@OPGovWatch We picked Interest protocol as they are also a relatively unproven stable at an early development stage. Overnight differs in being deployed already but similarly lacks meaningful traction & proven durability.
In our opinion, TVL is a key metric for an ecosystem to enable traders & other projects but not the north star KPI to look at and not good to single out as a couple of $M USD can quickly move in and out. Ultimately, we all want to focus more on effective liquidity, value-add, sustainable growth.
For us, the main differentiator to QiDao is the previous track record & our perceived value-add to Optimism at the time of the proposal.
We knew QiDao, their risk management & ecosystem involvement from Polygon. The proposal from QiDao had a large Ask compared to their market cap but the incentive design & distribution, and especially their strong co-incentives lead delegates incl. us to vote yes. (I’d personally expect the same proposal to get at least a 30% haircut today though.)
Thank you @_Max_plus for your detailed answer and weighing into each of the mentioned critical points.
First of, have to say the communication from the website (focus on profits) and initially rather broad proposal with lack of focus on current products was a big turnoff - almost a red flag. Your reply gives us a much more detailed and positive picture.
While still inclined to call it an “USDC wrapper” or “top stable wrapper”, and having some doubts about long-term utility of USD+ & success of the products (yields drop, increased smart contract/operational risk vs. holding underlying, etc.), there is value in stables, efficiency & real yield in the current bearish environment - this explains also the uptick in delta-neutral on-chain yield strategies & new stable models.
Hence to summarize, the stablecoin/yield generation area is an interesting space, the Overnight products are early stage and might add value but traction & contribution to spur Optimism growth is still unproven & not fully clear.
Potentially, a smaller grant than originally proposed but larger than Interest protocol 1 proposal could be “fair” to get going IF good co-incentives are also available & more detail on LM, OP distribution is added.
(Note to self: It would be good to have a better overview than this distribution doc over previous grants, their success as well as current projects and their functionalities on Optimism incl. stablecoins, possibilities to lend and borrow Op, etc. to assess new proposals)