Optimism Project overview

by Deep Trade

The cryptocurrency project Optimism was founded to scale the Ethereum blockchain. The startup has already managed to raise $25 million in investments. At the moment, the sidechain is still in its launch phase, but it has already become a popular solution.

Features of Optimism

The Ethereum blockchain is an easy and flexible platform for the development of various decentralized projects. And the number of applications based on Ethereum is growing very fast.

This growth led to high fees and low application speed, as the network can process an average of 10-15 transactions per second. The Optimism project was created to solve both problems.

The new network is the second surface layer of the Ethereum blockchain. In it, all basic information is stored in Ethereum, but part of the transactions are processed in Optimism, a layer 2 network.

The second network lightens the load on the first, and this noticeably increases the transaction speed. In Uniswap, for example, the amount fees are reduced by 10 to 100  times.

The Optimism project offers users the following benefits:

Almost immediate execution of transactions. The immediate confirmation of the transaction.

The use of the Ethereum blockchain becomes ten times less expensive.

The level of reliability and the effect of decentralization of Ethereum are preserved.

The Optimism project is currently in the deployment phase. The main network and other tools will be fully functional by the end of 2021.

How to use the Optimism network

The algorithm itself has the following structure:

The function of using the second network is added to a user-friendly crypto wallet;

Existing ETH and other tokens are transferred to Optimism from the Ethereum blockchain;

The transferred cryptocurrency is used to perform transactions and interact with applications that support interaction with the second-layer network.

Users have the option to transfer their tokens back to the Ethereum blockchain at any time.

To transfer assets from the main to the secondary blockchain, Ethereum's gateway is used. Alternatively, users can choose alternatives like Celer Bridge or Hop Exchange. Using these bridges can make the transfer of funds even faster, but users will have to pay a higher fee.

Users need to take into account the fact that it will not be possible to quickly transfer tokens from the Optimism network back to the Ethereum blockchain. Each transaction can be verified within a week. This delay is due to a strict security procedure.

Once digital funds are sent to Optimism, the transfer cannot be reversed. But the developers plan to include such a feature in the future. You can see the infrastructure providers working with the secondary Ethereum network on the screenshot below.

The project team is not against third-party specialists participating in the development of the Layer 2 network. And for them, they have developed special documentation. Optimism is also actively developing the network community. On the official website, you can find news about the startup and current job openings.

The new network does not yet have its own digital currency. However, the developers plan to create a management token or a similar asset in the future. There are rumors that early Optimism users will receive a certain number of tokens as a thank you for their loyalty. This was the case with the decentralized exchange Uniswap, for example.

Connecting to the Optimism network

To connect to the network, you need your own crypto wallet. Take MetaMask, for example.

After you install it, here is what you need to do:

  1. Click on the wallet logo and then on the settings icon.
  2. Find the Networks button and click on it.
  3. Select a network and click Add.
  4. On the Wallet support page, check the relevance of the added network data.

After you have completed these steps, you need to save the settings.

If everything is done correctly, Optimistic Ethereum will appear in the list when you click on the network icon. Using the wallet menu, you can quickly switch between the second-tier network and the main Ethereum blockchain (Ethereum Mainnet).

To transfer tokens to the sidechain, you must first buy them on a cryptocurrency exchange or a P2P exchange. Next, you need to go to the transfer page of the network itself. The top block indicates the network from which the funds will be transferred, and the bottom block indicates the location to which the tokens will be transferred.

Users must specify the amount of the transfer. To start a transaction, you need to click on the Deposit button. A confirmation window will appear on the interface of the cryptocurrency wallet. At this stage, since the transaction is processed through the Ethereum main net, the transfer fees are about average.

The potential

The main advantages of Optimism at the moment are its low fees and high transaction speed.

It should be noted that this functionality is also offered by other Level 2 networks that focus on solving the problem of scaling the Ethereum blockchain.

Moreover, independent blockchains are actively developing at the moment and they have their own advantages. E.g. It will be difficult to compete with Polkadot (DOT) as long as the timeframe for withdrawing funds from the Optimism sidechain is more than 7 days.

Also, the developers of Optimism have made it clear that they are not responsible for users' funds, as the first version of the protocol is now in place. But there are not so many good Ethereum side chains yet, so any project that works and is adequate for the task demands. Optimism is no exception. Besides, the second version of the protocol should be fully deployed by the end of October 2021.

To date, the project has the following metrics:

More than 2.2 million transactions have already been processed on the Optimism sidechain.

  • Verified contracts:150+.
  • The system contains over 100 thousand unique addresses.
  • Users could save a total of $100 million on fees.

Various applications are already being actively developed based on Optimism. Examples:

  • Lyra, an automated market maker for options trading.
  • Synthetix, a system for storing and trading digital assets.
  • Uniswap: a peer-to-peer system that enables the exchange of ERC-20 tokens.

Optimism can support any existing Ethereum-based application. Deployment takes 1 click. At the same time, all previously used developer tools are saved.

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