New data from DefiLlama reveals that Optimism’s total value locked (TVL) has surged by almost 300 percent in the past month.
The Ethereum scaling solution surpassed US$1 billion in TVL ahead of the blockchain’s transition from a proof-of-work to a proof-of-stake network:
ETH Merge Optimal for Optimism
Optimism (OP) rose by more than 89 percent in the past week alone, reaching a high of US$2.22 on August 4 and noticeably outperforming most of the market.
The latest price action is likely based on developments surrounding the upcoming Ethereum layer-2 scaling protocol. The protocol will utilise rollups to speed up Ethereum’s transactions, thereby reducing its costs. This week’s value spike has followed an OP Labs announcement that flagged plans for a Bedrock upgrade set to arrive as early as Q4 2022:
Experts believe the Merge upgrade could potentially scale the network to 100,000 transactions per second, with layer-2 solutions further enhancing such capacity. This would represent a massive upgrade from its current 30 transactions per second.
Other developments users can expect to see soon include a 20 percent cut in the cost of data submission to layer 1, support for several alternative proof systems, and an optimised code that will allow nodes to synch 50 times faster.
Two Sides to the Optimism Coin
Optimism has been busy this year on fronts good and bad. In April the company announced its new governance structure and began preparing for the release of its new token, $OP, to help power the changes. The new structure would see governance divided between two houses – the Citizens house and the Token house, to be established via the airdropping of new tokens to users.
However, June brought damages to Optimism in the form of an exploit. The roll-up solution lost US$15 million worth of its new OP tokens after Wintermute, its launch partner, transferred the tokens to the wrong wallet address. Luckily, a white hat attacker returned 17 million tokens (worth approximately US$11 million).