We are writing to express our appreciation for the Optimism Foundation’s engagement with us regarding the issue surrounding the grants awarded to NFT Earth and LFGrow as part of our OPIncubator program.
Some members of the community perceive the transfer of OP tokens to NFT Earth and LFGrow, and the subsequent conversion to USDC to pay for the costs of launching their projects on Optimism as a violation of the underlying Optimism Governance Round 0 grant’s terms. This is due to those projects being viewed as affiliates of Layer2DAO because of the overlap in multisig control between the projects and Layer2DAO. As such, they should not have disposed of the OP funds to USDC to pay developers or contractors.
Once the aforementioned projects have been identified as affiliates, their status as such would preclude the use of funds for the purpose of compensating developers, AWS, GCP or any off-chain vendor. We note, however, that our team held the view that certain individuals who participated in said projects did so in their capacity as community members of Optimism, and not as part of Layer2DAO. As such, they may not be considered affiliates and would not be subject to the aforementioned restriction on the use of funds.
We apologize for any actual or perceived misuse of the Optimism Phase 0 grant we received. We assure you that our focus was on the growth of the Optimism community, and we acted in good faith in continuing to provide funds for different needs on Optimism. We would like to emphasize that this should not reflect negatively on the recipients of other OPIncubator grants or the larger Layer2DAO community. We also want to highlight that we are not aware of anyone directing funds to their personal wallets for any purposes aside from covering external hard costs to their projects, and the funds were appropriately expended in building the projects. We have requested that the grant recipients provide detailed accounting to the Optimism community to disprove any misuse of grant funds.
We remain committed to the growth and adoption of Optimism and the larger L2 ecosystem and appreciate the community’s attention to this matter.
Can you provide any evidence as to the existence of LFGGrow DAO? Is there a Discord? Any record of DAO governance? Snapshot votes? Who were the decision makers in moving all funds from the multisig to 20 different wallets and for what purpose were they moved?
It is documented that L2Earth and LFGGrow have the same multisigs signers and the Layer2DAO team itself said they control them. Why are you referring to them as “affiliates” if your organization controlled the mutlsigs? Why are you suggesting you need to request the “grant recipients provide detailed accounting” if multisigs controlled by your team were the ones who made the transactions?
Can you please formally document the signers on the L2DAO / NFTEarth / LFGrow multisigs to help us understand the composition of each team / multisig? Can you help us understand what it literally meant that these wallets were controlled by L2DAO?
Can you explain why any payments to individuals covering costs would require funds to be moved through multiple wallets before hitting the Coinbase account used by Weston? Can you explain what costs were expended specifically for LFGGrow a project with no discoverable footprint or product?
You mention “compensating developers, AWS, GCP or any off-chain vendor”, but Weston mentions explicitly above these funds were NOT meant to support the “NFTEarth = Exchange”. What developer costs, AWS costs, and GCP costs did LFGDAO have? And why were NFTEarth devs being paid from LFGrow?
Can you explain the purpose and justification for the other activities these wallets engaged in?
I just read in the official roundup from @lavande posted in another forum channel and it was my understanding that any concerns have been resolved based on the quite clear statement below:
" There is no further action to be taken against L2DAO regarding their Phase 0 grant.That does not mean there is nothing we can do about future grants or grant usage from today forward."
So which allegation are you claiming to be making now? Is it new ones/ additional ones? That somehow the reality of the 11,000 community members in NFTEarth and over 10,000 in L2DAO are not real people? Your motive is clear, there is no need to take the time of the Collective on this any further instead of focusing on growing the ecosystem.
You’ve caused material harm to many projects now by continually making false allegations without any proof to substantiate anything. It is a net negative on the entire ecosystem and yet you choose to spend your time this way, I do not understand this.
What I would like to understand @alexcutlerdoteth is why you think it is acceptable to make accusations and expect there not to be consequences when this is a violation of acting in good faith. It is a blatant CoC violation and you’re personal desire to cause harm to others working to build the ecosystem is disturbing.
