OP Mainnet activity was at all-time highs in Q2 2024. Average daily active addresses reached 122,000 (+37% QoQ) and average daily transactions rose to 601,000 (+28% QoQ).
The average transaction fee on OP Mainnet fell 80% QoQ to $0.09 due to EIP-4844. As a result, the net profitability of OP Mainnet increased 150% QoQ to $5.2 million.
OP Mainnet’s stablecoin market cap increased 50% QoQ to $1.2 billion. USDT led the way increasing 88% QoQ to $962 million, now comprising 79% of OP Mainnet’s stablecoin market cap.
The Optimism Collective launched Retro Funding Round 4 in May, allocating 10 million OP tokens ($22 million) to Superchain builders. This airdrop aimed to acknowledge the contributions of "artists, creators, and pioneers" within the Superchain.
OP Labs launched the Fault Proof System on mainnet. The launch of the Fault Proof System advances the OP Stack to Stage 1 decentralization, during which the Security Council will act as a fallback safety mechanism in case of emergencies.
Primer
Optimism (OP) is a Layer-2 Ethereum scaling protocol. It aims to increase Ethereum’s transaction throughput while decreasing transaction costs via Optimistic Rollups.
When Optimism users sign a transaction and pay a gas fee in ETH, the pending transaction is stored in a private mempool before being executed by the sequencer. Blocks of executed transactions on OP Mainnet are created every two seconds and periodically batch-submitted as transaction call data to Ethereum by the sequencer.
The Optimism Foundation controls the lone sequencer. Since its mainnet inception, the Optimism Foundation has allocated all sequencer revenues, denominated in ETH, to support Retroactive Public Goods Funding. Plans are underway for sequencer decentralization, with new sequencers expected to receive a portion of the network's sequencer transaction fees.
Optimism’s long-term strategy stems from its vision for a Superchain. The Optimism Superchain is envisioned as a unified network of OP Chains built using the OP Stack. The ultimate goal of the Superchain is to bring seamless interoperability between OP Chains that share security, bridging, governance, upgrades, and a communication layer. Notable networks that have created or are creating networks using the OP Stack include Base, Zora Network, Mode Network, Fraxtal, and Redstone.
Key Metrics
Analysis
In Q2 2024, the entire crypto market saw a decline following a strong previous six months. OP was not spared with its circulating market cap decreasing to $2.0 billion (-45.6% QoQ) and its fully diluted market cap falling to $7.7 billion (down 51.2% QoQ). OP’s market cap ranking fell from 39 to 45 overall. OP remained the fourth largest ETH rollup by market cap.
OP is the native token of OP Mainnet. It serves multiple functions including governing and incentives for fostering the growth of the Optimism ecosystem. By the close of Q2 2024, 1.1 billion OP tokens or 25.6% were in circulation. The total supply stands at nearly 4,3 billion OP.
In Q1 2024, the Optimism Collective announced Optimism Drop #4, distributing over 10 million OP tokens to nearly 23,000 unique addresses. This airdrop aims to acknowledge the contributions of "artists, creators, and pioneers" within the Superchain. Additionally, the Optimism Foundation disclosed the sale of approximately 19.5 million OP tokens, then worth nearly $90 million, to a16z.
In Q1 2024, EIP-4844 was enacted on OP Mainnet, introducing blobs and significantly changing the OP Mainnet cost structure. The result of EIP-4844 and blobs is cheaper posting costs to the L1, which means the decrease is also felt by the users. Consequently, the average transaction fee for the user fell 80% QoQ to $0.09 due to EIP-4844. As a result, OP Mainnet’s revenue fell in Q2 2024 to $5.3 million, a decrease of 68% QoQ. While revenue fell, the L1 submission costs fell even more dramatically, down 99% to $66,900. The net profitability of Optimism increased over 150% to $5.2 million.
Despite the broader market pullback and sluggish price action, OP Mainnet activity was at all-time highs in Q2 2024. Average daily active addresses reached 121,600 (+37% QoQ), average daily new addresses were 27,400 (+37% QoQ), average daily returning addresses were 94,200 (+37% QoQ), and average daily transactions rose to 601,000 (+28% QoQ).
Optimism has a strong focus on developers. In March 2024, Optimism released an updated roadmap for RetroPGF with four rounds planned for the year. Following that, the Optimism Collective launched Retro Funding Round 4 on May 23, allocating 10 million OP tokens ($22 million) to Superchain builders. Furthermore, the API3 team announced the launch of their Oracle Stack on Optimism, providing builders access to the API3 Market QRNG and the upcoming OEV Network. Artemis data shows that Optimism averaged approximately 138 weekly active core developers and 345 weekly active ecosystem developers in Q2 2024.
