A Guide to Uniswap on Optimism

Does Optimism live up to the hype? See for yourself. Here's how to use it.

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Dear Bankless Nation,

Layer 2 is here.

LAYER 2 IS HERE. 🥳

Uniswap V3 deployed on Optimism mainnet earlier this week.

This is alpha right, so it’s not perfect. There are tradeoffs when using it today. But this is the first major app to go live during Layer 2 summer.

It’s also a peek at what the future of DeFi looks like.

Optimism gives near-instant transactions for a low cost. Instead of paying $20 for trades on Uniswap, you pay <$1. Instead of waiting 2-3 minutes for transactions to confirm on-chain…you don’t have to wait at all.

Uniswap on Mainnet is a dial-up modem.

Uniswap on Optimism is broadband.

Ethereum is now scaling trustless transactions per second. Absolutely massive.

So we decided to put together an Optimism guide for you today.

This is your first map to the Layer 2 frontier.

And it absolutely lives up to the hype.

- RSA


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Bankless Writer: Ben Giove, Bankless Contributor & President of Chapman Crypto

How to use Optimism

The wait is finally over: Layer 2 summer is heating up with Uniswap V3’s deployment onto Optimism. While it’s only an alpha release, and it’s limited in functionality and decentralization, we’ve tested it out and it absolutely lives up to the hype.

With transaction speeds that would make the Flash blush, and substantially reduced gas costs, Uniswap on Optimism is a teaser for the incredible capabilities and potential of layer 2. It’s also the first domino of many to fall as more of our favorite DeFi protocols, such as Synthetix, will be deploying more capabilities on Optimism in the coming weeks.

This is a historic moment for Ethereum. It’s the first step in transforming the network from being slow and expensive to blazingly fast and cheap.

Want to experience the magic for yourself? 

This post will serve as your guide on Optimism, how to migrate to this layer 2 solution, the trust assumptions of doing so, and what the experience will be like when you get there.

We’ll see you on Layer 2.

Optimisms Trust Assumptions

Moving funds to another network is not a decision to be made lightly. While Optimism is a true layer 2 secured by Ethereum, the protocol is still in its infancy. It’s not yet a finished product, with a fully public, permissionless, and decentralized mainnet. Because of this, early users will be taking on considerable trust assumptions.

For starters, the Optimism core team essentially has complete control over the network. The team has the ability to make changes to the contracts controlling the Optimism Gateway bridge, meaning that there is one central point of failure from which user funds can be lost, seized, or stolen.

While less of a concern for users, the team also has the ability to whitelist contracts and assets, meaning they have authority over what projects deploy to, and what assets are supported by, the network. In addition, at least one planned upgrade to Optimism within the next few months, which could cause the network to go down (the team will give warning in advance). This means that users will not be able to conduct any transactions during this time.

It’s important to note that assumptions like these are not out of the ordinary when it comes to a brand new network, as developers will often put safeguards in place to catch bugs and ensure the protocol is functioning properly. Furthermore, these risk factors have also been communicated by both the Optimism and Uniswap teams. 

Finally, due to the architecture of Optimistic Rollups, there is a seven-day withdrawal period when bridging tokens from Optimism back to Ethereum L1, meaning that funds will be completely inaccessible during this period. This will not go away when the protocol launches its public mainnet, however there are solutions in the works, such as Maker’s Optimism Dai Bridge, to get around this issue.

Adding Optimism to Your Wallet

The first step to getting onto Optimism is to add the network, Optimistic Ethereum, to your wallet. The process is incredibly simple, and no different than connecting to Polygon, Fantom, or any other EVM-compatible chain. This also means that these will be the same steps for connecting to other Ethereum L2s, such as Arbitrum and ZK-Sync, in the future.

The quickest way to do this is by using chainid.link. This is a tool that pre-sets the network information that you would otherwise have to input manually. 

Let’s walk through the steps for connecting via this method.

  1. First, head over to and click on the green “connect” button at the bottom of the page.

  1. Next, a prompt will appear asking you to approve the connection. Select “approve” to confirm that you want to add Optimistic Ethereum to your wallet. You can also verify the network details yourself by referencing Optimism’s documentation.

  1. After hitting approve, you’ll be prompted again asking you to connect to the network. Click confirm and voila: You’re on Optimism!

If you’d like, you can also manually enter in the network information, which is simple in and of itself. Click here for a guide on how to do so.

Depositing Onto Optimism

After you’ve connected to Optimism, the next step is to deposit funds from Ethereum. This process is also fairly simple and will be familiar to anyone who has bridged funds to other chains, such as Polygon.

The primary way to do this is through the Optimism Gateway. Optimism Gateway works similar to other token bridges: Users deposit funds into a smart contract on Ethereum, which are then locked, with a representation of these tokens minted on Optimism. When you withdraw funds, the tokens on Optimism are burned, while on Ethereum they become unlocked. Remember: It takes seven days for withdrawn funds to become accessible again.

