According to information received from DefiLlama, the total value locked on Optimism has surged by around 284% in the last month. For those who are unaware, this is a layer-2 scaling solution for the blockchain of Ethereum, and the vast majority of the TVL consists of users borrowing and lending assets on AAVE through the layer-2 chain of the scaling solution.
Most of the investors have been spending their time bidding up a large number of the digital assets that are related to the ecosystem of Ethereum- while majorly anticipating the Merge upgrade, which could see the blockchain move from a proof-of-work network to a proof-of-stake network.
Optimism Has Been Gaining Through The Merge Upgrade
According to a recent developer call by Ethereum, the tentative date for the Merge coming online came on the 19th of September. As a layer-2 blockchain of Ethereum, Optimism does seek to scale the ecosystem through Rollups, or through off-chain computations, in order to speed up transactions. Most of these transactions are then recorded on the scaling solution and then finalized on Ethereum.
The project has been home to around 35 different protocols, which consist of derivatives exchange Synthetix, Uniswap- the decentralized exchange- and Velodrome, the automated market maker. Due to the exceedingly high volume of user trade orders on all exchanges, the blockchain’s current capacity of 30 transactions per second is quite ill-equipped to handle such high demand.
The blocks of Optimism are created and executed on layer-2 while the user transactions are batched up and then submitted to the Ethereum layer-1. On layer-2, the transactions are immediately accepted or rejected with no mempool, which contributes to a fast user experience.