What is Optimism (OP)?

TL;DR

Optimism, founded in 2019, is an Ethereum scaling solution that is built to work seamlessly with its parent chain and make transactions on the platform cheaper and faster by “rolling” them up into what is one transaction on the Ethereum mainnet. Its native token, $OP, allows holders to participate in its governance system, called the Optimism Collective.

What is Optimism (OP)?

Optimism is a Layer 2 Ethereum blockchain meant to help with scaling. Like a lot of rollup solutions, Optimism realizes the network efficiency problem that Ethereum faces. That is, in its early days, the low throughput that the Ethereum network presented didn’t stand in the way of its ability to handle its traffic. But as time has gone on, as the industry has matured, and as Ethereum has become the largest smart contract platform in the world, its low efficiency has really begun to show at scale. As covered in our article on the subject, this means network congestion, high gas fees, and slower transactions.

Optimism, being a layer 2 solution, is built to increase the throughput of the network without actually changing anything about how it operates. It processes transactions off chain and works with Ethereum’s existing consensus mechanism (now proof of stake).

How does Optimism work?

Optimism, in short, is meant to make Ethereum cheaper and faster. If Ethereum is easy and cost-effective to use, developers will want to use it to deploy apps, hence Optimism’s scalability solution!

Optimism uses what are called optimistic rollups. What a rollup does is “roll up” what amounts to hundreds of Ethereum transactions. This bundle of transactions is represented by a single transaction on the Ethereum mainnet. By doing this, it ends up that there is only one transaction’s worth of gas fees. Furthermore, by taking the transactions and processing them outside of the Ethereum blockchain, Optimism is able to cut down on network congestion. This solution does not actually validate the transactions, as it functions with Ethereum’s existing consensus engine.

Okay, so we have what it means to roll up hundreds of transactions. But you may be wondering why it’s called an “optimistic” rollup. When using an optimistic roll up, a network’s transactions are taken to be correct until they are proven false. In other words, the transactions are published to Ethereum without direct proof of validity- as the network is “optimistic” about them- and are instead regarded as pending. Transactions can be challenged as invalid by submitting a “fraud proof” within what is a 7-day challenge window. After the seven day challenge window closes, the transactions go through, and are recorded on the Ethereum chain.

Optimism is very focused on smooth operation alongside Ethereum. As such, it is EVM-equivalent, which means that it runs with complete alignment with the Ethereum Virtual Machine specifications. For users, their Optimism address is the same as their Ethereum address, and like on the Ethereum network, users use ETH for gas fees as Ethereum is the parent blockchain.

The Optimism Collective

The Optimism Collective is Optimism’s system of decentralized, public-run governance. Its thesis is that products that are made to serve the public good can and should be profitable. According to its page on the subject, Optimism states that this governing force is made up of the various communities, companies, and other participants that support Optimism.

So, how does one access the Optimism Collective? Let’s read on!

What can you do with $OP?

Optimism’s OP token grants users access to and the ability to participate in the Optimism Collective which handles governance of the Optimism platform. It comprises what is called the Token House and the Citizens’ House. The Token House handles technical decisions, and the Citizens’ House has to do with funding decisions.

How to acquire $OP

OP is available on multiple exchanges like Poloniex! You can acquire OP through trading a USDT and USDD trading pair: OP/USDT | OP/USDD

Feeling ready to get started? Sign-up is easy! Just hop on over to https://poloniex.com/signup/ to start your crypto journey🚀

What is Optimism (OP)? was originally published in The Poloniex blog on Medium, where people are continuing the conversation by highlighting and responding to this story.