Please read Guide to Season 3 : Course Correcting for full context before reading this proposal.
The Protocol Delegation Program will be voted on by the Token House in Special Voting Cycle # 9 a.
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 an means to participate in Token House governance. Self-delegation of grants has historically been discouraged.
After much debate, delegates have requested a comprehensive and consistent approach to protocol delegation. 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 delegate a portion of idle OP from the Governance Fund to value-aligned protocols based on the objective 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 5 M 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 20 protocols, using idle tokens in the Other Initiatives category of the Governance Fund. Delegations will be made pro-rata at the beginning of each Season, for a maximum of 2 Seasons, according to the below criteria:
total gas fees generated on Optimism during the proceeding Season
Protocol delegations will be capped at the point at which a protocol reaches a total of 2 M delegated OP. The cap is on total OP delegated. If a protocol already has 2 M OP in delegation, they will not be delegated additional OP through this program. Any OP that is not delegated due to this restriction will be re-allocated on a pro-rata basis among the remaining protocols.
Only protocols that maintain > 70 % voting participation rate will be eligible for renewal for a subsequent Season of delegation.
Protocol delegates will be subject to the Delegate Code of Conduct. Protocols will be contacted before delegation occurs and given the opportunity to opt-out if they aren’t able to meet the requirements or do not wish to participate. 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.
The proposal outlines the Protocol Delegation Program, which aims to allow protocols building on Optimism to have a voice in the ecosystem's governance. This program involves delegating a portion of idle OP from the Governance Fund to value-aligned protocols based on specific criteria. Delegations will last for two Seasons, after which protocols must reaffirm their commitment. A total of 5 M OP would be delegated across 20 protocols, with delegations based on gas fees generated on Optimism. Protocols can receive a maximum of 2 M delegated OP, and only those with >70% voting participation rate will be eligible for renewal. Protocol delegates must adhere to the Delegate Code of Conduct, and any violations may result in removal of delegations.
polynya: system:
A total of 8M OP (or no more than 1/3 of the votable supply as of the start of each Season) would be delegated across 20 protocols, using idle tokens in the Other Initiatives category of the Governance Fund. Delegations will be made pro-rata at the beginning of each Season, for a maximum of 2 Seasons, according to the below criteria:
Recommend making this “1/3rd of active votable supply” - a majority of the votable supply is dormant, so in reality at 8M OP you’re ending up with >70% in many proposals. At that point, delegates’ votes are meaningless, so Optimsm governance will effectively end up being controlled by the 20 protocols outright (actually less than that - maybe 10-15 - will qualify for >51%).
lefterisjp: system:
A total of 8M OP (or no more than 1/3 of the votable supply as of the start of each Season)
I echo @polynya here in putting a % limit of this in relation to the active votable supply.
Otherwise indeed delegation and us individual delegates will become meaningless and will stop participating alltogether.
Netrim: system:
total gas fees generated on Optimism during the proceeding Season
This would be the metric to define those 20 protocols
StrategicReserve: system:
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 an means to participate in Token House governance. Self-delegation of grants has historically been discouraged.
After much debate, delegates have requested a comprehensive and consistent approach to protocol delegation. 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 delegate a portion of idle OP from the Governance Fund to value-aligned protocols based on the objective 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.
millie:
I also never said that they shouldn’t have a voice, I simply pointed out that they are not nearly as committed to Optimism as other protocols are.
The whole point is to take subjective assessments out of it and allocate OP to protocols based on verifiable usage metrics. You’re attempting to introduce something (commitment, interest) highly subjective into the allocation process.
This program was posted on OP channels publically with requests for feedback.
Joxes: As we know, Optimism is not a simple Ethereum protocol, but a chain on top of Ethereum to host protocols inside. As a direct consequence, the Optimism governance is of interest to the protocols within it (this is not new but good to remember).
On the other hand, fair distribution of a token for governance purposes is an extremely difficult task, and releases seen as “fair” no longer exist in this space. No token will be distributed in this process, yes, but meets the same criteria. Regarding this, as members of this governance we have been discussing these topics, mainly the cases of self-delegation and how it provides access to the protocols to have representation without it being an unfair or advantageous game. On this we have a proposal in preparation to discuss in the coming days.
Sharing our thoughts
Definitely talking about this is a good idea, a way to insert a new type of delegate is fascinating to diversify with differents types of governance participants that can contribute to the enrichment of Optimism ecosystem and its future.
For now, this new proposed base of 5M is a good start to offer to projects deployed in Optimism participation. According to Defillama, Optimism currently has 36 protocols with a TVL above $1M, while the addresses per day metrics indicate that 47 projects are used by at least 100 addresses according to Dune on Optimism protocols metrics. Ideally, this removes all doubts about the activity and purpose of Optimism being fulfilled.
Now, we’re going to assume that most of the protocols have the same level of intentions to participate in the program; What would be a good criterion to measure a good voting power allocation method?
system:
total gas fees generated on Optimism during the proceeding Season
As discussed above, this measure alone cannot make a good fit from the subjectivity of benefiting the protocols that provide more benefits to Optimism: We should take into account that some even grant subsidies for use sponsored by the same governance (in the form of OP tokens) so add a weighting of other metrics like:
Active addresses per week
TVL
Volume
Other metrics combined (same treatment as recent airdrop criteria).
For those projects that are encouraging activity with $op distribution, we will possibly find oversized data, the metrics regarding: Active addresses per week, TVL and volume, will not be taken according to current data; In these cases, each project must resolve the way in which they present this data. Pre-distribution metrics can be a parameter, but it will not be applicable to all (this is because many projects deployed with the grant and their distribution is not yet complete) along with their declaration of participation as delegates. These are just criteria ideas to consider.
You could even think of a previous protocol classification:
DeFi
Bridges
Games
Others
And from there, use one or a maximum of two objective metrics (gas and active addresses, for example, as applicable). The first classification would have to be approved and adjusted by governance, we would recommend doing it through a weighted vote (where each delegate expresses what % of allocation each category deserves, of the total proposed), and the rest according to the results of the metrics taken.
The limits, participation requirement and code of conduct seem reasonable to be in line with the progress of governance, and not a big change from the current climate.
One of the points that remain open is how to obtain a diverse participation of protocol representatives in Optimism before large lobbies repel other participation intentions, and at the same time, adjust to the processes that each protocol organization has to follow in order to be able to participate. exercise their work (what is the opportunity cost for a DAO to organize to elect a member dedicated to a possible delegation with potential concrete benefits) that doesn’t discourage the desire to participate in this initiative. Small DAOs or reputable teams could quickly get up to speed but large protocols with governance such as Uniswap or Aave can lead to cumbersome processes.
In addition, Optimism should be careful about endorsing representations to protocols that are not legitimate or agreed with the governance/DAO/community or whoever conforms to the protocol set, for example, let’s imagine the following scenario: What happens if a founder decides to participate in the delegation on behalf of the protocol without explicit approval of the protocol (DAO/governance/community)? How can the Optimism collective deal with scenarios like this and distinguish legitimate entries?
About an alternative proposal issued by @lavande
Receiving the same voting power base for protocols is a better approach for the participation in a fairer way, but it is essential to evaluate how much the base would be equivalent to the multiplier.
Resolving this, said proposal looks more solid and easier to reach a consensus regarding the use of metrics and objective and subjective classifications that will lengthen the discussion.
For this reason, we consider it important to summarize the following advantages and disadvantages of this proposal:
Advantages
On the original proposal: prioritize participation in probably more genuinely used protocols, indirectly representing Optimism users not yet involved in governance.
On the alternative proposal: equal and fair treatment to begin with for all interested protocols.
Disadvantages
About the original proposal: too complex and it will take a long discussion without reaching a consensus of the majority (say >70%).
About the alternative proposal: we do not like the proposed selection mode of 15 predefined and 8 additional by voting. We prefer to vote all 23 in a single round or faithfully follow the order of a table; since they result in better and simpler resolution paths (for example, discovering the protocols that are really interested from those that are not).
A final concern
We cannot rule out that the sudden appearance of a new group of delegates may further discourage the work of independent or individual delegations, which at the end of the day, may reduce the diversity of participation in governance and, if unsuccessful, the delegations to protocols and have to be modified, reduced or eliminated, it’s likely that some individual delegates have already left.
Please read Guide to Season 3 : Course Correcting 26 for full context before reading this propos…
Please read Guide to Season 3 : Course Correcting 26 for full context before reading this proposal.
The Protocol Delegation Program will be voted on by the Token House in Special Voting Cycle # 9 a.
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 an means to participate in Token House governance. Self-delegation of grants has historically been discouraged.
After much debate, delegates have requested a comprehensive and consistent approach to protocol delegation. 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 delegate a portion of idle OP from the Governance Fund to value-aligned protocols based on the objective 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 5 M 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 20 protocols, using idle tokens in the Other Initiatives category of the Governance Fund. Delegations will be made pro-rata at the beginning of each Season, for a maximum of 2 Seasons, according to the below criteria:
total gas fees generated on Optimism during the proceeding Season
Protocol delegations will be capped at the point at which a protocol reaches a total of 2 M delegated OP. The cap is on total OP delegated. If a protocol already has 2 M OP in delegation, they will not be delegated additional OP through this program. Any OP that is not delegated due to this restriction will be re-allocated on a pro-rata basis among the remaining protocols.
Only protocols that maintain > 70 % voting participation rate will be eligible for renewal for a subsequent Season of delegation.
Protocol delegates will be subject to the Delegate Code of Conduct 14 . Protocols will be contacted before delegation occurs and given the opportunity to opt-out if they aren’t able to meet the requirements or do not wish to participate. 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.
polynya: system:
A total of 8M OP (or no more than 1/3 of the votable supply as of the start of each Season) would be delegated across 20 protocols, using idle tokens in the Other Initiatives category of the Governance Fund. Delegations will be made pro-rata at the beginning of each Season, for a maximum of 2 Seasons, according to the below criteria:
Recommend making this “1/3rd of active votable supply” - a majority of the votable supply is dormant, so in reality at 8M OP you’re ending up with >70% in many proposals. At that point, delegates’ votes are meaningless, so Optimsm governance will effectively end up being controlled by the 20 protocols outright (actually less than that - maybe 10-15 - will qualify for >51%).
lefterisjp: system:
A total of 8M OP (or no more than 1/3 of the votable supply as of the start of each Season)
I echo @polynya here in putting a % limit of this in relation to the active votable supply.
Otherwise indeed delegation and us individual delegates will become meaningless and will stop participating alltogether.
Netrim: system:
total gas fees generated on Optimism during the proceeding Season
This would be the metric to define those 20 protocols
StrategicReserve: system:
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 an means to participate in Token House governance. Self-delegation of grants has historically been discouraged.
After much debate, delegates have requested a comprehensive and consistent approach to protocol delegation. 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 delegate a portion of idle OP from the Governance Fund to value-aligned protocols based on the objective 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.
millie:
I also never said that they shouldn’t have a voice, I simply pointed out that they are not nearly as committed to Optimism as other protocols are.
The whole point is to take subjective assessments out of it and allocate OP to protocols based on verifiable usage metrics. You’re attempting to introduce something (commitment, interest) highly subjective into the allocation process.
This program was posted on OP channels publically with requests for feedback.
Joxes: As we know, Optimism is not a simple Ethereum protocol, but a chain on top of Ethereum to host protocols inside. As a direct consequence, the Optimism governance is of interest to the protocols within it (this is not new but good to remember).
On the other hand, fair distribution of a token for governance purposes is an extremely difficult task, and releases seen as “fair” no longer exist in this space. No token will be distributed in this process, yes, but meets the same criteria. Regarding this, as members of this governance we have been discussing these topics, mainly the cases of self-delegation and how it provides access to the protocols to have representation without it being an unfair or advantageous game. On this we have a proposal in preparation to discuss in the coming days.
Sharing our thoughts
Definitely talking about this is a good idea, a way to insert a new type of delegate is fascinating to diversify with differents types of governance participants that can contribute to the enrichment of Optimism ecosystem and its future.
For now, this new proposed base of 5M is a good start to offer to projects deployed in Optimism participation. According to Defillama, Optimism currently has 36 protocols with a TVL above $1M, while the addresses per day metrics indicate that 47 projects are used by at least 100 addresses according to Dune on Optimism protocols metrics. Ideally, this removes all doubts about the activity and purpose of Optimism being fulfilled.
