Optimism TVL surges nearly 300% M/M ahead of The Merge upgrade

According to information from DefiLlama, overall worth locked (TVL) on Optimism, a layer-2 scaling service for the Ethereum blockchain, has actually risen 284% in the previous month. The large bulk of TVL consists of users providing and obtaining possessions on Aave through Optimism’s layer-2 chain.

Investors have actually been bidding up digital possessions associated with the Ethereum environment in anticipation of The Merge upgrade, which will see the blockchain shift from an evidence-of-work network to that based upon evidence-of-stake. 

According to a current Ethereum designer call, the tentative date for The Merge coming online has actually been set up for Sept. 19. As a layer-2 Ethereum blockchain, Optimism seeks to scale the ecosystem via Rollups, or off-chain computations, to speed up transactions. Transactions are recorded on Optimism and finalized on Ethereum.

The project is home to 35 protocols, including derivatives exchange Synthetix, decentralized exchange Uniswap, and automated market maker Velodrome. Due to the high volume of user trade orders on exchanges (including cancellations), the Ethereum blockchain’s current capacity of 30 transactions per second is ill-equipped to handle such demand. However, some experts predict that the network could potentially scale to 100,000 transactions per second after The Merge upgrade, with layer-2 solutions further enhancing such capacity. 

Optimism blocks are constructed and executed on layer-2 while user transactions are batched up and submitted to the Ethereum layer-1. On layer-2, transactions are immediately accepted or rejected with no mempool, enabling a fast user experience. Correspondingly to the TVL development, the project’s namesake tokens have also rallied by 300% during the same period.