S8 Governance Fund Missions

Governance Fund Missions 🏹
1

Grants Council Mission

  1. Expected impact on the Intent:

    The Grants Council makes grants, on behalf of the Token House, in an effort to make progress towards the Intent. In Season 8, the Grants Council will work towards the below success metrics, which the Foundation believes will create progress towards the Intent:

Interop-ready TVL

Primary: X TVL/AOP that is interop readywithin the Interop set

Secondary: % share of TVL / AOP within the Interop Set that’s interop ready v.s. Total TVL / AOP

Why this metric?: Interop introduces new development and interaction patterns for application developers. Growing the volume and share of interop-compatible assets onchain increases the chance that interop is widely adopted by application developers and users alike.


Interop Transaction Fees

Primary: X ETH / Month transaction fees generated from transactions that interact with the L2ToL2CrossDomainMessenger contract

Secondary: % share of interop transaction fees v.s. non-interop

Why this metric?: The total fees spent on interoperable transactions maps to usage of the feature after launch, and is a good indicator of the net growth caused by introducing the feature to the Superchain. This metric may not be measurable until full interop launches in late Q4.

  1. Total budget: [TBD by Budget Board] OP from the Governance Fund
    • Please note this budget was ~9M OP in Season 7, excluding Audit grants
  2. Eligibility: The Foundation recommends that all incentive programs and the chain delegation program for Season 8 be available to chains on a fully-standard, governance-approved release of the OP Stack and have opted into the Security Council (or are on track to). This corresponds to the green + yellow chains (see Superchain Index.) Projects are eligible who have deployed their own contracts on eligible OP Chains. Additional criteria may be determined by the Grants Council.
  3. Selection Algorithm: It is at the discretion of the Grants Council to determine their own selection algorithm. Selection algorithms (which have taken the form of public rubrics in the past), must be made public on the forum before the first round of selection takes place.
  4. Evaluation Algorithm: Projects selected by the Grants Council will be assessed, based on their ability to generate contribution towards the success metrics defined above, by OP Labs or Open Source Observer on the measurement date.
  5. Measured Outcomes:
Interop-ready TVL

Primary: X TVL/AOP that is interop ready within the Interop set

Secondary: % share of TVL / AOP within the Interop Set that’s interop ready v.s. Total TVL / AOP

Why this metric?: Interop introduces new development and interaction patterns for application developers. Growing the volume and share of interop-compatible assets onchain increases the chance that interop is widely adopted by application developers and users alike.


Interop Transaction Fees

Primary: X ETH / Month transaction fees generated from transactions that interact with the L2ToL2CrossDomainMessenger contract

Secondary: % share of interop transaction fees v.s. non-interop

Why this metric?: The total fees spent on interoperable transactions maps to usage of the feature after launch, and is a good indicator of the net growth caused by introducing the feature to the Superchain. This metric may not be measurable until full interop launches in late Q4.

  1. Measurement Date:
    • End of Season 8

Strategic Rationale

  1. Proactive Grants are Needed to Incentive Growth: The Mission supposes that proactive grants are needed to incentivize growth in the above defined success metrics. Otherwise, these tokens could be allocated retroactively or via other means.
  2. Grants Council Acts as an Extension of Growth Team: The Mission supposes that the Grants Council is an effective means of distributing user incentive grants. The Collective could, alternatively, chose to distribute user incentives via third party growth campaigns or the Foundation’s growth team.

Futarchy Mission

In Season 7, Optimism partnered with Butter and Uniswap Foundation to test the efficacy of futarchy in relation to alternative methods for predictive token allocation decisions, such as a Council structure. You can read more about the results of this experiment here (expected June 26th).

To build upon this initial experiment, the Foundation proposes running additional futarchy experiments in Season 8 to test the following:

  • The impact of play money on futarchy contests that award grants (similar to Season 7)
  • The performance of futarchy in making predictions about budgeting decisions
  1. Expected impact on the Intent:
    • By improving decisions about which grants drive different success metrics, we are more likely to achieve our Intents.
    • By better understanding how to best allocate tokens to support different Missions under the Intent, we are more like to achieve our Intents.
  2. Total budget: [TBD by Budget Board] OP from the Governance Fund
  3. Eligibility: There can be two dimensions of permissionless eligibility: 1) forecasters who participate by betting in the market and 2) projects that have set up pools in the market.
    • Forecasters: Participation in the prediction market will be permissionless — any non U.S. resident can sign up and “play.” Forecasters may be required to disclose conflicts of interest.
    • Projects, when applicable: All incentive programs will be available to chains on a fully-standard, governance-approved release of the OP Stack and have opted into the Security Council (or are on track to). This corresponds to the green + yellow chains (see Superchain Index.) Projects are eligible who have deployed their own contracts on eligible OP Chains.
  4. Selection Algorithm: The decision market serves as the selection algorithm itself, serving as a public indication about the projects that the market believes should receive grants and/or about the budgets that should be assigned to different Missions.
  5. Evaluation Algorithm:
    • Projects selected by the futarchy mechanism will be assessed, based on their ability to generate contribution towards the success metrics defined above, by OP Labs or Open Source Observer on the measurement date.
    • The probabilities assigned to budgeting decisions may be used as an input into the Budget Board’s modeling for Season 9 Missions.
  6. Measured Outcomes:
Interop-ready TVL

