Special thanks to @brichis,@kaereste, and @Porter_Smith for review and feedback on these amendments as part of the Feedback Commission
Season 6: Chain Delegation Program Amendment
Chain Delegation Program Amendment
The Chain Delegation Program was not utilized in Season 5 due to longer than expected timelines on the partnership side and due to the ongoing evolution of what it means to be part of the Superchain. However, the Chain Delegation Program is expected to play a meaningful role in our plans to onboard the next ~15 OP Chains. Below we propose an amendment to the original proposal, based on changes that have occurred over the course of Season 5. This program pertains only to L2’s as governance controls protocol parameters at the L2 level.
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OP Chains that meet the below criteria will be eligible for 250k OP in delegation:
- In the Superchain Registry (or similar)
- Committed to contribute revenue back to the Collective and generating > 1 ETH / month in sequencer revenue, for at least 2 consecutive months
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Additionally, chains the meet the below requirement will be eligible for an additional 750k OP in delegation:
- 1M in transaction volume per month, for at least 2 consecutive months (qualifying Chains will be re-assessed on this metric at the beginning of each Season.) This metric more closely ties to private grant milestones, replacing the previous revenue generation metric (in part due to the impact of 4844).
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Chains operating on the Standard Configuration would be eligible for an additional 500k OP in delegation (a total of 1.5M OP for these chains.)
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Qualifying Chains will be re-assessed on these metrics at the start of each Season.
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The size of the program would be increased to 20M, to support the first ~15 OP Chains in their first year of governance participation. All delegation formulas and caps remain the same.
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The duration of the program would be extended, to support the first ~15 OP Chains in their first year of governance participation, on a rolling basis until, all qualifying chains have gone through the program.
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All delegations made through this program will be capped at the point at which an OP Chain reaches 3M in delegation (including Partner Fund grants able to be delegated), at the time of opt-in.
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No delegations have been made through this program to date. Any delegations that are made will be noted as a comment to this forum post.
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OP Chains will not be added to this program until they opt-in and verify they are able to uphold the below participant expectations
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OP Chains must maintain a >70% voting participation rate during the Season, calculated at the start of each Season, or their delegation will be removed at the start of the next Season
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Delegates should set an ENS Primary Name to their delegation address and create a delegate statement on vote.optimism.io. It is also recommended to set an ENS avatar with the logotype of the OP Chain.
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Chain delegates should identify a point of contact that will be responsible for this delegation. It is recommended that this delegate attend community governance calls, hosted bi-weekly.
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Chain delegates will be top 100 delegates, which mean they are eligible to provide approvals on proposal drafts and should be active in the governance forums.
The new program charter, updated with the above changes, can be viewed in its entirety here.
What Does it Mean for Delegates?
The proposed amendments to the Chain Delegation Program will go to a vote in Special Voting Cycle #23a. You can see the full details in the Season 6 Reflection Period Guide. If the amendments are not approved, the Chain Delegation Program will continue to through the end of Season 6, as approved in the original proposal.
In either case, the Chain Delegation Program will continue to be delegated 10M OP from the Governance Fund through the end of Season 6.
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As part of the Path to Open Metagovernance, we’ll be experimenting with polls this Reflection Period.
Are there any aspects of the Chain Delegation Amendment that you are NOT supportive of?
Please provide additional feedback in the comments if you select any answers below
- Expansion from 10M OP to 20M OP
- Expansion of term length of program
- Tiered qualification and delegation amounts
- Specific qualification criteria
- Additional participation requirements
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Do you believe this proposal is ready to move to vote?
Please provide additional feedback in the comments if you select any of the below
- Yes
- Yes, with adjustments
- No
Upon thinking more on this, we’re not sure there’s a compelling reason to expand this program. It’s not at capacity now, and also we risk getting into a situation where becoming a Superchain member is increasingly a lopsided deal that disfavors Optimism mainnet/governance.
Pledging sequencer revenues is relatively low cost for new chains that aren’t established, but becoming a Superchain member already will give those chains access to substantial subsidies at the expense of Optimism tokenholders. The checks and balances on providing those grants and other financial resources is largely reliant upon an independent Optimism governance that puts OP tokenholders first.
This program expansion – aside from not having an obvious demand for the increased budget – risks stacking Optimism governance with a bunch of chains whose incentives are not aligned with maximizing OP tokenholder value. A small number of chains would provide representation, but adding up to 20m votes that have a strong incentive to only increase the drain of Optimism’s treasury to fund initiatives on other chains is probably too much.
