What Is Optimism (OP)? Overview of The Optimism Ecosystem

Table of Contents

What is Optimism?

Optimism is a Layer 2 scaling solution on Ethereum that reduces gas fees, increasing transaction completion speed. Thereby providing a smoother experience for users while still maintaining the security of the original Ethereum chain. Optimism belongs to the Optimistic Rollup segment, using a fraud proof security mechanism.

Simply put, your transaction will be considered valid and approved if it cannot be proven to be fraudulent.

Website Optimism

The name “Rollup” comes from separating transactions from the main chain. Then package it into a single batch and create proof. Then upload to Layer 1, imagining the transactions being rolled back. More specifically, Optimism is a layer 2 consisting of 3 main components:

Ethereum mainnet: Optimism’s Layer 1 native security platform.
Optimistic Rollup: The core of Optimism’s scalability.
Optimistic Virtual Machine (OVM): Ethereum-compatible virtual machine, helping projects operate as if they were on L1 Ethereum. This is the environment where Ethereum’s smart contracts run. Therefore, OVM can be considered as EVM with much better scalability, helping to process a large number of smart contracts at the same time.

Optimism network structure

Key components of Optimism

OP Stack

OP Stack is a set of SDK tools that help developers easily build a Layer 2 platform on Ethereum. Optimism says that the OP Stack is more than just a “rollup” or a simple optimistic solution. This is a set of source code organized into modules with high extensibility. The solution set that Optimism shares will be the basis of a diverse development journey into a Modular Blockchain.

OP Stack

In addition, a notable feature of OP Stack is the atomic cross-chain interaction, which helps different chains to be easily compatible with the toolkit, thereby supporting block creation activities between each other. Additionally, the OP Stack has been greatly simplified after the Bedrock update, making the process of building a Layer 2 simple, economical, and optimized for developers.

Superchain

After OP Stack launched, many big names in the industry adopted Optimism’s toolkit to build Layer 2 blockchains such as Base, opBNB, Zora, Celo, and DeBank. These Layer 2s are built based on OP Stack called Op-chain. When many Op-chains are aggregated, they form a Superchain. In addition, a16z has also developed Magi, a Rollup Client based on OP Stack. They are responsible for processing off-chain transactions before sending the results to Ethereum.

Superchain is the long-term goal that Optimism is aiming for. Aim to create a decentralized, secure and trustworthy scaling platform. To support the development of decentralized applications on Ethereum. Additionally, in June 2023, Optimism changed its name to OP Mainnet. Now serves as the base layer providing solid infrastructure for Superchain.

Optimism’s governance model

Optimism launches the Optimism Collective – a bicameral governance system consisting of Token House and Citizen House.

Token House: this is the institute established when the first airdrop was distributed. This is where the first people active in the community can vote on protocol upgrades. And encourage project development as part of the Governance Fund.

Citizen’s House: this is an institute that will be managed by NFT “soulbounds” for the purpose of distributing and building products that are useful to the community (public goods) and deciding the amount of money allocated to projects. “soulbound” NFTs are non-transferable NFTs that act like a decentralized identity within Optimism’s governance model.

Optimism’s governance model

The Optimism Collective model will create value for the following 3 target groups:

OP token holders: through participation in Token House governance activities. Token holders will receive rewards from protocol revenue.
Contributors and project builders (Builders): this group will benefit directly through the retroactive public goods funding program. When they contribute ideas to build a better ecosystem. They will receive rewards in this program.
Community users: this group will receive OP token airdrops, incentives of projects receiving funding from Optimism

Airdrop by Optimism

Optimism does not open public sale but will airdrop to certain users. The project has airdropped to users twice.

First time

On April 26, 2022, Optimism announced an airdrop for the following users:
Users who use Optimism Bridge before June 23, 2021 or interact with dapps on Optimism more than once between June 23, 2021 and May 23, 2022
Users interact with dapps on Optimism for 4 weeks
Users participate in voting for DAOs on L1
DAO leaders and builders
Users have donated Gitcoin on L1
Users used bridges from Ethereum to other chains, and interacted with dapps on Ethereum

In addition, user wallet addresses that meet 4 or more criteria will be rewarded with a certain amount of tokens.

2nd

On February 10, 2023, Optimism announced its 2nd user airdrop. The project airdrops to users who have delegated voting rights or paid gas to trade on Layer 2 Optimism.

In the future, Optimism may continue to have airdrops for users. The project has about 11% tokens left for future airdrops.

