Totally agree, tokens should have usage scenarios, otherwise the incentive effect of long-term inflation will be small, and the token economic model will not be sustainable
Ape Prince . thanks for the detailed post and making sure that you have covered all your POVs. I however am not sure if this is the way to go. If OP token for gas was the idea, wonder why the OG builders of Optimism did not go for it. I have no expereince in tokenomics so I am guessing here as well, but I tend to agree here with @MinimalGravitas ā¦ if we subisdize gasā¦ how are we making up the difference. i.e the gas is the gasā¦ to post back to L1 no one is giving us a discount so how do we make that 25% cut that you propose? Would be good to see some plan for this.
These questions are in discord over here. Replying to both over here.
First Iām not advocating this point to happen or not to happen. Iām advocating a possibility that can lift the $Op token price and bring more value to the network rather than sitting on the MC of below 300 Millions shamefully.
This forum and other social media platforms are where we find solutions and create a dialog and make others aware of the possibilities or otherwise. Also, the community can talk on behalf of the topic and I donāt have to answer each and every question too. There are plenty of Pro tech guys here and they can pitch in too. We are a group of individuals who are trying to find the best road map for optimism and this topic was posted for that not to evaluate the knowledge individuals have. Optimismās core principles are community governance and it speaks for itself.
Also remember this is a free speech forum where we get feedback and discuss on topics again, remember I donāt own this above process. This is created by Zukabba on Boba network due credits has been given. This process has been already discussed in the Boba Network forum and won with a majority of community votes and now Boobs network has implemented it. Technically I have no idea how to do it since Iām not a tech guy but more of a business analyst. If I knew how to code and fighter all this out by myself then I wouldnāt be writing here other than writing the code and creating my own Eth rollup.
Boba network is a folk of Optimism and they had the same problem like we do with $OP token and they are trying to figure out what is the best path forward and they came up with this idea and Boba Network had already implemented this above process right now itās working according to information.
For your 1st question -
Answer -
25% fee discount plan
This has been done and now itās working in the booba network. Booba Network the first Layer-2 to enable a dual token fee option. Itās a copy of optimism. If booba network has done it then the Optimism team may be able to do it too. Those who are pro coders from our community can dig deep and let us know about this. So, since this has already been done in a Eth rollup network itās not IMPOSSIBLE to implement.
Check this video out!
2, Question -
Answer -
Competitive intensity - very high
The competition between Rollups is very high. Optimism competes not only with other Optimism Rollups such as Arbitrum, but also other scaling solutions such as Polygonās PoS chain and ZK rollups such as Starknet. Vitalik Buterin expects ZK Rollups to outperform Optimistic Rollups in the medium to long term as they provide a better experience. ZK rollups are proven to have better security through validity, and there is no long waiting period for withdrawals.
New entrants will have to make significant improvements to current solutions in order to capture a significant market share. It will take years of development, and other than Celestia, no such promising technology has emerged.
The threat of alternative options is high, and monolithic and interoperable blockchains are a real threat. Monolithic architectures also have the advantage of a consistent complete experience compared to modular architectures. Parachains on Polkadot, Appchains on Cosmos, and Subnets on Avalanche are also working to increase adoption.
Application developers can be considered Rollupās suppliers. Demand for developers is very high, giving it significant bargaining power. Developers must be incentivized by multi-million dollar ecosystem grants.
Users can be considered customers here. Users are scattered and do not have much bargaining power. But in a highly competitive industry, new platform solutions purchase user wallet share inorganically through airdrops and incentive programs.
EVM equivalence
Optimism goes beyond simple EVM compatibility to EVM equivalence. On an EVM-compatible chain, developers still need to modify their Web3 applications to use a different architecture. Additionally, tools built for Ethereum over time may not necessarily work on other EVM-compatible chains. EVM equivalence on Optimism solves this problem by being almost equivalent to executing on the Ethereum mainnet, allowing one-click porting of applications and all tooling work. This approach will help Optimism grow the developer community faster and with fewer bugs than other scaling solutions.
3, Question form the discord -
āThis is impossible. Fees collected on Optimism are used directly to pay for writing to Ethereum mainnet. If you charge less fees there just wont be enough OP to sell for the ether the rollup needs to post itās proofs. The fees arenāt arbitrary.ā
Answer -
income model
There are two types of income: explicit income and MEV.
The Optimism Foundation runs a single centralized sequencer that is solely responsible for generating Layer 2 (L2) blocks and adding transactions to Ethereumās Layer 1 (L1). The sorter fee consists of two parts, the L2 execution fee and the L1 data fee.
L2 execution fees are similar to Ethereum gas fees. The amount of fees to be paid depends on the complexity of the transaction, i.e. its computational and storage requirements. Thatās about 1% of what users pay.
