Uniswap V3 is version 3 of the Uniswap protocol that changes the way to conduct DeFi trading activity thus introducing considerable changes to the decentralized industry. The Alpha launch of Uniswap v3 on the Optimism Ethereum (OΞ) mainnet was announced on July 13, 2021. The launch of the system is just the beginning of a durable process portrayed in the roadmap of Optimism.
The specialists assure that this is the future picture of decentralized finance. The project is presented like a teaser that shows the incredible capabilities and huge potential of Layer 2. The DeFi protocol can achieve more using the functionality of Optimistic Ethereum. Ethereum Unique Addresses Chart shows that Optimism has gained more than 1000 unique addresses within a couple of days after its launch.
Optimism is a Public Benefit Corporation (PBC) that refers to corporations created for profit and production of public benefit. The corporation is operated in a responsible and sustainable manner guided by the obligation of balancing the financial interests of stockholders and other materially affected parties with the “public benefit charter” that the organization is incorporated with. The main goal of the document is to improve and provide fair access to public goods online by developing open-source software. It is a kind of pledge to the Ethereum community to stick to its values by creating infrastructure that promotes the development and sustainability of an ecosystem by distributing public goods.
Optimism, which was known before as Plasma Group, has become a pioneer in “optimistic rollups.” It means that state changes are published with little inspection and fraud-checking first, thus enabling additional speed. Invalid updates could be flagged by any user, though, with the offender being punished by the protocol.
Uniswap on Optimism
The startup Optimism became a viable solution when the gas cost reached unsustainable highs. The Uniswap V3 launch to make transactions more affordable for users.
The introduction of Uniswap on Optimism has become a revolutionary step for the decentralized finance industry. The 3 innovative things that were introduced with the 3rd version include the addition of concentration liquidity in specific price ranges in the curve, numerous commission layers, and enhancement of oracles.
New functionality was introduced to enhance the efficiency of the locked funds. Concentrating liquidity in certain price ranges, thousands of individual curves are created by the algorithm of a new protocol helping users to trade more efficiently and derive bigger profit from trading.
Transaction capacity on Optimistic Ethereum should comply with the transaction capacity of the base layer. However, the confirmation follows instantly.
The system Optimism planned to launch its mainnet in May 2021 but delayed the launch by 2 months though the testnet debuted in late April. The Alpha launch is a limited version of the whole system for its further full deployment. It helps to resolve issues that may arise with the gradual installation of different features in the system. The post in the official blog of the company warned that this stage still requires “rigorous battle testing” as this is a complex scalability solution. The platform also offers a limited assortment of assets during launch such as ETH, USDT, WBTC, SNX, and DAI with more assets coming in the following weeks after the launch.
The founder of Uniswap Hayden Adams commented on the breakthrough event on Twitter saying that they managed to achieve instant transactions and a stable scaling increase for high-speed DEX trading at low cost. At this, all systems were built on Ethereum and still preserve decentralization. During the Alpha period, Optimism Ethereum supported the initial throughput capacity of 0.6 transactions per second. The transaction speeds increased later.
In June 2021, it was reported that Optimism’s gas costs are 35 times cheaper than Ethereum’s.
On August 17, 2021, 1inch Network announced that it has expanded to the Optimistic Ethereum mainnet thus becoming the second DeFi app that moved to second layer network on Optimism after Uniswap. It was also done to increase transaction speeds and decrease gas fees for its users. Optimism was chosen as the platform is focused on scalability.
How to start working with Optimistic Ethereum
Users should add the network Optimistic Ethereum to their wallets to start working with the system. Next, the user should deposit funds from Ethereum, which is a relatively simple process. It should be done via the Optimistic Gateway that works in the same way as other bridges.
The architecture of Optimistic Rollups allows only a seven-day withdrawal period when bridging tokens back to Ethereum L1. It means that withdrawn funds are entirely inaccessible during this period. After depositing, the funds are locked while their representation is minted on Optimism. When withdrawn, the tokens are burned and then become unlocked on Ethereum. As it was mentioned above, the withdrawal takes approximately a week. It takes from five to twenty minutes to make the funds available on Optimism after the confirmation of the transaction on Ethereum.
Support of the Optimism project
Optimism has raised 25 million USD in a funding round led by venture capital titan Andreessen Horowitz. In July 2021, Alchemy decided to support Optimism. Alchemy Product Manager Michael Garland commented that Layer 2 presents a practical solution decreasing the pains of Ethereum users. The company has selected Optimism due to the way the protocol resolves problems with fraud. Its mechanism helps to make fraud proofs faster. Optimism’s Etherscan integration enables auditions in the same transparent manner and with the same insight, it is performed on Ethereum L1.
The Optimism core team has full control over the network and can make changes in its contracts controlling the Optimism Gateway bridge. It means that there can be only one point of failure where funds can be lost or stolen. The team can whitelist contracts and assets. Also, they can decide on the projects to be deployed on the network.