iCloud photos space question

[ProwlingTiger]

I recently turned on iCloud photos and synced about 11,000 photos and videos. My phone still shows photos as taking up 50GB though. I turned on optimize storage but it doesn't seem to be optimizing and is still storing full res on the phone. I have a 128GB iPhone, is it because I still have plenty of free space? If i start to fill the space or try to fill it, will it automatically optimize the photos?

Thanks,
Dan