Analysis

Ethereum Layer 2 Community Optimism Is Dropping a Token

Key Takeaways

  • The Ethereum Layer 2 community Optimism is launching a token and new governance mannequin.
  • The Optimism crew has introduced that the token can be distributed through a collection of airdrops, and that new customers can nonetheless become involved.
  • Optimism is one in all a number of Layer 2 options hoping to assist Ethereum obtain scalability.

Optimism’s new OP token can be distributed to Optimism customers throughout “a whole season of airdrops.” The crew revealed its token as half of a bigger transfer towards a decentralized governance construction often known as the Optimism Collective.

Optimism Launches Token 

Ethereum energy customers are getting one other airdrop—a collection of them, in reality.

Optimism, one in all Ethereum’s prime Layer 2 scaling initiatives, has introduced that will probably be issuing a governance token below the ticker OP. The Optimism crew revealed the information in a weblog publish Tuesday. The crew additionally shared an inventory of standards for airdrop eligibility, which incorporates objects so simple as being an Optimism person to extra superior standards similar to being a DAO voter or multisig signer. 

The token airdrop would be the first in a collection of airdrops to be launched within the coming months. Whereas the crew didn’t present a precise date for the primary airdrop, it took care to warn customers that it’s not stay but, and any try and persuade customers in any other case is a rip-off.

The token drop is a component of a bigger transfer to a extra decentralized governance construction. The Optimism Collective, as will probably be often known as of at the moment’s announcement, will function a bicameral “home” system that divides governance roles amongst a Token Home and a Residents’ Home. The Token Home can be comprised of recipients of OP through the first airdrop; Optimism will add customers to the Residents’ Home later by means of issuing “soulbound” NFTs that can’t be purchased or bought. Collectively, the bicameral system in meant to mitigate the doable plutocratic tendencies of purely token-based governance.

Optimism leverages a type of cryptographic expertise known as Optimistic Rollups to assist Ethereum scale. By operating its personal community on prime of the bottom chain, it may possibly course of transactions at the next velocity and decrease price than Ethereum mainnet whereas leveraging the safety of the community. Optimism has a bridge that connects Ethereum mainnet to its Layer 2 community. Since launching in 2021, the community has welcomed key DeFi initiatives like Synthetix and Uniswap. In launching a token, Optimism can be adopting a decentralized governance mannequin akin to many different related DeFi initiatives on Ethereum. 

The token announcement had been anticipated for a number of days, thanks primarily to an Apr. 19 Mirror publish through which Optimism detailed a plan to start out a brand new chapter “pushed by neighborhood possession and governance.” A leaked Coinbase web page additionally appeared to listing an Optimism token final week.  

Layer 2 Race Intensifies

The venture has seen important progress over the previous few months amid elevated deal with Ethereum’s Layer 2 scaling options. In accordance with L2Beat information, the community holds about $662 million in whole worth locked, a sum that’s jumped 15% over the past week for the reason that token rumors began to floor. Notably, though Optimism is presently benefiting from a wave of hype, it’s nonetheless lagging behind its largest competitor, Arbitrum, one other Layer 2 resolution of the Optimistic Rollup selection holding $3.57 billion in whole worth locked—greater than half the Ethereum Layer 2 market. 

Whereas Optimism and Arbitrum are presently two of Ethereum’s largest scaling weapons, that’s anticipated to alter as soon as ZK-Rollups like StarkWare’s StarkNet achieve important traction. Final week, the early Ethereum DeFi venture MakerDAO outlined plans to launch on StarkNet commencing with a bridge launch this Thursday as a part of its dedication to serving to the Ethereum ecosystem scale (2022 can be an enormous yr for the Ethereum protocol and its scaling roadmap, because it’s resulting from launch its extremely anticipated “Merge” to Proof-of-Stake). 

With Optimism now dropping a token, different related Layer 2 protocols face a choice of whether or not to observe go well with. On this planet of DeFi, it’s not unusual for initiatives to launch a token as soon as a competitor does to incentivize utilization and assist bootstrap progress. Both approach, alongside the Merge, the race to construct out Layer 2 is more likely to turn into a key narrative in Ethereumland over the following few months. 

Disclosure: On the time of writing, the creator of this piece owned ETH, SNX, and had publicity to MKR and UNI in a cryptocurrency index. They mistakenly thought they had been eligible for the primary spherical of Optimism’s OP airdrop, however later realized that that they had not been included. 

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