Now, we’re going to assume that most of the protocols have the same level of intentions to participate in the program; What would be a good criterion to measure a good voting power allocation method?
system:
total gas fees generated on Optimism during the proceeding Season
As discussed above, this measure alone cannot make a good fit from the subjectivity of benefiting the protocols that provide more benefits to Optimism: We should take into account that some even grant subsidies for use sponsored by the same governance (in the form of OP tokens) so add a weighting of other metrics like:
Active addresses per week
TVL
Volume
Other metrics combined (same treatment as recent airdrop criteria).
For those projects that are encouraging activity with $op distribution, we will possibly find oversized data, the metrics regarding: Active addresses per week, TVL and volume, will not be taken according to current data; In these cases, each project must resolve the way in which they present this data. Pre-distribution metrics can be a parameter, but it will not be applicable to all (this is because many projects deployed with the grant and their distribution is not yet complete) along with their declaration of participation as delegates. These are just criteria ideas to consider.
You could even think of a previous protocol classification:
DeFi
Bridges
Games
Others
And from there, use one or a maximum of two objective metrics (gas and active addresses, for example, as applicable). The first classification would have to be approved and adjusted by governance, we would recommend doing it through a weighted vote (where each delegate expresses what % of allocation each category deserves, of the total proposed), and the rest according to the results of the metrics taken.
The limits, participation requirement and code of conduct seem reasonable to be in line with the progress of governance, and not a big change from the current climate.
One of the points that remain open is how to obtain a diverse participation of protocol representatives in Optimism before large lobbies repel other participation intentions, and at the same time, adjust to the processes that each protocol organization has to follow in order to be able to participate. exercise their work (what is the opportunity cost for a DAO to organize to elect a member dedicated to a possible delegation with potential concrete benefits) that doesn’t discourage the desire to participate in this initiative. Small DAOs or reputable teams could quickly get up to speed but large protocols with governance such as Uniswap or Aave can lead to cumbersome processes.
In addition, Optimism should be careful about endorsing representations to protocols that are not legitimate or agreed with the governance/DAO/community or whoever conforms to the protocol set, for example, let’s imagine the following scenario: What happens if a founder decides to participate in the delegation on behalf of the protocol without explicit approval of the protocol (DAO/governance/community)? How can the Optimism collective deal with scenarios like this and distinguish legitimate entries?
About an alternative proposal issued by @lavande
Receiving the same voting power base for protocols is a better approach for the participation in a fairer way, but it is essential to evaluate how much the base would be equivalent to the multiplier.
Resolving this, said proposal looks more solid and easier to reach a consensus regarding the use of metrics and objective and subjective classifications that will lengthen the discussion.
For this reason, we consider it important to summarize the following advantages and disadvantages of this proposal:
Advantages
On the original proposal: prioritize participation in probably more genuinely used protocols, indirectly representing Optimism users not yet involved in governance.
On the alternative proposal: equal and fair treatment to begin with for all interested protocols.
Disadvantages
About the original proposal: too complex and it will take a long discussion without reaching a consensus of the majority (say >70%).
About the alternative proposal: we do not like the proposed selection mode of 15 predefined and 8 additional by voting. We prefer to vote all 23 in a single round or faithfully follow the order of a table; since they result in better and simpler resolution paths (for example, discovering the protocols that are really interested from those that are not).
A final concern
We cannot rule out that the sudden appearance of a new group of delegates may further discourage the work of independent or individual delegations, which at the end of the day, may reduce the diversity of participation in governance and, if unsuccessful, the delegations to protocols and have to be modified, reduced or eliminated, it’s likely that some individual delegates have already left.
From someone who was against self-delegation, this proposal set a clear defined rule and process ar…
From someone who was against self-delegation, this proposal set a clear defined rule and process around protocol doing self-delegation which will remove the continuous debate from last 2 season.
query :- I see cap is 2 M OP, so what about protocol that has a head start in self-delegation ? They will get another 2 M OP ?
lavande: The cap is on total OP delegated. If a protocol already has 2M OP in delegation, they will not be delegated additional OP through this program.
The program will run for a maximum for 2 Seasons, after which point protocols that are interested in maintaining their voting power will need to do so via their owns means.
Please read Guide to Season 3 : Course Correcting 26 for full context before reading this propos…
Please read Guide to Season 3 : Course Correcting 26 for full context before reading this proposal. The Protocol Delegation Program will be voted on by the Token House in Special Voting Cycle # 9 a. 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 an means to participate in Token House governance. Self-delegation of grants has historically been discouraged. After much debate, delegates have requested a comprehensive and consistent approach to protocol delegation. 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 delegate a portion of idle OP from the Governance Fund to value-aligned protocols based on the objective 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 5 M 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 20 protocols, using idle tokens in the Other Initiatives category of the Governance Fund. Delegations will be made pro-rata at the beginning of each Season, for a maximum of 2 Seasons, according to the below criteria: total gas fees generated on Optimism during the proceeding Season Protocol delegations will be capped at the point at which a protocol reaches a total of 2 M delegated OP. The cap is on total OP delegated. If a protocol already has 2 M OP in delegation, they will not be delegated additional OP through this program. Any OP that is not delegated due to this restriction will be re-allocated on a pro-rata basis among the remaining protocols. Only protocols that maintain > 70 % voting participation rate will be eligible for renewal for a subsequent Season of delegation. Protocol delegates will be subject to the Delegate Code of Conduct 13 . Protocols will be contacted before delegation occurs and given the opportunity to opt-out if they aren’t able to meet the requirements or do not wish to participate. 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.
polynya: system:
A total of 8M OP (or no more than 1/3 of the votable supply as of the start of each Season) would be delegated across 20 protocols, using idle tokens in the Other Initiatives category of the Governance Fund. Delegations will be made pro-rata at the beginning of each Season, for a maximum of 2 Seasons, according to the below criteria:
Recommend making this “1/3rd of active votable supply” - a majority of the votable supply is dormant, so in reality at 8M OP you’re ending up with >70% in many proposals. At that point, delegates’ votes are meaningless, so Optimsm governance will effectively end up being controlled by the 20 protocols outright (actually less than that - maybe 10-15 - will qualify for >51%).
lefterisjp: system:
A total of 8M OP (or no more than 1/3 of the votable supply as of the start of each Season)
I echo @polynya here in putting a % limit of this in relation to the active votable supply.
Otherwise indeed delegation and us individual delegates will become meaningless and will stop participating alltogether.
Netrim: system:
total gas fees generated on Optimism during the proceeding Season
This would be the metric to define those 20 protocols
StrategicReserve: system:
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 an means to participate in Token House governance. Self-delegation of grants has historically been discouraged.
After much debate, delegates have requested a comprehensive and consistent approach to protocol delegation. 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 delegate a portion of idle OP from the Governance Fund to value-aligned protocols based on the objective 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.
millie:
I also never said that they shouldn’t have a voice, I simply pointed out that they are not nearly as committed to Optimism as other protocols are.
The whole point is to take subjective assessments out of it and allocate OP to protocols based on verifiable usage metrics. You’re attempting to introduce something (commitment, interest) highly subjective into the allocation process.
This program was posted on OP channels publically with requests for feedback.
Joxes: As we know, Optimism is not a simple Ethereum protocol, but a chain on top of Ethereum to host protocols inside. As a direct consequence, the Optimism governance is of interest to the protocols within it (this is not new but good to remember).
On the other hand, fair distribution of a token for governance purposes is an extremely difficult task, and releases seen as “fair” no longer exist in this space. No token will be distributed in this process, yes, but meets the same criteria. Regarding this, as members of this governance we have been discussing these topics, mainly the cases of self-delegation and how it provides access to the protocols to have representation without it being an unfair or advantageous game. On this we have a proposal in preparation to discuss in the coming days.
Sharing our thoughts
Definitely talking about this is a good idea, a way to insert a new type of delegate is fascinating to diversify with differents types of governance participants that can contribute to the enrichment of Optimism ecosystem and its future.
For now, this new proposed base of 5M is a good start to offer to projects deployed in Optimism participation. According to Defillama, Optimism currently has 36 protocols with a TVL above $1M, while the addresses per day metrics indicate that 47 projects are used by at least 100 addresses according to Dune on Optimism protocols metrics. Ideally, this removes all doubts about the activity and purpose of Optimism being fulfilled.
Now, we’re going to assume that most of the protocols have the same level of intentions to participate in the program; What would be a good criterion to measure a good voting power allocation method?
system:
total gas fees generated on Optimism during the proceeding Season
As discussed above, this measure alone cannot make a good fit from the subjectivity of benefiting the protocols that provide more benefits to Optimism: We should take into account that some even grant subsidies for use sponsored by the same governance (in the form of OP tokens) so add a weighting of other metrics like:
Active addresses per week
TVL
Volume
Other metrics combined (same treatment as recent airdrop criteria).
For those projects that are encouraging activity with $op distribution, we will possibly find oversized data, the metrics regarding: Active addresses per week, TVL and volume, will not be taken according to current data; In these cases, each project must resolve the way in which they present this data. Pre-distribution metrics can be a parameter, but it will not be applicable to all (this is because many projects deployed with the grant and their distribution is not yet complete) along with their declaration of participation as delegates. These are just criteria ideas to consider.
You could even think of a previous protocol classification:
DeFi
Bridges
Games
Others
And from there, use one or a maximum of two objective metrics (gas and active addresses, for example, as applicable). The first classification would have to be approved and adjusted by governance, we would recommend doing it through a weighted vote (where each delegate expresses what % of allocation each category deserves, of the total proposed), and the rest according to the results of the metrics taken.
The limits, participation requirement and code of conduct seem reasonable to be in line with the progress of governance, and not a big change from the current climate.
One of the points that remain open is how to obtain a diverse participation of protocol representatives in Optimism before large lobbies repel other participation intentions, and at the same time, adjust to the processes that each protocol organization has to follow in order to be able to participate. exercise their work (what is the opportunity cost for a DAO to organize to elect a member dedicated to a possible delegation with potential concrete benefits) that doesn’t discourage the desire to participate in this initiative. Small DAOs or reputable teams could quickly get up to speed but large protocols with governance such as Uniswap or Aave can lead to cumbersome processes.
In addition, Optimism should be careful about endorsing representations to protocols that are not legitimate or agreed with the governance/DAO/community or whoever conforms to the protocol set, for example, let’s imagine the following scenario: What happens if a founder decides to participate in the delegation on behalf of the protocol without explicit approval of the protocol (DAO/governance/community)? How can the Optimism collective deal with scenarios like this and distinguish legitimate entries?
About an alternative proposal issued by @lavande
Receiving the same voting power base for protocols is a better approach for the participation in a fairer way, but it is essential to evaluate how much the base would be equivalent to the multiplier.
Resolving this, said proposal looks more solid and easier to reach a consensus regarding the use of metrics and objective and subjective classifications that will lengthen the discussion.
For this reason, we consider it important to summarize the following advantages and disadvantages of this proposal:
Advantages
On the original proposal: prioritize participation in probably more genuinely used protocols, indirectly representing Optimism users not yet involved in governance.
On the alternative proposal: equal and fair treatment to begin with for all interested protocols.
Disadvantages
About the original proposal: too complex and it will take a long discussion without reaching a consensus of the majority (say >70%).
About the alternative proposal: we do not like the proposed selection mode of 15 predefined and 8 additional by voting. We prefer to vote all 23 in a single round or faithfully follow the order of a table; since they result in better and simpler resolution paths (for example, discovering the protocols that are really interested from those that are not).
A final concern
We cannot rule out that the sudden appearance of a new group of delegates may further discourage the work of independent or individual delegations, which at the end of the day, may reduce the diversity of participation in governance and, if unsuccessful, the delegations to protocols and have to be modified, reduced or eliminated, it’s likely that some individual delegates have already left.
From someone who was against self-delegation, this proposal set a clear defined rule and process ar…
From someone who was against self-delegation, this proposal set a clear defined rule and process around protocol doing self-delegation which will remove the continuous debate from last 2 season. query :- I see cap is 2 M OP, so what about protocol that has a head start in self-delegation ? They will get another 2 M OP ?
lavande: The cap is on total OP delegated. If a protocol already has 2M OP in delegation, they will not be delegated additional OP through this program.
