What is Optimism (OP) and How Does it Work? | KuCoin Crypto Gem Observer

2022/06/02 03:25:58

Since its launch in 2016, Ethereum has grown into one of the most prominent blockchain networks in the nascent industry. Ethereum is currently the largest decentralized finance (DeFi) network, controlling over 50% of the entire DeFi market. Additionally, Ethereum is the most popular non-fungible token (NFT) blockchain.

Ethereum still faces multiple technical challenges that prevent further adoption despite achieving the above milestones. The blockchain network currently runs on a Proof-of-Stake (PoS) consensus mechanism, which is costly and slow.

Although Ethereum is inching closer to becoming a Proof-of-Stake (PoS) network, it is rapidly losing users to other scalable networks with low fees. To help address this problem, Optimism went live as a low-cost and lightning-fast Ethereum Layer 2 (L2) blockchain.

What is Optimism？

Optimism features a bridge that connects the Ethereum mainnet to its Layer 2 network, making it easier for developers to build Ethereum-native decentralized applications (dApps).

Optimism is based on four pillars: simplicity, pragmatism, sustainability, and optimism. By leveraging a simple design, Optimism mitigates the time and money needed for engineering, allowing it to direct its energy toward developing new features instead of recreating existing ones. For simplicity, Optimism uses tested Ethereum code and infrastructure where possible.

When it comes to pragmatism, Optimism bases the development of its protocol on real-world needs. With this in mind, the project takes a keen interest in addressing user and developer needs while avoiding theoretical perfection. The Optimism team leverages an iterative development approach to ensure it gets constructive feedback from the protocol’s users.

Regarding sustainability, Optimism understands that developers need a network that will stay operational and competitive for a long time. To this end, the project is building its platform while focusing on long-term sustainability and avoiding shortcuts to scalability. Optimism believes that its simple design will attract a large community, thus making its protocol sustainable.

Optimism bases its optimism on Ethereum’s vision. Specifically, the project eyes a future where we get to redesign our relationships with the institutions that coordinate our lives. By operating as an extension to Ethereum, Optimism keeps protocol development as close to Ethereum as possible to help the latter succeed.

Who Created Optimism?

Optimism PBC, a tech company headquartered in New York, created Optimism. Jinglan Wang, Karl Floersch, and Kevin Ho co-founded the company in 2019. Wang is the firm’s CEO. Floersch previously worked as a blockchain engineer at ConSensys. On the other hand, Ho is the Protocol Product Manager at Optimism.

What is the Optimism (OP) token used for?

Optimism boasts a native ERC-20 token dubbed Optimism (OP). OP serves as a governance token within the Optimism Collective, a large-scale experiment in decentralized governance. Members of the Optimism Collective that hold OP get certain governance rights.

Optimism Collective’s governance structure features two equal chambers. These are the Token House and the Citizens’ House. These houses are responsible for balancing short-term incentives with the long-term vision of the Optimism protocol.

About the Optimism Airdrop

Optimism’s OP token is live and eligible users can claim the first phase of the airdrop. The airdrop distributes the token to thousands of addresses that engage in positive community-centric behavior. Through this airdrop, Optimism will help create the Token House.

Token House members will be able to vote on the distribution of project incentives and protocol updates, among other matters.

Optimism has dedicated 19% of OP’s initial supply to airdrops. The first airdrop will distribute 5% out of the 19%, and the remaining 14% will go to future airdrops.

Closing Thoughts

By creating an L2 network that leverages Ethereum’s consensus mechanism, Optimism is well poised to help Ethereum become scalable as it inches closer to becoming a PoS blockchain. Through the scalability that Optimism offers, Ethereum will be able to retain its current users and potentially attract more.