Background of Optimism:

Optimism is a decentralized infrastructure platform based on Ethereum that enables instant transactions and scalable smart contracts. It was founded in 2019 by Jinglan Wang, Karl Floersch, and Kevin Ho. Optimism has completed three rounds of fundraising, with a cumulative amount of $178.5 million and a valuation of $1.65 billion. Its most recent funding was a Series B round on March 17, 2022, which brought in $150 million in venture capital. The company’s investors include IDEO Colab Ventures and Paradigm Fund. Its founding name was Optimistic Rollups and it was conceived with the objective of addressing Ethereum's scalability limitations by processing a majority of transactions off the main chain, known as Layer 1, and only submitting a summary of these transactions to Layer 1. This approach significantly reduces transaction fees and improves network throughput.

How Optimism Works:

As its original name suggested, Optimism leverages a technique called optimistic rollups, which relies on an assumption that transactions are valid. Instead of processing each transaction on Layer 1, Optimism bundles transactions together and sends them to a network of verifiers. These verifiers periodically submit proofs of validity to Layer 1, ensuring that the transactions are legitimate. If any verifier detects a fraudulent transaction, it can challenge it, and the transaction will be reverted.

Benefits of Optimism

• Lower Transaction Fees as rollup technology significantly reduces transaction fees compared to Ethereum.

• Faster Transaction Speeds to process transactions much faster than Ethereum, with typical confirmation times of around 10 seconds.

• Scalability where Optimism handle a much higher volume of transactions than Ethereum, making it more scalable.

• EVM Compatibility with the Ethereum Virtual Machine (EVM), meaning that existing Ethereum dApps can run on Optimism without any modifications.

As a result of the benefits explained above, Optimism also has use cases in Decentralized Finance (DeFi) thanks to its low fees and fast transaction speeds, huge potential in Non-Fungible Tokens (NFTs) market due to its scalability and low fees and of course gaming because it can  handle high transaction volumes.

In conclusion, Optimism poses a challenge to Ethereum networks by offering several advantages that could potentially lead to a shift in user preference and developer adoption however, it is important to note that both platforms can coexist and serve different use cases. Moreover, Ethereum remains the most popular blockchain platform, with a large and established ecosystem of dApps and protocols. All in all the future for Optimism lies in delivering on its promises and with respect to Ethereum, it all depends on how well they evolve especially as new players come on to the market.  Ultimately, the competition between Ethereum and Optimism is likely to benefit the overall blockchain ecosystem by driving innovation and improving the user experience.

Optimism in Numbers:

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