Optimism has entered into a private token sale of approximately 116M OP tokens, split among seven purchasers, for treasury management purposes. The tokens are subject to a two-year lockup. During the lock-up, the purchasers will be able to delegate the tokens to unaffiliated third parties for participation in governance.
The tokens come from the Unallocated portion of the OP Token treasury, and are part of the Foundation’s original working budget of 30% of the initial OP token supply.
Starting today, there will be several transactions to send the OP. These are all planned transactions and we’re sharing a heads up to keep the community informed.
I have a few questions regarding this token sale. Was this private token sale a planned event, or is there additional information available for me to read about it?
Could you provide details on the programs or processes that will be used to select the delegates who will receive these delegations?
Is the Unallocated Fund mentioned here the same as what you referred to here:
I am interested in understanding whether this process is subject to changes in different seasons.
Could you provide details on the programs or processes that will be used to select the delegates who will receive these delegations?
The process to select delegates will be up to each individual tokenholder, as is the case with all OP holders across the Collective.
Is the Unallocated Fund mentioned here the same as what you referred to here:
The Unallocated Fund is 8.8% of the total initial supply of OP, as identified in the OP Allocations documentation. You can also refer to the Foundation Year 2 Budget Proposal from last May for details on past token allocations from Unallocated.
I also have a few questions regarding OP token allocations.
Can you expand on what specific allocation these OP tokens are being sold from? Is it from the 19% allocated to Core Contributors, the 8.8% allocated to an Unallocated Reserve Fund, or the 17% allocated to Sugar Xaddies (investors)?
Edit: The question above has been answered in your last post. I didn’t catch it before writing this.
Regarding the 17% allocated to Sugar Xaddies, how much of this amount has been sold to date? I don’t believe an amount has ever been disclosed. It would be helpful to know how much of this allocation remains, if you are able to share.
I think Foundation has full autonomy over working budget, so no comment on token sale. Only writing this comment to express my gratitude for keeping the community involved, even with internal transaction. No surprise other DAO are looking at us, learning from us and building around us.
Just a few questions to understand the conditions and other information that could be relevant if these can be available:
Who are purchasing in this token sale? Very appreciated if we can know the names.
Is the unlocking -immediate and total- after two years or progressive once this period ends (example, linear unlocking)?
Is there more about (if any) previously agreed commitments on how they will be involved in governance? because currently 69M OP tokens are delegated and 113M OP sold is a massive shock to consider.
Not a question about the terms of the token sale, but if you’re using a vesting contract for the 2 year schedule, I’m sharing Hedgey Investor Lockups as a tool that would be helpful. (Previously shared Hedgey Grants in the forums)
The vesting contracts which are used in our team token vesting and investor lockup products, are are audited by Consensys Diligence, and are trusted by Celo, Gitcoin, CollabLand, Index Coop, and a bunch of other great teams.
The contracts themselves would allow OP to distribute tokens that unlock for investors on a predefined schedule at whatever rate you chose (periodic monthly/streaming) plus can include a cliff if you have it. Additionally, you can enforce the programmatic lockup schedule while still allowing the investors to delegate token voting rights for onchain governance in full and partial amounts.
The tokens can also be programmatically locked while the lockup itself can be transferred to different wallets or held with a custodian. (If OP enables it)
There’s also an easy UI for OP create and issue locked tokens, plus a dashboard for OP and the recipients to track and manage their token claims on app.hedgey.finance
It’s all a free public good - no sign ups needed to use the platform.
Summing this all up, I think using Hedgey would allow OP to distribute tokens to the investors with a built-in programmatic unlock schedule, while still giving the investors the flexibility to move locked tokens to cold storage/custodians and also delegate voting rights to multiple parties easily.
Wanted to share it as an option. I’m sure there’s a million moving pieces in the background I’m not aware of so also understandable if it’s not a fit. Can share more or help if needed. my TG is @ goforlindsey
Information about the unlock schedule for the Sugar Xaddies token allocation is available in the OP Token Unlock Public Tracker. This sheet is updated on (roughly) the last day of each month.
