Optimism: The Game-Changing Layer 2 Scaling Solution for Ethereum
😎 Research Tool That I Use To Invest: https://defichronicles.gumroad.com/l/efnjx
YouTube Video: 👇
https://www.youtube.com/watch?v=gJ0Qmgh3Dmw&t=10s
Intro:
Optimism is a Layer 2 solution for Ethereum. OP is a scaling solution for Ethereum and is a separate blockchain running on top of it. Optimism’s mission? To help end-users like ourselves access Ethereum’s dApps with cheaper transactions and a smoother user experience.
With an impressive 524M dollars in total value locked and daily active users up to 150,000 30. OP is one of the L2 most used in the past months.
Optimistic rollups are considered “optimistic” because they roll up all the transactions and bundle them into a single transaction, to be executed on Layer 1. This approach enables spreading fixed costs across multiple transactions in each batch, reducing fees for end-users.
The system has a 1-week challenge window where such transactions can be contested by running a fraud-proof.
If the fraud-proof succeeds, the rollup protocol re-executes the transaction(s) and updates the rollup’s state accordingly. The other effect of a successful fraud-proof is that the sequencer responsible for including the incorrectly executed transaction in a block receives a penalty.
they assume off-chain transactions are valid and don’t publish proofs of validity for transaction batches posted on-chain. This separates optimistic rollups from zero-knowledge rollups that publish cryptographic proofs of validity for off-chain transactions.
Metrics:
Rank: #90
All-time high: $4.57
Current price: $1.17
Circulating Supply 234,748,364 OP
Total Supply 4,294,967,296
Market Cap $285,027,221
Tokenomics:
With a max supply of 4,294,967,296 and a current circulating supply of 234,748,364 OP.
75.91% of the supply remains locked.
Breakdown of the tokenomics:
20% is allocated to retroactive public goods funding
17% to investors
19% to core contributors
25% to the ecosystem fund
The remaining 19% comprises airdrops, of which 5% was allocated for the first airdrop. The remaining 14% is to be retained for future airdrops.
Even though there was a massive 5% token unlock for early users, investors’ tokens are locked until June 2023 with a slow vesting schedule until 2026.
Investors will start receiving their tokens beginning June 2023 (in 154 days to be exact) at 3.6%, which is at a slow rate, therefore we still have time until we start seeing people cashing out, and even with it, it should be in small portions due to the amount being unlocked per month.
Analytics and stats:
Active users, revenue, active developers, and total value locked.
Optimism Scan — Unique addresses.
Since Nov 2021, OP has been growing with an average of over 5,000 unique addresses per day. With 2.2M unique addresses in total.
Optimism Scan — Daily transactions.
Topping at 600,000 transactions in just one day on Dec 21, 2022.
Daily active addresses, topping at 111,000 on December 2022.
Another interesting chart is the active developers. Growing day by day.
Price action
The first few days for OP were really good, pushing the price up to $4.57 (Not shown in the chart, because it is only tracking the price since the day it got on Binance). After reaching an all-time high, OP started losing stream due to people cashing out for a profit, mostly from airdrops.
It stayed at $0.40 for a few weeks retesting the $2.20 for a second time with no success. At the moment it is creating a triangle on which it tried to break over the $1.10 creating a false breakout.
Levels on OP are $0.40, $0.66, $0.98, $1.20, $1.45, and $2.20.
Conclusion
If I would have to draw a conclusion on if the project is good or not, I would give it a thumbs up. Tokenomics looks good, the growth of the blockchain over the past year has been amazing, and price action even with the bear market has been ok.
In terms of stats, it also looks good. When you compare it to Matic.
OP market cap is at 200M while Matic is at 7B
Daily transactions are at 500–600k while Matic is at 3M.
Unique addresses are at 2M while Matic is at 200M
Daily active developers are at 26 while Matic is at 52
Therefore, I would say the current price and market cap of OP are not overrated. The tech is amazing, there are tons of projects built over it, and is super cheap and fast. And when you compare it to Matic there are not that far off hitting the same stats soon.
If OP can continue with their transactions, addresses, more daaps, and the right partnership we could see it hitting over 1B market cap in no time.
Subscribe to my newsletter where I share every week market recaps and the positions I am taking.
