Try Quests to earn cryptoOptimism is a Layer-2 Ethereum scaling solution. It combines numerous transactions into one, and then pushes that transaction to a different blockchain for additional processing.
It then provides the transaction receipts back to Ethereum by utilizing a data compression mechanism, thus lowering the burden of transactions on Ethereum Mainnet.
Ethereum Mainnet users can bridge tokens to Optimism to take advantage of the chains' improved performance.
When an asset is bridged, the Mainnet token is locked into the bridge contract and a new token is minted on the Layer-2 chain. In the event that a token is bridged back from Layer-2 to Mainnet, the Layer-2 token is burned and the bridge token is unlocked.
The Total Value Locked (TVL) in the Optimism Bridge Contract is the net value of all tokens bridged to the Optimism chain.
Takeaways
Optimism is a strong contender in the race to become Ethereum's primary scaling solution.
Bridge transfers have increased since Optimism started its airdrop and OP token reward scheme.
Compared to Avalanche, Optimism is seeing a relative increase in asset inflows.
Stablecoins are frequently bridged to Optimism, with USDC being the largest asset on the chain.
The Optimism chain is currently hosting over $800M tokens. This is comprised of 36% in ETH and 64% of other ERC-20 tokens.
Several stablecoins were bridged to Optimism. USDC has the highest value locked in the Optimism Bridge contract. As a result, USDC is Optimism's largest asset.
Some predict that alt Layer 1 chains like Avalanche will take over as Ethereum's primary scaling method. Avalanche is quite popular and has amassed more than $2B in TVL.
This prediction is inspired by analyst JP12’s research showing more GMX tokens bridged to Avalanche, compared to GMX bridged to another Layer 2 chain called Arbitrum. This data point pointed towards a preference for Avalanche over Layer 2 chains.
User preferences, though, seem to be shifting. Avalanche is losing ground to Optimism in terms of bridge transfer volumes.
On August 4, Aave announced a liquidity mining program for Optimism's OP token. Over the course of 90 days, Aave will distribute 5 million OP to Aave Protocol’s Optimism Market users. This announcement coincided with a spike in transfers to Optimism using the native bridge.
Technical Notes:
- Only the official Optimism Bridge contracts were included in the analysis.
- In addition to the TVL in the Optimism Bridge, there are tokens on the Optimism Chain that arrived there through other means. For example, Hop Protocol allows the migration of assets to and from different Layer 2 chains.
Acknowledgements:
Special thanks to Akbaridria for their previous work on Optimism. I expanded upon their SQL query to produce many of the data in this dashboard.
Twitter: @streamust
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