Sirwin
Sirwin

Optimism – How far?

By paragism | paragism | 28 Mar 2021


Optimism was founded by some former Plasma group researchers in 2019 to implement an Ethereum scaling solution – Optimistic Rollup. The organization raised a $3.5 million seed round from crypto venture fund Paradigm and IDEO CoLab Ventures. Optimism is a bit different from many other blockchain research organizations as it is a non-profit organization as of now. They aimed to contribute towards open-source developmental work and didn’t even launch a token.

It is undeniable that Ethereum has a scalability issue and that’s why so many so-called Ethereum killers keep on appearing. Still, the developers prefer Ethereum due to its decentralization, security and robustness. Ethereum 2.0 is supposed to solve many problems and make Ethereum more scalable but it will take a few years as per the road map. Even Ethereum 2.0 may not give Ethereum the optimal scalability and that’s why the community is focusing on layer 2 solutions to scale up Ethereum for a long time.  Optimistic Rollups (ORs) are layer 2 constructions that run on top of Ethereum’s base layer. The construction is designed to enable the running of smart contracts at scale while still being secured by Ethereum. The constructions are similar to Plasma and mimic the almost infinite scalability of Plasma to run an EVM compatible Virtual Machine called OVM (Optimistic Virtual Machine). The word 'Optimistic' signifies the publishing of minimum information with no proof with the assumption that the aggregators don’t commit frauds and the validators of Ethereum blockchain are honest. The transactions are bundled and settled in batches on the main chain i.e., in rolled-up form.

Like many other Layer 2 solutions, Optimistic Rollups store funds in a smart-contract on the Ethereum blockchain. The end users can enjoy almost feeless and instant transactions on layer 2. The layer 2 structure can provide up to 200-2000 transactions per second (TPS) and thus provides much better scalability.  A gamified demo of Uniswap on Ethereum Layer 2 was launched some time back which used Optimistic Rollup architecture. Optimistic Virtual Machine or OVM plays a very significant role by enabling the implementation of arbitrary smart contract logic. Almost anything possible on Ethereum mainnet is possible in the OVM. If the OVM is used along with Ethereum Virtual Machine (EVM), it supports writing codes in ‘Solidity’ and all existing codes can be ported onto Optimistic Rollup with ease. Yes, OVM has been live since January 2021.

The Ethereum community is really optimistic with ORs. Synthetix DEX is already working on an integration with Optimism for a few weeks. This official blog post of Synthetix stated, “Once OΞ mainnet is live a new SNX deposit contract will be deployed by the pDAO on L1. This will be the bridge that allows SNX holders on L1 to migrate to L2.”  Uniswap also declared to adapt Optimism in V3. Optimism mainnet was supposed to be rolled out in the last week of March 2021 but it has been postponed till July. As per their official blog post posted today, they had to delay the official public mainnet in favour of a more coordinated community launch after thorough audits and tests.

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Image source - Fullness of blocks on the Ethereum network

The Ethereum network is really congested but the congestion is proof of the demand. DeFi activity is at the peak and NFTs are attracting great investor attention. Everything is happening with arbitrary and insane gas fees. The fullness of blocks on the Ethereum network is 97-98% since last a few months and the base layer is going to be unusable for the common users soon. A chain like Binance smart chain is reaping the benefit of Ethereum’s overload but will people choose a centralized network in the long run? Ethereum’s layer 2 chains will provide a very tough competition to the layer 1 Ethereum killers. The Ethereum developers have created decentralized applications at such a rapid pace that the demand-supply curve has become really unstable. The value still settles on Ethereum as everything is built around it. Optimism offers a very easy transition from the Ethereum base layer as it is an extension of the blockchain. The migration of the developers can be smooth through Optimism. Obviously we need large-scale production now and the wait may be a bit longer.

Note: This post was first published here for Cryptowriter in association with voice.com.

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paragism
paragism

Cypherpunk. Writing content which I love. Creeping on the blockchain. Twitter - @paragism_


paragism
paragism

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