Ethereum Layer 2 scaling solution Optimism is rethinking its strategy after years of helping other projects build networks on its technology. Now the company’s chief executive, Jing Wang, says that approach came at a high cost.
Optimism was designed to offer cheaper transactions just as Ethereum experienced rising gas fees around 2020-2021. Its OP Stack software has been used to launch chains like Coinbase’s Base and Kraken’s Ink, allowing them to build their own blockchains while remaining compatible with Ethereum.
But in an X post on Nov. 27, Wang said the team “did too much and focused too little,” pointing to over-hiring and a lack of strategy as market conditions shifted. She said the company has been “bathing in tactics for a long time” with partner chains, “without building the operating machinery to continue that momentum into a market that’s dramatically different today.”
Although Optimism reduced costs by cutting staff and bringing all teams under one group, competition from Solana, Stripe-backed Tempo, and other networks is getting tougher, Wang said.
Wang went on to tease a change in focus. Rather than just helping launch new chains, Optimism will let enterprises have more control over their networks, though she didn’t say exactly how.
“At the end of the day, enterprises want to control their own economics. They aren’t gonna be sharecroppers on Stripe’s blockchain,” the Optimism CEO wrote.
Optimism did not immediately respond to The Defiant’s request for comment.
Falling On-Chain Metrics
Wang’s remarks come as Optimism’s key metrics continue to weaken. The network’s total value locked has fallen back to 2022 levels, according to data from DefiLlama.
Monthly on-chain revenue fell from about $2.3 million in March 2024 to roughly $373,000 in October, likely because transaction fees dropped around 90% after Optimism’s Ecotone upgrade in Q1 2024.
The network’s OP token is also struggling. As of press time, OP is down more than 85% over the past year and more than 90% from its all-time high, per data from The Defiant’s price page.