The Ethereum blockchain, known for its smart contract capabilities, has long struggled with scalability issues. As the network grew in popularity, it became increasingly expensive and slow to use. To address this problem, the Ethereum community introduced layer 2 scaling solutions, also known as rollups, starting in 2019. Optimism's OP technology was one of the first to market.
Today, Optimism's technology is widely used by various entities to create their own layer-2 networks. In 2024, prominent companies such as Kraken, Uniswap, World Network, and Sony's Blockchain Lab all utilized Optimism's technology to build their own scaling blockchains. As a result, Optimism's founding team, led by Jing Wang, has been nominated for CoinDesk's 2024 Most Influential list.
According to Ben Jones, another co-founder of Optimism and director at the Optimism Foundation, 'If you have to put your finger on the pulse of the lifeline of the Optimism Collective, it is Jing Wang.' The founding team, consisting of Ethereum veterans including Wang, Jones, Karl Floersch, Mark Tyneway, Kelvin Fichter, and Kevin Ho, has a story that dates back to 2016 when Wang met Floersch, a former researcher at the Ethereum Foundation. Wang's journey in crypto began in the Bitcoin space, but she became frustrated with the lack of female participation in the developer ecosystem.
It was Vitalik Buterin, the creator of Ethereum, who introduced her to Floersch and encouraged her to explore Ethereum. At the Ethereum Foundation, Floersch mentored Wang, assigning her a 'textbook' writing project that eventually led to the development of Plasma, a scaling design that preceded rollups and became a precursor to Optimism.
Plasma was initially an academic exercise focused on scaling transactions on Ethereum, but Wang, alongside Floersch, created the Plasma Group, a non-profit that advanced scaling research. After the Plasma Group was established, Wang realized that people wanted a layer 2 with lower fees and faster transactions, leading to the development of optimistic rollups. However, as a non-profit, the team struggled to secure funding to turn their research into products.
This challenge prompted the creation of Optimism, with the goal of building a sustainable ecosystem. Optimism was founded in 2019, and its network was operational by the end of 2021. The company behind Optimism later split into two entities: OP Labs BPC, the primary developer firm, and the Optimism Foundation, which oversees governance and ecosystem growth. Wang was the CEO of Optimism PBC before the split and became the Foundation's CEO and executive director.
Optimism's blockchain is powered by optimistic rollups, which bundle large amounts of transaction data into digestible batches, making it cheaper to transact on the platform than on Ethereum. The OP Stack, released in 2023, allows developers to create their own layer-2 chains, which can join the 'Superchain,' a network of blockchains built with Optimism's technology that enables interoperability and shared liquidity.
The Superchain aims to address fragmentation, making it easier for blockchains to communicate and transfer funds. Competitors like Arbitrum, Polygon, and zkSync have also released their own stacks, heating up the competition to attract users and companies. The first major client of the OP Stack was Coinbase's Base network, which brought the largest US exchange on-chain in August 2023.
Since then, many other prominent companies have launched their own layer-2s using the OP Stack, making Optimism a clear winner. As of November 2024, layer 2s on the OP Stack accounted for 52.7% of all Ethereum layer-2 transactions. Jones attributes the success of OP Stack to its ease of use for developers, allowing them to create their own chains without significant complexity. However, some competitors have noted that Optimism's strategy involves giving out large sums of OP tokens in the form of grants to encourage adoption.
While officials at the Optimism Foundation argue that these grants support developers and contribute to the ecosystem's growth, others have raised questions about the lack of transparency surrounding the grant amounts. Jones argues that the grants are not merely a handout but rather a way to reward projects for contributing to the OP ecosystem and improving its code and software. The success of Optimism's strategy, which combines easy technology with grants, remains to be seen, but for now, the platform has established itself as a leading player in the Ethereum scaling race.