Governance Update #2

📢 Updates and Announcements Governance Updates
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Voting Underway

Optimism’s Token House is up and running! For the past six weeks, Token House delegates have been reviewing and voting on Governance Fund grant proposals from projects across the Optimism ecosystem.

In the first three voting cycles, the Token House approved 36 project grants and rejected 14 proposals. 19.3mm OP has been distributed to projects already. OP Summer is officially in full swing — keep your eyes peeled for news on incentive programs, community funding, and more.

For a summary of the first three voting cycles, see the Cycle #1, Cycle #2, or Cycle #3 roundup threads.

Voting Cycle 4 is begins today and ends on Wednesday, August 3 at 12p PST. See proposals current up for vote on Snapshot, or in the Cycle #4 roundup thread.

What We’re Learning

The Optimism Collective launched with a minimal governance framework and an intention to iterate. To understand what’s working and what’s not, we’ve been collecting feedback from proposal authors, delegates, and other members of our community. We’ve heard a few common themes:

There are too many proposals to review. In our current governance structure, every project proposal is put up for a vote by the entire Token House. The Governance Fund received dozens of proposals in the first two voting cycles alone. Ideally, each proposal gets feedback before voting begins; with so many individual votes, this is hard to make happen.

There’s no time between voting cycles. Voting cycles run every two weeks. Cycles begin on Thursday at 7p GMT and end 13 days later on Wednesday at 7p GMT. Our hypothesis was that proposal authors would leave their submissions in “draft” mode until they’d received feedback, then submit to a voting cycle when ready. Instead, we’re learning that authors submit to a voting cycle even if they’re received minimal feedback – there are no guidelines suggesting otherwise! This means many delegates both review and vote within the same two week period and don’t have time to get to the incoming “draft” proposals.

Some proposals don’t have enough background info. Delegates aren’t familiar with every project submitting a proposal. While some proposals come from well-known crypto projects, others come from smaller or more specific projects unknown to many delegates. In order to evaluate proposals well, delegates have expressed the need for better context-setting and background info, or more time for research.

Communication channels are challenging. Our governance process spans Discord, Discourse, and Snapshot. Community members have expressed confusion or frustration at having to track conversations across multiple platforms :hot_face:

Some parts of the governance process are underspecified. v0.1 governance process as defined in the Operating Manual lacks clear instructions on a few situations that have come up in the first two voting cycles: how to re-submit a proposal which previously passed, rules around conflicts of interest, and precise submission deadlines.

Lack of alignment on Governance Fund scope. Our governance documentation says the Governance Fund exists to encourage the “proactive growth of the Optimism ecosystem,” and there is a distinct allocation of OP for public goods funding. Nevertheless, there’s still plenty of room for interpretation of “proactive growth.” Should the GovFund be used to compensate development teams? Can closed-source projects apply for funding? Can some public goods be considered as promoting proactive growth despite the separate bucket? There’s been good discussion on these and similar questions in the Discord.

Gov Fund Guidelines

As Governance Fund grants are approved are distributed, our community has raised questions about individual projects’ use of the tokens they receive.

Teams who receive grants from the Governance Fund must be able to account for all transactions that touch any portion of their grant funds. And while this may be obvious, we expect no self-dealing. If any expenditure can be construed as self-dealing, we expect the team to be clear about this in advance and include why it’s not self-dealing. Withdrawals of the grant from the Optimism network should also be clearly stated and justified.

We’re grateful to our community for holding projects accountable to their proposals. Accountability will be a core focus of future governance process iterations.

What’s Next

Season 1 of Optimism Collective governance is coming to a close. What does this mean?

The Optimism Foundation is working with delegates and community members to shape a set of process upgrades that improve our governance based on the feedback above. We promised this would be an iterative experiment, and we mean it! The next iteration will be considered Season 2.

Here’s what to expect:

  • Season 1 will end after Voting Cycle #4 closes (at 7p GMT on August 3).
  • After Voting Cycle #4, the governance process will take a three-week Reflection Period with no active votes (Aug 4 — Sept 1)
  • During the Reflection Period, the Optimism Foundation will publish (a) a proposed changelog for the v0.2 OPerating Manual, and (b) a set of governance proposals aimed at addressing the feedback we’ve received so far.
    • While changes to the OPerating Manual don’t require a formal vote, we request that delegates and the broader community provide feedback during the Reflection Period to make this next season the best it can be.
    • Any proposals that require more than a change to the Operating Manual will be put up for Token House vote (e.g. establishing a standalone committee with an up-front budget).
  • Special Voting Cycle #5 will begin after the Reflection Period and will run for 13 days, from Aug 25 at 7p GMT until Sept 7 at 7p GMT. This voting cycle will include only the process improvements mentioned in (b) above.
  • Season 2 will begin on September 8 with Voting Cycle #6. The governance process will follow the v0.2 Operating Manual and any new processes approved in Special Voting Cycle #5.

What this means for proposal authors:

  • The current Voting Cycle #4 is the last set of proposals that will be reviewed until Voting Cycle #6 begins on September 8.
  • Season 2 (beginning with Voting Cycle #6) will include new structure and process. Stay tuned for more information on the new governance flow.

