The Optimism (OP) cryptocurrency is becoming an A popular choice among investors and blockchain technology enthusiasts. This Layer-2 network was created to improve Ethereum’s scalability, enabling faster transactions with lower fees. With the growing demand for solutions that alleviate congestion on the Ethereum network, interest in Optimism is growing.
Optimism uses a technology called “optimistic rollups,” which allows transactions to be grouped together, making them more efficient. This not only benefits users by offering reduced costs, but also makes the experience of using decentralized applications (dApps) more enjoyable. This system contributes to the evolution of the cryptocurrency ecosystem, and its OP token plays a crucial role in the governance of the network.
What is Crypto Optimism (OP)?
Optimism is a new model of digital democratic governance optimized to drive the rapid and continuous growth of a decentralized ecosystem. The Collective is a group of communities, companies and citizens united by a mutually beneficial pact to adhere to the maxim that impact = profit; the principle that positive impact for the collective must be rewarded with profit for the individual. This maxim serves as a purpose, which motivates the creation of a more productive and empathetic economy.
The Optimism Collective will dispel the myth that public goods cannot be profitable. Collective will consistently provide huge retroactive incentives for public goods that benefit Optimism, Ethereum, and Collective as a whole. These public goods act as drivers for the growth of the Collective's economy. Growth that yields profit for the Collective and profit that finances further investment in public goods, which together produce a virtuous cycle of impact-driven expansion.
Optimism resources
Optimism Layer 2 solutions are intended to lighten the load on the Ethereum network. There are two main features to get cryptocurrency adopters excited. Optimism allows for near-instant transactions. Transactions in blockchain Ethereum are almost ten times cheaper. Considering the daily transaction volume, these are impressive features.
The Ethereum blockchain allows for easy and flexible development of decentralized projects. The number of applications built on Ethereum is rapidly increasing. It's no secret, however, that Ethereum's success has also caused problems for the network. The high volume of transactions increases the time and costs needed to confirm them.
The network can process only 10 to 15 transactions per second on average. This growth has led to high confirmation speeds and high rates. Optimism eases the burden of these two issues. When it comes to the popular cryptocurrency exchange Uniswap, transaction fees are reduced by 10 to 100 times. Similar tests have shown up to a 143-fold reduction in rates on Synthetix Exchange.
The incentives provided by Optimism Rollups help keep transactions secure. Each node in the network must place a bet to suggest a new block. And each node has the power to challenge the validity of a transaction. The smart contract verifies the results on Ethereum layer 1. Nodes are rewarded or lose the bet based on the outcome of the dispute. In other words, Optimism proposes a scaling solution where transaction calculation does not take place at layer 1. Still, on-chain commit ensures that essential Ethereum resources are maintained.
How does Optimism (OP) work?
The ultimate goal of Optimism is to make transactions on the mainstream Ethereum network more sustainable. But the demand for ETH will also increase, reducing costs and increasing speeds. The network's already thriving ecosystem (including currency markets, easy-to-use wallets, exchanges, income aggregators, etc.) should facilitate increased growth.
Sequencers used in Optimism perform off-chain calculations. They then publish transaction data compressed into a smart contract on Ethereum at periodic checkpoints. As the computation is resource intensive, it can scale by moving it out of Ethereum. Every time the sequencer publishes transaction information, there is a window in which anyone can run their calculations to determine if the transaction data is genuine. In other words, the verifier verifies the information. The smart contract validates the information. The verifier will receive part of the deposit as a reward for the effort, while the rest is burned. Then a new sequencer checks the data recorded in the chain.
Ultimately, the system provides an incentive for sequencers and verifiers. This will also make Optimism stakeholders want to participate in verifying the sequencer data. However, it is worth mentioning that there is a lock-up period of seven days. After that, users can withdraw their funds back to the Ethereum network. In a nutshell, Optimism can run your Layer 2 scaling solutions using both on-chain and off-chain computing resources. Various Ethereum applications can also run on Optimism. Users are left with faster and cheaper transactions that encourage the Ethereum ecosystem to grow and prosper.
Optimism is built on a strong design philosophy that is based on four main pillars: simplicity, pragmatism, sustainability and, of course, optimism. It is important to understand these pillars as they strongly influence the design of Optimism as a whole.
Simplicity
Optimism is designed to be as simple as possible for the feature set it provides. Ideally, Optimism should consist of the minimum number of moving parts necessary for a secure, scalable and flexible L2 system. This simplicity gives the Optimism design a number of significant advantages over other more complex L2 constructs.
