OPTIMISM

Ethereum was getting too expensive. By 2020, a simple token swap could cost $50-$200 in gas fees.

The network was technically brilliant but practically unusable for regular people. The Optimism team — originally from Plasma Group, an Ethereum research organization — built an "optimistic rollup" that processes transactions off the main Ethereum chain, then posts the results back to Ethereum for security.

The "optimistic" part means the system assumes all transactions are valid unless someone proves otherwise (a "fraud proof"). This is faster and cheaper than verifying everything upfront.

Optimism is a Layer 2 scaling solution for Ethereum. It processes transactions off-chain (faster and cheaper) while inheriting Ethereum's security.

Revenue comes from the difference between fees users pay on Optimism and the cost of posting data back to Ethereum ("sequencer revenue"). The OP Stack is the open-source technology that anyone can use to build their own L2 chain — Coinbase's Base chain is built on it.

Optimism Mainnet — the L2 chain where users transact. OP Stack — the open-source toolkit for building L2 chains (used by Base, Worldcoin, and others).

OP Token — the governance token for the Optimism Collective. RetroPGF (Retroactive Public Goods Funding) — an innovative system for funding open-source contributors.

The OP Stack strategy. Rather than just building one L2, Optimism open-sourced its technology so anyone could build their own chain using the same codebase.

Coinbase's Base chain, built on the OP Stack, was the validation moment. This created the "Superchain" vision — a network of interoperable L2 chains all using Optimism's tech.

It was a bet that giving away the technology would make it the standard.

Competition from Arbitrum (which currently has more TVL) and zkSync/StarkWare (which use different, potentially superior technology). L2 scaling is a race, and it's unclear whether optimistic rollups or zero-knowledge rollups will win long-term.

There's also the risk that Ethereum itself gets fast enough to make L2s less necessary.

Andreessen Horowitz (a16z) led the Series B at a $1.65 billion valuation. Other investors include Paradigm, IDEO CoLab, and various crypto-native funds.

Coinbase's decision to build Base on the OP Stack was the biggest validation.