NFTEarth, incubated from a DAO vote, acted in accordance with all specificed objectives as stated repeatedly, and costs were required to pay developers, infrastructure providers, community moderators, and other essential business costs to start any project. You seem to be making the case that if you are on a multisig, you are therefore responsible for the team actions - this is not the case. I am on many multisigs, this does not make me responsible for enforcing a certain clause a particular DAO may have.
NFTEarth, again being formed from scratch and finishing a live and operational L2 NFT exchange used all received funds in accordance with how it was stated they would be used and finished ahead if schedule.
The LFGROWWW incubation, on the other hand, was formed to serve as additional supoort for the NFT ecosystem development, exactly as stated, and then again voted on by the DAO with overwhelming support. Did you do any research into this before posting the accusations again? It is clear to me you did not; there is a website, a GitHub repository, A team on Vercel, and the very first compensation Tx to a developer from Singapore who I remember hiring vividly, because the call for the interview was so late at night and was found through a web3 recruiter. There is a bridge nearly complete, a launchpad nearly complete, again all in alignment with the stated objectives of the incubation.
I would ask anyone genuinely curious about the situation to head to NFTEarth and test the live application for themselves. In the community there was been nothing but positive support for L2 NFTs and the growth of NFTs on Optimism and a hardworking team. In addition to the large social following, the public GitHub repository, and tbe confirmed acceptance to the Google Cloud for Startups program.
I please ask you, one again, to stop making accusations that are not factual and are intended to harm others/ projects that you have a competing interest with.
I’ve read your post four times and I’m having difficulty connecting your comments to any of the specific questions I asked of @Exosphere. If you are going to respond in place of Exosphere, I’d request that you quote each question in your response and reply to it individually for simplicities sake.
I will remind you that while per Justine no punitive action can/will be taken on the existing misuse of funds from the foundation, whether or not there were or are currently code of conduct violations another matter. Likewise, establishing a record on these open questions will be essential in governance evaluating any further grants from L2DAO, NFTEarth, LFGrow, and their associated teams and members so your response will be much appreciated.
I’ve cleaned up the questions to make them easier to process:
Why do you refer to LFGGrow and NFTEarth as two separate entities when they have the same multisigs owners?
Can you provide any evidence as to the existence of a LFGGrow DAO? Is there a Discord? Any record of DAO governance? Snapshot votes?
Who were the decision makers and signers in moving all funds from the LFGrow multisig to 20 different wallets and for what purpose were they moved?
Given it has been documented that L2Earth and LFGGrow have the same multisigs signers and the Layer2DAO team itself has said they control them. Why are you referring to them as “affiliates” if your team (per Weston’s own words) controlled their mutlsigs? Wouldn’t that make them an extension of L2DAO if all granted funds were controlled by L2DAO?
To clear up this point, can you please formally document the signers on the L2DAO / NFTEarth / LFGrow multisigs to help us understand the composition of each team / multisig?
Can you explain why any payments Weston to cover costs would require funds to be moved through multiple wallets before hitting the Coinbase deposit account used by Weston?
Can you explain what costs were required for LFGGrow, a project with no discoverable footprint or product, to expend it’s expend $27,500 OP in such a short time?
You mention “compensating developers, AWS, GCP or any off-chain vendor”, but Weston mentions explicitly above these funds were NOT meant to support the “NFTEarth = Exchange”. So what developer costs, AWS costs, and GCP costs did LFGDAO have?
Why did wallets connected to NFTEarth developer wallet ryuzaki01.eth receive payouts from both NFTEarth and LFGROW if they were separate entities? Why was NFTEarth team member @milkywave paid by the LFGGrow multisig?
Can you explain why only two signers sign multi-sig transactions? And the evidence that suggests they may both be wallets controlled by @0xWeston?
