<p>At the time Optimism being introduced to the market, it was expected to bring about an optimal solution to ETH applications thanks to the Rollups, off-chain calculations. However, Optimism’s early hack seemed to drain the project’s big ambition. The 20-million-OP hack is the result of an exploit in the smart contract of the project market maker, affecting the Optimism’s overall performance in a deteriorated way.</p><p class="prosemirror-p-center"><img src="https://cdn.builder.news/news/11ed1954226f2978a8e6023f659fee92.jpg" alt="OP BUSD price" title="OP BUSD price" width="600" height="405"></p><p>Along with The Merge of Ethereum, Optimism is turning the tables by being a sustainable project with strong backups and plans. Recently, market participants can’t help to come across Optimism's positive media coverage. Just before <a href="https://www.builder.news/crypto-insights/the-merge-a-pivotal-event-for-ethereum" alt="The Merge: A pivotal event for Ethereum" title="The Merge: A pivotal event for Ethereum" target="_blank" rel="" class="">The Merge upgrade</a> (expected to be in September), Optimism is reported to have roughly 300% increase in total volume locked while the $OP price has experienced a significant pump to $1.98 which is approximately four times the previous price range. Everything happens for a reason! Optimism proves it has enough potential to thrive. Let’s <a href="https://www.builder.news/" alt="Builder.news" title="Builder.news" target="_blank" rel="" class="">Builder.news</a> decode what make Optimism so “imperishable”.</p><p class="prosemirror-p-center"><img src="https://cdn.builder.news/news/11ed1954226f473ea8e6023f659fee92.jpg" alt="Optimism price surge" title="Optimism price surge" width="600" height="334"></p><h2>A brief about Optimism</h2><p>Optimism (OP) is a scaling solution for Ethereum-Layer 2, which can accommodate all Ethereum applications. The initiative aims to reduce gas fees by bundling batches of transactions using Optimistic Rollup technology. Its native governance token for the Optimism protocol is OP.</p><h3>3 main components of Layer-2-ETH Optimism</h3><ul><li><p>Ethereum mainnet: Optimism’s native layer-1 security platform</p></li><li><p>Optimistic Rollup: Optimism's core scalability</p></li><li><p>Optimism Virtual Machine (OVM): A virtual machine compatible with Ethereum Layer 1, making projects work like on this chain. OVM can be considered an advanced version of EVM, with an aim to support a bulk of smart contracts in a given period of time.</p></li></ul><h3>Optimism’s outstanding features</h3><ul><li><p>Fast and cost-saving transactions: With fast transaction speed, the fees will be deducted from 10 to100 times compared to current gas.</p></li><li><p>Convenience for D-app scaling and deploying: Ethereum D-apps or D-apps in other EVM-compatible ecosystems can be run on Layer 2 with just a few lines of code where EVM is fully supported.</p></li><li><p>High-level of security: Optimistic inherits the Ethereum’s layer-1 security.</p></li></ul><p><em><strong>&gt;&gt;&gt; </strong></em><a href="https://www.builder.news/project-review/optimism-op-a-layer2-scaling-solution-for-ethereum-applications" alt="Optimism (OP) - A Layer-2 scaling solution for Ethereum applications" title="Optimism (OP) - A Layer-2 scaling solution for Ethereum applications" target="_blank" rel="" class=""><em><strong>Click to read an in-depth review about Optimism</strong></em></a><em><strong>.</strong></em></p><h2>Optimism price surge: Everything happens for a reason</h2><p>Ever since the price dump after OP hack, Optimism is now back to where it used to be. The OP price is witnessing a x4 increase, reached ATH upto $2 per $OP. There are underneath answers for the recent situation of Optimism and considering these can help investors or traders have a brighter idea of future investment in the peculiar protocol.</p><h3>Thriving Optimism ecosystem</h3><p>OP price surging is undeniable to the fact that its ecosystem is doing exceptionally well in performance. Optimism is not only increasing its TVL but also introducing an NFT collection called Optimistic NFT explorer. In the context non-fungible tokens remain their ceaseless heat, the Optimism’s NFT collection has attracted a significant amount of market participants and NFT enthusiasts by offering free-mint program. The NFTs after being minted will be ideally marketed on Quixotic, the largest NFT marketplace on Optimism ecosystem.</p><h3>Modest number of VCs ensures OP’s sustainability</h3><p>It is possible to anticipate that with only 3 funds invested in Optimism, OP’s sustainability can be ensured. Specifically, Optimism has the following capital calls:</p><ul><li><p>Seed round: Raised $3.5 million from Paradigm and IDEO Collab Ventures</p></li><li><p>Series A: Raised $25 million from A16z, Paradigm and IDEO Collab Ventures</p></li><li><p>Series B: Raised $150 million from Paradigm and a16z.</p></li></ul><p>Although number of VCs invested in Optimism is not excessive, the protocol has raised a total of $178.5M in funding over 3 rounds, making it one of the most reliable project to look after. This can possibly a reason for the growth in $OP price.</p><p class="prosemirror-p-center"><img src="https://cdn.builder.news/news/11ed1954226f4c11a8e6023f659fee92.jpg" alt="Optimism crunchbase" title="Optimism crunchbase" width="600" height="438"></p><h3>Optimism's market cap is small compared to valuation</h3><p>Another reason could be that OP's market cap was small compared to valuation. Specifically, when moving sideways, OP price fluctuates in the range of $0.4-0.6. At this price, the market capitalization of Optimism was only a maximum of $150 million.</p><p>However, on March 17, the project successfully raised $150 million in a Series B round also the latest funding round, bringing the protocol's valuation to $1.65 billion. This funding round was led by two well-known investment funds in the Crypto market, Andreessen Horowitz (a16z) and Paradigm. The funds raised will be used to expand Optimism's staff and develop the protocol to further reduce network costs.</p><h2>Final words</h2><p>Deciding on a project to invest is not an easy task, investors must take completely careful look at each and every activity it has widely published. The reasons above might be true to the fact that Optimism is doing a great job at the moment. However, in the future, while no one can guest what can happen, protocols based on layer-2 Ethereum will probably be a new wave for others to take after, in which Optimism is one of the pioneers.</p><div class="pr-block-special"><strong>Disclaimer:</strong><br>This article is intended for and only to be used for reference purposes only. No such information provided constitutes advice or a recommendation that any investment or trading strategy is suitable for any specific name.</div>

Optimism seems to do things exceptionally well. What are the reasons for this?