Iām going to be consistent with my DeFi committee A decision and vote abstain. For me personally, the amount requested was extremely high but also I definitely appreciated seeing the results so far so I didnāt feel strongly to vote a yes or no given these factors and that we donāt have a group focused on project grant accountability for the governance fund yet (especially needed for an amount this high IMO).
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Hi all, Iām cryptoharry, Head of the Treasury Working Group at Inverse Finance DAO. This thread is extremely in-depth, with a lot of high-quality arguments from both sides - Iād like to share a few thoughts from myself.
Velodrome onboarded our protocol to the Optimism Ecosystem by offering us a veNFT at their launch. I have nothing but great things to say about the team at Velodrome, they have been a pleasure to work with so far. Bringing our decentralized stablecoin, DOLA, across to Optimism has so far been a success, and we have already begun building (first smart contract on optimism besides our token deployed a couple of weeks ago!).
I notice that someone previously cited our DAO Multisig Wallet executing a few swaps of OP ā VELO, Iād like to highlight that our many swaps of USDC (bridged from Ethereum L1) to VELO (to be locked for 4 years) were excluded, you can see over $20k in transactions here and plenty more to come!
As Alex highlighted above, the OP incentivisation that we have received from Velodrome (around 10k) has not only helped onboard us, but led to us investing significantly more $ than received and building on the chain. I believe that this behaviour will be replicated with other protocols as a result of Velodromeās strategy. I am in full support of Velodrome receiving what they have requested, I am confident that they are one of the best-placed projects in the ecosystem to help turbocharge the continual growth of Optimism as a successful L2. At Inverse, we have a lot of potential for big plans on the chain, so itās in our interest for the ecosystem to be as active/successful as possible.
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good proposal. support this.
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Great proposal with Velodrome 
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I voted Against this proposal.
I tried to follow this discussion closely after my initial comment but my concerns remain the same.
This Grant would be 1.72% of Optimismās Governance Fund and would grow the circulating supply of the OP token by 1.86%. This is significant, and I do not appreciate Velodrome team members trying to say otherwise. We are talking about millions of $ here:
Velodromeās current traction is great but if anything proves to me that they have already achieved a network effect and do not require millions more from the Optimism Treasury to establish themselves, it seems they can accomplish all of the goals outlined in this proposal without the grant:
Separately, I am not sure what kind of message it sends that the DeFi Committee decided to Abstain in a Recommendation on a ~$5.5 million grant. This is a pretty significant treasury move.
Disclosure:
I co-founded a different Optimism DEX so consider me biased
hi, please allow me quote this seemingly overlooked list:
those are builders, the lot of them. they are the ones building on OP city, and Velodrome helped onboard them as efficiently as possible. the earliest developers on OP city - a fresh, new city on blockchain land - are trying to make a point. please, letās try to hear them out.
i would also add to that list the commoners of OP city (retail) such as myself. individually we might be small, but look at us collectively and you are looking at arguably the most committed group of citizens in OP city. we are in it for the long haul. and i thank Velodrome for providing us with a great DeFi playground for the next 4 years+. looking forward to more swings and slides, along with more neighbors to play with!
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Fair enough. I actually didnāt realize you were a Rubicon founder. I think an abstention in that case might be more appropriate, but there is no rule that you canāt vote down a fellow DEX so thatās your call.
For the record, if Rubicon can come back showing that they have delivered same kind of growth multiples on your 900,000 OP grant I promise weāll be first in line to show support for your next proposal.
Since you raised this again, Iāll want to make sure reemphasize all our responses that put the size of our ask in proper context so people donāt the wrong idea.
Our ask is significantly smaller than those distributed to date by the Governance Fund relative to key KPIs:
Velodrome is offering 31x the co-incentives of other DEX projects combined while only asking for 1.6x larger grant.
Our grant request is oriented towards continuing activities that have a proven ability to return 2x-3x the underlying value of grant:
Our grant is dramatically over performing Governance Fund grants to date:
In short, the grant only looks large if you ignore baselines in terms of KPIs, massive co-investment, or demonstrated ROI multiples it has delivered. It remains significantly smaller in actual dollar terms than the one originally given to us by OPLabs. Repeatedly suggesting āit is too bigā without directly engaging in this context isnāt constructive, especially from someone who received their own incredibly generous grant but has yet to produce evidence of similar returns.