Can you explain the purpose and justification for the other activities these wallets engaged in such as:
To clarify this statement, this statement does not indicate that concerns have been resolved, rather, it indicates that the Code of Conduct cannot be applied retroactively.
If you would like to report a Code of Conduct violation, please do so through the defined reporting process specifying the specific violation # and substantiate the claim with documentation.
Hello Alex and Jack and the rest of the OP Collective,
Thorough time has been taken to prepare a response to all your questions here, and hopefully this can serve as a form of resolution and for the Collective to move forward at this point. Please see all questions and responses as well as the disposition of every single token that you have inquired about and the corresponding Tx hashes which can all be viewed on chain and are linked here. First off I believe it is important to clarify that although a contributor to multiple DAOs, I was not acting on behalf of Layer2DAO while spearheading these efforts to revive the NFT landscape on Optimism. I was a community member concerned about the future of NFTs, and felt compelled to do something about the situation. That being said, if anything I was a part of here was against the rules, I ask that you understand from the perspective of someone looking to bootstrap some projects. No rules were intentionally broken, if they in fact were it was not malicious. I believe that acting in good faith needs to count for something, and I am speaking for not only myself here, but all of the team that I’ve assembled and put together over the past three months.
I understand that we are competitors and have some history. I’d ask that for the sake of the OP Collective and ecosystem, that we choose to move forward for the benefit of all parties involved.
To get right into it. First thing I will address is NFTEarth and the Txs in question here to clear up any concerns. NFTEarth is an L2 NFT marketplace that was founded in direct response to the news of Quix closure. I wanted to fix this. There was much discussion in Layer2DAO community about how to go about this, a couple ideas, and I finally chose to go for leading this effort, apart from my role in any capacity of L2DAO. We held a vote as a DAO, and it passed with an overwhelming percentage of the community (99%) voting in favor to incubate the project. My understanding was that any grant funds received from L2DAO were to be used as the team saw fit, given the immense challenge we had ahead of ourselves and the necessity for operating expenses when bootstrapping a project like a new NFT marketplace. My initial forecast was 3-6 months time and $500K-$1M would be the necessary funding required to get the exchange operational. We did it in 1 month with significantly less funding.
Here was the Txs from NFTEarth Safe that account for the use of the 27,500 $OP tokens here:
On the second matter of LFGROWWW. A community member who has a strong interest in NFTs took the lead on this initiative, although I additionally have contributed and so am able to provide insight into your questions. One of the things we quickly realized while working on NFTEarth was the massive lack of infrastructure support for NFTs on Optimism. No one supported the L2 network, and it was like pulling teeth to get basic infrastructure needs in place, and so an idea came up - what if another DAO is created, but one to serve a different purpose, to be a hub of resources for NFT developers, creators, and collectors. Naturally this fit well with the ambitions of the NFTExchange and I got very involved with this project as well. The goals were to build educational resources, a bridge for NFTs from Mainnet to Optimism, a launchpad, and a Quests platform (learn and earn style) that combined education and tasks, all into one platform that could then be monetized by being used as a service. This is how NFTEarth envisioned using the resources that LFGROWWW would create, by integrating all these aforementioned tools directly into the exchange, so that not only would the exchange be unique from having its own token, unique tokenomics, etc., but additionally could offer an NFT-type hub for users of the marketplace. The bridge has been completed, the launchpad has also been completed, and the Quests platform was also completed as well. Getting these items into their own interfaces is where the current state of the platform is, and largely has been on hold for the past couple weeks due to running of out funding. Here is the Txs from the LFGROWWW Safe that account for the use of the 27,500 $OP tokens here:
There is overlap on the projects in terms of contributors and leaders, but again although they are similar and will be able to create synergies, they are distinct and that plan has no changed. The reality is that it is extremely difficult to find NFT developers, let alone any who are able/willing to come work on L2 NFTs, and so we have done the best we can, with what we had.