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I see no requirement for eligible projects to stay on Superchain.
We might add some more detail.
For example:
- 250k OP stays at least 1 year
- 750k OP stays at least 3 years
- 2m OP never opts out
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The program is temporary in that delegations are only made for the first year of the Chain’s participation and are then removed (tokens returned back to the Governance Fund.)
Chains receiving delegation will be re-evaluated at the start of each Season to ensure they continue to meet the criteria, meaning they would have to still be part of the Superchain Registry or would lose their delegation.
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Got it. thank you Lavande
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Thanks for raising these points and starting an important conversation.
In terms of this specific program, the goal is to allow OP Chains to begin to participate in governance with accountability mechanisms (participation requirements, removable delegation, etc.) that aren’t available with private grants or free market delegation. Importantly, delegations will not be made above a 3M OP cap on the Chain’s total delegation, so the program should mostly benefit smaller Chains/Chains that don’t already have large amounts of existing voting power. OP Chains are basing the future of their business on Optimism and it’s very important to them to be able to participate in governance outcomes that affect the future of their businesses. This program allows them to get involved, on a temporary basis, with guidance and oversight from the Token House.
At a higher level, we do believe these Chains are incentive aligned in building & maintaining the OP Stack as a platform that provides value to all of its users, including OP Mainnet. We understand the concerns around economic incentive alignment, balance of power, and value accrual across the Superchain (and especially relative to OP Mainnet), and plan to schedule a joint house community call with the founding team to expand upon these topics in early July, aligned with theme of Season 6: Supporting the Superchain.
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I echo the concerns of @GFXlabs as they are valid points.
I also would like to ask who ends up monitoring that this OP is well used in governance and the participations metrics are upheld?
If not will undelegation happen before end of the year?
I hope yes as this should be very strict criteria to make sure governance participation is upheld.
Other than that I don’t think it’s a bad idea to add such a delegation so long as it’s temporary. To incentivize participation of more chains in the governance of the optimism ecosystem so I will be voting for.
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I share similar concerns mentioned above. Delegating 20M tokens is quite a lot. I fully support OP Chains representing themselves within governance, but I’m not sure about the accepted OP Chains being directly within the top 100 delegates. Currently, the top 100 delegates consist of individuals/teams who have been providing value to the Optimism ecosystem for a long time. I don’t support directly including OP Chains among these individuals/teams with this new delegation method.
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The Foundation will monitor participation rates for all program participants at the start and end of each Season. If delegates believe there should also be a mid-point evaluation, that is something we could also consider (the goal to balance accountability for participants with the operational overhead of monitoring/enforcement for the Collective.)
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The following reflects the views of L2BEAT’s governance team, composed of @kaereste and @Sinkas, and it’s based on the combined research, fact-checking, and ideation of the two.
We’re voting FOR the proposal.
While the chain delegation program was not utilized in Season 5, we view it as a promising initiative that could be further explored. We acknowledge the concerns raised by our fellow delegates, and we share some of them, but we believe they are not substantial enough to warrant a ‘no’ vote from us.
In our view, for the Superchain’s vision to succeed, it is important that all member chains are actively engaged in governance. This engagement is not merely a matter of voting; rather, it necessitates meaningful and impactful participation.
The importance of this engagement is underscored by the fact that the decisions made through governance directly and immediately impact the Superchain’s member chains.
Therefore, it is of utmost importance that these member chains are not mere spectators. They should have a meaningful voice and influence in the decision-making process. This is crucial to ensure their active contribution and meaningful participation in shaping the trajectory and future of the Superchain.
In order to achieve this active participation we need to encourage those chains to get involved early and we believe this program gives a chance to make it happen.
Sorry for belated response. It is a fact that the new participants in the OP Chain ecosystem will inevitably contribute to the development of the OP world. We can state that Chain Delegation plays an important role in ensuring more seamless onboarding and being a stakeholder in the governance environment. HOWEVER, we believe that delegating 20 million OP for 15 new OP Chains is an excessive amount when considering the distribution among all delegators. Hoping for a more balanced amount of delegation to continue this environment, where the current top delegators can make the best decisions for the OP ecosystem, we submit our vote against the Chain Delegation proposal.
2 Likes