The program will run for a maximum for 2 Seasons, after which point protocols that are interested in maintaining their voting power will need to do so via their owns means.
system:
A total of 8 M OP (or no more than 1 / 3 of the votable supply as of the start of e…
system:
A total of 8 M OP (or no more than 1 / 3 of the votable supply as of the start of each Season) would be delegated across 20 protocols, using idle tokens in the Other Initiatives category of the Governance Fund. Delegations will be made pro-rata at the beginning of each Season, for a maximum of 2 Seasons, according to the below criteria:
Recommend making this “ 1 / 3 rd of active votable supply” - a majority of the votable supply is dormant, so in reality at 8 M OP you’re ending up with > 70 % in many proposals. At that point, delegates’ votes are meaningless, so Optimsm governance will effectively end up being controlled by the 20 protocols outright (actually less than that - maybe 10 - 15 - will qualify for > 51 %).
system: A total of 8 M OP (or no more than 1 / 3 of the votable supply as of the start of e…
system: A total of 8 M OP (or no more than 1 / 3 of the votable supply as of the start of each Season) would be delegated across 20 protocols, using idle tokens in the Other Initiatives category of the Governance Fund. Delegations will be made pro-rata at the beginning of each Season, for a maximum of 2 Seasons, according to the below criteria: Recommend making this “ 1 / 3 rd of active votable supply” - a majority of the votable supply is dormant, so in reality at 8 M OP you’re ending up with > 70 % in many proposals. At that point, delegates’ votes are meaningless, so Optimsm governance will effectively end up being controlled by the 20 protocols outright (actually less than that - maybe 10 - 15 - will qualify for > 51 %).
system:
A total of 8 M OP (or no more than 1 / 3 of the votable supply as of the start of e…
system:
A total of 8 M OP (or no more than 1 / 3 of the votable supply as of the start of each Season)
I echo @polynya here in putting a % limit of this in relation to the active votable supply.
Otherwise indeed delegation and us individual delegates will become meaningless and will stop participating alltogether.
Who are the 20 protocols?
Protocols from Phase 0 ? or a mixture of Phase 0 Protocols with Phas…
Who are the 20 protocols?
Protocols from Phase 0 ? or a mixture of Phase 0 Protocols with Phase 1 ?
Even with 8 M $OP per season, a project will only get 400 K $OP for self-delegation so to reach t…
Even with 8 M $OP per season, a project will only get 400 K $OP for self-delegation so to reach the max cap of 2 M a project need to eligible for continuous 5 season.
If 10 proposal manage to be in top 20 for continuous 5 season and looking at how tightly coupled Optimism is on protocol level, this will put token house and gov fund at 10 protocol disposal.
If we take % active votable then :-
1 / 3 would be 4 M OP and it will take 10 season or close to 1 year before causing the same effect as mentioned above.
total gas fees generated on Optimism during the proceeding Season
This make sense, they are generating fee so giving them voice in gov is logical. Imo, I dont see this as a problem, total active supply or votable supply, we will see the same effect sooner or later, echo-chamber and centralization.
From yesterday’s community call, it seems OF is working on solving voter’s apathy but no promise on any commitment yet, but we have this proposition to support protocols that tell us where the priorities are.
system:
total gas fees generated on Optimism during the proceeding Season
This would be the …
system:
total gas fees generated on Optimism during the proceeding Season
This would be the metric to define those 20 protocols
system: A total of 8 M OP (or no more than 1 / 3 of the votable supply as of the start of e…
system: A total of 8 M OP (or no more than 1 / 3 of the votable supply as of the start of each Season) I echo @polynya here in putting a % limit of this in relation to the active votable supply. Otherwise indeed delegation and us individual delegates will become meaningless and will stop participating alltogether.
Who are the 20 protocols? Protocols from Phase 0 ? or a mixture of Phase 0 Protocols with Phas…
Who are the 20 protocols? Protocols from Phase 0 ? or a mixture of Phase 0 Protocols with Phase 1 ?
Even with 8 M $OP per season, a project will only get 400 K $OP for self-delegation so to reach t…
Even with 8 M $OP per season, a project will only get 400 K $OP for self-delegation so to reach the max cap of 2 M a project need to eligible for continuous 5 season. If 10 proposal manage to be in top 20 for continuous 5 season and looking at how tightly coupled Optimism is on protocol level, this will put token house and gov fund at 10 protocol disposal. If we take % active votable then :- 1 / 3 would be 4 M OP and it will take 10 season or close to 1 year before causing the same effect as mentioned above. total gas fees generated on Optimism during the proceeding Season This make sense, they are generating fee so giving them voice in gov is logical. Imo, I dont see this as a problem, total active supply or votable supply, we will see the same effect sooner or later, echo-chamber and centralization. From yesterday’s community call, it seems OF is working on solving voter’s apathy but no promise on any commitment yet, but we have this proposition to support protocols that tell us where the priorities are.
system: total gas fees generated on Optimism during the proceeding Season This would be the …
system: total gas fees generated on Optimism during the proceeding Season This would be the metric to define those 20 protocols
The cap is on total OP delegated. If a protocol already has 2 M OP in delegation, they will not be…
The cap is on total OP delegated. If a protocol already has 2 M OP in delegation, they will not be delegated additional OP through this program.
The program will run for a maximum for 2 Seasons, after which point protocols that are interested in maintaining their voting power will need to do so via their owns means.
The cap is on total OP delegated. If a protocol already has 2 M OP in delegation, they will not be…
The cap is on total OP delegated. If a protocol already has 2 M OP in delegation, they will not be delegated additional OP through this program. The program will run for a maximum for 2 Seasons, after which point protocols that are interested in maintaining their voting power will need to do so via their owns means.
Based on community feedback, the following updates have been made:
Adjusted the program amount fr…
Based on community feedback, the following updates have been made:
Adjusted the program amount from 8 M OP to 5 M OP to reflect active votable supply, defined as the average participating voting power in Voting Cycle # 8
For additional clarification, added: “The cap is on total OP delegated. If a protocol already has 2 M OP in delegation, they will not be delegated additional OP through this program.”
This is not a final version. The Reflection Period officially starts on 11 / 17 / 22 , so there is plenty of time for additional feedback.
Based on community feedback, the following updates have been made: Adjusted the program amount fr…
Based on community feedback, the following updates have been made: Adjusted the program amount from 8 M OP to 5 M OP to reflect active votable supply, defined as the average participating voting power in Voting Cycle # 8 For additional clarification, added: “The cap is on total OP delegated. If a protocol already has 2 M OP in delegation, they will not be delegated additional OP through this program.” This is not a final version. The Reflection Period officially starts on 11 / 17 / 22 , so there is plenty of time for additional feedback.
Overall I think this is a good idea, but I still have some concern that this could enable run-
Pros…
Overall I think this is a good idea, but I still have some concern that this could enable run-
Pros:
Protocols have a consistent voice
Objective metric (gas fees) is not game-able
Influence is significant, but with a cap
Cons:
There is one major con that worries me. Many of these protocols already have their communities delegating large amounts of $OP directly to them or to affiliated delegates (not a bad thing). This proposal is basically gifting voting power in addition to the power they have already gathered from the communities.
My concern is that non-protocol affiliated delegates currently have no good way to increase their voting power based on merit. Voting power was distributed during the first optimism airdrop and has experienced very little changes since then. Some of the most active and thoughtful delegates have seen their voting power slowly decline due to dilution.
I really don’t know what a solution would be, but if the Collective values non-affiliated delegates it would be great to have a similar merit-based program for the governance community to counteract the dilution this will introduce as well as create a growth path for actively participating delegates.
Overall I think this is a good idea, but I still have some concern that this could enable run- Pros…
Overall I think this is a good idea, but I still have some concern that this could enable run- Pros: Protocols have a consistent voice Objective metric (gas fees) is not game-able Influence is significant, but with a cap Cons: There is one major con that worries me. Many of these protocols already have their communities delegating large amounts of $OP directly to them or to affiliated delegates (not a bad thing). This proposal is basically gifting voting power in addition to the power they have already gathered from the communities. My concern is that non-protocol affiliated delegates currently have no good way to increase their voting power based on merit. Voting power was distributed during the first optimism airdrop and has experienced very little changes since then. Some of the most active and thoughtful delegates have seen their voting power slowly decline due to dilution. I really don’t know what a solution would be, but if the Collective values non-affiliated delegates it would be great to have a similar merit-based program for the governance community to counteract the dilution this will introduce as well as create a growth path for actively participating delegates.
I’m wondering how this aligns with the plan for the citizen house.
The token house represents token…
I’m wondering how this aligns with the plan for the citizen house.
The token house represents token holders. Now we’re introducing the representation of important ecosystem stakeholders (like protocols).
Is this an immediate measure to give protocols representation in the governance process while the citizens house is missing, or is there also a long-term desire for important ecosystem stakeholders to be represented in the token house?
Once protocols are added, one could think of adding DAO’s, NFT Projects, Applications and other important stakeholders.
I’m wondering how this aligns with the plan for the citizen house. The token house represents token…
I’m wondering how this aligns with the plan for the citizen house. The token house represents token holders. Now we’re introducing the representation of important ecosystem stakeholders (like protocols). Is this an immediate measure to give protocols representation in the governance process while the citizens house is missing, or is there also a long-term desire for important ecosystem stakeholders to be represented in the token house? Once protocols are added, one could think of adding DAO’s, NFT Projects, Applications and other important stakeholders.
As someone who has been against self-delegation, I see this proposal as overcoming and with clear r…
As someone who has been against self-delegation, I see this proposal as overcoming and with clear rules.
It would be good if the delegates of the protocols would come forward and present their interests in front of the governance as was done in the beginning with the Delegate Commitments.
As someone who has been against self-delegation, I see this proposal as overcoming and with clear r…
As someone who has been against self-delegation, I see this proposal as overcoming and with clear rules. It would be good if the delegates of the protocols would come forward and present their interests in front of the governance as was done in the beginning with the Delegate Commitments.
As I expressed during the Governance Call following the release of the Course Correction proposal, …
As I expressed during the Governance Call following the release of the Course Correction proposal, I believe that having total gas fees generated as the core criteria by which OP is (pro-rata) delegated to protocols on Optimism, would result in the under representation of many projects and flawed results.
Looking at this dashboard: Optimism - Popular Apps and Project Usage Trends ? ?✨ 14 , you can see that Synthetix is low on the list despite having one of the most active communities on Optimism and being deeply integrated with the rollup. Aside from under representation of some protocols, another thing that stands out to me is that both Uniswap and Galxe would end up with a large amount of delegated OP from this program, despite having hardly any activity and interest in Optimism governance.
Uniswap has displayed little interest in Optimism even though they were awarded a large OP allocation from the Phase 0 Governance Fund. More than 6 months have passed and there still hasn’t been an attempt to make use of the OP incentives Uniswap was given ( 1 Million $OP). I could go even further by outlining that no one from Uniswap Labs or the Grants Program submitted a proposal for the use of OP from that allocation until there was public pressure on Twitter for them to do so. They seemed quite disinterested in Optimism governance back then, and based on the lack of a plan for the OP they hold, it seems they still lack interest. Therefore I believe delegating a large portion of OP to Uniswap Protocol, based on a single metric of gas fees generated last season, would be a pretty big waste.
Galxe is a project which has lead to a great amount of growth and usage on Optimism, but does not have significant resources and infrastructure deployed to Optimism like many DeFi protocols do. So despite successfully onboarding many users to Optimism through the Quests campaign, it would be unjust for Galxe to have a major portion of OP delegated to them, from this program, without sharing the same exposure that other protocols have to Optimism.
In general I think that the Protocol Delegation Program would end in suboptimal and flawed results under the current criteria. Gas fees generated, on its own, don’t properly represent the depth of alignment that protocols have with Optimism and would certainly need to be used in combination with other metrics for it to be effective in achieving the goals of this program.
I think if used in combination, the following metrics would lead to fairer results:
Total Value Locked in the protocol
Is the project Optimism native (deployed on OP and ETH mainnet only)?
Does the Protocol conduct its Governance on Optimism?
Gas Fees Generated by the protocol
I think the above criteria could be weighted and combined to produce much better results for Optimism Governance and fulfill the purpose of the Protocol Delegation Program.
Eager to hear feedback from the OP foundation and other delegates on the above idea!
