Conclusion

• Overall Optimism is doing well in terms of transaction, user and swap metrics and we have seen the number going up in the recent weeks specially.
  • The frequency has seen an increase in the recent few weeks.
  • The success rate is improved with optimism with only 5% transactions actually failing since the past few weeks.
• If we compare it to other L2 such and Polygon and Arbitrum, then optimism has a long way to go, Polygon is still dominant L2, and Arbitrum is showing more promise than optimism in terms of L2 competition.

Number of Active Users - Overtime

• We see around 80k-150k users daily on Optimism.
• The highest was 215K, with 180K Successful and 35K Failed transaction users during the week of 30 May, 2022.
• The number of active users have seen a slight increase in the recent weeks.

Transaction Frequency - Overtime

• We see around .5M transactions daily on Optimism, with some days even seeing transactions around 1-1.5M.
• The highest was 1.7M, with 1.64M Successful and 103K Failed transactions.
• The frequency has seen an increase in the recent few weeks.
• The success rate is improved with optimism with only 5% transactions actually failing since the past few weeks.

Gas User over Time - $USD

• Optimism like other L2s is known for its very low gas fees.
• We saw there are ~0.5M-1M transactions everyday and the gas fee is a mere 4K $USD per day.
• Till date we have seen only 193K $USD in Gas fees from 47.4M transactions.

Swap Metrics

Gas Used

• Optimism being an L2 is know for its Gas optimization, we see that for the past 180 days only ~230 ETH has been used in fee for about 9M Swaps.

Swap Frequency

• Swap frequency has shot up since July 18, totalling around 400K swaps per week, for a cumulative of 9M swaps in the past 180 days.

Number of Swappers

• The swapper activity has seen a very slight increase as well in the past weeks, with a highest of 73K unique swappers in the week of May 30, 2022 alone.

What is layer 2?

Layer 2 (L2) is a collective term to describe a specific set of Ethereum scaling solutions. A layer 2 is a separate blockchain that extends Ethereum and inherits the security guarantees of Ethereum. [1]

Why do we need layer 2?

Three desirable properties of a blockchain are that it is decentralized, secure, and scalable. The blockchain trilemma states that a simple blockchain architecture can only achieve two out of three. Want a secure and decentralized blockchain? You need to sacrifice scalability.

Ethereum has reached the network's current capacity with 1+ million transactions per day and high demand for each of these transactions. The success of Ethereum and the demand to use it has caused gas prices to rise substantially. Therefore the need for scaling solutions has increased in demand as well. This is where layer 2 networks come in.[2]

Scalability

The main goal of scalability is to increase transaction speed (faster finality) and transaction throughput (higher transactions per second) without sacrificing decentralization or security.

The Ethereum community has taken a strong stance that it would not throw out decentralization or security in order to scale. Until sharding, Ethereum Mainnet (layer 1) is only able to process roughly 15 transactions per second. When demand to use Ethereum is high, the network becomes congested, which increases transaction fees and prices out users who cannot afford those fees. That is where layer 2 comes in to scale Ethereum today.[2] \n

How does layer 2 work?

As we mentioned above, Layer 2 is a collective term for Ethereum scaling solutions that handle transactions off Ethereum layer 1 while still taking advantage of the robust decentralized security of Ethereum layer 1. A layer 2 is a separate blockchain that extends Ethereum. How does that work?

A layer 2 blockchain regularly communicates with Ethereum (by submitting bundles of transactions) in order to ensure it has similar security and decentralization guarantees. All this requires no changes to the layer 1 protocol (Ethereum). This lets layer 1 handle security, data availability, and decentralization, while layer 2s handles scaling. Layer 2s take the transactional burden away from the layer 1 and post finalized proofs back to the layer 1. By removing this transaction load from layer 1, the base layer becomes less congested, and everything becomes more scalable.[2]

Rollups

Rollups are currently the preferred layer 2 solution for scaling Ethereum. By using rollups, users can reduce gas fees by up to 100x compared to layer 1.

Rollups bundle (or ’roll up’) hundreds of transactions into a single transaction on layer 1. This distributes the L1 transaction fees across everyone in the rollup, making it cheaper for each user. Rollup transactions get executed outside of layer 1 but the transaction data gets posted to layer 1. By posting transaction data onto layer 1, rollups inherit the security of Ethereum. There are two different approaches to rollups: optimistic and zero-knowledge - they differ primarily on how this transaction data is posted to L1.[2]

Methodology

• Find all the various metrics for Optimism first like Transaction TPS metrics.
• Then we look at more detail into the transaction metrics like frequency, gas used, number of users.
• We then also look at the swap metrics to understand the current state of Optimism.
• Once we have the complete picture of Optimism, we then compare it against other L2s such as Polygon and Arbitrum to see how is it faring against the other L2.

Optimism vs other L2s

Transaction Frequency - Overtime

• We see around .5M transactions daily on Optimism, with some days even seeing transactions around 1-1.5M, this is very slightly higher than arbitrum, but way lower than polygon.
• Recent weeks however has seen the relative share of arbitrum go up to 11% vs 83% for Polygon and only 5.2% for Optimism.
• In the past 180 days polygon has seen 523.9M transactions, where as Arbitrum has seen 31.2M and Optimism has seen only 23.8M transactions.
• Arbitrum has gone up in usage very recently since Sep 2022.

Number of Active Users - Overtime

• We see around 80k-150k users daily on Optimism, this is very slightly higher than arbitrum on some weeks, but way lower than polygon.
• Recent weeks however has seen the relative share of arbitrum go up in terms of number of active users, where as optimism is declining and polygon has gone up as well.
• There have been 26.2M users in the past 180 days for Polygon, 2.8M for Arbitrum and 1.8M for Optimism.

OPtimism Metrics

Transactions Per Second

• While L2s are known for low fees, they are not particularly know for high TPS, however Optimism surprisingly has had 709 as Max TPS on Oct 11, 2022.
• Looking at the overall max vs average till date, the overall max is ~709 Transactions vs 24 Transactions as the average.
• The max is quite variable day to day but on most days it is around 300 transactions.