Optimism (OP) operates as a layer-two blockchain built upon Ethereum. By leveraging optimistic rollups, it enhances the scalability of the Ethereum ecosystem while relying on the security of the Ethereum mainnet. This structure ensures that transactions are recorded trustlessly on Optimism but are ultimately secured by Ethereum.

As one of the largest scaling solutions for Ethereum, Optimism holds over $500 million in TVL. It hosts 97 protocols, with the most prominent being Synthetix (SNX), a derivatives exchange; Uniswap (UNI), a DEX; and Velodrome (VELO), an AMM. To start using Optimism, users can add the network to their Metamask wallet and bridge assets such as ETH to the L2. The project distributed its OP token via a widely expected airdrop on May 31, 2022.

The Optimism Foundation, a nonprofit entity focused on expanding the Optimism ecosystem, leads the project. Much like Ethereum, Optimism strives to evolve into a fully decentralized public good without a profit motive. The initiative relies entirely on grants and donations for funding and commits to building infrastructure that supports the sustainability and growth of public goods.

Optimism is structured around four fundamental principles:

• Simplicity
• Pragmatism
• Sustainability
• Optimism

The project seeks to minimize complexity in its layer-two Ethereum solution by relying on established Ethereum code and infrastructure whenever feasible. This approach ensures the codebase remains straightforward and integrates directly with existing systems.

Pragmatism is central to the ecosystem, guided by the practical requirements of both the development team and its users. Consequently, Optimism pursues an iterative development strategy, rolling out capabilities such as EVM equivalence in stages.

Long-term sustainability drives the design philosophy, avoiding quick fixes for scalability. The network utilizes optimistic rollups, leveraging Ethereum’s consensus mechanism. While blocks are built and run on the L2 (Optimism), transaction batches are sent to the L1 (Ethereum). The L2 operates without a mempool, accepting or rejecting transactions instantly to provide a seamless user experience backed by Ethereum’s security.

Transactions are posted to Ethereum without immediate validity proofs and remain open to challenges for a set duration (currently seven days). Once this period passes, the transaction is deemed final. As a result, moving funds from Optimism back to Ethereum requires seven days.

Optimism seeks to build an ecosystem that creates value for three specific groups:

• Token holders gain value via the productive re-deployment of sequencer revenue.
• Contributors and builders gain value through retroactive public goods funding.
• Users and community members gain value from ongoing airdrops and project incentives.

Essentially, demand for OP block space produces revenue that is distributed to public goods, which in turn drives further demand for blockspace. Consequently, the Optimism token allocation is structured as follows:

• Ecosystem fund (25%): divided among the governance fund (5.4%), the partner fund (5.4%), the seed fund (5.4%), and unallocated portions (8.8%).
• Retroactive Public Goods Funding (20%)
• User airdrops (19%): comprising a first airdrop of 5% and subsequent airdrops that are yet to be announced.
• Core contributors (19%): individuals who assist in bringing the Optimism Collective from concept to reality
• Investors (17%)

The initial token supply stands at 4,294,967,296 OP tokens, with an annual inflation rate of 2%. During Year 1, 30% of the initial token supply will be made available to the Foundation for distribution. Following the first year, token holders will vote to decide the Foundation's annual OP distribution budget. The Foundation expects to seek these annual allocations:

• Year 2: 15% of the initial token supply
• Year 3: 10% of the initial token supply
• Year 4: 4% of the initial token supply

Optimism relies on optimistic rollups. This technology allows transactions to be recorded trustlessly on the second-layer blockchain while periodically broadcasting merkle roots of those transactions to the first-layer blockchain. External validators check these merkle roots, a process that typically delays withdrawals from layer-twos using optimistic rollups by one week.

You can purchase OP on exchanges including Binance, Huobi, KuCoin, Gate.io, Bybit, and Coinbase.