Mar 18, 2022 - Economy

Ethereum scaling startup Optimism raises $150 million

A piggy bank with the number 01 on it

Illustration: Maura Losch/Axios

Optimism, a New York-based Ethereum scaling startup, raised $150m in Series B funding at a $1.65b valuation co-led by Paradigm and Andreessen Horowitz.

Why it matters: Web3 evangelists see a decentralized future that sprints cheaply along the Ethereum network, but the current architecture can't handle more than a jogger's pace at a luxury gym. Optimism, and a handful of peers, wants to build a second layer that adds speed and reduces costs.

The bottom line: There are other Layer 2 projects out there built on Ethereum, the best known of which is Polygon. Like the others, Optimism functions like a second chain that regularly reports back to Ethereum to provide it security. It runs much faster and cheaper than Ethereum by functioning 'optimistically,' meaning it assumes all transactions submitted are valid while allowing other users time to challenge malicious transactions; who'll be rewarded if their challenge turns out to be right.

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