Accelerated Decentralization Proposal For Optimism

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Authors: @GFXlabs
Contributors: @MattL (contributions to L1 Bridge Escrow section), @Juanbug_Pgov (general commentary)

If you hold OP, please signal your approval of this accelerated decentralization on this Snapshot petition.

Motivation

The promise of the OP token is to govern the Optimism L2 software. However, to date, neither Token House nor Citizens’ House has the power to execute code. In fact, governance does not even control its own governance contract. Optimism governance governs exactly nothing in its own right today, relying upon the Foundation to even create proposals. This stands in stark contrast to Optimism’s main competitor, Arbitrum, where the ARB token has complete system control over Arbitrum One and Arbitrum Nova.

Optimism governance launched more than two years ago. Over this time, governance has matured considerably, with increased capacity for decision making, increasingly robust checks and balances, and professionalization of many elected positions. While there was some early value in the Foundation and OP Labs having all system access powers, that time has passed as both the promised decentralization of power and the business strategy of Optimism have underperformed expectations.

Transferring all system powers, resources, and access to governance can relieve OP Labs and the Foundation from their burdens, and allow them to focus on the tasks they do best. It will also offer rejuvenation to a system that is currently stagnating with only de minimis progress towards decentralization, and a business strategy that appears to be high in cost and low in benefit.

Like an aging parent whose own capabilities are no longer growing, we hope Foundation and Labs will embrace our view that it is time to let the Optimism governance provide the vigor, clear direction, and focus on delivering value to tokenholders that they cannot. This is not an attempt to push either entity into irrelevance or diminish their contributions that have helped raise governance to a level of maturity and responsibility that it is ready to take the lead.

With that goal in mind, we have divided this plan into three phases of decentralization, to be completed by summer of 2025. Phase I, which governance contributors desire to see immediately, consists of resources that are ostensibly owned by governance and governance infrastructure. The immediate handover of control over funds and governance assets does not put any user funds at risk in any way, and does not insert governance into the core smart contracts.

Phase II consists of items that, while not core contracts of the protocol, are essential infrastructure that will require an orderly handover and cannot realistically be done immediately. They can, however, be accomplished swiftly.

Phase III is all remaining privileges, access, and control of onchain contracts and assets, and represents a complete decentralization of governance.

Phase I (Immediate)

OP Token Contract Ownership
Unlike some competitors (like Arbitrum), the OP token has no established rights to execute code, make proposals, share in revenue, or anything else.

This manifests itself as a lack of interest in OP as a governance token, making it a struggle to convince some users to delegate or vote. In some circles, OP is actually referred to as a meme coin, and not jokingly so.

Of particular embarrassment is that the OP token does not even own its own contract. Transferring ownership of the token contract to governance is an essential first step in a credible plan to make the OP token serve its intended purpose of governing Optimism.

Putting the token contract under onchain governance oversight also ensures that basic tasks will get done, like deploying standardized OP token contracts on Superchain member chains and a reliable, quick mint-burn bridge between those chains. This is of particular urgency with the Superchain grants program scheduled to dispense 12,000,000 OP tokens to member chains, but with no way to reliably get those tokens to those chains.

Governance Contract Ownership
Much like with the OP token, the governance contract used for voting is not under governance control. This leaves governance dependent upon the Foundation’s approval to present proposals for a vote. Lack of governance control has also resulted in episodes where the governance contract has been upgraded without the knowledge, much less the consent, of governance.

Because the governance contract currently controls no parameters of Optimism mainnet, giving onchain control of this contract to OP tokenholders can be enacted immediately.

For the avoidance of doubt, governance ownership of the governance contract includes a permissionless way for delegates to submit proposals for a vote.

Governance Fund Ownership
The OP tokens in the Governance Fund should be transferred to an address controlled by the governance contract.

ETH Collected on Behalf of Optimism Collective Comes Under Governance Control
There is currently 15,397 ETH collected for the benefit of Optimism governance, spread across several addresses under Foundation or Optimism Labs control. This ETH, minus a buffer for operational costs recommended by Labs, should be transferred to an address on L1 controlled onchain by Optimism governance.

Phase II (concluding end of Q1 2025)

Bridge L1 Escrow Comes Under Governance Control
OP Bridge currently holds several billion dollars in assets that could be deployed across Ethereum mainnet to generate revenue for Optimism governance. Utilizing bridge assets is being made common by other chains, most notably Blast, Mantle, and Gnosis, with Polygon looking like it will follow suit.

