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The whole ecosystem around Optimism, the layer-2 scaling solution built on Ethereum, has been on a really good roll as of late. Various announcements and events connected to Optimism saw the Optimism’s token (OP) rise in value.
However, what is more significant, the overall ecosystem is seeing much more activity from the side of developers as well as users. Optimism is also slowly catching up to one of its biggest laye-2 rivals on Ethereum, Arbitrum. But before we look at their current state, let’s examine what Optimism is and what news we have seen in the first 2 months of this year.
Optimism (OP) is a layer-2 scaling solution built on top of the Ethereum blockchain. Its goal is to enable fast and cheap transactions while maintaining the security and decentralization of the Ethereum network. Optimism is one of the most promising scaling solutions for Ethereum and has gained a lot of attention from the community.
One of the key features of Optimism is its optimistic rollup technology, which allows for batching multiple transactions into a single transaction, resulting in faster and cheaper transactions. This is accomplished by processing transactions off-chain and then committing them to the Ethereum blockchain in batches.
Optimism’s rollup technology is different from other scaling solutions, because it does not require any changes to the Ethereum network itself. Instead, it works by building a separate chain that periodically updates the Ethereum network. Optimism’s ecosystem includes a range of tools and services designed to make it easier for developers and users to interact with the network. These include:
However, the point of this article is not to cover in-depth Optimism, but to look at different news that have recently come out connected to Optimism. And there has been plenty, which have affected the overall ecosystem of Optimism, as well as its OP token.
First of all, it is important to note that the recent talking points and events connected to Optimism are not any type of hype or fake positive sentiment. This has been in the making for several months now. For instance, Optimistic Ethereum daily transactions have been increasing steadily for over a year now. And while they have dropped significantly at the end of January, the trend is slowly getting back to increasing over time.
This already shows that the activity around this token has been rising. And here are some of the most important news that came out of everything Optimism, its developers and its ecosystem has been working on.
One of the biggest news connected to Optimism was the announcement of “Bedrock” Upgrade, which was announced at the beginning of February. The upgrade should help Optimism with improving the transaction fees and speed. It should also create a foundation for future improvements such as decentralized sequencing, which should help Optimism compete with one of its main rivals – Arbitrum.
“OP Labs expects Bedrock will make Optimism the cheapest rollup on Ethereum.”
That was the statement of Kunal Goel from Messari. Goel was also joined by Zainab Hasan from Xord research, who stated that with Bedrock, Optimism has a chance of becoming the first EVM-based rollup that would be able to deliver security guarantees similar to those of Ethereum.
The news regarding the Bedrock upgrade was received very positively by the community and saw the OP token increase its price by more than 20 % in less than 24-hours after the announcement. The upgrade was to go forward and implemented on 15th of March, but it is still in the works currently.
The beginning of February also saw a surprise airdrop from the Optimism Network. More than 11.7 million OP tokens were distributed to over 300,000 wallets, which was a part of the initiative to distribute about 19 % of the total supply of its governance token.
The first airdrop, during which about 5 %, or approximately 200 million tokens, was conducted during May of last year. The reaction of the community was not surprising, as the token fell down pretty quickly after the airdrop. The token saw about 13 % price drop after it was distributed, which is a pretty common occurrence in the cryptocurrency world.
The tokens were mainly distributed to those, who have previously spent gas on executing transactions on the blockchain. Moreover, those who delegated the voting powers to other users received the OP token as well, since this type of activity is recognized by Optimism Collective, the foundation behind Optimism, as a positive sum activity that bolsters the blockchains governance system.
By the end of February, the Optimism Network had few more reasons to cheer. One of them was another surprising airdrop, which was announced by Collab.Land, the automated management tool, during which more than two million wallets received COLLAB tokens. The CEO of Abridged, the company behind Collab.Land, stated that this is only the beginning of the whole distribution.
However, probably the biggest news of the last few weeks connected to Optimism was the announcement of Coinbase. The cryptocurrency exchange stated that it is going to use Optimism to launch an Ethereum layer-2 scaling product Base. Amongst other things, the announcement also reads:
“Base aims to be decentralized, permissionless and open to anyone with the vision of creating a standard, modular, rollup agnostic Superchain powered by Optimism. We are joining Optimism as a core dev on the open-source OP Stack and working to create a thriving community of other developers.”
This would help Optimism to be more interconnected with the broad cryptocurrency infrastructure and increase its presence all across the ecosystem. Yet again, this news helps to spark the debate of how brilliantly this project is currently doing, as it seems that it is moving forward on multiple levels.
Speaking of moving forward, the biggest marketplace on Optimism, Velodrome (VELO), is moving forward as well. This decentralized exchange has seen raising weekly fees thanks to a record transactions volume and increasing popularity of Optimism.
The tokens of Optimism, as well as Velodrome are also the most traded pairs in combination with USDC. The OP/USDC and VELO/USDC trading pairs are generating the biggest fees due to the increasing popularity of both projects.
The positive sentiment around Velodrome can also be seen via rankings of decentralized exchanges and TVL locked on them. With about $320 million, Velodrome ranks at 7th place with only the likes of Sushiswap, Curve or Uniswap seeing higher TVL. This is only supported by the chart above, which shows the increasing number of holders of the Velo token.
Moreover, when compared to Arbitrum, Optimism has seen a bigger traction and community engagement than its rival. It has risen more steadily and significantly in numerous key data points such as the number of active addresses or total value locked (TVL).
The continuous uptrend for both projects has been definitely one the main talking points of many analysts. These two projects are currently seeing a lot of positive sentiment and activity in numerous ways. Research analyst of Kaiko, Paris-based crypto data provider Kaiko, said the following on the current pace of Optimism and Arbitrum development:
“One of the big narratives of 2023 looks to be layer-2’s and the only way to get direct exposure to them right now is through the OP token. TVL on Optimism has also outpaced Arbitrum, its closest competitor, to start the year.”
The Optimism token (OP) is trying to reach its highs as well. While the token has seen a severe downtrend ever since its release last year, it is slowly attacking its previous highs. In January and February of this year, OP created its ATH, after it increased from $0.7 in October 2022 to $3.2 at the end of February. Considering that the token has only seen a ravaging cryptocurrency bear market, OP is currently not doing as terribly as many would think.
Overall, Optimism is a promising scaling solution for Ethereum that has the potential to significantly improve the speed and cost of transactions on the network. Its ecosystem is well-designed and includes a range of tools and services that make it easy for developers and users to interact with the network, which is currently seen on many different levels.
The news and current developments brought about by the likes of Collab.Land, Coinbase, Velodrome or Optimism Network itself only support this. The overall ecosystem built around this layer-2 scaling solution shows how much it has to offer and with the current pace of improvement as well as the positive sentiment, it seems very unlikely that it could stop any time soon.