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

🏛 Governance Grants
46

1- In the case we have been discussing, to my understanding it is simple, the protocol receives 9M OP voted by this government with the promise it made during its postulation, says one thing (proposal) and does another. I think at this point almost all of us agree that it is not ethically correct.

That this statement is incorrect is the point I’ve been shouting into the void: this is based on a flawed premise, that everyone understands that governance tokens aren’t always for governance. It is highly likely that several protocols omitted any mention of governance power because they assumed that their tokens would carry it. Otherwise you would have seen many more proposals ask for it, not 0 or maybe 1.

So yes, it’s flatly incorrect that we “all agree” omitting mention of governance usage is unethical (for instance, of the ~10 people who have weighed in here, at least Gabagool and I disagree), and it’s highly problematic that a handful of forum participants think they can definitively claim without precedent or consensus that protocols already granted OP under a set of different assumptions now aren’t entitled to the full use of OP tokens.

2- Can protocols include in their proposals to allocate a % of the OP tokens received to governance? Yes they can and surely more protocols will do so. Now, from my point of view it is not correct because if they want to have participation in the governance they should acquire tokens in the secondary market and delegate them to a candidate of theirs.
If it is implicit to assign part of the PO token to their delegate and the reasons are approved by the governance in voting it seems to me appropriate since that is what governance is for, just as you can not approve and reject any proposal that has this kind of objective.

Okay, phew. Now that I know it was you who was responsible for the quote above, I can comfortably say that your position is inconsistent because what you outlined to Maker was the incorrect presumption that they in fact could not even ask for governance power because that’s “not what this was for.” I think this was damaging to Optimism’s credibility and a missed opportunity for Maker to lend their considerable expertise to governance.

Overall, without backing, you and others have claimed to represent what was or was not allowed as part of this distribution, and that’s affected existing grantees’ actions. That people were doing it before this very thread was posted, one saying “hey we shouldn’t let them do this,” is problematic. That people in this thread proposing it! are treating it as already settled precedent without considering the consequences of this position is doubly so.

I’m afraid I’m having trouble understanding your second paragraph here, but it seems like you’re making a very thoughtful point.

In conclusion, these are my opinions and I will always want the best for this governance. In the future I may change my mind if there is a better proposal regarding self-delegated tokens received by the governance. At the end of the day these proposals may be approved in a vote, but that is a decision made by the collective as a whole.

I appreciate your statement here and acknowledge there’s room for all of us to grow as part of this experiment. I’m pushing back on you here because I find the opinions I’m reading to be based on flawed presumptions, but I think we all agree that we’re trying to get to the right answer.

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47

The cards can be used for anything. It must be clear in the proposal what they are to be used for. This is explained here.

The delegates and members then give their opinion on the proposal. All comments are the member’s point of view. The proponents can defend their point or change it as I said before, the snapshot is who ends up defining the will of the government.

Ok, here may be a mistranslation of what I meant in English. I meant to say “the most.” In this case of those we are discussing in this thread, I never make reference to governance.

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48

Ah, okay - understood. Yeah I apologize for any potential gaps in meaning myself due to translation.

Whether it’s that “most” or “all” of us agree, my point is that this is not at all a settled, uncontroversial premise on which we can make judgment calls unilaterally.

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49

This is expressed here

Still, I will respond again.

Both Maker and any protocol can do what we are doing, open a debate. In that particular case I gave my “opinion” on the proposal, I issued an opinion, it is not an order.

In all the comments you refer to me as if I speak for the government, I am just someone who is interested in the good of this government. If there is something in my “opinion” that you guys don’t like, we can always enter into debate.

On the other hand, I always express my opinion within what the operations manual allows.

And if you know the rules of phase postulation, both Maker and other protocols you can resubmit a proposal and even change your proposal to take it to a grant and get it approved.

As I said before, the will of the collective is expressed in the snapshot, not with my opinion.

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50

Good idea…lets see how OP team will react to this

51

So after browsing through this thread I am left with more questions than answers, at this point I don’t know if the issue was Perp delegating their OP tokens or because it was not explicitly stated in their proposal?

I am of the opinion that protocols should participate in governance, and in fact, think that the token house is indeed vulnerable to governance attacks down the road if the major protocols living on it are not active participants of governance.

If the issue is that they didn’t explicitly state it in their proposal that they plan to delegate their idle OP from phase 0, I think it’s too early to judge them on it since they haven’t clearly violated their original proposal. Now if they were to never distribute their OP allocation and strictly use the OP to vote for more OP tokens for them selves or something that would constitute a governance attack. I reject @polynya’s insinuation that this is a “de-facto governance attack” in it’s current form and would invite the other active delegates of this forum to tone down their rhetoric as well.

The precedent being set here is that if a project were to make any changes to their token distribution plan from the governance fund, that they are violating OP governance and should be blacklisted in the token house. So what if a project decides to re-direct incentives within their allocation or re-design their token distribution plan in light of new data or a lack of effectiveness in the original incentives plan? Are we to say that anything not explicitly stated in the original proposal is deemed a mis-use of funds? After reading this thread I am unable to gauge the sentiment around those things.

On a another note, with the sheer volume of proposals coming through, I don’t find it reasonable that the fate of all those proposals be decided by an extremely small portion of the voting supply and by the handful of delegates who are active here. Personally I have more faith in Perp Protocol’s delegate voting genuinely and beneficially for the token house than I do in some random delegates who “like Optimism” but have no real tangible incentive alignment with Optimism.

