With the ultimate goal of providing open internet for everyone, Optimism represents a low-cost and lightning-fast layer-2 protocol for Ethereum. Though the project is not the first and probably not the last one to solve Ethereum’s scalability problem, its team members are sure of success. Thanks to a number of technological solutions, they not only achieve their key goal but also offer a user-friendly UX for developers. All-in-all, the project aims to create a new model where those who create or sustain public goods get proper rewards for their contribution.
The project is backed by a non-profit organization the Optimism Foundation. As the platform is not fully decentralized at the time of writing, the founders claim to donate all the profits they get from running a centralized sequencer to scaling and sustaining public goods. Being an NGO, the company is fully funded by grants and donations.
Ever since the popularity of cryptocurrencies boosted in 2017, Ethereum has been struggling with scalability issues which resulted in high transaction fees and low throughput. Optimistic rollups represent one of the technological solutions to this problem. It implies creating another layer on top of Ethereum’s mainchain for transactions’ verification.
The name “optimistic” comes from the fact that all transactions included in a rollup are presumably valid by default. Validators who are responsible for their verification don’t provide any proofs as they publish only the minimum information that the network requires. At the same time, validators have one week to query the whole rollup if they consider the data to be fraudulent. Such an approach not only secures the network while keeping it scalable. It also helps to significantly increase the speed of transaction confirmation. This is possible because transactions are sent to the mainchain in bundles removing the need for itemized verification.
The OP token
To encourage Optimism early adopters and reward those who support the protocol, the Optimism Foundation distributes generous airdrops.
The number of tokens one can claim depends on the type of support provided. The dedicated page on the official website distinguishes several categories such as Optimism Users, Repeat Optimism Users, DAO Voters, Multidig Signers, Gitcoin donors, and Users Priced Out of Ethereum. The number of OP allocated per address varies between 409.42 and 2,469.35 tokens.
The Airdrop event didn’t go as initially planned, though. 248,699 addresses received their first reward on May 31st, 2022. According to the whitepaper of the project, these are “early adopters and active users of projects in the Optimism ecosystem”. However, as those users cashed out their rewards practically as soon as they received them, the OP token price plummeted from $4.5 to $0.87 per token in a matter of a few hours resulting in widespread frustration within the Optimism community. Many users complained that many claimants were somehow able to get their rewards before the official airdrop took place and dump the price.
The OP token itself is built on top of Ethereum as it can be stored on any ETH-compatible wallet like Metamask or Coinomi. With the maximum supply of 4.3 billion tokens and a 2% yearly inflation, the token is available for trading on a big number of both centralized and decentralized exchanges such as Binance and Uniswap. The token allocation implies giving away 19% of tokens to the core contributors of the project, 25% to the ecosystem fund, 20% to retroactive public goods funding, 17% to investors (“sugar xaddies”), and 19% to user airdrops.
More reasons for pessimism
In addition to the unsuccessful airdrop, Optimism lost $15 million worth of its tokens at the end of May 2022, as the hired market maker Wintermute provided the company with the wrong address. Though the first two test transactions went smoothly, the problems took place when the Optimism Foundation tried to send the main chink of 20 million tokens.
Wintermute was supposed to provide an address on Optimism (L2) but gave an Ethereum address (L1) which was not yet synced to the L2 address at that time. As a result, the funds were left inaccessible to L1. The attacker made use of this vulnerability and stole the money cashing out one million tokens to Ethereum immediately and then transferring it to a private address via Tornado Cash. On June 9th, the exploiter reportedly sent 1 million tokens more to Vitalik Buterin and returned 17 million tokens to the Optimism contract address. When the theft was discovered on June 30th, Wintermute took full responsibility for itself.
Optimism team and partners
The project doesn't provide any information about its team members on its website, but some key players can be found on its LinkedIn profile. Thus, Kevin Ho who resides in New York, the US, is the Co-Founder and Protocol Product Manager. With a degree in computer science which he received at the University of Pennsylvania in 2018, he was at first leading the development of Cryptoeconomics.study, a free, open-source blockchain protocol course. In 2019, he founded Optimism.
Mark Tyneway is another co-founder and Protocol Developer at Optimism Foundation. Prior to joining the company in October 2020, he worked in a number of IT companies including IBM where he took the position of software engineer.
Liam Horne joined the company as the CEO in February 2021. Being particularly enthusiastic about blockchain in general and Ethereum in particular, he also co-founded such companies as Ether Capital and ETHGlobal.
The scaling solution provided by Optimism has found a big number of followers and supporters across the whole crypto community. Some of the most famous projects include: DeFi protocols such as Uniswap, 1inch, and Aave; on-ramp exchanges like Binance, Huobi, and KuCoin; crypto wallets like Metamask, TrustWallet, and Coinbase. Also, an oracle service provider Chainlink integrates the Optimism solutions for improving the scalability of its products.