Plasma becomes Optimism and could save Ethereum

Ethereum is still trying to increase the capacity of its transactions, and the startup Optimism wants to drive this transformation.

Optimism aims to use a multi-tiered approach, similar to the Bitcoin Lightning Network, to increase the number of users who can use the network with smart contracts.

From Plasma to Optimism

Optimism, formerly called Plasma-Group, was born as a research-oriented non-profit association focused on building a second tier for Ethereum as described by Ethereum creator Vitalik Buterin himself and Lightning co-creator Joseph Poon in a 2017 article .

In January 2020, the team announced it was moving from being a research collective to a profit-making startup called Optimism, backed by $ 3,5 million from Paradigm and IDEO CoLab Ventures.

Dan Elitzer of IDEO CoLab said that the Plasma team realized last year that the market didn't need the solution they were working on. This "led them to develop their new Optimistic Rollup approach," said Elitzer.

Some industry critics see this transition to a profit-making startup as a controversial move. In response to these speculations, the startup will launch an alpha test next week called the Optimistic Virtual Machine (OVM).

OVM, which is based on the Ethereum Virtual Machine (EVM), aims to provide the second fastest level of Optimism with the same smart contract functionality as the underlying blockchain.

What is the goal of Optimism

By making smart contracts operate above the basic level, Ethereum supporters aim to make the platform more effective and, therefore, widespread.

Optimism co-founder Ben Jones said that this second tier will eventually incorporate Optimistic Rollup, which processes many transactions faster and a certain type of quadratic funding auctions proposed by Glen Weyl.

The latter aim to solve a thorny problem recently faced by the zcash community, that is, how to finance the decentralized development of a "public good". Jones said the details of how this system will work are under development, but will likely refer to mining dynamics and network tariffs.

"The order of the transactions themselves is valuable," Jones said, referring to a concept that the exchange lightning Sparkswap discovered last April. There is a value in the location of cryptographic transactions within a payment channel.

Bitcoin has already moved in this direction through the startup Lightning Labs, which recently launched a payment channel management service called Lightning Loop.

Doubts about the Optimism plan

Dragonfly's Ramachandran is quite positive about the Optimistic Rollup, however he said he is uncertain about the second half of the Optimism plan, which is the quadratic financing that may involve adding a network token in addition to the Ether currency.

Optimism's Jones clarified that there are still no plans for a new network token, nor a date for a beta launch comparable to what Lightning Labs and Blockstream had for bitcoin in 2018.