Layer2DAO response to allegations from Velodrome / OptiChads [March 2023]

[Note: I’ve updated this post with additional detail provided by Train (Layer2DAO co-founder). My original post remains below this.]

Overview of the OPIncubator program

Layer2DAO’s Phase 0 governance grant was to create an incubator program (OPIncubator) via a grant of 27,500 OP tokens to six different projects. Those who wanted to participate would purchase an NFT to be able to vote on the incubation. The goal of this was to increase the usage and grow the Optimism ecosystem.

Once the NFT and infrastructure were created, the selection of those projects was in the hands of those who wished to participate. On-chain voting via ownership of the L2StateOfMind NFT was commissioned as a part of the proposal. From that point forward the disbursement of the funds was not in the hands of the core team of Layer2DAO, but instead in the hands of those who wished to participate in the governance of that incubator program. The discussions regarding the OPIncubator program were held on the Layer2DAO Discord. Ownership of the OPIncubator governance NFT was available to anyone who wished to mint a NFT and participate in the snapshot votes.

More than two hundred unique wallet holders participated in each of these rounds. They had the chance to vet, ask questions, make suggestions to changes, and vote for or against these proposals. The attached transactions spreadsheet, along with the snapshot votes by the OPIncubator participants, shows that Layer2DAO did in fact fulfill its grant proposal and has a few remaining tokens to expend as it wraps up its grant. Despite the bad faith that the Velodrome team has portrayed, Layer2DAO remains committed to growing the adoption of the L2 community, which includes Optimism.

View the full accounting of the OpIncubator program, including all transactions.

OPIncubator grant to NFT Earth

Each of the OPIncubator grant recipients were projects that received their funding with this in mind. As part of the process, the Layer2DAO community would ask them how it would continue the mission of building on L2s and increasing the adoption and usage of the Optimism chain (this is the spirit of what Phase 0 governance grants wanted to achieve). NFT Earth, while having some of the same team members (notably Weston), was and is a separate organization that was voted on by the OPIncubator NFT holders and approved as a grant recipient. This was not and is not the same organization that received the Phase 0 grant (Layer2DAO). Exosphere and I were asked if we wanted to join as advisors, which we accepted.

Jack’s own words in response to a OPIncubator recipient was:

“My understanding (and it could be flawed here) is that Decentragora has every right to do whatever it wants with the given OP – their reception in my mind is indistinguishable from someone receiving liquidity mining rewards”.

Attacks by the Velodrome team

We will continue to provide context to the community but do not and will not see the benefit of responding to each and every comment made as we are busy building and making L2s a better space. The parties involved would be wise to note that their actions are not just affecting Weston or the other team members but the thousands of token holders and partners that are also trying to build to make this a great space.

Jack and Alex had one goal that started with their conversation last week: prevent any further Layer2DAO or NFT Earth grant proposals from being considered. It appears that they have created enough FUD with false accusations to achieve this goal but it is my hope that the delegates and badge holders will see past their bias and false narrative and look at what was achieved despite Alex’s and Jack’s efforts.

There is little anyone can do to ever convince Jack and Alex of anything on these matters. I could say the sky is blue and they would say I am a liar simply because they have a vendetta against Weston. They say their motives are altruistic but the words and methods used to evaluate a situation are hardly neutral and poison the well before a conversation can even be had about a situation. Rather than approach the issue with “ hey i saw this and was wondering if you could provide some context,” their approach has been to say something along the lines of “I see you stole funds… or misappropriated grants… or you are rugging your project based on thes tx….care to comment?” The combative nature does not make room for having a conversation and instead presumes guilt before the conversation is even started. This is not a healthy approach to a Collective.