Gonna.eth: Well put Millie, maybe we can come up with a multiplier like in the OP airdrop? so each of these conditions will boost your total delegation if they got to a certain threshold.
millie:
Total Value Locked in the protocol
Is the project Optimism native (deployed on OP and ETH mainnet only)?
Does the Protocol conduct its Governance on Optimism?
Gas Fees Generated by the protocol
BP_Gamma: Hey Millie,
I work with the Uniswap Foundation, and they have actually been expending a lot of resources on their OP liquidity mining program and making attempts to improve it.
Case in point: They are giving a grant to those who are analyzing how LPs have migrated to Opitmism for rewards and how much volume was obtained
twitter.com
Uniswap Foundation
@UniswapFND
2/ UGPCA bounties to analyze results of Phase 1 ends this Wednesday on Nov 23:
?How have LP migrated to Optimism for rewards?
⚖️How much volume was impacted for LM?
?How many new LPs claimed fees?
For @DuneAnalytics wizards, check out the bounty today!
unigrants.notion.site/Bounty-20-Opti…
7:50 PM - 21 Nov 2022
6
I would say they are more inclined to be over-deliberate when embarking on new programs. They are extremely thorough, so I don’t think that’s showing a lack of interest, but quite the opposite.
They have also passed governance votes on Uniswap on how the LM program on Optimism is to be conducted. https://twitter.com/UniswapFND/status/1584681671882047488?s=20&t=wBUMDIteiCl6-96LjzPpqw
I’ve spoken with Ken and Devin from the Uniswap Foundation, and they have put a lot of thought and resources into their OP LM program, which is currently ongoing.
Thank you, and I hope that clears things up!
StrategicReserve: millie:
Thank you for the info, but from the looks of it the newly formed Uniswap Foundation has essentially outsourced the program to projects which already have their own OP allocations.
To clarify, three programs are competing in Uniswap’s in-house OP LM program. Of those three, Arrakis Finance did not receive an allocation from OP governance. Their solo application was rejected. xToken and Gamma did receive a grant from OP governance.
I don’t think you are characterizing the Uniswap OP LM program fairly. The Uniswap Foundation didn’t blindly “outsource” this. They created a competitive, staged program that passed their governance process with community feedback. UF’s program includes an analytics period (just awarded) where the LM programs are scrutinized before moving forward to the next stage.
This is exactly the kind of due diligence many who participate in the OP governance process have been asking for. Especially in regard to incentivizing liquidity. That due diligence was prioritized over expediency.
millie:
I have no issue with that but I’m not convinced that they care about Optimism any more as a result of it since they decided not to host the LM program through their own interface, which would have obviously been far more beneficial to Optimism and reached a much wider audience.
Uniswap running their LM program would require them to manage the LP positions. That management could lead to wildly different results based on strategy. That is why they created a competitive program to manage the distribution of OP rewards. Uniswap heavily promoted the program on Twitter.. Likewise, all three managers had robust participation in the grant for the number of rewards allocated.
You can read about some of the results here
millie:
Looking at this dashboard: Optimism - Popular Apps and Project Usage Trends , you can see that Synthetix is low on the list despite having one of the most active communities on Optimism and being deeply integrated with the rollup. Aside from under representation of some protocols, another thing that stands out to me is that both Uniswap and Galxe would end up with a large amount of delegated OP from this program, despite having hardly any activity and interest in Optimism governance.
I do feel it’s important to point out that Uniswap allocated 0 OP of a 1m OP grant towards participating in OP governance. In contrast, Synthetix self-delegated 2m OP they received from the OP partner fund. That is your right to do so under the terms of Layer 0 rules and your internal SIP, but attempting to punish Uniswap for not “having any activity or interest in Optimism governance” when they had zero votes is not fair.
The whole point of the Protocol Delegation Program is to allocate funds for governance to the projects actually building on the platform. Uniswap should absolutely have a voice in Optimism governance based on its credentials, usage, and relevance with DeFi.
millie: millie:
I think if used in combination, the following metrics would lead to fairer results:
Total Value Locked in the protocol
Is the project Optimism native (deployed on OP and ETH mainnet only)?
Does the Protocol conduct its Governance on Optimism?
Gas Fees Generated by the protocol
That was my suggestion on how to improve the the criteria for this program, you seem to be fixated on my mention of Uniswap in my original comment, so I will entertain your critiques.
Do you deny that had Uniswap ran the OP liquidity mining program through the official Uniswap interface, the impact of the program would be far greater?
Do you think that my suggestion is less optimal than relying on a sole metric of Gas Fees Generated the past season?
millie: where in my comments did you see “governance forum activity” as a criteria for this program?
I think the volume idea is good one and I’m happy to incorporate that into one of the necessary criteria.
So let me once again quote my original suggestion just so that it is clear what I am suggesting:
millie:
I think if used in combination, the following metrics would lead to fairer results:
Total Value Locked in the protocol
Is the project Optimism native (deployed on OP and ETH mainnet only)?
Does the Protocol conduct its Governance on Optimism?
Gas Fees Generated by the protocol
nickbtts: Fully agree with this. I think it’s important to note that some metrics, notably Volume, are more easily or non-expensively gamed than others (such as time weighted TVL); as such I think there will have to be some governance or foundation decided metrics. I’m sure we can be a little more sophisticated than one single metric!
Agree with the suggestions above, and perhaps a few others:
Does the project hold its treasury on Optimism?
Does the project currently have an active delegate? (we may need to wait for next season outcome on definition of delegate and activity)
Has the project been awarded a grant? (this shows at least some level of team DD, could be size proportionate)
MattL: Just want to come in and say that I completely agree with Millie’s views here.
I think it’s important to consider more than just gas fees generated when deciding how to delegate Optimism to protocols. Gauging just gas fees is a flawed metric, and will come with some very flawed results in my opinion. There’s no reason that something like Quests or Perp Protocol should have outsized influences on Optimism governance. Both of those have varying reasons, but still.
I do think there should be a metric to properly support new projects, and ensure that they’re able to obtain a say in governance as well. But then again, this sort of thing can be rewarded medium/long term with better metrics and involvement from these new protocols.
It’s also worth considering the fact that many protocols on Optimism have been building, innovating, experimenting, and helping to grow Optimism for so long now. It seems only fair to reward these protocols for their efforts while still allowing newer protocols to have a say in the direction of Optimism and continue innovating.
Thanks for bringing up this important issue. I hope the Optimism Foundation and other delegates take your suggestions into consideration.
As I expressed during the Governance Call following the release of the Course Correction proposal, …
As I expressed during the Governance Call following the release of the Course Correction proposal, I believe that having total gas fees generated as the core criteria by which OP is (pro-rata) delegated to protocols on Optimism, would result in the under representation of many projects and flawed results.
Looking at this dashboard: Optimism - Popular Apps and Project Usage Trends ? ?✨, you can see that Synthetix is low on the list despite having one of the most active communities on Optimism and being deeply integrated with the rollup. Aside from under representation of some protocols, another thing that stands out to me is that both Uniswap and Galxe would end up with a large amount of delegated OP from this program, despite having hardly any activity and interest in Optimism governance.
Uniswap has displayed little interest in Optimism even though they were awarded a large OP allocation from the Phase 0 Governance Fund. More than 6 months have passed and there still hasn’t been an attempt to make use of the OP incentives Uniswap was given ( 1 Million $OP). I could go even further by outlining that no one from Uniswap Labs or the Grants Program submitted a proposal for the use of OP from that allocation until there was public pressure on Twitter for them to do so. They seemed quite disinterested in Optimism governance back then, and based on the lack of a plan for the OP they hold, it seems they still lack interest. Therefore I believe delegating a large portion of OP to Uniswap Protocol, based on a single metric of gas fees generated last season, would be a pretty big waste.
Galxe is a project which has lead to a great amount of growth and usage on Optimism, but does not have significant resources and infrastructure deployed to Optimism like many DeFi protocols do. So despite successfully onboarding many users to Optimism through the Quests campaign, it would be unjust for Galxe to have a major portion of OP delegated to them, from this program, without sharing the same exposure that other protocols have to Optimism.
In general I think that the Protocol Delegation Program would end in suboptimal and flawed results under the current criteria. Gas fees generated, on its own, don’t properly represent the depth of alignment that protocols have with Optimism and would certainly need to be used in combination with other metrics for it to be effective in achieving the goals of this program.
I think if used in combination, the following metrics would lead to fairer results:
Total Value Locked in the protocol
Is the project Optimism native (deployed on OP and ETH mainnet only)?
Does the Protocol conduct its Governance on Optimism?
Gas Fees Generated by the protocol
I think the above criteria could be weighted and combined to produce much better results for Optimism Governance and fulfill the purpose of the Protocol Delegation Program.
Eager to hear feedback from the OP foundation and other delegates on the above idea!
Gonna.eth: Well put Millie, maybe we can come up with a multiplier like in the OP airdrop? so each of these conditions will boost your total delegation if they got to a certain threshold.
millie:
Total Value Locked in the protocol
Is the project Optimism native (deployed on OP and ETH mainnet only)?
Does the Protocol conduct its Governance on Optimism?
Gas Fees Generated by the protocol
BP_Gamma: Hey Millie,
I work with the Uniswap Foundation, and they have actually been expending a lot of resources on their OP liquidity mining program and making attempts to improve it.
Case in point: They are giving a grant to those who are analyzing how LPs have migrated to Opitmism for rewards and how much volume was obtained
twitter.com
Uniswap Foundation
@UniswapFND
2/ UGPCA bounties to analyze results of Phase 1 ends this Wednesday on Nov 23:
?How have LP migrated to Optimism for rewards?
⚖️How much volume was impacted for LM?
?How many new LPs claimed fees?
For @DuneAnalytics wizards, check out the bounty today!
unigrants.notion.site/Bounty-20-Opti…
7:50 PM - 21 Nov 2022
6
I would say they are more inclined to be over-deliberate when embarking on new programs. They are extremely thorough, so I don’t think that’s showing a lack of interest, but quite the opposite.
They have also passed governance votes on Uniswap on how the LM program on Optimism is to be conducted. https://twitter.com/UniswapFND/status/1584681671882047488?s=20&t=wBUMDIteiCl6-96LjzPpqw
I’ve spoken with Ken and Devin from the Uniswap Foundation, and they have put a lot of thought and resources into their OP LM program, which is currently ongoing.
Thank you, and I hope that clears things up!
StrategicReserve: millie:
Thank you for the info, but from the looks of it the newly formed Uniswap Foundation has essentially outsourced the program to projects which already have their own OP allocations.
To clarify, three programs are competing in Uniswap’s in-house OP LM program. Of those three, Arrakis Finance did not receive an allocation from OP governance. Their solo application was rejected. xToken and Gamma did receive a grant from OP governance.
I don’t think you are characterizing the Uniswap OP LM program fairly. The Uniswap Foundation didn’t blindly “outsource” this. They created a competitive, staged program that passed their governance process with community feedback. UF’s program includes an analytics period (just awarded) where the LM programs are scrutinized before moving forward to the next stage.
This is exactly the kind of due diligence many who participate in the OP governance process have been asking for. Especially in regard to incentivizing liquidity. That due diligence was prioritized over expediency.
millie:
I have no issue with that but I’m not convinced that they care about Optimism any more as a result of it since they decided not to host the LM program through their own interface, which would have obviously been far more beneficial to Optimism and reached a much wider audience.
Uniswap running their LM program would require them to manage the LP positions. That management could lead to wildly different results based on strategy. That is why they created a competitive program to manage the distribution of OP rewards. Uniswap heavily promoted the program on Twitter.. Likewise, all three managers had robust participation in the grant for the number of rewards allocated.
You can read about some of the results here
millie:
Looking at this dashboard: Optimism - Popular Apps and Project Usage Trends , you can see that Synthetix is low on the list despite having one of the most active communities on Optimism and being deeply integrated with the rollup. Aside from under representation of some protocols, another thing that stands out to me is that both Uniswap and Galxe would end up with a large amount of delegated OP from this program, despite having hardly any activity and interest in Optimism governance.
I do feel it’s important to point out that Uniswap allocated 0 OP of a 1m OP grant towards participating in OP governance. In contrast, Synthetix self-delegated 2m OP they received from the OP partner fund. That is your right to do so under the terms of Layer 0 rules and your internal SIP, but attempting to punish Uniswap for not “having any activity or interest in Optimism governance” when they had zero votes is not fair.
