Just-In: Ethereum L2 Protocol Optimism Raises $150 Million In Series B

The Ethereum blockchain is preparing to become more scalable come ETH 2.0, and its Layer 2 solutions are growing stronger as well. Optimism, an Ethereum Layer 2 protocol, has just announced the closing of a Series B funding round. The network activity might be beneficial to Ether’s price in the long term.

Ethereum Layer 2 Optimism reaches unicorn status

Sharing via Twitter, the protocol revealed that it raised $150 million at a $1.65 billion valuation. The funding round was co-lead by Andreessen Horowitz and Paradigm.

Founded in 2019 and having spent around one year on mainnet, the L2 boasts having reached several milestones. It has saved over $1 billion in gas fees for users, deployed thousands of smart contracts, and its open-source codebase has been forked three times.

Optimism is also looking forward to several upgrades through the year to make using the Ethereum network cheaper. It is pushing enhancements to further slash fees, having already dropped transaction fees by 30% in the last year. The protocol revealed that an upgrade in the coming weeks – call data compression – will bring up 40% savings in fees for users.

Optimism: Bedrock, which is the next major release of the protocol, is expected to further lower fees. Also on the horizon is EIP4844 which is being contributed by the protocol and promises to lower fees by up to 100%. The anticipated upgrades make the protocol firmly believe that “sustainable, sub-dollar transactions” on Ethereum are now a question of when and not if.

Our next major release, Optimism: Bedrock, will enable theoretically optimal transaction submission costs via Cannon, our next-gen fault proof.

We're also contributing to EIP4844, which promises to further slash fees by up to 100x.https://t.co/9c3zwrKp81

— Optimism 🔴✨ (@optimismPBC) March 17, 2022

Optimism plans to deploy the funds to support its ecosystem and grow its team. The protocol is looking to recruit top talents in all departments to achieve this.

Speaking about the funding round, the CEO of the Public Benefit Corporation, Jinglan Wang, stated that Optimism is committed to developing public goods on Ethereum, and getting decentralized.

We don’t just want to say that we want to be decentralized, we also want to show the community that we’re setting up our own incentives to be compatible with that, Wang told TechCrunch.

Ethereum’s L2 ecosystem is growing rapidly

Like Optimism, other Ethereum L2s are pioneering ground-breaking innovations in the blockchain industry. Among these are Optimistic Rollup – which Optimism uses – and Zero-Knowledge (ZK) rollups.

These technologies are billed to be the future of making blockchains scale by reducing the storage burden of the mainnet. Already, Ethereum’s L2s have reached a TVL of $5.76 billion per data from L2Beat.

The L2s have also been attracting venture capital investment. Starkware, another L2, closed a $100 million funding round at a valuation of $6 billion last November.