We went through the whitepaper a while ago and liked a couple of innovative ideas:
- Different ICO sale strategy
- Efficiency (Potentially able to quickly scale with higher utilization rate)
- Possibility of voting/delegation
The project is at the earliest stage with the ongoing ICO which likely takes longer than the originally envisioned 32 days with currently 124 holders & few daily purchases and we’d like to see the protocol risk (management - especially liquidity risk) play out a bit.
Re: The proposal
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Benefits for Op could be very strong: Op as Collateral, Op can still be used for governance, (Co-)Incentives can lead to strong initial & potentially sustained growth with IP efficiency
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Risk: Similar to onboarding toxic assets in a lending protocol, Optimism should be cautious of incentivizing projects that potentially add significant risk to users in the ecosystem. We are a bit worried about the fractional reserve model which may lead to locked up user funds (+ bad debt in case of toxic assets, liquidation failures, other protocol bugs).
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The size of this dev grant is small and a no-brainer. Despite not being fans of funding development, we’d support the 31,764 OP tokens for deployment.
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The size of the other, main grant proposal (240K Op) is also reasonable for a new, value-adding project though we’d prefer to see the initial sale finish, more certainty around the date of deployment & Op distribution as well as protocol risk management before incentivizing growth with Op tokens.
(Not sure why there are 2 proposals on the forum.)