With Optimism or what is called Optimistic Ethereum, you are using a layer 2 chain that is running on top of the Ethereum mainnet (layer 1). Optimism offers a platform for the execution of transactions, but the data about transactions are posted to the mainnet, which validates them. There is comfort and safety that you get from driving on a highway while also driving on a less crowded side street.
Even though Ethereum has been heavily used for many years, you cannot ignore the fact that it has high transaction fees and slow confirmation times. As a result, it is prevented from reaching its full vision of being a network for the financial sector. A number of projects have emerged in the recent past that provide scaling solutions, with rollup-based solutions becoming the most popular of these.
This is one of them; Optimistic Ethereum, or Optimism as it is more commonly referred to. It is a way to reduce the gas fees and speed up transaction processing by using a rollup scaling solution.
What is an Ethereum Layer 2?
There are a variety of limitations caused by the constant increase in the number of users of the Ethereum network due to the continuously growing number of users. It is at this stage that Ethereum L2 solutions need to prove their worth.
It is through the use of Layer 2 solutions that we are able to increase transaction speed, and also reduce gas costs. Some examples of Ethereum solution layers are Immutable X, Arbitrum, Polygon, and Optimism, to name a few.
There is a need to enhance the Ethereum network right now by implementing Layer-2-based solutions. Sharding is indeed being considered as an option by Ethereum for the same reasons. It would be necessary to split the Ethereum network into multiple networks collectively known as “shards.” The realistic implementation of this is, however, quite a ways off.
What is Optimism?
It is possible to support all dApps implemented on Ethereum using Optimism. This is achieved by performing the computation off-chain, thereby increasing speed and reducing the cost of the computation. In any case, the Ethereum blockchain is still used for recording information about transactions.
Optimism has been able to record a significant increase in transaction speeds for exchanges that use it. It has also been noted that transaction fees have decreased significantly over 100 times over. As a result of these benefits, Ethereum’s properties have not been compromised in any way. This makes it an extremely secure and decentralized solution. As a result, it gives you a good sense that you are attempting to create scalability for your network.
How does Optimism work?
There is a technology known as rollups used by Optimism (Source). It is called a rollup because it combines or bundles the data about hundreds of transactions, including mintings of non-fungible tokens (NFTs), swapping of tokens, and any other transactions. On the Ethereum mainnet (layer 1), all these transactions are merged into a single transaction. The blockchain transaction fee, or gas fee, required in order to pay comes down to just one transaction when so many transactions are rolled up into one.
Optimistic rollups are true because transactions are presumed to be valid until they are proven to be incorrect or to put it another way until they are proven to be incorrect. If a potentially invalid transaction is presented during a certain period of time, it can be challenged with a “fraud-proof” and the computations of the transaction can be compared to available state records. A portion of the gas that was used to compute the fraud-proof is reimbursed by Optimism.
How to Send Funds to Optimism?
Depositing assets to Optimism is easy and needs wallets like MetaMask.
With Optimism, you can perform nearly anything you like as long as you have Ether (ETH) on the chain. If you wish to convert this ETH into Optimism tokens and ERC-20 tokens, there are two ways:
- Using a bridge, you are able to deposit assets that you already own.
- With Optimism, you can use one of the fiat onramps or centralized exchanges that are compatible with Optimism to buy assets and have them deposited directly into your Optimism account.
Deposits can be made via the following gateways:
- To access the gateway, go to the website and agree to the terms.
- When prompted, click Connect wallet, choose your wallet type, and approve the connection within your wallet itself if requested.
- You should indicate which network, fiat on-ramp, or centralized exchange you wish to deposit into.
- The Optimism gateway will suggest a list of options that support the source you enter if it is not directly supported by the gateway. Click on the option you want to use.
- The gateway will enable you to exchange tokens with the network you choose (in this case ETH) and enter an exchange amount (here 0.0002) if the network is supported by the gateway.
- Under the routing section, select the bridge type if you are transferring more than 0.5 of an ETH amount. The trusted bridge consists of Warp speed, which does not consume a whole lot of gas. The warp speed bridge cannot be used for any other type of transaction.
- You can go to deposits and then confirm by clicking deposits again.
- Once the transaction has been confirmed in the wallet, and ETH has been deposited to Optimism, confirm the transaction in the wallet.
- Adding the Optimism network to your wallet is as simple as going to the following link and clicking connect. Once the transaction is approved, you will be able to use the network.
- The asset has now been deposited and you can see its details.
What Benefits does Optimism bring to Ethereum?
Optimism has a lot of benefits, like equivalence with the EVMs, data security, speed, and cost savings. There are a few chains out there that are as closely EVM compatible as Optimistic, but it goes a step beyond that and aspires to be EVM equivalent. Optimistic Virtual Machine (OVM) was created as an EVM compatible Virtual Machine to assist Ethereum developers in supporting any Ethereum application on any Ethereum network.
As opposed to sidechains such as Ronin, which have their own internal security because they operate independently, rollups such as Optimism leverage the Ethereum mainnet to provide their security. The Optimism blockchain is used to process transactions, but the data associated with the transactions are stored and written to Ethereum.
Optimism (OP) Token
A new cryptocurrency called OP was launched on May 31, 2022, by Optimism. It was announced during the airdrop that 231,000 addresses were entitled to claim 214 million OP tokens for free. In total, those 4.29 billion units are equivalent to 5% of the total supply, which means that 95% of the total supply is still on the way.
Token holders have the opportunity to participate in OP’s governance system, which is comprised of a two-tier governance system comprised of a Token House and a Citizens’ House. The Citizens’ House will be opened to the public later in 2022.
The Token House, which is already in existence, has been given the responsibility of governing the technical decisions concerning Optimism, such as software updates. Citizens’ House has the responsibility of making general funding decisions for public goods.
How Add Optimism to Metamask?
You need a wallet in order to interact with the blockchain on Optimism in order to manage assets on the network.
Now we will see how to configure Optimism in MetaMask. For this purpose, go to this link and click connect.
- Then click on Approve to complete the process.
- Click Switch Network to complete the process.
- Once you click Switch Network, you will be connected.
Due to the scalability problem faced by Ethereum, a number of Ethereum alternatives have emerged, which have been dubbed “Ethereum killers“. Avalanche or Fantom, the so-called Ethereum killers, are independent blockchains or layers in the same way Ethereum is. At the same time, Ethereum founder Vitalik Buterin was working hard on layer 2 chains. Layer 2 chains provide an alternative way of scaling Ethereum.
A layer 2 scaling solution is Optimism. Optimistic rollups, which will enable you to package massive amounts of transaction data into digestible batches, will allow you to use it. In addition to being cheaper to use than Ethereum, Optimistic is quickly becoming one of the most popular layer 2 protocols.
The eponymous token, which governs Optimism, can be called OP, for short. In the final weeks of May 2022, part of the OP supply was airdropped to early users of Optimism in a somewhat turbulent launch.