Nice work Jack, let me know if I can help with the next one!
Very concise and incredibly insightful.
650k OP - liquidity mining
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 Celer’s validator networks.
200K OP: builder grant
6–12 months expected
Fee rebate to start 11/15
The fee rebate proportion is 80%, however the total rebate amount per user is capped to the “Per-User Rebate Maximum” (5,000 OP) mentioned above.
8/4 - Foundation sends 1mm OP to 0xf5e9d550c3c50364d630edb4753be404cd109121, which immediately sends to EOA 0xf5e9d550c3c50364d630edb4753be404cd109121 then sends → 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; we’d have to check with the Celer team to see how they’ve programmed it.
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 won’t know the largest beneficiaries without directly investigating the pool itself.
11/15 0x20f sends 10k OP to ‘IncentiveEventsReward’ contract 0xf6C5d7DA1654d9BbDe0D25A5fd6776B37a2aD881
drainToken also exists in this contract.
Will revisit in a month or so to get a sense of spend rate.
880k OP remains in EOA
Overall, across chains, Celer’s TVL has decreased ~30% since 8/42
On Optimism, Celer’s 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 hasn’t 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 hasn’t 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, Celer’s 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 doesn’t appear to have been a meaningful increase in share, which is what one would expect to occur as a result of this grant.
- Get the 880k EOA-custodied OP to a multisig asap
- 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 doesn’t 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 isn’t 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.
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:
8/3 Foundation sends 300k OP to multisig 0xcd150D9CFDb39D287D69B9b1bb7111E58414aCA8
1mm OP for “NOPs and other ecosystem participants over time in order to support and encourage building on Optimism”
8/3 Foundation sends 1mm OP to multisig 0x7EE753e87f20eb3262967c2Fc54762b0B4Ff4D75
300k OP to the 0x Grants program for ecosystem builders
7/8 Foundation sends 300k OP to multisig 0xba9493f97BEF07a272998139A268398b80AB9Dd5
8/12 0xba9 sends to another multisig, 0x1d702651ed22736eEb261aC9E2B72E7F79Ed9EA9
- 630k OP for gas fee rebates
- 270k OP liquidity incentivization around planned tokenomics overhaul
OP never distributed from Foundation; information and directions were never provided by team.
It appears that this grant won’t be distributed; Zipswap recently announced plans to cease operations as a team.
- 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
No distribution has been made by the Foundation to the planned multisig 0x2431CBdc0792F5485c4cb0a9bEf06C4f21541D52.
- 250k OP for liquidity mining on stable pools
- 50k OP for gas rebates
No distribution has been made by the Foundation to the planned multisig 0x3576aafaffe4c07f894447265b391856377157db.
250k OP for fee rebates
50k OP for builder bounties
7/8 Foundation sends 300k OP to multisig 0x01ea687Be2937D4Bfd9e302b8dbD3be8d9bDb14e.
- This is a lot of undeployed OP (and this is only for one phase), and it’s worth checking in with these projects to see what has held them up, whether it’s 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 projects’ outlooks or strategies have changed in any way and explore potential changes in scope.
- Past a point there’s got to be something like a deadline to start these grants; are we going to honor them if projects don’t claim funds by a year from now, for example?
Back from hiatus. Thanks for bearing with me.
Polynomial’s still pending some data from the team so skipped ahead to Aelin.
I won’t spend too much time on Aelin because it is already known to governance that they went off spec in managing their grant.
- 360k OP to LP stakers / liq mining
- 540k OP to a pool incentive program
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.
Although there may have been a fine reason for Aelin’s 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 Optimism’s 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.
Summary: 300k OP for volume-based discounts.
Continuing the discussion from [GF: Phase 0 Proposal] Slingshot:
7/8 foundation sends 300k OP 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.
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.
I consider this work invaluable to the governance community! Thank you
Wow, great work! If you need any help, feel free to DM me.
This is the kind of follow up the governance will need moving forward. Pure Ethos, Don’t Trust, Verify
Good job. Thx, bro.
I will be there.
Been some time since the last update – had some personal developments as well as the start of grants council. I figured it was fine because so many projects hadn’t started yet.
Soon I’ll pick this back up - will start with Polynomial Protocol’s grant.
