The Optimism Foundation will deploy a governance token called OP to control protocol and network parameters and encourage adoption.
The Optimism Foundation has unveiled a new governance structure and token as part of its ongoing efforts to ensure the scalability and cost-effectiveness of Ethereum (ETH), the world’s largest smart contract platform.
The Optimism Collective was featured in a lengthy post Tuesday afternoon outlining its mission and mandate to govern. Described as a “large-scale experiment in digital democratic governance,” the Optimism Collective is essentially a group of communities and stakeholders dedicated to improving Ethereum’s technical capabilities.
According to the information, the Optimism Collective is run by two components: the House of Citizens and the House of Tokens. The community center will use the income generated by the network to “facilitate and manage the distribution of retrospective funding for public goods.” Created as a result of upcoming airdrops, the token house is to vote on protocol updates and project encouragement.
The Token House, based on the new Optimism Governance Token Operating System, will be responsible for monitoring protocol and network parameters, as well as incentivizing users to enter the ecosystem.
The Optimism Foundation stated in its post that “the calls for scalability from the blockchain community are resounding,” referring to the growing demand for fast and efficient smart contract features. This demand is being met by several Tier 1 competitors, all of whom succumb to the flaws of centralization, sacrificing Ethereum’s “security and values,” the foundation said in a statement, adding:
“Technology scaling alone is not enough. We have a responsibility to scale our assets along with our networks.”
Relative: “People should invest in all the big Tier 1 companies,” says one veteran trader.
While Ethereum continues to dominate the developer market, its competitors are growing faster, according to a January report from research firm Electric Capital. The report notes that the activity of developers of projects such as Polkadot (DOT), Solana (SOL) and BNB Smart Chain (BNB) is growing, which could potentially undermine the dominance of Ethereum. Meanwhile, according to DeFi Llama, Ethereum’s share of the decentralized finance (DeFi) market, as measured by total value locked, has also declined significantly over the past 12 months.
Ethereum still accounts for over half of DeFi TVL, but its dominance is waning. Source: DeFi Lama
As Cointelegraph reported, progress on a proof-of-stake Ethereum upgrade is underway, though delays have pushed back the implementation timeline by a few months. On April 11, Ethereum developers implemented the first-ever “shadow fork” of the network to test their assumptions about the upcoming merger.