What other catalysts are worth watching for the upcoming upgrade of Optimism?

Written by: The DeFi Investor

Translated by: TechFlow

With numerous bullish catalysts emerging, it's time to explore the Optimism ecosystem. Here’s why Optimism could be the next hot L2 and an overview of some key ecosystem catalysts.

Optimism is the second most popular Ethereum L2. While transaction volume on Optimism still lags significantly behind Arbitrum, Optimism's TVL has been growing steadily.

Since the launch of the $OP token, on-chain activity on Optimism has nearly doubled. Recently, daily transaction volume took a hit following the conclusion of the Optimism Quests campaign. However, with a major network upgrade approaching, its activity may soon reach new all-time highs again.

On February 3, the Optimism Goerli Testnet successfully implemented the Bedrock upgrade. The mainnet upgrade proposal is scheduled for April 5. In short, the Bedrock upgrade will bring significant performance improvements, including lower transaction fees.

The upgrade is expected to go live on mainnet in under two months. A few months ago, Arbitrum completed a similar upgrade called Nitro, which led to a massive surge in daily transactions. The Bedrock upgrade could trigger a similar spike in activity on Optimism.

But that’s just the beginning. Many top projects within the Optimism ecosystem are also preparing for major upgrades:

• Synthetix V3
• Velodrome V2
• ......

Synthetix V3

Synthetix is a derivatives liquidity protocol. Its new version has been in development for a long time. Now the V3 code is under audit, and its launch is imminent.

Key features of V3:

• Permissionless asset creation

• Simplified staking

• Providing liquidity services to dApps to enhance liquidity.

Synthetix V3 will allow anyone to create synthetic tokens tracking the price of any crypto or non-crypto asset, unlocking endless possibilities.

In addition, Kwenta, the perpetual DEX powered by Synthetix, recently added 22 new markets. Following the addition of new trading pairs, trading volume on Kwenta Perps V2 reached an all-time high. And starting last week, traders on Kwenta Perps V2 became eligible to earn $KWENTA rewards.

Velodrome V2

Velodrome is Optimism’s largest native DEX. Velodrome V2 is a complete rebuild of the protocol, which was audited just days ago. Some of its key features include:

• New UI
• Customizable pools
• Fast switching
• Flexible fee structures, etc.

After the V2 launch, the team also plans to introduce support for concentrated liquidity pools, along with a series of other upgrades.

Beyond these upgrades, one of the most anticipated protocols on Optimism is Ethos Reserve.

Ethos Reserve is a CDP protocol. It will allow users to take out interest-free loans in the form of ERN while generating yield from their collateral.

Finally, I remain very bullish on Arbitrum, as many DeFi primitives are being built there. But I believe Optimism deserves attention too.

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