Proposal to stop Phase 0 Projects to submit new proposal in Phase 1

🏛 Token House Governance
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There were 20+ projects in Phase 0, some of them has a good plan to distribute the token while other does not. Here is an excellent summary by @MinimalGravitas .

Phase 0 officially concluded yesterday and soon OP will distribute 36M token between Phase 0 projects. Announcement

With this proposal, I want to share my idea and seeking your feedback on whether to allow Phase 0 projects to submit another funding proposal in phase 1 or not .

In my opinion, as long as previous funds are not exhausted completely, we should not consider the new proposal because:-

  1. We dont how they will use the existing fund(Phase 0), I know their plan is there in Phase 0 proposal but plan and execution is totally different.
  2. We dont know if they will manage to retain user and/or liquidity
  3. Why not use the fund and submit another, why rush ?

Thales, a Phase 0 project, with 900K OP token has submitted another proposal seeking 2M OP token in Phase 1 and I am against it. If this proposal is approved, they will have 3M OP token, just imagine that 3Million OP token for a project with circa 500 weekly transaction . With such a huge amount of token at their disposal, this will just bring token farmer to their platform and by the time we will realize this, it will be already too late.

In my opinion, they can submit a new one like said earlier, and just because we have funds does not mean it is mandatory to just give it all.

I want to hear your opinion. Should we allow the projects to submit proposal when last funding is still there ?

Looping other delegate active on this forum. @solarcurve @lefterisjp @polynya @Joxes

Edit 1: After giving some thought and feedback from discord, I agree banning is not right. I suggest when 70% of fund are exhausted.

Edit 2: Huge thanks to everyone for their input and thoughts, I will combine them together in coming days.
In the mean time, I would like to hear your opinion on this too ;. Accountability of Phase 0/1 Funds given to projects. Again I am referring two projects there, those are just for example/reference.

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First of all, thanks for referencing the summary from @MinimalGravitas. It is super cool he put us under the Perfect Proposal tier of his personal proposal tier list.

I believe banning Phase 0 recipients from applying for additional Phase 1 allocation is kinda not optimal, to say the least. Phase 0 allocation amount was not chosen by respective projects, but by curated choice of on-chain metrics. Every project is different, with a different liquidity mechanisms and at a different bootstrap phase. Some projects have large liquidity pools (hence large TVL) because of the nature of the protocol, while others do not, such as Thales. That is why Phase 0 projects gained a wide range of allocations in Phase 0, from 300,000 up to maximum amount of 9,000,000 OP tokens.

In case of Thales, we were allocated 900,000 OP tokens based on on-chain metrics and a fact that we are native to Optimism. Now, for example, imagine if Thales deemed itself worthy of a larger allocation that will be used in a way that is highly beneficial to both Thales protocol and the Optimism Network, across 5 different mainnet products built on top of Thales. If your suggestion here is in fact the rule, how is it fair to ban an Optimism-native super-aligned project to apply for more funding from a total of 231,928,234 OP tokens from Phase 1 just because it was selected for Phase 0 and received 900,000 OP tokens?

Also, I am kinda saddened that you consider Thales a type of project that would allow OP token incentives to be gamified/exploited by mercenary actors. I implore you to join our community and learn more about Thales to get a more clearer picture that Thales is not your average short-lived project. If you read our Phase 0 proposal, you can find a case why it’s impossible to wash trade on Thales and gamify the trading incentives. We are project born out of Synthetix, highly aligned with the entire Optimism ecosystem and we are definitely not looking to “bring token farmer to our platform” as you quoted, I can assure you of that. Also, projects that still did not experience explosive growth are exactly the ones in need of user-inviting incentives. Rejecting proposals because of a low transaction count (it’s 1.5K weekly btw, and not 500 as you quoted) is counterintuitive. Projects that have big amount of transaction count are in less need of bootstrapping growth than projects with low amount of transaction count, right?

I can stand behind how maybe you think it is too early to propose for additional funding while the 900,000 OP tokens from Phase 0 are not to be depleted any time soon, but with clearer picture of a total amount of OP tokens under our disposal we can plan better and coordinate in the long-run in much more optimal manner.

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Without going into specific projects, I completely support not to allow / take into consideration projects that still have funds from Phase 0 to participate in Phase 1.

Although counter-intuitively this might incentivize projects to speed run through their Phase 0 incentives - since they know they will be able to apply for Phase 1. So, if this proposal got through I think it’s an important point to take into consideration.

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I support the idea that asking for Phase 1 incentives before you’ve spent any Phase 0 incentives does not make sense.

However, I don’t think we need a rule in place for this. Delegates should do a good job of policing this behavior on their own. I favor fewer rules and more flexibility.

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This proposal is very unwarranted imo because there is really no reason for it.

Each protocol that is already deployed on Optimism or planning to deploy, has the right to apply for the Phase 1 governance fund and putting limitations around who can and cannot submit applications is adding a layer of bureaucracy that isn’t needed.

