As promised, this will be a continuously updated thread loosely tracking where the granted OP has gone. My goal is to cover all of the grants, tracking how OP flowed to likely user or team wallets, and to what ends. Among other things Iāll be paying attention to distribution (e.g., how many OP paid out per user connected, share of top 5 wallets, etc) and to whether the OP was used for intended ends.
This is a really time-consuming thing that requires some double-checking, and even then I might get things wrong. So I invite people to join me on this, especially the project teams that will be referenced. Iāll generally try to do outreach to those teams privately to get more clarity before posting publicly, though.
The 1inch Network is thrilled to announce that a total of 300,000 OP tokens will be distributed among the 1inch Walletās users in a move to incentivize their activity on the Optimism network.
The distribution will be made in a retrospective Merkle drop. The OP tokens will be equally distributed between 3,782 selected wallets of the 1inch Walletās most active and regular users, and are already available for claiming. For a detailed instruction on how to claim OP tokens on Optimism, please, head to the 1inch Help Center.
Distribution
9/5 Governance distributes 300k OP to 0x1bd315E3F029083DA8731a6b1c6F2959A0d15376
Wallet transfers all OP to 0xea1e11e3d448f31c565d685115899a11fd98e40e, which programmatically distributes 79 OP to designated wallets.
In 72 days, 253 of the 3,782 wallets have claimed their share of the airdrop, with the current rate being roughly 1 claim per day.
There are 280k OP remaining; at the current rate of claims, it will take just under 10 years for these 3,782 wallets to have gotten their money.
After scanning a few of the recipient wallets to determine evidence of increased use, I eventually stopped my analysis at this point, given this grantās application as a retro airdrop and the low, flat rate of OP distributed.
Observation and Recommendation
This was a retroactive airdrop, which was not detailed in the governance proposal.
There is little if any evidence of benefit to Optimism as a result of this grant; the total number of potential wallets is relatively low, and very few wallets have been involved to date. Even if the pace were somehow to increase, the total number of potential wallets is limited due to the retro airdrop, and itās not clear what the catalyst for such an increase would be.
1inch should thus consider returning the remaining 280k OP, as it seems that nobody is really going to benefit here going forward; we could use this OP for other purposes. EDIT: Itās in an immutable merkle distributor contract, so the OP is effectively bricked.
Caveat
If 1inch did in fact heavily promote this airdrop ahead of time, this could be considered in scope, if not evidently successful. I invite any corrections on this point.
Other context: Celer had already been running incentives with its native token, so the largest wallets had already been farming. What was strange was that the largest wallets were repeatedly depositing and withdrawing their liquidity, which might indicate the intention was to game some sort of reward.
Celer rewarding USDC, USDT, and ETH
150K OP: gas rebates for bridging
cBridge can facilitate that structure by covering a portion of the gas fee that the user needs to pay. For example, if a user bridges 10 USDC from Avalanche, instead of getting $9.5 with the $0.5 covering the gas costs on Optimism, she would now get $9.8 with $0.3 covered by cBridge through $OP token distribution to Celerās validator networks.
The fee rebate proportion is 80%, however the total rebate amount per user is capped to the āPer-User Rebate Maximumā (5,000 OP) mentioned above.
Distribution
Liquidity Mining - 650k allocated
8/4 - Foundation sends 1mm OP to 0xf5e9d550c3c50364d630edb4753be404cd109121, which immediately sends to EOA 0xf5e9d550c3c50364d630edb4753be404cd109121 then sends ā to EOA 0x20f3880a281092dbc6699e5d5a0ff5feb3d3db1a.
8/11- 0x20f sends 10k OP to farming reward contract 0x06292de88adb3b1557b034ebb1c367e65ab93e4c
9/21- 0x20f sends 100k OP to farming reward contract 0x062
Liquidity mining here is likely linear so the rewards will follow a preset schedule. Of note is that the 0x062 contract has a function drainToken which lets the dev wallet retrieve the OP. OP is manually transferred in to the contract in batches.
Of the 650k allocated for distribution, only ~50k has been claimed. However, the rate of rewards distribution is unclear; weād have to check with the Celer team to see how theyāve programmed it.
