The partner fund is not currently accepting grant requests and more details will be coming soon. But, regardless the plan was always to pursue grants through governance.
First, we should note that most pairs actually don’t trade through Uniswap at all. As @OPGovWatch pointed out above, Velodrome supports liquidity for 29 separate projects to Uniswaps 9. For most of the ecosystem, no trades route through UniV3 at all because it has no significant liquidity for their pairs.
Second, concentrated liquidity will certainly be more optimal for key pairs and it will always be an important portion of the ecosystem DEX landscape. That is why we’re exploring adding it to Velodrome. But, concentrated liquidity is not without it’s own issues. It is inaccessible to the retail LPs and there is plenty of research to suggest huge % of LPs lose money on Univ3.
It is not as capable as Velodrome is at providing fast, accessible liquidity/onboarding and it cannot be relied on alone to power an ecosystem.
Looking at snapshots of routing will never give you an accurate picture of routing in the aggregate. I’d recommend pulling comparative volume numbers for specific pairs over 30 to 90 day periods for that kind of analysis. That said, you are correct that the vast majority of UniV3s volume on Optimism is through just a few key pairs (also Perps variable pairs inflate volume numbers as well and need to be controlled for).
It is not accurate however to say that they are not incentivized. Projects are incentivizing heavily on UniV3. Just less efficiently.
It only looks very large if you look at it without applying any comparative analysis to other grants that have gone out (as high as 9M OP) relative to size and performance of the grantee protocols. That is why we took care to lay this out above. Indeed, it is actual significantly less in $ value terms that the original grant given to us by OP Labs.
You have to also take into consideration that the matching investment of incentives ($6m+) from Velodrome here is unprecedented and we’re the only project that has partner add their own matches on top of that to access the incentives, increasing the multiplier effect
It is critical for the effectiveness of these programs that Governance evaluate large asks in their broader context. I would ask that if we continue to call the ask “large” we get specific in relative to what.
I’m not sure I follow here. When projects lock VELO they gain the ability to direct emissions to build liquidity and their share of the 100% of protocol that is directed to lockers. The token has both functional and financial utility to the protocols, allowing them to create revenue positive liquidity programs. The procuring and locking of it also supports a virtuous cycle that benefits the ecosystem at large. It is what has helped to drop ecosystem liquidity costs by 30%-70%. Why isn’t this a behavior we’d want to incentivize?
OP tokens at this time only utility is governance. I’m not sure why Velodrome would be the best place to force the locking of $OP tokens. This seems like something better undertaken by governance. For example, perhaps in the future locking/staking it required for voting.
That said, we do care a lot about bringing more utility to the OP token. That is part of why the Optimism Foundation received the largest partner veNFT to support their ability to vote for incentives (in perpetuity) for OP pairs. It is why we’ve raised possible solutions like increasing the number of OP token pairs and making it possible to delegate your OP while in LPs.
Yes, competing incentives coming from other chains such as Arbitrum, Metis, etc. [quote=“ScaleWeb3, post:49, topic:3736”]
What kind of impact do you expect from full deployments of Curve and the upcoming start of incentives on Uniswap, Curve, Sushi + Velodrome on Velo bribing, efficiency, market share?
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As I understand things, Curve has no plans for a full deployment on Optimism. Staking will remain on mainnet, governance will remain on mainnet, and fees will continue to be sent to mainnet indefinitely. It sounds as if native bribing may eventually come, but there are no immediate plans outside of the stopgap solution they’ve presented for the purposes of receiving a grant.
As for incentives on those other platforms, our hope would be that the combined power of them helps to attract more liquidity and volume from mainnet and alt L1s, growing the total amount of TVL, volume, and economic activity on Optimism as a whole.
The goal for all of us needs to be to reach that tipping point where Optimism can compete for the largest trades and liquidity providers, which creates a flywheel effect attracting even more activity to the network.
Bribe for emissions models such as Curve and Velodrome have been demonstrated to be more efficient than direct incentives on UniV2 or UniV3.
We have plenty of direct 1:1 examples comparing incentives on UniV3 vs Velodrome as @tao outlined above. It is why there are 20+ protocols incentivizing on Velodrome and like 3 on Uniswap. It is also why projects like Aelin shifted all of their incentives to Velodrome from Uniswap saving millions in the process.
Yes, it certainly could make sense to push every DEX to co-incentivize key ecosystem public good pairs as part their proposals. I actually advocated for this on Curve’s proposal, but it didn’t seem like there was any appetite for it there.
We stand up great on these metrics too, more data coming.
Good ser. Out of respect for us and the 20+ protocols who have co-signed the proposal, can you please demonstrate the flaw or suggest a better framework before implying ours is flawed in some way.
As stated above, the ask is not huge relative to objective measures or the matching investment. Additionally, no other proposal has ever been paired as simply with a proven 2x-3x return on the grant value or a promise to match 1.6x the underlying value in incentives.
It would behoove us not to think of it in terms of this will cost $3.8m. But rather, it will return at least $7.6m to $11.4m in value based on the demonstrated performance of the original grant.
I have a feeling that if governance doesn’t show a capacity to process large deeply evidenced grant requests at a similar level to OP Labs that the power to allocate them may be shifted away.
More to come.