When it comes to developing web applications with Ruby on Rails, there are certain gems that can significantly enhance your productivity and streamline your workflow. Here are 10 essential gems every Ruby on Rails developer should know:

1. Devise: A flexible authentication solution that helps manage user sessions effortlessly.
2. Pundit: Simplifies authorization with a set of clear and understandable policies.
3. ActiveStorage: Facilitates file uploads and management in your Rails applications, making it easy to handle user-generated content.
4. Sidekiq: A powerful job processing framework that allows you to handle background jobs efficiently.
5. RSpec: A popular testing tool that provides a great way to write and execute tests for your Rails applications.

In addition to those mentioned, there are more gems that enhance the capabilities of your Ruby on Rails projects. Consider these:

6. Capybara: A helpful tool for integrating testing in your applications, allowing you to simulate user interactions.
7. Faker: It generates fake data for your development environment which is invaluable for testing and demos.
8. Bullet: A gem designed to help you optimize your ActiveRecord queries, highlighting inefficiencies during development.
9. Figaro: Simplifies the management of environment variables, making it easier to configure your Rails applications.
10. RailsAdmin: Provides a beautiful interface for managing your application's data without writing any additional code.

Optimizing your Ruby on Rails application for better performance is crucial to enhance user experience and improve your website's search engine rankings. Start by implementing caching strategies to reduce database queries and boost page load speed. Utilizing tools like fragment caching, page caching, and action caching can significantly enhance your application's efficiency. Additionally, consider employing a Content Delivery Network (CDN) to serve static assets, minimizing the server load and speeding up asset delivery.

Another important aspect of performance optimization is reducing the number of database queries executed during request processing. This can be achieved by employing techniques such as eager loading and lazy loading of associations, which help eliminate the N+1 query problem. Furthermore, profiling your application using tools like New Relic or Rack Mini Profiler can help you identify bottlenecks and areas for improvement. By focusing on code efficiency and following these strategies, you can ensure that your Ruby on Rails application runs smoothly, providing an optimal experience for your users.

When it comes to testing in Ruby on Rails, adopting a structured approach is essential for ensuring the reliability of your application. First and foremost, it's important to use the built-in testing framework that Rails provides, which includes unit tests, functional tests, and integration tests. These testing types cover various aspects of your application, ensuring that individual components function as expected, while also validating that different parts work seamlessly together. Additionally, employing test-driven development (TDD) can lead to more efficient coding practices, as it encourages developers to write tests before the actual implementation, ultimately leading to cleaner and more maintainable code.

Another best practice is to maintain a high level of code coverage with your tests, targeting at least 90% of your application's codebase. This can be achieved by regularly running test suites and utilizing tools such as SimpleCov to track coverage metrics. Furthermore, consider implementing behavior-driven development (BDD) using frameworks like RSpec, which enhances collaboration between developers and stakeholders by allowing them to write tests in a more natural language format. Finally, remember to run your tests frequently, ideally automated through continuous integration (CI) pipelines, to ensure that new changes do not introduce regressions or bugs.