The unlock is immediate and total after two years.
The current circulating supply of OP is over 800m tokens. The Collective will continue to support initiatives to increase the delegated supply of OP as a share of the total circulating supply.
There are currently no plans for more private token sales in the future.
Can we know who are the seven purchasers?
Do you plan to publish the price deal you made?
Was there any discount to the current spot price or TWAP?
Who are purchasing in this token sale? Very appreciated if we can know the names.
This was a private sale. The terms and purchasers are not being disclosed.
Thou it’s understandable for the names to remain private, is the same applied for the wallet addresses?
Are plans for private sells to be public in the future?
Hey there! Appreciate the notice on the $OP movements, it will def. help avoid weird speculations. With that being said, I do have a couple of Qs:
What was the thought process on not putting any vesting on these tokens? Seems like something utterly out of the ordinary even if they are “not buying shares”
I’m not versed on legal stuff, so would appreciate the insight: How does this not represent a liability on the Foundation’s side? “Private sale” sounds awfully close to selling shares, specially if this is not executed from a Snapshot vote.
How does this affect the decentralization threshold in which Optimism network works? It will not affect the sequencer, since its run by the team, but… Having unknown entities with considerable voting power, probably sold at a discount, does seem to change a bit current Optimism landscape.
I’m trying my best not to attack what is happening, since I understand this probably an amazing opportunity to secure the future of Optimism’s development, marketing, etc. but I do find it conflicts a bit with the decentralization narrative.
Optimism Foundation has the full right to sell its token as it pleases, without the input of any holder of $OP. In fact, a sale enabling its runway should be applauded.
However, this is not a private transaction because the $OP token is publicly traded. For the same reasons investors were made aware of the initial allocation of the $OP, the public should be made aware of the terms of any large insider transactions related to the token.
In public markets, of which $OP is a part of, insiders/high ranking employees/directors typically create predetermined plans to sell their shares in a company (like you’ve insinuated the Optimism Foundation has done here). Further, once these sales are actually made, the insiders file Form 4s notifying the public of the amount and price of the stock sold.
I think we can agree that the Optimism Foundation is directly analogous to the insiders in this situation. Not only is the Optimism Foundation aware of material non public information (developments/plans and in this case, the terms of this token sale), but the Optimism Foundation, per your post, planned the sale of these tokens.
Even if $OP is not a security, that does not exempt the Optimism Foundation from normal course disclosure. There should no be objection to the premise that an Optimism Foundation sale of $OP, the token powering the system Optimism Foundation created, is an insider transaction. Accordingly, the Optimism Foundation has the legal obligation to disclose the terms of this deal.
Can you explain how the Optimism Foundation would not be subject to what should be ordinary course disclosure?
Hiho.
Nice to see this transparency and as a foundation I can understand that you need to compensate the early, angel, and try to make capital efficiency besides the use of the blockchain and the collected fees that are needed to survive. Unless we have a super bull market and the usage of OP chain goes crazy this is going to be unsustained in the time and the foundation will suffer a little. So it’s remarkable that you are informing us and it would be great no to disclose the names, obviously because it could be a rule misalignment but maybe the numbers to understand the new voting responsibility that we are going to see around.
Very happy to understand what’s happening.
Have to agree with Frank here. The securities question, whatever the SEC or anyone’s opinion on the subject, is irrelevant. A private token sale to 7 counterparties for >$100m <$150m would actually strengthen the SEC’s argument.
Anyway even disregarding this whole regulatory issue, from a corporate governance standpoint it puts your public investors at a disadvantage against I’d imagine a pretty sizeable group of people involved in the transactions. By not disclosing material-non-public information such as the buyers identities and discounts paid you are eroding trust for current holders as well potentially incurring a huge legal liability down the line.
Besides, this is all useless since some way smarter people than me are going to find out were the OP went anyway. Blockchain architecture has it’s pros and cons
Just my 2 cents with tiny financial exposure to Optimism (as well as other chains), but I think OP has at the very least a long-term vision for the chain, unlike most other money grabs.