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Voted Against.
Apart from my major concern of spending 1.5M $OP to subsidies price of Native project token.
What I would like to see from proposal requesting second grant:-
- More focused towards protocol integration
- Approach mentioned here is cost effective but only short lived, integration takes time but it has a long lasting benefits.
- If distribution plan is similar to first one, I would at least suggest to keep a time gap between two proposals or reduce the ask by 30-40% compare to first proposal.
Fair enough.
We debunked this claim with data/evidence multiple times and multiple ways.
Weāve onboarded and integrated with more protocols than any other single entity in the ecosystem.
Thank you for your consideration. 
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Looking good One of the most complete and beneficial proposals on optimism. Without on chain liquidity there is no success for the cain. Velodrome have created a liquidity machine.
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This is pretty much my position right now. Just like @polynya I am going to wait before I vote on this since the amount at stake is high and the community doesnāt seem to be aligned. I want to allow for a couple more days of discussion.
I am going to be honest though: at the moment, the entity of the amount requested and the back and forth on this thread makes me want to lean towards a vote against this proposal. A vote against is a two way door (a new proposal can be submitted and discussed with more time), a vote for is not.
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I wish somehow we could pin this so that many user could see.
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Hey @DanieleSalatti
Appreciate you giving us a sense of where your head is at.
Hope youāll indulge me probing on your thinking just a little bit more.
Can you give us an idea of what youād need to see to convince you that the ask wasnāt actually high in any kind of comparative terms to other grants? Including those active up for votes at this moment?
Weāve tried to break this down any number of different ways.
Can you give us an idea of what would convince you that community is actually fairly aligned?
Weāve done qualitative analysis on the commenters on this proposal and found 65% of them (24 total) to be positive with just 22% of them negative (8 total, 40% new accounts). This is mirrored pretty closely in the current voting where 55% of voters have voted yes (2636 total) where just 10% have against (515 total). Youāll also notice that over 20 protocols and builders are supporting our proposal as wel.
There is certainly a vocal minority opposed, but surely we need tools to see the bigger picture.
This I would push back on a bit.
A vote against is almost certainly a vote to put an indefinite end on what is arguably the most effective incentive program currently active as there is currently no timeline for āSeason 3ā. The Optimism Foundation has already hinted that big changes are coming, so really no one knows when a new proposal could conceivably be put up for review let alone be approved/implemented.
The protocols weāre actively onboarding to the ecosystem (32 already and another 12 or so in the pipeline) need the ability carefully plan and model their expansion and investment in Optimism. The reliability and consistency of incentives is critical to that as builders like @TokenBrice, @cryptoharry, @Smerdyakov, and others have expressed in this discussion. Letting incentives lapse would not come without a significant cost and risks stalling the hard earned momentum weāve built.
I will also note that this really isnāt a lump-sum grant of 4M OP. It is a grant of 2M that gives governance the option of ending the program at the three month mark if they are not pleased with the results per the mechanism we designed with @Katie.
Extending existing programs that have proven their effectiveness for three more months while securing our commitment to pump $6.5M in stimulus exclusively into the Optimism ecosystem feels far less risky than letting the program lapse.
I will also add that this process is incredibly intensive and has taken our team away from the core work of our protocol for weeks on end now. I think we can deliver a lot more value if we can put our attention back on onboarding another protocols, not spending all of our time trying to persuade delegates of our value.
Voted yes - It seems like one of the main concerns around this proposal is grant size, which is understandable because this is a large request. However, only half of the funds will be distributed up front, with the second half being contingent upon an efficacy report at the 2.5 month mark which I feel has been overlooked (see below). This circumvents the issue of the team having to submit another proposal and go through this extremely labor intensive process (as shown by the 176 comments as of writing this) but also includes the accountability component which has been missing from previous proposals.
The Velodrome team has been extremely successful with growing the ecosystem (which is the purpose of the governance fund) with their previous grant as shown extensively by data and metrics. This is an impressive grant performance, backed by verifiable numbers and data.
