Optimism

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Discover Optimism's fundamentals and latest news.

This content was generated by Whalee (BETA), an AI crypto assitant that analyses cryptocurrencies. Informations can be incomplete and/or erroneous. Please always double check and DYOR.

What is Optimism?

Optimism (OP) is a layer-two scaling solution built on top of Ethereum, designed to enhance the Ethereum network by providing faster, more stable, and scalable transactions. It uses Optimistic Rollups, which rely on off-chain computation and trustless recording of transactions, ensuring the security of Ethereum. The OP token is an ERC-20 token that allows holders to participate in the governance of the Optimism protocol and public goods funding.

How is Optimism used?

Optimism (OP) is a governance token on the Optimism network, a Layer 2 platform compatible with the Ethereum network. It allows its holders to participate in the governance of the Optimism protocol and public good investment. The OP token is used in the Token House, which governs technical decisions such as software upgrades, and the Citizens' House, which governs public-goods funding decisions.

How do I store Optimism?

To store Optimism (OP) tokens, you can use a variety of wallets that support the Optimism network. Here are some options:

  1. Guarda Wallet: Guarda offers a multi-currency wallet that supports over 400,000 assets, including Optimism. You can create an online wallet or download a mobile app for iOS and Android. The wallet allows you to buy, send, receive, and store your OP tokens securely.

  2. Trust Wallet: Trust Wallet is another secure option for storing OP tokens. You can download the mobile app and add Optimism to your wallet. The wallet features include buying, selling, swapping, and storing your OP tokens safely.

  3. MetaMask: You can also store OP tokens using MetaMask. To do this, you need to add the Optimism network to your MetaMask wallet. This can be done by visiting the OP token profile on CoinGecko, copying the token's Optimism network contract, and then importing the token into your wallet.

  1. Ledger Wallet: Ledger Wallet also supports the Optimism network, but you need to ensure you have ETH on the Optimism network to pay for transaction fees. You can send ETH from an exchange to your account via the Optimism network or use a bridge like Hop Exchange.

These wallets provide a secure and user-friendly way to manage your Optimism tokens.

How to buy Optimism?

To buy Optimism (OP) tokens, follow these steps:

  1. Choose a Crypto Exchange: Select a reputable exchange that supports the purchase of Optimism (OP). Some popular options include Uphold, Kraken, Binance, KuCoin, and CEX.IO.

  2. Create an Account: Register on the chosen exchange by providing your email address, mobile number, and other required information. Verify your account by uploading a valid photo ID and other requested documents.

  3. Add a Payment Method: Link a payment method such as a credit/debit card, bank account, or existing cryptocurrency holdings to your exchange account.

  1. Buy Optimism: Use your linked payment method to purchase Optimism (OP) tokens. You can do this through the exchange's spot market, where you can place market orders or limit orders to buy OP at a specified price.

  2. Store Your Tokens: Once you have purchased OP, store them securely in a compatible cryptocurrency wallet, ensuring robust security features such as multi-factor authentication.

Remember to research the fees and risks associated with each exchange and payment method before making a purchase.

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History of Optimism

Optimism, formerly known as Plasma Group, is a Layer 2 scaling solution for Ethereum that aims to facilitate faster and cheaper transactions. The project was founded by Kevin Owocki and was initially known as Plasma Group before being rebranded as Optimism.

Optimism launched its OP token on May 31, 2022, with an initial airdrop of 214 million OP tokens to 231,000 eligible addresses. This airdrop accounted for 5% of the total 4.29 billion supply, leaving 95% of the supply yet to be released into the market. The initial airdrop was met with frustration from the Optimism community due to some users claiming tokens early and then selling them. Optimism acknowledged the mistakes and promised a retrospective analysis.

The OP token is an ERC-20 token that allows its holders to participate in the governance of the Optimism network through the Optimism Collective, a two-tier governance system comprising the Token House and the Citizens' House. The Token House governs technical decisions, while the Citizens' House manages public-goods funding decisions.

Optimism uses a technology called Optimistic rollups, which bundle large amounts of transactions into a single transaction on the Ethereum mainnet, reducing gas fees. The system assumes transactions are valid until proven false, allowing for a more efficient and cost-effective process.

The Optimism network is designed to be simple, pragmatic, sustainable, and aligned with the Ethereum vision. It features a minimum number of moving components, uses existing battle-tested Ethereum code, and focuses on long-term sustainability.

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How Optimism works

Optimism is a Layer 2 scaling solution for Ethereum that utilizes a technology called optimistic rollups to provide faster and cheaper transactions. Here's how it works:

Optimistic Rollups

Optimistic rollups are a method of processing transactions off-chain in batches. This means that multiple transactions from Ethereum's Layer 1 are bundled together into a single transaction, which is then executed on Optimism's Layer 2 network, known as OP Mainnet. The transaction data is then posted to Ethereum's Layer 1 for processing. This process significantly reduces transaction fees and alleviates network congestion.

How Rollups Work

The rollup technology assumes that every transaction is initially valid on Optimism's Layer 2. No computations are performed unless a transaction is suspected of being fraudulent. If a transaction is challenged, the system runs fraud-proofing to verify the transaction. This approach is different from zero-knowledge rollups, which provide a proof that all transactions are valid before pushing them onto the main Ethereum blockchain.

