What is Optimism? Network, token and how it works
Optimism is an Ethereum scaling network plus a governance token called OP. The network is a Layer 2 that settles on Ethereum, and its fees are paid in ETH.
Vahe HakobyanEditor-in-chief
Updated Oct 6, 20263 min readFact-checked
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Optimism handles transactions away from Ethereum and posts the results back for settlement. Its main chain is OP Mainnet, and the project groups it with other chains under the name Superchain, all built on the OP Stack.
What is the OP token used for?
OP is the governance token of the Optimism Collective. Optimism says holders use it to vote on protocol upgrades and on how funding is given out. You do not need OP to use the network, because transaction fees on Optimism are paid in ETH.
- Vote on protocol upgrades.
- Vote on funding for public goods.
- Vote on changes to the network's rules.
How does Optimism work and who created it?
Optimism is an optimistic rollup. It assumes each transaction it processes is valid, and if someone spots a bad one, they can challenge it with a fraud proof during a challenge window. The fraud proof shows the batch was wrong, and Ethereum can correct it. OP Labs writes the core software and the Optimism Foundation handles governance and funding. OP Mainnet launched in 2021, and the OP token arrived in May 2022.
How is Optimism different from other scaling networks?
Arbitrum is another optimistic rollup, so it also assumes transactions are valid and relies on fraud proofs. Zero-knowledge rollups take the opposite approach: they prove each batch is valid before it settles on Ethereum. Optimism's group of chains, the Superchain, all run on the OP Stack, a framework for Ethereum Layer 2 chains.
What are the risks and legal issues?
Optimism is not fully decentralized. Its sequencer, the part that orders transactions before they go to Ethereum, is run by a single entity, so users trust that operator for ordering. No US federal law specifically names OP, and the SEC's view of a token usually depends on how it was sold. The IRS treats crypto as property.
Frequently asked questions
No. It is a rollup that settles on Ethereum and relies on it for security and final settlement.
Yes. Fees on Optimism are paid in ETH, so you can use apps there without holding any OP.
Most wallets that support Ethereum and similar networks work with Optimism, and most wallets that let you add a custom EVM network can connect.