As this is not a court (other than public opinion) they don’t need to follow any sort of rules but have been allowed to make damaging remarks about projects without reproach as well as engage in character assassination and bullying of anyone who wishes to engage in conversation on this topic that disagrees with them. If you think about when a conflict takes place in or around your life or workplace, most individuals will opt not to get involved. They do not want to get “drawn into the drama.” Alex and Jack count on this and use it as a weapon by attacking any new voice that tries to enter the conversation as being an alt or unallowed to speak because of prior history or bags they hold. This, in effect, has a chilling effect on governance and the growth of the community. See examples below:

Alex and Jack have claimed that Weston was a founder of Layer2DAO. They know this is not true and have been told that repeatedly. Weston was recruited to the team at a point after the OP grant was received by Layer2DAO. The DAO was initially founded by me and Exosphere.

Jack has made the claim that Layer2DAO was reprimanded, its ability to participate as a delegate was revoked, and its participation in a prior grant round disallowed because of some prior action. We have found no evidence – other than Jack and Alex’s words – that any vote by governance was ever made to such effect. No public notice, or otherwise, was ever provided to Exosphere as a delegate or the DAO as a grant recipient. In fact, Exosphere is still an active delegate. Their goal in presenting this as fact is to color the opinions of those who have not previously been involved. By stating it this way it suggests that these issues have already been decided and enacted by the governance community rather than just themselves. The truth is they were resolved, and no action was taken. Layer2DAO complied with the OP Foundation’s representatives to their satisfaction and the parties moved forward with building on Optimism.

Alex has also made a false claim in the OP discord channel “As a reminder“, again using the phrase as to insinuate that all in the community have agreed to the notion” that the DAO used the grant to “soft rug” its token holders.

His purported proof was a price graph of the token. If I were to lay the ETH price graph over it I guess the DAO would have been responsible for “soft rugging” ETH at the same time. This type of behavior if gone unchecked by other council members or delegates will continue to devolve the community. The code of conduct exists to deter this behavior but so far it has not been enforced with any regularity on its participants. Alex is aware that a multisig wallet was exploited and Layer2DAOs tokens were taken and later on recovered. The aftermath was documented and presented in our after action report. It is interesting that Alex was able to post a screenshot and tweet within seconds of the exploit happening as if he knew it was going to happen:

So at 2:10 price is fine, at 2:15 disaster happens for the team and token holders, and at 2:18, per his screenshot on DexScreener, Alex goes to a partner protocol of Layer2DAO to FUD and asks if we just rugged them? You’re telling me in 180 seconds between the time it occurred his first thought was to tee up a beautiful negative chart - write a post and send it?


The bias and how far they are willing to go to create a narrative at whatever cost is transparent. Bottom line. The Governance Grant during phase 0 was far more undeveloped than the grant proposals and accords are today. Likely, if the OPIncubator grant was proposed today, it would have a lot more caveats to it than existed at the time it was created and funded. The proposal was meant to further the mission of Optimism growth and participation and it succeeded in doing just that. We continue to engage in a meaningful transparent fashion and are happy to discuss with the community the successes we have experienced with the OPIncubator project.

[Note from Exosphere: Below is my original post]

Hi Optimism community! You might already know me, but if not, I’m Exosphere, one of the core team members of Layer2DAO. I co-founded Layer2DAO at the beginning of 2022 to provide the Ethereum L2 space a central community, coordinate promotional efforts to further the L2 space, and collaborate on projects. I’m also a delegate on Optimism.

Many of our efforts focused on Optimism, as one of the most promising L2 networks. We chose to launch an early adopter NFT collection on Optimism that allowed L2 early adopters to mint for free an NFT that corresponded in level to the number of L2 networks that they bridged assets to in 2021 (example of the Level 1 NFT). We partnered with Quix (we helped them launch their NFT launchpad) and ended up minting over 20,000 NFTs, many of which where the first time someone owned an NFT on an L2.

This NFT activity ended up making us eligible for OP governance round 0, with a 300,000 OP allocation. The center piece of our proposal was the OPIncubator program, which over six rounds would distribute 27500 OP each to six projects that our community deemed worthy of the support. OP Governance was very young at that time, and there was limited guidance what the OP grant should be used for, especially compared to today. The program one of our community members came up with was a way to allow our Layer2DAO community to decide which projects would receive some of our OP tokens, while also teaching on-chain governance to people that might have been priced out on other chains.

