Our votes in cycle #2
In voting cycle 2 we came up with the following assessment criteria for proposals:
Value-add: Very small - Very high (Project Size, Product importance for Op, User/TVL Onboarding)
Amount: Reasonable - Too much (compared w/ value-add, use of funds)
Op distribution: Bad (internal development, venture funding) - Good (long-term, unique, value-add…)
Co-incentives: None - Great
Our votes in cycle #3
Please redelegate from ScaleWeb3.eth to Superdelegate.eth
Delegated votes to ScaleWeb3.eth cannot be used anymore. Manual redelegation is required.
We tried to solve this over the span of 2 weeks and had been in contact with Snapshot, Gnosis Safe and other delegates but due to the sudden Snapshot change & our setup of the l1 mulsitig we are not able to use the address on Optimism and for Optimism governance voting anymore.
Please redelegate from ScaleWeb3.eth to Superdelegate.eth
Our votes in cycle #4 (Pls redelegate from ScaleWeb3.eth → Superdelegate.eth for cycle #5)
Can’t wait to get more engaged w/ Op projects & DeFi proposals which should ultimately show
- great alignment with Optimism,
- real value-add for user/project onboarding AND retention through clever incentive design;
as these 2 factors are criticial to bootstrap growth & achieve lasting success as Op-Eth-Web3 ecosystem.
We plan to also share some blogs on interesting, unique, potentially sticky liquidity mechanisms, short- & long-term ecosystem/DeFi strategies incl. KPIs worth optimizing for. Hence, it would be nice to have the comprehensive proposal assessments, and research proposal claims (KPIs) vs. actual results!
Here are our votes for the current cycle:
Interest Protocol - Yes
Socket - No
OptiChads - Yes
Kromatika - No (Don’t expect positive outcome of distribution of funds)
Revert Compounder - Yes
Bankless Academy - Yes
Across Protocol - Yes
Tarot - No
Otterspace - No
dHedge - Yes
This voting cycle was a bit chaotic with the new governance process, committees and delegate approvals. Nonetheless, we mostly followed the recommendations of the governance committees and see that their engagement with proposers during REVIEW ahead of voting improves final proposals.
We voted NO on the Kromatika proposal as we don’t see a strong positive impact on trade performance yet (DEX aggregation) and still doubt that the adjusted token distribution w/ lots of small-scale strategies have a lasting positive outcome: gas refund, marketing, referral marketing, airdrop, LM…
We just saw that Socket would accept a 60% Op cut if they succeed this round which would make it a great proposal to proceed. We hope they follow through. As we cannot be certain and don’t want to set a precedent for changing proposals during voting (tough to assess), we still voted “no” this time.
This round, we saw a couple of projects share multiple proposals to get the ball rolling and for follow-up grants. When submitted in one go, this makes it harder to go through for delegates & committees but we generally appreciate the move towards milestone payments. Hence, it would be best for projects to share one proposal, describe launch, goal, KPIs, finish date…follow-up proposal & submit that one later.
We voted with our new Delegate Address: Superdelegate.eth. Pls redelegate from ScaleWeb3.eth!
It seems the low requirements for funding have set a bad precedent.
New grant applicants have repeatedly refered to previous proposals to justify their high requested grant amounts instead of thinking of marginal value-added, collaborative growth and value/partner-alignment.
We hope the criticial evaluation of the (success of) first rounds of grants, a more comprehensive ecosystem growth plan (liquidity, user onboarding, focus, etc.), and a mindset of frugality, long-termism & accountability will help and stir the discussions back to co-growing a successful ecosystem with impact.
Here are our votes for the current cycle:
Abracadabra - No
Overtime - No
Overnight - No
Sushi - Yes
Tarot - No (solid proposal but the ask is high for a small project. We like the OP/LP pairs on Tarot but we have serious doubts that the incentives spent per week (22,500 OP) will be good for Optimism)
Alchemix - No
Dope Wars - Yes (proposal offers value-add and distribution per game & for devs is well-specified)
Otterspace - Yes
Rainbow Wallet - Yes
Karma Delegate Dashboard - Yes
Karma Discourse Plugin - Yes
Safe - Yes
Lifi - Yes
Yearn - Yes
We voted with our new Delegate Address: Superdelegate.eth. Pls redelegate from ScaleWeb3.eth!
The lack of meaningful governance activity in this governance delegate model and the cartelization/oligopoly around grants reminded us of a good old article: Lisk - the mafia blockchain.
We see similar things happening in Optimism right now with a few delegates & projects consolidating power while driving away all sorts of other (potential) contributors & stakeholders.
