The following is a non-binding proposal for the Collective to consider in passing a Token House Budget for Seasons 8. The proposal is informed by the Budget Boardās good faith review of historical information provided to the Collective. The content is presented āas-isā without a certification of its accuracy or effectiveness. The Collective is encouraged to review any and all information, including numerical information, made available to the Collective in making its budget determinations.
Summary
Proposes a 7.24M OP budget across 2 Governance Fund missions, a ~31% decrease versus Season 7 (10.5M OP). This proposal aims to balance increased runway with the strategic importance of the interop product launch.
The general structure was to generate a baseline allocation per mission, based on a combination of prior comparable proposals and a target 10 year runway, then adjust allocation based on factors of strategic importance, ROI confidence, and funding intensiveness.
Each mission proposes to have an āabove baselineā allocation; however, this should be rare since season 8ās goals are focused on a highly important product launch, Superchain interop.
If ending continued at this āabove-baselineā level, including the proposed 4.4M OP/year DAO Operating Budget, the Governance Fund would have an estimated 6.6 years of runway remaining under the current token allocation.
Season 8 Governance Fund Mission Budget Proposal
See Methodology, Baseline Analysis, Budget Calculation sections for detail
| Mission | Proposed Budget |
|---|---|
| Grants Council | 6.29M OP |
| Developer Advisory Board | 949k OP |
| Season 8 Total | 7.24M OP |
Strategic Rationale
- The Governance Fund should be managed to last for an extended period of time with the current token allocation. Continuing the rate of spend for Season 7 + the Proposed DAO Operating Budget would only last for 4.9 more years.
- Itās extremely difficult to measure ROI of past grants or attribute impact to funding alone. Additionally, timelines for results often extend beyond seasonal cycles, and success or failure of prior spend does not promise the same result for future grants.
- The Governance Fund is used for proactive funding, but demand for proactive funding isnāt consistent. Some seasons need more, others less. The process should be flexible to adjust up or down.
- We want to avoid both āuse it or lose itā dynamics and āeasy moneyā behavior.
Methodology
Estimating Baseline OP per Mission
To extend the lifetime of the Governance Fund, we worked back from a target runway to get a target OP per season. Then, we can use historical spend to roughly allocate between missions in reference to this target.
- Generate a Baseline OP per Season
Baseline OP per Season=OP Token Allocation Remaining/Target Seasons of Runway
- For each S8 mission, find benchmark budgets for prior successful missions.
- Use the benchmarks to determine percent allocation of the Baseline OP:
Baseline OP per each Mission= [Benchmark OP for the mission/Total Benchmark OP across S8 missions] *Baseline OP per Season
Scaling Each Missionās Budget
To handle for some seasons and missions requiring a greater or smaller budget, we can score missions based on a set of criteria in order or to scale the amounts up or down (similar to the Retro Funding proposal).
We assume that every mission proposed has some significant level of importance, so these scores reflect and skew up or down relative to historical benchmarks (e.g., -5 score doesnāt mean something is ābadā).
Score missions based on a set of 3 criteria to increase or decrease the budget for that mission. Scores were an average of budget board membersā inputs.
- Strategic Importance: How much more or less influential do we expect this mission to be towards long-term Optimism success.
- ROI Confidence: A governor on spend. Is this mission highly experimental, or do similar missions have a strong record of proven results?
- Funding Intensiveness: Another governor on spend. If the mission is naturally more funding intensive than prior benchmarks (e.g., new infrastructure spend, increased competition), then the budget may need to be larger.
These can be scored from -10 to +10. This allows for at most a 4x increase above baseline (+30 = +300%). Assuming that all missions proposed have already been deemed important enough to fund, we can cap the downside at a 90% reduction.
See Appendix for sample descriptions of scores.
Budget Calculation
The board began by establishing a baseline seasonal budget, calculated by dividing the remaining governance fund allocation over a hypothetical 10-year period. This seasonal baseline was then split across missions based on historical spending patterns.
Next, the board voted on criteria to adjust each missionās budget up or down from the baseline. The average of these votes determined the final budget for each mission.
The resulting total budget of 7.24M OP implies a 6.6-year runway (including the DAO Operating Budget) if spend continued at this rate, as the board voted to scale allocations above the original 10-year baseline in light of current priorities.
Baseline Mission Budget
- 124.33M OP remaining (Source: OP Token Unlock Sheet as of Jun 19 2025)
- Assume a 10 year target runway (Note: This will not be a 10 year budget).
- This target can change over time, 10 years roughly doubles runway versus the prior pace.
- 44.4M held out for DAO Operating Budget (estimated 4.44M OP per year * 10 year target)
- 79.93M OP spendable
- 3.996M OP Baseline OP per Season
- 79.93M OP spendable / (10 year target * 2 seasons per year)
Baseline OP per Mission
Note: In season 7, audits (900k OP) came from the Grants Council budget, but in season 8 this is reallocated to the Developer Advisory Board budget
Allocating the 3.996M OP Baseline per season across missions
| Mission | Comparable Budget | Share of Total | Baseline OP per Mission |
|---|---|---|---|
| Grants Council | 9.0M OP in Season 7 | 87.5% | 3.50M OP |
| Developer Advisory Board | 1.285M OP in Season 7 | 12.5% | 499.3k OP |
Mission 1: Grants Council
Proposed Budget = 6.29M OP
- Baseline = 3.50M OP, Multiplier = 1.8x
Mission 1 Scoring
| Factor | Score | Reasoning |
|---|---|---|
| Strategic Importance | +6 | Interop-ready TVL should help make Superchain Interop more attractive at launch. |
| ROI Confidence | -2 | Results are not guaranteed, any growth program is experimental; however, there is experience from prior seasons. |
| Funding Intensiveness | +4 | It is a highly competitive environment, which may require increased funding in order to be relevant. |
| Mission 1 Total | +8 | 1.8x Multiplier |
Mission 2: Developer Advisory Board
Proposed Budget = 949k OP
- Baseline = 499.3k OP, Multiplier = 1.9x
Mission 2 Scoring
| Factor | Score | Reasoning |
|---|---|---|
| Strategic Importance | +5 | Interop-enabled apps may become a strategic differentiator for the Optimism Collective. |
| ROI Confidence | +2 | Balancing the importance of audits with experimental interop-enabled app programs. |
| Funding Intensiveness | +2 | Anticipated increased audit expenses and competitiveness for developers. |
| Mission 2 Total | +9 | 1.9x Multiplier |
APPENDIX: Descriptions of Score Ranges
Sample Descriptions of Score Ranges
| Factor | -10 Score | 0 Score | +10 Score |
|---|---|---|---|
| Strategic Importance | Mission is substantially less critical than prior missions. We expect little to no relative impact. | Mission is just as important as prior missions. | Mission is far more critical than prior missions. This is make or break. |
| ROI Confidence | Mission is 100% experimental, weāre throwing things against a wall and seeing what sticks. | There is a strong hypothesis that this mission will have positive ROI. | There is a strong track record of similar missions providing exceptional results. |
| Funding Intensiveness | Mission requires substantially less funding than prior missions. | Mission requires a comparable amount of funding as prior missions. | Mission requires substantially more funding than prior missions. |