I want to discuss project boosting their delegate power with governance fund

[OPUser]

This is not a proposal or even an idea for something.

I want to hear your opinion on project(s) using token allocated to their project to boost their delegate voting power.

In GF Phase 0, top three project got 21M OP(9 + 9 + 3) token and if they choose to delegate those token to themselves, it will lead to centralization in DAO which will hurt us all and might cause bias in DAO which is even bigger problem.

Maximum number of voting we have seen so far was in GF Phase 0 when we saw 20M votes.

Imagine 2 delegate holding voting power of 18M which can guide any voting decision in their direction.

My opinion:-

1. They should use the token for distribution plan mentioned in their proposal.
2. All delegate must follow the same process, create the profile and users would choose anyone they want. At least give them a chance ?
3. I know it will be diluted slowly but it will take a year and I think, its enough amount of time to do the damage of early stage gov such as ours.

I am not against on person holding too much power, that’s a different discussion, I am questioning the approach.

Better or ideal approach would be distributing the token as they seems fit as per their proposal plan and once its diluted, users will get a chance to choose their delegate. At least give us, a retail user, a chance.

What is your view on this ?

Why this thought and discussion? because of this uptick I saw on Dune.

Now, from my last experience, this is not directly towards anyone and please avoid name calling.

[AxlVaz]

I think this approach is consistent.

I think it is something we need to discuss. No project should use grants to increase its voting power.
In my opinion we are allocating a lot of tokens without seeing the results yet. I mean we don’t know if the protocols are going to use it correctly, we should see the impact of all the voting processes and follow up.

It is not about being agile and assigning tokens deliberately, this could bring a negative impact to governance.

[Netrim]

Approach wise this is a very real possibility. The biggest issue I can see about this is how able we will be to monitor their usage. I know on chain metrics but it’s perfectly possible for them to simply take the backlash and still keep on voting.

Ideally, token distribution should haven been vested as part of the proposals. This would help with the dilution.

[Joxes]

This is an interesting situation (and this case serves as an early example, don’t get me wrong) to take into account when OP governance approves allocation of funds for projects. In the worst case scenario, the project can simply lie and take tokens and ‘maliciously’ affect future decisions. As always, distribution is key (there is no a perfect way), but for example, delegates have been careful with proposals soliciting ‘excessive’ amounts during phase 1, encouraging projects to divide their goal into different proposals/stages (sometimes semms like a sort of primitive KPI options) instead of a single-step-to-long-term proposal.

And these cases can be interpreted in different ways, since this action (by example) wasn’t in the Token Plan, and it would be good if the project clarified this recent action. If any project expresses its desire to participate in some way it should not be misunderstood, Optimism is a protocol of protocols, and therefore we expect the participation of protocol teams, companies, DAOs, protocol communities, independent communities, organizations and individuals.

However, transparency in the use of OP tokens is a must. Vested mechanism as proposed by @Netrim is worth considering (although it is not a good fit for many initiatives), in fact other networks have applied these mechanisms before, I will review their results and come back here.

[tongnk]

Thanks for bringing this up - I didn’t realise it was controversial but have a couple of thoughts.

Firstly, we’re heavily invested in the future of OP given we are not deploying multi-chain and have gone all in on OP. With this we’d like to see OP tokens utilised to grow the entire chain and ecosystem. We see the success of Perp tied to the success of OP. We’d like to be able to maintain our voice going forward, especially given that over time this voice will decrease as we distribute tokens for the growth of OP.

Given that other projects from Phase 1 will soon receive their tokens this is going to happen across the board. I’m of the opinion that giving protocols who are OP native a voice is actually a good thing. Restricting these tokens and their usage creates a two fold problem:

1. Monitoring and enforcement is extremely hard and it’s extremely easy for bad actors to bypass this
2. You’re creating a second class of tokens and effectively signalling that OP projects should not participate in governance

If it’s a major concern we are happy to abstain from future votes until Phase 1 distributions to projects are completed.

[Netrim]

The issue at hand is simple, if the purpose was governance then your whole Phase 0 proposal is a lie.
If the purpose was NOT governance then you need to abide for the Phase 0 proposal que get back on track.

If you wanted to actively participate on Optimism governance, go ahead. Buy OP on the open market or persuade other people to delegate to Perp.

[OPUser]

we’re heavily invested in the future of OP given we are not deploying multi-chain and have gone all in on OP

Yes, and I thank you for that and you also get heavy reward for that so its win-win situation.

With this we’d like to see OP tokens utilised to grow the entire chain and ecosystem.

Believe me you when I say this, I am not involved with OP and any project on OP what so ever and still investing my time and energy here, you know why,its because I want to see the success of OP too, so we are on the same page here.

We’d like to be able to maintain our voice going forward

Sure, I want that too but I am questioning your approach. You are a delegate like me and others here so you must follow the same approach, users will decide where they want to put their faith, if they choose you I am fine with that but at least give them a chance.

