Tag: optimism

Ethereum Layer 2 Startup Optimism Raises $150m in Series B Round

Ethereum scaling startup Optimism has secured a $150 million Series B round, co-led by Andreessen Horowitz and Paradigm.

After this financing, the company was valued at $1.65 billion.

Since NFT and Defi products are closely linked to the Ethereum network, the Ethereum network has found transactions becomes slow and expensive for paying gas fees, pushing drive users to Layer 2 look for solutions like Optimism.

Layer 2 (L2) solutions are reported to have saved users of the Ethereum network more than $1 billion in gas fees. This “Total value locked” (TVL) on the L2 platform has exploded over the past year, with about $5.75 billion currently held on these blockchains, according to tracker L2Beat.

Optimism CEO Jinglan Wang said:

“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. 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.”

As reported by blockchain.News on September 1, Ethereum Layer-2 Off-chain Labs raised $120 million led by Lightspeed Venture Partners in its Series B financing, aiming to expand Ethereum contracts to meet the growing demand for Ethereum transactions.

Curve Finance Submits Application for 1 Million OP Token Grant

Curve Finance has submitted a governance proposal on Optimism for a 1 million OP token grant, according to a post on the Optimism forum submitted on July 24.

Curve’s total Optimism value currently stands at $17.4 million. On Curve pools in Optimism, the average is at $3.4 million in weekly trading volume.

While Optimism is an Ethereum Layer 2 protocol, Curve is the top liquidity pool for token swaps.

The Block reported that the grant proposal states currently 1 million OP tokens worth $850,000 will be distributed over 20 weeks on Curve. The statement means that 50,000 OP tokens will be distributed per week to Curve pools if it passes.

“These tokens will serve as incentives to liquidity providers (LPs) on gauged Curve pools on Optimism. Gauged pools on Curve receive token emissions on a weekly basis. These pools are decided by a weekly on-chain DAO vote on Curve,” The Block reported.

Three synthetic type tokens are available, including sUSD, sETH, and sBTC, which are the only three gauged Curve pools available on Optimism currently that will receive the weekly 50,000 OP tokens emissions. The number has been planned to increase over time, the announcement said.

According to the proposal, the grant will help incentivise Optimism liquidity via Curve-based emissions. 

“These rewards could help to attract more LPs to seed their liquidity to Optimism pools, thus expanding the Layer 2 network’s decentralised finance footprint,” The Block reported.

Kokomo Finance Accused of $4M Exit Scam

Kokomo Finance, an open-source and noncustodial lending protocol on Optimism, has been accused of an exit scam worth $4 million. The protocol allegedly plucked user funds via a smart contract loophole, causing the Kokomo Finance token to plummet 95% in value in a matter of minutes. Blockchain security firm CertiK alerted its followers to the situation in a tweet on March 26.

According to CertiK, the deployer of the KOKO token attacked the smart contract code of a wrapped Bitcoin token, cBTC, by resetting the reward speed and pausing the borrow function. An address beginning with “0x5a2d..” then approved the new cBTC smart contract to spend over 7000 Sonne Wrapped Bitcoin (So-WBTC). The attacker then called another command to swap the So-WBTC to the 0x5a2d address, which produced a $4 million profit, according to the security firm.

CertiK also noted that Kokomo Finance removed all social media accounts immediately following the alleged rug pull. The protocol rose up the ranks quickly in recent days, with blockchain data platforms like CoinGecko and DefiLlama officially tracking it shortly after Kokomo Finance went live on Optimism on March 25. Recent screenshots reveal that more than $2 million was locked into Kokomo Finance prior to it falling more than 97%.

Over 72% of the total value locked in the Kokomo Finance protocol came in the form of wrapped Bitcoin, according to data from DefiLlama. While most aspects of the audit were passed, “typographical errors” were found, and the owner of the KOKO token was also found to have a one-time ability to mint 45% of the maximum supply to an arbitrary address.

Kokomo Finance is a lending protocol that enables users to trade for wBTC, Ether (ETH), Tether (USDT), USD Coin (USDC), and Dai (DAI). It operates on the Optimism layer 2 scaling solution, which allows for faster and cheaper transactions on the Ethereum network.

