Assessing Optimism's Impact on Ethereum's Scalability and Transaction Efficiency

Abstract

While blockchain technology, Ethereum in particular, has transformed digital agreements, it still faces challenges in certain areas. Optimistic Roll-ups are a Layer 2 scaling solution that aims to improve the efficiency of Ethereum by increasing scalability, reducing fees through transaction bundling, and improving security. Optimism block production is overseen by a central entity known as the "sequencer," responsible for critical functions such as transaction confirmation, state updates, and executing L2 blocks. Despite the increasing adoption of Layer 2 scaling solutions like Optimism, a comprehensive evaluation of its impact on Ethereum's transaction efficiency remains lacking in the existing literature. This research aims to investigate the use of Optimism’s impact on three important factors: gas fees (transaction execution costs), transaction fees (fees paid to validators), and batch sizes (number of transactions). To examine specific transactions and compare them between the Ethereum blockchain and the Optimism rollup chain, the explorers Etherscan, and Optimism were used. Data was collected and analyzed on the 3 primary dependent variables and it showed that by implementing Optimism, transactions were processed faster in larger batches, reducing costs, and increasing transactions. Additionally, it was shown that Optimism achieved lower gas fees by implementing a method called block storage, leveraging the availability and integrity guarantees of Ethereum while minimizing the gas fees associated with storing blocks. These findings provide insights of the impact of Optimism on Ethereum's transaction efficiency. Furthermore, & the enhanced understanding of the efficiency and scalability of Optimism could attract more users and developers to Ethereum, leading to an increase in the overall number of transactions taking place on the network.