Primary: X TVL/AOP that is interop ready within the Interop set

Secondary: % share of TVL / AOP within the Interop Set that’s interop ready v.s. Total TVL / AOP

Why this metric?: Interop introduces new development and interaction patterns for application developers. Growing the volume and share of interop-compatible assets onchain increases the chance that interop is widely adopted by application developers and users alike.


Interop Transaction Fees

Primary: X ETH / Month transaction fees generated from transactions that interact with the L2ToL2CrossDomainMessenger contract

Secondary: % share of interop transaction fees v.s. non-interop

Why this metric?: The total fees spent on interoperable transactions maps to usage of the feature after launch, and is a good indicator of the net growth caused by introducing the feature to the Superchain. This metric may not be measurable until full interop launches in late Q4.

  • Incorporation of futarchy outcomes into Budget Board decision making in Season 9
  1. Measurement Date:
  • End of Season 8, and quarterly thereafter.

Strategic Rationale

  1. Futarchy is Worth Studying as a (Potentially) Better Way to Make Predictions: Futarchy has unique properties that, under certain circumstances, may result in better predictions than alternative methods such as tokenweighted voting or Council structures. Concave decisions may benefit from the wisdom of the crowds and the additional, local information that futarchy can draw out via permissionless, incentivized markets (upside and downside based on forecast accuracy) may improve decision making.
  2. Expands on v1 Learnings: In Season 7, we tested a core hypothesis about futarchy. Running additional experiments will allow us to build on our initial learnings and further test where futarchy might be most appropriate within Optimism’s governance system.

Developer Advisory Board Mission

  1. Expected impact on the Intent:

    The Developer Advisory Board makes grants, on behalf of the Token House, in an effort to make progress towards the Intent. In previous Seasons, these grants came out of the Grants Council budget. However, in Season 8, the Developer Advisory Board will make grants that work towards a different objective than the Grants Council. The Developer Advisory Board will make grants that drive developer adoption, either in the form of Audit grants or Mission Requests (as they have in previous seasons.) These grants should make progress towards the below metric:

Verified Developer Interop Adoption

Primary: [X ] Atlas deployers with contracts interacting with interop L2ToL2CrossDomainMessenger per month

Why this metric?: We believe it’s an early indicator of developer adoption and verified developers set a quality bar.



  1. Total budget: [TBD by Budget Board] OP from the Governance Fund
    • Please note this is relative to 1.285M OP in Season 7
  2. Eligibility: All incentive programs and the chain delegation program for Season 8 will be available to chains on a fully-standard, governance-approved release of the OP Stack and have opted into the Security Council (or are on track to). This corresponds to the green + yellow chains (see Superchain Index.) Projects are eligible who have deployed their own contracts on eligible OP Chains.
  3. Selection Algorithm: It is at the discretion of the Developer Advisory Board to determine their own selection algorithm. Selection algorithms (which have taken the form of public rubrics in the past), must be made public on the forum before the first round of selection takes place.
  4. Evaluation Algorithm: Projects selected by the Developer Advisory Board will be assessed, based on their ability to generate contribution towards the success metrics defined above, by OP Labs or Open Source Observer on the measurement date.
  5. Measured Outcomes:
Verified Developer Interop Adoption

Primary: [X ] Atlas deployers with contracts interacting with interop L2ToL2CrossDomainMessenger per month

Why this metric?: We believe it’s an early indicator of developer adoption and verified developers set a quality bar.



  1. Measurement Date:
    • End of Season 8

Previous Budgeting Data

  • In Season 7, the 3 Foundation Missions totaled 295k OP
  • In previous Seasons, audit grants totaled ~2.5M OP (within Grants Council Budgets) as outlined below:
    • S4: 200.000 OP
    • S5: 665.000 OP
    • S6: 640.000 OP
    • S7: 990.000 OP

Strategic Rationale

  1. Proactive Grants are Needed to Incentive Growth: The Mission supposes that proactive grants are needed to incentivize growth in the above defined success metric. Otherwise, these tokens could be allocated retroactively or via other means.
  2. Developer Advisory Board has Unique Ability to Drive Developer Growth: The Mission supposes that the Developer Advisory Board is an effective means of distributing grants that result in developer growth. These grants include more technical aspects such as audits or previous Foundation Mission Requests: