Decentral Block Post

The price of Optimism (OP) has been skyrocketing since the beginning of July due to its proximity to Ethereum.

Notably, OP's price rallied by nearly 300% in over a month to reach $2.31, its second-highest level on record, on Aug. 4. The token received its bullish cues primarily from the euphoria surrounding Ethereum's potential transition to proof-of-stake in September via an upgrade called "the Merge."

Why the "Optimism"

To recap: Optimism is an Ethereum rollup solution. In other words, the so-called layer-2 solution handles a bundle of Ethereum's transaction verifications off-chain to boost scalability on the main chain.

Optimism could benefit from the Merge due to Ethereum's "Rollup-Centric Roadmap," which turns its main chain into a settlement and data availability layer and places scalability in the hands of layer-2 rollups via "danksharding."

"Currently, with the combined rollup and Ethereum architecture, the current Ethereum-only transaction throughput of 15–45 TPS could scale to as much as 1,000–4,000 TPS," noted Ally Zach, a researcher at Messari, adding:

The price of Optimism (OP) has been skyrocketing since the beginning of July due to its proximity to Ethereum.

Notably, OP's price rallied by nearly 300% in over a month to reach $2.31, its second-highest level on record, on Aug. 4. The token received its bullish cues primarily from the euphoria surrounding Ethereum's potential transition to proof-of-stake in September via an upgrade called "the Merge."

Why the "Optimism"

To recap: Optimism is an Ethereum rollup solution. In other words, the so-called layer-2 solution handles a bundle of Ethereum's transaction verifications off-chain to boost scalability on the main chain.

Optimism could benefit from the Merge due to Ethereum's "Rollup-Centric Roadmap," which turns its main chain into a settlement and data availability layer and places scalability in the hands of layer-2 rollups via "danksharding."

"Currently, with the combined rollup and Ethereum architecture, the current Ethereum-only transaction throughput of 15–45 TPS could scale to as much as 1,000–4,000 TPS," noted Ally Zach, a researcher at Messari, adding:

Victorian Police in Australia will soon be granted new powers to seize cryptocurrency and digital assets from criminals, as well as compel platforms to hand over information about suspects.

According to a statement released by Victorian premier Daniel Andrews on Aug. 2, new laws were introduced to parliament on Tuesday under the Major Crime and Community Safety Legislation Amendment Bill 2022, with the aim of cracking down on organized crime in the state.

The new bill is expected to give authorities “greater power” to identify and seize digital assets, in response to the growing use of digital cryptocurrencies by organized crime.

The laws will uphold also require crypto exchanges disclose information to assist with criminal investigations in the same way that banks would.

“They will be able to compel cryptocurrency platforms to hand over information about suspects like banks currently must, and seize digital ‘wallets’.”

Ether (ETH) price is up 60% since May 3, outperforming leading cryptocurrency Bitcoin (BTC) by 32% over that span. However, evidence suggests the current $1,600 support lacks strength as network use and smart contract deposit metrics weakened. Moreover, ETH derivatives show increasing sell pressure from margin traders.

The positive price move was primarily driven by growing certainty of the Merge, which is Ethereum's transition to a proof-of-stake (PoS) consensus network. During the Ethereum core developers conference call on July 14, developer Tim Beiko proposed Sept. 19 as the tentative target date for the Merge. In addition, analysts expect the new supply of ETH to be reduced by up to 90% after the network's monetary policy change, thus creating a bullish catalyst.

Ethereum's total value locked (TVL) has vastly benefited from Terra's ecosystem collapse in mid-May. Investors shifted their decentralized finance (DeFi) deposits to the Ethereum network thanks to its robust security and battle-tested applications, including MakerDAO (MKR) — the project behind the DAI stablecoin.

Currently, the Ethereum network holds a 59% market share of TVL, up from 51% on May 3, according to data from Defi Llama. Despite gaining share, Ethereum's current $40 billion deposits on smart contracts seem small compared to the $100 billion seen in December 2021.

Demand for decentralized application (DApp) use on Ethereum seems to have weakened, considering the median transfer fees, or gas costs, which currently stand at $0.90. That's a sharp drop from May 3, when the network transaction costs surpassed $7.50 on average. Still, one might argue that higher use of layer-two solutions such as Polygon and Arbitrum are responsible for the lower gas fees.