Let’s walk through the depositing process.

  1. Head over to the Optimism Gateway page, select the amount of ETH, or other tokens (currently only ETH, wBTC, SNX, USDT, DAI, and EURT are supported), you’d like to bridge over, and then click “Deposit.” 


💭 Reminder: If this is the first time you are depositing, you’ll also have to pay the usual contract approval fees


  1. You’ll then be prompted to again confirm the deposit. Click “Deposit” and then confirm the transaction in your wallet. This will require you to pay Ethereum gas fees, which cost $10-15 at current gas prices.

  1. After the transaction has confirmed on Ethereum, it should take anywhere from five to twenty minutes for the funds to become available for use on Optimism. If you’d like, you can monitor the transaction on Etherscan. 

  1. Once the funds become available, the page will display that the transaction is complete. You’ll also be able to verify the transaction on Optimistic Etherscan.

  1. Celebrate—you’re officially on Ethereum L2! Welcome to the frontier.

Trading on Optimism

A pleasant onboarding journey is nice, but what matters most is the destination. Is it really worth moving to L2? Does Optimism live up to the hype?

The answer is f*ck yeah it does.

Uniswap on Optimism is jaw-dropping. 

Trades occur at light speed, with transactions being confirmed in an instant. It’s so fast, it takes far longer to click “approve” in MetaMask than it does for the actual transaction to go through.

Think I’m exaggerating? Take a look for yourself:

As you can see that was...really, really fast. This speed not only blows existing chains completely out of the water, but matches (or even surpasses) that of centralized exchanges.

But it gets even better: Optimism also lives up to expectations in the form of lower gas fees. 

Trades on Uniswap are substantially cheaper on Optimism than they are on Ethereum mainnet, with a swap costing roughly 0.000563 ETH, or $1.06 at current prices, on the former, compared to 0.01 ETH, or $19, on the latter.

That’s a 17.9x decrease in gas costs, though the savings are expected to be closer to 10x in the protocols' early days. These gas reductions also come as transactions are limited to 50,000 per day, or 0.6 TPS, meaning that fees should decline even more as this limit is raised over time.

Between the speed and savings, it’s hard to articulate how great of an experience this is. While the only supported assets are ETH, wBTC, DAI, USDT, and SNX, this is still the same gamified, futuristic DeFi that we have come to know and love, but better in the ways we need it to be.

It’s a Web2 quality experience, but on Web3.

Supporting Infrastructure

Despite the infancy of the network and deployment, Optimism and Uniswap are quickly putting in place the necessary infrastructure that’s needed for a pleasant and informed user experience.

Optimistic Ethereum Etherscan

Block explorers are the bedrock for accessing on-chain data as they allow users to monitor transactions, view token and network data, and verify contracts. With that, Optimism’s Etherscan integration allows activity on the network to be audited with the same level of transparency and insight as on Ethereum L1.


🧠 Insight: Optimism has gained over 1000 unique addresses since V3’s launch.


How to use Uniswap Analytics

It’s important not only to be able to access network-level information but application-level data as well. Uniswap has provided this for its Optimism deployment through their analytics site. As with Etherscan, the layout is the same as the V3 site on Ethereum L1 where users can track volumes, fees, and liquidity for individual pools, tokens, and more.


🧠 Insight: Uniswap V3 on Optimism has over $4.25 million in TVL, and is doing over $1.75 million in volume in under 48 hours!


Zapper

Zapper is another important project to have integrated with Uniswap and Optimism.

The asset management platform recently started supporting LP tracking for Uniswap’s Optimism deployment, and soon will allow its users to trade, provide liquidity, yield farm, and transfer assets between Optimism and other networks.

The Internet Of Money Is Here

Uniswap V3 on Optimism is here. And it’s a game changer. While there’s work to be done on decentralization and functionality, it’s still enough to provide a tantalizing taste of the future.

Transactions are mind-bogglingly fast, significantly cheaper, and while not yet trustless, are backed by Nation State-level resistant security guarantees of Ethereum.

This is the internet of money: Unstoppable value moving at the speed of information, at low cost.

It certainly poses some interesting questions: In the long run, will any users still be on layer-one? Are “ETH killers” dead chains walking?

Regardless, one thing is certain: The Ethereum economy is about to be unleashed in ways that were never befocare possible. This is our broadband moment, and it’s hard not to be optimistic about it.


Action steps


Author Bio

Ben Giove is the President of Chapman Crypto and an analyst for the Blockchain Education Network (BEN) Crypto Fund, a student managed crypto fund built on Set Protocol. He’s also a proud member of the Bankless DAO!


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