Whatever the situation is here right now, I believe the best path forward is to put one put in front of the other and all get back to building. I have poured so much time and effort into seeing both of these projects succeed, and in experience strong early results, and it is saddening to see the project and the community not receive RGPF funding, nor cycle 11 funding, nor any form of emergency funding, when I still believe that the potential for NFTs on L2 is one of the largest addressable markets that exists. Please see answers to your questions below.
Best regards,
Weston
Why do you refer to LFGGrow and NFTEarth as two separate entities when they have the same multisigs owners?
Because they are separate entities, each with their own purpose. People can create different companies and still be a part of both. One can own a pizza shop while also owning and operating an accounting business.
Can you provide any evidence as to the existence of a LFGGrow DAO? Is there a Discord? Any record of DAO governance? Snapshot votes?
Yes, please see the proposal for the creation of LFGROWWW here. Snapshot
The project started in February about 45 days before all of this discussion started. The goal of launching the DAO and the discord are in the works. As the proposal states the goal was to have everything up and running by May 2023. Although this has clearly set back that progress.
Who were the decision makers and signers in moving all funds from the LFGrow multisig to 20 different wallets and for what purpose were they moved?
The decision makers on this multisig are Weston and 0xadventurer. The payments were for the development for of the NFT bridge (80% done), the launchpad (90% done), the Quests platform for learn and earn activities (complete) and the educational resources for creators to serve as a one-stop shop for all things NFTs could be accessed, on L2, which were a part of the proposal. What the ENS do with their funds is up to them and out of control of the project. The claim that all of these wallets belong to me is incorrect and I am prohibited not just by Optimism but by general principle from doxxing all the people who did work for the projects without their permission.
Given it has been documented that NFTearth and LFGGrow have the same multisigs signers and the Layer2DAO team itself has said they control them. Why are you referring to them as “affiliates” if your team (per Weston’s own words) controlled their mutlsigs? Wouldn’t that make them an extension of L2DAO if all granted funds were controlled by L2DAO?
Layer2DAO does not control either project. Exosphere, Train and I have the ability to control the multisig, a point that will be rectified when we find another signer we can trust to work with. Please see the statement previously made by Exosphere. I believe this has already been addressed.
To clear up this point, can you please formally document the signers on the L2DAO / NFTEarth / LFGrow multisigs to help us understand the composition of each team / multisig?
Each has 5 signers on the Safes, but the Team’s are composed of different people, 12 on NFTEarth, and 5 on LFGROWWW. We respect the request from the anonymous advisors that have assisted Layer2DAO and will not doxx them in any way.
Can you explain why any payments Weston to cover costs would require funds to be moved through multiple wallets before hitting the Coinbase deposit account used by Weston?
Other than what has been documented here which was used to pay off chain costs, I have not received any additional distributions to Coinbase that would constitute personal enrichment. I am willing to share my account information with the Foundation if they would like to see it.
Can you explain what costs were required for LFGGrow, a project with no discoverable footprint or product, to expend it’s expend $27,500 OP in such a short time?
Yes, as was stated in the incubation vote, there was an urgent need to take action on the items mentioned, and so developers were hired at as fast of pace as possible to complete tasks such as development work for all aforementioned objectives.
You mention “compensating developers, AWS, GCP or any off-chain vendor”, but Weston mentions explicitly above these funds were NOT meant to support the “NFTEarth = Exchange”. So what developer costs, AWS costs, and GCP costs did LFGDAO have?”
LFGROWWW is still in development, again with a goal to finish the stated objectives by May of 2023, but has been severely derailed by this string of continuous accusations as to its efforts to genuinely build useful tooling for the L2 NFT Ecosystem. See above comments on project status.
Why did wallets connected to NFTEarth developer wallet ryuzaki01.eth receive payouts from both NFTEarth and LFGROW if they were separate entities? Why was NFTEarth team member @milkywave paid by the LFGGrow multisig?