In late 2022 the Optimism community was shocked that Quix, the hub of NFT activity on Optimism, announced that they were shutting down. Given that we had a front-row seat with our own NFTs, we saw NFT trading drop significantly on Optimism. In our opinion that was a significant blow to the future of the Optimism network, and the success of NFTs on L2. Our community sprung into action and started looking for other projects that would fill the void. After not being able to find a team that was stepping in, Weston, one of Layer2DAO’s core team members, decided to take action assemble a team to start NFT Earth. Personally, I was asked to be an advisor to the project, which I was glad to do considering how important NFTs were to onboarding people to the L2 ecosystem. Although some of the team overlaps between the Layer2DAO and NFT Earth, they function as completely separate entities and are governed differently.

Eventually the NFT Earth team approached Layer2DAO with the possibility of applying for an OPIncubator grant. We thought this would be an excellent use of the program, since Optimism was lacking an Optimism-focused successor to Quix and NFT activity was severely down on the network. This was one of several funding sources that NFT Earth was able to secure. The project needed to move fast since they quickly started incurring 5-digit hosting expenses and needed to capture market share to be viable.

From our knowledge the NFT Earth team has used their OPIncubator grant as planned and has succeeded in standing up a fully functional NFT exchange that already has captured a portion of NFT trading volume on Optimism. They launched their own token via airdrop to build further community and create incentives for trading NFTs on Optimism.

Over the last week, some Optimism community members have started targeting NFT Earth and Layer2DAO, spreading baseless accusations and lies. While we are unsure of their motivations, I believe this is a mix of old grudges (Velodrome team and Weston have a known history of conflict) and competitiveness (rumors have it that OptiChads is working on their own NFT exchange and want to kneecap NFT Earth before it receives an OP grant in round 11). They are spreading lies about these projects on social media, OP governance, and personally attacking Weston in ways that break the Optimism community guidelines. They are directly approaching our partner projects and bullying them into severing ties with us.

I urge the Optimism community to see past these intimidation tactics and reject this harassment by the offending teams. Their playbook of flooding Optimism governance with so much misleading information that no one can tell truth from fiction only hurts the Optimism governance experiment.

Layer2DAO prides itself in exposing the larger crypto community to the decentralization that L2s offer and remains focused on helping onboard the larger crypto community to L2s. Please let me know if you have any questions that I can answer.


Is this the multisig that the NFTE team used? (YES)

weird… it seems that the funds were sold and than sent to 20 different wallets that market bought $NFTE, random altcoins, and wash traded on the exchange.


I agree :point_up: after seeing the discussion from the other governance members in the discord who confronted the team here it seems they have been avoiding submitting any on chain data to provide evidence that says otherwise. Great :+1: job on finding this information in an effort to keep the community here on Optimism a little bit safer from bad actors.


Layer2dao conducted the best governance system on Optimism via l2stateofmind dynamic NFT which was used for voting in deciding OPIncubator grant to different projects.

NFTEARTH marketplace was voted for by the community as well before grants were released.

Fud from some disgruntled individuals is indeed portraying Optimism in a bad light.

Allow NFTEARTH to thrive and see how NFT’S on Optimism will thrive as well.


I am surprise at the attack on Layer2dao and NFTEarth, it shows the kind of people we have in this ecosystem. @Dicaso I think it will be good if you can substantiate your allegation with proof. Bringing other projects down to promote your own is not healthy for optimism ecosystem, bring out your ingenuity that is what will make us trust your HYPERDRIVE project.


Was it used for the purpose it was earmaked. Be truthful to yourself.

