It Is Time For On-Chain OP Voting

By GFX Labs & co-signed by @millie

Dear Optimism Community,

As OP delegates and token holders, we are committed to the progressive decentralization of Optimism and the Optimism Collective. The Collective and OP token started 200 days ago, and since then, the community and protocol have made significant progress toward its goal of supporting public goods, and the Optimism Labs team has continued to be on the bleeding edge of L2 development.

Over the last five months, OP holders have utilized Snapshot to conduct voting for its grant program. We thank Snapshot for offering a free service that thousands have utilized that is a building block in DeFi governance; however, as a project matures, the governance processes must mature with it. GFX Labs believes it is time for Optimism to transition its governance system to on-chain voting. While the appeal of utilizing Snapshot is for many that it is a free service, OP tokens are not burdened with the same costs as L1 protocols. Additionally, by migrating away from Snapshot, the governance process will become widely accessible and thus easier for many OP holders to participate.

On-chain voting is the expectation of every quality, decentralized project with a governance token for a good reason. It requires the protocol to make the management of the protocol and its contracts objective. Voting on-chain is transparent and permanent. With on-chain governance, token holders will also manage the treasury and functionality of the protocol directly. In short, it is the gold standard for decentralized governance.

However, we think a good first step would be to swap out Snapshot for on-chain governance polling, and once a couple of months have passed, then proceed with further steps of decentralization away from team control. For example, after on-chain polling, the foundation could transfer the OP token treasury from their multi-signature contract to the OP token holder’s treasury, and eventually, as core protocol development progresses, the DAO could and should manage the ownership of those contracts as well. Overall, the idea is to continue the process of progressive decentralization. Gradual decentralization on a stated timeline would represent a major improvement to today – where votes have to be hand adjusted by humans in order to avoid disenfranchising thousands of OP addresses that have delegated their votes to a variety of persons.

The OP token is a standard governance token, so it will be compatible with most popular governance systems. Alternatively, the community could tailor-make its own system. Since these requirements are consistent with most token governance systems, it would be best to adopt an existing, popular, and time-tested solution like Compound’s Governor Bravo, which is also utilized by Uniswap and many other protocols.

Governor Bravo is a relatively simple governance system. The participants need to choose the proposal threshold, the number of votes an address must have to make a proposal, and the quorum threshold, which is the number of votes a proposal must have to succeed. There are three time parameters to choose from: the review period, voting period, and timelock period (unimportant for deciding off-chain events but very important for on-chain activity).

The Collective could institute a similar quorum threshold and timing to the existing system. The only major change with this system is that each proposal must have a proposer with the necessary votes. As it stands, the foundation manages the process of posting proposals to Snapshot once two delegates with sufficient voting power have given their approval. In an on-chain system, these delegates must send the proposal themselves. We don’t see this as a material modification and think it has substantially more upside than downside because it requires delegates to have the conviction to sponsor a grant application formally. This exposes delegates to reputational risk if they put forward low-quality proposals.

While there might be a concern of on-chain voting costs, we’d like to propose a few solutions to OP token holders’ concerns. First, to put things into perspective, voting on mainnet costs about $3.60 at a gas price of 30 Gwei; on Optimism, we project voting to cost approximately 14¢. If 14¢ is too expensive, Optimism could set up a free voting interface for voting via signature similar to Snapshot, but where all votes are broadcast on-chain like comp.vote & uni.vote. Ultimately, there will always be a cost to on-chain governance, but OP token holders should remember that there is no such thing as a free lunch. Perhaps even more importantly, if Optimism’s costs are so high that it is prohibitive to vote, then Optimism is a stunning success for attracting traffic and requires secure, reliable voting more than ever.

Additionally, we are aware of millions of OP votes and thousands of delegations that are regularly unable to participate in the protocol governance due to the Collective’s reliance on Snapshot. While this hasn’t significantly impacted the historical management of the protocol, it could become a fundamental issue as OP token holders assume more responsibilities in the protocol. While the stakes aren’t critical at this moment, we think it’s best to close the chapter of utilizing Snapshot and move to an on-chain governance system while stakes are still low.

GFX Labs will do its best to answer any questions over the next week. If the general reception is warm, we’ll submit a formal proposal to move off Snapshot and onto on-chain governance the following week.

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Thanks for putting this proposal together @GFXlabs!

