Guide to one of Ethereum's Layer Two scaling solutions

Guide to one of Ethereum's Layer Two scaling solutions

The cryptocurrency industry in general has become much more popular in recent years. This led to the development and launch of hundreds if not thousands of decentralized applications (dApps) in various areas such as DeFi, gaming, learning, trading, investing and so on.

There are many reasons for this, including but not limited to the massive bull run in 2021, the rise of non-fungible tokens, the popularity of memecoins, and more. This caused hundreds of thousands of users to flock to what could be the next trend.

However, unlike previous cycles, this time we have also seen regular users taking advantage of on-chain availability and trading with various dApps such as Uniswap, OpenSea and so on. And while this had a massively positive impact on the industry's growth and valuation, it also highlighted some very critical points.

Blockchains like Ethereum – where the lion’s share of dApp activity takes place – have had issues around affordability, scalability and even accessibility. Layer-one alternatives like Solana also proved insufficiently effective in handling the massive load of user requests.

This brought up a topic that has been widely discussed in the cryptocurrency community for years – scalability. Now, as scaling solutions became essential for the future growth of the industry, projects like Optimism saw the light of day.

As one of the most popular Ethereum scaling solutions, Optimism aims to solve some of the underlying issues with the network, with a particular focus on scaling.

Fast facts about optimism

• Das Mainnet von Optimism ging im Dezember 2021 live
• Optimism hat seinen nativen Token (OP) am 31. Mai 2022 eingeführt.
• Insgesamt 231.000 Adressen waren berechtigt, 214 Millionen OP-Token zu beanspruchen.

Fast navigation

What is optimism?

Optimism is an Ethereum scaling solution. Essentially, its purpose is to help the main network function smoothly by taking on some of its transaction load. Technically, optimism is an “optimistic rollup,” and it’s important to understand what rollups do before diving deeper.

What is a rollup?

Rollups are one of the multiple scaling solutions designed to help Ethereum achieve higher transaction throughput.

The Ethereum Foundation explains that they “perform transaction execution outside of Layer 1 and the data is then posted to Layer 1 where consensus is reached.”

The main advantage of this is that it reduces the load on the main network while guaranteeing the information sent through its native security.

There are two main types of rollups, differentiated primarily by their security models:

• Zero-Knowledge-(ZK)-Rollups – diese führen die Berechnung Off-Chain durch und übermitteln dann den Gültigkeitsnachweis an die Chain.
• Optimistische Rollups – diese gehen davon aus, dass Transaktionen standardmäßig gültig sind und führen Berechnungen nur dann betrugssicher durch, wenn es eine Herausforderung gibt.

Optimism falls into the second category, and as you may have guessed, its parent chain is Ethereum.

How does optimism work?

The big idea that makes optimism interesting to most is the optimistic rollup. The basic principles of the concept are briefly explained below.

The TLDR about this, however, is that an Optimistic Rollup is another way of calling a blockchain that is designed to leverage the security of another network that acts as a parent network.

Block storage

All blocks on Optimism are stored in a specific smart contract built on Ethereum and calledCannonicalTransactionChain– CTC to make it easier. You will be helped in a list that is located within the CTC and can only be appended.

The CTC contains code that guarantees that the current list of blocks cannot be changed by newer transactions on Ethereum. This guarantee can be broken if the Ethereum network itself goes through a reorganization and the order is changed.

Block production

The “Sequencer” is the only party that manages block production on Optimism. It helps network by providing:

• Sofortige Transaktionsbestätigungen und Statusaktualisierungen;
• Aufbau und Ausführung von Layer-Two-Blöcken;
• Senden von Benutzertransaktionen an Ebene eins.

It does not have a mempool, which means the transactions are accepted (or rejected) immediately. This happens in the order in which they are received. When someone sends a transaction, the sequencer checks if it is valid (pays a sufficient fee) and applies it as a pending lock to the local state. These outstanding blocks are then pooled and periodically submitted to the Ethereum network for completion.

The main goal of this bundling is to reduce overall transaction fees by spreading certain fixed costs across all transactions within a single batch. Of course, this fee may vary depending on the network load at the time the transactions are submitted to the sequencer.