The exit scam allegations against Kokomo Finance have raised concerns about the security of decentralized finance (DeFi) protocols. While DeFi has enabled greater financial freedom and accessibility for users, it has also brought with it new risks and challenges. Smart contract vulnerabilities and security loopholes can be exploited by bad actors, as in the case of Kokomo Finance.

Despite this incident, the DeFi space continues to grow and evolve, with new protocols and platforms emerging all the time. As the industry matures, it is likely that greater attention will be paid to security and risk management, in order to protect users and prevent similar incidents from occurring in the future.

Ethereum Layer 2s See Surge in Popularity in Q1 2023

Ethereum layer 2 networks, including Optimism, Arbitrum, and Polygon, saw a surge in popularity in Q1 2023, according to a report from Web3 development platform Alchemy. The report, titled “Web3 Development Report,” cites data from Dune Analytics and shows that Ethereum users bridged over $635,000 worth of crypto assets to these networks from January to March, a significant increase of 44% over the fourth quarter of 2022 and 518% over the first quarter of 2022.

The growth in bridged assets may have been driven by successful airdrops from Optimism and Arbitrum in Q1 2023, as suggested by the Alchemy report. Additionally, layer 2s saw greater activity from developers, with the deployment of smart contracts related to layer 2s increasing by 160% compared to Q1 2022, despite a 30% decrease from Q4 2022.

Layer 2s have been offered as a solution to Ethereum’s scalability problem, which has been causing high gas fees since as early as 2020. By enabling more transactions to be processed off the main Ethereum network, layer 2s can significantly reduce the fees required to interact with the blockchain. As a result, users are increasingly turning to these new scalability solutions.

This trend is reflected in the broader Ethereum ecosystem, with increased developer interest observed in Q1 2023. According to the Alchemy report, Ethereum software development kits (SDKs) such as Ethers.js, Web3.js, Hardhat, and Web3.py were downloaded 1.9 million times in the first quarter of 2023, an 8% increase from Q1 2022. Downloads of the MetaMask SDK, a tool used to develop apps that can interact with Ethereum wallet MetaMask, also increased in each month of the first quarter.

The crypto industry is coming off the back of a steep downturn in trading volume and crypto prices during 2022, with scandals like the UST depegging and FTX collapse causing many investors to shy away. However, despite this negative sentiment, users still flocked to these new scalability solutions.

While layer 2s have proven to be a useful tool for improving Ethereum’s scalability, some experts have argued that sharding the Ethereum network will also help to cut down on gas fees. Sharding involves breaking up the Ethereum network into smaller, more manageable pieces, allowing for more parallel processing of transactions. Ultimately, a combination of solutions will likely be necessary to address Ethereum’s scalability challenges and keep up with growing demand.

Significant Unlock of Optimism's OP Tokens Imminent, Wintermute Transfers a Large Batch to Binance

According to Token Unlocks data, a significant amount of Optimism’s OP tokens is scheduled for release on May 31st. A total of 386,547,056.64 OP tokens, equivalent to approximately $587 million and accounting for 9% of the total supply, are set to be unlocked. This includes 204,010,947 OP tokens for core contributors and 182,536,110 OP tokens for investors.

Furthermore, as monitored by Spot On Chain, Wintermute, one of the B-round investors of Optimism, has transferred 2.651 million OP tokens to Binance over the past 42 hours. The tokens, which were transferred at an average price of $1.63, amount to a total of $4.31 million.

Wintermute’s move comes ahead of the significant token unlock event, wherein OP tokens worth $587 million will be released on May 31st, representing 9% of the total supply.

It’s worth noting that the impact of such a substantial token release on the market could be significant, given the large value and volume of tokens involved. The market and the Optimism community will be closely observing the aftermath of this unlocking event.

Balancer's $2.1M Breach Impacts Pools Across Ethereum, Fantom, and Optimism

Blockchain security firm PeckShield Inc. has reported a significant discrepancy in the initial loss estimates related to the Balancer ($BAL) platform. According to a recent tweet by PeckShield, the loss, which also involves Beethoven X, is now believed to be greater than $2.1 million. This affects multiple pools across platforms such as Ethereum, Fantom Foundation, and Optimism Foundation.

The Balancer team had previously alerted its community to withdraw liquidity from the affected vaults. Their initial estimate suggested that “only 0.08% of total TVL ($565,199) remains at risk.” However, PeckShield’s analysis indicates that this figure might have been “seriously mis-calculated.”

