The Optimism Foundation’s future operating budget of OP is subject to governance by the Token House. Each year, the Foundation can put forth a budget proposal and the Token House may approve or reject it.
The Foundation was allocated a Year 1 budget in the founding documents of the Optimism Collective. It has to date used 5.21% of this Year 1 budget.
Therefore, the Foundation is symbolically requesting an additional 1 OP for its Year 2 (2023-2024) operating budget.
This vote is meant to introduce the Foundation budget approval process and set a precedent for future budget approvals.
This proposal will go to vote in Special Voting Cycle #12b on May 18th at 19:00 GMT.
What is the Optimism Foundation?
The Optimism Foundation is a Cayman Islands foundation company. Its mission is to support the establishment of the Optimism Collective, the development of the Optimism ecosystem, and the technology that powers it.
The Foundation is one component in an evolving and ever-growing web of companies, groups, and individuals driving towards realization of the Optimistic Vision.
More information on the Foundation and its goals is available in the Optimism Governance Documentation.
Foundation Budget Proposals
The Optimism Foundation administers a portion of the token supply to further the Collective’s goals. This set of tokens will be referred to as the “Foundation Budget.” The Foundation Budget must be utilized in line with the overall OP Token Allocations, described in detail below.
This is the first Foundation Budget Approval proposal. The Foundation’s Year 1 operating budget was determined by the initial OP token allocations at the founding of the Collective on April 24, 2022. The core team decided on this allocation because they believed access to this portion of the treasury would would (a) give the Foundation the optimal leg-up to bootstrap and steward the Collective and (b) best position the Foundation to move more quickly along the Collective’s iterative path towards decentralization.
Going forward, any further budget for the Foundation must be approved by the Token House. As described in the Operating Manual, the Foundation may submit a proposal to the Token House once each year to request additional OP be added to the Foundation Budget.
Overall OP Allocations
The overall ecosystem allocations of the total initial supply of OP (as outlined in the governance documentation) are as follows:
- 858,993,459 OP (20%) to Retroactive Public Goods Funding
- 1,073,741,824 OP (25%) to Ecosystem Fund (Governance Fund, Partner Fund, Seed Fund, Unallocated)
- 816,043,786 OP (19%) to User Airdrops
- 816,043,786 OP (19%) to Core Contributors
- 730,144,440 OP (17%) to Sugar Xaddies (aka Investors)
Review of Year 1 Budget
In Year 1 (April 20, 2022 → April 19, 2023), 30% of the total initial token supply was made available to the Foundation for administration in line with the overall token allocations detailed above. In utilizing these tokens, the Foundation may not exceed 30% of the total supply, and may not exceed any individual category’s allocation limit.
The Foundation’s administration of Year 1 budget was as follows:
|Category||Description||OP Distributed||% total supply OP||% Foundation budget|
|RetroPGF||Distributed in RetroPGF Round 2. More details.||3,916,618 OP (out of 10,000,000 OP granted)||0.09%||0.30%|
|Partner Fund||Distributed across 48 partners.||40,111,394 OP||0.93%||3.11%|
|Unallocated||Funded core protocol development, marketing, community programs, and operational services.||11,368,634 OP||0.26%||0.88%|
|Airdrops||Distributed via OP Airdrop #2. Details Airdrop 2 | Optimism Docs.||11,742,277.10 OP||0.27%||0.91%|
Token Distributions Outside of Foundation Budget
In addition, outside the Foundation’s Year 1 budget, but in keeping with the overall OP Allocations:
- 214,748,365 OP (5% of total OP) was distributed via Airdrop 1
- 60,425,931 OP (1.4% of total OP) was granted by the Token House via the Governance Fund, of which 53,489,103 OP have been distributed
Altogether, the Collective has distributed 335,376,391 OP, or 7.8% of total initial supply of OP. This information is available and updated in a public tracker here.
Details on Year 1 Budget
Grants made from the Partner Fund were used to provide services and tooling to the Optimism community, promote education, experiment with liquidity mining programs, drive consumer usage, and/or support Optimism’s governance system.
In RetroPGF 2, badgeholders voted to distribute 10m OP to 195 projects and organizations who provided some public good to the Collective. Distributions are currently ongoing, and just shy of 4m OP have been distributed to date. More details on RetroPGF 2 results and methodology available here.
Finally, Airdrop 2 distributed 11.7m OP to reward the delegation of OP tokens as an experiment to strengthen the Collective’s governance system. More details and methodology available in the governance documentation.
The Optimism Foundation is symbolically requesting an additional 1 OP for its Year 2 (April 20, 2023 → April 19, 2024) budget.
The Foundation has adequate funding left over from its Year 1 budget to continue its role as a steward of the Optimism Collective for the next twelve months.
In April 2024, the Foundation may submit a new budget proposal to the Token House for review.
Going forward, the Foundation expects to use the Foundation Budget left over from Year 1 in support of the four Collective Intents established as part of Governance Season 4, and in line with any updated Collective Intents the community aligns on in following seasons.
As this is the first instance of a Foundation Budget Proposal, feedback on the structure or contents is welcome.