To sum things up, I would appreciate some clarity from those who had strong feelings on this topic to detail what the main concerns are, so at least there is some consensus to go off after reading this long thread.

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52

Correct. If it wasn’t explicitly mentioned they don’t have the approval for that specific use. We don’t have to guess how projects will use this funds. Guessing isn’t how governance works.

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53

Sadly you are replying to one sentence in my post without answering anything else in that paragraph.

Please be a little more thoughtful in your responses as we are fracturing the thread with micro replies.

Correct. If it wasn’t explicitly mentioned they don’t have the approval for that specific use. We don’t have to guess how projects will use this funds. Guessing isn’t how governance works.

So what if a project realizes that there is a more effective way at stimulating activity on OP and make a change to their distribution plan and target the incentives in a way that’s different to how it was outlined in the original proposal? Are projects strictly bound by their governance fund proposal and cannot make any changes to their incentive program? That sounds unnecessary imo

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54

I like objectivity… it’s easier to make a point.

Anyway, following this thinking what about requesting some kind of approval from the community? Projects can follow up on their success or issues and request feedback from the community or not? It shouldn’t be hard to find some balance since using funds/voting power without explicit consent isn’t exactly how governance works.

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There is a mistake here, no one is against protocols participating in governance. Even if you note that there are already protocols that have delegates in governance.

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Sorry, I don’t have any strong feelings, and I’m a novice to this governance stuff. I apologize for the wording. In future, it’d be best of the projects declare if they’ll use the granted OP for governance voting, and if so, why.

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57

Here it depends on the flexibility of each one, let’s imagine that all projects do the same and use the inactive tokens from the OP for different activities as long as they don’t “violate the original proposal”, it would be very difficult to follow and verify that each one complies with its original proposal. I think this would blur the main goal of governance and open the door to constant cheating.

Protocols can always reapply for another application, and they can also propose a tokenization change through governance, I don’t see any problem here. If they want to change they can propose it and bring it to a vote. If they want more OP tokens they can reapply for the next phase

Proposals are on the forum for at least 2 weeks, sometimes even longer, no great activity is required.
It is also part of the commitment made by the delegates when they applied to the forum. See here.

So I don’t see what’s wrong with a delegate fulfilling the commitment they made, just like other delegates who don’t, we can’t force them to spend time on governance.

I think it’s clear, protocols have to be clear what the OP tokens are going to be used for, that’s what the application template is for.

The final decision is always in the snapshot.

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Protocols can always reapply for another application, and they can also propose a tokenization change through governance, I don’t see any problem here. If they want to change they can propose it and bring it to a vote. If they want more OP tokens they can reapply for the next phase

Are you implying that any change to a project’s distribution plan should be voted on through OP governance even after a project has received their allocation?

I don’t think that’s feasible to police and nor should it be pursued, the best way to assess a project’s distribution plan is upon future gov fund applications. When a project applies for a second allocation, the entirety of their OP distribution and it’s impact can be assessed at that time. Delegates would have a clear picture of how a protocol contributed to Optimism’s growth and improvement and make a decision accordingly.

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59

I don’t think I expressed myself well.

What I meant in general terms is that protocols can always fall back on governance. I think whether it is for a change or to request more OP tokens, governance in my opinion has to be a useful tool for all participants.

Even if a protocol decides to make a change in the token utilization plan, I think it would be correct or more transparent to communicate it through governance. I think this way this kind of debates and controversies could be avoided in the future.

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60

This is a very interesting question. I am actually not sure what the right answer should be here. Perhaps we should make it standard to specify in a governance funding proposal what they intend to do with the idle funds while they are not being spent/allocated.

I may be on the minority here but I don’t see it as bad to have more people/projects involved in governance, even if that comes from using idle funds from governance funding. Perhaps proposals for funding should be structured and paid out so there is no funds sitting idle but that’s another topic altogether.

Right now governance power seems quite concentrated. Perhaps allowing this would help to change this?

But since this seems to be a hot topic and already debated a lot here, would it not make sense to make it part of the proposal template? Something like: “Do you intend to use the idle funds for governance?”

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61

Yes, even after several conversations, among some participants we have made this proposal

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62

ha i think its a good idea .but dao is the most important decider

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support the opinion,its a good idea

64

That was a really good spot @OPUser, I don’t in principle mind if projects want to delegate a small portion of received funds to voting, IF they state in their proposal that this is what they will be doing.

As @lefterisjp says, it might even be a good thing for project teams who have received funding from Optimism to have some say in the governance, not only does it help decentralize power amongst more different people, but they are going to be teams that we’ve already assessed as being well aligned with Optimism. On the other hand, I don’t think an optimal outcome has grant recipients instantly having a multiple times bigger say than the biggest delegates, who are each representing about 12k users.

While Perp have done the right thing and undelegated now the issue has been brought to light, we do probably need to address the issue in a way that doesn’t rely on the honest actions of unknown individuals. From what I understand there is no way to blacklist addresses from SnapShot votes, therefore a harmful governance attack from other recipients in the future seems like a very real possibility if we don’t come up with a solution.

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65

Yeah I’m on the same page and agree with the reasoning, I don’t think it’s necessarily a bad thing that we have protocol participation in token house.

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