What to Expect as Optimism Lets Go of Bedrock
Optimism (OP) recently launched the highly anticipated Bedrock update, ushering in a wave of transformative changes to the network. Throughout the update process, OP temporarily suspended deposits and withdrawals, but once the launch is complete, normal transaction operations resume.
The Bedrock update marks the official release of the OP Stack, introducing a free and open source set of modular components that synergistically power Optimism. By leveraging Ethereum as the data availability layer and implementing advanced batch compression techniques, Bedrock significantly improves upon its predecessors, effectively reducing transaction costs.
With the successful release of the update, let’s investigate some of the important improvements it brings. First and foremost, Bedrock cuts costs on the network, eliminating all gas costs associated with executing EVM when sending data to L1. Additionally, it incorporates L1 reorganization functionality into the node software, dramatically minimizing deposit waiting times—a boon for users.
Bedrock’s updates don’t stop there; it also supports node performance, further enhancing the overall user experience. Considering these positive changes, the impact of the update on Optimism will be interesting. Terminal Token data shows that Optimism has recently seen an increase in daily and weekly active users. However, introducing reduced costs can entice new users, injecting a dose of volatility into user metrics.
According to Dune data, transaction volume on Optimism has shown a consistent upward trend since May, and with the Bedrock update in effect, this momentum is expected to pick up further. Surprisingly, the release of the update didn’t generate the price reaction that many had anticipated. CoinMarketCap revealed that the OP price depreciated more than 2% within 24 hours.
Despite the price drop, OP trading volume has seen a significant increase, which has raised concerns among some market participants. At the time of writing, OP is valued at $1.39, with a hefty market capitalization of over $894 million.
One plausible explanation for this decline could be the recent opening of the OP token, which happened a few days ago. The unlocking of tokens often leads to an influx of circulating supply and a consequent drop in price. Another token unlock is scheduled for June 30, 2023.
Fortunately, the Bedrock update has kept the OP’s development activity at a high level. The popularity of the project, as evidenced by social volume, has also remained relatively strong. Notably, the OP’s weighted sentiment has turned positive, instilling a sense of optimism.
However, it should be noted that whale interest in OP has waned, reflected in the lower number of whale transactions. Additionally, OP’s network growth has seen a significant slowdown recently, overshadowing its overall performance.