Benefits

Optimistic rollups offer several benefits:

  1. Cheaper Transactions: By bundling multiple transactions into one, the transaction fee is distributed among all users involved, making transactions cheaper.
  2. Faster Transactions: Optimism's Layer 2 network processes transactions faster than Ethereum's Layer 1, providing a smoother user experience.
  3. Scalability: Optimism helps address Ethereum's scalability issues by handling more transactions while maintaining the security and decentralization of Ethereum's architecture.
Governance and Token

Optimism has its own native token, OP, which is used for governance of the Optimism Collective. The OP token gives holders participation rights in the collective, which includes the Token House and Citizens' House. The Token House governs technical decisions, while the Citizens' House governs public-goods funding decisions. OP token holders share governance rights with appointed citizens, ensuring a balance between short-term incentives and long-term vision.

Airdrops

Optimism has conducted several airdrops, distributing OP tokens to eligible users. The criteria for eligibility include using Optimism projects, participating in decentralized governance, and donating to public goods platforms. The airdrops are designed to incentivize users to interact with the network and contribute to its growth.

OP Mainnet

The OP Mainnet is the main blockchain network in the Optimism ecosystem. It was built by OP Labs and runs on the OP Stack software. The network allows developers and users to enjoy quick transactions at low fees while maintaining the security of Ethereum's architecture. The OP token is used for governance and is available on various centralized crypto exchanges and through the Optimism bridge.

Superchain Thesis

Optimism also has a "Superchain" thesis, which aims to connect multiple Layer 2 networks through shared code and the ability to interact with each other. This vision includes networks like Coinbase's Layer 2 network Base, which was built using the OP Stack and is part of the Superchain idea.

Overall, Optimism provides a scalable and cost-effective solution for Ethereum users, enabling faster transactions and a smoother experience while maintaining the security and decentralization of the Ethereum network.

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Optimism's strengths

Optimism (OP) has several strengths that contribute to its popularity as a Layer 2 Ethereum scaling solution:

  1. Scalability: Optimism uses optimistic rollups to process transactions in batches, reducing gas fees and network congestion. This allows for faster and cheaper transactions, making Ethereum more accessible to a wider audience.

  2. Security: Optimistic rollups inherit the security properties of Ethereum’s base layer, ensuring the integrity and availability of data without requiring the execution of transaction data on the Ethereum mainnet itself.

  3. Governance: The Optimism Collective, comprising the Token House and the Citizens’ House, provides a community-driven governance model that integrates companies, developers, and users. This model rewards public goods and contributions that benefit the ecosystem, promoting a more democratic and sustainable digital economy.

  1. Modularity and Open-Source Architecture: Optimism’s architecture is designed to be modular and open-source, allowing it to serve as a robust foundation for a new digital economy that is more inclusive and fair.

  2. Retroactive Public Goods Funding: Optimism allocates a portion of transaction fees to fund projects and developments that are deemed beneficial for the collective good of the ecosystem, supporting a more sustainable and community-centric economic model.

  3. EVM-Equivalence: As an EVM-equivalent Layer 2 solution, Optimism is fully compatible with existing applications on the Ethereum mainnet, ensuring easy deployment and integration.

These strengths collectively contribute to Optimism’s ability to enhance the Ethereum ecosystem, making it a popular choice for developers and users alike.

Optimism's risks

Optimism (OP) is a Layer 2 solution for Ethereum that utilizes optimistic rollups to offer users cheaper transactions and a smoother user experience. Despite its benefits, Optimism carries some risks.

Risks of Optimism
  1. Security Risks: Optimism, as a Layer 2 solution, relies on the security of the Ethereum mainnet. Any vulnerabilities in Ethereum could potentially impact Optimism's security as well.

  2. Market Volatility: Optimism's token, OP, is subject to market fluctuations. InvestorsObserver has given Optimism a low Risk/Reward Score, indicating that it is a relatively low-risk investment, but market conditions can still affect its value.

  3. Dependence on Ethereum: Optimism's performance is closely tied to Ethereum's. If Ethereum experiences issues, Optimism may also be affected.

  1. Airdrop Risks: Optimism has conducted airdrops in the past, which can create sell pressure if not managed effectively. This can impact the token's value and user experience.

  2. Interoperability Risks: Optimism's goal of creating an interoperable future through the OP Superchain and OP Stack may come with integration risks and potential compatibility issues.

  3. General Risks of Optimism: The concept of optimism itself can be risky when applied to critical areas like AI safety, where overly optimistic assumptions can lead to catastrophic consequences. This highlights the importance of balanced risk assessment in the development and use of Optimism.

Overall, while Optimism offers several benefits, it is essential to be aware of these potential risks to ensure informed decision-making.

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Did Optimism raise funds?

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Optimism’s team

Here are the key team members behind Optimism (OP):

  • Jinglan Wang: Co-founder and CEO of Optimism, active on Twitter as @jinglejamOP.
  • Kevin Ho: Co-founder of OP Labs, the entity behind Optimism's development and ecosystem, active on Twitter as @kevinjho_.
  • Karl Floersch: Co-founder of Optimism and CEO of OP Labs, mentioned in the context of testing fault proofs on the Optimism blockchain.
  • Prithvi Subburaj: Co-founder and Product Manager.
  • Mark Tyneway: COO.
  • Brian Avello: Co-founder and Systems Engineer.
  • Eva Beylin: Director.
  • Abbey Titcomb: Team member.
  • Joshua Stein: Team member.
  • Nick Balestra-Foster: Team member.
  • Matthew Slipper: Team member.
  • Kathy Zheng: Team member.
  • Kevin Zhijie Chen: Team member.
  • Smit Vachhani: Team member.
  • Tasia Potasinski: Team member.
  • Tess Rinearson: Team member.
  • Mattie Fairchild: Team member.
  • Stephanie V.: Team member.
  • Julien Boedec: Team member.
  • Vivian (Wei) Tao: Team member.
  • Lynnette Nolan: Team member.
  • Haonan Li: Team member.

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