Data from DefiLlama shows that the Total Value Locked (TVL) for Optimism has increased by 284% during the month. Optimism is a layer-2 scaling option for Ethereum. Users lending and borrowing assets on Aave through Optimism’s layer-2 chain make up the vast majority of TVL.
Ethereum Optimism TVL Surges
As investors bid up digital assets that are tied to Ethereum, they have been doing so in anticipation of The Merge update.
On Thursday August 11, Ethereum developers will test the merge on Goerli’s testnet. The mainnet merger will be approved if all goes according to plan on September 19. If there were problems with the Goerli merger, then the mainnet merging would be delayed.
The Merge’s anticipated launch date has been set for September 19, according to a recent Ethereum developer call. Rollups are off-chain computations. Optimism is an Ethereum layer-2, which aims to speed up transactions and extend the Ethereum ecosystem. Transactions are initiated on Optimism and completed on Ethereum.
USD/ETH trades starting at $1,853. TradingView
There are 35 protocols in the project, such as Velodrome automated market maker, Uniswap decentralized exchange, and Synthetix derivatives exchange. The Ethereum blockchain’s current capacity of 30 transactions per second is inadequate to manage the enormous amount of user trade orders on exchanges (including cancellations). Analysts believe that the Ethereum blockchain could scale up to 100,000 transactions per seconds with The Merge upgrade. Layer-2 solutions will increase this capability even further.
Layer-2 hosts optimism blocks. User transactions, however, are submitted to Ethereum layer-1. Layer-2 transactions can instantly be accepted or rejected without mempool. This gives users a speedy user experience. Correspondingly to the TVL development, the project’s namesake tokens have also rallied by 300% during the same period.
Dai on Optimism 👀
In 5 Days, you can go from 30 to 140 millions. pic.twitter.com/AQlNWvX6c9
— Maker (@MakerDAO) August 9, 2022
Goerli Testnet: A Brief
In less than 24 hours, the Ethereum network will move one step closer towards its largest update to date. The second-largest cryptocurrency by market capitalization has been preparing to switch from Proof-of-Work (PoW) to the significantly less energy-intensive and, in some people’s opinions, more decentralized Proof-of-Stake for years (PoS).
Senior Ethereum developers stated last month that the so-called “Merge” to “Ethereum 2.0” will occur on September 19. However, there is still a challenge for developers to overcome before the “Merge” can be implemented on Ethereum’s mainnet.
Developers want to implement the merging on one last testnet after completing the switch from PoW to PoS on two of Ethereum’s main testnets (Ropsten and Sepolia) in June and July.
Ethereum has risen more than 80% since its lows in mid-July under $1,000. It was last trading around the mid-1800s at one point. This has occurred despite a greater cryptocurrency market rebound due to an uptick of macro mood (Bitcoin up more than 25% from mid-July lows), but analysts indicate that ETH’s surge has been driven by the anticipation surrounding the merger.