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Ethereum optimism6/27/2023 ![]() Another key driver for both chains is Galxe, the on-chain identity and credentials project.” In the case of Optimism, Lee says that, “we’re seeing a similar trend where DeFi protocols are one of the key drivers of adoption of the chain - Perpetual Protocol, Velodrome, Pika Protocol. Some of the most recent projects that have been onboarded to the network include: Bebop DEX, which specializes in one-to-many and many-to-one token trading automated money flow provider Cask Protocol on chain-asset management platform Factor and NFT platform OpenSea. These improvements may also be the reason why many new projects have decided to launch on Arbitrum. By holding the token, investors have the right to vote and the weight of their vote is determined by the amount of OP that they are holding.This upgrade, which was completed prior to the Ethereum Merge, increased Arbitrum’s throughput capacity by more than 7-to-10 times that of the Ethereum mainnet - hastening transaction speeds and reducing costs and requirements to run nodes. The purpose of the Optimism token is to take part in the protocols of the on-chain governance and public goods funding. Instead, fees are always paid using Ether, the native cryptocurrency of the Ethereum blockchain. Unlike other scaling solutions, users don’t need OP tokens to pay fees. The OP token is using the ERC-20 standard on the Ethereum blockchain. Like many other blockchains, Optimism has its own token which is listed under the exchange ticker OP. Once the users is finished with his business he can choose to opt for an on-chain settlement of his balance or to keep it on Optimism for other activities. ![]() Each transaction will only cost a fraction of the usual fee. This is especially useful when trading on decentralized exchanges or moving crypto in and out of liquidity pools. If funds are deposited on Optimism, users can interact with dApps that support the second layer solution. Doing so can be easily done by using a gateway that can be connected with any wallet such as MetaMask.Ī deposit takes around 20 minutes but a withdrawal form Optimism takes about a week since validators have to check the user’s balance before withdrawing the funds to the Ethereum blockchain. Since Optimism is a second layer based on Ethereum users have to bridge their assets to its blockchain. Once the block is tightly packed, Optimism hands the transaction data back to Ethereum. These blocks are acting very similar to receipts between transacting parties and only require a minimal set of data that is also compressed. It confirms valid transactions and creates blocks on its second layer. A new block on Optimism is produced by a sequencer. How does Optimism work?Īll blocks that are rolled up by Optimism are stored in a smart contract on Ethereum that is called the “Canonical Transaction Chain”. Optimism was introduced in 2019 but its mainnet just started in December 2021, which is the reason why this solution hasn’t become popular yet. It is estimated that this technology is reducing fees on the Ethereum blockchain by over 100 times compared to a standard on-chain transaction. Validators have one week time to check the entire rollup for any fraudulent transactions. ![]() The name of the protocol stems from the fact, that all validators assume optimistically that all transactions that have been bundled are valid. Optimism is a so-called layer-2 scaling solution. This is achieved by a technology that is called optimistic rollups which is bundling multiple transactions “rolling them up” into one transaction and settling them on another blockchain. Optimism speeds up transactions on Ethereum at a fraction of the cost of a usual on-chain transaction. How does Optimism work and how can you get involved in enjoying all of its features? What is Optimism? Optimism is a scaling solution for Ethereum that promises to solve these problems. Its blockchain is becoming slow and more expensive. Ethereum has become the second-largest blockchain after Bitcoin and is the market leader in terms of total value locked on its chain. More dApps and more users are competing and this does not only increase transaction costs but also the time to execute transfers on the blockchain.
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