Highlights of Optimism

With the above characteristics, Optimism’s Blockchain has notable points including:

Trading experience: With fast processing speed, gas fees are being reduced by 88 times compared to current Ethereum gas.
Convenient for expanding, scaling and deploying Dapps: Fully supporting EVM, Ethereum dapps or DApps in other EVM compatible ecosystems can be run on layer 2 with just a few lines of code.
Security: Layer 2 still inherits the strict security level of Layer 1 Ethereum.

Detailed information about OP Token

Token OP

Key Metrics OP

Token Name: Optimism (OP) Token
Ticker: OP
Blockchain: Optimism
Token Standard: ERC-20
Contract: 0x42000000000000000000000000000000000042
Token Type: Governance
Total Supply: 4,294,967,296 OP
Initial Supply: 234,748,364 OP

OP Token Allocation

Ecosystem Fund: 25%
Retroactive Public Goods Funding (RetroPGF): 20%
User Airdrops: 19%
Core Contributors: 19%
Sugar Xaddies: 17%

Token Allocation

Token Release

Token Release

All project tokens will be paid in installments over 4 years with the core team and investors (A16Z, Paradigm, Nascent) locked for 1 year then paid in installments for the remaining 3 years.

Token Use Case

Recently, Optimism introduced a decentralized autonomous organization DAO, Optimism Collective, which will be built to promote the development of Optimism in all aspects such as ecosystem, promotion, and marketing. In the long term, together with the Optimism Foundation, the Optimism Collective will jointly manage the development of Optimism comprehensively.

Optimism Collective is managed by two parts: Citizen’s House and Token House.

Token House: Established when the first airdrop reached users to pay tribute to individuals whose contributions promoted the development of Optimism.

Citizen’s House: Established with the goal of determining the amount of incentives for projects and activities that are beneficial to the ecological system. Individuals here will receive NFTs that cannot be converted into soundbond tokens that will be revealed more in the future.

It can be said that Optimism is creating a game with the most use cases with individuals holding OP tokens

OP Token storage wallet & exchange

Wallet stores OP tokens

Immediately after launch, you can store OP tokens at: Metamask, Trust Network, …

OP token exchange

Currently OP has been listed on many major exchanges, you can buy and sell OP at:

CEX: Binance, Kucoin, Coinbase,…
DEX (on the Optimism ecosystem): Uniswap v3.

Core Team

Core team

Following Optimism is Optimism Foundation, which will develop the ecosystem in the initial period. When enough time passes and the system generates enough gold, the Optimism Foundation will disband and hand over development work to the entire community.

Ben Jones: Co Founder & Director

Ben earned his bachelor’s degree in Science, Physics and Mathematics from Northeastern University.
Ben worked as a Software Engineer at Quantum Diamond Technologies IncQuantum for a relatively short period of time.
After that, Ben joined the Crypto market as Blockchain Associate at Underscore VC.
Ben started his business with Plasma Group and then from December 2019, Ben started building and developing at Optimism PBC with the title of Co Founder and Scientific Director.
In May 2022, Ben moved from Optimism PBC to become Director at Optimism Foundation.

Karl Floersch: CEO of OP Labs

Karl earned his bachelor’s degree in Science, Computer Science from Stony Brook University.
Karl used to work as a Frontend Engineer at 3Rings Media3Rings and a Blockchain Engineer at Consensys – the parent company of Metamask or Infura.
Karl has had a long time working with the Ethereum Foundation with the title of Research for 2 years and 5 months.
From January 2020, Karl began to be in charge of CTO at OP Labs and then CEO from May 2023.

Investors

Most recently the project raised $150 million from a Serie B round led by a16z and Paradigm, in addition to previous funding rounds as follows:

Funding round and Investor

January 15, 2020, Seed Round ($3.5 million): Paradigm, IDEO Colab Ventures
February 24, 2021, Series A ($25 million): Andreessen Horowitz, Paradigm, IDEO Colab Ventures
March 17, 2022, Series B ($150 million): Paradigm, Andreessen Horowitz. Current valuation is $1.65 billion.

Roadmap

Development roadmap of the Optimism project:

June 2019: Introducing Optimistic Rollup.
October 2019: Launch of Optimistic Rollup PoC.
September 2020: Launch of EVM Compatible Testnet.
January 2021: Launch Alpha Mainnet.
August 2021: Launch of EVM Equivalent Mainnet.
December 2021: Officially launched Mainet.
2022: Launch of the next generation of Fault Proof algorithms.
2023: Split Rollup, launch Incentivized Verification and Decentralized Sequencer mechanisms.
2024: Fault Proofs adjusted on Layer 1.

Conclude

Through the overview article about the Trader Joe project above, AZC News hopes readers will grasp basic information about this project to make their own investment decisions. Wishing you a successful investment!