The whole point of the Protocol Delegation Program is to allocate funds for governance to the projects actually building on the platform. Uniswap should absolutely have a voice in Optimism governance based on its credentials, usage, and relevance with DeFi.
millie: millie:
I think if used in combination, the following metrics would lead to fairer results:
Total Value Locked in the protocol
Is the project Optimism native (deployed on OP and ETH mainnet only)?
Does the Protocol conduct its Governance on Optimism?
Gas Fees Generated by the protocol
That was my suggestion on how to improve the the criteria for this program, you seem to be fixated on my mention of Uniswap in my original comment, so I will entertain your critiques.
Do you deny that had Uniswap ran the OP liquidity mining program through the official Uniswap interface, the impact of the program would be far greater?
Do you think that my suggestion is less optimal than relying on a sole metric of Gas Fees Generated the past season?
millie: where in my comments did you see “governance forum activity” as a criteria for this program?
I think the volume idea is good one and I’m happy to incorporate that into one of the necessary criteria.
So let me once again quote my original suggestion just so that it is clear what I am suggesting:
millie:
I think if used in combination, the following metrics would lead to fairer results:
Total Value Locked in the protocol
Is the project Optimism native (deployed on OP and ETH mainnet only)?
Does the Protocol conduct its Governance on Optimism?
Gas Fees Generated by the protocol
nickbtts: Fully agree with this. I think it’s important to note that some metrics, notably Volume, are more easily or non-expensively gamed than others (such as time weighted TVL); as such I think there will have to be some governance or foundation decided metrics. I’m sure we can be a little more sophisticated than one single metric!
Agree with the suggestions above, and perhaps a few others:
Does the project hold its treasury on Optimism?
Does the project currently have an active delegate? (we may need to wait for next season outcome on definition of delegate and activity)
Has the project been awarded a grant? (this shows at least some level of team DD, could be size proportionate)
MattL: Just want to come in and say that I completely agree with Millie’s views here.
I think it’s important to consider more than just gas fees generated when deciding how to delegate Optimism to protocols. Gauging just gas fees is a flawed metric, and will come with some very flawed results in my opinion. There’s no reason that something like Quests or Perp Protocol should have outsized influences on Optimism governance. Both of those have varying reasons, but still.
I do think there should be a metric to properly support new projects, and ensure that they’re able to obtain a say in governance as well. But then again, this sort of thing can be rewarded medium/long term with better metrics and involvement from these new protocols.
It’s also worth considering the fact that many protocols on Optimism have been building, innovating, experimenting, and helping to grow Optimism for so long now. It seems only fair to reward these protocols for their efforts while still allowing newer protocols to have a say in the direction of Optimism and continue innovating.
Thanks for bringing up this important issue. I hope the Optimism Foundation and other delegates take your suggestions into consideration.
Well put Millie, maybe we can come up with a multiplier like in the OP airdrop? so each of these co…
Well put Millie, maybe we can come up with a multiplier like in the OP airdrop? so each of these conditions will boost your total delegation if they got to a certain threshold.
millie:
Total Value Locked in the protocol
Is the project Optimism native (deployed on OP and ETH mainnet only)?
Does the Protocol conduct its Governance on Optimism?
Gas Fees Generated by the protocol
As I expressed during the Governance Call following the release of the Course Correction proposal, …
As I expressed during the Governance Call following the release of the Course Correction proposal, I believe that having total gas fees generated as the core criteria by which OP is (pro-rata) delegated to protocols on Optimism, would result in the under representation of many projects and flawed results. Looking at this dashboard: Optimism - Popular Apps and Project Usage Trends ? ?✨ 14 , you can see that Synthetix is low on the list despite having one of the most active communities on Optimism and being deeply integrated with the rollup. Aside from under representation of some protocols, another thing that stands out to me is that both Uniswap and Galxe would end up with a large amount of delegated OP from this program, despite having hardly any activity and interest in Optimism governance. Uniswap has displayed little interest in Optimism even though they were awarded a large OP allocation from the Phase 0 Governance Fund. More than 6 months have passed and there still hasn’t been an attempt to make use of the OP incentives Uniswap was given ( 1 Million $OP). I could go even further by outlining that no one from Uniswap Labs or the Grants Program submitted a proposal for the use of OP from that allocation until there was public pressure on Twitter for them to do so. They seemed quite disinterested in Optimism governance back then, and based on the lack of a plan for the OP they hold, it seems they still lack interest. Therefore I believe delegating a large portion of OP to Uniswap Protocol, based on a single metric of gas fees generated last season, would be a pretty big waste. Galxe is a project which has lead to a great amount of growth and usage on Optimism, but does not have significant resources and infrastructure deployed to Optimism like many DeFi protocols do. So despite successfully onboarding many users to Optimism through the Quests campaign, it would be unjust for Galxe to have a major portion of OP delegated to them, from this program, without sharing the same exposure that other protocols have to Optimism. In general I think that the Protocol Delegation Program would end in suboptimal and flawed results under the current criteria. Gas fees generated, on its own, don’t properly represent the depth of alignment that protocols have with Optimism and would certainly need to be used in combination with other metrics for it to be effective in achieving the goals of this program. I think if used in combination, the following metrics would lead to fairer results: Total Value Locked in the protocol Is the project Optimism native (deployed on OP and ETH mainnet only)? Does the Protocol conduct its Governance on Optimism? Gas Fees Generated by the protocol I think the above criteria could be weighted and combined to produce much better results for Optimism Governance and fulfill the purpose of the Protocol Delegation Program. Eager to hear feedback from the OP foundation and other delegates on the above idea!
Gonna.eth: Well put Millie, maybe we can come up with a multiplier like in the OP airdrop? so each of these conditions will boost your total delegation if they got to a certain threshold.
millie:
Total Value Locked in the protocol
Is the project Optimism native (deployed on OP and ETH mainnet only)?
Does the Protocol conduct its Governance on Optimism?
Gas Fees Generated by the protocol
BP_Gamma: Hey Millie,
I work with the Uniswap Foundation, and they have actually been expending a lot of resources on their OP liquidity mining program and making attempts to improve it.
Case in point: They are giving a grant to those who are analyzing how LPs have migrated to Opitmism for rewards and how much volume was obtained
twitter.com
Uniswap Foundation
@UniswapFND
2/ UGPCA bounties to analyze results of Phase 1 ends this Wednesday on Nov 23:
?How have LP migrated to Optimism for rewards?
⚖️How much volume was impacted for LM?
?How many new LPs claimed fees?
For @DuneAnalytics wizards, check out the bounty today!
unigrants.notion.site/Bounty-20-Opti…
7:50 PM - 21 Nov 2022
6
I would say they are more inclined to be over-deliberate when embarking on new programs. They are extremely thorough, so I don’t think that’s showing a lack of interest, but quite the opposite.
They have also passed governance votes on Uniswap on how the LM program on Optimism is to be conducted. https://twitter.com/UniswapFND/status/1584681671882047488?s=20&t=wBUMDIteiCl6-96LjzPpqw
I’ve spoken with Ken and Devin from the Uniswap Foundation, and they have put a lot of thought and resources into their OP LM program, which is currently ongoing.
Thank you, and I hope that clears things up!
StrategicReserve: millie:
Thank you for the info, but from the looks of it the newly formed Uniswap Foundation has essentially outsourced the program to projects which already have their own OP allocations.
To clarify, three programs are competing in Uniswap’s in-house OP LM program. Of those three, Arrakis Finance did not receive an allocation from OP governance. Their solo application was rejected. xToken and Gamma did receive a grant from OP governance.
I don’t think you are characterizing the Uniswap OP LM program fairly. The Uniswap Foundation didn’t blindly “outsource” this. They created a competitive, staged program that passed their governance process with community feedback. UF’s program includes an analytics period (just awarded) where the LM programs are scrutinized before moving forward to the next stage.
This is exactly the kind of due diligence many who participate in the OP governance process have been asking for. Especially in regard to incentivizing liquidity. That due diligence was prioritized over expediency.
millie:
I have no issue with that but I’m not convinced that they care about Optimism any more as a result of it since they decided not to host the LM program through their own interface, which would have obviously been far more beneficial to Optimism and reached a much wider audience.
Uniswap running their LM program would require them to manage the LP positions. That management could lead to wildly different results based on strategy. That is why they created a competitive program to manage the distribution of OP rewards. Uniswap heavily promoted the program on Twitter.. Likewise, all three managers had robust participation in the grant for the number of rewards allocated.
You can read about some of the results here
millie:
Looking at this dashboard: Optimism - Popular Apps and Project Usage Trends , you can see that Synthetix is low on the list despite having one of the most active communities on Optimism and being deeply integrated with the rollup. Aside from under representation of some protocols, another thing that stands out to me is that both Uniswap and Galxe would end up with a large amount of delegated OP from this program, despite having hardly any activity and interest in Optimism governance.
I do feel it’s important to point out that Uniswap allocated 0 OP of a 1m OP grant towards participating in OP governance. In contrast, Synthetix self-delegated 2m OP they received from the OP partner fund. That is your right to do so under the terms of Layer 0 rules and your internal SIP, but attempting to punish Uniswap for not “having any activity or interest in Optimism governance” when they had zero votes is not fair.
The whole point of the Protocol Delegation Program is to allocate funds for governance to the projects actually building on the platform. Uniswap should absolutely have a voice in Optimism governance based on its credentials, usage, and relevance with DeFi.
millie: millie:
I think if used in combination, the following metrics would lead to fairer results:
Total Value Locked in the protocol
Is the project Optimism native (deployed on OP and ETH mainnet only)?
Does the Protocol conduct its Governance on Optimism?
Gas Fees Generated by the protocol
That was my suggestion on how to improve the the criteria for this program, you seem to be fixated on my mention of Uniswap in my original comment, so I will entertain your critiques.
Do you deny that had Uniswap ran the OP liquidity mining program through the official Uniswap interface, the impact of the program would be far greater?
Do you think that my suggestion is less optimal than relying on a sole metric of Gas Fees Generated the past season?
millie: where in my comments did you see “governance forum activity” as a criteria for this program?
I think the volume idea is good one and I’m happy to incorporate that into one of the necessary criteria.
So let me once again quote my original suggestion just so that it is clear what I am suggesting:
millie:
I think if used in combination, the following metrics would lead to fairer results:
Total Value Locked in the protocol
Is the project Optimism native (deployed on OP and ETH mainnet only)?
Does the Protocol conduct its Governance on Optimism?
Gas Fees Generated by the protocol
nickbtts: Fully agree with this. I think it’s important to note that some metrics, notably Volume, are more easily or non-expensively gamed than others (such as time weighted TVL); as such I think there will have to be some governance or foundation decided metrics. I’m sure we can be a little more sophisticated than one single metric!
Agree with the suggestions above, and perhaps a few others:
Does the project hold its treasury on Optimism?
Does the project currently have an active delegate? (we may need to wait for next season outcome on definition of delegate and activity)
Has the project been awarded a grant? (this shows at least some level of team DD, could be size proportionate)
MattL: Just want to come in and say that I completely agree with Millie’s views here.
I think it’s important to consider more than just gas fees generated when deciding how to delegate Optimism to protocols. Gauging just gas fees is a flawed metric, and will come with some very flawed results in my opinion. There’s no reason that something like Quests or Perp Protocol should have outsized influences on Optimism governance. Both of those have varying reasons, but still.
I do think there should be a metric to properly support new projects, and ensure that they’re able to obtain a say in governance as well. But then again, this sort of thing can be rewarded medium/long term with better metrics and involvement from these new protocols.
It’s also worth considering the fact that many protocols on Optimism have been building, innovating, experimenting, and helping to grow Optimism for so long now. It seems only fair to reward these protocols for their efforts while still allowing newer protocols to have a say in the direction of Optimism and continue innovating.
Thanks for bringing up this important issue. I hope the Optimism Foundation and other delegates take your suggestions into consideration.
Well put Millie, maybe we can come up with a multiplier like in the OP airdrop? so each of these co…
Well put Millie, maybe we can come up with a multiplier like in the OP airdrop? so each of these conditions will boost your total delegation if they got to a certain threshold. millie: Total Value Locked in the protocol Is the project Optimism native (deployed on OP and ETH mainnet only)? Does the Protocol conduct its Governance on Optimism? Gas Fees Generated by the protocol
Hey Millie,
I work with the Uniswap Foundation, and they have actually been expending a lot of reso…
Hey Millie,
I work with the Uniswap Foundation, and they have actually been expending a lot of resources on their OP liquidity mining program and making attempts to improve it.