When evaluating the active addresses on OP Mainnet, wallet transfers were the leading category. Following that were stablecoins and infrastructure. Of the major consumer sectors, DeFi was the leader while bridging rounded out the top five.
Additional key ecosystem events and proposals for Q2 2024 include:
Synapse Bridging Support: Synapse now supports bridging between Solana and Base, Arbitrum, and Optimism.
Fjord Network Upgrade: Implement the Fjord Network Upgrade on Optimism to reduce gas costs and improve robustness of L1 data pricing.
Chain Delegation Program Amendment: Refine the Chain Delegation Program to better support the Superchain strategy with increased program size and timeline.
OP Mainnet’s DeFi TVL (USD) decreased by 27.9% in Q2 2024 to $833.3 million, causing its TVL ranking to fall from 11th to 13th. Synthetix lost its position as the leading protocol by TVL, seeing a 53% QoQ decrease to $145 million. Aave became the leader with $248 million TVL in Q2, only down 8% QoQ. Velodrome had $101 million TVL, down 41% QoQ, and Uniswap had $57 million TVL, down 32% QoQ. The ‘Other’ category, which aggregates protocols outside of the top six, was up 2% QoQ to $214 million, suggesting the distribution of TVL on OP Mainnet is becoming healthier.
OP Mainnet ranked sixth among chains by DEX Volume, with an average daily DEX volume of $101.8 million, a 30% increase QoQ. Of that figure, Uniswap maintained its lead with 57% of the volume, averaging $58 million per day, and Velodrome remained comfortable in second with 13%, averaging over $13 million per day.
OP Mainnet maintained its position as the ninth largest network by stablecoin market cap in Q2 2024, with the stablecoin market cap increasing by 50% to $1.2 billion. USDT has pulled away, seeing its stablecoin market cap increase by 88% QoQ to $962 million, now comprising 79% of OP Mainnet’s stablecoin market cap. In contrast, USDC fell 23% QoQ to $162 million.
Superchain
The Superchain is a network of OP Chains built with the OP Stack, including OP Mainnet. The ultimate goal of the Superchain is to bring seamless interoperability between OP Chains that share security, bridging, governance, upgrades, and a communication layer. As of April 29, 2024, chains like Base, Zora Network, Mode Network, Fraxtal, and Redstone are a part of the Superchain.
In Q2 2024, several key developments took place within the Superchain. Notably, Protocol Upgrade #8 introduced changes for Stage 1 decentralization, increasing the security and decentralization of the Superchain. Worldcoin launched World Chain, and Celo chose the OP Stack for its transition to a L2. The Redstone Network launched to power fully onchain games, and Optimism rolled out new features for layer-3 developers, including custom gas tokens and Plasma Mode.
Optimism Collective also launched Retro Funding Round 4 on May 23, allocating 10 million OP tokens ($22 million) to Superchain builders. Furthermore, the Chain Delegation Program was amended to better support the Superchain strategy by increasing the program size and expanding the timeline.
Fault Proofs
In Q2 2024, Optimism made significant strides in enhancing the security and trustworthiness of the OP Mainnet through the implementation of fault proofs. This "permissionless" system allows users to publish output proposals with the fault dispute system to produce claims. The claims can facilitate withdrawals from L2 to L1 without dependencies on a trusted third party like the sequencer or any other centralized infrastructure. The Fault Proof System additionally allows any user to contribute to security by challenging and removing invalid proposals.
The launch of the Fault Proof System advances the OP Stack to Stage 1 decentralization. During this stage, the Security Council will act as a fallback safety mechanism in case of emergencies. The Security Council is permitted to override the system with a 75% signing threshold.
Following the launch, Sherlock conducted an audit on June 11, 2024. Additionally, OP Labs announced the MVP of Kona, a suite of portable no_std Rust implementations of the OP Stack rollup state transition. Kona features multiple optimizations, including support for eth_getProof to reduce RPC hits and the capability to validate L2 output root claims both natively and on the Fault Proof VM.
Closing Summary
In Q2 2024, the broader crypto market slowed, ultimately impacting OP’s market cap. Despite this, OP set all-time highs in network activity, with average daily active addresses reaching 121,600 (+37% QoQ) and average daily transactions rising to 601,000 (+28% QoQ). The decrease in the average transaction fee to $0.09 due to EIP-4844 and the subsequent increase in net profitability by over 150% highlighted the significant cost efficiency achieved.
The quarter also saw substantial progress in the development of the Superchain and fault proofs. The implementation of Protocol Upgrade #8 increased the security and decentralization of the Superchain, while the launch of the Fault Proof System on mainnet and the MVP of Kona enhanced the robustness of the OP Stack.
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