While we do not propose a plan for utilizing these assets or any immediate changes in where they are held on L1, we do believe it is a decision for governance to make. This is particularly important from a sustainability perspective, since the current vision for Optimism revenues are tied to sequencer revenues on Optimism and Superchain members. As sequencer revenues trend towards zero over time in an intensely competitive marketplace, the bridge is an obvious way to permanently create sustainable revenue streams over the long term for governance and the maintenance of Optimism.

Sequencer Decentralization Roadmap
OP Labs and/or the Foundation should present a plan to decentralize the Optimism mainnet sequencer before the end of March 2025. This plan should include specific actions to take and requirements. The plan also must include a target date to decentralize the sequencer for Optimism before the end of Q2 2025.

If this date to decentralize the sequencer is determined to be unfeasible within the decentralization plan, then the plan should also present specific actionable steps to ensure the current sequencer operator is directly accountable to governance for major parameters.

Revisions and Re-Ratification of the Law of Chains
The Law of Chains was not drafted by governance, though governance ratified it. The Law of Chains will be reviewed for conflicts with this roadmap and other governance priorities, and revised, or re-ratified as is by governance. A schedule to periodically revisit the Law of Chains will also be established to ensure that it serves the needs of governance in its task to protect, grow, and generate value for Optimism stakeholders.

Phase III (concluding Q2 2025)

Full Control of Optimism by Optimism Governance
Complete technical control over the Optimism protocol should be handed over to Token House, Citizen’s House, and various bodies appointed or elected by Token and Citizen’s House. This handover can be done by empowering the current governance contract or by providing a new architecture that is approved by governance.

The Foundation is encouraged to seek a permanent seat on the Security Council and potentially other privileges, but those should flow from authorization by governance and not from the Foundation’s own authority.

Foundation Grants Disclosure
No later than the end of Q1 2025, the Optimism Foundation should commit in a binding manner to disclose to Optimism governance all past and ongoing grants. To the extent some of this information may not be made public, the Foundation must offer to make this information available to appointed representatives of Optimism governance.

Completed Decentralization of the Sequencer
Barring legal or technical blockers, the sequencer should be decentralized according to the plan presented by OP Labs and/or Foundation in Phase II.

If you hold OP, please signal your approval of this accelerated decentralization on this Snapshot petition.

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Thank you for laying out this plan, I appreciate the thoughtfulness put into each step and agree that we can do more to decentralize, the time is ripe for change. Just out of curiosity, are there any risks you’ve identified associated with an accelerated timeline?

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Phase I are all items that don’t impact the Optimism chain itself, and are mainly around governance no longer using the Foundation as a custodian for its own assets. So risks there would primarily be around wasting funds (OP and ETH).

Phase II and III would involve some technical risk in any kind of handover, and would need to be treated with the appropriate amount of preparation and testing. There is also the possibility that governance could find some way to damage the chain through control of the bridge, sequencer, and protocol upgrades but that’s true of anyone controlling those items – note that we just saw a fix to a protocol upgrade from OP Labs around fraud proofs. Governance control mainly lends even more eyes to the same issues.

Like parents of a grown child, Labs and Foundation will both have significant influence and voice in a governance-owned protocol. If the intent is to decentralize, there’s not much reason to wait any longer, since governance at Optimism has already had several years to mature.

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Thank you for raising this conversation. The Collective’s progressive path towards full decentralization is an important topic.

Tactically, the Foundation has been working on several initiatives to share more information about this path, accompanied by collaborative conversations to gather input from the community, in the coming weeks and months.

The timing of this post coincides closely with several of those initiatives, including:

  • Publication of a framework outlining the milestones towards Optimism’s progressive decentralization (currently under review by the Collective Feedback Commission and other advisors), meant to occur over a period of multiple years, as originally outlined in the Working Constitution.
  • A post outlining how a series of upcoming proposals in Season 6 move us closer to some of these milestones (and interoperability).
  • The Foundation’s Product Vision, which lays the groundwork for the Collective to be involved in the 2025 planning process starting in November.

The hope is that these efforts spur constructive, rather than divisive, conversations that result in a plan that is in the best long term interest of the entire Collective.

Ideologically, it is important to remember our original commitment to take a fundamentally different approach towards progressive decentralization, which means drawing direct comparisons to other systems can be counterproductive.

Our Working Constitution outlines that our path towards decentralization will be gradual (over the course of several years), experimental, and iterative. The role of the Foundation in this journey is to bootstrap a sustainable governance system, based heavily on the input of participants, that enables the accomplishment of the key strategic goals of the Collective over the long term.

