I will symbolically vote Against this proposal as the Foundation has significantly underdistributed tokens and creating a larger supply overhang than projected. Particularly given $OPās challenging tokenomics to begin with, it was imperative to at least get a wide distribution in the early days, to bolster some confidence in the token, and this hasnāt happened anywhere near the degree implied in Year 1.
As per initial projections, roughly ~9.5% or ~400M OP should have been distributed to users via airdrops. However, only 11.7M was, since Airdrop #1, and a total of 226.5M.
I understand that this is an evolving process and the projections are just that, but Foundationās handling of OPās token distribution and lack of clarity has undermined confidence in the $OP token.
For me to vote For on this proposal, I need detailed projections for Year 2 and moving forward, and the measures taken to ensure they will be met within an acceptable margin of error. Of course, Iām referring to categories directly under the purview of Foundation like RPGF and Airdrops. Without accountability and standards, these proposals are meaningless.
Thank you OP foundation! I second @polynya 's request for Year 2 projections and measures to adhere to the planned emissions. Additionally, Iād also like to understand why the Year 1 emissions did not follow the initial plan?
As the above mentioned request was ignored, I have voted Against this proposal. I will continue to hold Foundationās work in distributing $OP tokens to a higher standard.
Hi @polynya, thank you for the thoughtful response.
I agree the Foundation has not distributed as many tokens as originally expected.
Our intention was not to mislead anyone, but rather to be a responsible steward of our existing budget for the benefit of Optimism. There are a couple factors that contribute to this:
- We want to be able to prove good ROI on token spend. We have been carefully following the analytics put out by OP Labs to understand incentives and grantsā effects on TVL, transaction volume, and gas fees. Weāve also applied similar analysis to Partner Fund distributions and Airdrops #1 and #2. We want to be able to prove that OP distributions are moving key ecosystem metrics, which has not always been the case, and this has affected the velocity with which we distribute tokens.
- Market conditions have affected the number of quality targets for OP. The graph linked above was shared as an indication of total possible spend, and the market reality has pushed us away from the max distributions displayed there. We acknowledge that this should have been communicated more clearly and proactively to the community. While farmers are persistent, the bear market means explorers and new-to-crypto users who may benefit most from incentive programs are also in shorter supply. The Foundation is instead focused on programs that target builders, through our Collective Intents, the recently launched Foundation Mission (RFP) program, our ideas list, and work on RetroPGF.
Going forward, weāre committed to sharing a clearer framework for how the Foundation evaluates OP spend based on ROI. Our goal is to be able to express target metrics for token spend across tx/OP, TVL/OP, gas/OP, addresses/OP, delegatedOP/OP, or a combination of those metrics, and to report back on how distributions measure up against these targets.
Weāve published an estimate of future annual token spend, but these numbers are just estimates, not commitments, and actual token distributions will be determined by the Foundationās ability to develop distribution programs with good, measured ROI.
The Foundation will commit to providing a mid-year report in November 2023 to update the community on how weāre tracking against those estimates in advance of next yearās annual budget proposal. In the case that we are not tracking to hit the estimates above, the midyear report will be an opportunity for the Foundation to sync its decision-making algorithm with the broader community.
We continue to welcome tactical or strategic feedback on how token allocations could be used to help support the Collective and grow Optimismās ecosystem. For example, your idea here on delegate bonding curves may make a great RFP and is a helpful suggestion to focus distributions on providing real value to the Collective.
Thank you, as always, for your feedback.
Appreciate the response. As Iāve mentioned before, the damage caused by withholding supply is far greater than being worried about farmers. Farmers will always be there, and the good news is theyāll distribute tokens out to real investors in very short order. I understand this is subjective, but it also depends on the magnitude of the problem, of course - and at 1 year circulating supply being only 7% is indeed a massive problem, even moreso with the insider unlocks coming up shortly, which will become a significant portion of circulating supply. At this stage, the focus should be on distributing tokens to a representative circulating supply and rebuilding confidence in the $OP token with greater transparency. My symbolic dissent vote stays, and I hope things improve significantly for Year 2 so I can come back and vote For enthusiastically next year.
Greetings,
Despite weeks passed from the voting days for this proposal, revising and reviewing this proposal gives me thrilling sense.
Iām voting against as well but for a different reason.
I think itās fine that we hold back the airdrops until the attestation station and other reputation systems are in placeā¦
But iām voting no on this because symbolic proposals are a waste of everyoneās timeā¦
Why spend the time writing this forum post and making everyone read it to send out 1 OP? We all have better things to do.
Not to mentionā¦ I donāt see multiple delegates supporting this proposalā¦ I thought that was a requirement for a vote?
Proposals from the foundation do not currently need delegate backing I believe
Time isnāt the real concern here in my opinion, the real problem is the capital inefficiency that is occuring from making such a symbolic vote onchain.
Here is the onchain vote. I donāt see an easy way of seeing the number of individual voters, but I stopped counting after around 250. Each vote costs around .4 dollars in gas give or take (it can go as high as 1.3 dollars, according to another delegate). At current prices, this means that the combined gas spent to symblically send 1 OP easily passes 60 OP , all paid from each individualās ETH balance. Aka, this vote costed at least 6000% more to the community than the value at stake.
I know this is not a problem specific to this vote, but issues like this are significant blockers for Governance Accesibility, which has been voted in as a Collective Intent . From what Iāve seen on the onchain voting thread some solutions are being explored, but I really recommend we refrain from these symbolic votes for now. They are hurting inclusivity and in and could lead to long-term consequences due to missed votes hurting peopleās delegate profiles and future Attestation scores.
