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**[TL; DR]**
· Optimism is a layer-2 blockchain, built on the Ethereum blockchain, to provide a scaling solution to the network.

· Optimism’s native token is called Optimism (OP) and is listed on many exchanges.

· The price of the Optimism coin is likely to rally in 2023.

· Analysts predict that the price of OP will reach $2.50 in 2023 and $5.00 in 2025.

## Introduction
Ethereum hosts many decentralized applications (dApps) since it is the preferred blockchain for developers due to its security.

However, as many users and developers use the network it becomes slow and costs more because of the limited capacity. To overcome the problem of scalability, Ethereum has devised a reliable solution, [the use of layer-2 blockchains](https://www.gate.io/uk/blog_detail/1885/immutablex-ethereum-layer-2-blockchain-built-for-speed-scalability-and-gamers "the use of layer-2 blockchains") to handle the extra network load.

## Optimism, Ethereum’s layer-2 scaling solution

Optimism is a layer-2 blockchain since it operates on the Ethereum network. It provides a scalable solution to the blockchain resulting in fast transactions and low gas fee. This is in contrast to the Ethereum mainnet with slower transactions [and higher gas fee](https://www.gate.io/blog_detail/554/Why-are-Ethereum-fees-so-high- "and higher gas fee"). Optimism achieves these through its rollup technology.

![](https://gimg2.gateimg.com/image/article/1672206085111.png)<center/>Optimism blockchain- Bulliscoming</center>
In basic terms, scalability refers to the number of transactions that a blockchain processes per second. Although Optimism processes the transactions off the Ethereum blockchain, it constantly communicates with it. This is because it depends on the Ethereum blockchain infrastructure for other key aspects such as security and decentralization. As a result, Optimism is as secure and decentralized as the Ethereum blockchain, the host protocol.

## History of Optimism
Optimism is the biggest layer-2 blockchain operating on the Ethereum blockchain. Although it launched its token on 31 May 2021, the blockchain had been running for a year. It emerged from the layer-2 technology called Plasma which was created by two developers earlier on.

There are several well-established decentralized applications that exist on Optimism which include UniSwap, Synthetix, 1inch, AAVE, Tornado cash and DeFi Saver, among others. In addition, it hosts cross-chain bridges and NFT technology protocols.

 Many dApps prefer Optimism to other layer-2 protocols that exist on the Ethereum blockchain due to its speed, low cost and the ease of developing and running applications on it.

## How Optimism works
Its technology uses rollups to process transactions in large batches which reduces congestion on the Ethereum network. In fact, the rollups bundle hundreds of transactions together. In this way, it turns hundreds of transactions into a single one which helps to reduce the gas fees.

Compared to the transactions that occur on the Ethereum blockchain those on Optimism are hundred of times less costly.

This is because for every transaction, it distributes the gas fee among the hundreds of transactions it bundles together.

Although it executes the transactions using its protocol it transfers them [to the Ethereum blockchain](https://www.gate.io/bitwiki/detail/102/ethereum "to the Ethereum blockchain") for processing. This means that the data about the transactions are recorded and stored on the Ethereum mainnet.

## How to use Optimism blockchain
The way users make transactions on Optimism is almost the same as they do on the Ethereum blockchain. You use the same or similar address on both Optimism and Ethereum mainnet. Also, Optimism’s blockchain explorer functions in the same way as Etherscan. Notably, Optimism supports different DeFi wallets such as MetaMask.

## What benefits does Optimism offer?
We have already covered some of the benefits of Optimism which include decentralization and security. Let’s just recap on these and the rest.

Scalability: According to Ethereum.org, Optimism offers up to “10-100 x improvement in scalability” as the roll ups “write the transactions to Ethereum as calldata.”

Reduced transaction fee: By using rollups, which bundles transactions, Optimism reduces the gas fee considerably.

Security: All the transactions carried on Optimism are settled on the Ethereum blockchain. Therefore, transactions that take place on the Optimism are secured by the host blockchain.

## Optimism crypto token
The native token of Optimism is called Optimism (OP) and is listed on different crypto exchanges including Gate.io. The token has several use cases such as funding third party development integrations to the blockchain.

## OP price drivers
First, OP coin is a native token for a layer-2 blockchain. Secondly, Optimism offers some innovative solutions which many large companies have embraced. Already, layer-2 and layer-1 blockchain tokens seem to perform well on the crypto market.