Copy pasting # Conclusion
Our analysis has shown that DPoS networks can be very fragile constructs. In this the incentives between participating parties need to be balanced and adjusted, if necessary, to reach as high a degree of decentralization (or: optimal ecosystem efficiency & output) as possible.
fascinating analogy - would love to see a more fleshed-out thesis here so we can move forward. absolutely agree with the need to broaden participation, and in fact I’ve been working on some more analytics to assess the health of delegation activity. wasn’t able to get it in on time for the last call tho
Thoughts on grants, current stage of market & Optimism and the Velodrome proposal
- The first grant assessments offer good insight on little initial success. Despite not agreeing with all takeaways as it’s too early to call initiatives a good or bad idea (Execution!), we can already tell that focused grants to top projects have a big short-term impact and we should run smaller, much shorter experiments, and more clearly scoped grants to derive more learnings.
- It’s no surprise that some highly flawed retroactive grants were not successful & user onboarding has generally been slow and expensive when there is very little general user interest in crypto
- Sustainability and long-term success of each of the grant proposals is yet to be seen.
- There is lots of entitlement from proposers and high Asks justified by previous grants instead of looking at marginal value added and long-term value
- Grant rounds have been rushed. There should rather be continuous grants & different tiers with varying requirements for applicants depending on the size of the grants.
Current Stage of the market & Optimism
- Crypto is not a sprint but a marathon – despite some investors claiming otherwise in bull markets.
- We know 5-15 of the top crypto teams today. It’s early days but we expect some of them to continue to outperform while completely new teams will join and overtake tier 2, 3 projects.
- Optimism is a $200M marketcap project. The grant amounts signal it’s a Multi-$B project already.
- Crypto has the lowest trade volume in a long time and top projects, for example DEXs, have not yet fully moved to Optimism. Therefore, current market shares and the long-term importance of projects should not be overstated. ( → Avoid drawing premature, wrong conclusions)
Questions: Phase 1 Evaluation & Strategy going forward
- Politics & Governance Theatre
- Lots of unnecessary debates are tiresome & turn off genuine contributors
- Real goals (great product, ecos, Op, impact) are consequently not central in the Op ecosystem
- Expensive traction
- Optimism bought some initial traction in this market; some liquidity & users will stay for a while
- There are few dedicated builders & innovative apps onboarded to Optimism so far
- Stop the waste
- There should be ongoing grants run by a dedicated vehicle with some autonomy & clear KPIs (we like public discourse but in Op it’s ineffective to say the least; OP will be siphoned away)
- Projects should not benefit from multiple grants at the same time (Don’t give a grant to a project for DEX liquidity and to a DEX for DEX liquidity incl. that token pair…)
- Long-term, continous incentive distributions are not effective (Why are there still projects ineffectively incentivizing user liquidity on an Uni v2 fork with insig. trade volume each day?)
- Run small, lean experiments (2-6 weeks marketing, incentives, etc.)
- Don’t overoptimize meme KPIs such as TVL. Liquidity is key but a moving target if not effective.
- Important decisions: Focus ( → Sustainable growth)
- Is this the right time to focus on liquidity/user incentives or dev grants?
- What is the right vehicle for diff grants and support programs?
- Which incentive designs are best? ( → new Op Foundation team, should collab with ecos )
- Do you want to give first-movers to Optimism more advantages/funds now? Do you think that will pay off more or might it potentially hurt long-term adoption?
- What are the top projects that contribute most today, in 3y to OP?
- What is the biggest value-add from different stakeholders on Optimism? How to optimize that?
- Do you want ecosystem teams to opt-in to lock-ins at this early stage of Optimism?
- What’s the best way to incentivize future growth of projects & communities in the OP ecosystem?
We think Optimism (Gov) should double down on the most important ecosystem stakeholders in the long-term but focus on clearly scoped incentives in the near-term!
- Early movers require bigger incentives than late adopters (Grant Amounts, APYs, etc.). There is no need to overoptimize this though as opportunists, yield hunters, grant hunters today will likely not add unique, sustainable value but hurt future, potentially bigger contributing projects. This means Optimism should more carefully look at marginal value added from projects & proposals from now on and put an additional focus on onboarding the best teams.
- This gov fund can & should be utilized for liquidity goals as much as for onboarding important building blocks, top teams, adding users, communities, building public goods
- Offering top teams 2-5% of the total gov fund in the next 5 years can pay off!
