Data from DefiLama shows that the total value locked (TVL), on Optimism, a layer-2 scaling solution to the Ethereum blockchain, rose 284% over the past month. Most TVL is made up of users borrowing and lending assets through Optimism’s layer-2 chain.
In anticipation of The Merge upgrade which will see The Blockchain transition from a proof–of-work network into one based on proof–of-stake, investors have been bidding for digital assets in the Ethereum ecosystem.
A recent Ethereum developer call revealed that the tentative date for The Merge’s launch is Sept. 19. Optimism is a layer-2 Ethereum blockchain. It aims to scale the ecosystem through Rollups or off-chain computations. This speeds up transactions. Optimism records transactions and then finalizes them on Ethereum.
The project hosts 35 protocols, including Synthetix, Uniswap and Velodrome, which are derivatives exchanges. The Ethereum blockchain’s current capacity, which can handle 30 transactions per second, is not sufficient to deal with the large volume of trade orders (including cancellations). Experts predict that the network will be able to handle 100,000 transactions per second with layer-2 solutions.
Layer-2 is where optimism blocks are created and executed. On layer-2, user transactions are batched and submitted to Ethereum layer-1. Transactions can be accepted or rejected immediately with no mempool on layer-2. This allows for a quick user experience. In line with the TVL development the namesake tokens of the project have also rallied by 30% during that time.
Dai on Optimism: From 30 million to140 million in 5 Days pic.twitter.com/AQlNWvX6c9
— Maker (@MakerDAO August 9, 2022