Katie,
The risk of this feeling like a snub doesn’t come from the committee’s rejection of the proposal. That is your committee’s right. It is that the committee’s rejection seems to be born a misunderstanding of the nature of Tarot and the role that LP incentives will play in driving protocol activity, even after it has been clarified by @TigrisOfGaul and @jackanorak.
Statements like “all of tokens are being used to bootstrap Tarot’s own token” doesn’t acknowledge that doing so is a more capital efficient way to incentivize Tarot usage then direct protocol incentives and “our recommendation is to focus on Optimism pairs” seems like you’ve entirely missed the point of the incentives. Why would a lending and borrowing protocol looking to grow on Optimism ask for a grant to incentivize OP pairs?
If this is where you all choose leave things, I see two risks:
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Tarot doesn’t have specific and actionable feedback to submit an improved proposal, maybe doesn’t even try
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Builders develop a perception that they can’t trust governance to understand or engage with nuanced proposals resulting worse outcomes for the ecosystem
If the committee is going to stick to it’s no recommendation, I would like to see them at the very least demonstrate they understood and remain unpersuaded by the thoughtful clarifications offered below.
From Jack:
Tarot, an incentivized leveraged yield protocol, is unlike many projects in that it can (and would) directly incentivize general use selectively with token emissions. Borrow and lend on the protocol, get TAROT in addition to your compounded yield.
Because of this, using OP to incentivize liquidity on TAROT is more or less tantamount to directly incentivizing borrowing and lending activity. More liquidity → more capacity to issue TAROT → more users of the protocol.
In this way, Tarot would have the flexibility to juice certain types of activity it wants to promote without having to redirect OP to farmers looking to dump it. Pairing TAROT with OP isn’t necessary but does offer a marginal liquidity backstop for OP.
From Tigris:
We view the OP incentives program through the lens of efficient capital allocation , and structured our proposal to align the long-term success of Tarot on Optimism with that of the Optimism network.
Currently, the direct incentivization of DEX liquidity is 30-50x more capital efficient than incentivizing borrow activity in Tarot. For example, $1 of OP bribes results in $2-3 of DEX rewards almost immediately, compared to $1 of OP borrow incentives resulting in ~$1 of borrow activity over one year. From the protocol’s point-of-view, it makes no sense to bribe non-TAROT pairs on DEXs, as the impact of bribing other pairs does not flow to Tarot directly.