In this guide, you’ll learn:
- The basics of Layer 2 and Optimism
- Why layers 2 like Optimism exist
- The benefits of using Optimism
- What are some popular alternatives to Optimism
- Who is behind Optimism
- What is the OP token and what’s its purpose
Without waiting any longer, let's jump right in! 👇
What is a layer 2 like Optimism? Understanding the basics
In simple terms, when we say "Layer 2", we're talking about solutions that are made to help scale an application by handling transactions off the main layer / layer 1 while taking advantage of the robust decentralised security model this layer 1 provides.
Optimism, in particular, is an instance of what tech enthusiasts term "Optimistic Rollup". To put it in layman’s terms, think of it as a supplementary structure that draws its security from another foundational, or "parent", blockchain. Like building a small office inside a big secure building. The small office doesn't need its own security guards because the big building already has them. In the same way, Optimism uses Ethereum's safety features without needing its own.
Want to Learn More?
If you're interested in understanding more about layers 2 and rollups and how they work, read this guide.
Why do we need layers 2 like Optimism?
TL;DR: Ethereum is safe and decentralised but can be slow and very pricey. Smart folks worked on finding solutions to scale, leading to additions like Optimism or Arbitrum that sit on top of Ethereum.
As more folks started using Ethereum, it began to hit its limits. This made using Ethereum more expensive and got folks brainstorming about how to make it work better, so people could still enjoy its safety without the high cost.
Remember the huge fuss with CryptoKitties in December 2017? The network was so packed, everything slowed down big time. Or the NFT rush in 2021? People, believe it or not, were shelling out up to $100 just to use Ethereum, whether to get NFTs or to trade tokens on platforms like Uniswap. Sounds wild, right? But that was the reality back then.
Many solutions were explored to make Ethereum better and open to everyone, no matter how big or small their budget was. A standout approach was Optimistic rollups, like Optimism and Arbitrum. The name "optimistic" hints at how these systems check transactions.
The brains behind these systems crafted ways (known as layer 2 solutions) to speed up transactions and handle more of them at once, meaning cheaper fees. Best part? They did this without giving up on the key principles of Ethereum: being decentralized and safe (secure).
What are the benefits of Optimism:
TL;DR: Increased transactions per second greatly improves your user experience. And the fact that it’s cheaper than Ethereum makes it more inclusive and accessible for people everywhere.
With a basic understanding of what Optimism is and its origins, let's discuss why it matters to you. And just to clear the air, it won't turn you into an ever-smiling optimist. Sometimes it can be a bit tricky and might stress you out a tad. But trust me, it's an exciting ride.
Cutting to the chase, so you don't dash off: Optimism lets you do a lot of what Ethereum does, but at about a tenth of the cost. You can work with decentralized finance apps, trade and create NFTs, and so on. And yes, if that's your thing, you can buy those less reputable coins too (I am talking about shitcoins here).
Want get started and bring funds to Optimism?
Take a look at this guide on how to bridge funds to Optimism if you don’t know where to start.
What are some popular alternatives to optimism
I've touched on this before, but Optimism isn't the only game in town. While I'm a big fan and find it user-friendly, you may want to explore these other options too:
Arbitrum boasts an active DeFi community and a plethora of engaging on-chain games. Whether you're looking to purchase perps with GMX or trying out the latest game from TreasureDAO, there's plenty to dive into.
You might also consider stopping by Base, an additional low-cost and secure Ethereum L2. Designed by Coinbase, it's crafted to be developer-friendly and aims to usher in the next billion users to web3.
It's the new player on the block and houses the trendy app Friend.Tech (an app that’s all about creating a network of friends and turning social interactions into tokens).
3. ZkSync and Starknet
I'm aiming for a comprehensive rundown here, and it would be remiss not to mention Polygon, a name you might see making headlines quite frequently. Though it leans more towards being a sidechain than a rollup, it's packed with interesting features. Plus, big names like Reddit, Starbucks, and Lufthansa airline chose it for their digital collectibles and loyalty programs.
Who is behind Optimism
Optimism was founded back in 2018 by Jinglan Wang. From its inception, it has drawn thousands of users and developers to its network. In March 2022, the platform raised a notable $150 million in a Series B funding round, valuing it at a striking $1.65 billion (source). Additionally, they've launched their very own governance token.
But who really powers Optimism today?
At the core, we have the Optimism Foundation. This is a nonprofit organization with a mission to expand and nurture the Optimism Collective. But it's important to understand that the Foundation is just a piece of the puzzle. It sits among a vast and growing network of organizations, teams, and passionate individuals, all rallying towards the Optimistic Vision (hang tight, we're getting there).
In the nuts and bolts of things, the Optimism Foundation serves as a formalized body. It's specifically set up as a Cayman foundation company, giving it the legal capacity to form solid, enforceable agreements with third parties in the tangible world. The main focus? It's all about fostering the growth of the Optimism Collective, enhancing the Optimism ecosystem, and furthering the technology that brings it all to life.
Diving deeper, there's the Optimism Collective. Think of it as a united front of companies, communities, and passionate individuals. Their shared aim? Rewarding public goods and charting a sustainable future for Ethereum. This collective is structured into two main parts:
The Token House
This is the powerhouse for governance. They take charge of presenting, discussing, and voting on a variety of governance-related proposals. Whether it's about grants from the Governance fund, changes to the Protocol, adjustments in Inflation, allocating Treasury funds, or any other governance-related aspect, it’s the Token House that steps in.
The Citizens’ House
Their primary role, at least for now, is to oversee retroactive public goods funding (RetroPGF).
🤨 And where do you fit in all this? If you're an owner of OP tokens, surprise! You're essentially a part of the Token House. A revelation, right? But, remember, being part of this elite group means wielding influence, and with that comes responsibility. It's either you roll up your sleeves and dive into governance or you delegate that voting power to a trusted entity. The choice is yours.
For a comprehensive understanding and to actively participate in shaping the future of Optimism, check out our detailed guide on Optimism Governance.
What is the OP token and what’s its purpose
The OP token is more than just a digital asset; it's a voice in the future of Optimism. By holding OP, even the average Joe can influence how the collective evolves. Think of it as owning a piece of the decision-making pie. It ensures everyone has a say in shaping Optimism's direction.
Now, should you dive in and get these tokens? Well, it's like any investment or decision: do your homework. I won't tell you what to do financially. Remember to always research (or as the crypto folks like to say, DYOR - "Do Your Own Research") before diving into anything.
Want to Learn More?
Check out our guide on how to move funds to and from Optimism.
That's a wrap on our Optimism primer.
If you're still on the fence, maybe a second glance at this piece will do the trick. And if you're eager to dive in, our handy guide with a list of apps awaits you.
Whatever you choose, remember, the world of blockchain is vast and exciting. Dive in at your own pace.
Do you have any questions or comments? Ping me on Twitter!