I think it’s the logical step to take in light of the Governance transition coming up in the season 3 and also snapshot has proven to not be reliable for a project of the magnitude of Optimism.

Given there will be some protocol level proposals potentially coming forth in season3, I think adopting on chain voting is a must for Optimism going forward.

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Thank you for starting this discussion! Community feedback has been very clear that this is important and the Foundation is taking this feedback seriously. This is a priority and we’ll keep you informed about plans and next steps. It’s important to flag that this doesn’t fall under a valid proposal type, as outlined in the operating manual, so while continuing the conversation here is encouraged, this isn’t a something that can progress to a vote.

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On chain vote would be safer and some gas fee would prevent sybils.
Has been considered a partnership with Aragon? Besides the Aragon DAO platform, Aragon comunity love governance.

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This thread is absolutely just to be a discussion starter! That said, when/if we are ready to formally propose, what is the best format to shepherd an eventual proposal to a vote?

Presumably this would fall under “protocol upgrade” proposals? Is there a template for that yet? It would be great to know now how any future proposal should be formatted and what the process looks like to get it to a vote after a discussion about best options for implementation.

Thank you in advance! Appreciate all the work y’all are putting in to keep the wheels moving.

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A template for Protocol Upgrades will be provided during Season 3. However, the decision to move to on-chain voting falls under “administration,” which is current facilitated by the Foundation. The Foundation has been intentional with the initial set of proposal types, and will introduce more proposal types as Optimism continues to decentralize and iterate on governance.

That said, we’ve heard community feedback loud and clear that Optimism should move to on-chain governance. Thank you for starting this conversation. The Foundation is actively looking into how this should happen. Here’s where we’re at:

  • We’ve been in touch with the Tally team to discuss using their infrastructure for an MVP on-chain voting setup
  • We are exploring an auth contract we’d need in order to limit who can post on-chain votes
  • Optimism has variable block times, so Tally will not work out of the box with our current gov process. We’re reviewing the changes necessary for a wall-clock Governor contract, as well as looking at Velo’s Governor implementation on Optimism.

We’d be happy to continue to post updates on this process here!

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It is great to hear the Foundation is actively looking at moving to an on-chain governance system.

Do you intend to limit proposal power beyond a traditional proposal threshold? Most governance systems have a proposal threshold that will dictate who is and isn’t able to make proposals. In some systems like Compound Governor Bravo, addresses without sufficient votes can be added to a whitelist so they can make proposals. Generally, we think it is important to remove social guards from governance and rather limit its impact by what governance can control on-chain.

The existing governance contracts would work without change on Optimism; though their timing may be imperfect, it shouldn’t materially affect the objective of on-chain governance or its outcome. However, some minor changes could be made to improve it. We’d be happy to lend a hand in designing or implementing on-chain governance.

Hi everyone,

Ross here from a16z. This is a needed post from GFX Labs and Millie detailing realistic considerations for a transition to on-chain voting. We are supportive of a transition away from off-chain voting for a number of reasons. On-chain voting typically results in increased transparency, efficiency, and decentralization. Here are a few additional considerations after observing a number of other protocols implement on-chain/off-chain voting schemas:

Off-chain + on-chain voting convolutes the governance process. A number of other protocols have governance schemas that require multiple rounds of off-chain voting before progressing to on-chain voting. This has two effects, which should be balanced against one another:

(1) Efficiency is decreased due to repeated voting rounds prior to any action, which is desirable in some cases e.g. modifying core code. This is undesirable for more routine operations.

(2) The true level of proposal support is obfuscated by off-chain voting, sometimes resulting in unexpected outcomes on-chain. Because a significant percentage of voting power belongs to entities that cannot participate in Snapshot voting due to technical constraints, there is often a disparity between Snapshot polling results and actual on-chain votes.

There are many possible avenues to further reduce the cost of voting on-chain. As a starting point, GFX Labs’ estimated cost of $0.14/vote at 30 Gwei is significantly lower than L1 voting. The coming implementation of EIP-4844 will further reduce this cost by up to two orders of magnitude. As we’ve previously discussed in other threads, there are a variety of economic incentive designs to completely alleviate the cost of voting and actually pay ecosystem participants to vote and/or delegate. Additionally, as MakerDAO has demonstrated, the rise of a professional delegate class can also negate the cost of voting for the subset of participants most impacted by voting costs. With all of these factors in mind, we do not think the cost of voting on L2 should materially influence any decisions made regarding on-chain voting mechanics.