Address
OP
Share
Cumulative Share
0x2ddbd93427608f5ff3a7f83f46f293aa410ddea9
8624
15%
15%
0x089a2c44131b1eb30cc4fc226560163fcef2c288
6101
11%
26%
0x21d9c1d2cdcb44b04e6ded64dd89bcf5fcb09ce5
4395
8%
34%
0x4fc126b084fd491cf417c306717019e9c0d6d087
2754
5%
38%
0xa2ada734d1d76e3d689fdb0c676ceb95bfd6cacf
2705
5%
43%
0x10bf1dcb5ab7860bab1c3320163c6dddf8dcc0e4
2240
4%
47%
0xf0eabe8052643d080df6cffcc637b2b3bc0e6ad2
1954
3%
51%
0xf0bbfb6b0d222e0d065538546d20302298752446
1854
3%
54%
0xdb38e01ba0d515ef152c79155f19e338cd823a56
1776
3%
57%
0x8604c23ac29342c1bed458cee6be460054cda8c9
1617
3%
60%
0x9a25d79ab755718e0b12bd3c927a010a543c2b31
1511
3%
62%
The first and third wallets are related, so the top three entities are getting 38% of all rewards claimed to date. However, of the top four wallets, only #2, 0x089, is still farming.1 This could mean that much of the distribution has yet to be claimed by large providers still farming.
We thus wonāt know the largest beneficiaries without directly investigating the pool itself.
Fee Rebate - 150k allocated
Just started. 11/15 0x20f sends 10k OP to āIncentiveEventsRewardā contract 0xf6C5d7DA1654d9BbDe0D25A5fd6776B37a2aD881
drainToken also exists in this contract.
Will revisit in a month or so to get a sense of spend rate.
Unused
880k OP remains in EOA
Brief performance analysis
TVL
Overall, across chains, Celerās TVL has decreased ~30% since 8/42
On Optimism, Celerās TVL has roughly tracked that decrease, but some recent deposits have brought it almost back up to the start of the period.3 From my view, taking out the recent deposit, this suggests that the grant hasnāt had a meaningful impact on liquidity.
More transaction volume (particularly inbound) is an intended second-order effect of the grant. The data suggest that the grant hasnāt noticeably facilitated bridge activity.
On Optimism, Celer has decreased 1 percentage point in transaction share since August. from ~3.4% to 2.3%4
Across crypto, Celerās 1m volume is roughly 20% the amount of the leader, Multichain. On Optimism, it is only 4% of the leader, the Optimism Gateway, and 5% of the #2 bridge, Multichain.5 Again, there doesnāt appear to have been a meaningful increase in share, which is what one would expect to occur as a result of this grant.
Distribution to date seems properly managed and not obviously to related parties, though any related parties are likely to still have their liquidity in and thus likely not to have claimed rewards yet. A more thorough analysis would identify the largest liquidity providers to this bridge.
This grant doesnāt appear to have been deployed to any real effect. It could be worth revisiting the length of time used on this grant or the timing (maybe the moment isnāt right). Or, if the Grants Council has the authority, they could even revisit the scope of the grant in collaboration with Celer.
It might be interesting to evaluate the grant distribution on bridges relative to activity.
Cycle 1: Projects that havenāt yet gotten or used their OP
These are the Phase 0 proposals that were voted in as a batch on June 22.
The full slate is below. Asterisks denote proposals that have not yet gotten or used their granted OP.
These proposals amount to a total of 4.1mm OP in grant funds that have not been deployed as of this writing (11/19).
200k OP for builder grants 100k OP for Optimism-focused events:
Distribution
8/3 Foundation sends 300k OP to multisig 0xcd150D9CFDb39D287D69B9b1bb7111E58414aCA8
Chainlink
Proposal
1mm OP for āNOPs and other ecosystem participants over time in order to support and encourage building on Optimismā
Distribution
8/3 Foundation sends 1mm OP to multisig 0x7EE753e87f20eb3262967c2Fc54762b0B4Ff4D75
0x
Proposal
300k OP to the 0x Grants program for ecosystem builders
Distribution
7/8 Foundation sends 300k OP to multisig 0xba9493f97BEF07a272998139A268398b80AB9Dd5 8/12 0xba9 sends to another multisig, 0x1d702651ed22736eEb261aC9E2B72E7F79Ed9EA9
Zipswap
Proposal
630k OP for gas fee rebates
270k OP liquidity incentivization around planned tokenomics overhaul
Distribution
OP never distributed from Foundation; information and directions were never provided by team.
