Bad proposal and not funny. IMO the entire point of multiple rounds of airdrops was pretty clearly to telegraph that instadumping would have consequences down the line.
Considering FDV is well above 5 billion dollars and the team couldn’t orchestrate a functional airdrop, maybe there should be more focus placed on infrastructure/coordination/execution as opposed to banning evil sellers. Consider the possibility that a rational actor might sell the airdrop due to believing the price will drop like almost every other airdrop has, and may seek to rebuy in a lower range, potentially helping to set at least a temporary price floor. The righteous desire to blacklist sellers is a naive, thinly veiled grasp at getting more tokens sent to oneself, undoubtedly with the hope that you will become richer when you dump the tokens from a higher price, but not in an evil way, such as immediately after an airdrop. Also, this type of token governance in its current form is incredibly stupid to begin with, illustrated well by the popular thread on blacklisting airdrop sellers. An idea being popular says nothing about it’s merit or efficacy at what it portends to be aimed at fixing.
Including satire as part of gouvernance has several benefits.
First, it provides a safety valve for frustration and anger; instead of resorting to violence or other destructive means of expression, people can use satire to release their pent-up frustrations in a harmless way.
Second, satire can serve as an early warning system for problems within society; if satirists are routinely making fun of certain government policies or leaders then it may be indicative of deeper issues that need addressing before they spiral out of control.
There is no excuse for dumping so early, love this proposal!
I have used Optimism for months. I like it. But the launch was a shitshow, it’s well documented. That’s why I sold. Me selling was a hedge against further blunders by the team and to realize present value, lest further blunders occur and it goes to 0. Does it mean I will stop using Optimism? No. Will I stop using Optimism altogether if I am punished for hedging? Absolutely Yes. Optimism does not have a monopoly on L2 scaling solutions, there are competitors. If early users do not migrate to these competitors on merit alone, ostracizing them certainly will.
It is clearly a bad proposal.
Selling =/= dissenting
Your argument that it is a good proposal lies in the idea that selling indicates people (a) do not believe in Optimism, (b) do not value participating in governance.
This is reasonably obviously not true for all sellers. Other reasons someone might sell include:
- They think the valuation of OP is currently too high and they can wait until it becomes aligned with their expectations in order to participate in governance, and thus have a larger governance share.
- They think the valuation is okay, but they expect a post-airdrop dump. They want to buy lower and they think they can sell quickly before this “airdrop dump” happens and rebuy more OP.
- The airdrop is meaningfully large for their net worth, so selling some tokens makes a big difference to them, but they still believe in the future of Optimism.
- They sold on airdrop addresses and rebought on other addresses to anonymise their on-chain activity.
- They have tax obligations.
- They are selling 90% of their crypto portfolio because they are scared of a bear market, but they will rebuy in a couple of years.
- They are fucking rekt and this $ income helps them a lot, maybe one day if they are no longer rekt they can afford to participate in governance of the projects they believe in again.
Since it is possible to sell and still believe in Optimism and still want to participate in governance, permanently censoring addresses doesn’t seem like a good option.
Cost of user acquisition
Even if your argument were true, and all sellers did not believe in Optimism and did not value participating in governance, it is still not sufficient reason to censor their ability to participate in the future!
The airdrop spend equity (in the form of $OP) for user acquisition and user retention.
The focus on user acquisition and retention is clear through the airdrop criteria, where users and repeat users are heavily rewarded. They are even rewarded much more than DAO voters!
Their tokens were earned for their Optimism usage. That was the criteria set by OP Labs (or whoever is in charge). Clearly, this was a reward for specifically using Optimism, something that OP Labs found to be an important metric. Plus, since users expect airdrops, users will speculatively use a product in order to gain the future airdrop. $OP spend is a customer acquisition cost for those users.
Now, imagine the future airdrop that you are censoring these users from.
Will the future airdrop target “usage” as a metric again? If a future airdrop were to target usage once again, that means OP Labs or The Foundation believe rewarding/paying for usage is still important. If you believe paying for usage (as bootstrapping mechanism) is important, how can you justify not including specific users? If you are paying people to use the product, it is expected that some of those people will sell by nature of the incentive!
If you don’t believe paying users is important in the future, then you should not define airdrop criteria to reward users.
