Popular Ethereum scaling solution Optimism has announced a $150 million Series B financing round co-led by Andreessen Horowitz (a16z) and Paradigm with a total valuation of $1.65 billion.
According to a blog after from Optimism, the Layer 2 (L2) solution has saved users of the Ethereum network more than $1 billion in gas costs. The funding will be used to expand the Optimism team and work to further reduce network costs.
Fees on the Optimism network were reduced by a cumulative 30% last year and now the team is contributing to a proposal for Ethereum improvement (EIP-4844) for Shard Blob transactions, which could reduce network costs for Ethereum by up to 100x in the near future.
With the potential to reduce costs for all rollups by 100x and a practical path to implementation, we strongly support this EIP.
But how, you ask?
— Optimism ✨ (@optimismPBC) March 4, 2022
L2 solutions such as Optimism have become extremely popular due to the increased demand for NFTs, smart contracts and DeFi applications on the Ethereum network, which in turn overloads transaction processing and drives up gas prices.
Optimism continues hiring “optimistic rollups”, which aggregate transactions outside of the Ethereum blockchain, with the benefits of reduced slippage, lower transaction costs, and vastly improved transaction speeds.
According to data tracker L2Beat total value locked (TVL) on L2 platforms has grown to $5.76 billion, with Optimism currently ranking fourth among its L2 peers, with approximately $440 million worth of TVL on its platform.
Kain Warwick, Australian crypto veteran and founder of Synthetix, a decentralized derivatives exchange, told his 107,000 Twitter followers that not only did he participate in the Optimism funding round, but that he “doubled down hard” on the expectation that Optimism will “soon with ETH in size would be”. †
Disclosure I participated in this round following on from the previous round, but I’m doubling hard. My size portfolio now looks like this:
I expect optimism to be in magnitude soon with ETH, I wonder what the catalyst could be… https://t.co/yBw4mBtDz4
— kain.eth L222 (@kaiynne) March 17, 2022
Late last year, Optimism expanded from whitelist-only status and made the network publicly accessible, meaning any developer can start building a project on the Optimism network.
Related: Optimism Announces Upgrades That Enable ‘One-Click’ Roll-Up Deployment
Making network development public offers some great benefits in terms of increased output, but as iOS jailbreak developer Saurik discovered, it also opens up the potential for “critical bugs.”
Fortunately, Saurik, real name Jay Freeman, discovered such a bug in early February, which allowed malicious hackers to create infinite ETH on the network and notified the Optimism team. He was awarded a $2 million bug bounty, one of the largest bounties to date.