Optimism

Please read Guide to Season 3: Course Correcting for full context before reading this proposal.

Protocols building on Optimism are among its most important stakeholders and they value having a voice in the development of this ecosystem. Throughout Season 1 & 2, protocols have repeatedly expressed this interest by requesting that they be able to self-delegate grants as a means to participate in Token House governance. Self-delegation of grants has historically been discouraged. This proposal presents a more incentive-aligned way for protocols to get involved in governance in Seasons 3 and 4.

The Protocol Delegation Program would temporarily delegate a portion of idle OP from the Governance Fund to value-aligned protocols based on the criteria outlined below. This is an experimental program in which delegations are meant to last two Seasons in total, at which point protocols will need to reaffirm their commitment to Optimism governance via their own treasuries. The continuation of this program for a second Season will be voted on in the Special Voting Cycle following Season 3.

If this proposal is approved by the Token House:

• A total of 5M OP (or not more 1/3 of the active votable supply, defined as the average executed voting power in Voting Cycle #8) would be delegated across as many as 23 protocols, using idle tokens in the Other Initiatives category of the Governance Fund. Delegations will be made at the beginning of each Season, for a maximum of 2 Seasons.

• Delegation:

  • Each protocol will receive a flat delegation amount
  • Protocols that are Optimism Native will receive a multiplier of 1.25x the flat rate
  • Protocols that already have an Optimism delegate will receive a multiplier of 1.25x the flat rate. Delegates must have identified their protocol affiliation in a delegate commitment posted by 11/9/22 (end of Season 2) and have voted on at least 10 votes through Season 2.
  • Protocols may receive both multipliers, if they meet both criteria

• Protocols:

  • 15 protocols will be selected based on the below criteria. This criteria, while imperfect, was designed to be simple, objective, not easily gameable, and applicable across protocols:

    • total gas fees generated on Optimism during the proceeding Season

  • If any qualifying protocols have misused grant funding in the past, they will not be eligible.

• To broaden the stakeholders that are represented and to take into account factors that cannot easily be quantified or standardized, protocols will be able to self-nominate themselves for one of 8 additional spots in the program. Self-nominations would run from Dec 21st - January 11th and the Token House would vote on the 8 protocols to be added to the program during Special Voting Cycle #9b. A template and additional details will be provided if this proposal passes.

• All Protocol delegations will be capped at the point at which a protocol reaches a total of 2M delegated OP. If a protocol already has 2M OP in total delegation, they will not be delegated additional OP through this program. If delegation through the program would push a protocol over the 2M total OP delegated, they will only be delegated OP up to the amount at which they reach 2M total OP delegated.

• All protocols must opt-in to participating in the program by submitting a delegate commitment on the Forum and agreeing to abide by the Delegate Code of Conduct. Only protocols that maintain a >70% voting participation rate during Season 3 will be eligible for renewal for a subsequent Season of delegation.

• Protocol delegates will be subject to the Delegate Code of Conduct. Any protocol that the Token House finds to be in severe violation of the Delegate Code of Conduct will have their Protocol Delegate Program delegations removed.

You can view discussions on the original draft proposal here

Agreed with most of all these points above; however, I would caution against the below:

While understandable to reward those who were there since the beginning, rewarding certain projects more because of being Optimism Native and having Optimism delegates, works against the principles of decentralization. In fact, it can have the opposite effect of promoting aspects of centralization such as moat-building and moral hazards.

I agree with everything except for the boosts to the Optimism Native + OP delegates for the reason that they work against the principles of decentralization and introduce centralization risks.

Being an optimism native project should be rewarded. They have intentionally made OP their home and even though they can and should branch out, most upcoming projects will focus on OP.

I am undecided on providing a multiplier for Optimism delegates, but I think it’s fine to provide a multiplier(x1.25) for a native project.

Glad to see this in place too.

I agree optimism native should be recognized.

I don’t see the point though in having a recognized delegate. This would give extra votes to projects that already have delegates working for them. Does not make much sense. In fact it sounds unfair.