If the future airdrop does not target “usage” as a metric, but instead targets governance-specific activities, and these addresses were eligible based on their behaviour from today until this theoretical airdrop, how can you justify not including governance participants because they once, historically, sold some tokens? They have done other actions that qualify them as good governors or participants. Is that overridden by historical financial activity?
If you want to airdrop only to people that will keep the coins, then you should not even make the token transferable! Of course, this would not be an effective customer acquisition tool, which is why nobody does that.
Why does the price matter?
The proposal is motivated entirely by the short-term price of $OP. The short-term token price action is detached from the performance of governance almost entirely.
The only people that care are price-speculators, traders and short-term investors. Governance certainly performs the same whether the price is $1.50 or $2. Sure, extensive price changes could make governances attacks on Optimism cheaper, but there is not a single mention of that in the initial proposal, and it is not really a concern given the size of the airdrop or the short-term nature of the sell-pressure from “instant dumpers”.
The valuation of Optimism will be defined by Optimism’s ability to gain traction, market share, being valuable to users, etc. Airdrop dumpers cannot materially impact that.
Does it matter if the price goes down for a day or two? Why does OP Labs care? It is the price you pay for using equity as a behaviour-incentivisation tool.
Is a ‘holder’ more valuable?
Perhaps you can argue that you can optimise the treasury and $OP equity spent by not including “potential dumpers”, and thus rewarding only holders or “long term believers”. You can argue that you’re giving free money to these evil dumping people for nothing.
But for this to be true, you would need to show that a holder-user more valuable to Optimism than a seller-user.
Is the number of long-term holders of OP an important metric to the success of Optimism?
Imagine two users:
User A is a regular, legitimate user of Optimism. They get all their friends to use Optimism. They have a lot of daily on-chain activity. They have no interest in participating in governance, so they sold their initial airdrop.
User B delegated their initial airdrop and didn’t participate at all in governance either. They still hold their tokens and their delegate votes every now and then. They have used Optimism once per month.
Which user is most valuable to Optimism? Which user should be rewarded in future airdrops?
I don’t see how the ‘holder’ criteria is necessarily the thing to optimise for, and don’t see how punishing historic sellers is the right mechanism for rewarding holders anyway.
Airdrop and token distribution criteria should match what it is incentivising. The previous airdrop, users were rewarded for being a user. If you want to reward holding, you can design mechanisms for that easily.
Even if you concluded that you wanted to do this, regardless of it being a bad idea, then the measure itself is ineffective. Users will simply change their address. It takes ten seconds. You do a lot of work, raise negative pr, etc for something that is completely ineffective.
If Optimism is to be the primary L2 of Ethereum, it will have millions of users. It will not be expected that every user is also a governor.
If you don’t want your airdrop to be sold, make it non-transferable. In fact, if you don’t believe your airdrop is a customer acquisition cost ($) then make it non-transferable and see what happens
he twitted about htis
There is a simple chain reactions that created the whole mess
- A tweet from optimismPBC went online and this was the exact words…“sup nerds”
- This definitely sparked a reaction from a huge community waiting to claim airdrops
- As comments where made in response to the tweet on number1 above asking if claims where available
- A twitter user dropped the token contract address
- People began to look into the contract address,I did also
- And those who understood chain txns saw uniswap transaction, I don’t know if this was the testing carried out by the devs or not. I practically saw those small transaction and the exchange price was around 3.3$
- Back to twitter I guess some-people saw the same thing on chain and spoke about addresses already having #OP tokens
- People began hitting the claim page to check if it was possible to claim,I think the traffic to that page brought some glitch to the page…and then a spooky response to users who were once eligible that they were not eligible, this further created panic
- Then the narrative came in,that it was possible to claim writing some codes,I personally kept watching uniswap as liquidity was added and taken out and price began to drop to lower $3
- Finally the claim page was ready and I think I could remember #OP token had dumped below $3
- More glitch on the claiming process causing more panic,twitter community was already filled with lots of FUD.
- Those who claimed felt it was necessary to exit,not because they did not believe in the project,but out of FUD…further dumping the price.
