Future of Smart Contracts? Ethereum’s Optimism Reveals Optimistic Virtual Machine (OVM)

Optimism, which rebranded from the Plasma Group research outfit into a Public Benefit Corporation last month, unveiled its Optimistic Virtual Machine (OVM) alpha.
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A new startup working on the frontlines of some of the cryptoeconomy’s most promising technology has released the alpha version of a tool that can bring layer-two scaling to base layer Ethereum smart contracts.

On February 11th, Optimism, which rebranded from the Plasma Group research outfit into a Public Benefit Corporation last month, unveiled its Optimistic Virtual Machine (OVM) alpha.

Optimism’s work focuses on so-called “Optimistic Rollup” tech, which can actualize highly scalable sidechains that can considerably extend the capabilities of Ethereum’s main chain.

Accordingly, the new Optimistic Virtual Machine can bring the power of these rollups to the Ethereum Virtual Machine, working like a “containerized L2-compatible EVM inside of the EVM,” per its builders.

Take the Old, Make It New

The arrival of the OVM means the Ethereum ecosystem can now leverage this powerful tool to optimize the smart contract platform’s decentralized services further. As the Optimism team explained in their reveal post, the OVM is young but poised to become increasingly useful over time:

“We put Uniswap on L2, but there are so many cool smart contracts on Ethereum — we need to support them all! Upgrading smart contracts to Optimistic Rollup / L2 should be as simple as a recompilation & redeployment.”

Like Uniswap, then, the rest of Ethereum’s decentralized finance sector can now tap into L2 capabilities through the OVM. And as the DeFi arena and the OVM continue to mature, Ethereum itself will be evolving into “Ethereum 2.0,” which will make use of things like proof-of-stake (PoS) consensus and scaling via a sharding system. The Optimism team confirmed they created the OVM to be readily embraceable by Ethereum 2.0.

As such, the startup’s scaling experts noted in their announcement that “the extremely high scalability gains (by some estimates well over 100,000 TPS) from combining sharding and rollup feel more within reach than ever.”

Fuel Labs Another Rollups Play to Watch

The researcher John Adler helped to spearhead the theoretical work that led to the recent advent of Optimistic Rollups in the Ethereum community. Now, Adler is putting theory into practice, having launched Fuel Labs with Nick Dodson last fall in order to create Fuel, a permissionless Optimistic Rollup sidechain system.

In January, Fuel Labs rolled out a series of “v0 testnets” for that system and revealed that a more mature v1 testnet would be coming out in March. That means things are still early on for the project, but progress is coming along nicely so far and the Ethereum ecosystem is becoming that much more technically viable in kind.

Indeed, one of the most interesting aspects of Fuel is just how secure it is while also being incredibly useful for powering large amounts of payments.

“As with any properly-design optimistic rollup, the only way to attack it is for miners to conduct a week-long 51% attack on the main chain — highly visible, easily attributable, and impossible in practice for a chain as important and secure as Ethereum,” Fuel’s creators have previously explained.

The Future Is Near

One of the earliest estimates for the possible start of the Ethereum 2.0 transition, specifically called “Phase 0” of the Serenity upgrade, was early January 2020.

That window has come and gone now, of course. And with more last-minute efforts left to finish up, Ethereum’s developers are now eyeing July 2020 as a new likely Ethereum 2.0 launch point according to answers posted in a Reddit “Ask Me Anything” thread conducted with ETH2 researchers last week.

“I have 95% confidence we will launch in 2020,” Ethereum Foundation researcher Justin Drake noted in one of his answers.

Whenever Serenity ends up launching, it’ll mark the formal activation of Ethereum’s most pivotal evolution to date. And for now the platform’s builders look to be well on track to kick that evolution off in just a matter of months.


William M. Peaster is a professional writer and editor who specializes in the Ethereum, Dai, and Bitcoin beats in the cryptoeconomy. He's appeared in Blockonomi, Binance Academy, Bitsonline, and more. He enjoys tracking smart contracts, DAOs, dApps, and the Lightning Network. He's learning Solidity, too! Contact him on Telegram at @wmpeaster

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