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Optimism and NFTs 🎈

What the Optimism surge means for NFTs!
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Apr 28, 20224 min read

Dear Bankless Nation,

Optimism is a layer two (L2) scaling solution that inherits Ethereum’s security while making Ethereum transactions rapid and inexpensive.

I’ve been beating the Optimism + NFTs drum for a while not just because of the L2’s friendlier UX, but also because it’s the only scaling solution that currently offers full equivalence with the Ethereum Virtual Machine.

This complete compatibility with the EVM means NFT builders can 1-click deploy their dapps to Optimism while still enjoying all the L1 Ethereum tooling they know and love.

Combine this advantage with how Optimism just became the first of the “big four” L2s (Arbitrum, Optimism, zkSync, and StarkNet) to unveil a native token, and we have big catalysts for blooming the Optimism NFT scene going forward.

That said, let’s dive into this week’s Optimism OP news and give you some things to look out for NFT-wise.

-WMP


Optimistic NFT surge

Still catching up on the basics of Optimism? See my Beginner’s Guide to Optimism - Graphic by Logan Craig

The Optimism Collective and OP

On Apr. 26th, the Optimism team unveiled the Optimism Collective.

Described as a “large-scale experiment in digital democratic governance,” the Optimism Collective will steer the Optimism ecosystem and will be governed across two houses: the Token House and the Citizens’ House.

The Token House, which will be kickstarted by the first OP airdrop, will be composed of OP ERC20 token holders. These stakeholders are set to vote on protocol incentives, updates, and beyond.

The Citizens’ House, which will also arrive later this year, will vote on public goods funding initiatives, and membership will be distributed via non-transferrable soulbound NFTs.

Checking for OP eligibility

The first OP airdrop hasn’t taken place yet, though you can check your eligibility for the upcoming distribution. So if you’ve tried the Quixotic NFT marketplace or any other dapps on Optimism in recent times, see if you’ve qualified for this first round of OP.

More airdrop rounds are coming, too, so it’s not too late to experiment with the L2 and earn a spot for future allocations. Avoid scams in the meantime by tracking the Optimism team’s official comms so you’ll know when OP is officially live.

Collectable L2 announcement

NFTs on Optimism can be very inexpensive. For example, the Optimism team released their Optimism Collective Mirror post as Mirror’s first L2 NFTs, and they were mintable for less than $1 worth of gas. With further technical advances over time, look for these L2 NFT gas costs to drop even further.

OP isn’t bad for ETH

Simply put, Optimism’s efficiency and security stems from how the L2 batches and posts transaction data to Ethereum. The OP token will be a governance instrument for the Optimism Collective, whereas the Optimism L2 will continue to pay ETH fees to post its transactions to Ethereum.

So for instance, the Optimism L2 seeing more NFT activity would directly accrue value to Ethereum in contrast to alt-L1s that can silo value to themselves through native fee markets. On the flip side, it is something of an open question as to how OP is supposed to accrue value over time.

The Optimism NFT surge

As you can imagine, the news of OP and further rounds of airdrops has led to a burst of activity on Optimism. According to L2BEAT, the total value locked (TVL) on Optimism surged by +16% over the past week.

The 6 largest L2s currently per TVL; note that Metis Andromeda and Boba Network are forks of Optimism - Image via L2BEAT

Notably, this wasn’t just a generalized bridging surge as the activity boom has coincided with a huge spike of transactions in Optimism’s young NFT ecosystem. Per this Dune Analytics dashboard that tracks Quixotic by Michael Silberling, on April 27th the NFT marketplace recorded its best day yet for ETH volume, USD-denominated volume, number of NFT trades, and unique active addresses.

Image via Dune Analytics

Demand for more NFT projects grows

As Mirror’s Optimism integration showed, NFT projects can offer very friendly UX by embracing Optimism in the here and now. So as buzz around this EVM-equivalent L2 increases and as NFT users continue to seek more affordable solutions, expect growing calls for popular L1 NFT projects to add support for Optimism.

Zooming out

Optimism’s full EVM equivalence and upcoming bridging advances will soon make it trivial to move and use NFTs between Optimism and Ethereum.

So as opposed to non-EVM NFTs on blockchains like Tezos and Solana which have technical idiosyncrasies, Optimism NFTs are effectively Ethereum NFTs and vice versa. This dynamic could have a force multiplier effect on the growth of the Optimism NFT scene going forward, since Ethereum NFTs continue to be perceived as the highest-quality and most desirable NFTs around.

Indeed, the more that Optimism NFTs come to be seen as interchangeable with, or indistinguishable from, Ethereum NFTs, the more a considerable Optimism NFT boom becomes likely in the months ahead in my opinion. Only time will tell for now.


Action steps

Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.

Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here.

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