In a related post dated August 27, Balancer acknowledged an exploit linked to a specific vulnerability. While they have implemented mitigation procedures to minimize risks, they were unable to pause the affected pools. As a preventive measure, Balancer urged users to withdraw from the impacted liquidity pools.

The current location of the stolen funds amounting to $2.1 million is yet to be ascertained.

For those unfamiliar, PeckShield Inc. is a renowned blockchain security and data analytics company, while Balancer is a platform that allows users to create or add liquidity to customizable pools and earn trading fees.

USDC will integrate into Polkadot, NEAR, Base, Cosmos' Noble, and Optimism this September

Circle, the company behind the USDC stablecoin, is set to expand its digital dollar to six new blockchain ecosystems. The move comes as part of Circle’s “Stable September” initiative and aims to provide developers and businesses with a more versatile and secure stablecoin experience. The expansion will increase USDC’s native availability from nine to fifteen blockchain ecosystems.

Multi-Chain Expansion of USDC

Circle has announced that it will extend the reach of its USDC stablecoin to five new blockchain ecosystems in September, including Base, Cosmos via Noble, NEAR, Optimism, and Polkadot. A sixth addition, Polygon PoS, is slated for October. This expansion follows Circle’s recent launch of its Cross-Chain Transfer Protocol (CCTP) on mainnet and the introduction of its Web3 Services pillar and Programmable Wallets.

According to Circle, “the expansion of USDC to six new blockchain ecosystems enables developers to build on a stable foundation with a fully reserved digital dollar they can trust.” This move is expected to offer businesses and their users a “faster, safer, and more efficient way to send, spend, and exchange value around the globe.”

Supporting Blockchains Detailed

Base

Base is an Ethereum Layer 2 solution designed to onboard the next million developers and billion users. It is built on OP Stack in collaboration with Optimism and is currently incubating at Coinbase. Base aims to serve as an easy-to-use bridge for Coinbase users.

NEAR

NEAR is a high-performance blockchain that offers frictionless user onboarding and a unique scaling solution built on sharding technology. The integration of USDC into NEAR aims to “empower developers to integrate stablecoin payments flows into JavaScript or Rust-based decentralized applications.”

Noble

Noble is an appchain in the Cosmos ecosystem focused on simplifying asset ownership and transfer within the Inter-Blockchain Communication (IBC) ecosystem. USDC issued on Noble will be accessible to dozens of appchains via a seamless IBC integration.

Optimism

Optimism is an Ethereum Layer 2 solution that utilizes Optimistic Rollup technology to improve transaction throughput. The integration is expected to result in “significantly faster and lower-cost USDC transactions.”

Polkadot

Polkadot aims to facilitate an internet where independent blockchains can exchange information in a trustless manner. Circle plans to bring USDC to Polkadot via the Asset Hub parachain.

Polygon PoS

Polygon PoS complements Ethereum’s decentralized security and aims to appeal to the general public while maintaining decentralization.

Conclusion

The expansion of USDC to six new blockchains is a significant step in Circle’s commitment to delivering a stablecoin with the “widest reach, developer optionality, and the simplest, most secure user experience.” With this move, Circle continues to solidify its position as a leader in the stablecoin market.

OKX NFT Adds Base, Linea Support, Beyond Ethereum, Optimism, Polygon

OKX, a key player in the Web3 technology landscape, broadened its NFT Marketplace’s capabilities by integrating support for Base and Linea blockchains on September 5, according to press release shared with Blockchain.News. This move follows the company’s earlier decision to include Base and Linea in its wallet services, thereby extending the marketplace’s compatibility to 17 different blockchains.

OKX has already supported NFTs on Ethereum, Solana, Binance Smart Chain, Polygon, OK Chain, Immutable X, Aptos, Optimism, Klaytn, Arbitrum and Avalanche Chain.

Base and Linea: A Technical Overview

Base, an Ethereum Layer 2 (L2) solution, is built on the open-source Optimism Stack. It aims to tackle the blockchain trilemma of scalability, security, and decentralization by offering interoperability and composability for participating rollups. The inclusion of Base also brings liquidity from OpenSea, a major NFT marketplace, into the OKX ecosystem.

Linea, a project by ConsenSys, employs Zero-Knowledge Succinct Non-Interactive Argument of Knowledge (zk-SNARK) cryptography technology. The Ethereum L2 solution is designed to enhance transaction throughput while maintaining a secure environment, aligning with the broader push for scalability in the Ethereum network.