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I am an early OP user and adopter. I have no personal ties with the L2Dao or NFTearth team. However I am an OG member of both projects and fully support both projects and both teams . I am an active member of both discords as well as the OP discord and governance. I can attest to voting on all issues where it was required as well as discussion and community engagement by the teams on matters even when discussion wasnt mandatory. I have seen both projects thrive and aggressively and consistently encourage and support growth of the L2 ecosystem. The personal unwarranted attack happening to them is very unfortunate. I believe in both teams and have faith that they will rise above it and continue their healthy and positive impact on the entire L2 community


So there is no denying that L2DAO had a priori knowledge of how its grantees are going to use the original grant by the optimism foundation? And you fail to see how this constitutes a violation of the “no sale” rule by L2DAO; or assuming that the rule didn’t exist at the time, constitutes a misuse of funds by shifting financial risks taken by an individual party that decided upon themselves to build a product onto every Optimism token holder?

I get that developers would like to have somebody else take the financial risks for their “work”, but this is, as far as I see, not contract work. Nobody hired NFTEarth or its devs that overlap with L2DAO developers to build an NFT market place, NFTEarth decided upon themselves to take that risk and do the work, while L2DAO acted outside its scope to use the OP granted to them by the optimism foundation to knowingly shift the financial risk from the NFTEarth developers onto all OP token holders, while I doubt that the devs had any intention to share potential financial profits resulting from this activity to all Op token holders.

This seems to be a general issue with blockchain developers, they are willing to take all the potential gains but are looking at every step of the way to distribute risks and costs onto third parties.


Posting my awful experience with the team here for council members context outside discord…
As well as some other suspicious incidents that I noticed on chain leading back to the OP foundation grant money.

I was hired to do a commission by Weston for a NFT that NFTEarth had published in the very early weeks of their launch.:rocket:

Well all of this got me thinking :thought_balloon: did I get paid with money :moneybag: from OP foundation for that work ?

Sure enough I go back & find the same links following back to the 300,000 OP transfer of Optimism.

Happy to send back the OP that I received to the foundation even though I was severely underpaid and none of the agreements in the discussion we had were made to credit me as the artist like I requested from Weston.

The sad reality of it is that he not only lies to artists but manipulates them into thinking one thing and that turned out to be completely false.

There was no association with the musician 3LAU that he claimed to have involvement with the commission piece.

I’m thinking :thought_balloon: wow :star_struck: I know this musician and would be honored to do something in correlation to his music. Meanwhile it was false.

So out of further curiosity I went to see where exactly the royalty payments are set to and see something else that is suspicious :face_with_raised_eyebrow:

The royalty is set to RPGF so for one second I think great I may have had a positive influence on Weston here somehow when encouraging him to donate to public goods.

Think again folks.
I see a small transfer leading to another account where is appears that many contracts are all being routed to from sales on the NFTe marketplace totaling a balance of 16 ETH.

Not the 937a address shared in the discord.

If you look at both the address above :arrow_up: and below :arrow_down: here you’ll see two separate accounts used to hide the royalties going into one account…

Regarding the OP that was transferred to me from Weston it’s pretty obvious what happened on chain here through the transactions below :arrow_down:

This is a clear violation of how the funds were supposed to be used.


Here you will see the money sent to me from an account …

I just checked the account in question and it seems to be dumping L2DAO tokens and purchasing NFTe tokens with that money most recently.

This is the account that Weston sent me money from.


Scroll to the very 1st transaction and you will see that Layer 2 DAO sent the money that funded this account…

Once again a photo for context…

Commission payment

Now if you click on the next transaction below :arrow_down: you’ll see that this is where the 27,500 OP came from the L2DAO…

Account that seeded wallet …

Last but not least the original 300,000 OP from Optimism transfer from the Foundation to the account that led to my payment from Weston is all tied to the same behavior of buying and selling L2DAO or NFTe to manipulate the market price.

OG transfer from Optimism Foundation…

One :point_up: more very suspicious set of :face_with_raised_eyebrow: transactions I noticed right away when looking into this was that one of these wallets had sold off the OP from the foundation…

From L2Dao: Contract Address 0xaf5a0068f5465260a1a88a6264d0dce4469609cf | Optimism
To: Token Transfer | Optimism

That same wallet sold 1.2 million L2DAO tokens 13 days ago and looks like a liquid pull by the L2DAO and NFTEarth team.