Optimism Governance is uniquely designed to be the system through which the entire Collective will derive security and accomplish strategic goals. This vision is distinct from other ecosystems’ approaches. It requires a fundamentally different approach and a timeline tied to the security, sustainability, and resilience of the system rather than speed.

We remain fully committed to gradually and fully decentralizing the system. We hope the upcoming publication of our milestones towards decentralization serves as a tool for the community to hold us accountable in this process. The journey along this path will involve ongoing and collaborative conversations with the community.

Below we address @GFXlabs’s specific proposal, line by line:

Phase 1

  • Token contract

    “the OP token does not even own its own contract”

    • Depending on interpretation, we find this statement misleading, if not inaccurate. To clarify, the OP Token does not authorize any L2 account to upgrade its code. The only way to upgrade the OP Token is via a Protocol Upgrade. This was an intentional decision made to reflect our view that token contract upgrades should not occur frequently, if ever. Effectively, this means that the OP Token is already “owned” by the Collective via the same Security Council it has authorized to implement other protocol upgrades. However, we appreciate that this may be opaque and could benefit from a concrete example of the process in practice.

      Additionally, we agree that deploying a standardized OP Token contract to other chains is a critical feature, one which we believe does justify using a Protocol Upgrade to modify the OP Token. Several Core Developers in the Collective have been working on this in earnest over the past few months as a part of interop development. We expect that this proposal will be a part of the interop rollout in the first half of 2025. We hope that this will help provide a concrete example of OP Token upgrades, and demonstrates our approach towards bringing governance responsibilities online as they support strategic initiatives and not as ends in and of themselves.

  • Governance Contract Ownership

    • The transition of control over the onchain Governor contract to OP tokenholders is already planned to occur before the end of Season 6. This proposal will transition upgrade control to the Security Council, which we believe will allow us to remain agile without risking an irrecoverable bug. Stay tuned for more details in the proposal, expected to be posted by Agora in Voting Cycle #28 or #29.

    • In regards to the ability for delegates to submit proposals for a vote, we don’t believe it is safe to put the entire Governance Fund onchain with permissionless proposal rights while the cost of governance attack is currently lower than the value of the Governance Fund. This is a dynamic many DAOs currently face but that we can avoid while we work to increase votable supply (and we’ve hired someone to focus exclusively on doing this.) However, Agora has shipped a new feature that allows any delegate to draft a proposal in the voting UI. Drafts will still need to follow a valid proposal type and receive the required delegate approvals to move to a vote.

  • Governance Fund Ownership

    • The proposal referenced above (expected in Cycle #28 or #29) would move the Governance Fund entirely onchain, meaning budget proposals would execute onchain. This means that the Grants Council, if renewed, would manage its own grant delivery process, largely eliminating the Foundation in this process.

  • ETH Collected on Behalf of Optimism Collective Comes Under Governance Control

    • We don’t currently believe there is a strategic need for the DAO to manage ETH while the DAO has access to the +150M OP Governance Fund and the +800M OP Retro Fund. This is also a responsibility that should come online alongside a comprehensive framework for managing the treasury, governing the macroeconomic policies of the Collective, and measuring the efficacy of capital allocation. These are all important governance responsibilities that are under or poorly defined in most other systems. We agree with the sentiment that the near term priority should be on the more technical aspects listed above rather than transition of these responsibilities.

Phase 2

  • Bridge L1 Escrow Comes Under Governance Control

    • It is not entirely clear whether this milestone is suggesting any change in control structure. All L1 contracts, including bridge Escrow contracts, are already held by the Security Council. If this is a suggestion to move the ownership directly to an onchain governor contract, we feel the need to emphasize that this would pose a potentially existential security risk until we achieve Stage 2 decentralization.

    • We agree that all Protocol Upgrades—of which L1 Escrow contracts are among the highest stakes—are decisions for governance to make. However, since this post alludes to “utilizing” the bridge funds, we feel an obligation to express our strongly held viewpoint that such appropriation of user assets would represent an existential threat to Optimism’s social contract, business reputation, and long-term viability. Tactically speaking, it is a clear violation of the key User Protection to State Transition and Message Validity outlined in the Law of Chains. Strategically speaking, the Collective is in the business of providing neutral, scalable blockspace. No matter how alluring it may be to move user assets, deposited with the clear expectation of being fully custodied in a known escrow contract, into a different smart contract—even a relatively low-risk one—the long-term erosion of trust which would accompany such violation of expectations outweighs any short-term sustainability improvements which might come with it.

