Cryptocurrency (Mar 10, 2021 06:01AM ET)
Optimism and MakerDAO Partner up to Reduce Ethereum Gas
- Ethereum scaling solution provider, Optimism, has partnered with Maker to create an Optimism Dai Bridge.
- The bridge will help speed up transfers from Layer 2 to Layer 1.
- Optimism is expected to help reduce gas fees on Ethereum.
Optimism and MakerDAO are partnering to solve one of Ethereum’s most pressing problems. The Optimism Dai Bridge is a game-changer that will help reduce gas fees in the Ethereum (ETH) network.
It is no secret that the second largest crypto, ETH, has a few limitations. Currently one of the most pressing is the really high gas fees. ETH gas fees are so high that Binance CEO referred to it as a blockchain for ‘rich guys’.
Regarding ETH scaling, Layer 1 refers to the underlying blockchain structure. However, Layer 2 is an overlaying blockchain on top of Layer 1. In fact, ETH Layer 2 is a set of solutions that help scale the network thus reducing congestion. As such, Optimism is an ETH scaling solution that will help ‘optimize’ the ETH network.
However, Optimism currently enables instant transfers from L1 to L2, but the reverse is a bit harder. Making transfers from L2 to L1 takes a week as Optimism requires a week to verify transfers to prevent fraud.
A week, however, is a long waiting period that might deter users. Fortunately, the Maker protocol is a viable solution. It is able to preserve the truthless and decentralized nature of Optimism.
Thus, Optimism will add the Maker protocol to create the Optimism Dai Bridge.
Incredible work! An extremely cool and technically elegant solution to fast exits out of L2 by the maker team. https://t.co/8cMeJK5wL5
— Optimism (@optimismPBC) March 9, 2021
The bridge will lock up L1 DAI to mint L2 oDAI. In fact, Maker will offer oDAI as a claim against the L1 DAI that it will lockup in a vault awaiting verification. Once Maker verifies the transfer, the oDAI will be replaced by L2 DAI. In addition, Maker will verify transfers using an off-chain proof log that will only take minutes.
Further, Maker is able to provide this solution as it has high liquidity, does not require collateral for lockup, and is trustless. As such, the Optimism Dai Bridge is a true game-changer. The bridge will launch soon, while fast withdrawals are expected in 2021 Q3 or Q4.
This article first published on coinquora.com