Just made a post about my concerns. I welcome the Layer2DAO/NFTE team to dispute this.

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I think at this stage it might be best to have independent arbiters - possibly delegates or badgeholders - independently assess the situation. Ideally about 3 people who have not engaged the debates so far who can see it fresh. And then decide one way or another. Otherwise this risks turning into a sprawl.


I think it’s very important at this point to do that. It’s hard to trust that @Dicaso is working in good faith while also doing this.

We need someone to look into the allegations that has not openly admitted fudding a project and encouraged others to do the same, but also someone who does not stand to benefit from the allegations.

We should all remember this is the behavior that is seen from outside our governance process.


Here is the transaction from the money Weston sent me leading back to 300,000 OP from OP foundation that was granted to L2DAO.

The 7.69 OP he sent leads back to a wallet that seems very suspicious.

That wallet was seeded with money from the L2DAO.

A few screenshots to show for context on the paper trail I discovered showing original deposits.

It’s all on chain and you can check it out yourself if you want.

L2DAO tx deposit of 27,500 OP below :arrow_down:

OP > L2DAO tx of 300,000 OP below :arrow_down:


I see some more suspicious activity happening at this very moment from another wallet that was seeded by this one…

Which was also seeded by L2DAO 0xaf5a0068f5465260a1a88a6264d0dce4469609cf

NFT earth - 0x5a711a7aae4a270c05fb9d67544ddcd2694bdc2c sent funds to this wallet which has a lot of transactions … 0xd8B73d634bd6F6D7d1e992551Ab7E06e4c21B171

Suspicious activity HERE

Can someone please confirm this activity on chain and the original source of the funds that came from Optimism foundation ???

New Wallet

Now I am seeing this wallet with hight amounts of activity leading back to the NFT earth vault that received funds from the L2DAO. @Dicaso can you help to confirm some of this…

New Wallet
Wallet that received funds from NFTE vault… :arrow_down:

Here you see 5000 OP that was transferred from NFTE :arrow_down:

NFTE Wallet
Here is the NFTE wallet that sent those funds. :arrow_down:

Similar to the other wallet you will see this one lead back to the Optimism Foundation with the initial transaction that seeded the wallet from the L2Dao.

L2DAO Wallet

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I would love to see the team refute any of these transactions. (still no response?) There were movements from confirmed team wallets yesterday of NFTE/L2DAO tokens around the same time as the wild volatility that occured. (on both Optimism and Arbitrum)


This is baseless and off topic. Dictum scammed a lot of people and protocols on Arbitrum. They had “partnered” with almost every large protocol on Arbitrum. Anyone doing the slightest bit of actual research could find this information.

The reason there is a “guide” on L2dao discord is because I personally spent several days helping members within L2dao and the larger Arbitrum community get their funds back. We actually helped a lot of people get their funds back after dictum couldn’t even rug properly.

I’m all for this process but we need to stay on topic and you’re still reframing events to fit your timeline.

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you should give account fractal vision of the sales of your nft to the community, go for your suspension and lets rest.

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I am not making any accusations. I am just asking questions. Given that the flagged wallet is known to be a multisig signer on 2 safes that embezzled 55,000 $OP, I think it is a fair question to ask:

What exactly was your relationship with Dictum? Were these transfers made before, or after the Dictum hack, and why?

I don’t see why it couldn’t be another embezzlement if I already found 2 instances with the same wallet. It’s actually getting fun to look for them at this point.

This sort of speculation that comes from asking honest questions is why we need an independent investigation NOW. I think it will do the optimism community a disservice if we would have to wait months for a conclusion. You will just encourage people like me to keep posting about it everyday.


Correction: * 3 instances of embezzelement so far. I almost forgot about this one: