Optimism (OP) is the native token of Optimism, a Layer 2 network for the Ethereum blockchain that seeks to cut down settlement times and lower transaction costs.

OP has a total supply of 4.294 billion. The first 5% of this was distributed in an airdrop on May 31, 2022.

The airdrop went to those who met a variety of criteria before March 25, 2022, including swapping tokens on Optimism’s blockchain and voting on governance proposals. Most of the 248,699 eligible wallets have claimed their airdrop, according to a dashboard on Dune Analytics.

However, the airdrop did not go as planned. It slowed down the blockchain, and some users managed to claim OP before Optimism “officially” announced the airdrop on social media. The token was worth $4.57 at launch and quickly fell to $0.79 hours later before recovering to about $1.37 by June 3.

A further 14% of the token’s total supply is reserved for future airdrops, with 19% to go to core contributors, 25% to an ecosystem fund and 17% to investors. A final 20% will go to “Retroactive Public Goods Funding,” – where Optimism’s community rewards projects that have provided public goods.

Optimism uses “optimistic rollups” – a data compression technique that collects batches of Ethereum transactions, rolls them up into a single transaction on Optimism’s own blockchain, then sends a single, rolled-up transaction back to the Ethereum blockchain.

These rollups, launched on public mainnet in December 2021, are called “optimistic” because the network assumes that they are all valid. If they’re not, validators can contest spurious transactions for up to a week after they’ve been processed.

Rolling up transactions on Optimism is quicker than processing them on Ethereum – Optimism’s Layer 2 is faster than Ethereum, and Ethereum needs only to process a single transaction rather than all those contained within the rollup. Optimism is cheaper, too; as of June 2022, transactions on Optimism cost under a dollar, while Ethereum transactions cost about $6.

Optimism’s main rival is Arbitrum, which does not have a token as of June 2022. Another type of rollup called zero-knowledge is also popular on Layer 2 networks, such as Loopring and Immutable X. Zero-knowledge rollups Layer 2 systems preserve privacy by making public only a small amount of metadata.

Optimism was founded in 2019 by Jinglan Wang, Karl Floersch and Kevin Ho. As of June 2022, the company has raised $178.5 million, according to data from Crunchbase. Andreessen Horowitz and Paradigm led its $150 million Series B round in March 2022.

OP will decentralize the project and shift the company treasury to the Optimism Collective, a governance system for funding projects for the public good.

The collective is split into two groups. The first is Token House, which lets holders vote on projects around Optimism. The second is Citizen House, which allows holders to vote on how funds can be dispersed to projects outside of Optimism.