What is Optimism (OP)?

What is Optimism?

(Source:@Optimism)

Optimism is an Ethereum-based Layer 2 scaling solution designed to increase transaction processing speed and reduce fees through Optimistic Rollup technology. Since its launch in 2021, Optimism has become an indispensable part of the decentralized finance ecosystem, supporting many Ethereum-based decentralized applications.

The operation principle of Optimism

Optimism adopts the so-called Optimistic Rollup technology, which batches multiple transactions into a sidechain for execution and periodically syncs them to the main chain. Unlike traditional on-chain transactions, Optimistic Rollup presumes all transactions are valid, and validation only occurs when someone raises an objection. This operation mode reduces blockchain congestion and transaction fees while maintaining the security of the Ethereum main chain.

Optimism provides a developer-friendly environment that allows developers to directly use Solidity for smart contract development, and deploy on Optimism's Layer 2 network without modifying the original code. In addition, users can interact with the Optimism ecosystem through common decentralized wallets such as MetaMask and WalletConnect.

Advantages of Optimism

1. High scalability and low cost: using Rollup technology to batch process transactions, reduce the burden on the main chain, and lower transaction fees.
2. Strong compatibility: Fully compatible with the Ethereum Virtual Machine (EVM), developers can deploy without changing their code.
3. Strong security: All transactions will ultimately be confirmed on the Ethereum main chain, maintaining a high level of security.
4. Decentralized Governance: Optimism adopts decentralized autonomous organizations (DAOs) for governance, allowing the community to collectively decide on the network's development.

The challenges of Optimism

1. Dependency of challenge mechanism: As transactions are assumed to be true first, challenging and consuming a certain amount of time is required to raise objections.
2. Liquidity and Capital Efficiency: Although Optimism has improved transaction speed, there are still challenges in large fund flows or flash loan scenarios.
3. Interoperability: Although there are already cross-chain bridges, there is still room for improvement in the broader ecosystem interoperability.

Optimism's token economics

Optimism's native token is $OP, mainly used for network transaction fees, governance decisions, and staking. The token distribution model of OP is as follows:

1.Ecosystem Fund（生态系统基金）- 25%，其中包括：

• Governance Fund: 5.4%
• Partner Fund: 5.4%
• Seed Fund: 5.4%
• Unallocated: 8.8%

2.Retroactive Public Goods Funding（公共资源回馈）- 20%

• To support public resources and open-source projects, helping the ecosystem grow.

3.User Airdrops（用户空投）- 19%，包含：

• Airdrop #1: 5%
• Future Airdrops Plan (Future Airdrops): 14%

4.Core Contributors - 19%

• Allocated to project early development teams and core members.

5.Sugar Xaddies (Investors) - 17%

• Investors who provide early funding support.

(Source:@Optimism)

The development prospects of Optimism

As Ethereum's scalability solution, Optimism not only significantly improves transaction efficiency but also reduces usage costs, enabling more decentralized applications to operate on a large scale. With the development of Ethereum 2.0 and the application of more Rollup technologies, Optimism will be able to better support the growth of DeFi and Web3 applications. Optimism has already become the choice of multiple DeFi projects such as Uniswap, Synthetix, Aave, etc., attracting a large number of users and capital inflows with its strong compatibility and low fees.

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Summary

Optimism's innovation enables Ethereum to operate more efficiently, solving the long-standing issues of high transaction fees and network congestion. With the expansion of the ecosystem and the addition of more scaling technologies in the future, Optimism is gradually becoming a leader in Ethereum's scaling technology, driving the flourishing development of decentralized applications in Web3.