By Godfrey Benjamin
Updated
3 min read
The funding will be used for adding more talents to the team as Optimism is hiring across various departments.
Ethereum Layer-2 scaling solution Optimism has raised the sum of $150 million in a Series B funding round. The capital raise was co-led by Paradigm Capital and Andreessen Horowitz (a16z), two of the biggest Venture Capital firms backing the growth of the digital currency ecosystem. The funding places Optimism at a valuation of $1.65 billion.
The relevance of the Optimism protocol is inherent in the need for alternative solutions to enhance the usability of the Ethereum blockchain. With the growth of Decentralized Finance (DeFi), and Non-Fungible Tokens (NFT) on the Ethereum blockchain, the inherent challenges of congestion are still commonplace, and Optimism is providing the right scaling solution while providing the right DevEx to draw in massive adoption.
Optimism uses a transaction execution method called optimistic rollups to improve throughput and lower transaction fees while still maintaining the security properties of the underlying blockchain. Through its innovative offering, the Optimism team boasts of being able to cut transaction fees by 30% and within a year, the protocol has saved up to $1 billion on transaction fees. The protocol has deployed thousands of contracts while three forks of Optimism are now resident on the mainnet.
The funding will be used for adding more talents to its team, and according to the vacancies page, Optimism is hiring across various departments as it continues on its ambitious path of cutting transaction fees on the Ethereum blockchain by 100x.
As part of its growth markers, Optimism has been recording massive milestones in its Total Value Locked (TVL), despite being a Public Benefit Corporation with an open-source codebase that has already led to a number of popular forks. Thus far, Optimism has recorded over $363 million in TVL according to data from DeFiLlama
What makes the Optimism team noble is that it is not taking advantage of the growth of its protocol.
“We made a commitment to the public that we would not take profit from operating centralized parts of the system, so we wanted to remove the financial incentive for ourselves to remain centralized,” Optimism CEO Jinglan Wang tells TechCrunch in an interview. “While we are making revenue, we’re giving all of that revenue back toward funding public goods on Ethereum … We don’t just want to say that we want to be decentralized, we also want to show the community that we’re setting up our own incentives to be compatible with that.”
The importance of Layer-2 protocols as the immediate solution to Ethereum’s many woes cannot be over-emphasized, and amongst the innovative protocols in the space today, Optimism undoubtedly has a future role, and that implies being flexible with the innovations it integrates over time.
“We want to be future proof so we’re not closing the doors to the possibility of integrating a ZK [Ethereum Virtual Machine] down the line,” Wang says. “We’re also pragmatists and we don’t want our work to toil forever in academic hell – we want people to use it.”
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Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.
