Proposal to Include Liquidity Providers in Governance Process

Summary: Liquidity Providers to the Optimism $OP token should have voting power

Currently, only $OP Optimism tokens are recognised to have voting power and can be delegated. Over time, there will be a drop in governance participation from what we observe in other DAOs.

It is crucial to include liquidity providers (LPs) in the governance process from the start. Liquidity providing is an important part of the ecosystem to allow a liquid market for the token to trade in. Liquidity Providers also tend to be vested in the community and would love to see the collective succeed.

Benefits we can see out from this proposal would be: increased token participation and ability to meet voting quorum as time goes on. LPs would also be more incentivised to participate in the governance process and contribute ideas to the ecosystem.

Cons are that the developers need to upgrade the snapshot mechanism.

Thanks for reading this. Happy to receive criticisms and feedback.

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Strongly agree with this. If we donโ€™t include LPs in governance over the long term, weโ€™ll force a hard distinction for holders between governance and liquidity. Hopefully both will be stronger if we allow them to be implemented at the same time.

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Strongly agree with this as well. LPs provide a great amount of token utility, enable new dao members and have a vested interest in the token.

Agreed 100%, because having only OP on your wallet to be delegated takes away composability than can be garnered from OP being an ERC-20 token standard

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Iโ€™m in agreement with this for the above reasons - but also for the reason that it lends a key incentive for the token swap initiative Velodrome have outlined for the ecosystem, detailed here.

LPs are absolutely stakeholders, and enabling governance rights provides a compelling additional value to those weighing the risks of providing liquidity in the first place.

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