Collective Year 3 Budget Update and Year 4 Budget Outlook
Thank you to the Budget Board for review and feedback on a draft version of this update.
Summary
Year 3 (May 2024 to April 2025) delivered exceptional growth: The Collective committed 229.92M OP across Season 6 and Season 7, driving the Superchain to 68.3% L2 market share, $5.5B TVL, and 16.9M daily transactions (source: Superchain Health Dashboard)
Season 8 Focus: 51-81M OP earmarked for interoperability and continued Superchain growth. No new token allocation requestedāoperating within the original framework.
Key wins:
- Ecosystem Expansion: Major partners like Kraken (Ink), Sony (Soneium), and Uniswap (Unichain) joined the Superchain for a total of over 30 chains in the Superchain Ecosystem. (source: SuperchainEco)
- Core Development: Delivered permissionless fault proofs, Stage 1 decentralization, and Superchain devnet.
- Community Growth: 10.4 M OP committed via Airdrop 5 across 54,723 unique addresses and increased 30-day retention by 4.2 percentage points. (source: Airdrop 5 Analysis)
- Public goods: 26.4M OP committed via Retro Funding across 437 grantees
- Revenue: The Optimism Collective generated 17,756 ETH in revenue (all time) from operating the Superchain, primarily driven by Baseās RevShare (6,210 ETH), and OP Mainnet (11,170 ETH).
Financial Overview
Total circulating supply: 1.75B OP (40.8% of total)
Total committed: 2.51B OP (58.4% of total).
The current circulating supply of OP, is maintained in the public OP Token Unlock tracker and updated weekly. *See Appendix for definitions of Circulating vs. Committed OP and Ecosystem fund info.
Notable acceleration: Ecosystem Fund supply in circulation increased 5x (55M to 277M OP) as major partner grants that were previously committed became unlocked.
Year 3 Strategic Highlights: Season 6 & 7
Ecosystem Growth: 176.34 M OP Committed
Chain & Infra: Successfully onboarded major new entrants including Kraken (Ink), Sony (Soneium), Uniswap (Unichain), World Chain (World), and Celo. This included token grants aimed at bootstrapping these ecosystems by fostering liquidity, infrastructure development, and user acquisition on new OP Chains. There are now over 30 chains in the Superchain Ecosystem. Funded essential tooling (Oracles, RPC Endpoints, Wallet Infra, Dev Tooling, Audits, and Analytics) to support seamless cross-chain functionality.
Core Stack Development: Delivered critical infrastructure including permissionless fault proofs and Stage 1 decentralization (including OP Mainnet, Base, Ink, and Unichain). Implemented L1 Pectra defense and L2 Pectra support. Advanced interoperability through Superchain devnet and standardized APIs.
Airdrops & Growth Campaigns: Airdrop 5 launched in October 2024, allocating 10.4M OP to 54,723 Superchain power users. With the completion of Airdrop 5, a total of 266.6M OP has been committed via user airdrops to date. Please note that SuperStacks - an experimental pilot points campaign, launched to show how the Superchain can benefit from more dynamic incentives - is not yet included in the numbers for Airdrops + User incentives as the program has not concluded.
Gov Tooling, Foundation Gov Missions and Community: The Foundation made grants to support the development of various experiments, including futarchy. Grants to the community included funds to support badgeholders, security council members, collective feedback commission members, and governance participant compensation.
Marketing Support: Committed to supporting Marketing efforts for Superchain and broader Ethereum community. They include: DAO Research Collective, We3 User Research, and Ethereum Interop Forum.
The Foundationās approach remains mission-aligned and outcome-driven.
Retroactive Public Goods Funding: 26.4 M OP Committed
Year 3 completed four targeted scopes (26.4M OP total):
- Round 5, OP Stack (Oct 2024): 8M OP rewarded contributors to the OP Stack, including Ethereum Core Development, OP Stack R&D, and developer tooling (Results).
- Round 6, Governance (Dec 2024): 2.4M OP was committed to governance contributors, including elected governance bodies, tooling, and analytics (Results).
Retro Funding saw a major evolution in Season 7. The program shifted from periodic rounds to continuous rewards with two ongoing missions:
- The Retro Funding Onchain Builders Mission, rewarding onchain applications across the Superchain.
