GFX Labs - Delegate Communication Thread

17 Polls Ending July 6, 2022

Proposal A: Optimistic Railway
Summary: This proposal would distribute 400,000 OP to Optimistic Railway. Optimistic Railway is an early stage development and self describes its project as: “We are building the 4 dimensional railway of the metaverse - the infrastructure to connect social dapps and enable massive on chain gaming.”

90% of the tokens would go to “core team & operations” with the remaining 10% being distributed to users.

Recommendation: Vote No. This project does not appear to have a web site, few concrete deliverables are offered, and it’s unclear to what extent the 90% is going to individual compensation vs operating expense. This project appears to be in seed or pre-seed stage, and (at writing) a grant of nearly a quarter million dollars requires some demonstration of work already underway, product-market fit, or allocation of equity to Optimism Foundation. We encourage the applicants to reapply once there is more of their product to showcase.

Proposal B: dForce
Summary: This proposal would distribute 300,000 OP to dForce, a lending platform that issues the overcollateralized stablecoin USX. 50% of the allocation would be earmarked for liquidity incentivization on Optimism, 30% for grants to developers working on or around dForce protocols, and 20% for marketing events related to Optimism and dForce.

Recommendation: Vote No. The 30% for developers does not appear to be restricted to Optimism, and could be used to fund dForce on other chains while still adhering to the proposal application. It’s also unclear how 20% for marketing Optimism would be done, and this looks like it would simply be used to advertise the liquidity incentives. Given that no new building appears to be proposed, the funds will not be restricted to use on Optimism-related purposes, and incentives are largely just Optimism subsidizing a private business over its competitors rather than increasing overall Optimism ecosystem growth.

Proposal C: GYSR
Summary: This proposal would distribute 400,000 OP to GYSR, a platform focused on helping protocols distribute incentives for users that perform on-chain activities. 35% of the allocation would be general subsidization of its users’ incentives pools on Optimism, 35% used to incentivize existing users to migrate to Optimism, 25% to support development of Optimism-specific GYSR technology, “5% as incentives for projects to use Optimism over other networks as part of their deployment.”

Recommendation: Vote Yes. This grant’s focus is not merely offering an Optimism-provided subsidy to the applicant’s business because it includes allocations to both further develop on Optimism and to migrate existing user base to Optimism. Both of these are reasonable efforts to support with grants targeting ecosystem development.

Proposal D: Mean Finance
Summary: This proposal would distribute 300,000 OP to Mean Finance. Mean Finance is a decentralized, dollar-cost-averaging protocol deployed to both Polygon and Optimism. 45% would be used for user subsidies on Optimism, 30% for grants and bounties to expand use cases of the Mean protocol, 20% for community and growth initiatives, and 5% as a retroactive reward for early adopters.

Recommendation: Vote Yes. This protocol adds quality-of-life services to users on Optimism. While we would prefer to see the funding explicitly used only for Optimism and a TVL that’s at least several million dollars in value, the novel and practical use case of the Mean protocol on Optimism overcomes our objections.

Proposal E: Raptor
Summary: This proposal would distribute 800,000 OP to Raptor. The OP would be sold to finance 10 ETH2 validator nodes. Raptor offers to use 50% of the rewards from those nodes to buy back and verifiably burn OP.

Recommendation: Vote No. This is a large amount of OP that would need to be sold entirely to finance the 10 nodes, and the current APR suggests a very long time to see a return on this investment. Long time horizons on a handshake deal are not a recipe for success. It does not directly grow the Optimism ecosystem.

Proposal F: Balancer & BeethovenX
Summary: This proposal would distribute 500,000 OP to BeethovenX, which is being advised by Balancer. “OP will likely be used to bribe in veBAL gauges for pools on Optimism, primarily boosted pools.”

Recommendation: Vote Yes. This proposal does not commit to a particular use of the OP, and the only use mentioned is basically liquidity incentivization. That being said, boosted pools would also spread liquidity to other protocols on Optimism. In this case, it’s not an ideal proposal, but the second-order effects should ensure contribution to the overall ecosystem on Optimism.

Proposal G: Summa
Summary: This proposal would distribute 2,000,000 OP to Tracey & Associates Accounting to bootstrap bringing some bookkeeping, payroll, and other professional services online in order to use Optimism as rails.

Recommendation: Vote No. This project is ill-defined, still a concept, and has an enormous request. We recommend the applicants focus on some specific deliverables, establish their project, and then seek smaller amounts of funding in future rounds.

Proposal H: WardenSwap
Summary: This proposal would distribute 300,000 OP to WardenSwap, a DEX aggregator. Tokens would then be earmarked as 25% for grants/hackathons, 20% as subsidy to users, 10% for referral links, 35% to marketing, 10% to WardenSwap to pay for its own maintenance.