    • We would also like to reinforce that the Law of Chains is a critical governing document, which was ratified by the Token House. The Law of Chains also plays a pivotal role in onboarding OP Chains to join the Superchain, which is the sustainable way to drive revenue for the Collective.

  • Sequencer Decentralization Roadmap

    • We think sharing more plans on the timeline suggested is a reasonable goal. It feels worth flagging now that this will be a long burn — decentralized sequencing protocols are still rapidly evolving, but even beyond the tech itself, have deep economic and strategic implications for the Superchain and its partners. As such, we think holding the sequencer accountable to governance is the correct short-term focus.

      The OP Labs team is actively working on productionizing and open-sourcing the infrastructure required to easily run a high-availability, performant sequencer, so that switching OP Mainnet to a new sequencer is more feasible. The Standard Rollup Charter draft contains an initial proposal for sequencer accountability structures; we welcome feedback and collaboration on the relevant governing policies.

      Lastly—over the next quarter, we expect to see new core development work with a focus on sequencing. For example, the Flashbots team recently began engaging heavily with OP Stack core development processes. We are extremely excited to build a collaborative roadmap with industry experts, and hope that this will both accelerate development, and decrease reliance on OP Labs and the Optimism Foundation as a bottleneck to this part of the roadmap.

  • Revisions and Re-Ratification of the Law of Chains

    • The Law of Chains is a foundational governing document upon which all OP Chains rely. This document serves the critical purpose of providing a neutral, transparent, and long-term social contract for how the Collective makes decisions about protocol upgrades. As such, it should not be subject to change often–especially as we move towards upcoming interoperability milestones, where governance rigidity is even more of a key value proposition (see framework by Vitalik here). Periodic review of this document can be facilitated, but should occur on a 1-3 year cadence.

    • The ability to propose amendments to the Law of Chains is a metagovernance right, which has always been slated to be the last set of governance responsibilities to come online. This is partly because the ability to change the system while it is being built, and while new partners are relying on its consistency, is destabilizing. The Collective Feedback Commission is the first step in a gradual path to decentralizing these rights.

Phase 3

  • Full Control of Optimism by Optimism Governance and Completed Decentralization of the Sequencer

    • We continue to be fully committed to the transition of full control over the system to Optimism Governance and to complete decentralization of the sequencer. The difference of opinions on this is only in regards to the timeline required to make this transition responsibly.

  • Foundation Grants Disclosure

    • Although the budget with which the Foundation makes these grants was part of the initial token distribution, and is therefore not subject to detailed disclosure, we are supportive of greater disclosure around the Foundation’s expenditures. However:

      • Public disclosures about individual grants will only be made at the point in time at which it does not jeopardize the Foundation’s ability to onboard more OP Chains to the Superchain, something which greatly benefits all members of the Collective.

      • We are not supportive of select grant disclosures to certain delegates within the Collective, as that can create tiered information asymmetry among delegates.

      • For reference on current disclosures, delegates can refer to previous budget reports on the forum.

As stated above, this is a very important topic and this post has started a very important conversation. We look forward to continuing to engage in many more constructive and collaborative conversations on this topic as we work to progress on this path as a Collective.

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It’s wonderful the Foundation has taken the time to address the priorities laid out above in detail. Some of them do require some additional context for readers, or prompt a request for more clarification.

We don’t feel this is the case. Optimism’s governance structure, with the Citizens’ House and Security Council, has fairly robust checks and balances compared to most DAOs. Additionally, it wouldn’t be unreasonable to discuss the Foundation retaining some form of veto rights that it could actively exercise over certain sorts of proposals.

There is a very strong strategic need for governance to have these funds. Firstly, under the Foundation’s custody, this ETH is like a fallow farm field. None of the substantial ETH is staked, either through a service or directly staked. It is clear that there is some hesitancy on the part of the Foundation that makes them skittish about picking such low-hanging fruit. Let governance assume this risk, and offload it from the Foundation.

Secondly, and more importantly, Optimism suffers under a competitive disadvantage versus other grants programs, in that any grantee being directly compensated has their funds locked for 12 months. This is because they are paid in OP tokens, which are also volatile in price. Having access to this ETH would allow these grants – currently forcing grantees to be illiquid and long OP tokens for a year – to be made with ETH or stables, neither of which presumably require a 12-month vesting. Currently, grants that must be locked regularly have to overpay for services or attract lower quality counterparties, and governance control over this ETH would remedy this.

