What Is Optimism (OP): A Comprehensive Guide
Every year, the realm of cryptocurrencies is getting more an more traction espoecially due to massive interest spike in recent years, resulting in the quick spread of decentralized applications (dApps) across diverse sectors like decentralized finance (DeFi), gaming, education, and trading. While this influx of users exploring new applications is undoubtedly exciting, it has also unearthed some profound challenges within blockchain networks, notably Ethereum, the central hub for dApp activities.
Yet Ethereum, the platform of choice for most dApps, continues to struggle with despite PoS consensus mechanism introduction with issues concerning cost, scalability, and accessibility. Even alternatives like Solana proved incapable of handling the surging demand for dApps and DeFi services. This underscored the pressing need for scalable solutions, and it's precisely where projects like Optimism entered the fray. In this module, we will explore the key charactristics of Optimism and its mechanisms.
What is Optimism?
At its core, Optimism serves as a layer-two scaling solution for Ethereum. Its primary aim is to alleviate the transactional burden on the Ethereum main network, making it operate more efficiently. To comprehend Optimism, one must first grasp the concept of "Optimistic rollup" and how it operates.
What is a Rollup?
Rollups encompass a family of scaling solutions engineered to amplify Ethereum's transaction throughput. They execute transactions off the Ethereum main chain, with data later posted to the main chain for consensus. This approach relieves the Ethereum main network's load while upholding data security.
Two primary types of rollups, differentiated by their security models, exist:
Zero-Knowledge (ZK) Rollups: These perform computation off-chain and furnish proof of validity to the main chain.
Optimistic Rollups: These inherently assume transactions' validity and only engage in computation through fraud-proof if challenged.
Optimism falls within the latter category, with Ethereum as its parent chain.
How Does Optimism Work?
The crux of Optimism's functionality revolves around the concept of Optimistic Rollup, leveraging the security of a parent network. Here's a simplified breakdown of how it functions:
Block Storage: Every block within Optimism resides in a smart contract on Ethereum, known as the Canonical Transaction Chain (CTC). These blocks constitute an immutable list, and the CTC guarantees the inviolability of block order, except during an Ethereum network reorganization (reorg).
Block Production: A sole entity, designated as the 'sequencer,' oversees block production on Optimism. The sequencer is responsible for supplying instant transaction confirmations, constructing and executing layer-two blocks, and submitting user transactions to layer one. Notably, there's no mempool; transactions are either accepted or rejected in the order of receipt. The sequencer validates transactions and records them in the local state as pending blocks, subsequently forwarding these blocks for finalization on Ethereum.
Block Execution: Ethereum nodes fetch blocks from the Ethereum peer-to-peer network, while Optimism nodes access blocks directly from the CTC append-only contract. These Optimism nodes include an Ethereum Data Indexer and Optimism Client Software, mirroring Ethereum's design. Both networks share the Ethereum Virtual Machine (EVM), account and state structure, gas metering, and fee schedule.
Fault Proofs: In an Optimistic Rollup, state commitments are directly posted on the Ethereum network without necessitating proof of their validity. When a state commitment is challenged successfully, it is supplanted with a new one.
Bridging Assets Between Layers
Interoperability between different layers is essential for layer-two scaling solutions like Optimism. There are various methods to bridge assets between layers. The official website provides a bridge, requiring a Web3 wallet like MetaMask. To bridge tokens from Optimism to Ethereum, you can click the arrow between the value boxes. If Optimism isn't added to your MetaMask, the platform will guide you through the process. Confirm the amount and sign the transaction. It's crucial to note that bridging from Optimism to Ethereum necessitates seven days.
Governance: Optimism's Model
Optimism's native cryptocurrency is the OP token, governed by the Optimism Collective, a consortium comprising companies, communities, and individuals collaborating to enhance Ethereum's ecosystem. This governance structure consists of two houses:
The Token House: Members of the Token House propose and vote on diverse initiatives. OP holders can either vote directly or delegate their voting authority. The Token House votes on proposals related to protocol upgrades, inflation adjustments, treasury allocations, rights protection, and governance fund grants.
The Citizens' House: This experimental governance model centers on retroactive public goods funding.
Introducing the OP Token / Optimism Token
The OP token was introduced via an airdrop, distributing 5% of the total supply to eligible users, encompassing DAO voters, Multi-Sig signatories, recurrent Optimism users, and Gitcoin contributors. The team has future airdrop plans, with 19% of the supply allocated for this purpose.
Optimism's growth and evolution continue, with the Optimism Foundation presenting upgrades to the Optimism mainnet, including the introduction of Bedrock, a novel generation of decentralized Rollup architecture. The future teems with exciting developments as layer-two solutions like Optimism advance and compete in the blockchain arena.
Closing Thoughts
Optimism forms a pivotal component of the Ethereum scaling puzzle, offering a promising remedy to scalability and affordability challenges while upholding Ethereum's hallmark attributes of security and decentralization. As the crypto industry evolves, layer-two scaling solutions like Optimism will play a pivotal role in shaping its trajectory.