Optimism, one of the leading second-layer solutions for the Ethereum blockchain (ETH), has just raised $150 million in a Series B funding round. This new capital injection brings the company’s valuation to $1.6 billion, and will allow it to recruit new developers in order to optimise its network.
Optimism valued at $1.6 billion
Optimism, an Ethereum (ETH) layer 2 solution, just saw its valuation reach $1.6 billion after closing a Series B funding round.
The round was led by investment funds Paradigm and Andreessen Horowitz (a16z), both of which specialise in the blockchain sector. Paradigm was able to invest in several reference projects such as Phantom, FTX or OpenSea. Andreessen Horowitz, for its part, announced at the beginning of the year that it wanted to invest $4.5 billion in various cryptocurrency projects.
This new capital injection will allow Optimism to recruit more staff, especially developers, in order to optimise the operation of its network. This is in conjunction with the upcoming release of its new transaction compression system which could reduce transaction fees by up to 40%.
The place of layer 2 today
Optimism is a so-called second layer of the Ethereum blockchain, and acts as such to relieve the weight of transactions flowing on the blockchain while reducing the cost of transactions for users. Transactions flowing on Ethereum are sent to Optimism, then compacted with each other before being sent back to Ethereum.
A solution that has met with great success, notably because of the sometimes exorbitant prices of transactions circulating on the Ethereum blockchain, which have notably risen in the face of the success of non-fungible tokens (NFTs), DAOs and DeFi in general, causing a questioning of the network’s scalability capacities.
Top 5 Ethereum blockchain layer 2 rankings by total locked value (TVL)
There are about 20 such solutions currently underpinning the Ethereum blockchain, but the frontrunner is Arbitrum, far ahead of the others with its $3 billion of total locked value (TVL). Optimism is currently in 4th place.
In total, $6 billion is stored on Ethereum’s second layers, which is still small compared to the parent blockchain, which currently has almost $113 billion of TVL.