We think this option should remain open. We and others have lost faith in the current business model of relying upon sequencer revenue, both from Optimism and Superchain members. We fully expect sequencer revenues to trend down over time as L2s must remain competitive with both each other and mainnet. This means the revenue may not allow Optimism to be sustainable, and also that other Superchain members will have an incentive to pioneer new ways to see returns on their investments, since Optimism gets 15% of sequencer revenues. Already we see ultra-low-fee Superchain members where sequencer revenue may never materialize in any meaningful way.

Users have shown little aversion to conservative bridge asset management. Gnosis, Blast, and others serve as examples. Polygon may be the first of the “major” chains to experiment with this, as they are fielding proposals currently. That should serve as a good test of whether users react negatively and can inform any future plans.

But there are no plans at present. We believe it’s the responsible thing to do to keep options open, though.

The Law of Chains does not irrevocably bind Token House or governance as a whole. It even says so:
But Participant Protections are not, and do not create, legal rights, or corresponding legal obligations. They are not absolutely guaranteed to any ecosystem participant.

The Law of Chains is a set of guidelines. It is not a contract.

Governance approved it, and governance can change it. It is also specifically intended to be a living document, and will require regular updating and re-ratification to remain relevant.

As stated upthread, we do not have faith that sequencer revenue sharing will long-term provide the return that OP tokenholders require to justify holding the asset.

This is an entirely reasonable response, and we’re happy to see it.

This is another area where Optimism lags behind peers. Consider beginning with a level of disclosure similar to The Arbitrum Foundation, and working out from there to meet this goal. See this example:

Screenshot 2024-09-18 at 5.21.13 PM
Screenshot 2024-09-18 at 5.21.13 PM1564×1162 121 KB

(The footnote leads to a table of projects that have received grants, though not with amounts.)

Compare to the Optimism Foundation, which does not readily make available lists of grants made at the discretion of the Foundation.

100% agree, and we are excited to move forward on this together. We view the Foundation and Labs as parents to governance. Just as there is sometimes tension when a child has grown up, and the parents need time to adjust to the new dynamic, we understand it can be difficult to let go of the reins. The Foundation has done a wonderful job raising governance, but governance has matured, and it’s time to begin the transition from Foundation overseeing governance to governance being a full partner in developing and growing Optimism.

If you hold OP, please signal your approval of this accelerated decentralization on this Snapshot petition.

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Progressive decentralization, the paradigm adopted by the OP collective from a16z, has not historically (20th century or last 4 years) worked. This proposed approach is downstream of that and representative of the generalized local minimum governance efforts are in.

Seeking and nurturing variety is crucial to overcoming this phase.

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I am quite happy to see this conversation.

I think we should strive for better decentralization of the Optimism ecosystem as indeed at the moment it’s firmly at the hands of the foundation.

I appreciate that the foundation has a roadmap for this decentralization but it’s been years already and the progress is quite slow. Especially when compared with other L2s.

We can do better.

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As I understand a key problem here is voter-apathy. I’ve been working on a solution to this. It is currently oriented towards a different context (community with non-transferable reputation token), but I see potential potential to extend it and general approach might be valid for other contexts (especially Optimism I would say because of bicameral governance structure that it uses). You can read the idea here. Note this section which considers applicability of this idea to other contexts. Feedback is appreciated.

My intuition is that when it comes to control of core contracts for Optimism the right solution lies in creative ways of utilizing its bicameral governance structure.

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Disclaimer: The views expressed here are my own and do not represent the Grants Council, Govnerds, Feedback Commission, or any other governance entity I am involved with.

I am signing the petition, but I want to provide clarity on what I am supporting by doing so. I agree with GFXlabs on some points and also believe the Foundation plays an essential role in ensuring the success of this process.

1. Decentralization of OP Governance (Phase I)

I fully support the need for governance to gain more control, especially over the OP token and governance contract. However, I believe the Foundation should present a clearer roadmap toward this decentralization. This roadmap should include checkpoints, allowing the collective to evaluate progress and adjust if necessary, but it must set clear expectations about where we are heading and how long each step will take.

2. Governance Fund and ETH Control

While I understand GFX’s call for immediate governance over these funds, I believe the Foundation should retain control for now. However, I suggest establishing a Treasury Council, initially overseen by the Foundation, which gains more autonomy over the seasons as it becomes battle-tested. This approach strikes a balance between decentralization and ensuring the security of these resources. The Treasury Council could start by handling grants approved by the Grants Council. In line with the Foundation’s example, I believe the Grants Council is gaining too much power, and decentralizing oversight would allow both the Treasury Council and the Grants Council to oversee and check each other, fostering a more balanced governance structure.

