Introduction

• In this analysis, You will read about the Optimism chain. I examined the Optimism chain during the recent bear as markets were turbulent. We want to know how the Optimism chain was during the Bear market.
• So, I went through the Optimism chain and analyzed these parameters:
• OP Price
• Success and Failed Transactions
• Average/TPS/TPM transactions
• Optimism Bridge Inflow and Outflow
• New Users
• OP swaps

Analyzed by Hess - Reading Time Almost 12 Min.

What is the Optimism chain?

• Optimism is a Layer 2 scaling solution for Ethereum that can support all of Ethereum's Dapps. Instead of running all computation and data on the Ethereum network, Optimism puts all transaction data on-chain and runs computation off-chain, increasing Ethereum's transactions per second and decreasing transaction fees.

Swaps From and To OP Token

• As I mentioned before, OP is a native token of Optimism. The total number of swappers and swaps from and to OP tokens increased like other parameters over time. The total number of swaps and swappers in November was much higher than the total number of swappers and swaps in July. A huge growth for OP token and Optimism chain.

• The average swap volume from and to OP tokens decreased over time. The highest volume of swaps happened when OP token price had ATH. During that time, The swap volume increased up to 126M US dollars. Recently, The daily swap volume from and to OP token decreased to 30-40M US dollars.

What is an OP token?

• OP Coin protocol is a revolutionary invention of the last decade. It's essential meaning is money digitization. It's the first decentralized peer-to-peer payment network without using any central authority or middlemen.

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Bear Market

• The current crypto bear market has induced panic, fear, and uncertainty in investors. The dire situation started when the global market capitalization of crypto dropped below the $2 trillion mark in January 2022. Since then, the price of Bitcoin has decreased by over 70% from its all-time high of $69,044.77, reached on Nov. 10, 2021. Similarly, the values of other major cryptocurrencies such as Ether, Solana, and Avalanche have decreased by around 90%. 

• First off, the build-up to the bear market started in 2021. During this period, many regulatory authorities threatened to introduce stringent laws governing cryptocurrencies. This created fear and uncertainty in the market. For example, the United States Securities and Exchange Commission (SEC) issued a lawsuit against Ripple. In addition, China banned Bitcoin mining, resulting in most of its BTC miners having to relocate to other countries. A global increase in inflation and rising interest rates instilled fear and uncertainty in the market, resulting in lower crypto investment than expected. Although there is much publicity pertaining to the United States’ inflation and interest rates, other countries such as India have experienced similar challenges. Notably, earlier this year, the Federal Reserve announced that it was taking stringent measures to “accelerate tapering of monthly bond purchases.” In other words, the United States planned to introduce measures that slow down its economy to control the ever-rising inflation in the country. The following graph shows the inflation trend from 2016 to 2022.

• Crypto analysts believe that leverage was another primary cause of the current bear market. Leverage entails pledging a small amount of money as collateral to borrow a large amount for investment. In this case, investors borrow from exchanges to finance their investments in the market.

  The downside of leverage is that once the price of an asset begins to fall, the trading positions liquidate, resulting in a cascading crash of cryptocurrency prices. This lowers investor confidence and tends to inject fear and uncertainty into the market

OP Pirce

• The OP price was around 0.5$ when launched. Following the ETH price, OP token price increased rapidly since July. The OP price had ATH in August when reached 1.98$. In August, The OP price moving was much higher than ETH or other tokens. About 200% increases In a short time for OP tokens. However, After that because of the Market situation, The OP price decreased. It’s Normal. If you see the ETH price over time, You can see OP token follow the ETH pattern. Right now, The OP price is around 1$.

Transactions

New Users

• One of the important parameters for a chain is New Users. I divided new users into those users that received transactions and those new users that doing the transactions. In July, The total number of new users in July was around 1000-200 daily But for a short time increased to 28K in less than a month. Recently, In November, The daily number of new users is around 4000-5000 unique wallets.
• The highest number of new users joined to Optimism chain in October. In the last 180 days, About 27% of new users joined to Optimism chain in October. In July, August, and September, The monthly new users were around 100K but in October increased to 136K.

Gas Price

• I drew a chart and show the total number of transactions and gas prices over time. The total number of transactions on Optimism changed too much over time. The daily number of transactions was 50-70K in July. During August, The total number of transactions increased to 100-130K. Again, From September, The total number of transactions was 2x higher than in August. Recently, The daily number of transactions reach 300K!

• One of the Layer2 features is the Lower gas fee in comparison to the Ethereum Chain. The average gas price show when the total number of transactions increased, The average gas price decreased. The average gas fee was 0.01 during July but recently, In November, When the total number of transactions increased up to 300K, The average gas fee is around 0.004.

Bridge Inflow and Outflow

• Over time, The total number of bridge users increased on the Optimism chain. Both Inflow and Outflow increased. In July, The daily number of Inflow users was 50-70 and Outflow users were 250-300 users. Over time, The total number of bridge users doubled in September. Recently, The total number of bridge users increased significantly and reached around 1K. The share of outflow users is around 66.9% and the share of inflow users is 33.1%.

• I analyzed the ETH amount bridged in and out of the Optimism chain too. Like the total number of users, The total ETH amount that bridged from and to the Optimism chain increased too. The total Inflow ETH is 15K and the total outflow ETH is 410. The bridged amount to Optimism was much higher than to bridged amount out of Optimism.

THANK YOU FOR READING!

ALL CODES AND CONTENTS WERE WRITTEN BY HESS.

:bird: Twitter: @hessaminanloo

:flying_disc: Discord: hess#0890

:calendar: Analyze Date: 2022/NOV/09

• Over time, All parameters related to transactions increased on the Optimism chain. The average number of transactions is 167K. In the last 180 days, The total number of transactions

  on Optimism is 22M.

• The average Number of Transactions Per hour is 30K, The average number of transactions per Minute is 511 and the average number of transactions per second is 8.3 TX. In a short time, The average number of transactions doubled in July.

• During November, The average number of transactions/Per Hour/Per Minute and Second was 4x higher than the average number of transactions in July. Great growth for the Optimism chain.

Deposits and Withdraw

• The daily deposits and withdraws on one of the popular platforms on Optimism, Velodrome decreased over time. The highest volume was deposited on Velodrome between July and August. The daily net volume shown during that time was negative. Over time, The net volume in USD had some days negative and some days positive but overall, Deposits decreased.

Conclusion

• Bear Market impacted all Crypto markets. But some of the projects were doing better than others. In My opinion, Optimism was one of the successful projects during the Bear market. The OP token price increased and had a new ATH. The total number of transactions, New users, Swaps, and … increased in the last 180 days. I can say that the Bear market impacted on Optimism chain but overall Optimism parameters growing as fast as possible.