Preface: I am one of the Community Leaders on Clipper; Technical Advocate for Admiral Dao
Summary: 300k OP for:
- Liquidity Mining / Trader Mining
- Builder Acquisition
- Clipper’s Adventure Series
- 148,600 OP | Available to claim, distributed to 26,888 eligible community crypto addresses for past behavior rewards (merkle distribution).- OP Mainnet Transaction Hash (Txhash) Details | Optimism
- 12,000 OP | Clipper’s Adventure Series - Captains (OP Mainnet Transaction Hash (Txhash) Details | Optimism)
- 7,000 OP | Liquidity Mining Rewards - Clipper’s Farming Pool Aug-04-2023
OP Mainnet Transaction Hash (Txhash) Details | Optimism
- 2,000 OP | Clique Campaign - Red Wars 2 Nov-25-2023
- 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
“can you report how the retro airdrop has gone? and where’s the liquidity mining component?”
- 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%)
- 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.
this is awesome. thank you. def encourage others to do the same. can you report how the retro airdrop has gone?
and where’s the liquidity mining component?
Thank you jack. I discovered this project thanks to retropgf. I will allocate a small percentage as I think it’s a very nice initiative!
Adding this thread here not to rehash the discussion on this (I am NOT interested) but because it really folds under this broader project.
RPGF special edition of this series.
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.
I’m not going to make this especially structured, but there’s a lot here.
300k OP total
- 30% - 90k OP to be paired against 300k KROM in a Uni v3 pool
- 20% - 60k OP gas refund to support ‘gasless swaps’
- 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
11/6/22 Foundation wallet sends 300k OP to 0x05d235d8ba95bfc457f9a11f64cf869f0f3f60f9
then a bunch of time elapses. Although Kromatika say:
this isn’t deployed until 6 months later, May 3, 2023. I am not aware of any stated reason for this delay.
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. That’s 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?
Does it help incentivize or subsidize certain user activities or business development initiatives?
It just keeps the token price from going lower.
The thing is, Kromatika didn’t go off scope in doing this—they 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 there’s 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, I’m open to seeing substantive data showing its value. I’ve asked the Kromatika team in the OP Discord for a response, and the answer they gave is “to prevent arbitrage” with no further clarification.
Kromatika’s 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.
This is to be implemented using a Kromatika Gas tank smart contract where the $OP grant will be deposited in combination with meta transactions and Kromatika relayers. Everytime a user performs a gasless swap on Kromatika dapp (using the gasless feature), a matching $OP amount will be deducted from the Gas tank as relayer fee and sent to the Kromatika relayer that has paid the gas on user’s behalf.
So, in effect, a user makes a gasless swap, a relayer pays the eth on the user’s 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 hadn’t really thought the system through.
Here is a suggestion:
Usage of Kromatika’s limit orders aka FELO(fees earning limit orders). These limit orders are actually concentrated liquidity positions on Uniswap V3 pool at the desired tick range.
Using FELO for OP/ETH, we add liquidity to the pool in exchange for ETH. This ETH can then directly fund the biconomy gas tanks which the validators can then use to cover the users tx costs on swap.
We feel this will be an efficient means of delivering the gas refunds. There is no direct selling, since using FELO (Kromatika’s flagship limit orders) means $OP liquidity is being added to the Uniswap v3 pool at a specific tick range. This can be carried out on a periodic basis based on the delegates recommendation.
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 piece—one of the largest chunks of this grant.
For the moment, I’m 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 I’m 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.
9/5/23, 10k OP goes to EOA connnected to Plasma Address 0xb5f9100e94c8f5b71101395dab91cbeffba4cc08 | OP Mainnet
9/6/23, that 10k is passed on to proxy contract 0x12e70f6fe298ce8cfceed3c9d54172761dbccf90 (implementation 0x1Aad56a82624b111f67Da9C6763d1af211823250)
Coins are distributed to LPs from this contract.
40 wallets participate in this liquidity mining program, or 250 OP per wallet.
10 wallets get 2/3 of the OP here.
On 11/11/23, WithdrawEmergency is called on this contract. I might chase the meaning of this down later.