3. Bridge Assets Utilization

I agree that bridge assets should be under governance control, but not primarily to generate revenue. The key reason is to avoid unilateral decisions made by non-governance actors. Again, this should be managed by a Treasury Council to ensure that the governance process is respected while protecting users and network stability.

4. Sequencer Decentralization Plan

I support the need for a sequencer decentralization plan, as outlined by GFX. However, I do not agree with setting a firm handover date for Q2 2025. Instead, I believe the Foundation should propose a 3-year roadmap with annual evaluations to hold them accountable. The timeline must be flexible and based on the maturity and readiness of governance.

5. Business Strategy Critique

GFX raises a valid point about fee revenue becoming unsustainable over time. Additionally, chains can adjust fee margins to attract users, which contradicts the proposed 15% fee revenue from chains to integrate into the Superchain. This is a crucial issue that needs to be addressed, especially if we are to sustain long-term value within the ecosystem.

6. Complete Decentralization by Summer 2025

I agree with the Foundation that this deadline is likely too fast. However, it would be beneficial to set a deadline and revisit it once we reach that point. A hard deadline may be unrealistic, but a target gives us something to work toward, with the flexibility to revise based on real-world progress.

In conclusion, while I support this push for decentralization and will sign the petition, I believe a measured and well-planned approach is essential to success. I’m a firm believer that The Foundation’s involvement can ensure we decentralize responsibly.

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I’ve also expressed my approval of this petition and want to emphasize the areas that are most important to me. My primary objective is to initiate a conversation and work toward aligning on a timeline with the Foundation to gradually and responsibly decentralize over time. This is by no means intended to rush the process but rather to ensure we move forward thoughtfully.

I fully support Gonna’s recommendations and believe this is an excellent opportunity for the Foundation and governance to use this moment to discuss the path toward decentralization, particularly in defining a timeline for the shift.

Disclaimer: The views expressed here are my own and do not represent the Grants Council, Govnerds, Feedback Commission, or any other governance entity I am involved with.

My contributions to the petition primarily revolve around the L1 Bridge Escrow and the potential to deploy these funds across L1 DeFi. I’ve conducted several economic opportunity assessments, and with the bridge funds being invested in low-risk strategies—such as MakerDAO DSR, AAVE lending markets, Lido, and other LST opportunities—we’re looking at a potential return in the range of $20-30 million by utilizing half of these assets.

While this approach will require deeper consideration, it remains a crucial area of focus for me to ensure the DAO’s sustainability and to support the ongoing expenses of various growth programs. The best case scenario from my perspective would be to focus on growth with funds generated through DAO-led initiatives like this, limiting the use of OP tokens while still ensuring that security is paramount.

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I want to preface my statements by saying that I appreciate the work put into this proposal and the dialogue and engagement it has prompted. However, I do not agree with this proposal and will not be singing the petition.

I have the benefit of being on the other side of governance and working at a Foundation that eventually dissolved and fully decentralized the protocol. OP Labs and Foundation are private companies and it’s unrealistic to think that we, as community members, will ever have a complete view of everything that’s happening behind the scenes. These teams have actually been extremely transparent in their plans, but it’s impossible for them to share every detail because we are not employees.

I also have the benefit of being involved in governance since day one and witnessing the monumental changes in our governance structures. The Foundation has not given us any reason to believe that they will not decentralize, when they have already shipped the Security Council, fraud proofs, Citizen’s House veto, etc. Decentralization takes time and Optimism is still in it’s infancy with only 2 years of governance under our belts.

Decentralizing too quickly would be catastrophic, especially when DAO governance itself is brand new and there aren’t really any examples of any DAOs doing this right imo. I would encourage everyone to slow down and reflect on how far we have already come.

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While I acknowledge the need for transparency and decentralization, I don’t think it’s good practice to rebut an opinion submitted on the forum through personal X account.

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Agreed, this type of behavior is unnecessary.

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Glad to see such detailed debate on this important topic, both from GFX labs as well as the response from the Foundation. I have signed the petition , less so because of the original roadmap (as it has already been discussed), but to signal the importance of progressive decentralization.

