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

🏛 Governance Grants
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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.

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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.

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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.

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9

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.

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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.

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11

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

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12

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.

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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?

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14

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

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Thank you for your understanding.

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Thank for making this decision

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+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.

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?”.

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18

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.

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

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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.

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So governance tokens should only conditionally be used for governance?

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No, these tokens were allocated via a governance fund and using the tokens for governance was not specified in the token plan of the proposal, see below. If tokens are going to be used for governance, this should be specified in the proposal.

Distribution

Token holders have recently passed the new tokenomics proposal which outlines two programs that can support these goals:

  1. Liquidity Acquisition: are incentives for lenders to lend any type of collateral to the Market Making Entity
  2. Liquidity Mining: are incentives for market makers to ensure deep liquidity and the best experience for traders
  3. Builder Acquisition: we will extend our current grants program and further incentivise builders to build on top of Perp and utilise Perp as a base layer

Our plan is to have these tokens allocated towards three type programs. One key thing to note is that given our history of experimentation, we may scale incentives up or down depending on the outcomes of each program. Our goal is to ensure that we don’t overspend and that we maximize the impact of these tokens.

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okay so there are different classes of OP tokens, only some of which have governance rights?

i mean one way or another you’re saying that under some conditions an owner of a governance token can’t exercise those rights

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Tokens acquired via the governance fund are done so via a proposal which outlines the plan for those tokens very explicitly, then voted on accordingly. If using the allocated tokens for governance is not outlined explicitly in the proposal then no, those tokens should not be used for governance as that was not part of the voted on proposal. Do you disagree?

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that’s a well-considered, precise way of saying that governance tokens are only conditionally so

1 Like