Questions OP Team must ask is:
- Who tweeted “sup nerds” on the official OptimismPBC account,was it an encoded message to pass on to a selected few who had skill in writing solidity codes to call the claim function from the backdoor?
2. Irrespective of the answer the author of that tweet gives,the OP team should punish him,a severe punishment like revoking his OP Token team allocation,and even suing him to court and made to pay a fine or even serve a jail time…to me, he or she spoofed on the team,and community at large.
The sages say "charity begins at home"
- I don’t know if this is possible…kick out Uniswap from OP
I believe many other proposals on how to deal with the sellers and buyers on uniswap will come up.
Finally with a decision to uphold fairness,accountability and right policies in the blockchain space,I will suggest every central exchange that traded the token before it was officially announced/listed yesterday should issue a public document stating the way and manner those tokens arrived on their exchanges and a clear and precise punishment for those users by way of debiting their accounts and funds returned to OP team or a buy and burn action.
Any transaction…claiming,selling and buying after the official announcement on twitter should should be declared valid/true.
Strongly concur with Cobie
Maybe the question should be: how to incentivize good behavious instead of punishing bad ones?
What about rewarding even more next time people that are actively rigth now in thi blog for example?
At least this situation is generating quite a debate, thanks to Cobie.
I think that this guy is right. These people whom they consider to be sellers, these people used the network and made contributions, and thanks to such a mass of people, this project has grown so much. They are doing stupid things, what else can I say. trade themselves and all.
To Optimism: Cobie is giving free consulting, reflect and make something good from the advice he is giving. You want to enable good governance and a living community long term so don’t give in for the paternalistic impulse.
Trolling in a governance chat, classy ser.
Perfect. Maybe we can just use the Squidgame token dynamics?
Proposal to send 1M $OP to HitmanDAO to execute suggestion #2b
Everyone seems to want witch hunts and cancel culture. Allow free economy to happen. Stop trying to cancel poor people. The only people who sold are people that needed the money.
This only hurts poor people, and all the people with a million OP to throw around don’t understand this. When you can’t afford to pay rent or get groceries, you don’t have a choice.
I know this is the normal in the United States, but this is international. You don’t have to make the rich richer and the poor poorer, and you don’t have to cancel everyone because they didn’t do what you wanted them to.
If noone was suppose to sell their OP then they could have done a vesting period like luna. “You made money and I lost because you sold” is what is going on here. Its like 5 year olds throwing a tantrum, and you would think there has never been an airdrop before in history.
Also of note, Uniswap airdropped to all users, including those with failed transactions that never even really used their platform. They have done just fine. If I want to sell and buy my tokens 20 times I will, and if I am punished for it I’ll just go somewhere else that allows freedom. And many others will too, and you would be leff micromanaging a dwindling user base that is over-governed.
Anyways, OP has a better argument than myself that may be generally more well accepted. Whatever reason you want, cancel culture is a bad idea because once you run out of enemies to cancel then next thing you know you are the one canceled.
Thankyou cobie for your rational, well spoken, and simple explanation of just a few of the reasons why excluding poor people from future gains is a bad idea.
Hey! First of all I really appreciate you writing this. This is really a nice explanation and is super valuable. I feel like my job here is done =)
I want to clarify I’m not myself particularly in favour of filtering out people that sell.
And I even less judge people who sell. I mean I personally got the ENS airdrop and sold it after a few days. If I wasn’t working for OP Labs and didn’t want to involve myself, I might have sold this one too, who knows. No judgement there.
But I also thought the proposal wasn’t stupid, and deserved a proper answer. Which you have now delivered. Nice
Cobie, are you a delegate? I would love to delegate to you.
Also, couldn’t blacklisted people just make a new wallet? AND well if you don’t allow new users in on future airdrops it defeats the purpose of airdrops >>> attracting new users <<<. It would just fatten up a select subset of existing users.
If anything optimism should seek to be more inclusive, not less.
Check my proposal:
Its taken from Reddit Moons (Which are on testnet still), no need to reinvent the wheel… just use what works.
Thank you for typing this all out so I don’t have to. I sold half of my OP reward because I will have to pay significant taxes for pressing the claim button. Has nothing to do with my opinion on the protocol, in fact I really like Optimism and it has been a pleasure to watch it grow despite its issues.