I look forward to seeing the planned transitions to OP badgeholders by the end of Season 6, but wanted to ask a question regarding one part of the reply:

In addition to the other safeguards mentioned by @GFXlabs , isn’t one of the roles of the Anti-capture Commission to mitigate this risk? With their voting supply + quorum requirements , I can see most potential attacks having to undergo countermeasures that are a lot more robust than in other DAOs. I understand that perhaps it’s still not considered a developed enough commission to defend something of as high value as the Governance Fund, but I feel it’s still worth considering

Just to share an opposing view, is this not being done already by Token Delegates through their budget votes? I’m curious to hear more about what you have in mind, but right now it feels like the Treasury Council would serve little purpose other than to stand between the Token House and Grants Council.

The final thing I wanted to share regarding this discussion comes from a very important summary from @katie . This is more of an observation than something that can be done in an actionable manner, but I feel that part of the reason people might feel Optimism isn’t decentralizing isn’t because there’s no efforts, but because the steps are being made on much larger time frames compared to other Onchain organizations.

This is something that the Foundation is clearly doing deliberately (see the comments on ETH treasury spending), and I feel future Seasons communications could start emphasising on this more. We already have Themes each season, but I feel is important to also start summarizing the learnings and advancements of each Season, to show how progress is being made.

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Our team at Anthias Labs has signed this petition to signal a need to further this conversation proposed by @GFXlabs. Along with risk, our primary focus as delegates has been attempting to clarify the unique Optimism value proposition and how the Optimism Collective can capture part of the value it creates from this unique value proposition.

The value proposition of the Superchain may be correct, but we, along with other delegates, continue to maintain the thesis that sequencer fees are going to 0. Therefore, it is insufficient to consider Superchain sequencer fees to be the only path of Optimism Collective value accrual for the next 3, 5, 7+ years.

We believe that the Collective needs to begin focusing more on the app layer as opposed to purely the chain layer for value capture (or at least test this), but the current construction of the DAO does not fully allow for this testing. There is no current way–at least to our understanding–to test a program like the following:

How can the Optimism Collective gain more revenue in new ways? One way will be to supercharge a handful of apps with incentives as opposed to spreading incentives thinly across many apps. Utilize the same amount of OP incentives (or less), but target them much more effectively. Thesis: More builders + users will migrate directly to Optimism for 20%+ yields on 3-4 apps than 8%+ yields on 30-40 apps, so long as the risk profile is similar. We can test this for one season and see the TVL growth relative to market beta. A rough plan would be to foster an application process where apps apply for these incentives from the DAO. Then, the top 3-4 apps will be selected, and these will be the supercharged Superchain apps. In exchange, these apps will give back to the DAO in revenue share, which will ideally drive more value to the OP token.

A program like the above is a concept that could not be proposed today by a delegate or group of delegates and does not fit in the current structure of the Grants Council. It is just an example of a new way of value accrual that the Collective could benefit from testing for one season.

Whether or not the full roadmaps outlined in this forum thread or as outlined by the Foundation are accurate or will need to be amended, it is clear that the Optimism Collective is in need of clarification here if it seeks to maintain its position and not fall to emerging L2 and alternative L1 solutions.

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I proposed this as a baby step towards establishing a battle-tested Treasury Council that would eventually be able to execute key tasks like grant deliveries, Retro funding distributions, and governance rewards. The goal is to gradually build its capacity, so it can also propose a strategy to put the 15,397 ETH collected into a sustainable farm for the Token House in the near future. This isn’t about creating a barrier, but rather ensuring we have a structure in place that can effectively manage these responsibilities as we decentralize further.

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I appreciate the intention but have some major concerns with the approach and “why now” rationale. I will add that I’m not a token house delegate, just an engaged citizen and working on a project that has received grants from the Foundation.

The Good

There are two things I really like here.

First, I think it’s good for there to be a clearer decentralization roadmap and scorecard. It should be simple and objective, but not overly prescriptive. My mind immediately goes to a version of L2Beat’s risk analysis pies that tracks progress towards governance decentralization.

For instance, one criterion could be that the foundation has a viable economic model in place that has performed well under different market conditions. Right now, you and others in this thread point out long-term risks with the viability of the sequencer fee revenue model. So some proof point around economic viability should be a stage gate for full decentralization, not something we expect to be magically solved post-decentralization.

You named some other potential stage gates, like the token governing the contracts, decentralizing the sequencer, etc

Second, I like that this is a measurable “vibe check” on whether OP is moving fast enough towards complete decentralization.

This kind of feedback or referendum, taken at regular intervals, could be a really good thing. Voting and forum discussions are very tactical; they don’t offer much signal on delegate sentiment or confidence in governance. They also don’t show us the trendline.

That said, the “vibe check” aspect should be separate from the “what next” aspect.

