Is Optimism’s ‘Superchain’ Winning the Ethereum Layer-2 Race?

Optimism, one of many main layer 2 networks, has managed to get a slew of consumers and firms to deploy their very own blockchains utilizing its know-how, referred to as the OP Stack.

A part of the technique for getting new networks to make use of the know-how is giving issuing giant sums of OP tokens within the type of grants. Officers inside the Optimism ecosystem say these tokens ought to assist varied tasks get their construct on OP Stack going.

Some inside the ecosystem argue that it’s too early to conclude whether or not OP Stack has received the tier-2 race.

One of many largest traits of 2023 among the many main layer 2 tasks on Ethereum was the rise of “blockchain in a field,” the place the groups inspired builders to clone their code to create new layer 2s.

Now one mission particularly seems to be rising because the clear chief. And as is commonly the case in blockchain improvement, an important issue is the cash that adjustments fingers behind the scenes.

Optimism, one of many main layer 2 networks, has managed to get a slew of consumers and firms to deploy their very own blockchains utilizing Optimism’s know-how, with the OP Stack, below open-source software program licenses.

Optimism’s first main buyer to emerge from OP Stack was Coinbase’s Base – final yr. However in latest months, much more tasks have emerged in direction of the ecosystem Uniswap, Sony and Kraken plans to deploy new layer-2 networks using the OP Stack.

It is a essential improvement within the evolution of the broader blockchain universe, as layer 2 networks are on the core of builders’ efforts to make transactions quicker and cheaper within the Ethereum ecosystem. Ethereum, whereas the second-largest blockchain after Bitcoin, is presently the main smart-contracts community – that means it will probably course of applications and help purposes – and it has grow to be the dominant house for decentralized change and lending platforms. Layer-2 blockchains work as auxiliary networks on prime of Ethereum, offering a venue for transactions that may be executed shortly and at a low price after which settle into the bottom chain.

A part of the Optimism Basis’s technique for getting new networks to make use of their know-how is giving issuing giant sums of OP tokens within the type of grants. Officers inside the Optimism ecosystem declare that these tokens are supposed to assist varied tasks kick off their construct on OP Stack, whereas contributing to Optimism’s Superchain, a community of OP chains linked collectively, in addition to the governance system of Optimism, referred to as the Collective.

Finally, the purpose is to succeed in important mass – maybe akin to the Nineteen Eighties rise of VHS over Betamax because the dominant videotape know-how.

Kraken’s OP token allocation

The take care of Kraken got here with a major subsidy, together with an allocation of 25 million OP tokens, value roughly $42.5 million when CoinDesk lately introduced the information. Kraken’s community is named ‘Ink’.

Representatives from World (the lately renamed Worldcoin mission), Uniswap, and Sony all declined to touch upon what number of tokens their tasks acquired as a part of their packages, however In response to Kraken’s Andrew Koller, the creator of Ink, different OP Stack members additionally acquired vital quantities of cash.

Optimism Basis officers say they depart it as much as the tasks to announce the quantities of their grants.

In an business that prides itself on transparency, the reluctance to share what number of OP tokens have been allotted to these chains raises some questions on how massive a task these subsidies performed in these offers.

A spokesperson for the Optimism Basis shared with CoinDesk that the Optimism ecosystem has this have been clear about their treasury, and that the Kraken deal falls below their ‘partnership fund’, which ‘goes in direction of sure tasks to assist help the preliminary improvement of the chain’.

The distribution of the treasury and the subsidies of optimism

In response to information as of September 30, there are roughly 841 million OP tokens earmarked for that sort of financing, whereas slightly below 480 million OP tokens have already been dedicated. That quantities to a remaining 361 million, or nearly $480 million as we speak OP token value of $1.32.

Some smaller tasks constructing layer 2s on the OP stack have additionally acquired tokens. Celo’s governance discussion board beforehand introduced that it might obtain as much as 6.5 million OP tokens for constructing on OP Stack, and the Bitcoin-focused BOB mission shared that it was nonetheless within the negotiation course of, however on the time of writing the deal was for approx 500,000 OP tokens.

The tokens allotted to BOB come from a unique grant bucket known as Retroactive Public Items Funding (RPGF), which is distributed via Optimism’s DAO, not the Basis. The Grants Council, which is a part of the DAO, is liable for distributing these tokens, which takes place over cycles.

As of September 30, there are solely 860 million OP tokens below the RPGF bucket, “which fits in direction of rewarding chain impression inside Optimism and the Superchain,” in line with an Optimism Basis spokesperson. Tasks similar to Kraken’s Ink are additionally eligible for RPGF funding.

So has Optimism finally received the layer 2 race, and does their subsidy technique play a task on this?

The Optimism Basis spokesperson advised CoinDesk through electronic mail that: “Like many different ecosystems within the house, we view grants as methods to help tasks and builders, and allocations are earned by reaching agreed-upon progress milestones which are ROI constructive are for the entire. Collective. We’re all working collectively to scale the way forward for Ethereum and when groups on the Superchain are profitable, it advantages all the Ethereum neighborhood.” ROI stands for return on funding.

Did OP Stack win the Layer-2 Race?

Optimism Basis Chief Development Officer Ryan Wyatt advised CoinDesk in an interview that “the adoption of OP Stack because the de facto alternative for scaling L2s is beginning to occur, which is thrilling. Whether or not you wish to name that successful or no matter, I do not know.”

The OP token value has fallen as a lot as 65% this yr, based mostly on costs from the web site DigitalCoinPrice. However that is lower than the decline for different main layer 2 tokens, similar to Polygon’s MATIC, which fell 70% in 2024, and Arbitrum’s ARB, which fell 72%. Etherum’s native cryptocurrency, ETH, is up about 6% this yr.

Wyatt added: “Whether or not we’re at a degree the place it is only a indisputable fact that if you are going to launch an L2, you are simply going to go OP Stack, I feel it is too early to inform. However when giant establishments, firms, enter this house, they usually wish to be an L2, I feel you begin to orient extra alongside the strains of, “Why would not we go together with the OP Stack?”

Opponents, similar to Offchain Labs, the principle developer firm behind Layer-2 Arbitrum, have taken a unique strategy of their makes an attempt to let customers construct with their know-how.

“There is a technique that prioritizes bulletins, and there is a technique that prioritizes precise on-chain success and metrics,” Steven Goldfeder, CEO of Offchain Labs, advised CoinDesk. “Our technique is to empower actual customers and actual builders and construct actual know-how that allows new, fascinating and established completely different use instances of know-how.”

As for Kraken’s Ink determination to decide on OP Stack, Koller advised CoinDesk that the reasoning got here all the way down to “what is going to enable me to spend engineering sources most successfully,” he mentioned.

“Do I wish to fear an excessive amount of about safety and protocol upgrades and having to handle that myself, or do I would like to have the ability to use sources successfully and simply create good UX and good tooling and get our prospects on-chain and make requests?” Koller mentioned. “That is actually what we had been about.”

He added: “Let’s simply give attention to expertise so we do not have to fret in regards to the complexities of working a blockchain. I feel that is why Optimism was a transparent alternative.”

Learn extra: Kraken selected Optimism’s ‘Superchain’ after getting a stack of OP tokens