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What Is Optimism

Optimism is a layer 2 scaling solution for Ethereum that uses optimistic rollups. Transactions occur on Optimism but get posted to Ethereum mainnet for validation. This reduces gas fees by bundling many transactions into one. Optimism assumes transactions are valid until proven otherwise via fraud proofs within a challenge period. The Optimistic Virtual Machine (OVM) ensures consistent execution between layers 1 and 2. Optimism is the second largest layer 2 by total value locked and uses Ethereum as its data availability layer to access transaction and state data.

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30 views

What Is Optimism

Optimism is a layer 2 scaling solution for Ethereum that uses optimistic rollups. Transactions occur on Optimism but get posted to Ethereum mainnet for validation. This reduces gas fees by bundling many transactions into one. Optimism assumes transactions are valid until proven otherwise via fraud proofs within a challenge period. The Optimistic Virtual Machine (OVM) ensures consistent execution between layers 1 and 2. Optimism is the second largest layer 2 by total value locked and uses Ethereum as its data availability layer to access transaction and state data.

Uploaded by

Umar Raza
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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What is Optimism ?

Optimism is a layer 2 chain, meaning it functions on top of Ethereum mainnet


(layer1).

Transactions take place on Optimism, but the data about transactions get posted to
mainnet where they are validated. It’s like driving in a less crowded side street
while benefiting from the security of a highway.

Optimism is the second-largest Ethereum layer 2 with a total of $313 million


locked into its smart contracts, as of this writing, according to Defi Llama. Arbitrum
comes first with $1.32 billion.

Synthetix, a derivatives liquidity protocol, is the largest protocol on Optimism, with


a total value locked (TVL) of $125 million. Uniswap, a decentralized exchange
(DEX), is the second most popular protocol on the chain. As of this writing, there are
35 protocols on Optimism with at least $1,000 locked into their smart contracts.

How Does Optimism Work ?

Optimism uses a technology called rollups, specifically Optimistic rollups.

They’re called rollups because they roll up (or bundle) the data about hundreds of
transactions – non-fungible token (NFT) mints, token swaps … any transaction! –
into a single transaction on Ethereum mainnet (layer 1).

When so many transactions are rolled up into a single transaction, the blockchain
transaction, or "gas," fee required to pay comes down to only one transaction,
conveniently distributed across everyone involved.

And they’re called Optimistic rollups because transactions are assumed to be valid
until they are proven false, or in other words, innocent until proven guilty. There’s a
time window during which potentially invalid transactions can be challenged by
submitting a “fraud proof” and running the transactions’ computations with
reference to available state data. Optimism reimburses the gas needed to run the
computation of the fraud proof. (Here’s a more technically detailed explanation of
the process.)

What is OVM (Optimistic Virtual Machine) ?

To guarantee deterministic smart contract execution between L1 and L2, i.e. resolve
any discrepancies, Optimism does this through something known as the OVM
(Optimistic Virtual Machine) — a fully-featured EVM-compatible execution
environment built for use in layer-2.

This OVM is special, it creates a new smart contract called the execution manager
which acts as a virtual container for OVM contracts, providing a function to make
any functionality between L1 and L2 consistent.

Rollups significantly increase processing speeds by moving a large amount of


transaction data off-chain ? So where they move data to on which chain ?

Optimistic rollups use fraud proofs to verify the correctness of transactions

What is layer 2 scaling ?

This category of off-chain solutions derives its security from mainnet ethereum

How many types of scaling are available ?

There are two types of scaling

(this is incomplete)

Q:What is the data Availability layer in the op stack and what are its functions ?

Answer:

The DA layer is the layer where we stored raw data that is later used to power the op stack
chains. The data includes the following things
1. Transaction data
2. Block Data
3. State Data

DA layer is responsible for ensuring that this data is available to the all nodes in the
network

The DA layer is an important part of the security model of the op stack. If the DA layer is
not secure then it would be easier for the attackers to tamper with the data that is used to
power the op stack chains. This could lead to the various problem like data loss fraud and
censorship

If a certain piece of information or data can no longer be retrieved from the DA layer , it may
not be possible to sync the chain.

Q:What is the data Availability layer used by OP Stack ?

Answer:

Ethereum DA is the currently most widely used DA layer/module for the op stack.

So when using the ethereum DA module , source data can be derived from any piece of
information accessible on ethereum blockchain. This includes ethereum calldata , events
and 4844 blobs.

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