As we know, Optimism is not a simple Ethereum protocol, but a chain on top of Ethereum to host protocols inside. As a direct consequence, the Optimism governance is of interest to the protocols within it (this is not new but good to remember).
On the other hand, fair distribution of a token for governance purposes is an extremely difficult task, and releases seen as “fair” no longer exist in this space. No token will be distributed in this process, yes, but meets the same criteria. Regarding this, as members of this governance we have been discussing these topics, mainly the cases of self-delegation and how it provides access to the protocols to have representation without it being an unfair or advantageous game. On this we have a proposal in preparation to discuss in the coming days.
Sharing our thoughts
Definitely talking about this is a good idea, a way to insert a new type of delegate is fascinating to diversify with differents types of governance participants that can contribute to the enrichment of Optimism ecosystem and its future.
For now, this new proposed base of 5M is a good start to offer to projects deployed in Optimism participation. According to Defillama, Optimism currently has 36 protocols with a TVL above $1M, while the addresses per day metrics indicate that 47 projects are used by at least 100 addresses according to Dune on Optimism protocols metrics. Ideally, this removes all doubts about the activity and purpose of Optimism being fulfilled.
Now, we’re going to assume that most of the protocols have the same level of intentions to participate in the program; What would be a good criterion to measure a good voting power allocation method?
As discussed above, this measure alone cannot make a good fit from the subjectivity of benefiting the protocols that provide more benefits to Optimism: We should take into account that some even grant subsidies for use sponsored by the same governance (in the form of OP tokens) so add a weighting of other metrics like:
- Active addresses per week
- TVL
- Volume
- Other metrics combined (same treatment as recent airdrop criteria).
For those projects that are encouraging activity with $op distribution, we will possibly find oversized data, the metrics regarding: Active addresses per week, TVL and volume, will not be taken according to current data; In these cases, each project must resolve the way in which they present this data. Pre-distribution metrics can be a parameter, but it will not be applicable to all (this is because many projects deployed with the grant and their distribution is not yet complete) along with their declaration of participation as delegates. These are just criteria ideas to consider.
You could even think of a previous protocol classification:
- DeFi
- Bridges
- Games
- Others
And from there, use one or a maximum of two objective metrics (gas and active addresses, for example, as applicable). The first classification would have to be approved and adjusted by governance, we would recommend doing it through a weighted vote (where each delegate expresses what % of allocation each category deserves, of the total proposed), and the rest according to the results of the metrics taken.
The limits, participation requirement and code of conduct seem reasonable to be in line with the progress of governance, and not a big change from the current climate.
One of the points that remain open is how to obtain a diverse participation of protocol representatives in Optimism before large lobbies repel other participation intentions, and at the same time, adjust to the processes that each protocol organization has to follow in order to be able to participate. exercise their work (what is the opportunity cost for a DAO to organize to elect a member dedicated to a possible delegation with potential concrete benefits) that doesn’t discourage the desire to participate in this initiative. Small DAOs or reputable teams could quickly get up to speed but large protocols with governance such as Uniswap or Aave can lead to cumbersome processes.
In addition, Optimism should be careful about endorsing representations to protocols that are not legitimate or agreed with the governance/DAO/community or whoever conforms to the protocol set, for example, let’s imagine the following scenario: What happens if a founder decides to participate in the delegation on behalf of the protocol without explicit approval of the protocol (DAO/governance/community)? How can the Optimism collective deal with scenarios like this and distinguish legitimate entries?
About an alternative proposal issued by @lavande
Receiving the same voting power base for protocols is a better approach for the participation in a fairer way, but it is essential to evaluate how much the base would be equivalent to the multiplier.
Resolving this, said proposal looks more solid and easier to reach a consensus regarding the use of metrics and objective and subjective classifications that will lengthen the discussion.
For this reason, we consider it important to summarize the following advantages and disadvantages of this proposal:
Advantages
- On the original proposal: prioritize participation in probably more genuinely used protocols, indirectly representing Optimism users not yet involved in governance.
- On the alternative proposal: equal and fair treatment to begin with for all interested protocols.
Disadvantages
- About the original proposal: too complex and it will take a long discussion without reaching a consensus of the majority (say >70%).
- About the alternative proposal: we do not like the proposed selection mode of 15 predefined and 8 additional by voting. We prefer to vote all 23 in a single round or faithfully follow the order of a table; since they result in better and simpler resolution paths (for example, discovering the protocols that are really interested from those that are not).
A final concern
We cannot rule out that the sudden appearance of a new group of delegates may further discourage the work of independent or individual delegations, which at the end of the day, may reduce the diversity of participation in governance and, if unsuccessful, the delegations to protocols and have to be modified, reduced or eliminated, it’s likely that some individual delegates have already left.