Finally, we think it’s important to take a deliberate, thoughtful approach to governance design. Because governance systems tend to ossify over time, it is far easier to “get it right” upfront rather than rapidly implementing an on-chain voting design and then subsequently seeking to overhaul that governance design later on. Optimism is also in an advantageous position to learn from and build upon the governance designs of numerous other protocols that have already explored various on-chain voting mechanics.

Looking forward to everyone’s thoughts and contributions as Optimism moves toward on-chain voting!

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Thanks to @GFXlabs for starting this thread and to everyone that contributed to this conversation. Here is an update from the Foundation (spoiler alert: we’re moving to on-chain voting in Season 3!):

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So after a conversation with lavande in discord I don’t understand why we are moving all votes on-chain already.

If a vote is purely to signal an outcome and does not carry along an onchain action there is no reason to not do it in snapshot or any other offchain voting tool.

Right now there is 5 open votes. Each vote costs $1.3. That’s $6.5 just to do all the onchain votes for this round. All of this round’s votes are unnecessary and just signaling intent. Something snapshot can do. And save $6.5 from every governance participant. Depending on where you are from $6.5 may be pocket change, or it may be significant. We should strive to be inclusive and invite governance participants from all countries, even non-wealthy ones.

I totally agree we should move towards onchain voting, but that should only be for actions that happen onchain. Signaling onchain is just burning money. As far as I know all control is still centralized to the Optimism foundation. So long as the governance has no control, there is no reason to have votes on-chain just to tell the optimism foundation what the intent is. Give the control to the token holders, and then make the voting on-chain to exercise that control.

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We are strong advocates of onchain governance where the token holders control the underlying protocol. While the current state of Optimism governance has not reached that goal, transitioning from Snapshot governance to formal onchain governance is the first step. Our hope is Optimism continues to progressively decentralize by passing the OP treasury to the token holders, transitioning multisig controlled roles to the DAO, and empowering token holders to craft proposals. Realistically this will be a long process while the underlying technology continues to develop.

As for the current proposals, if the token holders controlled the OP treasury, an onchain vote would have been necessary to effect the transfer of OP. To your point, each proposal does not have an onchain effect. We will continue encouraging the Optimism Foundation to transition the OP treasury to the token holders rather than administering it themselves. We believe it is the logical next task for the DAO to take over.

In addition, onchain votes are open to all. Whereas offchain voting solutions exclude folks who interact with governance in atypical ways and leave delegates susceptible to integration bugs. As one of the delegates effect by Snapshot’s support issues with Gnosis Multisigs, we’re thankful that proposals are onchain, and we know other delegates in similar positions to us.

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I am sorry but I think you have not read my post. We both agree on having on-chain governance. But … only if it make sense.

We are strong advocates of onchain governance where the token holders control the underlying protocol.

Well … in Optimism they don’t :wink:

In addition, onchain votes are open to all. Whereas offchain voting solutions exclude folks who interact with governance in atypical ways and leave delegates susceptible to integration bugs.

Agora also has bugs. I don’t see this as an argument. Just as an example, the deadline for current round of votes shows to end in 4 days while it ends today.

As for the current proposals, if the token holders controlled the OP treasury, an onchain vote would have been necessary to effect the transfer of OP

Would have been. But it’s not yet. So why force participants in governance to spend money for no reason? It’s simply useless and not inclusive.

We just voted for an intent of inclusive governance. Forcing users to pay $1.3 per vote means only users in rich countries can participate freely.


P.S.: I think we want the same thing. I just disagree in the timing of the change, and believe that especially with the gas prices we have right now we are hurting inclusivity in the governance process.

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Although this is not a UI bug, it is indeed a shortcoming of onchain in general and hella confusing, our apologies! :pray: Unfortunately, not something we can change or ‘fix’ easily as onchain proposals mean setting an end block number instead of a human readable time.

But @lavande mentioned, I believe Bedrock will fix this issue going forward. Definitely something we’ll monitor to make sure it’s fully resolved post-Bedrock, otherwise, we’ll be back with some other implementation suggestions.


However, it does sound like the crux of this discussion may lie around cost of voting and whether it’s hurting inclusivity. One suggestion is whether we want to should explore gasless voting via gas relay options.

And I think folks like Tally and Scopelift have implemented solutions like these in other DAOs too iirc, definitely something we can work to implement if the community would like.

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