Case in point: They are giving a grant to those who are analyzing how LPs have migrated to Opitmism for rewards and how much volume was obtained
twitter.com
Uniswap Foundation
@UniswapFND
2 / UGPCA bounties to analyze results of Phase 1 ends this Wednesday on Nov 23 :
?How have LP migrated to Optimism for rewards?
⚖️How much volume was impacted for LM?
?How many new LPs claimed fees?
For @DuneAnalytics wizards, check out the bounty today!
unigrants.notion.site/Bounty- 20 -Opti…
7 : 50 PM - 21 Nov 2022
6
I would say they are more inclined to be over-deliberate when embarking on new programs. They are extremely thorough, so I don’t think that’s showing a lack of interest, but quite the opposite.
They have also passed governance votes on Uniswap on how the LM program on Optimism is to be conducted. https://twitter.com/UniswapFND/status/ 1584681671882047488 ?s= 20 &t=wBUMDIteiCl 6 - 96 LjzPpqw
I’ve spoken with Ken and Devin from the Uniswap Foundation, and they have put a lot of thought and resources into their OP LM program, which is currently ongoing.
Thank you, and I hope that clears things up!
Thank you for the info, but from the looks of it the newly formed Uniswap Foundation has essentiall…
Thank you for the info, but from the looks of it the newly formed Uniswap Foundation has essentially outsourced the program to projects which already have their own OP allocations.
I have no issue with that but I’m not convinced that they care about Optimism any more as a result of it since they decided not to host the LM program through their own interface, which would have obviously been far more beneficial to Optimism and reached a much wider audience.
StrategicReserve: millie:
Thank you for the info, but from the looks of it the newly formed Uniswap Foundation has essentially outsourced the program to projects which already have their own OP allocations.
To clarify, three programs are competing in Uniswap’s in-house OP LM program. Of those three, Arrakis Finance did not receive an allocation from OP governance. Their solo application was rejected. xToken and Gamma did receive a grant from OP governance.
I don’t think you are characterizing the Uniswap OP LM program fairly. The Uniswap Foundation didn’t blindly “outsource” this. They created a competitive, staged program that passed their governance process with community feedback. UF’s program includes an analytics period (just awarded) where the LM programs are scrutinized before moving forward to the next stage.
This is exactly the kind of due diligence many who participate in the OP governance process have been asking for. Especially in regard to incentivizing liquidity. That due diligence was prioritized over expediency.
millie:
I have no issue with that but I’m not convinced that they care about Optimism any more as a result of it since they decided not to host the LM program through their own interface, which would have obviously been far more beneficial to Optimism and reached a much wider audience.
Uniswap running their LM program would require them to manage the LP positions. That management could lead to wildly different results based on strategy. That is why they created a competitive program to manage the distribution of OP rewards. Uniswap heavily promoted the program on Twitter.. Likewise, all three managers had robust participation in the grant for the number of rewards allocated.
You can read about some of the results here
millie:
Looking at this dashboard: Optimism - Popular Apps and Project Usage Trends , you can see that Synthetix is low on the list despite having one of the most active communities on Optimism and being deeply integrated with the rollup. Aside from under representation of some protocols, another thing that stands out to me is that both Uniswap and Galxe would end up with a large amount of delegated OP from this program, despite having hardly any activity and interest in Optimism governance.
I do feel it’s important to point out that Uniswap allocated 0 OP of a 1m OP grant towards participating in OP governance. In contrast, Synthetix self-delegated 2m OP they received from the OP partner fund. That is your right to do so under the terms of Layer 0 rules and your internal SIP, but attempting to punish Uniswap for not “having any activity or interest in Optimism governance” when they had zero votes is not fair.
The whole point of the Protocol Delegation Program is to allocate funds for governance to the projects actually building on the platform. Uniswap should absolutely have a voice in Optimism governance based on its credentials, usage, and relevance with DeFi.
millie:
Thank you for the info, but from the looks of it the newly formed Uniswap Foundation h…
millie:
Thank you for the info, but from the looks of it the newly formed Uniswap Foundation has essentially outsourced the program to projects which already have their own OP allocations.
To clarify, three programs are competing in Uniswap’s in-house OP LM program. Of those three, Arrakis Finance did not receive an allocation from OP governance. Their solo application was rejected. xToken and Gamma did receive a grant from OP governance.
I don’t think you are characterizing the Uniswap OP LM program fairly. The Uniswap Foundation didn’t blindly “outsource” this. They created a competitive, staged program that passed their governance process with community feedback. UF’s program includes an analytics period 1 (just awarded) where the LM programs are scrutinized before moving forward to the next stage.
This is exactly the kind of due diligence many who participate in the OP governance process have been asking for. Especially in regard to incentivizing liquidity. That due diligence was prioritized over expediency.
millie:
I have no issue with that but I’m not convinced that they care about Optimism any more as a result of it since they decided not to host the LM program through their own interface, which would have obviously been far more beneficial to Optimism and reached a much wider audience.
Uniswap running their LM program would require them to manage the LP positions. That management could lead to wildly different results based on strategy. That is why they created a competitive program to manage the distribution of OP rewards. Uniswap heavily promoted the program on Twitter. 1 . Likewise, all three managers had robust participation in the grant for the number of rewards allocated.
You can read about some of the results here
millie:
Looking at this dashboard: Optimism - Popular Apps and Project Usage Trends :abacus: :red_circle::sparkles: , you can see that Synthetix is low on the list despite having one of the most active communities on Optimism and being deeply integrated with the rollup. Aside from under representation of some protocols, another thing that stands out to me is that both Uniswap and Galxe would end up with a large amount of delegated OP from this program, despite having hardly any activity and interest in Optimism governance.
I do feel it’s important to point out that Uniswap allocated 0 OP of a 1 m OP grant towards participating in OP governance. In contrast, Synthetix self-delegated 2 m OP they received from the OP partner fund. That is your right to do so under the terms of Layer 0 rules and your internal SIP, but attempting to punish Uniswap for not “having any activity or interest in Optimism governance” when they had zero votes is not fair.
The whole point of the Protocol Delegation Program is to allocate funds for governance to the projects actually building on the platform. Uniswap should absolutely have a voice in Optimism governance based on its credentials, usage, and relevance with DeFi.
millie: StrategicReserve:
Uniswap running their LM program would require them to manage the LP positions.
That is not true, there is a UniV3 staker contract designed specifically for permissionless liquidity mining which leaves the active management up to the individual LPs. There is also a modification of that contract which has been public since last spring Add minimum tick width by dmihal · Pull Request #1 · dmihal/v3-staker · GitHub.
I also never said that they shouldn’t have a voice, I simply pointed out that they are not nearly as committed to Optimism as other protocols are.
millie:
Thank you for the info, but from the looks of it the newly formed Uniswap Foundation h…
millie:
Thank you for the info, but from the looks of it the newly formed Uniswap Foundation has essentially outsourced the program to projects which already have their own OP allocations.
To clarify, three programs are competing in Uniswap’s in-house OP LM program. Of those three, Arrakis Finance did not receive an allocation from OP governance. Their solo application was rejected. xToken and Gamma did receive a grant from OP governance.
I don’t think you are characterizing the Uniswap OP LM program fairly. The Uniswap Foundation didn’t blindly “outsource” this. They created a competitive, staged program that passed their governance process with community feedback. UF’s program includes an analytics period (just awarded) where the LM programs are scrutinized before moving forward to the next stage.
This is exactly the kind of due diligence many who participate in the OP governance process have been asking for. Especially in regard to incentivizing liquidity. That due diligence was prioritized over expediency.
millie:
I have no issue with that but I’m not convinced that they care about Optimism any more as a result of it since they decided not to host the LM program through their own interface, which would have obviously been far more beneficial to Optimism and reached a much wider audience.
Uniswap running their LM program would require them to manage the LP positions. That management could lead to wildly different results based on strategy. That is why they created a competitive program to manage the distribution of OP rewards. Uniswap heavily promoted the program on Twitter.. Likewise, all three managers had robust participation in the grant for the number of rewards allocated.
You can read about some of the results here
millie:
Looking at this dashboard: Optimism - Popular Apps and Project Usage Trends :abacus: :red_circle::sparkles: , you can see that Synthetix is low on the list despite having one of the most active communities on Optimism and being deeply integrated with the rollup. Aside from under representation of some protocols, another thing that stands out to me is that both Uniswap and Galxe would end up with a large amount of delegated OP from this program, despite having hardly any activity and interest in Optimism governance.
I do feel it’s important to point out that Uniswap allocated 0 OP of a 1 m OP grant towards participating in OP governance. In contrast, Synthetix self-delegated 2 m OP they received from the OP partner fund. That is your right to do so under the terms of Layer 0 rules and your internal SIP, but attempting to punish Uniswap for not “having any activity or interest in Optimism governance” when they had zero votes is not fair.
The whole point of the Protocol Delegation Program is to allocate funds for governance to the projects actually building on the platform. Uniswap should absolutely have a voice in Optimism governance based on its credentials, usage, and relevance with DeFi.
millie: StrategicReserve:
Uniswap running their LM program would require them to manage the LP positions.
That is not true, there is a UniV3 staker contract designed specifically for permissionless liquidity mining which leaves the active management up to the individual LPs. There is also a modification of that contract which has been public since last spring Add minimum tick width by dmihal · Pull Request #1 · dmihal/v3-staker · GitHub.
I also never said that they shouldn’t have a voice, I simply pointed out that they are not nearly as committed to Optimism as other protocols are.
StrategicReserve:
Uniswap running their LM program would require them to manage the LP positio…
StrategicReserve:
Uniswap running their LM program would require them to manage the LP positions.
That is not true, there is a UniV 3 staker contract designed specifically for permissionless liquidity mining which leaves the active management up to the individual LPs. There is also a modification of that contract which has been public since last spring Add minimum tick width by dmihal · Pull Request # 1 · dmihal/v 3 -staker · GitHub 1 .
I also never said that they shouldn’t have a voice, I simply pointed out that they are not nearly as committed to Optimism as other protocols are.
millie: I should add that I’m honestly disappointed there was no attempt to make use of the UniV3 staker by UniFDN… There has literally been a handful of attempts at making use of UniV3 liquidity mining and those were very isolated small scale experiments on ETH mainnet. Due to the gas costs of opening UniV3 positions it becomes difficult for small LPs to be active in those programs, but on Optimism that is not the case.
I also like all three of the projects which had the Uniswap Liquidity Mining program outsourced to them but there is no doubt that Uniswap offering the LM program on their interface, would have a much greater impact on participation.
Any way I will voice these opinions in Uniswap’s Governance Forum but I think it essentially boils down to Uniswap not wanting to allocate dev resources to this initiative. Happy to be proven wrong on that.
On a side note, for anyone who has misconceptions about the UniV3 staker and whether it’s viable for permissionless Liquidity Mining, I suggest listening to my discussion with Guil Lambert on the topic. We go into great depth about it’s advantages and why there is a lot of misinformation about the effectiveness of the staking contract. SD083 - Spartan Space - UniswapV3 by Synthetix Discussions TL;DR - It’s NOT game-able for short tail pairs like ETH-USD or OP-USD!!!
StrategicReserve: system:
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 an means to participate in Token House governance. Self-delegation of grants has historically been discouraged.
After much debate, delegates have requested a comprehensive and consistent approach to protocol delegation. 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 delegate a portion of idle OP from the Governance Fund to value-aligned protocols based on the objective 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.
millie:
I also never said that they shouldn’t have a voice, I simply pointed out that they are not nearly as committed to Optimism as other protocols are.
The whole point is to take subjective assessments out of it and allocate OP to protocols based on verifiable usage metrics. You’re attempting to introduce something (commitment, interest) highly subjective into the allocation process.
This program was posted on OP channels publically with requests for feedback.
I should add that I’m honestly disappointed there was no attempt to make use of the UniV 3 staker …
I should add that I’m honestly disappointed there was no attempt to make use of the UniV 3 staker by UniFDN… There has literally been a handful of attempts at making use of UniV 3 liquidity mining and those were very isolated small scale experiments on ETH mainnet. Due to the gas costs of opening UniV 3 positions it becomes difficult for small LPs to be active in those programs, but on Optimism that is not the case.
