Optimism

Optimism is an Ethereum Layer 2 scaling solution built using optimistic rollup technology. It functions as a separate blockchain that processes transactions off-chain (on Layer 2) before submitting compressed transaction data in batches to the Ethereum mainnet (Layer 1) for final settlement. This architecture dramatically reduces transaction fees and increases throughput while inheriting the security guarantees of Ethereum. The core innovation is its "optimistic" assumption that all transactions are valid, relying on a fraud-proof mechanism where anyone can challenge incorrect state transitions during a designated challenge window.

The system's security model is anchored by a single, permissionless fault proof (previously called a fraud proof) system. When a batch of transactions is posted to Ethereum, there is a dispute time delay (typically 7 days) during which any network participant can submit a fault proof to challenge the validity of the state transition. If a challenge is successful, the rollup state is reverted, and the malicious sequencer's bond is slashed. This mechanism allows Optimism to trustlessly scale Ethereum without introducing new trust assumptions, as the canonical state is ultimately secured by Ethereum's consensus.

A key feature of the Optimism ecosystem is the OP Stack, a standardized, open-source development stack for building Layer 2 blockchains. The OP Stack powers the main Optimism Mainnet (formerly Optimistic Ethereum) and forms the foundation for the Superchain, a network of interoperable, shared-sequencer L2s like Base and Zora. This modular framework handles core components like sequencing, execution, and settlement, enabling developers to launch custom, Ethereum-aligned chains. The ecosystem is governed by the Optimism Collective, which uses the OP token for governance and protocol incentives.

At its core, Optimism functions as an Optimistic Rollup, a blockchain that runs parallel to Ethereum Mainnet (Layer 1). It processes transactions in batches off-chain, assuming they are valid by default—this is the "optimistic" assumption. Only a single, compressed summary of these transactions, called a rollup block, is periodically posted to Ethereum. This fundamental mechanism allows Optimism to handle thousands of transactions per second at a fraction of the cost, as users only pay for the cost of storing data on Ethereum, not for executing each transaction there.

Security is maintained through a fraud proof system. After a rollup block is posted, there is a challenge period (historically seven days) during which any verifier can dispute an invalid transaction by submitting a fraud proof. If a fraud proof is successfully validated, the incorrect state is reverted, and the malicious sequencer is penalized. This design ensures that the security of assets on Optimism is ultimately backed by Ethereum's consensus, as the Layer 1 contract acts as the final arbiter of truth. The sequencer, which orders transactions, can be decentralized over time, though it currently operates as a single entity managed by the Optimism Foundation.

The technical stack includes the Optimism Virtual Machine (OVM), now evolved into the EVM-equivalent OVM 2.0. Unlike other scaling solutions that use a separate virtual machine, Optimism's is fully compatible with the Ethereum Virtual Machine (EVM). This EVM-equivalence means developers can deploy existing Ethereum smart contracts with minimal modifications, and tools like MetaMask and Hardhat work natively. The system uses compressed transaction data and efficient calldata posting to Layer 1 to minimize costs further.

A critical innovation is fault proofs (the mechanism behind fraud proofs) and the Cannon fault proof program. Cannon is a decentralized, on-chain verifier written in MIPS that can be run by anyone to mathematically prove fraud, moving beyond the earlier, more centralized multi-signature model. The ecosystem is governed by the Optimism Collective, which uses the OP token for governance and a retroactive public goods funding model to sustainably support development. Future upgrades, like the integration of EIP-4844 with blob transactions, are designed to reduce data posting costs by orders of magnitude, solidifying its scalable foundation.

The OP Stack is the standardized, open-source development stack that powers the Optimism Collective's Layer 2 networks, including the primary Optimism Mainnet. Its core innovation is a modular architecture that separates key blockchain components—such as consensus, execution, and settlement—into discrete, interchangeable modules. This design allows developers to create custom Layer 2 chains, known as OP Chains, by mixing and matching these modules, rather than building an entire blockchain from scratch. The stack's foundational module is the Optimistic Rollup protocol, which bundles transactions off-chain and posts compressed data to Ethereum for security and finality.

A central component of the OP Stack is the Bedrock upgrade, which introduced a re-architected rollup client. Bedrock significantly reduced transaction fees by optimizing data posting to Ethereum, minimized dispute window durations for faster withdrawals, and achieved near-equivalence with Ethereum's EVM and Geth client for improved developer compatibility. This modular client architecture means core functions like the sequencer (which orders transactions), batcher (which posts data), and verifier (which validates state) can be upgraded or replaced independently, fostering rapid innovation and specialization within the ecosystem.

The OP Stack enables the creation of a Superchain, a network of interoperable OP Chains that share bridging, governance, and a communication layer. Chains built with the stack can choose to join this collective, gaining native security from Ethereum and seamless connectivity with other members. This vision moves beyond isolated Layer 2 solutions toward a unified, scalable blockchain ecosystem. The stack is governed by the Optimism Collective, with upgrades proposed and ratified through its decentralized governance process, ensuring its development remains aligned with the public good and the needs of its users.

Optimism is a pioneering Layer 2 (L2) scaling solution for Ethereum that utilizes Optimistic Rollup technology to increase transaction throughput and reduce fees while inheriting Ethereum's security. It was first conceptualized and built by the team at Plasma Group, a research organization that later merged with the Ethereum infrastructure company Optimism PBC (Public Benefit Corporation) to form the core development entity. The project's mainnet, Optimism Mainnet, launched in December 2021, marking a shift from earlier testnet iterations like the Optimistic Ethereum (OE) testnet.

The core innovation, the Optimistic Rollup, operates on the principle of optimistic execution. It assumes transactions are valid by default and only runs computation via a fault proof (historically a multi-round interactive fraud proof) if a challenge is issued during a dispute period or challenge window. This design significantly reduces the on-chain computational burden. A critical evolution was the development of EVM equivalence, which allows the Optimism Virtual Machine (OVM) to be nearly identical to the Ethereum Virtual Machine (EVM), ensuring seamless compatibility for developers and smart contracts.

A major milestone in Optimism's evolution was the Bedrock upgrade in June 2023. This hard fork introduced a new, modular rollup architecture that lowered fees further, improved proof systems, and reduced sequencer downtime by more closely aligning with Ethereum's codebase and execution layer. The upgrade also laid the groundwork for a multi-client ecosystem, moving away from a single, centralized client implementation. This technical progression is governed by the Optimism Collective, a decentralized ecosystem supported by the OP token and its Retroactive Public Goods Funding (RPGF) model.