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Like Arbitrum, Optimism doesn’t have a native cryptocurrency to pay for gas fees. Zero-knowledge rollups, another popular type of rollup, are used by Loopring, Immutable X and ZKSync. Arbitrum and Boba Network also use the technique to help Ethereum users save on fees. The protocol isn’t the only scaling solution to use optimistic rollups. The Ethereum network is fit to burst, and until upgrades to the main blockchain save the day, scaling solutions like Optimism allow Ethereum’s decentralized finance industry to grow and remain usable by those who can’t afford its high transaction fees. Optimism is best understood as one of several solutions trying to address Ethereum’s state-bloat problem.
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It uses, for instance, the same virtual machine as Ethereum, and charges for gas in the same way (albeit at a lower rate, thanks to its optimistic rollup solution).īecause Ethereum and Optimism are so similar under the hood, you can send any ERC-20 asset-a cryptocurrency compliant with the generic Ethereum token standard-between the two networks.
Optimism symbol software#
Optimism’s layer 2 software is designed to mimic Ethereum’s code as much as possible. The sequencer compresses this data even further to reduce the size of the transaction (and thus save money), then submits transaction data back to Ethereum. These blocks are the ‘rollups’-batches of Ethereum transactions. This sequencer instantly confirms valid transactions, then creates and executes blocks on Optimism’s layer 2-a blockchain that sits atop the L1 blockchain, in this case Ethereum. Unless a user submits their transaction directly to the Canonical Transaction Chain, new blocks are produced by something called a sequencer. All of its rolled-up blocks are stored on an Ethereum smart contract called the Canonical Transaction Chain. Optimism is basically a big append-only list of transactions. An open mainnet launched in December 2021. It wasn’t until January 2021 that an alpha mainnet launched, and it took until October 2021 for Optimism to launch a version of the Alpha mainnet that was compatible with the Ethereum Virtual Machine. Optimism was introduced in June 2019, and a testnet was released in October 2019. Per Dune Analytics, Optimism secures about $740 million of on-chain value, as of March 2022, down from slightly over $1 billion in January. It’s supported by DeFi platforms like Synthetix and Uniswap. Validators in the rollup have a week to query the entire rollup if they believe that it contains fraudulent data.Ī dashboard on Dune Analytics indicates that Optimism cuts Ethereum transaction fees (also known as gas fees) by a staggering 129 times. This saves time, since individual transactions do not have to be submitted with direct proof of their validity. Optimistic rollups are a type of rollup that ‘optimistically’ assumes all transactions in the rollup are valid. The lessons learned will be synthesized in the protocol's next major milestone: what we’re referring to for now as ‘OP 1.0’. We've picked up a ton from our time spent designing, building, and operating an optimistic rollup. The special sauce to Optimism’s scaling methodology is in its name: it uses a technique called optimistic rollups, whereby multiple transactions are ‘rolled up’ into one transaction, settled on another blockchain, with receipts fed back to the main Ethereum blockchain. Optimism speeds up Ethereum transactions and cuts their costs by settling them on another blockchain using advanced data compression techniques. While the Ethereum fraternity waits for the roll-out of planned upgrades to the network that will address these issues, scaling solutions have emerged to make Ethereum transactions faster and cheaper. It uses optimistic rollups to process transactions in batches, reducing gas fees.Įthereum has grown to become the second largest cryptocurrency by market capitalization, thanks largely to its support for smart contracts-which underpins a growing ecosystem of decentralized applications ( dapps) and decentralized finance ( DeFi) platforms.īut it suffers from a problem: it’s slow and expensive to use, thanks to persistently high transaction fees.Optimism is an scaling solution for the Ethereum blockchain.