Velodrome Example: Why 4 MILLION OP is a way too large Ask for Velo today *
- Incentivizing partially idle sitting TVL & high farming rewards to certain parties (early partners in the Velo ecosystem) will not offer as much return for OP today as it can in a bull market.
- Velodrome played a significant role in onboarding projects. The economics offer some lock-in for partners to Velo & Optimism. This can help with kickstarting the ecosystem but we are not convinced that the protocol is competitive in the long-term with the most efficient DEXs. Op should be careful of incentivizing liquidity & lock-in at this point as it will hurt projects, Op efficiency, users.
- There are positive signs with Velo but we don’t see a full-scale liquidity flywheel taking off. Quite a few of those positive signs (for example user activity) can be attributed to the central positioning in the ecosystem, the previous grant and the resulting support for more protocols than other projects.
- Spending almost 2% on liquidity incentives (TVL growth) of 1 DEX project should lead to activity & sustainable growth with high certainty. Currently, many DEXs are starting liquidity incentives on Optimism, effectively competing for the same USD. Optimism needs to find the best use of funds - not favor one over others & potentially lose in the long-term. If Optimism doesn’t have certainty on the best use, Optimism should run smaller scale experiments until we know.
- We can compare Velodrome to Sushi’s Onsen pools (at the time: Uni v2) to onboard & bootstrap new projects to Optimism. Consequently, it would make sense to give Velodrome another, smaller grant to enable them to keep onboarding more teams & pools (don’t focus too much on lockup & liquidity incentives) while making sure to also welcome and better onboard Uni, Arrakis, Curve, Sushi & Co to Optimism and building an ecosystem-wide liquidity plan.
- Without going into more detail, the mentioned co-incentives are directly bought with Op. Lots of projects got an OP grant to run incentives on Velo. Now Velo asks 4M OP (100K+ OP/week) to match their bribes or build liquidity. This is not how you grow an ecosystem.
- In our opinion, a grant of 500K OP would go a long way in onboarding new projects.
*We don’t understand how a committee can Abstain. That said, won’t engage in further Velo discussions.
Here are our votes for the current cycle:
Alchemix - Yes
Following recommendation, good project, solid proposal.
Arrakis - No
Following recommendation, good project but proposal not detailed enough.
Symphony - Yes
Unique app, solid proposal, good focus on onboarding new users.
Velodrome - No
Huge Ask, too much focus on liquidity, prefer focus on onboarding teams & new pools.
Homora - Yes
Following our recommendation, adj. proposal good for liquidity & Homora as building block.
Angle - Yes
Following our recommendation, EUR stablecoin & proposal can have positive impact on Optimism.
InsureDAO - Yes
Following our recommendation, small project w/ reasonable proposal, can help w/ Optimism growth.
Curve - Yes
Following our recommendation, top project w/ okay liquidity proposal, good for ecos efficiency & growth.
Pooltogether - Yes
Following our recommendation, proposal helps w/ liquidity & especially user onboarding.
Overnight - Yes
Following our recommendation, okay proposal can help w/ liquidity on key pairs, good co-incentives.
Socket - Yes
Following recommendation, adjusted Ask is reasonable, top cross-chain aggregator with Lifi and similar, good focus on onboarding builders & users.
Ethernaut - Yes
Great dev onboarding proposal, adjusted Ask + top-up is a good approach.
Tally Ho - Yes
Reasonable proposal to drive users to Optimism.
Ambire - Yes
Reasonable proposal to drive users to Optimism, slight lack in clarity.
Messari - No
Interesting proposal but expensive, would like to see comparable Defillama proposal.
Defillama - No
Top team, should be incentivized to prioritize Optimism but proposal lacks detail.
Agora - Yes
Small proposal that can add value to governance on Optimism.
Mochi - Yes
Unique app, solid proposal w/ focus on onboarding users & retaining new stakeholders.
Saw a comment re: similar proposals in different phases: Generally agree that Optimism governance needs to be more careful about marginal value added from here on. In the case of wallets, we see significantly different use bases & are in favor of strong incentives to help them start using Optimism (if incentives are implemented in a solid way incl. sybil-resistance).*
Not all recommendations (for example from tooling committee) are live yet. We have already voted but the snapshot was taken down again. Will check back later & possibly adjust voting if there is additional, good input from committees that we missed or surprises on Snapshot.
We voted & will vote again with our new Delegate Address: Superdelegate.eth.
ScaleWeb3.eth will not be usable again due to the l1 multisig setup we have.
Here are our votes for the #special-cycle-9a
Protocol Delegation Program: For
Grants Council: For
Both of these ideas can tackle some of the previous issues correctly raised in season reviews.
