One point here, by the way: Alchemix were in fact first airdropped locked VELO tokens – that is, they were granted governance power over the protocol. Which eventually led them to buy and lock more VELO, which is what you see in AIP-59.
Sometimes being a little active in fostering engagement is a good thing.
First, it is necessary to contextualize:
Both the Perpetual and Synthetix self-delegations were in a framework where they had not expressed that they would be used for self-delegation.
As I said before and say again now I am not in favor of self-delegation, but if there is a superseded proposal it would be something to assess and subsequently be in favor in that particular case.
Finally I have given my reasons why I do not see this self-delegation as positive. And as I have said other times it is my point of view. If the proponents want to include self-delegation in their proposal that is fine and they can do so. As always the final decision is in the snapshot.
Here you have been awarded a grant, and you have also been given an airdrop. Do you think these are not enough reasons to bet on Optimism?
Honestly? I think in many cases people need to be shown the value of governance power.
There’s a ton we’re capable of accomplishing with enough participation and buyin from stakeholders, and we’re all here because we know this. Not everyone knows this, and unless they do we’re not going to have enough resources to follow through on our goals.
There’s an entire graveyard of projects and ecosystems that’ll show you that grants and airdrops are in themselves not enough to sustain effort. Users, developers, and partners can’t be expected to immediately ‘get it’ just because they got some free money – they need to have some actual hands-on exposure to what we’re doing.
What i’m saying is that sometimes you need to drag people to the party when you want them to show up. That’s what facilitating self-delegation is to me.
And you think that granting grants is not inviting them to the party?
Self-delegation of token grants can lead to centralization or secret agreements between projects-protocols and delegates to delegate tokens in exchange for votes/grants.
I think it is necessary to be careful with self-delegation, a malicious actor could sneak in.
I also believe that a good cause of self-delegation can add to this governance but it has to be evaluated with a lot of criteria and responsibility.
I think this fear is legitimate but entirely misplaced if you think self-delegation in broad daylight is a major vector here. The routes to collusion are many and don’t require a lick of self-delegation.
You want to know how to avoid centralization and kneecap collusion? Get more stakeholders in the game. Right now the distribution of votes is more or less fixed since the airdrop, and the only distribution of OP is to protocols, which are doing nothing with them until doling out 60% of their granted tokens (realistically closer to 100% initially given the speed of liq mining relative to other uses) to the likes of stablecoin farmers to be dumped into LPs, again doing nothing.
So there are likely few marginal delegators (the # of delegated tokens has consistently decreased, even as circulating supply has increased), and the same centralization concerns persist until the next marquee OP airdrop, which may or may not improve the distribution.
Show projects, partners, builders what it means to get into governance and take part in assembling the collective, to tangle over heady ideas about coordination and incentivization, to cooperate and compete, and you start to see the decentralization we all want here.
That’s all to say that i think allowing some measure of self-delegation in fact hastens decentralization, and what’s more, you get a bunch more voices in the forums.
I urge you to be more open-minded here, both about the risks of centralization and about the benefits of letting broader inclusion breathe.
this is veering into a more general discussion so out of respect for Alchemix and their efforts i suggest we move this into a thread i just spun up: Let's settle once and for all the question of grantees self-delegating
This game is open and everyone can participate, or is this not the ethos of cryptocurrencies?
In general it is hard to make there interests in DAOs and governance, even if incentives are handed out. We have voted a lot of projects and given a lot of money in grants, projects/protocols have a great opportunity to receive incentive funding on their projects/protocols without resorting to inflating their token or using their treasury. Only a few have submitted delegates in this government.
Do you think the game is not open, do you think there is no inclusion, when the cost of participation is $0?
Protocols can apply for delegates in their communities and some have large communities. isn’t that what Velo did to get delegate votes? they have done it even for voting committees. Surely in the future we will get proxies for the tokens that are being given now as incentives to protocol users. Protocols have influence over their communities/users.
If it is convenient to continue the conversation in another thread.
Since it is a potential, I’d suggest removing this until the Alchemix team has better knowledge whether alOP will be feasible and apply for a future grant. Especially since your other solution was to extend the rewards LPs, it is better to see the success of this grant, instead of doubling down.
I’ve received multiple answers to this, none of them end-all be-all clear on what is required. We want to be flexible but ultimately if our entire multisig has to KYC it’s probably a no go. Anything else I think we can work around. If the proposal passes and it turns out we can’t KYC, OP doesn’t lose anything and all we lost is time. So if we don’t figure out the exact KYC requirements by the time it’s time to vote, I would prefer to go to a vote and just state that we aim to follow KYC requirements and will work with the Optimism Foundation to do so.
There are dozens of L1 projects willing to shell out if you build on their chain. We chose Optimism because of its EVM compatability / Ethereum alignment (being an L2), as well as the vibrant DeFi ecosystem.
I understand concerns with governance, but I think an argument for self-delegation is that if you want us to make Optimism a true home for Alchemix, then we would like to have a voice in it. Having that initial voice lets us experience OP governance firsthand to determine if we would like to purchase more OP to have a more sustained voice. Understood though that there can be concerns with protocols partnering up / gaming votes with that concentrated power.
