Decided Optimism (OP) is a good investment? You can get OP on Coinbase today.
As crypto has become exponentially more popular in the past several years, some blockchains have struggled to keep up with the heightened load. Ethereum is a chain that has struggled with scalability, or the ability to support large amounts of transactions. As a result, Ethereum transaction costs, otherwise known as gas fees, increased substantially. This change allowed for fewer transactions and gave the chain the ability to keep up with the demand. However, higher gas fees negatively impact Ethereum users. As a result, some crypto projects have begun creating Layer 2 solution, which are essentially new blockchains that run in parallel to Ethereum. Optimism is an Ethereum Layer 2 solution hoping to solve multiple issues on the Ethereum mainnet.
What is Optimism (OP)?
Optimism is a Layer 2 solution for Ethereum that uses most of the major components of Ethereum but provides a unique architecture to limit transaction costs and increase transaction throughput.
To make the chain run faster at a lesser cost, Optimism uses a unique method of verifying transactions. By default, all transactions are assumed to be accurate. The “Optimistic” approach saves both time and money as each individual transaction does not have to be checked, unlike other methods of consensus. If a verifier believes that a transaction is fraudulent, then they can request to have it verified. If it is fraudulent, then the verifier is rewarded, and the user who completed the fraudulent transaction is fined. This system reduces the amount of energy needed to complete transactions, which in turn reduces transaction costs and increases speed.
Another feature of the Optimism chain is the way that decentralized applications (dApps) are deployed. Most sidechains or Layer 2 solutions use Ethereum Virtual Machine (EVM)-compatible mechanisms to deploy dApps. This process makes it easy for Ethereum developers to port over their dApps to Layer 2s and sidechains. Optimism uses the Optimism Virtual Machine (OVM), which is an EVM equivalent. Ethereum dApps can be loaded on to Optimism with little to no changes in the overall code.
OP is the governance token for the chain. It is mainly used to vote on projects and proposals on the chain.
Optimism (OP) Price History
OP was released via an airdrop on May 31, 2022. The airdropped tokens were given to users who had interacted with the Optimism chain before the release. The initial token price was around $4.50 on the day of the airdrop. However, many recipients of the airdrop quickly sold their OP positions, and the token fell to around $1.50 within hours.
Overall, 25% of the total OP supply is designated for the Ecosystem Fund, 20% for Retroactive Public Goods Funding, 19% each for airdrops and core contributors and 17% for investors.
The first airdrop only released 5% of the total supply, so another 14% is still up for grabs in the form of future airdrops.
Optimism (OP) Competition
Optimism is definitely not the first project hoping to solve the issues on the Ethereum mainnet surrounding cost and speed. Some of the other large Layer 2 and sidechains include Polygon (MATIC), xDAI (xDAI) and Loopring (LRC). Optimism has already attracted large projects, which have been easily integrated through the OVM.
Another feature that sets Optimism apart from its competition is its focus on “Public Goods,” completed through the Ecosystem Fund and the Retroactive Public Goods Funding program. Portions of the total token supply are reserved for the funding and rewarding of projects that are helpful to society as a whole. Optimism has already donated over $1 million to such projects.
While Optimism has a couple programs that are different from its competitors, the idea of optimistic roll ups are not new, with several other projects doing almost the same thing as Optimism. This protocol may make it difficult for Optimism to establish market share in such a saturated environment.
How to buy Optimism (OP)
- Best For:Coinbase Learnsecurely through Coinbase's website
Sum of median estimated savings and rewards earned, per user in 2021 across multiple Coinbase programs (excluding sweepstakes). This amount includes fee waivers from Coinbase One (excluding the subscription cost), rewards from Coinbase Card, and staking rewards. ³Crypto rewards is an optional Coinbase offer. Upon purchase of USDC, you will be automatically opted in to rewards. If you’d like to opt out or learn more about rewards, you can click here. The rewards rate is subject to change and can vary by region. Customers will be able to see the latest applicable rates directly within their accounts.
Though Optimism is a relatively new project, it can still be bought and sold on Coinbase Global Inc. (NASDAQ: COIN). This trading platform is known for its low fees, security and overall ease of use.
To get started with a Coinbase account, register using an email and password. You will then have to verify your account with some basic personal information. You can then connect your bank account and begin trading.
Best Hardware Wallet for Optimism (OP)
While a crypto brokerage can be an easy way to buy and sell OP, it may not be the safest location to store it. A hardware wallet is a great way to add an extra level of security to your crypto holdings.
Best Hardware Wallet: Ledger
Ledger is a hardware wallet that allows users to securely store crypto. It stores private keys on a physical device, so crypto can only be accessed if the device is present. Ledger wallets do not directly support OP, but they can be used through a software wallet, such as MetaMask.
Ledger currently offers two hardware wallets: the Ledger Nano S and Nano X. The Nano S is cheaper and more beginner friendly. The Nano X is more expensive and offers more advanced features, such as more storage.
Keep an eye out for new projects on the Optimism chain, which can attract new users and impact the price. It’s also a good idea to start exploring the Optimism Network, as there will be future OP Token airdrops!
Cryptocurrency Market Outlook
The first half of 2022 has been one of the worst years yet for both crypto and worldwide economies. Some see the 50%+ slides continuing, while others believe the bottom may be close.
It is important to stay informed and on top of crypto prices. Benzinga offers a crypto price table for your convenience, which is a useful tool for anyone looking to be aware of crypto prices at all times.
Is Optimism (OP) a Good Investment?
Optimism is a new project, which also makes it a speculative investment. The major sell-off following the airdrop may not be a great sign for the future. However, the project has unique hopes of giving back to other projects and businesses. It has also attracted attention from large crypto projects.
The bottom line for Optimism will revolve around its market share. If it can bring in new users, then there is certainly room for growth. The pieces are in place; it is now down to execution.
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About Caden Pok
Caden has been involved with cryptocurrency for several years, began trading and investing in crypto in 2018 and is highly experienced with DeFi technology. He took part in undergraduate research studying cryptoeconomics and is a member of Wolverine Blockchain, a group designed to educate students on cryptocurrencies and blockchain technology. Currently, he mines multiple coins and holds positions in Cardano and Ethereum.