Andreessen Horowitz leads $25M round for Optimism's L2 scaling solution

Optimism has been on a hiring spree and plans to expedite its mainnet launch after securing backing from Andreessen Horowitz.

Optimism, a company providing Layer 2 scaling solutions for Ethereum, has secured backing from venture capital firm and Coinbase investor Andreessen Horowitz, or A16z.

Andreessen Horowitz, which manages a portfolio worth roughly $16.6 billion, announced it is leading Optimism’s $25 million Series A investment round on Feb. 24.

The demand for Layer 2 scaling solutions has escalated amid Ethereum’s surging fees, with average transaction costs pushing as high as $40 on Feb. 23.

To achieve lower fees, lower latency, and greater throughput compared to transacting on Ethereum’s Layer 1 main net, Optimism uses “rollups” to bundle transactions together using smart contracts on an Ethereum side-chain before broadcasting them to the mainnet.

Ethereum co-founder, Vitalik Buterin, summarized that “rollups move computation (and state storage) off-chain, but keep some data per transaction on-chain.”

A16z acknowledged that the growth of Ethereum over the past year or so has been a strong indicator of demand, noting the average capacity of Ethereum blocks has stabilized near 98% — meaning the network is functionally full.

“One lesson from internet history is that when you give developers a powerful new computing platform, they create applications at such a rapid rate that demand consistently outpaces supply. We believe the same will be true for Ethereum,”

The announcement notes that A16z spent significant time exploring different Layer 2 scaling solutions before the firm chose to support Optimism.

The firm emphasized that Optimism’s philosophical and technological alignment with Ethereum was a significant factor informing their decision to back the team, writing:

“One of the most exciting things about what Optimism has built is that it can be seen in many ways as an extension of Ethereum — from its philosophy down to its tech stack.”

Optimism is currently completing a phased rollout and will be ready for large-scale production later this year. The platform has been running testnets in partnership with DeFi platform Synthetix, and has started hiring to expedite public mainnet launch — which is now scheduled for March.

Publication date: 
02/25/2021 - 05:57
Author: 
Disclaimer

The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.