Off-Topic: A clean forum is a superpower. Discussions around airdrops should be moved to some channel in Discord or completely be banned from official channels to achieve quality discourse.
Here are our votes for the #special-cycle-9b
Grants Council - Builders: L2Beat, Dhannte, OPuser
We picked these 3 due to the mix of demonstrated expertise, OP alignment & detailed envisioned products to faciliate building on/with the OP stack.
We specifically look forward towards tooling around new OP primitives (Think: attestation station), “launching” Op chains, tracking, general “tools” for different stakeholder segments (incl. OP devs, cross-chain builders, investors, governance followers/voters etc.)
Grants Council - Growth: Stablenode, Gfx, Flipside, Michael Van der Meiden, JackAnorak
We picked these 5 as most of them have been central actors in Optimism governance and provided good input to grants evaluations before. We also like the differentiated perspectives on “what makes good grants” and “grant focus for Optimism”. Combined this looks very comprehensive and we see decent overlap with our own understanding of the next phase of grants. We mainly look forward to
- no incentive dumps for inflated KPIs & general overpayment (clearly scoped grants & results)
- ongoing, yet more specific support & collabs with top projects (follow-up on previous grants)
- small-scale rapid experiments with solid tracking & learnings, a.o.t. general growth approaches for the Op ecosystem such as education, reach, marketing channels, very promising projects or mini-apps (caveat: new retail investors from outside crypto should not be main target now)
- investments into new areas w/ potentially significant value-add &or network effects (e.g. attestation → identity → social score → lending/game app impact; DeFi L2 such as Uniswap → concentrated liquidity → options → trading apps; packaging of staked Eth yields, zkApps on top of Optimism)
- onboarding of quality people (define small projects; collaborative research/builder projects)
Protocol Delegation (in this order): Ens, Lifi, Connext, Thales, Kyber, Paraswap, dHedge, Agora
- These projects are built by long-term Web 3 builders whom we want to see more closely on/with Optimism (intentionally didn’t include all SNX projects or Velodrome to broaden the ecosystem)
- Some of the projects have solid, active governance (ENS, SNX overall) while others are just getting started. The former can provide learnings, the latter may offer fresh perspective on governance topics & implement learnings in own governance systems (win for projects, OP & crypto)
- Overall, don’t expect specific protocol vote to make a big difference but we hope to see long-term effects of this protocol delegation experiment. (Protocols should find more and more reasons why they should be more actively involved in Optimism & want to accrue more influence in Optimism)
(As our Superdelegate address doesn’t have any OP delegated currently and we can’t use the ScaleWeb3 address, you won’t see any official vote from us in this cycle.)
We voted for the Bedrock update and for temporary suspension. These votes are pretty straightforward to have an aligned community with shared values and progress on the tech side.
As mentioned by others, Agoric voting experience is horrible. Hope for improvements, otherwise this is an additional barrier and will hinder more governance participation.
Once more… we can not use our ScaleWeb3.eth voting account anymore - which is still shown on the Agoric delegate page. Pls delist it or make newcomers automatically delegate with our new address: Superdelegate.eth - otherwise votes get lost.
Besides that, appreciate the grants council channel on Discord incl. the concise posts from Diomedes, Boardroom’s governance summaries, and Lavande’s interactions on Discord & Forum to stay up to date.
Looking very much forward to the assessment of proposals, the following growth experiments and hope for an uptick in general, quality Optimism discussions.
Voted Against Protocol Delegation Program Renewal
The program is still in its infancy but the first results are terrible. Not only did protocols mostly not vote with delegated tokens but did not engage at all in governance. Since this was called an experimentation to get them more involved in Optimism, we do not consider this a successful attempt. At this point in time, we do not believe anymore that governance is the right venue to get projects closer to Optimism.
Potentially, it would be more successful with much less overhead to do direct communication, onboarding, partner development. And it would likely be a good idea to adjust the delegation program and simply enable projects building on Optimism with an interest in governance to apply for delegated governance tokens.
Voted For Intent #1: Progress Towards Technical Decentralization
Intents for Optimism are a great idea to cultivate a value-aligned community with shared goals. 1 Mio OP to accelerate the path towards one of the main mid-term goals (decentralization > censorship resistance) seems like a great investment.