Simplicity reduces engineering overhead, which in turn means we can spend our time working on new features rather than recreating existing ones. Optimism prefers to use battle-tested Ethereum code and infrastructure whenever possible. The most visible example of this philosophy in practice is the choice to use Geth as Optimism's client software.
When dealing with critical infrastructure, simplicity is also security. Every line of code we write is an opportunity to introduce unintentional bugs. A simple protocol means there is less code to write and, as a result, less surface area for possible errors. A clean and minimal codebase is also more accessible to contributors and external auditors. All this serves to maximize the security and correctness of the Optimism protocol.
Simplicity is also important to the long-term vision of Optimism. By limiting the amount of code we write on top of Ethereum tools, we can spend most of our time working directly with existing codebases. The engineering effort that goes into Optimism can also directly benefit Ethereum and vice versa. This will only become more pronounced as the Optimism protocol solidifies and existing resources can be repurposed into the core Ethereum infrastructure.
Pragmatism
For all its idealism, the design process behind Optimism is ultimately driven by pragmatism. The Optimism core team has real-world constraints, projects that build on Optimism have real-world needs, and users who engage with Optimism have real-world issues. Optimism's design philosophy prioritizes user and developer needs over theoretical perfection. Sometimes the best solution is not the prettiest.
Optimism is also developed with the understanding that any core team will have limited areas of expertise. Optimism is developed iteratively and strives to continually elicit feedback from users. Many core features of Optimism today (such as EVM Equivalence) were only possible through this iterative approach to protocol development.
Sustainability
Optimism is in it for the long run. Application developers need to be confident that the platform they are building on will remain not only operational but competitive for long periods of time. Optimism's design process is built around the idea of long-term sustainability and not shortcuts to scalability. At the end of the day, a scalable system means nothing without the ecosystem that supports it.
Sustainability actively influences Optimism's protocol design in ways that go hand in hand with our philosophy of simplicity. The more complex a codebase, the more difficult it is for people outside the core development team to actively contribute. By keeping our code base simple, we can build a larger community of contributors who can help maintain the protocol for the long term.
Optimism
Of course, none of this would be possible without a sense of optimism. Optimism about Ethereum's vision keeps this project moving forward. They believe in an optimistic future for Ethereum, a future in which we will be able to redesign our relationships with the institutions that coordinate our lives.
Although Optimism looks like a standalone blockchain, it is designed as an extension of Ethereum. We keep this in mind whenever they create new features or try to simplify existing ones. Optimism is as close to Ethereum as possible not just for pragmatic reasons, but because Optimism exists so that Ethereum can succeed. We hope you can see the influence of this philosophy as you look at Optimism's design.
Optimistic Rollups
Rollup is a layer 2 scaling technology. Rollups store hashes of contract state in the chain along with transaction calls and arguments that are recorded as call data. The actual transaction calculation takes place off-chain. This is the key to the proposed sizing solution. Rollups perform transaction operations on the Ethereum blockchain, but still post transaction data on layer 1. As transaction information is recorded on the Ethereum blockchain, rollups benefit from the same security measures available on layer 1.
High performance is achieved by grouping off-chain transactions into an on-chain state transition. Rollup security is guaranteed by the on-chain contract's ability to verify the accuracy of state transitions. Optimistic Rollup is the most popular rollup approach. ZK-Rollup is another popular solution. To ensure the execution of deterministic smart contracts between L1 and L2, Optimism uses the OVM (Optimistic virtual machine) to resolve any discrepancies. This is an EVM-compatible execution environment that can be used at layer 2. This creates a smart contract called the execution manager. It acts as a virtual container for OVM contracts. It provides a function that makes functionality between L1 and L2 consistent.
block storage
All Optimism blocks are stored in a special smart contract on Ethereum called the CanonicalTransactionChain (opens a new window) (or CTC for short). Optimism blocks are kept in an append-only list within the CTC (we'll explain exactly how blocks are added to this list in the next section). This attachment-only list forms the Optimism blockchain.
The CanonicalTransactionChain code includes which ensures that the existing block list cannot be modified by new Ethereum transactions. However, this guarantee can be broken if the Ethereum blockchain itself is reorganized and the order of previous Ethereum transactions is changed. The Optimism mainnet is configured to be robust against block reorganizations of up to 50 Ethereum blocks. If Ethereum undergoes a bigger reorganization than that, Optimism will also be reorganized.
Of course, it is a key security objective of Ethereum not to experience this kind of significant block reorganization. Optimism is therefore safe against large block reorganizations as long as the Ethereum consensus mechanism is as well. It is through this relationship (at least in part) that Optimism derives its security properties from Ethereum.
Block production
The production of Optimism blocks is mainly managed by a single party, called a “sequencer”, which helps the network by providing the following services:
- Providing instant transaction confirmations and status updates.
- Building and executing L2 blocks.
- Sending user transactions to L1.
The sequencer has no mempool and transactions are immediately accepted or rejected in the order they were received. When a user submits their transaction to the sequencer, the sequencer verifies that the transaction is valid (ie, pays a sufficient fee) and then applies the transaction to its local state as a pending block. These outstanding blocks are periodically sent in large batches to Ethereum for finalization. This batch process significantly reduces overall transaction fees by spreading the fixed costs across all transactions in a given batch. The sequencer also applies some basic compression techniques to minimize the amount of data published on Ethereum.
As the sequencer is given priority write access to the L2 chain, the sequencer can provide a strong guarantee of which state will be terminated once it decides on a new pending block. That is, it is known precisely what the impact of the transaction will be. As a result, the L2 state can be reliably updated extremely quickly. The benefits of this include a fast and instant user experience with near real-time Uniswap pricing updates.
Alternatively, users can skip the sequencer altogether and send their transactions directly to CanonicalTransactionChainEthereum via a transaction. This is usually more expensive because the fixed cost of sending this transaction is paid entirely by the user and is not amortized over many different transactions. However, this alternative submission method has the advantage of being resistant to sequencer censorship. Even if the sequencer is actively censoring a user, the user can always continue using Optimism and recover any funds through this mechanism.
Currently, Optimism PBC (opens a new window) runs the only producer of blocks. See the protocol specifications section for more information on how we plan to decentralize the sequencer function in the future.
block execution
Ethereum nodes download blocks from the Ethereum p2p network. Optimism nodes instead download blocks directly from the append-only block list in the CanonicalTransactionChaincontract. See the block storage section above for more information on how blocks are stored in this contract.
Optimism nodes are made up of two main components, the Ethereum data indexer and the Optimism client software. The Ethereum data indexer, also called the “data transport layer” (opens a new window)(or DTL), rebuilds the Optimism blockchain from blocks published on the CanonicalTransactionChaincontract. The DTL fetches events emitted by the CanonicalTransactionChainsinal that signal that new Optimism blocks have been published. It then inspects the transactions that issued these events to reconstruct the published blocks in the standard Ethereum block format (opens a new window).
The second part of the Optimism node, the Optimism client software, is an almost completely vanilla version of Geth (opens a new window). This means that Optimism is almost identical to Ethereum under the hood. In particular, Optimism shares the same Ethereum virtual machine (opens a new window), the same structure of accounts and states (opens a new window), and the same gas metering engine and rate table (opens a new window) . We refer to this architecture as “EVM Equivalence” (opens a new window) and this means that most Ethereum tools (even the most complex ones) “just work” with Optimism.
The Optimism client software continuously monitors the DTL for newly indexed blocks. When a new block is indexed, the client software will download it and execute the transactions included in it. The process of executing a transaction in Optimism is the same as in Ethereum: we load the Optimism state, apply the transaction in that state, and record the resulting state changes. This process is then repeated for each new block indexed by the DTL.
Bridging assets between layers
Optimism is designed so that users can send arbitrary messages between smart contracts on Optimism and Ethereum. This makes it possible to transfer assets, including ERC20 tokens, between the two networks. The exact mechanism by which this communication takes place differs depending on the direction in which messages are being sent.
Optimism uses this functionality in the default bridge to allow users to deposit assets (ERC20s and ETH) from Ethereum to Optimism and also allow withdrawals of the same from Optimism back to Ethereum. See developer documentation and examples for details on the inner workings of the default bridge.
Switching from Ethereum to Optimism
To send messages from Ethereum to Optimism, simply trigger the CanonicalTransactionChaincontract on Ethereum to create a new block in the Optimism block. See the section above on producing blocks for additional context. User-created blocks can include transactions that will appear to originate from the address that generated the block.
Switching from Optimism to Ethereum
It is not possible for contracts on Optimism to easily generate transactions on Ethereum in the same way that Ethereum contracts can generate transactions on Optimism. As a result, the process of sending Optimism data back to Ethereum is a little more complicated. Instead of automatically generating authenticated transactions, we should be able to make probable statements about the state of Optimism for contracts on Ethereum.
Making probable statements about the state of Optimism requires a crypto compromise (opens a new window) in the form of the root of the state of the Optimism trie (opens a new window). The Optimism state is updated after each block, so this commitment will also change after each block. Commitments are posted regularly (approximately once or twice an hour) to a smart contract on Ethereum called the StateCommitmentChain (opens a new window).
Users can use these compromises to generate Merkle tree proofs (opens a new window) about the state of Optimism. These proofs can be verified by smart contracts on Ethereum. Optimism maintains a convenient cross-chain communication contract, the L1CrossDomainMessenger (opens a new window), which can verify these proofs on behalf of other contracts.
These proofs can be used to make verifiable claims about the data within the store of any contract in Optimism at a specific block height. This basic functionality can be used to allow contracts in Optimism to send messages to contracts in Ethereum. oL2ToL1MessagePasser (opens a new window)contract (pre-deployed in the Optimism network) can be used by contracts in Optimism to store a message in the Optimism state. Users can then prove to contracts on Ethereum that a given contract on Optimism did, in fact, send a given message by showing that the hash of that message was stored inside the L2ToL1MessagePassercontract.
What are Layer 2 solutions on Ethereum?
Layer 2 (L2) refers to solutions used to scale applications processing Ethereum Mainnet (Layer 1) transactions while maintaining the same security and decentralization principles. Due to the increasing number of users using the Ethereum network, certain limitations have been created. Here Ethereum L2 solutions need to make a difference. Layer 2 solutions improve throughput (transaction speed) — in addition, they reduce network fees. Examples of Ethereum Layer 2 solutions are Immutable X, Arbitrum , Polygon and Optimism.
For network performance issues, Ethereum Layer 2 scaling solutions can be vital. Many options for scaling Ethereum are in the testing phase. These use different methods to achieve the desired scalability. Ethereum appears to have two options to resolve this: Layer 2 and sharding. These solutions address the issues of transaction settlement delays, high transaction fees, and scalability.
How do Layer 2 solutions work?
Layer 2 solutions seek to improve transactions made on the Ethereum network now. Ethereum is actually considering sharding as an option for the same issues. This would involve splitting the Ethereum network into multiple networks called “shards”. The realistic implementation of this is, however, some way off.
Layer 2 refers to a separate network that runs on Layer 1 or the main Ethereum network. Smart contracts keep Layer 2 solutions on the Ethereum network. For interaction with the main network, these do not require any modification to the base protocol. Ethereum Layer 2 scaling solutions provide different functions. This includes off-chain computing or scaling for payments.
Optimism vs. arbitration
Optimism is not the only rollup solution out there. Two other networks that offer similar solutions are Arbitrum and Polygon. In terms of functionality and popularity, Arbitrum is the closest alternative to Optimism. Let's take a look at the biggest differences and similarities between the two. Arbitrum is a Layer 2 solution that enhances the capabilities of Ethereum smart contracts. It focuses on increasing the speed and scalability of smart contracts while adding additional privacy features.
Arbitrum allows developers to run unmodified EVM contracts and Ethereum transactions on a secondary layer while still enjoying the security of Ethereum's Layer 1. In these respects, it offers features very similar to Optimism. The main difference between Optimism and Arbitrum is that the former uses single-round cheat proofs whereas Arbitrum uses multi-round proofs. Optimism's single-round fraud proof (FP) relies on L1 to execute all L2 transactions. This ensures that the PF check is immediate.
technical differences
Similar to Optimism, Arbitrum also uses transaction rollups to store batches of transactions sent to the Ethereum main chain. The sidechain can be used to execute these transactions at a low cost while still leveraging Ethereum to ensure correct results. This allows Ethereum to reduce its storage and computational load. It also enables Layer 2 DApps.
Arbitrum uses the Arbitrum Virtual Machine (AVM), while Optimism uses the Ethereum Virtual Machine (EVM). This is a sandbox virtual that includes network consensus rules for each Ethereum node used in running smart contracts. In other words, optimism requires a greater connection to the Ethereum network. In a nutshell, currently, there is no scalable solution that addresses all the problems of the Ethereum network. Arbitrum primarily seeks to improve the functionality of Ethereum smart contracts. Optimism does the same, but focuses heavily on reducing the cost of transactions.
Is Polygon an alternative to Optimism?
When talking about scalable Ethereum solutions, it is also worth discussing the Polygon cryptocurrency network. Polygon is also a Tier 2 scaling solution. It provides tools for developers to build scalable and decentralized financial applications. These Dapps are able to prioritize security, performance, and user experience (UX).
