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Coin Profile - Optimism (OP) and the Alignment of Public Goods (Like Ethereum)

The Optimism Collective is a group of people, companies and communities that are dedicated to incentivising impact by rewarding public good initiatives (like Ethereum). Optimism ($OP) is one of two governance tokens slated for use in Optimism's Ethereum-focused Layer-2 ecosystem. Read on to learn more about the Optimism project for your DYOR-based fundamental analysis.

optmisim-price-after-hackOptimism (OP) Price Evolution

What is Optimism (OP)?

Optimism is a Layer-2 scaling solution for Ethereum. Its primary technological innovation is the Optimistic Rollup protocol, which allows Optimism’s L2 blockchain to piggyback off Ethereum so it can use its consensus mechanism and security. Their Sequencer manages Layer-2 block production for immutable blocks, enabling instant transaction confirmations that are submitted to the Layer-1 Ethereum Blockchain.

Team

  • Co-Founder & CEO Jinglan Wan has invested in multiple Series A & B funding rounds for fintech companies.
  • Karl Floersch, co-founder, is a NY-based blockchain engineer who has worked with ConsenSys and as a researcher at the Ethereum Foundation (he wrote this about Ethereum in 2016).
  • Kevin Ho was lead developer for blockchain protocol course Cryptoeconomics.study in LA from 2018-2019 before joining Optimism as a co-founder.

Project status

Optimistic Rollups were introduced in 2019, the open mainnet launched Dec. 2021, and OP governance tokens launched via airdrop on June 1, 2022.

$OP Airdrop makes headlines: On June 1, Optimism initiated its first airdrop to 248,699 early adopters, including DAO voters, multi-sig owners, and Github contributors. Problems arose almost immediately:

  1. The airdrop was heavily anticipated and servers buckled under the high traffic, causing some recipients to miss out on their airdropped tokens.
  2. Many airdrop recipients sold their tokens immediately, sending $OP price crashing as low as $.73 in its first week. It reached an ATH of $2.10 on the day after launch.
  3. The community is now discussing whether and how the additional scheduled airdrops should take place and who should be airdropped.

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Does it have staying power?

Optimism stands out from other Layer-2 solutions because of its unique 2-house system that circumvents governance and security issues that have plagued other L2s. Token House participants use OP tokens for governance and incentivization and are responsible for protocol upgrades. Citizen House participants use Soulbound NFT tokens (SBTs) to collectively distribute revenue funds retroactively to public goods.

  • Competitive? As the 2nd largest Ethereum Layer-2 protocol, Optimism at the time of the first airdrop had about $313 million in TVL. (Arbitrum is the biggest, with $1.32 billion TVL but no native token).
  • Hiring? No specific roles are listed, but there’s a general invite to apply for future roles.
  • Scalable? If successful, Optimism’s bridging/roll up solutions would greatly scale the use of Ethereum and Optimism.
  • Social traction? Sentiment before, during and after the OP airdrop has been extremely high. Social community includes 47k in Discord and 217k Twitter followers.

Partnerships & Press - In addition to its own well-established brand, Optimism has integrated dozens of leading Web3 companies, brands and wallets, including Dune Analytics, OptiPunks, Chainlink, Binance, DAOhaus and Aave. Recent press has been extensive and includes coverage by mainstream and crypto media.

Hacks & Shutdowns - 20 million tokens worth ~$15 million were lost in transfer to Wintermute, a 3rd party liquidity provider. Allocated from Optimism’s Partner Fund to prepare for the OP token launch, the lost tokens were hacked before they could be recovered from an incorrect blockchain address. As of this writing, 1 million of the stolen tokens have been moved to a Vitalik Buterin address, and The Block reported that the hacker posted an onchain message saying he was willing to return all the tokens.

OP Tokenomics

Total supply 4,294,967,296 tokens
Token allocations

  • 20% to be used retroactively for public goods funding
  • 25% reserved as ecosystem funds, i.e., governance, partner, seed, and unallocated funds.
  • 19% to be airdropped to eligible members.
  • 17% and 19% will be given to investors and core contributors.
OP_Allocations

Vesting Most investors and core contributors are subject to 2-year lockup periods. Community-held tokens are vested for 1 year or less.

OP-unlocked-supply

Funding: According to Crunchbase, Optimism has held 3 funding rounds totaling $178.5 million:

  • Seed round: $3.5 million (CoLab Ventures)
  • Series A: $25 million (Andressen Horowitz, Paradigm)
  • Series B: $150 million (Andressen Horowitz, Paradigm)

Token utility OP tokens will grant participation rights in the Optimism Collective, including both governance houses (Token House and Citizen House). OP provides value through the re-deployment of Sequencer revenue, creating a value ecosystem and driving blockspace demand.

  • Decentralized? 90,016 current OP token holders and 250,000 community members were available for initial airdrop.
  • Burning? No.
  • Code Audit? Yes
  • Transparent founders? Yes.
  • Bug bounty? Yes.

Next up for OP

Optimism’s road map includes achieving the following milestones:

  • Sharded Rollup
  • Incentivized Verification
  • Decentralized Sequencer
  • L1 Governed Fault Proofs

To learn more about Optimism:

Website
$OP on Coingecko
Token Metrics
Documentation
Github
Smart Contract
Forum
Twitter
Discord

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Disclaimer: The content of this article is for general market education and commentary and is not intended to serve as financial, investment, or any other type of advice.