I also like all three of the projects which had the Uniswap Liquidity Mining program outsourced to them but there is no doubt that Uniswap offering the LM program on their interface, would have a much greater impact on participation.
Any way I will voice these opinions in Uniswap’s Governance Forum but I think it essentially boils down to Uniswap not wanting to allocate dev resources to this initiative. Happy to be proven wrong on that.
On a side note, for anyone who has misconceptions about the UniV 3 staker and whether it’s viable for permissionless Liquidity Mining, I suggest listening to my discussion with Guil Lambert on the topic. We go into great depth about it’s advantages and why there is a lot of misinformation about the effectiveness of the staking contract. SD 083 - Spartan Space - UniswapV 3 by Synthetix Discussions 2 TL;DR - It’s NOT game-able for short tail pairs like ETH-USD or OP-USD!!!
ken: Really appreciate all the insightful discussion here. Since Uniswap’s deployment on Optimism, we have been committed to ensuring the user experience is as accessible and seamless as possible.
millie:
there is no doubt that Uniswap offering the LM program on their interface, would have a much greater impact on participation.
Just to clarify, the Uniswap Foundation does not host any frontends or interfaces at this time, instead our goal is to empower teams already building on Uniswap, creating more opportunities in the same way that Optimism is doing so in this Protocol Delegate Proposal and with the grants awards before. We are definitely open to feedback on how we can improve generally. As a Day 1 ally of Optimism (a la unipigs), we are committed to helping increase usage of Uniswap on Optimism, but want to do so with both communities’ best interests at the forefront. Whatever metrics the community chooses to prioritize projects, we will gladly support together with committed members of the Uniswap community.
jackanorak:
what sorts of measures can we use to identify the most representative, most beneficial, and most impactful voices among the protocols?
This being the most important question for this proposal, is equally just as important for us for much of what the Uniswap Foundation does for the growth of our own protocol. As an example, when the UF kicked off the OP Liquidity Mining campaign with the $OP that was rewarded to the protocol about 2 months ago, here, we had broken it into 3 phases which get progressively larger and were designed with input from the Uniswap community.
In growing an aligned ecosystem for both the Uniswap and Optimism communities, we have been actively creating more opportunities to meaningfully contribute. As noted, the Uniswap Foundation Community Analytics Program ran an open bounty program for data analysts to analyze the first Phase of the LM program here. Looking at data from Phase 1, the LM program used only a small percentage (6.25%) of our $OP allocation in only 3 pools, brought over 200 new LPs with over $30M of TVL throughout the campaign, and maintained LP stickiness, even increasing TVL and transaction volume for 2 of the pools (credit to @springzhang). With the community’s help, we will post a retro on Phase 1 soon, integrate community feedback for tweaks to Phase 2, and launch that sometime in December to onboard even more users to Optimism!
lavande:
We’ll continue experimenting with ways to empower all types of delegates. We welcome discussion or ideas around future programs that could increase participation, balance representation, and/or get more folks involved.
This proposal is really exciting for us because Uniswap has not had the capability to participate in cross-protocol governance until now. With the UF, a core mission of ours is to be an advocate for the Uniswap community, including our governance representation on chains that Uniswap is deployed on. If we are included in the Protocol Delegation Program, our tentative plan is to propose the $OP be delegated to a multisig of 5, four being Uniswap community delegates and one representative from the UF. Our intention is to source nominations for the OP-UNI multisig from community members who are currently building on or are actively participating in Optimism ecosystem development. While the final details will not be confirmed until we receive more clarity on the Protocol Delegation Program, we are thrilled by the opportunity to be long term stakeholders in Optimism governance with help of other committed Uniswap community builders!
system:
Protocols building on Optimism are among its most important stakeholders and they valu…
system:
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 an means to participate in Token House governance. Self-delegation of grants has historically been discouraged.
After much debate, delegates have requested a comprehensive and consistent approach to protocol delegation. 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 delegate a portion of idle OP from the Governance Fund to value-aligned protocols based on the objective 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 .
millie:
I also never said that they shouldn’t have a voice, I simply pointed out that they are not nearly as committed to Optimism as other protocols are.
The whole point is to take subjective assessments out of it and allocate OP to protocols based on verifiable usage metrics. You’re attempting to introduce something (commitment, interest) highly subjective into the allocation process.
This program was posted on OP channels publically with requests for feedback.
StrategicReserve: millie:
you seem to be fixated on my mention of Uniswap in my original comment
I merely provided a counterpoint that “Uniswap has displayed little interest in Optimism”. Which many people would disagree with. Particularly for judging their merit on receiving an allocation in this new program.
millie:
Do you deny that had Uniswap ran the OP liquidity mining program through the official Uniswap interface, the impact of the program would be far greater?
That depends on how you define “impact”. I think running OP through liquidity managers resulted in highly optimized liquidity for Optimism on preferred pairs. Regarding smaller LP access, I think other programs like Revert and Uni V3 staker (which both got rewards) are able to cater to their needs.
millie:
Do you think that my suggestion is less optimal than relying on a sole metric of Gas Fees Generated the past season?
I don’t think Optimism native protocols should get any advantages with this program. Just because a protocol is deployed on other chains/layers, doesn’t mean they don’t care about the success of Optimism or that they should have any less of a voice here. Never will be a fan of “nativism”.
Nor do I think protocols that conduct governance on OP should get any advantage. The governance activity could be superfluous and inconsequential. Many protocols don’t have the resources to wholesale move their governance to Optimism. Many would have a conflict of interest in doing so.
As @BP_Gamma stated, I think volume is a better metric (or even fee generation) than TVL. TVL is just parked funds, with no description about what it’s actually doing or how it’s being used.
Certainly willing to entertain more objective metrics when evaluating protocol delegation rewards. But as I have stated many times before, I would avoid subjective assessments of a protocol’s “loyalty” or “commitment”, These kinds of things are poisonous for governance.
millie:
I think if used in combination, the following metrics would lead to fairer results:
T…
millie:
I think if used in combination, the following metrics would lead to fairer results:
Total Value Locked in the protocol
Is the project Optimism native (deployed on OP and ETH mainnet only)?
Does the Protocol conduct its Governance on Optimism?
Gas Fees Generated by the protocol
That was my suggestion on how to improve the the criteria for this program, you seem to be fixated on my mention of Uniswap in my original comment, so I will entertain your critiques.
Do you deny that had Uniswap ran the OP liquidity mining program through the official Uniswap interface, the impact of the program would be far greater?
Do you think that my suggestion is less optimal than relying on a sole metric of Gas Fees Generated the past season?
BP_Gamma: I’m glad that the conversation is shifting from Uniswap not caring about their OP distribution to now a debate about the methodology of distributing the OP rewards because the former was not a fair characterization of the situation.
I would disagree with your metric of TVL to determine the effectiveness of a DEX like Uniswap. TVL does not reveal anything about the liquidity depth. Volume should be the more relevant metric here.
Whether or not they’re optimizing their OP distribution should be analyzed on a objective basis. Just look at who is bringing in the volumes right now.
It’s bringing in 4x the volume of Velodrome on much less incentives and only 50K of OP has been distributed via Uniswap. Let’s stick with objective metrics of value added to Optimism. This is just my opinion, but I do not think the main metric should be how involved were you in these Optimism governance forums, but the MAIN metric should be how much actual value is being provided to Optimism in terms of their core product.
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StrategicReserve: millie:
you seem to be fixated on my mention of Uniswap in my original comment
I merely provided a counterpoint that “Uniswap has displayed little interest in Optimism”. Which many people would disagree with. Particularly for judging their merit on receiving an allocation in this new program.
millie:
Do you deny that had Uniswap ran the OP liquidity mining program through the official Uniswap interface, the impact of the program would be far greater?
That depends on how you define “impact”. I think running OP through liquidity managers resulted in highly optimized liquidity for Optimism on preferred pairs. Regarding smaller LP access, I think other programs like Revert and Uni V3 staker (which both got rewards) are able to cater to their needs.
millie:
Do you think that my suggestion is less optimal than relying on a sole metric of Gas Fees Generated the past season?
I don’t think Optimism native protocols should get any advantages with this program. Just because a protocol is deployed on other chains/layers, doesn’t mean they don’t care about the success of Optimism or that they should have any less of a voice here. Never will be a fan of “nativism”.
Nor do I think protocols that conduct governance on OP should get any advantage. The governance activity could be superfluous and inconsequential. Many protocols don’t have the resources to wholesale move their governance to Optimism. Many would have a conflict of interest in doing so.
As @BP_Gamma stated, I think volume is a better metric (or even fee generation) than TVL. TVL is just parked funds, with no description about what it’s actually doing or how it’s being used.
Certainly willing to entertain more objective metrics when evaluating protocol delegation rewards. But as I have stated many times before, I would avoid subjective assessments of a protocol’s “loyalty” or “commitment”, These kinds of things are poisonous for governance.
I’m glad that the conversation is shifting from Uniswap not caring about their OP distribution to n…
I’m glad that the conversation is shifting from Uniswap not caring about their OP distribution to now a debate about the methodology of distributing the OP rewards because the former was not a fair characterization of the situation.
I would disagree with your metric of TVL to determine the effectiveness of a DEX like Uniswap. TVL does not reveal anything about the liquidity depth. Volume should be the more relevant metric here.
Whether or not they’re optimizing their OP distribution should be analyzed on a objective basis. Just look at who is bringing in the volumes right now.
It’s bringing in 4 x the volume of Velodrome on much less incentives and only 50 K of OP has been distributed via Uniswap. Let’s stick with objective metrics of value added to Optimism. This is just my opinion, but I do not think the main metric should be how involved were you in these Optimism governance forums, but the MAIN metric should be how much actual value is being provided to Optimism in terms of their core product.
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millie: where in my comments did you see “governance forum activity” as a criteria for this program?
I think the volume idea is good one and I’m happy to incorporate that into one of the necessary criteria.
So let me once again quote my original suggestion just so that it is clear what I am suggesting:
millie:
I think if used in combination, the following metrics would lead to fairer results:
Total Value Locked in the protocol
Is the project Optimism native (deployed on OP and ETH mainnet only)?
Does the Protocol conduct its Governance on Optimism?
Gas Fees Generated by the protocol
alexcutlerdoteth: Looking at the top lines and saying Uniswap is bringing “4x the volume of Velodrome” is pretty disingenuous. At the time of our proposal, Velodrome supported over 29 projects with over a $100,000 in in their LPs to Uniswap’s 9. Uniswap is really primarily driving the bulk of its volume through a few highly efficient pairs. But, project’s need capital efficient liquidity to survive, even if their token isn’t driving high volume. That’s what we’re doing.
When you actually compare individual pools, Velodrome is absolutely competitive on a volume / TVL basis with Uniswap.
Volume can absolutely be considered. But, unless you think we should incentivize the abandonment of low volume but critical pools I think we can’t over-index on it.
where in my comments did you see “governance forum activity” as a criteria for this program?
I thin…
where in my comments did you see “governance forum activity” as a criteria for this program?
I think the volume idea is good one and I’m happy to incorporate that into one of the necessary criteria.
So let me once again quote my original suggestion just so that it is clear what I am suggesting:
millie:
I think if used in combination, the following metrics would lead to fairer results:
Total Value Locked in the protocol
Is the project Optimism native (deployed on OP and ETH mainnet only)?
Does the Protocol conduct its Governance on Optimism?
Gas Fees Generated by the protocol
millie:
you seem to be fixated on my mention of Uniswap in my original comment
I merely prov…
millie:
you seem to be fixated on my mention of Uniswap in my original comment
I merely provided a counterpoint that “Uniswap has displayed little interest in Optimism”. Which many people would disagree with. Particularly for judging their merit on receiving an allocation in this new program.
millie:
Do you deny that had Uniswap ran the OP liquidity mining program through the official Uniswap interface, the impact of the program would be far greater?
That depends on how you define “impact”. I think running OP through liquidity managers resulted in highly optimized liquidity for Optimism on preferred pairs. Regarding smaller LP access, I think other programs like Revert and Uni V 3 staker (which both got rewards) are able to cater to their needs.
millie:
Do you think that my suggestion is less optimal than relying on a sole metric of Gas Fees Generated the past season?