Thank you to our community for their participation, feedback, grace, and humor. And, as always,

Stay Optimistic :sparkles::red_circle:

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Hey @ben-chain date for the Voting Cycle 4 is wrong. I thik you wanted to say August 20 right? :blush:

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Thank you for the update, looking forward to iterations and improvements on the current governance process!

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Hi @ben-chain
It’s good to see things are always a work in progress :slight_smile:

I found these stats very interesting, though:

How would these break down between Phase 0 and Phase 1, though? I.e. How many successful projects and how much of the 19.33mm OP formed part of Phase 0 which was essentially a batch vote?

My line of questioning comes from a position as a prior author of a Proposal, while a lot of your feedback (and issues you want to address) appears to come from the position of delegates. Is this correct? If it is, then my concern is that you are only seeing half the picture.

My constructive criticism is if you only address the concerns of delegates then you may end up driving away high quality teams and individuals from participating with and building on Optimism. For example, have you checked the Activity stats of Proposal authors once their votes have been voted down? Are they going to pop up eventually on other L2s or other chains, with their ideas there?

My still hopefully constructive criticism is that if you are again only addressing delegator concerns, then Optimism may fall victim to ulterior motives. I don’t want to appear accusatory, but many of the more powerful delegates are not exclusively tied to Optimism, like the OP team is. They may have histories and financial interests across a variety of projects, L2s and other blockchains. This isn’t necessarily bad, but based on the success rate & OP distributions of Phase 1, people are being stamped out at a much faster rate than being let in/lifted up, and this may be leading to cynicism in the builder or entrepreneur community when they engage with the Optimism Governance Fund.

Thanks for letting me have my say. Yes I’m biased, too. But I’m just keeping you on your toes and making sure you listen to more of the 360 degrees of biases, and not only ‘time poor’ or ‘confused’ volunteer delegates …who DON’T wish to not un-volunteer & decentralise themselves :smiley:

My TLDR Feedback: More people should vote Yes/For and let’s see some things f’n go! :stuck_out_tongue:

Cheers,
Axel

EDIT: I shouldn’t only have a crack at delegates having ulterior motives. As was seen with that Perpetual Protocol/GrantDAO/Airdrop shemozzle, some people and projects asking for ‘free money’ and incentives don’t always have OP at the top of their list either.

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Hi Ben,

Thank you for saying this out loud.

I have one more request, not sure if its already planned or not but can we get a dashboard where we can track distributed fund and remaining fund(read only excel will be enough), find info related to delegates(voting power and so on), past proposal(approved and rejected) and other information related to gov. We already have everything but distributed, a simple dashboard with hyperlink to all this pages would help us a lot.

On the fund distribution this might be an overkill but it would be great if we can which domain got how much fund, for example, bridging fund, LP fund, dev fund and so on…this will help us in judging the proposal.

And we were bugging the whole team with wen OP token, I want to know wen OP Citizen ?

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We’re working on a public spreadsheet to help with account from governance fund. We don’t plan to maintain a visualization of delegate voting power – doing this in a sheet would get out of date very quickly. Would recommend you use some of the existing tooling on dune or boardroom.

Longer-term we’re thinking about the best way to centralize this info to make things eaiser for delegates, grant authors, and other community members. Thank you for the suggestions!

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Hey @ben-chain date for the Voting Cycle 4 is wrong. I thik you wanted to say August 20 right? :blush:

You’re right, thanks for the shout. Updated the original post :+1:t4:

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It will be nice if proposals that stayed in DRAFT waiting for feedback and did not move to READY have some consideration for the next cycle if we are limiting the scope.

Yes please, at least set a gov specific announcement channel in OP discord and tag delegates.

This is something we need to consider as a community and I’ll be happy to assist any debate proposed for this.

If proposals have a roadmap and intended and clear use of OP asked, then OP transfers can be scheduled and there’s no need for OP to transfer the whole batch in just 1 transaction. Consider a committee creation with their own multisig if this is to much work for the foundation.

Sorry where is voting Cycle #5 ?

Thanks for the hard work!

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I think the date is here :point_down:

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Thanks for the informations and updates keep improve more and moe in Governance !!

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thanks for addressing this! I was definitely confused by this at the start. What discord channel is the right one to follow the discussion?

this is also a valuable note, i was concerned about sending such large funds to wallets without known identity and only based on promises.

thanks for everything and i’m excited for season 2!

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We posted our reflection of season 1 in our Delegate Communication Thread :slight_smile: It touches on a few of the topics based on this post.

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I was a rather bit negative in my earlier reply.
So I wanted to say that this section…

…is very positive. It’s good to know that there are people who are regularly trying to improve things. The activity on this forum is large, and if there is a bit of order to all our opinions, and regular incremental improvements in processes (that is confirmed by community voting), then I think things are very positive over the long term for the Collective and OP.

Thanks again for your time,
Axel

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Happy to hear that you don’t stop trying to improve. I’m looking forward to the next cycle!

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Lfg! Let’s be in unison for the best of Collective Optimism!