism called "fraud proof," which ensures transaction integrity and security.
Optimistic rollups
Optimism utilizes a technology called Optimistic rollups. These rollups consolidate data from numerous transactions, like non-fungible token (NFT) mints and token swaps, into a single transaction on Ethereum's mainnet (layer 1). By combining multiple transactions into one, the blockchain transaction cost, known as the "gas" fee, is greatly reduced to a single transaction. This cost is then shared among all transaction participants. The term "Optimistic rollups" is derived from the assumption that transactions are valid unless proven otherwise, adhering to the principle of "innocent until proven guilty." A specific period is allowed during which invalid transactions can be contested by presenting a "fraud proof" and verifying the transaction computations using available state data. Optimism covers the gas expenses for executing the fraud proof computation.
Block storage and production
Optimism uses a smart contract called the CanonicalTransactionChain (CTC) on Ethereum to store its blocks. The CTC maintains an append-only list of blocks, ensuring new blocks are only added to the existing list without alterations. The "sequencer" manages block production on Optimism, facilitating instant transaction confirmations, constructing layer-two blocks, and submitting user transactions to the Ethereum network. Unlike traditional systems, the sequencer accepts or rejects transactions immediately, verifying their validity and incorporating them into the local state as pending blocks. These blocks are then batched and periodically sent to Ethereum for finalization. This batching process aims to reduce transaction fees by distributing fixed costs across all transactions in a batch.
Block execution
Optimism nodes download blocks from the CTC append-only contract, consisting of the Ethereum Data Indexer and the Optimism Client Software. The Ethereum Data Indexer reconstructs the Optimism blockchain by retrieving blocks from the CTC contract. The Optimism Client Software, similar to Geth (a popular Ethereum client), aligns closely with Ethereum's structure. Both Optimism and Ethereum utilize the Ethereum Virtual Machine (EVM), sharing a common account and state structure, and employing the same gas metering and fee schedule.
Fault proofs
In an Optimistic Rollup, state commitments are published to Ethereum without requiring validity proof. However, if a state commitment is challenged, fault proofs are requested. If the challenge is successful, the challenged state commitment is replaced by a valid commitment.
Superchain
The Optimism Superchain is a unified network created using the OP Stack. It integrates Optimism mainnet and other L2 chains, known as OP Chains, into a cohesive network.
OP Stack
The OP Stack offers an architectural framework for developing layer 2 chains. It aims to modularize all aspects of layer 2 into standardized open-source modules for various layer 2 chains. The OP Stack provides an open-source code library with standardized modules, enabling anyone to set up a layer 2 chain easily.
Bedrock hard fork
In June 2023, Optimism completed its Bedrock upgrade, advancing towards becoming a Superchain. The upgrade reduced deposit-confirmation times from 10 minutes to 1 minute and lowered gas fees by 40%. Bedrock improved proof modularity for its OP Stack, supporting both validity and fault proofs. It also transformed Optimism into a multi-client ecosystem, offering at least two client software options for running the network.
OP Token
In May 2023, Optimism launched its OP token through an airdrop to 231,000 eligible addresses, distributing 214 million OP tokens, accounting for 5% of the total 4.29 billion token supply. OP token holders gain participation rights in The Optimism Collective, which has two governance tiers: Token House and Citizens' House. Token House oversees technical decisions, while Citizens' House governs funding for public goods.
Tokenomics
Of the 4.29 billion tokens, 20% was allocated to public goods funding, 17% to investors, 19% to core contributors, and 25% to the ecosystem fund. The remaining 19% was designated for airdrops, with 5% for the initial airdrop and 14% for future ones.
The Optimism Foundation
The Optimism Foundation is a nonprofit organization supporting the growth of the Optimism Collective. Its philosophy emphasizes producing infrastructure that fosters public goods growth and sustainability.
The Optimism Collective
The Optimism Collective consists of companies, communities, and individuals collaborating to promote public goods and ensure a sustainable Ethereum ecosystem. Its governance features two houses: the Token House and the Citizens’ House.
Token House
The Token House comprises OP holders who submit, discuss, and vote on various governance proposals. OP holders can vote directly or delegate their voting power to "delegates" who represent multiple OP holders during voting.
Citizens’ House
The Citizens' House consists of Optimism citizens responsible for allocating rewards to public goods providers through "retroactive public goods funding" (RetroPGF). Citizens are selected via entries in the AttestationStation smart contract, ensuring fair compensation for public goods contributions. RetroPGF funds public goods based on actual value contributed, encouraging providers to continue their valuable efforts.
Funding
Optimism secured $150 million in a Series B funding round, led by Paradigm and Andreessen Horowitz, valuing the company at $1.65 billion.
Worldcoin integration
In July 2023, World ID, an identity protocol from Worldcoin, became available on OP Mainnet. TFH's World App, the first wallet for transactions using Worldcoin and other digital assets, was also migrated to OP Mainnet. Following the Worldcoin announcement, transactions on the Optimism network surpassed Arbitrum's daily transactions.