We should be rewarding teams that are building on Optimism. None of the funds requested are going to any internal operational costs, this grant is 100% focused on bootstrapping liquidity, lowering barriers to entry, and acquiring new users, which again, is the purpose of the governance fund.
I would also like to point out that the Velodrome has responded to every single concern raised with a thoughtful response backed by numbers, facts and technical analysis. There has clearly been a massive amount of effort on the Velodrome team to address concerns and move this proposal forward which should not be taken lightly.
I would encourage others to look past the grant size and focus on the data and metrics that have shown the success of this project so far. These are the types of grants and projects the governance fund should be supporting imo.
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Hi folks ā regarding the discussion around accuracy of Veloās metrics: want to draw your attention to these summaries from OP Labsā analytics team on Veloās affect on TVL.
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Good to see some numbers from a neutral source. I think this is more evidence that liquidity mining programs are beneficial to boostrap some initial liquidity, but after the initial couple of weeks itās best to let the protocols organically find their equilibrium. As such, we should focus more on user onboarding and diverse activity, rather than liquidity mining and chasing TVLs repeatedly - particularly given other factors like the high risk of Optimismās current centralized state.
Earlier, I had written my personal guidelines for what would qualify a project for a repeat grant: Polynya - Delegate Communication Thread - 
Governance / Delegate Updates - Optimism Collective
Having mulled over it, Velodrome does not meet my criteria. a) Rises in liquidity and adoption was largely frontloaded in July & August and growth has flatlined over time. Even if it had continued growing linearly, I would expect a gradual wind-down of incentives over time. b) Time has not passed yet without incentives to assess the effects. And c) thereās no new approaches - itās still mostly about liquidity irrespective of adjacent narratives.
As such, I have now voted Against. Iāll be following along the conversation, and Iāll be open to changing my vote to Abstain if more compelling arguments emerge.
My hope would be to assess the effects of Velodrome without incentives, and to see a more compelling proposal in the future based on a) whatās learned from that and b) new strategies to onboard users beyond focusing on liquidity - already been there, done that with the first grant. If the vote passes, I would expect significant increase in activity on Velodrome & the wider Optimism community versus what has come before. If all I see is status quo or mild growth, itās not good enough for a repeat grant.
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gm ser
This seems to be our biggest disconnect. This is exactly what we think we are doing and weāve been trying to demonstrate that weāre doing it more effectively and efficiently than (possibly) anyone else.
Can you describe what kind data or evidence youād need to see to persuade you on this point?
To be honest, this hurts. Weāve driven more growth than any grant to date across nearly every KPI while attracting more net-new protocols to Optimism (20) than the entirety of the Governance Fund (18). And weāve done so with a fraction of the funds distributed by this body (ostensibly) to drive ecosystem growth.
To have a delegate of your stature call that kind of impact āmildā is frankly a bit chilling.
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Upstream of user onboarding is development on the ecosystem. Our focus from day 1 has been to attract talent to come build on Optimism, and tbh weāve done an excellent job. Just look at the teams weāre working with, including many of which have taken the time to express their support in this proposal.
This grant is designed to incentivize protocols first and foremost by rewarding projects that take a stake in the ecosystem (bribing and/or locking). We believe that by increasing the diversity of protocols on Optimism, weāll be able to accelerate the overall network flywheel of more users > more protocols > more users.
But onboarding protocols takes time. Our ask here is to extend a program that has had incredible success attracting teams willing to build. Weāre in active communication with dozens of teams that are planning to launch on Optimism or have already done so through us.
Consider the case of Sonne Finance, a protocol with >$28M TVL and growing. They leveraged Velodromeās mechanics to design a sustainable token launch strategy:
- Paired USDC raised from TGE to create SONNE-USDC LP
- Staked SONNE-USDC LP on Velodrome and bribed the pool with more SONNE
- Redirected VELO emissions collected from their staked LP to their own platform as rewards
By redirecting VELO rewards, they were able to majorly reduce their SONNE burn rate during a crucial period and demonstrated that Velodrome really is a base layer protocol. This is the type of novelty we want to enable.
I believe weāll see similar fascinating experiments arise over the next few months.
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