It appears that this grant wonāt be distributed; Zipswap recently announced plans to cease operations as a team.
Synapse
Proposal
150k OP for builder grants
450k OP for liquidity mining, particularly on stablecoin pool (USDC,DAI,USDT,nUSD)
400k OP for liquidity mining on proposed SYN/Stable Curve pool
Distribution
No distribution has been made by the Foundation to the planned multisig 0x2431CBdc0792F5485c4cb0a9bEf06C4f21541D52.
Connext
Proposal
250k OP for liquidity mining on stable pools
50k OP for gas rebates
Distribution
No distribution has been made by the Foundation to the planned multisig 0x3576aafaffe4c07f894447265b391856377157db.
Gelato
Proposal
250k OP for fee rebates
50k OP for builder bounties
Distribution
7/8 Foundation sends 300k OP to multisig 0x01ea687Be2937D4Bfd9e302b8dbD3be8d9bDb14e.
Observations
This is a lot of undeployed OP (and this is only for one phase), and itās worth checking in with these projects to see what has held them up, whether itās operational issues, market conditions, changes in plans, lack of demand for builder grants, etc.
It could be worth coordinating the release of these lingering incentives at a planned date.
It could also be interesting to see whether these projectsā outlooks or strategies have changed in any way and explore potential changes in scope.
Past a point thereās got to be something like a deadline to start these grants; are we going to honor them if projects donāt claim funds by a year from now, for example?
Back from hiatus. Thanks for bearing with me.
Polynomialās still pending some data from the team so skipped ahead to Aelin.
I wonāt spend too much time on Aelin because it is already known to governance that they went off spec in managing their grant.
Proposal
900k OP
360k OP to LP stakers / liq mining
540k OP to a pool incentive program
Distribution
7/14 Fdn transfers 900k to Aelin multisig 0x17990cb7fbe68b7c2a31a9976970466cd1e7fed9
7/19 - 9/06 Aelin multisig sends 30,270 OP for liq mining
9/7 - 2,766 OP multisent to 29 wallets, reason unclear but appear to be pool incentives per proposal spec
9/16 - Multisig sends remaining 866,963 OP to 127 wallets as private sale for AELIN, following https://aelips.aelin.xyz/aelips/aelip-35/. This move was done unilaterally.
Observation
Although there may have been a fine reason for Aelinās move to use OP as deal incentives, it was undoubtedly out of scope for the team to make a unilateral decision and a bad precedent overall.
If a project is in distress, it could be worth Optimismās while to find a way to support it, but determining whether and how best to support should be a cooperative effort between governance and a grantee. Otherwise, the OP ought to be returned.
7/8 foundation sends 300kOP to Slingshot multisig 0x9D439E524F214Fb0cb5fA42030E578F60E64D98C
8/26 Slingshot multisig sends 25,653 OP to merkle distributor 0x307c3487e0165a6cfc384165d2d914a034ac8c90
The distributor sends 2608 txs to unique addresses of amts of 1,3,6, and 12 OP. 3,313 OP remaining.
8/27 Slingshot msig sends 13,942 OP to merkle distributor 0x3dea6da7cdad789e6d947c3e983ab4f996a7bbc1
Same but to 1,215 addresses, 2,275 OP remaining.
9/1 sends 3,738 OP to merkle distributor 0xa46fd59672434d1917972f1469565baeb57ed204
Same but 933 addresses 1,081 OP remaining.
9/30 sends 81,480 OP to unverified distributor 0x407da3E66095e28852774D5B88A575D75FDc6af4
same as above but for 3,855 addresses and now at values of 25, 5, and 1 OP 4,717 OP remaining here.
10/12 sends 9,522 OP to unverified distributor 0x6053cbeb363A0b4a07b1EBCC7C8c3863ff546F7C
Same as above but amounts of 2 OP, 6 OP, and 12 OP to 1359 wallets. 5,740 OP remaining here.
There are 165,665 OP remaining in the main multisig, which after roughly 3 months puts this grant more or less on track timewise.
There are three wallets that participated in each of these but they appear to be test wallets, and in any case the compensations were for tiny amounts.
Observations
This program appears to have been more or less followed to the letter.
