Ethereum layer-2- scaling solution Optimism has surpassed $1 billion in total value locked (TVL) which is nearly 300% M/M as The Merge upgrade approaches.
Total value locked (TVL) on Optimism, a layer-2 scaling solution for the Ethereum blockchain, has increased 284 percent in the last month, according to data from DefiLlama. Users lending and borrowing assets on Aave through Optimism’s layer-2 chain make up the vast majority of TVL.
In anticipation of The Merge update, which will see the blockchain switch from a proof-of-work network to one based on proof-of-stake, investors have been bidding up digital assets tied to the Ethereum ecosystem.
The Merge’s anticipated launch date has been set for September 19, according to a recent Ethereum developer call. With Rollups, or off-chain computations, Optimism, an Ethereum layer-2 blockchain, aims to extend the ecosystem and expedite transactions. On Optimism, transactions are entered, and on Ethereum, they are completed.
The project is home to 35 protocols, including automated market maker Velodrome, decentralized exchange Uniswap, and derivatives exchange Synthetix.
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).
Nevertheless, according to some analysts, the network might scale to 100,000 transactions per second with The Merge upgrade, with layer-2 solutions improving this capacity even further.
User transactions are bundled and sent to Ethereum layer-1 while optimism blocks are built and performed on layer-2. A quick user experience is made possible by layer-2, where transactions are instantly accepted or refused without the usage of a mempool.
The project’s namesake tokens have increased by 300 percent during the same time period in tandem with the TVL development.
