Decided you want in on the action? You can buy OP Tokens on Coinbase.
Optimistic roll ups have been an interesting development in the Ethereum ecosystem. The scaling solution could potentially make the Ethereum network much faster and cheaper by differing some of the work away from Ethereum's on-chain activity. Optimistic roll ups use a credit-based system where transactions await approval on the Ethereum blockchain but are granted credit on the Layer 2 chain. Optimism is using this new technology.
While Layer 2 solutions are flooding the market, Optimism was noticeable after a large airdrop happened this week. Also, a number of tweets appearing from Vitalik Buterin brought more eyes to Optimism’s potential.
What is Optimism?
Optimism is a Layer 2 solution for the Ethereum network. Its focus is simplicity. The simplicity is achieved through the limited code added to Ethereum. With a close tie to Ethereum, Optimism’s success is entirely dependent on the continued growth of the Ethereum network.
Processing transactions on Optimism is simple. In fact, it is comparable to the use of a credit card. A transaction made on Optimism is given a window of time to be challenged as fraudulent before it is uploaded to an Ethereum block. This window is seven days.
Fees on the Optimism network are much lower than Ethereum. Through its many transactions, Optimism receives impressive revenue accruement that is put to work in multiple ways throughout the Optimism ecosystem, incentivizing builders to continue development of the network.
Of Optimism’s total token supply (OP), 19% is dedicated to airdrops. The initial airdrop happened this past week, distributing 5% of the total OP supply. More airdrops are promised to come, intended for anyone providing a positive net sum for Optimism’s vision.
Governance of Optimism is unique. Part of the governance relies on the Token House, and the other side of the governance is the Citizens House. While the Token House focuses on incentivizing projects, upgrading protocols and funding the treasury, the Citizens House concentrates on the overall public good. Also unique to the Citizens House is the implementation of soulbound tokens (SBTs), which are non-fungible tokens (NFTs) containing personal data including individual achievements and work credentials. However, unlike standard NFTs, they cannot be transferred, making them bound to the individual. This new technology makes a soulbound NFT untransferable and permanent.
Optimism Market Position
The market position of Optimism is difficult to understand. With a recent airdrop and infancy to the marketplace, it is nearly impossible to predict where the OP coin will go. However, airdrops historically are dumped for cash. In OP’s case, it has proven no different.
The community has responded with outrage to those who dumped their freshly airdropped OP bags. Many are looking to ban the sellers from future airdrops.
As the coin dropped from $4.50 to just under $1, investors will need to truly believe in the longevity of the project for it to rally. While Optimism has many great features, the competition for market superiority in the Layer 2 space is hot.
Vitalik Buterin’s Bull Case for Optimism
Co-founder of Ethereum, Vitalik Buterin, has praised the governance structure of Optimism. Buterin appreciates decentralization, and making Optimism partially structured by the Citizens House could be viewed as a step in the right direction. While most projects use governance coins to make decisions, the potential of SBTs could be greatly beneficial.
Tom D Crypto’s Bear Case for Optimism
Popular crypto analyst Tom D Crypto presents a bearish case for Optimism (OP). In his recent video, he pulls up a number of other projects that used airdrops. Notable examples were ENS, LooksRare and dYdX.
The consistent theme isthat airdrops historically dump. At least in the short term, Optimism (OP) could be in some trouble. It could prove wise to wait for the selling to slow and the token to bottom before buying into the project.
Where to Buy Optimism
Optimism can be purchased on most large trading platforms. Most notably in the U.S. is Coinbase Global Inc. (NASDAQ: COIN). Another place to purchase Optimism is through a decentralized exchange, commonly referred to as a DEX – Uniswap would be a great one to try out.
How Long will it Take for Optimism to Reach $5?
The most pressing price concern for Optimism is that it underwent an airdrop. It is human nature to cash out of a new OP investment for profit. While this action could put downward pressure on the token in the short term, it does not necessarily mean that it will not recover. If Optimism can become a reputable Layer 2 solution for Ethereum, its token price will reflect that. A price above $5 is certainly possible for Optimism (OP).
Where to Store Optimism Safely
While software wallets can help you interact with Web3 applications, just as important is securing your digital assets. If you are looking for maximum protection, a hardware wallet is a great choice.
Best Hardware Wallet: Ledger Nano S
The Ledger Nano S is the latest hardware wallet from Ledger. It keeps your digital assets safe and away from phishing scams.
Best Software Wallet: MetaMask
Software wallets are necessary to connect to the many decentralized applications that Web3 provides. A great one to check out is MetaMask, the most popular Ethereum wallet that can also be used on the Optimism network.
Current Crypto Prices
The broader crypto market has been under pressure. As both crypto and stock markets have seen a rush to liquidity, prices have tanked. Bitcoin, as well as the majority of altcoins, have seen their valuations cut in half from their all-time highs in 2021.
So, is Optimism a Good Investment?
Optimism is an interesting Layer 2 solution that seems to have a great governance structure. The network could help to scale Ethereum and build an open internet. However, the recent airdrop is not a good sign for bag holders. Airdrops typically result in crashing prices as those who claim the token quickly sell for cash.
Frequently Asked Questions
Why has Optimism token been preforming well?
It’s likely that Optimism has been performing well ahead of the Eth2.0 deployment. Ethereum has seen bullish signs ahead of the merge and analysts predict thats why Ethereum layer 2s have been bullish as well.
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