OKX’s Multichain Strategy

The OKX NFT Marketplace is notable for its extensive multichain support, accommodating over 11 blockchain networks. It serves as a centralized hub for NFT transactions, including buying, selling, trading, and collecting, making it one of the most comprehensive platforms in the Web3 space. Major NFT marketplaces like OpenSea, LooksRare, and Magic Eden are among those supported.

Strategic Implications

While OKX has been known for its partnerships with high-profile brands and athletes, including Manchester City F.C. and McLaren Formula 1, the company’s core focus remains on technological innovation. Its recent global brand campaign, “The System Needs a Rewrite,” underscores its commitment to challenging the status quo through Web3 technologies.

The integration of Base and Linea is more than a mere addition of new features; it’s a strategic move that could have ripple effects across the NFT and blockchain sectors. By supporting a diverse range of blockchains, OKX positions itself as a versatile platform capable of adapting to the evolving needs of the Web3 community.

Ethereum Layer 2: A Simplified Overview

Common Ethereum Layer 2 projects include Optimism, Arbitrum and zkSync. Tokens from some of these projects, such as ARB (Arbitrum) and OP (Optimism), have been available for trading. This article aims to explain the concept of Layer 2 in straightforward terms.

As blockchain technology continues to evolve, Ethereum has established itself as a leader in smart contracts and decentralized applications. However, its growing popularity has brought about challenges, particularly in terms of scalability and transaction costs. To address these issues, Layer 2 (L2) solutions were introduced, designed specifically to navigate these hurdles.

What is Layer 2 (L2)?

Layer 2, often abbreviated as L2, refers to a secondary framework or protocol built atop the existing blockchain (Layer 1 or L1). The primary objective of L2 solutions is to increase transaction throughput and reduce associated costs, all while maintaining the security and decentralization properties of the main chain.

The Basics: Layer 1 vs. Layer 2

Layer 1 (L1) is the foundational blockchain layer. Think of Ethereum or Bitcoin; these are L1 blockchains. They form the bedrock upon which L2 solutions are constructed. L1 handles the core consensus, maintains the network’s security, and records all transactions.

Layer 2 (L2), on the other hand, operates atop L1 and can process transactions off-chain or in a more scalable manner. The results are then settled back onto the main chain, ensuring the security and immutability of the primary blockchain.

The Promise of Layer 2

Lowered Transaction Costs: L2 solutions, by handling numerous transactions off-chain and consolidating them into one L1 transaction, can markedly decrease the expense of each transaction.

Improved Transaction Capacity: Compared to conventional L1 blockchains, L2 solutions are capable of processing a greater volume of transactions every second (TPS), tackling a primary concern in the world of cryptocurrency.

Maintained Security: Even though transactions might be processed off-chain, they eventually settle on the main chain, inheriting the security properties of L1.

Diving Deeper: Types of Layer 2 Solutions

1. Rollups: These are a popular L2 solution where transactions are processed off-chain and then bundled or “rolled up” into a single transaction that’s recorded on L1. There are two main types of rollups:

Optimistic Rollups: Transactions are assumed to be valid unless proven otherwise. If a transaction appears suspicious, it can be challenged and verified.

Zero-Knowledge Rollups (ZK-Rollups): These use cryptographic proofs to validate transactions off-chain. Only the proof, which is much smaller in size, is submitted to L1.

2. State Channels: These are off-chain corridors where multiple transactions can occur between participants. Once the series of transactions is complete, the final state is settled on the main chain.

3. Plasma: A framework that allows for the creation of child chains branching from the main chain. These child chains can operate independently and report back to the parent chain periodically.

Layer 2 in Action

Several projects are pioneering the L2 space:

Arbitrum: An Optimistic Rollup solution aiming to make Ethereum transactions more cost-effective.

Optimism: Another Optimistic Rollup, focusing on scaling Ethereum and enhancing its overall efficiency.

zkSync: A ZK-Rollup platform that offers a scalable, low-cost solution for Ethereum transactions.

Conclusion

Layer 2 solutions represent a promising step forward in addressing the scalability and cost issues associated with current blockchain networks. As these solutions continue to evolve and mature, they could pave the way for broader adoption of blockchain technologies and a more efficient decentralized future.

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