Polygon is a multi-chain platform that combines the best aspects of Ethereum and other blockchains. Polygon addresses several issues associated with the Ethereum blockchain, including high network fees and slow transaction speeds. It does this without compromising security. This multi-chain system works in the same way as other systems like Cosmos, Polkadot and Avalanche.
The functionality and principles of Polygon and Ethereum are similar. It benefits from a high level of security. It also encourages collaboration with community participants as much of the code it uses is open source.
Optimism (OP) Cryptocurrency Where to Buy
The Optimism (OP) cryptocurrency can be purchased on a number of cryptocurrency exchanges. Binance is the most popular platform for buying and trading OP. The OP/USDT trading pair is the most active here, with an impressive volume of $8.544.959 in the last 24 hours.
Other reliable options include:
- DigiFinex
- bybit
These exchanges offer a user-friendly interface and often have competitive rates. To start buying OP, a user needs to create an account on the exchange of their choice and follow a few simple steps.
How to buy Optimism Coin (OP)
Buying Optimism (OP) coin is a simple process. Here are the steps to acquire this cryptocurrency.
- Choosing a broker: The first step is to select a broker that offers OP. Platforms like Binance and DigiFinex are good options.
- Create an account: After choosing a broker, the user must create an account. The process is quick and can be done via smartphone or computer.
- Verify identity: Many brokers require identity verification. The user may need to submit documents to complete this step.
- Deposit funds: Once your account is verified, you will need to deposit money. This can be done via bank transfer or credit card.
- Buy OP: With the funds in the account, the user must navigate to the OP trading pair. Then, he can choose how much he wants to buy and confirm the transaction.
- Store OP: After purchasing, it is important to store the coins in a secure wallet. This can be a digital wallet or a hardware wallet for added protection.
Following these steps allows anyone to buy Optimism coin efficiently.
Conclusion
The Optimism cryptocurrency stands out as an interesting solution in the blockchain sphere. With its OP token, it offers significant advantages over Ethereum's scalability.
Users can participate in governance of the network through token ownership. This allows you to influence important decisions such as upgrades and resource usage.
For those who wish buy OP, there are several options. It can be purchased on platforms like Binance, which offers a step-by-step guide on the process.
Furthermore, it is important to consider both the risks as to opportunities that come with investing in cryptocurrencies. The analysis provides insights into OP’s potential upside, helping investors make informed decisions.
Investing in Optimism is not just about buying coins, but also about understanding a innovative ecosystem which seeks to improve the user experience on Ethereum.
FAQ
Is Optimism Cryptocurrency Worth It?
Investing in Optimism can be advantageous due to its scalability technology, which promises faster and cheaper transactions on the Ethereum network. It is important to consider your investment goals before making a decision.
Cryptocurrency Optimism will rise?
Predicting whether the price of Optimism cryptocurrency will rise is tricky. The cryptocurrency market is volatile and depends on a number of factors, including new technology developments and changes in demand.
Cryptocurrency Optimism (OP) Price Prediction 2025
There is a possibility that Optimism could break through the $3,91 barrier and hold that price until the end of 2025. The lowest price for Optimism is expected to be between $3,23 and $3,91, and the most likely price will be around $3,75 by the end of 2025. Despite the wild swings in Optimism’s value and the controversy surrounding its environmentally harmful energy use, billionaire venture capitalist Tim Draper stands by his prediction that Optimism will reach $3,91 by the end of 2025 or early 2026.
Cryptocurrency Optimism (OP) Price Prediction 2030
By early 2030, Optimism price prediction and technical analysis suggest that Optimism will cost $10,77, and OP is expected to reach $10,77 by the end of the year. Furthermore, OP may reach as high as $10,16. The period from 2024 to 2030 will bring significant years for Optimism’s growth.
Is Optimism a good investment?
Investing in Optimism can be considered a good option for those looking to diversify their portfolio. The growth potential is linked to the adoption of its platform and the continued innovation of the Ethereum network.
What is the future of OP currency?
The future of OP coin could be bright, especially if the technology behind Optimism continues to evolve. The increasing adoption of scalability solutions could boost the coin’s value.
Is Optimism Coin safe?
As with any cryptocurrency, the security of Optimism Coin depends on the use of proper storage and transaction practices. It is important to conduct research on cryptocurrency security and follow recommended protocols.
How to store Optimism Crypto securely?
Storing Optimism securely can be done through digital wallets that offer robust security measures. Using hardware wallets and enabling two-factor authentication are good practices.
What are the risks of investing in Optimism?
Investing in Optimism comes with risks, such as market volatility and technological uncertainties. Investors should be aware of these factors and consider their risk tolerance before investing.