What is Optimism Crypto (OP)? - Beginner Guide - Market247.io
With Layer 2, Ethereum users no longer have to worry with network congestion issues and excessive transaction costs. Layer 2 Blockchains come in a variety of forms, and roll-up solutions, particularly optimistic roll-ups (Arbitrum, Optimism, etc.), are the ones that draw the most users and have the greatest TVL. Recently, Optimism released the OP token; in this article with Market247, let's find out What is Optimism Crypto (OP).
What Is Optimism?
Let's first examine more closely at what is optimism.
The Layer 2 Rollup scaling solution known as optimism runs on top of the Ethereum blockchain and enables quicker transactions with cheaper gas prices. Simply put, it enables the majority of processes and transactions to be carried out off-chain using an L2 protocol and permits the Ethereum Network to validate them there.
- Due to the gas charge and transaction time being too high for consumers' tolerance, the Ethereum Network has several restrictions.
- Optimistic Rollups (ORs) are separate from the Ethereum Network and operate on their own. With less latency than Ethereum, the L2 scaling solution will boost throughput and performance.
- Decentralized Applications (Dapps) based on Ethereum may operate on ORs without requiring complicated code modification thanks to the optimistic virtual machine (OVM). Optimism Rollups are EVM compatible because of this functionality.
How Does Optimism Work?
To learn more about what is Optimism, Let's explore how optimism works.
Rollups are used by optimism to process transactions in batches, lowering network load and gas costs. When compared to the Layer 1 protocol, rollups can help consumers save up to 100 times the gas charge.
Hundreds of Layer 1 transactions on Ethereum are combined into a single transaction through the rollup method utilized by Optimism cryptocurrency. The gas cost is split among all the customers because a bundle of transactions contains many transactions. The transaction data is uploaded to Ethereum's Layer 1 for processing while the rollup is carried out on Optimism's Layer 2.
Optimistic rollups are "optimistic" in the sense that no computations are made on Layer 2 of Optimism and every transaction is considered as genuine. The system conducts fraud-proofing to check the transaction if it detects fraud.
Project management model
The governance model of the Optimism Project
"Optimism Collective," a bicameral governance structure made up of Token House and Citizen House, is being introduced by optimism.
- The Governance Fund will allow Token House to vote on "protocol updates and project development incentives."
- NFT "soulbound" will oversee Citizens' House, which will be used to distribute practical items to the neighborhood. In the Optimism governance model, "soulbound" NFTs are non-transferable NFTs that function as a decentralized identity.
About OP token
- Token Name: Optimism
- Ticker: OP
- Blockchain: Optimism
- Token Standard: ERC-20
- Contract: 0x4200000000000000000000000000000000000042
- Token Type: Governance
- Total Supply: 4.294.967.296 OP
- Circulating Supply: 214.748.364 OP
After learning the basics of what is optimism (OP), let's explore its highlights.
Cost-effective transaction costs and scalability:
When compared to Ethereum, Optimism achieves a 10-100x improvement in scalability depending on the kind of transaction and offers a considerable decrease in transaction fees. According to optimism, transactions completed on this network have avoided $335 million in gas costs.
Compatible with EVM:
Using OVM, Optimistic can support any Ethereum application. Any dApp on Ethereum may be deployed into Optimism by developers without altering the architecture. This makes it simple to integrate Ethereum-based decentralized apps (dApps) into Optimism.
Optimistic Rollups like Optimism receive their security from the Ethereum mainnet, unlike other sidechains like Ronin that have their own privacy capabilities since they operate independently. Optimism is used to process transactions, whereas Ethereum is used to record and store the transaction data. As a result, Optimism can offer scalability while inheriting Ethereum's security.
When optimism hit mainnet in 2021, prominent wallets like MetaMask, Coinbase Wallet, Trust Wallet, etc. instantly began to support it. To link crypto payments with the broadest user population, the wallet lego is the frontier. The wallet initiatives that control the vast majority of users worldwide will reap the most advantages from the user game.
Disclaimer: This article is only a sharing on the subject of What is Optimism (OP): it does not endorse any particular company, service, or product. It makes no prior recommendations for trading.
Market247 hopes that after reading this article you have learned all there is to know about the OP token, including its benefits and key points.
Join the Market247 Community for further talks about Crypto if you have any concerns regarding what is Optimism (OP) or want to learn more about Layer 2.
What is Optimism (OP) - FAQs
How many OP are there?
Out of a total quantity of 4.29 billion OP, there were reportedly 244.74 million OP in circulation as of August 11, 2022.
Is OP a Good Investment?
When OP originally started, there was a lot of, rightly, optimism surrounding it, albeit that has now waned a little. Everything may ultimately rely on how usefully the token and platform may be developed in the future. You should always conduct your own research before investing in cryptocurrencies, always in mind that prices can go up as well as down, and never risk more money than you can afford to lose. Future results cannot be predicted based on past performance.
Will optimism increase?
Prices of cryptocurrencies can fluctuate greatly, rising and falling as often. Additionally, keep in mind that forecasts made by experts and algorithm-based forecasters can and frequently do not pan out. Remember that past results do not guarantee future success. Do your own research at all times. Furthermore, never invest money that you cannot afford to lose.
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