What is Optimism (OP)?
Optimism is a layer 2
scaling solution and aims to improve the scalability of Ethereum. The blockchain of Ethereum can no longer handle the large number of transactions, which makes the execution of a transaction long and costly. Optimism works as an additional protocol on top of Ethereum's blockchain. It is therefore a second layer which runs on top of the layer 1 blockchain (Ethereum).
As the name suggests, Optimism is an optimistic rollup. This means that transactions executed over Optimism are approved immediately. This happens without a transaction being checked beforehand. In this way, users can have transactions processed at lightning speed.
After a transaction is approved, validators are given a predetermined time in which to flag fraudulent transactions. To do this, they have to use a stake. If it turns out that a transaction has been wrongly flagged as fraudulent, the validator loses part of the stake. Does the validator prove to be right? Then he or she receives a reward.
Marking fraudulent transactions can be done within a predetermined time. Once this time has passed, the transactions will be permanently stored on the blockchain, and it will no longer be possible to modify them.
This seems like an unsafe way of processing transactions, but in practice it works very well. Transactions can be processed extremely quickly, while fraudulent transactions are always identified in time by validators.
Approved transactions are then 'rolled up', after which a cryptographic result remains. This outcome is much smaller than the number of rolled up transactions, so less space is needed to store the transactions on Ethereum.
What can you use Optimism (OP) for?
Optimism can be used by both developers and end users. When you use an application on the Ethereum blockchain
, or want to perform a transaction over Ethereum, you can use Optimism. This ensures that you can perform transactions a lot faster, and pay lower costs.
It can sometimes take hundreds of dollars and tens of minutes before you have completed a transaction on Ethereum. A large group of people therefore choose to use a different blockchain. dApp
developers therefore benefit greatly from scaling solutions like Optimism. Indeed, their dApps and tokens are used more often when people can make use of them in a cheap and fast way.
How can you use Optimism?
Optimism can be used in the same way as Ethereum. So as an end user, not much changes. The address you use on Optimism is the same address you use on Ethereum (starts with 0x). Also, Optimism's block explorer is the same as Ethereum's (Etherscan). This is because Optimism runs on Ethereum, and therefore does not have a separate chain or network.
Several dApps are supported by Optimism. This means that you can use such dApps directly on Optimism, without having to modify anything yourself. Think for example of Metamask. This wallet already supports tokens and transactions performed through Optimism.
Many DeFi applications
give you the ability to use Optimism. For example, on the platform of a DEX like SushiSwap or Uniswap, you can specify which network you want to perform a transaction over. By executing a transaction over Optimism, you pay lower fees and have to wait less time for processing. All tokens running on Ethereum can be sent over Optimism. To perform a transaction, you pay ETH tokens.
In many cases it is also possible to send tokens over Optimism from a central exchange. You then have the choice to send the tokens over Optimism.
Other layer 2 scaling solutions
Optimism is not the only layer 2 scaling solution for Ethereum. In recent years, several protocols have been developed to improve the scalability of the world's most widely used blockchain for dApps. Other projects doing this include Polygon (MATIC), Immutable X, Metis Chain, Arbitrum, Loopring (LRC) and xDai Chain.
The question is whether you should actually see these types of protocols as a competition. Each protocol works in its own way, which also appeals to a specific audience. For example, developers can develop dApps on Polygon's chain. Metis Chain mainly focuses on improving scalability for DAOs
(Decentralized Autonomous Organizations).
Ethereum is fully expected to complete its upgrade to Ethereum 2.0 in 2022. It is expected that the blockchain will then be able to handle a larger number of transactions. It is not yet certain whether this will be the case in practice. Partly for this reason, scaling solutions like Optimism will always be needed.
The OP Token
On May 31, 2022, Optimism launched its OP token through an airdrop. There is a total maximum inventory of 4.29 billion tokens, of which 5% (214 million) were released for free during the airdrop. The OP tokens are distributed in the following way:
- 20% for funding public projects;
- 25% for the ecosystem, governance, partner and seeds;
- 19% is released to community members through various airdrops;
- 35% for investors and contributors.
The OP token has an important governance function. This means that token owners can have a say in what the future of Optimism should look like. They can submit proposals to the community, as well as vote on proposals submitted by other OP token owners.
Where to buy Optimism (OP) crypto?
You can also buy Optimism's OP token as an investment. This is because the value of the token can increase (as well as decrease). If you want to buy Optimism (OP), you can do so at Coinmerce. Here you can buy OP tokens from Optimism using iDEAL, Giropay, MyBank, SEPA Bancontact and credit card. For the use of these payment methods you pay no additional deposit fees.
In which crypto wallet should you store Optimism?
After purchasing, you will find the purchased OP tokens directly in your Coinmerce wallet. Here you can keep them safe, as Coinmerce keeps most of its cryptocurrencies in cold storage. It is also possible to send OP to an external wallet. The cost for this is determined by the network.