Again, the Optimism coin is the blockchain’s governance token which creates a high demand for it. In other words, it enables its holders to give proposals on development issues or voting for any such proposals. For example, the OP holders can vote on issues related to treasury funds and upgrades of the protocol. They can also decide on how incentives can be distributed within the ecosystem.

## OP price prediction for 2023 and beyond
The OP coin has faced great volatility through 2022 just like other tokens. As of 22 December 2022, Optimism crypto has a value of $0.92 and a trading volume of $56,864,563. However, looking at its performance for the past 6 months its average price was around $1.00 but at one time it reached $2.00 in July. This shows its potential to rally within a short period.

![](https://gimg2.gateimg.com/image/article/1672206407222.png)
<center/>OP Coin price between June and December 2022- CoinGecko</center>

With the above information it is clear that the Optimism token price is likely to rise in 2023 and beyond. Although the [Optimism coin price](https://www.gate.io/coininfo/OP "Optimism coin price") prediction varies among analysts, they all concur that it will rally in the future.

For example, DigitalCoinPrice gave a positive OP price prediction for 2023. It predicts that the Optimism token price will reach $2.45 in 2023, $4.63 in 2025, above $5 in 2027 and $7.73 in 2028. Finally, it predicts that the OP price will be $14.86 in 2030.

Priceprediction.net predicts that the price of Optimism crypto should average $1.41 in 2023, but with a high possibility of surpassing $1.60. However, conservative estimates show that the price of OP will be around $1.00 by the end of 2023 and $77 by 2025. They used the previous BTC average growth pattern to arrive at these predictions.

Having studied the various predictions including the above, [the price of the OP token](https://www.gate.io/trade/OP_USDT "the price of the OP token") is likely to be around $2.50 by the end of 2023, $4.00 in 2024 and over $5 in 2025.

## Conclusion
Optimism is a layer-2 blockchain that provides a scaling solution to the Ethereum blockchain. It processes transactions speedily at lower cost than the Ethereum mainnet. Also, it has a token called Optimism whose price is likely to go up in the future.

## FAQ about Optimism coin
**Does Optimism have a coin?**
Optimism launched its native coin called Optimism (OP) in May 2021. Although it has a maximum supply of 4,294 billion its current circulating supply is 234,748,364. To increase its demand on the market, Optimism launched an airdrop on 31 May 2022 where 248,699 wallets participated. From that time, the price of Optimism has been increasing steadily despite the bearish market.

**What is Optimism Coin?**
Optimism (OP) coin is a native cryptocurrency of Optimism, an Ethereum layer-2 blockchain. Since Optimism provides an important service to the Ethereum blockchain, Optimism (OP) is a promising long term investment asset. This is because Optimism provides one of the best scaling solutions on the Ethereum network.

**How much will the Optimism token be worth?**
The Optimism coin should be worth $2.50 in 2023, $4.00 in 2024 and over $5.00 in 2025. However, this depends on the prevailing market conditions and the existing macroeconomic climate. Presently, many analysts predict that the market conditions will be bullish in 2023 and 2024. The [Bitcoin](https://www.gate.io/trade/BTC_USDT) halving event expected to occur in 2024 should result in a bullish crypto market which should extend to 2025.

**What is Optimism crypto used for?**
OP is Optimism’s governance token, meaning that its holders are able to give proposals on development issues. They can also participate in voting for or against proposed improvements. In addition, the OP coin is used for funding third party development integrations. Since Ethereum layer-2 coins have high utility investors can speculate on it.

**Will Optimism crypto go up?**
Since the blockchain offers an important service to the Ethereum community Optimism will go up [during bullish market conditions.](https://www.gate.io/blog_detail/368/what-are-bull-market-and-bear-market "during bullish market conditions.") Several technical systems and crypto experts predict that the price of OP will steadily rise over the next 5 years. If [Bitcoin](https://www.gate.io/trade/BTC_USDT)'s previous average growth pattern of 30% applies to OP, its price may reach $77 in 2025.

** Is Optimism part of Ethereum?**
Although Optimism is an Ethereum layer-2 chain, it is independent from its mainnet. Since its main purpose is to offer a scaling solution to the Ethereum network. In other words, it increases Ethereum’s transactions per second since it reduces its network overload.

<div>
Author: **Mashell C.**, Gate.io Researcher
This article represents only the views of the researcher and does not constitute any investment suggestions.
Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.

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What is Optimism blockchain? How does Optimism solve Ethereum scalability problem? Will the price of the Optimism token go up?

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Optimism coin - what is it and its predictions for 2023