Because we are all free to contribute to many DAOs, I personally have contributed and received forms of compensation from many various DAOs over the past few years and don’t expect this to change. It is not ok to dox developer wallets and would ask that for the respect of others you please refrain from posting ENS names of those who contributed to the projects when it is not relevant to them. Contributing to one DAO does not preclude you contributing to another, in fact, this trend is continually accelerating in the age of remote work, and sometimes people join to contribute for a specific task, join for a trial period, or ultimately determine it is not a good fit. This is a common occurrence in web3, and the fact that developers who have overlapping skills in NFTs then should stand to reason that they might be able to add value for both entities being discussed here. Hiring a dev and then after they perform well, referring that dev more work when it is good is just good business practice.
Can you explain why only two signers sign multi-sig transactions? And the evidence that suggests they may both be wallets controlled by @0xWeston?
We are a new project and it is not uncommon to have only a few signers. There is no evidence as you purport, only your continued suggestion that the two of us are the same person. No, I will not doxx this person as the security of the Safes and the procedures to ensure they are kept safe is not to be disclosed by design to avoid those with malicious intent figuring out who to target if they wanted to attempt to steal funds. This is a strategy you use all the time to discredit those who disagree with your point of view.
Can you explain the purpose and justification for the other….
Depositing at least five figures of value directly into a Coinbase deposit wallet used by westonnelson.eth -
Costs that required payment in USD or from a debit card needed to be reimbursed Vercel, SimpleHash, Google Cloud, ReadmeAPI, TypeDream, Loom, Cloudflare, Google Workspace,
Alchemy - on-chain payment of $USDC of 2,000 and 5,000, respectively.
Taking unusual action to obfuscate wallets, duplicating actions across several wallets and using contract integrations that make flow tracking more burdensome -
What the developers do with their compensation is entirely up to them, once it leaves the Safe’s control and that of the team, the signers cannot control the actions of others. As far as my own wallets I have verifiable expenses that the funds were used on. Again happy to share my coinbase wallet activity with the Foundation as well as the receipts for services paid for.
Buying up large amounts of NFTE and then exiting these positions at a profit using Uniswap v3 LP positions in a low-liquidity pool
Engaging in activities such as pulling liquidity before buying up more NFTE and manipulating price upwards only to re-exit the positions later through liquidity pulling
Ultimately pull nearly all liquidity out of the token, sending it to close to zero, its current value, mostly after after public evidence of misuse was surfaced
These three questions force the answer to operate under the assumption that public misuse of grants funds - with evidence - was surfaced. This is misleading and I would like to point out it was a comment, just like this, that started the entire issue now being resolved and careless statements have now caused serious harm to the entire ecosystem, not just Layer2DAO nor the OPIncubator grant recipients. Again, when it comes to liquidity management, it is not my choice who decides to provide liquidity on Uniswap. It is a decentralized exchange. Anyone can do so and also remove it at any point. It would appear some users traded well during the airdrop for themselves. Also not uncommon. Good for them. To accuse me of profiting from this is inaccurate. The liquidity reached nearly $150,000 at one point, there were 1,800 users involved in the airdrop, events like this attract many new people looking to speculate. As far as any POL we focused on trying to create LP with what little funds we had and had to manage it tightly to keep funds coming in to pay the bills and keep the project moving forward. Having any liquidity at all as a new project was a major win.
Participating in the exchanging and wash trading of NFTs on NFTEarth between them, obscuring value exchange and juicing NFTEarth stats highlighted in public comms
This has been discussed repeatedly as well but to clear this up again, the NFTEarth team has been working on an XP leaderboard system like Blur used to attract new users to the system, incentivizing listings and offers. The team experienced severe bot attacks at first launch of this, due to the cost of placing Txs on L2 being so low. To respond to this, we redesigned the algorithm for gaining XP, and was set to start the official round for airdrop 2 campaign 1 week and 1 day ago, the precise time that the first misleading and untrue accusation was posted by Dicasso, claiming NFTEarth was a scam - to attempt to harm the project in his own interests for personal gain and the attempted NFT Exchange he is looking to create.