Block execution

It is important to understand that Ethereum nodes download blocks from the Ethereum peer-to-peer network. Optimism nodes, on the other hand, download blocks directly from the CTC append-only contract.

There are two main components that make up optimism nodes. These are the Ethereum Data Indexer and the Optimism Client Software.

It is designed to reconstruct the Optimism blockchain from blocks published in the CTC contract. It's also called theData transport layer.

This is very similar to Geth, meaning that overall Optimism is very close to Ethereum in its design. This is also because Optimism shares the same Ethereum Virtual Machine (EVM), as well as the same account and status structure and gas metering mechanism and fee schedule.

Evidence of error

Using an optimistic rollup means that government commitments are published directly on the Ethereum network, without requiring proof of the validity of these commitments. Evidence of error is requested when a government obligation is challenged. If successfully challenged, it will be removed and eventually replaced with another.

Thedocumentprovides a more in-depth and technical explanation of the terms described above and the entire process.

How to bridge assets between tiers

With Layer 2 scaling solutions like Optimism, being able to share assets between different layers is obviously paramount.

There are several ways you can go about it. First and foremost, you can go to the official website and use the bridge provided there. All you would need to do is have a Web3 wallet like MetaMask.

From there, you need to select the network you want to bridge tokens from. This is the supported list:

There are also options for bridging centralized exchanges, but it is important to note that these are through providers that Optimism simply links to - meaning there is no endorsement and you should proceed with caution and after thorough due diligence.

From there, the process is particularly simple as all you have to do is confirm the amount and sign the transaction in your wallet.

assets to bridgeout ofOptimism, there are a few options. You can use a third-party bridge or the official bridge instead. The following is an example of the latter, but keep in mind that Bridging Optimism to Ethereum takes seven days.

All you have to do is click on the arrow between the value fields and this will switch the above transaction. If you haven't added Optimism to MetaMask, this will be done for you too. From there, all you have to do is confirm the amount and sign the transaction:

Governance: The model of optimism

The native cryptocurrency of the Optimism ecosystem is the OP token.

Optimism is governed by the so-called optimism collective. According to the official website, the collective is:

“…a group of companies, communities and citizens working together to reward public goods and build a sustainable future for Ethereum.”

However, the leadership of the Optimism Collective itself will consist of two separate houses: the Token House and the Citizens’ House. Let's break it down.

The Token House

The launch of the OP token and the token house marked the beginning of the governance of optimism. OP itself was distributed to hundreds of thousands of addresses who engaged in community-oriented behavior through the initial airdrop (more on that later).

In any case, Token House members are responsible for deliberating, submitting and voting on various proposals. To do this, OP holders can either vote directly or transfer their voting rights to a third party.

Essentially, the Token House votes on proposals of the following nature:

• Protokoll u Noten
• Inflationsanpassung
• Finanzmittel
• Schutz der Rechte
• Zuschüsse aus dem Governance-Fonds

The community center

At its core, Citizens’ House is an experimental attempt at a non-plutocratic governance model. It is responsible for the retroactive promotion of public goods.

The above brings us to our next point, the OP token.

Introducing the OP token

The OP token was launched through an airdrop that distributed a total of 5% of the total supply.

However, qualified users included:

• DAO-Wähler
• Multi-Sig-Unterzeichner
• Wiederholen Sie Optimismus-Benutzer
• Gitrcoin-Spender

If you suspect you are eligible, you can view all related wallets on the official claims page.

Many are wondering if there will be a new airdrop, and the short answer is – yes. The team has made it clear that it plans to allocate a total of 19% of the supply to this purpose. This is what OP's entire tokenomics looks like:

Official website

For a more comprehensive look at the economics behind the Optimism ecosystem, be sure to visit the official website.

Diploma

Optimism has quickly become one of the most popular Ethereum scaling solutions. Recently, the Optimism Foundation released a proposal to upgrade the Optimism mainnet to Bedrock, a new generation of decentralized rollup architecture developed by Optimism Labs. On this topic, the team said:

"We are confident that the post-Bedrock experience will be a positive change for developers in the Optimism ecosystem and have received continued enthusiasm for the upgrade from our partners. We are committed to making this upgrade a success and look forward to the results in the coming months and years."

It will also be very interesting to see how the various layer twos fare in the coming years as the battle between optimistic rollups and ZK rollups continues.

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