Since we have a week until community feedback ends, I’m going to take a few days to think about if I can more clearly dictate our plan for delegation or if it does ultimately just make sense to remove it.
We are live! Deposit caps will be 100k for a week, then cranked up to $5m so long as there are no issues: Alchemix
Why not using your community to leverage the Governance position instead of using grants for that?
My suggestion here would probably be simply to include the self-delegation component in one of your other asks - your delegate power would draw down over time, and the stickiness of that power would depend on, to @Prometheus point, perhaps your community’s interest in delegation.
For what it’s worth, I do think the primary source of new delegation will have to be protocols and especially their communities. And protocols are more likely to animate their communities once they come to appreciate the possibilities inherent in participating in governance. And no, I’m not talking about self-interest – i’m talking about helping to shape the ecosystem people want to see. It’s an exciting thing to consider if you’re a protocol.
My question is what happens when the incentives in Optimism run out.
I think self-delegation can also bring parasitic protocols into the network as well as users farming the token in their protocols.
I also believe that if Alchemix had any interest in this governance it would have appointed at least one delegate, why didn’t it do so if it sought to have a say in this governance? Asking for support in your community is a good start and has a cost of $0 as well as appointing a delegate to represent Alchemix’s interests.
In the event that the proposal is not voted YES, will Alchemix still be interested in governance as one of the protocols they seek to develop in the network? Self-delegation with token grants is the same thing @jackanorak complains about from users.
What I don’t see in the protocols being pushed by @jackanorak for self-delegation is at least minimal participation beyond his own proposals.
However, I will stop commenting on the thread beyond the proposal itself. I think it is a long discussion but worth addressing and discussing in governance. This kind of conversations make the governance of Optimism grow, which is what we all want.
Honestly I think we just haven’t wrapped our heads fully around OP governance, there’s a lot going on and you have to understand that many of the protocols applying are not going to be nearly as knowledgable as someone already very familiar. So I appreciate all your insight.
And yes - even without being given an initial say, Optimism is still very interesting to us as a long-term deployment. Obviously the potential for incentives led to us narrowing down to Optimism as our next L2 launch, but we passed on numerous other chains that reached out to offer significant incentives to deploy on them. And quite frankly I think the incentives just made us prioritize dev time - it was already shaping up to be our next launch without incentives because the team already liked what Optimism was doing and it’s one of the first EVM L2 with the right DeFi ecosystem (which is a good sign for future growth).
As mentioned I"m going to do a deeper dive into delegation and watch the other thread for discussion, then revise the proposal either with a more detailed delegation ask or with it removed, leaving at least a couple more days for community feedback. Ultimately the delegation is not our primary goal for the proposal.
hello @Ov3rkoalafied, it’s marc from Candide Wallet. Thank you for your proposal and congrats to Alchemix on their Optimism Launch! Alchemix is one of the protocols that really highlight interesting use cases enabled by DeFi with their self-repaying non liquidation loans.
Overall, well written proposal that highlights both Alchemix ecosystem value proposition and its values to contribute to public goods through Gitcoin.
I will echo previous feedback from other commentators:
Should the deposit caps on Optimistic Alchemix quickly fill, that will be indicative to Alchemix that we should look to re-allocate some bribes from CRV/CVX on mainnet to veVELO on Optimism to further scale the deployment.
Overall, I am in support of this proposal as Alchemix has a unique proposition to Optimism in terms of its innovative mechanism in DeFi.
Hello! A few updates related to this comment/others here:
I do want to note that The “total requested based on current TVL” feels a bit backwards to me. Isn’t the point of OP grants to incentivize TVL and genuine defi activity on Optimism? I think our (reduced) ask is fair for these reasons:
it’s a bit of a chicken & egg scenario, where we need a grant to prove we deserve the grant, but I believe the points above + the reduce total amount (from eliminating the delegated tokens) addresses the concerns. This also means we aren’t requesting dev or DAO funds - every OP token we get will go into the hands of those bringing TVL to Optimism through Alchemix / Alchemix partners.
For CVX/CRV bribes, it will be dependent on alAsset peg. As seen in the proposal it’s expected that the incentives bring more TVL to depositors than to liquidity (which is good, as that TVL is stickier). This also means that if we hit our TVL expectations, we will need more liquidity on Optimism. A clear sign of need would be either high TVL or lower alAsset peg on Optimism. Usually liquidity equivalent to half of TVL is sufficient / a good target.
So - if we meet our goal of >30m TVL, we’d need ~15m of liquidity. The incentives we have asked for in theory put us at 30m TVL, and 5m of liquidity. The liquidity comes from 250k OP tokens plus our VELO position. So we’d effectively need to provide another effective 500k+ of OP (in the form of ALCX) get up to the required liquidity. Which happens to be the grant we requested (that actually wasn’t intentional haha). So effectively, the way the proposal is set up is that we are providing the incentives to make Optimistic Alchemix feasible for launch, Optimism provides incentives start the growth, and then we can step in with more incentives to sustain the growth.