according to Optimism’s Total Value Locked (TVL), a layer 2 scaling solution for the Ethereum blockchain, surged 284% last month, according to data from DefiLlama. The bulk of TVL consists of users lending and borrowing assets on Aave through Optimism’s layer 2 chain.
Investors are bidding on digital assets linked to the Ethereum ecosystem in anticipation of The Merge upgrade, where the blockchain will move from a proof-of-work network to one based on proof-of-stake.
A tentative date for The Merge to come online is scheduled for September 19th, according to a recent Ethereum developer call.As a layer 2 Ethereum blockchain, Optimism seeks to scale the ecosystem and speed up transactions via rollup or off-chain computation. Transactions are recorded in Optimism and finalized in Ethereum.
The project has 35 protocols, including derivatives exchange Synthetix, decentralized exchange Uniswap, and automated market maker Velodrome. Due to the high volume of user trading orders (including cancellations) on the exchange, the Ethereum blockchain’s current processing capacity of 30 transactions per second is insufficient to handle such demand. However, some experts predict that the network could scale to 100,000 transactions per second after The Merge upgrade, and layer 2 solutions could further boost such capacity. increase.
The Optimism Block is built and executed at Layer 2, and user transactions are batched and sent to Ethereum Layer 1. At Layer 2, transactions are immediately approved or denied without mempool, resulting in a fast user experience. In response to TVL’s development, the project’s eponymous token also rose by 300% during the same period.
From 30 million to 140 million in 5 days. pic.twitter.com/AQlNWvX6c9
— Maker (@MakerDAO) August 9, 2022