Recommendation: Vote No. Referral links and influencers (both covered in this request) are not high-value ways to spend OP, and WardenSwap should not be asking for Optimism to pay for maintenance on an existing protocol. WardenSwap is also notably not co-incentivizing. There are simply better ways to distribute OP to grow the Optimism ecosystem

Proposal I: Pickle Finance
Summary: This proposal would distribute 200,000 OP to Pickle Finance. The applicant estimates 1000 OP would be distributed per day to users as incentives alongside their own native token.

Recommendation: Vote Yes. Pickle was the first yield aggregator on Optimism, and so has contributed to the growth of the ecosystem. Whether future impact will be meaningful is somewhat open to question, but recognition that Pickle provided a new use or functionality on Optimism justifies the grant.

Proposal J: Ooki Protocol
Summary: This proposal would distribute 700,000 OP to Ooki Protocol, a margin trading platform. The tokens would be distributed as liquidity incentives to bootstrap the initial seed liquidity needed for traders to operate on the platform.

Recommendation: Vote No. This is a very large grant request, and the applicants have not made a compelling case that the liquidity seeded would remain after the end of incentivization. It’s also not clear that the applicant DAO itself has much skin in the game, which for a request of this size seems important.

Proposal K: Infinity Wallet
Summary: This proposal would distribute 500,000 OP to Infinity Wallet, a cross-chain browserless wallet. 15% would be distributed for marketing (airdrops and completing activities), 45% for developers to deploy to Optimism and work with Infinity Wallet, 40% to waive the applicant’s usual fee to integrate dapps.

Recommendation: Vote No. The stated use of the grant is focused solely upon developing Infinity Wallet’s business and does not provide or promise new functionality or growth to the overall Optimism ecosystem.

Proposal L: Beefy
Summary: This proposal would distribute 650,000 OP to Beefy, a multi-chain yield optimizer. 90% would be to provide incentives to users, with 10% earmarked for “strategic partnerships.”

Recommendation: Vote No. Beefy is not yet deployed to Optimism, and the request is large. Additionally, nearly all of the grant would be used to subsidize users for Beefy, and it is unclear how this would add any value or use to the Optimism ecosystem once those incentives dried up.

Proposal M: 0xHabitat
Summary: This proposal would distribute 400,000 OP to 0xHabitat. 45% would be streamed to the 0xHabitat treasury, 45% for developer grants focused on 0xHabitat, and 10% for marketing.

Recommendation: Vote No. 0xHabitat is not yet deployed to Optimism, and the request largely leaves the grant’s use up to 0xHabitat DAO. Because of this, it is unclear whether or how these funds would contribute to the overall Optimism ecosystem.

Proposal N: Thales
Summary: This proposal would distribute 2,000,000 OP to Thales. The allocation would incentivize Thales users and ETH/THALES liquidity.

Recommendation: Vote No. Thales just received 900,000 OP in the previous governance cycle. Another large distribution is unnecessary and would crowd out other projects that can contribute to the ecosystem.

Proposal O: Paraswap
Summary: This proposal would distribute 450,000 OP to Paraswap. 50% would be allocated to dapps integrating Paraswap on Optimism, 35% to Paraswap-owned liquidity, 15% to DexLib integrations.

Recommendation: Vote Yes. The majority of the funding is going towards development and integration rather than simple liquidity incentivization. Increased composability, integration, and development is exactly what these grants are for.

Proposal P: Rotki
Summary: This proposal would distribute 190,770 OP to Rotki. The grant would fund development of open-source software by Rotki. Note that this is one of the only two grants to be accompanied by an actual budget breakdown.

Recommendation: Vote Yes. Rotki provides useful services in tracking and accounting, and is open source. It provides utility to a wide variety of users, is planning to use the grant to exclusively fund development of further functionality and utility. It also has the distinction of providing one of the only two budgets with much detail amongst all the grants, and should be rewarded for that. The size of the grant is also small relative to many very large requests.

Proposal Q: Candide Wallet
Summary: This proposal would distribute 190,000 OP to Candide, which is developing a cross-rollup noncustodial wallet. Candide has not yet launched, and code is open source. A detailed breakdown of the budget the grant request is based on is available at the proposal link.

Recommendation: Vote Yes. The request is modest relative to many grant requests, and the budget includes actual estimates to support the number of OP requested. Additionally, the funding is for development of new utility, and not merely for incentivizing users of a protocol at Optimism’s expense.

NB: GFX is having difficulty voting on Snapshot, which does not currently support multisig voting on Optimism. We use best practices for handling assets internally – including voting power that has been delegated – and utilize a multisig on our delegate address. We are attempting to find a workaround, but ultimately, Snapshot needs to support voting from multisig addresses.

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