What is Optimism ($OP): Layer 2 Scaling ETH and the $OP Token

Optimism is a Layer 2 Optimistic Rollup network designed to scale Ethereum by leveraging its security while reducing transaction costs and latency.

How Optimistic Rollups Work

• Off-Chain Processing: Transactions are processed off-chain and batched into a single on-chain transaction.
• Optimistic Validation: Assumes transactions are valid by default, with fraud proofs used to dispute invalid transactions.
• Ethereum Extension: Functions as an Ethereum-compatible Layer 2, offering faster and cheaper transactions.

👉 Discover how Optimism reduces gas fees

Optimism vs. Ethereum: Fee Comparison

| Metric | Optimism (L2) | Ethereum (L1) |
|----------------------|--------------------|--------------------|
| Avg. Transaction Cost | ~10x cheaper | Higher gas fees |
| Confirmation Time | Seconds | Minutes (peak congestion) |

Fee Breakdown

1. L2 Execution Fee: Cost to process transactions on Optimism.
2. L1 Data Fee: Covers posting transaction data to Ethereum.

Optimism’s Revenue Model

Optimism generates value for:

• Token Holders: Revenue funds public goods, driving ecosystem growth.
• Builders: Retroactive funding (RetroPGF) rewards contributions.
• Users: Airdrops and incentives enhance engagement.

Key Revenue Streams

• Sequencer Fees: From processing transactions.
• Blockspace Demand: Increased usage boosts revenue.

Founding Team & Vision

Founded in 2019 by Jinglan Wang, Kevin Ho, and Karl Floersch, Optimism Labs aims to build a scalable, Ethereum-aligned Layer 2 solution.

Optimism Airdrops

Four airdrops have distributed OP tokens to users:

1. May 2022: 248,699 addresses received 271–27,534 OP.
2. Airdrop #2: 11.7M OP to 307,965 addresses.
3. September 2023: 19.4M OP to 31,870 addresses.

👉 Track future airdrops

Governance: The Optimism Collective

• Token House: $OP holders vote on proposals.
• Citizens’ House: Soul-bound NFT holders fund public goods via RetroPGF.

The Optimism Superchain

A network of interoperable chains using the OP Stack:

1. Base (Coinbase)
2. Fraxtal (Frax Finance)
3. Mode (Parimutuel markets)
4. OP Mainnet (Primary network)

How to Use Optimism

Via Coinbase Wallet:

1. Transfer assets to Optimism network.
2. Use the Optimism Bridge for L1-to-L2 moves.

Warnings:

• Always bridge tokens correctly (e.g., ETH to OP).
• Verify exchange support for Optimism to avoid lost funds.

$OP Tokenomics

• Market Cap: $2.2B (May 2024).
• Circulating Supply: 1.1B OP.
• Max Supply: 4.29B OP.

Peak Prices:

• January 2023: ~$5.00 (post-Ethereum PoS upgrade).
• May 2024: Rally amid crypto market uptrend.

Competitors

1. Arbitrum: Multi-round fraud proofs.
2. Polygon: Sidechains + zk rollups.
3. zkSync: Zero-knowledge rollups.

FAQs

1. What makes Optimism unique?

Optimism uses optimistic rollups for low-cost, Ethereum-secured transactions.

2. How do I claim OP airdrops?

Monitor Optimism’s official docs for eligibility.

3. Is Optimism decentralized?

Yes, transitioning to decentralized sequencers and governance.

4. What’s RetroPGF?

A funding mechanism rewarding ecosystem contributors.

Final Thoughts

Optimism combines scalability, community governance, and Ethereum alignment, positioning it as a leader in Layer 2 solutions. With ongoing upgrades and airdrops, its future looks—fittingly—optimistic.

Author: Alex Moskov | Follow on Twitter