The next step of analysis for this (and, really, any other grant) would be to assess the efficacy of these handouts. I believe that it ought to be feasible to do some basic statistics given the final addresses distributed to: is there sibyl risk, were these wallets activated, did they participate in other incentives as well.
Been some time since the last update ā had some personal developments as well as the start of grants council. I figured it was fine because so many projects hadnāt started yet.
Soon Iāll pick this back up - will start with Polynomial Protocolās grant.
2,000 OP | Clique Campaign - Red Wars 2 Nov-25-2023
Remaining
113,767 OP
@jackanorak You are right, it would be time consuming for yourself to go through and cover all of the grants. Hope others from Season-1/Season-2 can contribute
ācan you report how the retro airdrop has gone? and whereās the liquidity mining component?ā
Retro Airdrop:
Claim Statistics:
129,305 OP has been claimed out of the 148,600 OP (93%)
22,180 out of 26,888 addresses have claimed so far (86%)
Criteria:
Rewarding those that Provided Liquidity and kept it in there
Claimed the OP Quest (deposit and swap once)
traded on Clipper more than other dexes combined
December 15th being the cutoff which goes hand in hand with our Adventure series which also concluded December 15th (One month prior to the retro drop) where depending on number of swaps or providing liquidity you received NFTs, so those that participated in these Liquidity Mining/Trading like activities were the ones that were likely to receive more from the past behavour distribution. This first drop is kind of an amalgamation of a few of the points in the proposal.
Kromatika came in for RPGF and i started digging into their grant, seemed like a good idea to do a whole writeup. I am, as always, doing this in my own personal capacity and not as a delegate or member of the grant council.
Iām not going to make this especially structured, but thereās a lot here.
30% - 90k OP to be paired against 300k KROM in a Uni v3 pool
20% - 60k OP gas refund to support āgasless swapsā
10% - 30k OP liquidity mining campaign on 0xPlasma and Gamma (by amendment)
20% - 60k OP airdrop for creation of limit orders; get a limit order filled, get an airdrop
10% - 30k OP for affiliate referrals
10% - 30k OP various marketing initiatives
DIstribution
11/6/22 Foundation wallet sends 300k OP to 0x05d235d8ba95bfc457f9a11f64cf869f0f3f60f9
then a bunch of time elapses. Although Kromatika say:
this isnāt deployed until 6 months later, May 3, 2023. I am not aware of any stated reason for this delay.
Protocol-deposited liquidity - 90K OP
90K OP transfer to EOA 0x878e2ed05589f57d53127e3d02ecf3a271ae7440, which creates two deposits:
first is 6K OP paired with the 300K KROM in an equal-valued, full-range (ie, V2-like) LP position, which is then burned
the second is more interesting: the other 84k OP, which is 93% of the POL allocation and 28% of the entire grant, is functionally a pure limit order to buy KROM with OP. Thatās what single-sided uni v3 positions are.
What is it there to do? Provide $150k worth of plunge protection on the KROM token.
Is this plunge protection needed for any core protocol functions?
No.
Does it help incentivize or subsidize certain user activities or business development initiatives?
No.
It just keeps the token price from going lower.
The thing is, Kromatika didnāt go off scope in doing thisāthey provided the exact amounts of OP and KROM they said they were going to provide. Their application simply lacked a compelling reason behind this piece of the proposal, and the planned buy pressure was never openly discussed and in fact denied by the team.
If thereās no already-existing sell pressure, what is the buy pressure for?
That said, although I have been unable to find evidence of any positive user impact from this liquidity provision, Iām open to seeing substantive data showing its value. Iāve asked the Kromatika team in the OP Discord for a response, and the answer they gave is āto prevent arbitrageā with no further clarification.
Gasless swaps
60k OP
Kromatikaās pitch is that traders can do swaps without paying gas fees. Instead of being paid with user ETH, gas fees would be deducted from the tokens a user would be acquiring. This grant would subsidize this use.
So, in effect, a user makes a gasless swap, a relayer pays the eth on the userās behalf, and kromatika sends OP to the relayer as compensation (as opposed to crediting the output to the user). But several months after making this proposal, the team acknowledged they hadnāt really thought the system through.
Their proposed solution, which was effectively to sell the OP for ETH to then send to relayers, would have violated the no-selling rule and was quickly dropped.
