The emergence of blockchain technology has become a force to reckon with, especially for the traditional financial system, as it addresses the ease of storing and transferring money in digital currency. Blockchain technology provides different ways to handle digital currency and has continued to find solutions to real-life problems.
Despite its rapid growth and adoption by many, blockchain technology has faced a trilemma in recent years. It involves the need to remain decentralized, improve scalability, and maintain security in the best possible way.
Scalability, decentralization, and security are the problems most blockchain technologies have struggled to tackle in all three despite having great ideas and adopting different architectures, but the need to achieve this solution has continued to grow in recent years.
A most notable situation was the collapse of the Ethereum network during the minting process of Otherside NFT (Non-fungible Tokens) by the famous Yuga Labs, the creators of Bored Ape Yacht Club (BAYC).
Many struggled to mint the Otherside NFT leading to high demand on the Ethereum network and excessive gas fees leaving many to wonder if other solutions could be utilized, like the Immutable X ZKRollup solution.
Scalability has become a hot button for many blockchain technologies, with Ethereum taking serious action recently with its Ethereum Merge to address this problem.
Let us discuss how Optimism, a layer 2 solution, has adopted rollups to address the trilemma facing the blockchain space.
What is Optimism (OP)
Optimism is a layer 2 scaling solution on the Ethereum network, providing a solution to scalability on the Ethereum network reducing transaction fees and downtime. Scalability refers to the rate of transaction per second (TPS) on a blockchain network.
Although being the most secure blockchain technology, Ethereum has struggled with scalability in the past few years. It has an excessive demand on its network. Furthermore, this has raised concerns in recent years with the emergence of the NFT paradigm as most minting is carried out on the Ethereum network.
Users on the Ethereum network engage in a bidding war to include their transactions in the next block once block space becomes limited. As a result, the cost of gas increases. It is also much more difficult for the average user to profit from a transaction. Users must pay a high gas fee and wait a very long time for their transactions to complete.
Optimism comes into play here as its solutions offer scalability on the Ethereum network and address the trilemma most blockchain technologies need help with addressing this issue.
How Does It Optimism Work?
Optimism employs optimism rollup to process its transaction on Ethereum in batches in other to reduce gas fees and network congestion.
The Optimism rollup confirms transactions in hundreds of batches. This idea is more effective than Ethereum Layer 1 solution as it saves transaction fees as transactions are carried out in bundles. During a transaction, if the system suspects cases of fraud, Optimism rollup runs a fraud-proofing to verify such transaction before forwarding it for approval on the blockchain.
With its novel approach to scaling, Optimism Rollup is quickly taking over the blockchain ecosystem. It combines the strength of zkRollup with the Optimistic Virtual Machine (OPVM).
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