Written by: Route 2 FI
Compilation: Deep Tide TechFlow
Image Credit: Generated by Maze AI
Everyone is talking about Optimism now. Coinbase just announced that they will be launching a new L2 blockchain called "Base", built on top of the $OP Stack. So this article will introduce you to:
- What is Optimism;
- Why $OP is the first choice for DeFi;
- Some DeFi protocols with great potential;
What is Optimism?
Optimism is one of the star layer 2 solutions on Ethereum. With many DeFi advancements on L2, Optimism is certainly at the forefront.
Similar to Arbitrum, Optimism uses Optimistic Rollups to increase transaction throughput and reduce Gas fees . Developers are able to create scalable and efficient applications on top of Ethereum and benefit from the network's existing infrastructure.
Yesterday Coinbase announced that they launched a new L2 blockchain called "Base", built on top of the $OP stack, providing a secure, low-cost, developer-friendly way for anyone, anywhere to build decentralized applications friendly way.
The collaboration works to upgrade the Optimism mainnet, Base and other L2s to the initial hyperchain. And it is hoped that the super chain can develop into a huge network, maximize interoperability, share decentralized protocols, and standardize its core primitives.
What makes Optimism a top choice for DeFi?
$OP focuses on compatibility with Ethereum . Any Ethereum dApp can easily integrate with Optimism and benefit from its scalability and reduced gas fees. This has led to many popular dApps and DeFi protocols migrating to $OP.
Optimism has been on mainnet for some time and has been battle-tested by several high-profile projects, including Uniswap, Synthetix, and MakerDAO.
With a major network upgrade on the horizon, expect activity in the Optimism ecosystem to reach new heights soon.
DeFi TVL on Optimism rose 41% last month, second only to Arbitrum. So let's take a look at some interesting DeFi protocols:
Velodrome
Velodrome is the largest and fastest growing DEX on Optimism .
In a way, it is a hybrid of Curve, Convex, UNIV2, combining multiple protocol layers in one center.
The exchange features an innovative liquidity pool called Velocity Pool, where liquidity providers can earn transaction fees and yields on their collateralized assets.
Velodrome also rewards users for participating in the ecosystem through a native token $VELO .
Velodrome allows many popular protocols such as Lido and Frax to incentivize their liquidity for their token holders.
Velodrome's TVL has grown exponentially from early 2023 to over $277 million today.
Synthetix
Synthetix is a decentralized asset insurance protocol that allows its users to mint and trade various derivatives through synthetic assets called "Synths."
Synthetix is at the forefront of the DeFi movement, potentially creating a massive market for the tokenization of real-world assets on Ethereum.
Sonne Finance
Sonne Finance is the first peer-to-peer lending solution that offers complete transparency and decentralization .
Since 2023, SonneFinance's TVL has been steadily increasing. It has also become one of the biggest bribers on the Velodrome.
DeFi Protocols to Watch
Toros
Toros Finance is a DeFi platform that gives users the opportunity to earn yield through Dynamic Vaults.
Perpetual Protocol
Perpetual Protocol is an on-chain perpetual futures DEX with deep liquidity and composability. With a TVL of $17 million, Perpetual stands out in the Optimism ecosystem.
Pika Protocol
Pika Protocol is a perpetual swap that allows users to trade foreign exchange and cryptocurrencies with up to 100x leverage and almost zero slippage. Pika Protocol adopts an automatic market maker model, and minimum liquidity is required to guide transactions.
