What is Optimism? (OP)

As Ethereum has grown, it has encountered challenges with transaction speed and cost, leading to network congestion and high fees. Optimism was created to lift some burden of the main blockchain by processing transactions off-chain, resulting in faster and cheaper transactions while maintaining Ethereum's security.

Importantly, Optimism is compatible with the Ethereum Virtual Machine (EVM), allowing developers to migrate their existing Ethereum dapps to the Optimism network.

OP is the native governance token of the Optimism network. By holding OP, users can participate in shaping the future of the platform through voting on proposals and other governance mechanisms.

Who Created Optimism?

Plasma Group, a non-profit research organization focused on Ethereum scalability, was founded in January 2019. After integrating concepts from Vitalik Buterin's rollup design, the team pioneered the Optimistic Rollup concept.

In January 2020, Plasma Group transitioned into Optimism PBC (and eventually the Optimism Foundation), a public benefit corporation founded by Ben Jones, Karl Floersch, Jinglan Wang, and Kevin Ho.

The Optimism mainnet was launched on December 16, 2021. The network's native token, OP, was launched in May 2022 through an airdrop. This airdrop rewarded early users and active contributors, further solidifying the community's role in the Optimism ecosystem and empowering them to participate in the network's governance.

Optimism Collective

The Optimism Collective is a governance structure where members can contribute and participate in the network's development.

The Collective consists of two governing bodies:

• The Token House: OP token holders that are responsible for submitting, deliberating, and voting on governance proposals.
• The Citizens' House: Focuses on distributing funding to valuable projects within the ecosystem.

How Does Optimism Work?

Optimistic Rollups

Optimism is designed to make Ethereum transactions quicker and cheaper through a mechanism called “Optimistic Rollups”.

Rollups are a Layer 2 technology that processes data away from Ethereum before submitting cryptographic proof of the data back to the main chain. In that way, Optimism batches transactions together, processes them off-chain, then submits them back to Ethereum.

L2 nodes in Optimism are made up of several components that work together to produce blocks on the L2 network:

• Sequencer nodes: Gather proposed transactions from users
• Batcher: Submits batch data to L1, which controls the canonical chain
• Proposer: Submits output roots to L1, which controls L2 to L1 messaging

The process is “optimistic” because Optimism assumes these bundles are valid by default. However, there is a challenge period of about 7 days where anyone can dispute a transaction if they believe it to be fraudulent.

The OP Stack

The OP Stack is a modular framework for building interoperable Layer 2 networks. Developers can use the OP Stack to create custom blockchains, while benefiting from Ethereum's security and network effects.

The OP Stack consists of several layers:

• The Data Availability Layer: Defines where the raw inputs to an OP Stack chain are published.
• The Sequencing Layer: Responsible for organizing and publishing transactions to the blockchain.
• The Derivation Layer: Used to process transaction data and send it to the main Ethereum chain.

The OP Stack was developed by the Optimism Collective and open-sourced it. The aim is to foster a collaborative ecosystem for developers to build scalable and efficient blockchain applications and expand the capabilities of Ethereum.

Optimism Superchain

The Optimism Superchain is a network of Layer 2 platforms that share security from Ethereum, a standardized communication layer, and an open-source technology stack. This allows developers to build applications that can operate interoperably.

Key Properties of the Superchain:

• Shared security from the Ethereum blockchain
• Standardized bridge for secure cross-chain communication
• Cost-effective deployment of new OP Chains
• Customizable configuration options for each OP Chain
• Secure transactions and cross-chain messaging

These properties enable the Superchain to function as a unified and scalable ecosystem, while still allowing for customization and flexibility for individual OP Chains.

How Does OP Work?

The OP token has a total supply of 4,294,967,296 tokens and is designed to power the Optimism Collective. The supply is allocated as follows:

• Ecosystem Fund (25%): Provides grants and funding to ecosystem projects and communities.
• Retroactive Public Goods Funding (RetroPGF) (20%): Retroactive funding to projects and individuals who made significant contributions to the ecosystem.
• User Airdrops (19%): Used to reward early users for their positive contributions to the network, spread across several airdrops:
• Airdrop 1 (May 2022): 5% of the total OP supply was distributed to over 250,000 eligible addresses, including early users, DAO voters, and Gitcoin donors.
• Airdrop #2 (February 2023): ~0.27% of the total supply was airdropped to users who spent more than $6.10 on gas using Optimism, made transactions from 25 or more unique addresses, or delegated their OP tokens to a governance delegate.
• Airdrop #3 (September 2023): ~0.45% of the total supply was allocated to users who delegated their OP tokens to an active governance delegate.
• Airdrop #4 (February 2024): ~0.24% of the total supply was distributed to users who bridged assets to Optimism from other chains.
• Airdrop #5 (October 2024): ~0.24% of the total supply was airdropped to "power users" of the Optimism Superchain, based on multi-chain activity and governance participation.

After the 5th airdrop, approximately 14% of the total OP supply remains allocated for future airdrops.

• Core Contributors (19%): Reward the core team in building and developing the Optimism network.
• Investors ("Sugar Xaddies") (17%): Allocated to early investors who provided financial support for the development of Optimism.

The OP cryptocurrency is mainly used for:

• Governance: OP token holders can participate in the future of the network by voting on proposals related to the network's development, upgrades, and overall direction.
• Transaction Fees: OP tokens can be used to pay transaction fees.
• Incentivization: Reward users who contribute to the network's health, security, and growth. This includes rewarding developers, liquidity providers, and other active participants.
• Consensus mechanism: OP tokens are used to participate in the network's consensus mechanism.

Optimism essentials

• Optimism is a Layer 2 scaling solution for Ethereum that uses optimistic rollup technology to process transactions off-chain, resulting in faster and cheaper transactions while maintaining Ethereum's security.
• The OP Stack is a modular framework developed by Optimism for building interoperable Layer 2 blockchains, enabling developers to create custom blockchains that share security and a communication layer.
• The OP token is used for governance, incentivizing network participation, and potentially for transaction fees in the future, with a significant portion of the supply allocated for airdrops to reward users for various contributions to the ecosystem.

How to buy OP?

You can buy the OP coin on Bitstamp. Sign up for a Bitstamp account and start trading Optimism today!

• Buy Optimism (OP) with Euro EUR
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• Buy Optimism (OP) with Ethereum ETH

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