Layer 2 solutions meant to help Ethereum scale have always been discussed by the public from time to time. Besides Polygon, Arbitrum and Optimism are considered veteran projects in this area. Just last week, Optimism commenced its airdrop of native OP tokens to early supporters.
What is Optimism?
Similar to Arbitrum, Optimism utilizes Optimistic Rollup Technology. Rollups process Layer 1 transaction data on a side chain. They help to lower the cost of transactions and improve speed. You can refer to our previous article on Arbitrum for an explanation of optimistic rollups.
Briefly, Optimistic Rollups process transactions by relying on ‘fraud proofs’, which assumes the transaction is valid until proven falsified. Node validators can dispute the transaction if inaccurate or fraudulent. If there is no dispute after a specific time period, the rollup processes the transaction and sends the result back to the Etherum network.
During the dispute period, if a transaction is invalid, anyone who is monitoring the state of the rollup chain can submit a challenge. Subsequently, the dispute resolution process will trigger immediately. The difference between Arbitrum and Optimism is the way they resolve disputes.
When a user submits a challenge on Optimism, the entire transaction associated with it will run through the EVM (see Glossary). In contrast, Arbitrum uses a more complex and lengthy off-chain dispute resolution method to reduce disputes to a single step in a transaction. Instead of sending the entire transaction into the EVM, the protocol will then send this single-step assertion to the EVM for final verification.
Current Optimism Ecosystem
Currently, there are several projects including large DeFi projects on Optimism. With major DeFi protocols integrating with Optimism, transactions among those DeFi protocols will be able to remain on Layer 2. In this case, users do not need to wait for funds to be sent back to Ethereum to interact with other protocols.
DeFi protocols on Optimism
There has always been buzz surrounding which Layer 2 rollup project — Arbitrum, Optimism or zkSync — would be the first to issue tokens. As Optimism stepped up to claim this title, early supporters had high expectations for its success. However, the airdrop went in the opposite direction.
First of all, overall market sentiment now is pessimistic. It was brave for Optimism to launch their token and conduct an airdrop in this market situation.
The airdrop itself also had its problems. Once the claiming started, Optimism experienced such high traffic in a short period of time that the blockchain became overloaded. This caused delays in the front end and users couldn’t complete their claims. As is normal with highly-anticipated airdrops, the OP token price rally, as expected, was a one-day wonder.
EVM: Refers to Ethereum Virtual Machine, a layer that separates the Optimism and Ethereum blockchains.
EVM-compatible: Being EVM-compatible means that Ethereum smart contracts can be deployed on the compatible chain. Pros include lower gas fees on the compatible network and developers are able to use the same programming language (Solidity) to write smart contracts.
The views expressed in this article are the author's alone and do not necessarily represent the views of ApolloX.
Risk Reminder: Crypto and NFT trading carries a risk. All trading activities are done at your discretion and at your own risk. The information here should not be regarded as financial or investment advice from ApolloX. ApolloX will not be liable for any loss that might arise from your use of any financial product.
The ApolloX app is available on Apple Store or Google Play here.
Stay up to date with ApolloX!