As of right now, over a year after this proposal was made, there is no clear plan for executing this pieceāone of the largest chunks of this grant.
For the moment, Iām setting aside the value of the liquidity mining as such, or how the v3 vaults are managed in relation to the protocol-deployed liquidity. In this analysis Iām simply looking at how much capital and how many wallets are attracted by this initiative, which is intended to bring in new users.
Note that this program took place in the last month or two. There is substantial evidence of wallets with interaction with known team wallets capturing a major portion of this grant; if these wallets are indeed team-owned wallets, this may violate the self-dealing clause of the Code of Conduct due to the sheer proportion of the OP claimed by these wallets. I invite the team to explain this piece.
A total of 37 wallets participated, or 270 OP per wallet
to
coins
share
cumshare
0x9b3493adb33004fd7a63fb1fe332d9cd8143995d
1758
18%
18%
0x47df83408184aaa52dc6adce63f6dec6a8d65c2d
1094
11%
29%
0xf61fb6d4034fb74b172355b65c2ceb161cb5fbdd
1012
10%
40%
0x3de057878288f40d2448d0cd5cb3ce23b3402062
931
10%
49%
0x87d59ab177cbec244bf4fb97dfbd4e254164d048
782
8%
57%
0xdfaede01e3d60f1ffe05c81df3ff99a3b11b0ed0
694
7%
64%
0x007213182b28189437a4154b8658f0966d9873e5
497
5%
70%
0x3ab0ce025ed37151ce3b60e569665a36fbc1b07e
481
5%
75%
0xddb6a43628d7772101893eed4c7f191309e04d90
291
3%
78%
0x799ba157d02efab073f77e5aa0d33ef5db18c6a0
283
3%
80%
Even more extreme: four wallets get half of the OP here.
And even more alarming: thereās substantial overlap between Gamma LPs and 0xPlasma LPs. Six wallets are in the top 10 of both pools. And all of these wallets have interesting, enduring connections with team Kromatika wallets.
0x3ab0ce025ed37151ce3b60e569665a36fbc1b07e, connected to a prodigious sibyl ring farming the limit order part of the grant. This oneās my personal favorite because you can see them farming limit order AND the liquidity mining portion of the grant then getting exit liquidity out of the LP portion of the grant by selling their KROM into the KROM/OP pool. Itās received at least 3k OP to one of its associated binance addresses from sibyl activity, and Iāve just scratched the surface. As yet I have found no connection to the team but I will keep digging.
The combined distribution between the two:
to
coins
share
cumshare
0x9b3493adb33004fd7a63fb1fe332d9cd8143995d
2524
13%
13%
0x87d59ab177cbec244bf4fb97dfbd4e254164d048
2190
11%
24%
0xf61fb6d4034fb74b172355b65c2ceb161cb5fbdd
1599
8%
32%
0x47df83408184aaa52dc6adce63f6dec6a8d65c2d
1278
6%
38%
0x3de057878288f40d2448d0cd5cb3ce23b3402062
1181
6%
44%
0x3ab0ce025ed37151ce3b60e569665a36fbc1b07e
850
4%
49%
0x03354f0a4c5df3849c39942199bca614baffcf4a
832
4%
53%
0x1335919a2ebbb7a2042563bca3591b111c7e0b13
779
4%
57%
0x799ba157d02efab073f77e5aa0d33ef5db18c6a0
768
4%
61%
0x330d575dab6dac642ddf13e9531ecdf5faf22f7b
766
4%
65%
with the overlapping wallets capturing 40% of all OP here.
To summarize, there does not appear to be strong evidence of new wallet attraction as a result of this program; there were a max total (not counting duplication) of 77 wallets, and a substantial portion of these wallets could be said to have had some existing relationship with Kromatika.
Limit order bonuses - 60k OP
As highlighted above, thereās already ample evidence of some sibyl activity on this. Iām going to investigate further but will stop here for now.
However, on a high level, here is the chart of limit orders made:
You can see a massive spike in limit orders, from 0-2 limit orders per day to a peak of 90 in a day. This coincides almost 1:1 with the incentive program associated with these limit orders. Once the incentives are over, so are the limit orders. There is little evidence of any organic takeup as a result of this program.