The L1 data fee is the cost of publishing a batch of transactions to Ethereum. The sorter uses a cost-plus approach, charging users a price higher than the L1 cost. It currently charges 1.24 times the sum of the gas required to submit a transaction and 2,100 gas. This generates surpluses that will be used to fund the growth of the ecosystem. Itās worth noting that 99% of the fees charged by Optimism are L1 data fees.
So far, these fees paid by users have brought in $24.5 million in revenue for Optimism.
Sequencers can also capture maximum extractable value (MEV) in the future. To recap, MEV refers to the value that privileged participants (such as miners, validators, or sequencers) extract by including, reordering, inserting, or ignoring transactions in the blocks they produce. Since there is only one sorter on Optimism, only it can capture MEVs. The Optimism team proposed a system for MEV auctions, under which they would sell other parties the ability to reorder or insert transactions in a block. Proceeds from the MEV auction will also flow back to fund Optimismās public goods.
Again I reiterate that this is not a competition about knowledge , this is a community discussion where community can pitch in and make the best out of this topic. We have so much of Pro coders in this community and they can pitch in on technical part of this.
Thanks for contributing to the discussion and we need more community players like you to have a healthy environment.
When I saw the first question you mentioned, I couldnāt help but like it. OPās MC has been hovering at 0.3B, itās really incomprehensible! Before he goes public, itās reasonable to at least target Matic or Avax, or even SOL.
Yes, this is an innovative technique in that it adds additional utility to $OP and a technique that is not yet applied in the other EVM ecosystems. But is there any way that $OP is for the gas fee and the government token at the same time?
Like you I of course agree that this forum should be for open and free discussion, however I do also think it should be as robust as possible.
With regards to the 25% fee discount Iām not sure the relevance of the video, but I didnāt know the amount of excess that was collected so the following is very useful info:
It currently charges 1.24 times the sum of the gas required to submit a transaction and 2,100 gas. This generates surpluses that will be used to fund the growth of the ecosystem.
If this is the case then for every $100 needed to be spent on L1, Optimism currently collects $124. If the fees to pay with OP were discounted by 25% then were everyone to pay in OP only $93 would be collected per $100 required. How would this discrepancy be paid for?
I assume youāre not suggesting making up the difference with Optimismās reserves?
So far, these fees paid by users have brought in $24.5 million in revenue for Optimism.
Using these figures the biggest possible discount you could apply without going into debt would be about 19.3%, but doing so would mean that Optimism was no longer building up itās reserves. I suppose whether you think that is worthwhile is a separate question.
Another relevant point here is that I donāt think you are correct that:
Iām advocating a possibility that can lift the $Op token price
The price of a token relates to the relative buying and selling pressures. If we were to use OP as the token of Optimism, the OP would need to be sold straight away in order to buy the ether needed for L1. This would create a sell pressure that I donāt think youāre factoring in. Using our ongoing exampleā¦
If we need $100 to spend on Ethereum Mainnet and we collect $100 of OP (utilizing the 19.3% discount) then users have bought $100 worth of OP and Optimism has then sold it. There is no net effect on the buying/selling pressure. In fact, as many of us have just been airdropped a bunch of OP I would argue that the net effect would be negative as not every user has to buy the token. If some of the OP spent on gas comes from users who didnāt have to buy it, while all of what is collected needs to be sold for ether then the price of OP would be pushed lower, not higher.
Finally, with regards to EVM equivalence, I think from your response that we are on the same page. Youāve expanded on my point about how important a feature this is to making Optimism stand out, so do I take it that you agree this is not worth sacrificing? I canāt imagine a possible way that gas on Optimism could be payed for with anything other than ether without losing this key advantage, and this is fundamentally the most important reason in my eyes why we should not make changes to the gas mechanism.
Also, the community can talk on behalf of the topic and I donāt have to answer each and every question too.
Completely agree with this sentiment BTW, I hope no one reading this takes it as a conversation just between the two of us, everyone who wants to should always be welcome to jump into any discussion on here. Iām sure thereās plenty of factors both of us are missing here!
Again I reiterate that this is not a competition about knowledge
Of course, but equally you shouldnāt be afraid to explain stuff that no everyone may be familiar with. Surely part of the purpose of these discussions is to help people learn how Optimism works and why people have different views and opinions on itās structure. I posted a collection of links yesterday that might help people get to grips with rollups generally and Optimism in particular:
If youāve got more resources that would be useful there please do chick them in that thread!
Seems like this could be a good idea for affordability versus continuing with using ETH. How would that effect liquidity? Would it go help since itās is keeping into optimism?
Yes, the sell pressure canāt be ignored. What these people really want is a burn mechanism for optimism. Which could be done by directing excess transaction fees to buying/burning OP tokens.
I donāt agree with that. I would rather use all available funds to grow the protocol, but the āburnā meme is strong.