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The Token: called OP, announced here, NOT yet claimable, will be able to claim in Q2, click here to see if you qualified and how many OP you earned (connect your wallet and scroll down)

What is Optimism?

It is an Ethereum rollup.

Rollups

Rollups are a relatively new L2 solution being implemented on Ethereum that enable exponential scalability gains while providing (nearly) identical security guarantees as mainnet Ethereum. The primary innovation of rollups is that they move computation off-chain, while storing only the bare minimum of transaction data on-chain with no added trust assumptions. The rollup chain handles all of the expensive and computationally-dense data processing, enabling exponential growth in Ethereum’s ability to execute transactions. Again, in its simplest form, the rollup chain executes the Ethereum transactions on its own chain, “rolls'' them up into one batch, and Ethereum receives and stores the results. Rollups can be thought of as branches off of the main trunk of Ethereum that increase the computation surface area of Ethereum. 

However, in order to do so, the Ethereum mainnet needs some way to verify that the transactions that happen off-chain are valid. So, how does Ethereum determine that submitted data from a rollup is valid and not submitted by a bad actor?

The answer is cryptographic proofs, like validity proofs for ZK-rollups (ZKR) and fraud proofs for Optimistic rollups (OR). Each rollup deploys a set of smart contracts on L1 Ethereum that are responsible for processing deposits/withdrawals and verifying the submitted proofs. The main value proposition of rollups is that they minimize the data footprint on L1 while still preserving the ability to check for fraud.

In the case of Optimistic rollups, no computation is actually done. ORs “optimistically” assume all state changes are valid and post the off-chain transactions to Ethereum’s layer 1 as calldata. To counter any potential fraudulent transactions, a challenge/dispute period is put in place for ~one week after posting to L1. During this time any third party can publish a fraud proof to verify the validity of the transactions across L1 and L2.  If the transactions are found to be invalid, the invalid transactions and all affected transactions will be reverted. Arbitrum, Optimism, Metis, Boba, and Fuel are examples of Optimistic rollups.

*Learn more about Optimism and all rollup implementations here!*

Optimism

Optimism is a Public Benefit Corporation (PBC) that created Optimistic Ethereum (OΞ), a leading Optimistic rollup on Ethereum. Optimism was formerly known as the Plasma Group but has since changed its name and even raised funds from the likes of a16z. The project aims to create a seamless L1-to-L2 developer experience by enabling (nearly) “copy and paste” code from one layer to the next, thanks to its OVM. OVM stands for Optimistic Virtual Machine and is the virtual machine that executes all transactions in the rollup. 

Optimism tries to stick as close as possible to the Ethereum ecosystem. It uses a modified GETH for its Layer 2 node and it has a Solidity compiler. However, it does not support any EMV languages apart from Solidity. 

As mentioned, the Optimism team is working towards “EVM equivalence” with the next upgrade, Optimism 2.0, which enables the OVM to be equivalent to the EVM in all technical aspects. Developer tools like smart contract libraries, Hardhat, and Solidity tooling will work natively on OVM 2.0. Additionally, current dApps live on mainnet Ethereum can be ported over to the L2 with no changes necessary! Even better, Optimism can (eventually) reduce the Ethereum L1 gas fees for these very same dApps by ~10,000% and increase the transactional throughput by ~200x.

Optimism launched with controlled rollout where a whitelisted group of dApps were approved to launch, most notably Uniswap, Synthetix, and 1inch. This limited release hampered Optimism adoption early on as it had onboarded only 6 dApps compared to ~60 for Arbitrum. However, on December 16th, 2021, the Optimistic team removed the developer whitelist for a full, open system which will allow all dApps to begin building on Optimism if they so choose. Top projects like Balancer and Tornado Cash have already moved over.

However, in February 2022, it was discovered that the Optimism rollup had a critical bug that would have allowed the repeated creation of ETH by triggering an opcode. Jay Freeman discovered the bug and alerted the Optimism team, who later awarded Jay a $2M bug bounty. The team is confident the bug was not exploited, has been fixed, and there remains no unpatched clients.

How it works

In the case of Optimism, transactions are sent to the rollup chain where they are received, reviewed, and executed by Sequencers. Sequencers take on this responsibility because they are rewarded for properly executing transactions. However, if a Sequencer acts maliciously or attempts to push through invalid transactions, they will be punished by having their staked funds slashed.

As mentioned previously, ORs rely on fraud proofs meaning at least one honest actor must identify a fraudulent transaction and challenge it, otherwise, it will be accepted on the chain. 

As we know, Optimistic Rollup assumes the existence of verifiers: For each transaction published by the sequencer, a verifier is responsible for downloading that transaction and applying it against their local state. If everything matches, they do nothing, but if there’s a mismatch there’s a problem! 

If anyone suspects fraud, they challenge it with the adjudicator contract on L1 mainnet. The adjudicator contract can verify the validity of the Sequencer’s results via the Optimistic Virtual Machine (OVM). If indeed, the Sequencer’s transaction/submission is invalid, a fraud proof is generated and the Sequencer’s funds are slashed. A portion of the slashed funds is awarded to the whistleblower. This is what gives users the incentive to monitor transactions and detect potential fraudulent blocks. 

Pros of Optimism

EVM-equivalence and better developer experience (existing tooling and programming languages) 

Easier dApp migration for existing dApps (L1 to L2), can create and ship faster than ZKR

All data available on-chain 

Computationally less expensive than ZKR

Cons of Optimism

Less theoretical/maximal throughput vs ZKR 

Centralized sequencer

Longer withdrawal period 

Fraud proofs mechanism not published yet

Resources to utilize Optimism and qualify for future airdrops

• Block explorer - Optimistic Etherscan
• Native bridge - Optimism Gateway
• User guide
• Live applications portal
• Dashboard
• ByBit (centralized exchange) bridge/on-ramp
• Add Optimistic Ethereum Network via MetaMask
• Fees paid to L1

Top Projects on Optimism

• Synthetix - DEX for synthetic assets
• Uniswap: AMM DEX
• Perpswap
• Stargate: An omnichain interoperability protocol.
• Lyra: An options trading protocol.
• Synapse: A cross-chain bridging protocol. 
• Hop Protocol: A cross-chain bridging protocol.
• ZipSwap: A fork of the Uniswap DEX protocol.
• Curve: One of the most popular DEXes in DeFi.
• Arrakis Finance: A liquidity management protocol.