Despite being the leading blockchain for building decentralized applications (dApps), Ethereum is painfully slow, gas rates are too high when the network is busy, and it’s expensive to store data on Ethereum. These serious issues need to be addressed for the mainstream adoption of Ethereum as a sustainable and fun platform for building applications. Layer 2 solutions – projects designed to increase the speed and efficiency of blockchain specifications – solve these problems to some extent.
Optimism is one of the most anticipated Ethereum Layer 2 solutions that can support all decentralized Ethereum applications (Dapps). Instead of running all the data and computation on the Ethereum network, Optimism puts all the transaction data on-chain and performs off-chain calculations, improving Ethereum transactions per second and decreasing transaction fees. In fact, tests showed a 143-fold decrease in transaction fees on Synthetix Exchange and a decrease of up to 100 times on Uniswap. Moreover, given that transaction data still remains on Ethereum, Optimism does not sacrifice the security or decentralization of Ethereum for scalability.
The following article will walk you through how you can buy Optimism (OP) today.
What is Optimism?
Optimism is a Layer 2 scaling solution for the Ethereum network that supports all decentralized Ethereum applications (Dapps). The purpose of Optimism is to achieve faster and cheaper Ethereum transactions while maintaining security from the main Ethereum blockchain. This is achieved by regulating transactions on another blockchain using advanced data compression techniques.
More specifically, Optimism uses a technique called optimistic roll up to scale the Ethereum network. In this process, multiple transactions are “rolled up” into one transaction, settled on another blockchain, with receipts returned to the main Ethereum blockchain. As implied in the name, optimistic rollups are a type of rollup that optimistically assumes that all transactions in the rollup are valid until proven otherwise. This saves time, since individual transactions do not have to be presented with direct proof of their validity.
OP is the ERC20 governance token for the Optimism network. The token is intended to shift the structure of Optimism by fueling The Optimism Collective, a bicameral governance system for funding. A total of 231,000 addresses can request 214 million OP tokens (5% of the total of 4.29 billion bid) at an average of 860 tokens per address. The complaint process officially began in May 2022.
Optimism is governed by a collaboration between members of the Optimism Foundation and the Optimism Collective.
- The Optimism Foundation is a non-profit organization dedicated to the growth of the Optimism Collective.
- The Optimism Collective is the central governing structure of the Optimism network. It is established as two co-equal rooms: the Token House and the Citizen’s House. Both houses are tasked with balancing short-term incentives with long-term vision in pursuit of the Optimism vision.
Brief history of Optimism
Optimism is a public utility company founded in 2019 and headquartered in New York. Jinglan Wang is CEO and co-founder of Optimism. The team behind Optimism is trying to avoid plutocracy by allowing participants in the Optimism network to coordinate without falling prey to the pressures of centralization.
The Optimistic Rollup was first introduced in June 2019, with an EVM-compatible Testnet launched in September 2020. In 2021, Optimism released its Alpha Mainnet, later implementing its Open Mainnet in December 2021.
Optimism raised $178.5 million at the time of writing, closing its latest funding round on March 17, 2022 from a Series B round.
How to buy the OP token
OP is already listed and tradable on many of the major exchanges such as Kucoin, Coinbase, Houbi Global and Gate.io. At the time of writing, the Huobi Global exchange owns most of the liquidity. Liquidity is predominantly focused on the OP/USDT trading pair.
- Open an online account.
The first step in buying the OP token is to open an account on a crypto trading platform that supports the token. As of now, Coinbase and Gate.io are the best trading platforms that offer the token. These are known for their safety, ease of use and low fees.
To open an account, you need to register for the exchange using an email and password. You may need to provide some basic personal information to verify your account. You can then fund it by connecting your bank or credit card.
- Buy or download a crypto wallet (optional).
While storing your cryptocurrencies on a crypto trading platform is convenient and easy, it’s typically not the safest and doesn’t allow you to use tokens outside of the trading platform. Wallets solve these problems and give people full control over their funds.
- Make your purchase.
After your account has been funded, use the search function to find OP on the trading platform. Note, if you are using Kucoin you may need to go to the spot trading platform first. Then, choose the amount of OP you want to buy and execute the trade. From there, your OP tokens will be stored in your wallet and will be accessible at any time.
Trade, sell or convert your OP
To sell your OP on Kucoin, you will need to sell it for Tether (USDT) or another stablecoin. This can be done on the spot trading platform. Alternatively, other platforms like Coinbase allow you to convert your OP directly into another cryptocurrency without having to use a spot trading platform. Note, it is important to be aware that OP cannot be converted to many other tokens at this time, as it is quite new.
Current Crypto Prices
The cryptocurrency market is inherently volatile, often fluctuating in large quantities over a short period of time. Extreme volatility stems from prices that rely heavily on shared beliefs and market sentiments. Refer to the table below to view the latest prices:
Is Optimism a good investment?
Like all altcoins, OP is a high-risk investment, driven primarily by speculation. Whether you consider OP a good or bad investment will largely depend on how much your goals are related to the vision of this particular Layer 2 scaling solution.
However, if you believe in the importance of Layer 2 solutions, Optimism could be a perfect choice. Optimism’s Layer 2 is highly scalable, fast and low-cost compared to Ethereum’s slow and expensive Layer 1. If Optimism continues to carry out its mission by successfully addressing the challenges inherent in Optimistic Rollups, an investment in OP could prove to be a profitable effort.