Exploring Optimism: Revolutionizing Scalability

What is Optimism?

Founded in June 2019 by Jinglan Wang, Karl Floersch, and Kevin Ho, Optimism has secured significant backing, including a $150 million Series B funding round from major investors like Andreessen Horowitz and Paradigm.

Optimism is an Ethereum-based layer-2 solution built to address infamous scalability issues. The second largest L2, Optimism’s Total Value Locked exceeds $970 million, second only to Arbitrum.

One of Optimism's most impressive features is its transaction validation speed, reaching up to 2,000–4,000 TPS. This is made possible through Optimistic Rollups, which enable the execution of smart contracts and transactions off the main Ethereum chain while maintaining security. For users, this translates to faster, cheaper, and safer transactions—a game-changer in the world of decentralized finance.

How Optimism Works

The optimistic rollup consolidates multiple transactions into a single one for processing at a later time. It will return all final transaction data to the Ethereum blockchain as a new block to be validated when the process is complete.

This technique helps reduce gas fees significantly, as they are split among all transaction owners instead of being paid by only one party, and speed up the validation process.

Every block created on Optimism is stored on the Canonical Transaction Chain (CTC), a special smart contract that ensures that new Ethereum transactions cannot modify existing block lists. With this technology, optimism can adopt and apply Ethereum's security and decentralisation features.

In Optimism, it is the sequencer that constructs all the blocks. Initially, the sequencer will confirm the transaction and then build a block on Optimism's tier 2. These blocks are known as Rollups (a collection of Ethereum transactions). Following that, the sequencer will execute the block by compressing it so that the transaction size is reduced. Once finished, the transaction data is returned to Ethereum.

As an EVM-compatible Layer 2, developers can easily install Ethereum smart contracts on Optimism, making it an ideal platform for scaling dApps. Furthermore, as one of the first Layer 2 solutions released, Optimism's welcoming development environment and long-term development have resulted in a varied and rich ecosystem.

Optimism’s Ecosystem

The Optimism ecosystem is a bustling hub of innovation, hosting a diverse array of projects including bridges, social, tools, and NFT platforms, in addition to its well-known array of DeFi solutions. Here are a few of the most prominent ones.

AAVE 3

Aave is one of the top protocols in the Optimism ecosystem. AAVE V3, the latest version of AAVE, introduces enhancements to user experience, security, and efficiency. It features gas optimization, increased scalability, and new risk mitigation tools. AAVE V3 also includes advanced governance mechanisms and innovative modes for managing assets. These upgrades reinforce AAVE's position as a top DeFi platform, offering users greater flexibility, security, and earning potential.

Synthetix

Synthetix operates as a decentralized liquidity layer on Ethereum and Optimism, serving as a crucial liquidity provider for leading DeFi protocols.

Through SNX staking, users earn interest and unlock borrowing capabilities for sUSD. This synthetic USD is usable across various Real-World Asset (RWA) Dapps within the Synthetix ecosystem, enabling trading in crypto, Forex, commodities, and beyond—all represented as crypto assets.

With support for eight Dapps, Synthetix stands as the Dapp with the highest Total Value Locked (TVL) on Optimism.

Velodrome

Currently, Velodrome holds the title of the largest DEX on the Optimism network. Inspired by the principles of Solidity, it operates as an Automated Market Maker (AMM) DEX, prioritizing liquidity and minimal slippage for key token pairs within Optimism's ecosystem.

Distinguishing itself amidst DEX competitors, Velodrome entices users with incentivized liquidity pools, cultivating an environment ripe for engagement and investment. Additionally, it grants governance powers to users through its token (VELO), enabling them to influence token distribution and decision-making processes.

Currently, Velodrome holds the title of the largest DEX on the Optimism network.

Embracing the Future with Optimism

With LaborX's integration of Optimism, freelancers now have access to a world of new possibilities. By accepting payments in $OP and exploring other tokens within the Optimism ecosystem, freelancers can maximize their earning potential and simultaneously contribute to the platform’s development.