Voted For Intent #2: Innovate on Novel Applications
Important proposal but we are slightly more sceptical of this intent due to larger expense & somewhat open-end results. Hoping for very specific RFP, active outreach to top parties in Web 2 & Web 3 and not spending the grant amount on some dev studio to build an alpha version that will be abandoned.
a) Requests for proposals are a good idea to get specific (small-scope) ideas implemented & (small) teams engaged in this ecosystem. Most often core team members & long-term crypto natives know very well what can be built &or should be built with current limitations & novelties in mind to faciliate the onboarding of the next wave of newcomers. On the other side, newer builders often don’t know where to start &or lack some specific knowledge and could very well benefit from specific proposals, requests for grants & benefit from close collaboration with oversight committees.
b) It seems many people in crypto have been “waiting” for cheaper blockspace & lower gas costs to enable a whole range of novel apps. However, despite the launch of many EVM compatible networks and l2s in the past 3 years and even deployments of top Eth apps on alternative cheaper blockchains (-> innovation is possible on other chains too), this explosion of novel apps hasn’t materialized yet for a variety of reasons. Among the reasons might be that 0-1 innovations happened already in DeFi, a shortage of top new teams with top dev talent, truly novel apps require in-depth knowledge and 95% of apps for the masses are still not possible on current infrastructure.
Voted For Intent #3 is: Spread Awareness of the Optimistic Vision
Another important proposal to grow Optimism.
Voted For Intent #4: Governance Accessibility
We believe this is already being targeted through governance adjustments and a couple of previous grants (Karma, Boardroom, etc.) but there is a lot more to do and it makes sense to formulate it as intent.
Besides that, the grants council communication throughout the last months was good to follow the progress made on the grants side. To be honest, the proposals in growth experiments are not as interesting & promising as we hoped for but looking forward to outcomes of the ongoing iterative experimentation.
PS: We can not use our ScaleWeb3.eth voting account anymore - which is still shown on the Agoric delegate page. Pls delist it or make newcomers automatically delegate with our new address: Superdelegate.eth - otherwise votes get lost.
Voted For the Inflation Adjustment: 2% → 0%
Upcoming inflation & dilution is going to be a big problem, no need to make this a bigger issue today with pre-approved funds for growth, partners, contributors…
Voted Against Treasury Appropriation (Read: Improvement is possible)
Generally, we prefer to not vote on non-events and rather use other channels to measure sentiment and support for different programs and Foundation initiatives. Epolyna raised also a good point that tokens should have been distributed more rapidly to a wider community. On the other side, the Foundation is also right about the market & somewhat ineffectiveness of previous incentive programs. Hence, props to the data-driven approach of the Foundation but moving tokens more aggressively into the hands of contributors should be a big goal for the next year. One of our main hopes for growth experiments is to really work on super short incentive programs, marketing programs to find out which “OP spent is indeed well-spent and leads to bigger Op ecosystem & higher Op price”.
Voted FOR a number of reviewers on growth experiments & builder incentives
It’s hard to measure individual reviewer’s input & output from the outside - basically judging public appearances such as hosting a governance call & forum activity - which is essentially not the core work.
Voted For Dev Advisory Board & Budget, Anticapture Commission, Grants Budget & Security Council
It’s not easy to judge the different councils & commissions. We signed off on important councils and respective nominations this time.
Abstained from Carlos Melgar Code of Conduct Violation since there is no clear case from the limited info we see and voted Against setting up a code of conduct council budget.
We are in favor of experimentation but generally very sceptical of the growing governance apparatus. At this point, it seems governance is growing quicker than developer and application onboarding.
With the growing OP governance budgets, governance participants are being incentivized to become full-time OP politicians - which we are not in favor of. Long-term, we still prefer a leaner approach based on a set of core values where all Op participants can voice concerns & ideas while core dev copmanies, top projects & individual contributors take on a supervisory position. Something to keep in mind.
The latest round of RetroPGF is a disaster.
- OP governance participants ask for funneling more OP towards them.
- Ambassadors from other ecosystems create lists of affiliated projects to funnel OP towards them.
- Random VC funded projects ask for OP.
- Projects that received already 100K+ OP in grants, ask for more OP for random things (why pay $150K for a random open-source frontend?). Meanwhile projects aren’t even dedicated to OP.
Some of the applicants had a small impact on growing Optimism. 99% of those were already more than sufficiently rewarded for it. There are additional pots to further incentivize them to contribute.
Most - not all - applications this time have had nearly 0 marginal impact on (growing) Optimism.
Personally, I’d be fine funding public goods, funding positive sum contributions, open source contributions. This just feels like the same mistake many layer 1s committed in 2018/2019 when they were asked how they’d compete against EOS $4B war chest & they started throwing (good) money after random projects, short-term contributions which were not maintained, bad money (sunk costs)…