Some Foundation proposals (e.g. Treasury Appropriation) are exempt from requiring delegate approval, and I do think symbolic votes are useful in gauging support for Foundationās actions. Most delegates support, while I do not, and dissenting voices can sometimes be useful in pushing the Foundation to do better (and judging by Bobbyās response, they are determined to do so).
I understand the desire to wait for better airdrop mechanisms, but the magnitude of supply overhang for $OP, with ~93% still pending circulation, is the worse evil IMO. Even an ineffective airdrop is sorted out by the market in short order; a supply overhang, lack of clarity and loss of confidence has long-term detrimental implications for the $OP token and by extension the Optimism collective.
I disagree with this quote. Many times foundations reaffirmed this was an evolving process and the first distribution chart was an intention.
How can you experiment and have a detailed distribution at the same time? Looking at how governance has evolved, we went from every delegate vote on every proposal to subcommittees and intents. Are you able to predict this sort of thing?
Do you have some metrics to back this?
Curious to know how this happens?
The focus should be to bring builders, public goods, and great ideas in. Make the ecosystem robust and full of use cases. I feel capital wonāt move if they just see governance debating on the circulating supply of a governance token.
Itās about the magnitude of deviation.
Projections, not distribution. Also, as I specifically mentioned, this is for the areas under Foundationās purview and predictable, like Airdrops, RPGF, Partner Fund etc. This does not apply to Governance Fund, obviously, which is more prone to experimentation.
Farmers sell on the market to investors.
This thread is about treasury appropriation by Foundation. Fortunately, Bobby has done a good response about acknowledging the mistakes made, and how they are striving to do better this year. Itās not quite enough for me, personally, but itās progress, and Iām happy to leave this thread at that. We can discuss bringing builders and public goods at a more appropriate venue.
Lastly, certainly thereās subjective opinion here - particularly the magnitude of damage caused by withholding supply, or how far distribution has deviated from projections. Iāll happily agree to disagree.
Disappointing, although you have cooperated with some big organizations (coinbase, OW, etc.) this year, but people donāt have much nostalgia for OP,because you are fooling that the strongest partner is the community not the resourcesļ¼looking at what is being discussed in various communities, it seems that your OP has been forgotten in history, but you still want to change the time and amount of token distribution, which is tantamount to slow death, quietly ARB, TVL is several times that of OP , and then look at the ecological projects on the chain, not to reflect on how to get the attention and support of the community, but to engage in some seemingly lofty things
I would like to express our support and cast vote in support for the Year 2 budget proposal put forth by the Optimism Foundation. We appreciate the Foundationās role in stewarding the Optimism Collective and recognizing the current issue in the foundation budget to continue its operations.
However, we also share the communityās concerns about the Foundationās handling of OPās token distribution. The discrepancy between the projected and actual distribution of tokens during Year 1 has raised questions about transparency and confidence in the $OP token.
Thanks @bobby , for shedding light on the factors that led to this distribution discrepancy. It is reassuring to know that the Foundation is taking steps to address this issue by pledging to provide a mid-year report in November 2023, as well as a more transparent framework delineating how OP spends are evaluated based on ROI with respect to distribution. These measures are crucial in bolstering accountability and equipping the community with a better understanding of the Foundationās decision-making processes. Looking forward those commitment in the near future!
Youāve made some interesting observations. I tend to agree with you.
I tend to agree with the things that @polynya mentioned and happy to see Bobby post a response.
But if you do not need any funding why do we need to each pay ~$.23 in gas to send you 1 OP by voting for this proposal? The proposal and this whole on-chain voting system feels like such a waste of time and money as I already mentioned here: It Is Time For On-Chain OP Voting - #13 by lefterisjp
I will also vote with a dissenting voice but to ask you guys to:
- Get rid of symbolic on-chain votes. Check my post above explaining why.
- Give true governance to the OP-holders. I know itās a gradual process but a year on it seems we still mostly rubber stamp what the foundation wants. It feels like the foundation is in almost total control. This needs to change and fast. Onchain voting should be for onchain actions. Which means we the OP holders should have full control for it to make any sense.
- Try to improve the OP distribution as @polynya mentioned.
Got it , so Treasury for PR and Community , itās so good
By examining the Foundation Budget data for Year 1, we found the distribution of the budget is insufficient. The Foundation seems to fail the distribution and cause a larger token supply overhang, as only the 5.21% is distributed.
We appreciate the Foundationās response for the concerns, however despite mentioning the main focus is on supporting builders via RetroPGF and Partner Fund in the response, we think the distribution of both category is still inadequate.
For Year 2, we believe the distribution process must be more detailed, wide and transparent. We decided to vote āagainstā on the proposal to show our concerns.
Voted against the proposal due to points already raised by Polynya. While the Foundation has commented on the discrepancy between realized and budgeted token distrubution (I agree with Polynya that commentary so far fails to explain rationale adequately), I would appreciate if the Foundation would comment on future outlook on token distribution.
Is the expectation that distribution will continue to strongly lag behind budget, will it accelerate to catch up to original budget, or will it match budget going forward?
Voted against this proposal and would have preferred to see the inclusion of executable code alongside the vote to move the 1 OP and officially conduct our first On chain vote with executable code.
I too share similar reasons as Polynya and Lefterisjp