- The Retro Funding Developer Tooling Mission, rewarding developer tools that empower onchain builders.
New approach benefits:
- Algorithmic impact measurement reduces subjectivity
- Monthly rewards improve reliability for builders
- Citizensā House governs algorithm selection
- 16M OP earmarked for Season 7 Retro Funding Missions
Overall, only 76.4M OP has been committed to date (9% of 859M OP allocation), with 91% (782.6M OP) still available for future retroactive rewards.
Governance Fund: 27.19 M OP Committed by Token House
The Governance Fund continued to operate throughout Year 3 as an important avenue for community led grants. Token House delegates evaluated and approved numerous proposals funding experiments and ecosystem projects.
This represents a steady increase in utilisation as the delegate community grows more active.
Budget Impact and ROI Framework
Year 3 established strong baseline metrics for measuring ecosystem return on investment. The Collective generated 17,756 ETH in protocol revenue across the Superchain primarily driven by Baseās RevShare (6,210 ETH), and OP Mainnet (11,170 ETH).
The Foundation is implementing enhanced ROI models to measure grant effectiveness across horizons of 1-3 years.
Revenue Attribution by Grant Category:
- Chain & Infrastructure grants: Direct correlation to new chain revenue contributions
- Core Stack Development: Protocol efficiency gains and user/chain/developer growth driven by new features.
- Growth Campaigns: Transaction volume growth, liquidity growth, and user retention metrics
- Public Goods: Developer ecosystem growth and long-term value creation
Early Success Indicators: Baseās rapid growth to 3,105 ETH average annual revenue run-rate within two years demonstrates the potential returns from strategic ecosystem grants.
Upcoming Analysis: Comprehensive ROI reporting of Ecosystem Fund planned for Q4 2025, including revenue per chain onboarded, TVL-to-revenue conversion rates, and network effects measurement across the Superchain.
A complete ROI analysis of S7 grants from Retro Funding, Grants Council, and Futarchy experiment will be published to the governance forum by Open Source Observer by the end of June.
Season 8 Budget Outlook
Looking ahead, the Foundation will continue managing the budget within the original allocation framework. The table below outlines the Season 8 directional estimates.
These projections are subject to adjustment based on program performance and governance input:
| Ecosystem Fund | Season 8 Budget |
|---|---|
| Core Stack Development | 18M OP |
| Chain & Infra | 25 - 50M OP |
| Gov Tooling & Community | 2M OP |
| Marketing | 1M OP |
| AirDrops & User Incentives | 5-10M OP |
| Total | 51 - 81M OP |
Additional Allocations:
- Governance Fund: To be proposed by Budget Board
- Retro Funding: To be proposed by Budget Board
Key Principles:
- No new tokens requested: Year 4 operates entirely within the original allocation framework, demonstrating fiscal discipline and sustainable growth.
- Community engagement: Mid-year update planned for December 2025, with Year 5 proposal by June 2026
- Impact Measurement: Building reporting infrastructure to measure grant effectiveness and refine allocation strategies based on demonstrated impact.
The Foundation remains committed to transparent, outcome-driven token deployment that scales Ethereum, empowers builders, and advances the Optimism Collectiveās mission.
Appendix (Accounting Notes)
- Circulating Supply: Defined as OP tokens in general circulation that have no known restrictions on transfer. This definition may be different than, or inconsistent with, the definitions used by other parties. The circulating supply can be accessed at https://static.optimism.io/tokenomics/circulatingSupply.txt
- Total OP Committed: Defined as Circulating Supply + all OP tokens that have been granted subject to a lock-up + all OP tokens that have been conditionally committed based on vesting and completing milestones + tokens OP Labs holds other than the initial allocation of 36%.
- Ecosystem Fund: The Ecosystem Fund is the culmination of the Partner, Seed and Unallocated funds, whose allocation of total supply is 19.6%. We have merged these buckets into one āEcosystemā fund, for ease of planning and reporting.
Please note that the Foundation budget comes from the initial 30% supply and is not subject to governance approval. If the Foundation ever wishes to request more tokens, that will require governance approval. In the meantime, updates are provided solely for transparency.