You got those token not because you were able to create the traction for your project alone,is it ? All those TVL and addresses belongs to small users like me and not giving us a fair chance to raise our voice is wrong.

I have just 140K votes assigned to me, do I have a place to raise my voice with that, Yes.
Word you are looking for is “dominance”, you want to maintain your dominance in DAO gov and you choose the different approach, short one and wrong one.

Monitoring and enforcement is extremely hard and it’s extremely easy for bad actors to bypass this

Yes, this might happen but if you dilute the token first as per your proposal plan, there are chance that we will hear more than 1 person voice. Other users might delegate to themselves or they will choose someone else.

I would like to see more participation and more decentralized voting power, top 1% dominating the DAO will lead us to three steps back, decision will be biased and it will lead to lack of motivation and confidence in DAO gov.

You’re creating a second class of tokens and effectively signalling that OP projects should not participate in governance

I never said that and that is/will never be my motivation, you are a delegate which means you have a voice in the DAO, I know for fact that other OP protects are also part of Delegates and on top of that, anyone can create a profile and advertise to get the voting power.

Why should we give your special route ? That is my concern.

If it’s a major concern we are happy to abstain from future votes until Phase 1 distributions to projects are completed.

I guess, my main concern is not clear yet, I am fine if you hold 20M or even 100M voting power, once that happen I will look for another DAO to waste my time and energy. Concern is your approach, dilute the token first as per your distributions plan and let user decide where they want to put their faith or buy the token from open market.

That is my concern, abstaining will not fix this.

[AxlVaz]

When they submitted their proposal in phase 0, they didn’t mention this direction they just took. Do you imagine that all the phase winners would apply the same strategy?

I find it dishonest that they are doing what they are doing, in a way we are all betting on OP’s success.

[GF: Phase 0 Proposal] Perpetual Protocol

Project Name: Perpetual Protocol Author Name: Nick Defillama TVL (at snapshot): $31,274,396 Transactons/day (at snapshot): 21,301 Tier: 1 Optimism native: Yes Revisions to metrics used: N/A Number of OP tokens to claim: 9,000,000 L2 Recipient Address: 0xDcf664d0f76E99eaA2DBD569474d0E75dC899FCD Proposal for token distribution (under 1000 words): Background Perpetual Protocol is a leading decentralised perpetual swap protocol that has facilitated over 40 billion in un-incentivised trad…

[polynya]

Should be part of the proposal, where they are required to disclose if they plan to use their OP in governance, or to state that they will not. Delegates can decide accordingly. In general, I agree using OP granted for governance is a de-facto governance attack, unless there’s a good reason to do so.

[tongnk]

For the sake of not escalating this issue further and focusing on the rest of the proposals, we will revoke the delegation

[Justin]

They should absolutely spend the tokens pursuant to their proposal. The primary purpose of Phase 0 is to stimulate usage and liquidity, not to hold in the treasury. As you point out, a related issue is the centralization of power of delegates and this is another reason why there should be a check on delegate power as i suggested in my post.

[Justin]

@tongnk

We’d like to be able to maintain our voice going forward

Is that goal consistent with the spirit and purpose of Phase 0? I’ve read everything that i can find but do not see any evidence that token accumulation for purposes of maintaining voting power is beneficial to the Optimism community. Have you seen any evidence of that and if so, can you link to that in this thread?

[AxlVaz]

You have made the right decision! This is the best thing for the Optimism ecosystem.

[OPUser]

Thank you for your understanding.

[Netrim]

Thank for making this decision

[optimist]

@polynya

Should be part of the proposal, where they are required to disclose if they plan to use their OP in governance, or to state that they will not. Delegates can decide accordingly.

+1, during this early stage of governance it seems critical that projects be transparent about this simply because a single grant is can currently be a huge power shift, as we’re seeing in this instance.

@tongnk

For the sake of not escalating this issue further and focusing on the rest of the proposals, we will revoke the delegation

I think this is the right decision for now, but I don’t think this means that projects should not be able to delegate OP in the future. As I said, I think it makes the most sense if part of the proposal template for OP grants includes a section that says something along the lines of “Do you waive your right to delegate the OP that you receive as part of this grant?”.

[gabagool]

While centralization is certainly an issue, another issue is stagnation.

Most users delegated OP upon receiving their airdrops. It is unlikely that there will be another large scale delegation event without further retail distro (airdrop #2) that requires delegation, or an individual/project running a large-scale campaign to gain voting power.

If $OP is a governance token, and grants are a key distribution method for that token, it seems illogical to me that that distribution would come with stipulation for how that voting power can be delegated.

Further, $OP tokens have already been distributed, so this will not be an effective strategy.

[Netrim]

The issue is simpler, the original proposal did NOT include any governance allocation, ergo it’s underhanded to use it for such purpose

[katie]

Well intentioned or not, this is not a good look. It should be outlined explicitly in the the proposal if there are plans to use allocated tokens for governance. I appreciate the tokens being undelegated in this case.

[jackanorak]

So governance tokens should only conditionally be used for governance?