If a proposal doesn’t have merit, it is the role of the Token House delegates to vote appropriately on it.

There is also no need to single out Thales DAO on this either. It is well with in their right to request more funds from the Phase 1 gov fund and it could be the case that they feel they provided intangible contributions to Optimism’s early adoption which they weren’t credited for through the Phase 0 distribution (this may or may not be the case I’m purely speculating). If so then there is nothing wrong with applying for more funds imo and it’s up to delegates to decide if the cause is worthy or not.

It’s very possible that other projects also apply for more funds (without already using what they were distributed) if Thales were to get approved for their request, and I do sympathize with the argument that it would set a bad precedent. However I have faith that delegates can and will do a good job of assessing each application on a case by case basis.

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I don’t think it’s necessary to block Phase 0 projects from submitting to Phase 1. There may be some exceptional proposal, or something new that may be worth approving a project for both phases. Delegates can use their judgment.

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I agree with Millie on this, it is the job of delegates to decide these things. Besides these phase 0 projects are the backbone of OP they deserve as much support as they can get.

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I’m pretty much on the same page as @solarcurve here. I think it is for us to assess on a case by case basis rather than making rigid rules.

I also agree that the line of silliness is more about asking for more funds before you’ve spent any of those previously awarded, rather than wanting projects to have spent all/most of the prior allocation first.

I sympathize with @padzank padzank’s position that the first grant was not an amount of their choosing, but obviously that issue will only relate to the Phase 0 OP and will be irrelevant going forward. I think in their case in particular I would prefer that they hold off on requesting more tokens until they have at least received and started allocating the first batch. From their new proposal the requirements and intentions are obviously different rather than just additive to Phase 0, but it doesn’t seem prudent to throw too much at them straight away before any demonstration of effective use.

That’s not to say I have any doubts on Thales good intentions, ability to deliver or alignment with Optimism though, they are one of the dApps on our rollup that I’ve used the most and probably deserve to be given a chance to demonstrate the next phase of their vision.

I’m not decided yet on how I will vote for their proposal this round, but @OPUser’s general points (1-3) seem pretty sound and so I’m probably leaning towards No until we see them making use of at least some of the 900k OP that they are due first.

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I wanted to add one point that I really feel any opposition should reconsider and it is important due to the timeliness; so if you could please read with an open mind, it would be sincerely appreciated.

Most projects fail in this space due to discussions of this nature dragging on for too long, I think a perfect example of this was one like we all witnessed how the ending of unsuccessful filtering of sybils for 2 months worked out. Thales has brought a ton of awareness (millions of Twitter impressions that are not being accounted for) to the OP ecosystem and I, at this point, am beginning to feel it was a mistake to delegate any of the tokens I had when seeing comments directly against the Optimism Collective’s Vision…when you have a protocol trying to launch an innovative new primitive (Overtime) that has massive potential to drive users and economic value to Optimism - in one of the worst bear markets crypto has ever been going through, and on top of this all, Arbitrum who is the top competitor to Optimism now has 51% of all L2 market-share.

This feels so slow to me in terms of governance and I really am questioning if people believe seriously to expect meaningful results if proposals like this aren’t approved. If I am building something new, think I will come to the OP forums and see this kind of support and have any interest whatsoever in joining Optimism?

Decisive action, for builders, on Optimism, plz. @polynya please reconsider with this in mind. :red_circle:

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Hey @OPUser thanks for the thoughtful discussion!

Firstly I probably echo other people’s opinion here that it would make more sense to have less rules, but follow judgement of delegators. Otherwise the system won’t work/scale.

That said I also find it rather peculiar to receive funds from Optimism and right when that is done, ask for more without having spent any of the initial amount.

Sure I would suppose it depends on the proposal, and what was the Phase 0 proposal about and what will Phase 1 be about but I have to admit I would be negatively predisposed by seeing a project ask for money money before having had the chance to receive the first batch of funding.

It is my understanding that through these funding phases we want to (1) enable as many different projects as possible to contribute to optimism and (2) allocate governance tokens to as diverse a group of people as possible.

Giving more funds to the same projects before even having distributed the first (quite generous in many cases) batch of funds does not align with what I understand as our goals here being.

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I dont agree with other points you have said but I do agree with you on this. There was no need to name call, apologies.

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Greetings all,

I feel inclined to clarify a few things as this post is potentially putting Thales in a bad spotlight.

Why did we apply for a grant in Phase 1?

Because that’s what we perceived the Phase 1 is for, nowhere was it said or even insinuated that Phase 1 is non intended for Phase 0 projects

Do we think the 900k we got in Phase 0 was too little?
We are extremely grateful to Optimism for all technical and logistical support since day 1. Phase 0 allocation to us was generous and fair and we definitely appreciated the 3x multiplier for being Optimism native. We have already worked out a plan via our governance on how to leverage these tokens over next 4 to 6 months to bootstrap our positional markets AMM (former binary options) and THALES token liquidity. We have given a lot of thought and consideration on how to make sure OP tokens are not farmed by swing traders, sybilers and otherwise unaligned farmers and are positive we have established a good plan to achieve that.

