What is Optimism (OP)?
Optimism (OP) 101
Optimism is a layer two blockchain designed to help Ethereum scale. Optimism’s EVM-equivalent architecture is designed to enable Ethereum apps to take advantage of the chain’s cheaper and faster transactions without technical barriers. The Optimism Token (OP) is used as a governance tool and it is not required to use Optimism or pay for gas fees.
What is Optimism?
Optimism is a Layer 2 (or “L2”) blockchain that helps the Ethereum base layer (or Layer 1) scale via cheaper and faster transactions while inheriting the security of Ethereum. Optimism was designed to be simple for EVM compatible projects to launch.
Optimism is an “Optimistic Rollup,” which allows the network to process transactions faster by piggybacking off the security of the base layer Ethereum network. Think of it like building a house within a safe gated community. Because the area is already so safe, you don’t need to install security cameras or get guard dogs.
Layer 2 blockchains act as scaling solutions for Layer 1s (or “L1”). In this case, Optimism is a scaling solution for Ethereum. Layer 1 blockchains are the main, or base level, blockchains. L2 chains allow transactions from Layer 1 chains to be processed on another blockchain so that the original chain only needs to store a summary of the completed actions. This significantly lowers the demands on the blockchain, improving scalability and lowering its gas fees.
The Optimism Foundation is a nonprofit organization that runs Optimism. The Optimism Collective is Optimism’s two-tier governance structure, which includes the Token House and the Citizens’ House. OP owners can participate in the Token House.
How does Optimism work?
Optimism is an EVM-equivalent blockchain, erasing the need for any translation between other EVM blockchains. As Optimism notes, anything that works on Ethereum will work on Optimism.
Once transaction data is submitted to Optimism, it’s subsequently “rolled up” to the Ethereum mainnet in batches. Optimism is an optimistic rollup — the “optimistic” descriptor comes from how the blockchain validates its transactions. Instead of implementing its own consensus mechanism, Optimism depends on its L1’s consensus protocol. In this case, Ethereum’s Proof-of-Stake mechanism. Or in other words, by taking advantage of Ethereum’s well-established security - Optimism can be faster and cheaper than the base chain.
In addition, these groups of transactions are bundled by a single computer, the sequencer. This significantly reduces transaction cost—typically between 1% and 10% of the cost on the Ethereum mainnet—while a challenge mechanism ensures the sequencer is honest.
All Optimism transactions are then posted to the L1 blockchain, Ethereum, inheriting the strong security guarantees of Ethereum along the way. After validators have added their assertion to the L1 blockchain, there is a window of time allotted for anyone else to dispute the transaction’s validity - which is done on the base chain, not the L2.
Optimism's main uses
Optimism is an Ethereum-scaling platform, particularly focused on DApps and smart contract applications. In addition to its blockchain uses, it’s also an experiment in sustainable ecosystem funding, as explained above.
Optimism is part of an Ethereum scaling philosophy which believes scale will come from developers building on Layer 2s, with the base chain providing the security.
Decentralized apps (or DApps) are blockchain-integrated websites that require you to connect and approve all transactions with your wallet signature.
Decentralized Finance, often shortened to “DeFi,” is the term used to describe all financial services that operate on blockchain technology. Common services include earning interest, borrowing, lending, and trading. DeFi enables trustless, permissionless, and fast transactions.
Non-Fungible Tokens (NFTs) are unique, digital items with blockchain-managed ownership. Examples of NFTs include digital art, collectibles, virtual reality items, crypto domain names, ownership records for physical assets, and more.
What are Optimism NFTs?
Optimism NFTs are NFTs that have been minted onto the Optimism blockchain. Optimism has become a popular blockchain for NFT projects because of its fast speed, and compatibility with Ethereum.
Is OpenSea compatible with Optimism?
Yes! If you’re buying an NFT on Optimism, you’ll need to switch to the Optimism network on your wallet and bridge your ETH to OP ETH. Many wallets will automatically prompt you to switch networks. If your wallet doesn’t support this, or you’d like to add the Optimism network to your wallet manually, we have a step-by-step guide here.
To find NFTs on OpenSea, select the “Explore” page and limit your search to Optimism by checking “Optimism” under the “Chains” section.
On Optimism, users pay for gas fees (also known as transaction fees) using Optimism ETH. As mentioned above, while Optimism has its own token, it’s not required to pay for gas fees.
The main difference rests in how Optimism handles disputes. On non-optimistic roll ups a disputed transaction is first resolved on the L2 blockchain and then sent to the L1 blockchain for final resolution. On Optimism, disputes are entirely resolved on the L1 blockchain.
Tentatively, Optimism will release Optimism Bedrock in Q1 of 2023. The roll-up upgrade promises to make Optimism safer and faster.