Many might share the sentiment that decentralization is taking too long, but have diverging views on the actions needed, the order of operations, or the overall timeline. In nation-state elections, 80% of voters might agree that “the country is on the wrong track” but then split their votes 50/50 across parties.

Reading through the comments above, it seems there is more support for the goal of accelerating decentralization than for the specific actions / timelines you propose. This petition has been effective at raising attention, but doesn’t give insight into which items on the agenda resonate most with delegates.

Concerns

There are two major concerns I have with this proposal.

First, OP governance is really complex. This bicameral house thing is unique. The surface area of what it is intended to govern is vast. The technical roadmap is hard. The endgame for how everything should be funded retroactively is fuzzy. Perhaps it’s all too ambitious. But that’s what we came here to try… right???

I have low confidence that rapid decentralization makes this easier.

Humans and wildebeests are both mammals. They both walk, eat food, and do things in groups. Humans spend over a decade learning how to walk, feed themselves, and contribute to a group. Wildebeests are literally born standing up and are fully independent in a week.

The point is that just because there are examples of DAOs that decentralized faster, it’s wrong to assume that every DAO should follow a similar trajectory / timeline. More complex organisms take longer to stand on their own. In nature, this is generally a function of brain size. More than 20% of human energy goes towards powering the brain. In wildebeests, it’s <5% — all their energy goes to walking around and running.

Hopefully it’s evident that governing Optimism is harder than most other things in Ethereum today. And for every (less complex) project that may appear to be on the right track, there are hundreds that have crashed and burned.

My second, even bigger concern, is who is going to do the governing.

Anyone reading this post is probably an OG. :saluting_face: Thank you for not giving up on DAO governance because you’ve probably seen your share of shenanigans.

But is this what you do full time? Is this – Optimism Governance – what you want to do full time?

Although there is a rising class of up-and-coming delegates from within the community (who play active roles in the grants council, Citizens House, etc), most voting power still rests in the hands of <50 organizations / individuals who are delegates for multiple DAOs and who are also running their own organizations at the same time they are doing this. Their time is at a premium and generally they only speak up on really important high-level matters.

That’s fine, but stuff has to get done too. Who is going to do the hard work of vision setting, retaining focus, saying no to all the cash grabs, pushing for greater efficiency, etc etc ?

The reality is that the Foundation currently has people spending 100% of their time on these problems. They also run RFPs and oversee external teams to build stuff. Long term, this work either needs to be solved by code / mechanism design or put in the hands of groups with sufficient context and incentive to do it well. That takes time. The more we expect to be solved by code / mechanism design, the less we should expect it to follow a predictable timeline.

IMHO, this feels like the hardest problem: building a talent funnel of fully-engaged governance participants who can take the baton from some of the OGs and give this work their full mindshare.

Final thoughts

You are totally right to point out that existing incentives (investors, job security, etc) make it hard to decentralize — and as result there should be a strong counterweight.

Personally, I think that will be better accomplished in the short to medium term by (a) clarifying what training wheels need to come off, (b) openly tracking progress in removing them, and (c) facilitating regular vibe checks on the foundation’s seriousness about all this.

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I’ve been following this thread for a couple of days and fully agree with Carl’s points.

Over the years, I’ve first-hand experienced the rise and fall of multiple DAOs. From my experience, real DAO leadership effectively guiding the entire network to focus on its goal is challenging to establish and maintain.

I like the tangible steps of mapping and defining what training wheels need to come off, the minimum requirements (and nice to have"s) before they can be taken off, and openly collaborating to progress this shared roadmap, which is the best way forward.

With Superchain Eco, we’re fully committed to helping realize the Optimism vision and progress its decentralization. One of our primary aims is building that talent attraction and retention funnel.

Now is the right time to start taking the next steps. @GFXlabs, thanks for jumpstarting this conversation!

I’m happy to support the first step and contribute to mapping the governable universe of Optimism, understanding where responsibilities currently sit, and identifying what is required to manage certain system elements properly.

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Hi @LuukDAO - I wanted to let you know that the Foundation has drafted something very similar to what you/@ccerv1 describe above. This “decentralization milestones framework” is currently under review by the Collective Feedback Commission and we plan to publish it soon, after incorporating their input. I’d be happy to discuss about how we might collaborate on refining that framework and/or monitoring our progress towards different milestones, as that will be an important part of holding the Foundation accountable to this framework.

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Great! Glad to hear this is already in motion, and we’re eager to help refine and operate the framework.

Can DM via forum or mail to op@superchain.eco

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