Marketing - 30k OP
This portion of the grant was to my knowledge never completely scoped, and as far as I can tell there hasnāt been any formal disbursement to this end, although there was a deposit to a fresh Coinbase wallet early on in the program, so if this was a marketing piece Iād expect to have seen some output from it by now. Waiting on clarification here.
Affiliate Referrals - 30k OP
One year in, still hasnāt been laid out.
Summary
-A year in, 175k of the 300k OP has been spent.
There is no meaningful enduring use of limit orders.
Two major portions of the grant havenāt begun.
One hasnāt been fully specified, to my knowledge.
One is used to provide liquidity in support of the KROM token price without adequate explanation (again, this is not deviation from the application)
One (which completed) was a potentially sybilled giveaway to traders with apparently little enduring effect, although this observation is admittedly preliminary.
And one, in the last few months, appears to have a large number of rewards going to few wallets that have unusually deep relationships with team-owned wallets.
And today we see a handful of orders made daily on the app at current run rates. Kromatika have now returned to ask for RPGF. I think there are several unanswered questions that need to be resolved before badgeholders resolve on the merit of their claim. Among the questions I leave to readers is whether this grant was an efficient use of OP funds.
Discussion
Why did I write this? The point isnāt to say that this group did anything bad per se. Instead, this is the kind of scrutiny that has to be applied to projects that are seeking to demonstrate their impact to the collective. Kromatika got 300k OP a year ago to bring in users. I leave it to readers to decide the amount of impact theyāve had.
Another reason I wanted to write this up is to highlight what I see as some corrosive elements of governance that Iām grateful we have largely collectively moved past. I stopped regularly updating this thread because I was joining the Grant Council and saw more value out of my time in getting great grants out the door than looking backward ā but also because I felt like the inception of the Grant Council has helped us turn a page toward more professionalization and less chaos.
The RPGF discourse lately has been difficult for me to process because it has seemed at times like a return to these earlier days, with more politicking and fluff and less rigor in determining 1) what we want as a Collective and 2) whoās been delivering it and ought to be rewarded.
The past few weeks I have once again, as before, been seeing evaluators come in giving underscoped, questionable applications a free pass for no good reason. This grant is a reminder of the times we had before the Grant Council, and I think we may be due for a similar type of evolution on the RPGF side, especially as it becomes more prominent.
But in sounding this out, Iām met with a problem. In the past, when I would air my concerns, I would immediately be hit not with meaningful responses but accusations of motivated reasoning and emotional bias(!). Iāve had code of conduct complaints filed against me. Iāve been filibustered at and called toxic and antithetical to what weāre trying to do at Optimism. Examples just from this team when the grant application was first made:
People need to do the work on evaluating previous contributions, and I donāt really know how to approach this, because itās going to be very difficult to do anything productive if actual investigation is met with so much friction. Already Iāve kept my mouth shut a few times this year to avoid causing any disturbance.
Iāve asked a ton of colleagues in governance now whether starting to ask questions again is a net positive, and the balance seems to be yes, but that I should expect to have it not be so great for me. I think thatās a shame, that people would be penalized for trying to make the most out of our collective resourcesābut I acknowledge that there is politically a very fine line to walk.
Anyway, I hope this helps so far. Iām not done, will dig more into the sibyl wallets, but itās been a long day, and maybe this start helps shed some light in the meantime.
This is my own opinion and has nothing to do with the Grants Council or Govnerds
Thank you, Jack, for your thorough and detailed analysis. Your effort in scrutinizing the various aspects of the grants provides valuable insights into the efficiency and impact of the projects.
I particularly appreciate your investigation into specific wallets, the in-depth analysis of the liquidity mining campaign, and the questioning of the deployment delay. These are crucial points that shed light on how community resources are being utilized.
I encourage an open and transparent discussion within the community. If there are specific areas that require further clarification or additional information, I hope your ongoing investigation will help uncover more details. Maintaining a constructive and respectful tone is key in these discussions. Letās work together to ensure the responsible use of DAO funds and promote transparency. Looking forward to further updates and professional responses from the community and Kromatika.
First off, did you reach out to the team of this project for clarity before you put out this post?
Just as you stated in the last paragraph of the start of this thread here
Secondly, to be unbiased and to fact-check, Iād like to see a response from the Kromatika team before stating any further opinion.