So why did we ask for more in Phase 1?

Since Phase 0 snapshot we have released or are about to release two new products and dapps: exoticmarkets.xyz
overtimemarkets.xyz
Those products are in a sense decoupled from our main dapp and were definitely not considered in Phase 0.

  • Exotic is a product focused on permissionless parimutuel markets, where anyone can create a prediction market of a sorts.

  • Overtime will be first fully decentralized Sport Markets AMM backed by Chainlink feeds.

Both products are intended to be Optimism native and Optimism alone.
Our ask in Phase 1 is to support these new products that have potential to tap into a billions of dollars industry.

We appreciate everyone’s vote and opinion here. If the consensus is that no Phase 0 DAO can apply for Phase 1 until it burns Phase 0 OP tokens, I can personally understand that sentiment, however, I do fear it might inadvertently send a message to DAOs to burn the tokens asap, which I am sure is in no one’s interest here.
That said, if quantity and diversity of DAOs applying is the desire, both Exotic and Overtime could have easily been decoupled DAOs making their own dedicated proposals, we just choose not to go that route.

For those not across Thales’ history, I would like to restate some of the ways Thales has worked towards helping Optimism vision:

  • Unlike most protocols, Thales has moved 100% of its single side staking and governance to Optimism since December 2021
  • Optimism is the only chain where Thales is paying LP incentives
  • THALES is listed on two centralized exchanges so far MEXC and XT.com. Albeit not tier 1, Thales DAO has worked with these exchanges and managed to get direct Optimism withdrawals and deposits enabled before any other CEXes had this integrated
  • Thales is working hard to bridge the gap between web2 and web3 users and has or will soon have direct fiat onramps in its dapps as well as direct bridges between CEXes or other chains onto Optimism
  • Thales was the first project to implement TWAP feeds to offer derivatived on Optimism native tokens such as LYRA, PERP and OP

I don’t expect everyone to be across everything we built and what we are about, but it should be fairly easy for delegators to check that we are about integrity, quality and delivering. Our portfolio of products is unique, novel and while there are competitors, none have a comparable level of decentralization.

Frankly, we were poached by a few other chains recognizing the originality in what we are building, but our vision for the foreseeable future is optimistic alone.

Thanks everyone for the support regardless of how you vote,

Best,

Danijel,

Thales founder

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Please reference above address that was originally provided, and has yet to receive any $OP tokens. Generally speaking I think it is going to be extremely hard to to demonstrate results when still yet to be received.

Also, the Vote via Snapshot for this concluded a long time ago also. When disbursement from OP multisig? Seemingly not really any sense of urgency.

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Phase 0 projects should be able to make another proposal in Phase 1, 2, n.
For us, as a delegate, the proposal has to fit into the Phase, it needs to show concrete value-add and the funding request needs to be reasonable.

Re: Thales

We believe Thales is well-aligned with Optimism but we’d like to see Phase 0 funds well-spent first. Also, the ask is large and the additional value-add to overall Optimism growth is at least questionable.

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Appreciate your input, thank you.

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thank you for all the inputs. very helpful to weigh things up

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I think it would make more sense to review new proposals on a case by case basis.

For example, for projects who already have a plan in place in terms of how to distribute OP rewards, they can still go for another application to accomodate new ideas which are widely supported by the community.

At the end of the day, we need projects highly aligned with the Optimism ecosystem, launching new innovative primitives over time, and proving their value to the long-term success of Optimism.

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hey @OPUser, thanks for putting up this proposal. Although in theory phase 0 projects might not have spent all their grant fund already, they may propose to fund other specific projects in other phases. My personal opinion is that it’s unnecessary to block Phase 0 projects from submitting to Phase 1. It’s probably best to leave it to delegates judgement for each case.

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@OPUser It would seem to not be something requiring restriction, although would most likely be a large factor in a delegates decision depending on the specifics of the proposal.

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We agree (generally) that projects shouldn’t ask for future incentives if previous OP tokens haven’t been spent since we need to see effective use of those tokens. However, we share a similar sentiment with other users in the thread that there shouldn’t be a specific rule as each case is unique.

For example, if a well-known project asked for 200k $OP in phase 0 and then another 100k $OP in phase 1, depending on their proposal and reasoning for asking for a further 100k, it might make sense to support that proposal. We work in a fast-moving space so a lot can change within a week or a two, so it is important that we allow flexibility for protocols to apply for further grants.

In regards to Thales, it was quite a large ask which made it easier to say no.

As a group of delegates, we have the opportunity to discuss these issues in the forums and understand the reasoning, rather than outright ban these situations.

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