What Is Optimism?

Ethereum is known to be one of the most secure and decentralized blockchains. However, the network haven’t  been able to scale beyond 30 transactions per second  as a result, Ethereum has limitations in the number of transactions it can handle per day. When it reaches its maximum capacity for the transaction, congestion occurs and the network cannot scale anymore. When the block space gets scare, the gas fee goes up and the transactions takes longer time to process, this problem was what brought up the wonderful idea behind OPTIMISM.

Optimism is a layer-two blockchain for Ethereum using optimistic rollups as scaling technology. It is one of Ethereum’s biggest scaling solutions with over $250 million in TVL at the time of writing. Optimistic rollups outsource the execution of transactions to a L2 solution like Optimism.

The transactions on Optimism are rolled up into batches that get relayed to the Ethereum mainnet, which only records the new chain state. Since their validity is assumed, the rollups are called optimistic. A rollup's validity can be challenged for up to seven days, which is why withdrawals from Optimism to Ethereum take seven days.

The roll-up technology optimism operates combines  a series of transactions on Ethereum’s layer 1 into a single transaction. While the rollup is executed on Optimism layer 2, the transaction data is processed on Ethereum’s layer 1.

·         In Optimism Rollup, most of the transaction processing happens off-chain, making transactions faster and less costly. The blockchain serves as a "rollup" that primarily validates and settles disputes. All transactions are assumed as valid, so it doesn’t undergo many computations on layer 2. What it does is move the transaction to layer 1 without verifying it, which leads to a significant increase in scalability. If there is suspicion of fraud in a transaction, Then Optimistic roll-ups will run a fraud-proof, which verifies it using data on Layer 1.

·         Optimism Execution: It's called "optimistic" because it operates on the assumption that most transactions are valid. Transactions are processed quickly, but if a dispute arises, the blockchain's smart contract can be used to verify the accuracy of the transactions.

·         Scalability: Optimistic Rollup significantly improves the throughput and scalability of the underlying blockchain by offloading transaction processing. This makes it more cost-effective and reduces congestion on the main blockchain.

·         Security: While Optimistic Rollup offers scalability, it relies on the assumption that participants will act honestly. If a participant disputes a transaction, the smart contract on the main blockchain resolves the issue by  doing a fraud-proof for verification. This validity of the transaction can be challenged within a week.

WATCH OUT FOR OUR NEXT ARTICLES ON DIFFERENT OPTIMISM DAPPs AS WE DIVE DEEPER INTO THE OPTIMISM