10/10/23 - 10k to gamma distro contract 0x95DD2ECba4D0472D0440D764e9a540C6a99e79eE
distributions functionally end a month later, 11/13
A total of 37 wallets participated, or 270 OP per wallet
Even more extreme: four wallets get half of the OP here.
And even more alarming: there’s 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.
- The top wallet:
0x9b3493adb33004fd7a63fb1fe332d9cd8143995d - first transactions two years ago were with Kromatika and Plenny, which both saw testnet interaction with the same wallet 0x9e77c5B95222908D9b0B42e79F6E476c4e7CBf2D - ethereum address history, charts and balances explorer - Ethplorer - aside from that, also gets biweekly KROM from team multisig
- #2 wallet 0x87d59ab177cbec244bf4fb97dfbd4e254164d048,
funded directly by a wallet repeatedly funded by two kromatika multisigs
- #3 wallet 0xf61fb6d4034fb74b172355b65c2ceb161cb5fbdd KROM transactions dating back a year, first non-eth token transacted, also funded by wallet at one time getting bweekly payments from kromatika multisig
- #4 wallet 0xddb6a43628d7772101893eed4c7f191309e04d90, also funded by wallet getting biweekly payments from kromatika multisig
- #5 wallet 0x799ba157d02efab073f77e5aa0d33ef5db18c6a0, biweekly payments from kromatika multisig
- 0x3ab0ce025ed37151ce3b60e569665a36fbc1b07e, connected to a prodigious sibyl ring farming the limit order part of the grant. This one’s 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. It’s received at least 3k OP to one of its associated binance addresses from sibyl activity, and I’ve 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:
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.
As highlighted above, there’s already ample evidence of some sibyl activity on this. I’m 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.
This portion of the grant was to my knowledge never completely scoped, and as far as I can tell there hasn’t 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 I’d expect to have seen some output from it by now. Waiting on clarification here.
One year in, still hasn’t been laid out.
-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 haven’t begun.
One hasn’t 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.
Why did I write this? The point isn’t 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 they’ve had.
Another reason I wanted to write this up is to highlight what I see as some corrosive elements of governance that I’m 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 – 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) who’s 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, I’m 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(!). I’ve had code of conduct complaints filed against me. I’ve been filibustered at and called toxic and antithetical to what we’re trying to do at Optimism. Examples just from this team when the grant application was first made:
As one of the Kromatika proposal author,I believe this advice is too much biased and is not an objective advise, probably due to conflict of interest with other protocols and especially a “fight” between the official DeFi A committee within Tarrot proposal on the committee recommendations for Tarrot, resulting into Tarrot proposal supporters going against the committee decisions as a rage option.
We would love to answer and reply to some of your review, when they are more objective ones.
Quote below point out that the Kromatika review was done not objectively and it was targeted directly at Kromatika rather than the proposal. It is a biased and would even say a rage review to proof something to the DeFi A committee. We would not go into explaining reviews that were designed to be biased and negative from start.
We think there is certainly space (and probably desire) for a Uniswap v3 limit order protocol of this type, but there isn’t enough evidence here that Kromatika is the one to achieve PMF, nor is there evidence laid out that this proposal makes this protocol more likely to be the one to do so.
Thanks anyway for the effort. No hard feeling though. Cheers
And yes, it is happening again:
People need to do the work on evaluating previous contributions, and I don’t really know how to approach this, because it’s going to be very difficult to do anything productive if actual investigation is met with so much friction. Already I’ve kept my mouth shut a few times this year to avoid causing any disturbance.
I’ve 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 that’s a shame, that people would be penalized for trying to make the most out of our collective resources—but I acknowledge that there is politically a very fine line to walk.
Anyway, I hope this helps so far. I’m not done, will dig more into the sibyl wallets, but it’s 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. Let’s 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.
Great job Jack!
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
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 I’ll 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 …
Secondly, to be unbiased and to fact-check, I’d like to see a response from the Kromatika team before stating any further opinion.
I did a few times, yes, including in public in the discord channel, where I believe you were active. And where I didn’t have complete information, I noted.
Secondly, to be unbiased and to fact-check, I’d like to see a response from the Kromatika team before stating any further opinion.
sorry, don’t follow
Nice, and thanks for your response!
Looking forward to the response from the team.