I don’t think Optimism native protocols should get any advantages with this program. Just because a protocol is deployed on other chains/layers, doesn’t mean they don’t care about the success of Optimism or that they should have any less of a voice here. Never will be a fan of “nativism”.
Nor do I think protocols that conduct governance on OP should get any advantage. The governance activity could be superfluous and inconsequential. Many protocols don’t have the resources to wholesale move their governance to Optimism. Many would have a conflict of interest in doing so.
As @BP_Gamma stated, I think volume is a better metric (or even fee generation) than TVL. TVL is just parked funds, with no description about what it’s actually doing or how it’s being used.
Certainly willing to entertain more objective metrics when evaluating protocol delegation rewards. But as I have stated many times before, I would avoid subjective assessments of a protocol’s “loyalty” or “commitment”, These kinds of things are poisonous for governance.
Well then we clearly disagree on many points. Once again you have inserted your own words which I h…
Well then we clearly disagree on many points. Once again you have inserted your own words which I have not expressed. I never used the word “loyalty” but I did use the word “exposure”. I think a protocol’s exposure to Optimism is directly correlated to whether the majority of the protocol’s infrastructure is deployed to Optimism, including where they conduct their governance.
I will let others have the floor at this point and avoid crowding the forum discussion.
Just one last point on TVL vs Volume criteria. For a DEX, you need to analyze volumes because with …
Just one last point on TVL vs Volume criteria. For a DEX, you need to analyze volumes because with concentrated liquidity, TVL becomes less of a metric and liquidity depth becomes more important.
Because DEX aggregators will route volumes to pools via liquidity depth/lower price impact, volume is more indicative of performance of a DEX than TVL.
Hey Millie, I work with the Uniswap Foundation, and they have actually been expending a lot of reso…
Hey Millie, I work with the Uniswap Foundation, and they have actually been expending a lot of resources on their OP liquidity mining program and making attempts to improve it. Case in point: They are giving a grant to those who are analyzing how LPs have migrated to Opitmism for rewards and how much volume was obtained twitter.com Uniswap Foundation 3 @UniswapFND 2 / UGPCA bounties to analyze results of Phase 1 ends this Wednesday on Nov 23 : ?How have LP migrated to Optimism for rewards? ⚖️How much volume was impacted for LM? ?How many new LPs claimed fees? For @DuneAnalytics wizards, check out the bounty today! unigrants.notion.site/Bounty- 20 -Opti… 7 : 50 PM - 21 Nov 2022 6 I would say they are more inclined to be over-deliberate when embarking on new programs. They are extremely thorough, so I don’t think that’s showing a lack of interest, but quite the opposite. They have also passed governance votes on Uniswap on how the LM program on Optimism is to be conducted. https://twitter.com/UniswapFND/status/ 1584681671882047488 ?s= 20 &t=wBUMDIteiCl 6 - 96 LjzPpqw 2 I’ve spoken with Ken and Devin from the Uniswap Foundation, and they have put a lot of thought and resources into their OP LM program, which is currently ongoing. Thank you, and I hope that clears things up!
Thank you for the info, but from the looks of it the newly formed Uniswap Foundation has essentiall…
Thank you for the info, but from the looks of it the newly formed Uniswap Foundation has essentially outsourced the program to projects which already have their own OP allocations. I have no issue with that but I’m not convinced that they care about Optimism any more as a result of it since they decided not to host the LM program through their own interface, which would have obviously been far more beneficial to Optimism and reached a much wider audience.
StrategicReserve: millie:
Thank you for the info, but from the looks of it the newly formed Uniswap Foundation has essentially outsourced the program to projects which already have their own OP allocations.
To clarify, three programs are competing in Uniswap’s in-house OP LM program. Of those three, Arrakis Finance did not receive an allocation from OP governance. Their solo application was rejected. xToken and Gamma did receive a grant from OP governance.
I don’t think you are characterizing the Uniswap OP LM program fairly. The Uniswap Foundation didn’t blindly “outsource” this. They created a competitive, staged program that passed their governance process with community feedback. UF’s program includes an analytics period (just awarded) where the LM programs are scrutinized before moving forward to the next stage.
This is exactly the kind of due diligence many who participate in the OP governance process have been asking for. Especially in regard to incentivizing liquidity. That due diligence was prioritized over expediency.
millie:
I have no issue with that but I’m not convinced that they care about Optimism any more as a result of it since they decided not to host the LM program through their own interface, which would have obviously been far more beneficial to Optimism and reached a much wider audience.
Uniswap running their LM program would require them to manage the LP positions. That management could lead to wildly different results based on strategy. That is why they created a competitive program to manage the distribution of OP rewards. Uniswap heavily promoted the program on Twitter.. Likewise, all three managers had robust participation in the grant for the number of rewards allocated.
You can read about some of the results here
millie:
Looking at this dashboard: Optimism - Popular Apps and Project Usage Trends , you can see that Synthetix is low on the list despite having one of the most active communities on Optimism and being deeply integrated with the rollup. Aside from under representation of some protocols, another thing that stands out to me is that both Uniswap and Galxe would end up with a large amount of delegated OP from this program, despite having hardly any activity and interest in Optimism governance.
I do feel it’s important to point out that Uniswap allocated 0 OP of a 1m OP grant towards participating in OP governance. In contrast, Synthetix self-delegated 2m OP they received from the OP partner fund. That is your right to do so under the terms of Layer 0 rules and your internal SIP, but attempting to punish Uniswap for not “having any activity or interest in Optimism governance” when they had zero votes is not fair.
The whole point of the Protocol Delegation Program is to allocate funds for governance to the projects actually building on the platform. Uniswap should absolutely have a voice in Optimism governance based on its credentials, usage, and relevance with DeFi.
millie: Thank you for the info, but from the looks of it the newly formed Uniswap Foundation h…
millie: Thank you for the info, but from the looks of it the newly formed Uniswap Foundation has essentially outsourced the program to projects which already have their own OP allocations. To clarify, three programs are competing in Uniswap’s in-house OP LM program. Of those three, Arrakis Finance did not receive an allocation from OP governance. Their solo application was rejected. xToken and Gamma did receive a grant from OP governance. I don’t think you are characterizing the Uniswap OP LM program fairly. The Uniswap Foundation didn’t blindly “outsource” this. They created a competitive, staged program that passed their governance process with community feedback. UF’s program includes an analytics period 1 (just awarded) where the LM programs are scrutinized before moving forward to the next stage. This is exactly the kind of due diligence many who participate in the OP governance process have been asking for. Especially in regard to incentivizing liquidity. That due diligence was prioritized over expediency. millie: I have no issue with that but I’m not convinced that they care about Optimism any more as a result of it since they decided not to host the LM program through their own interface, which would have obviously been far more beneficial to Optimism and reached a much wider audience. Uniswap running their LM program would require them to manage the LP positions. That management could lead to wildly different results based on strategy. That is why they created a competitive program to manage the distribution of OP rewards. Uniswap heavily promoted the program on Twitter. 1 . Likewise, all three managers had robust participation in the grant for the number of rewards allocated. You can read about some of the results here millie: Looking at this dashboard: Optimism - Popular Apps and Project Usage Trends :abacus: :red_circle::sparkles: , you can see that Synthetix is low on the list despite having one of the most active communities on Optimism and being deeply integrated with the rollup. Aside from under representation of some protocols, another thing that stands out to me is that both Uniswap and Galxe would end up with a large amount of delegated OP from this program, despite having hardly any activity and interest in Optimism governance. I do feel it’s important to point out that Uniswap allocated 0 OP of a 1 m OP grant towards participating in OP governance. In contrast, Synthetix self-delegated 2 m OP they received from the OP partner fund. That is your right to do so under the terms of Layer 0 rules and your internal SIP, but attempting to punish Uniswap for not “having any activity or interest in Optimism governance” when they had zero votes is not fair. The whole point of the Protocol Delegation Program is to allocate funds for governance to the projects actually building on the platform. Uniswap should absolutely have a voice in Optimism governance based on its credentials, usage, and relevance with DeFi.
millie: StrategicReserve:
Uniswap running their LM program would require them to manage the LP positions.
That is not true, there is a UniV3 staker contract designed specifically for permissionless liquidity mining which leaves the active management up to the individual LPs. There is also a modification of that contract which has been public since last spring Add minimum tick width by dmihal · Pull Request #1 · dmihal/v3-staker · GitHub.
I also never said that they shouldn’t have a voice, I simply pointed out that they are not nearly as committed to Optimism as other protocols are.
StrategicReserve: Uniswap running their LM program would require them to manage the LP positio…
StrategicReserve: Uniswap running their LM program would require them to manage the LP positions. That is not true, there is a UniV 3 staker contract designed specifically for permissionless liquidity mining which leaves the active management up to the individual LPs. There is also a modification of that contract which has been public since last spring Add minimum tick width by dmihal · Pull Request # 1 · dmihal/v 3 -staker · GitHub 1 . I also never said that they shouldn’t have a voice, I simply pointed out that they are not nearly as committed to Optimism as other protocols are.
millie: I should add that I’m honestly disappointed there was no attempt to make use of the UniV3 staker by UniFDN… There has literally been a handful of attempts at making use of UniV3 liquidity mining and those were very isolated small scale experiments on ETH mainnet. Due to the gas costs of opening UniV3 positions it becomes difficult for small LPs to be active in those programs, but on Optimism that is not the case.
I also like all three of the projects which had the Uniswap Liquidity Mining program outsourced to them but there is no doubt that Uniswap offering the LM program on their interface, would have a much greater impact on participation.
Any way I will voice these opinions in Uniswap’s Governance Forum but I think it essentially boils down to Uniswap not wanting to allocate dev resources to this initiative. Happy to be proven wrong on that.
On a side note, for anyone who has misconceptions about the UniV3 staker and whether it’s viable for permissionless Liquidity Mining, I suggest listening to my discussion with Guil Lambert on the topic. We go into great depth about it’s advantages and why there is a lot of misinformation about the effectiveness of the staking contract. SD083 - Spartan Space - UniswapV3 by Synthetix Discussions TL;DR - It’s NOT game-able for short tail pairs like ETH-USD or OP-USD!!!
StrategicReserve: system:
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 an means to participate in Token House governance. Self-delegation of grants has historically been discouraged.
After much debate, delegates have requested a comprehensive and consistent approach to protocol delegation. 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 delegate a portion of idle OP from the Governance Fund to value-aligned protocols based on the objective 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.
millie:
I also never said that they shouldn’t have a voice, I simply pointed out that they are not nearly as committed to Optimism as other protocols are.
The whole point is to take subjective assessments out of it and allocate OP to protocols based on verifiable usage metrics. You’re attempting to introduce something (commitment, interest) highly subjective into the allocation process.
This program was posted on OP channels publically with requests for feedback.
I should add that I’m honestly disappointed there was no attempt to make use of the UniV 3 staker …
I should add that I’m honestly disappointed there was no attempt to make use of the UniV 3 staker by UniFDN… There has literally been a handful of attempts at making use of UniV 3 liquidity mining and those were very isolated small scale experiments on ETH mainnet. Due to the gas costs of opening UniV 3 positions it becomes difficult for small LPs to be active in those programs, but on Optimism that is not the case. I also like all three of the projects which had the Uniswap Liquidity Mining program outsourced to them but there is no doubt that Uniswap offering the LM program on their interface, would have a much greater impact on participation. Any way I will voice these opinions in Uniswap’s Governance Forum but I think it essentially boils down to Uniswap not wanting to allocate dev resources to this initiative. Happy to be proven wrong on that. On a side note, for anyone who has misconceptions about the UniV 3 staker and whether it’s viable for permissionless Liquidity Mining, I suggest listening to my discussion with Guil Lambert on the topic. We go into great depth about it’s advantages and why there is a lot of misinformation about the effectiveness of the staking contract. SD 083 - Spartan Space - UniswapV 3 by Synthetix Discussions 2 TL;DR - It’s NOT game-able for short tail pairs like ETH-USD or OP-USD!!!
ken: Really appreciate all the insightful discussion here. Since Uniswap’s deployment on Optimism, we have been committed to ensuring the user experience is as accessible and seamless as possible.
millie:
there is no doubt that Uniswap offering the LM program on their interface, would have a much greater impact on participation.
Just to clarify, the Uniswap Foundation does not host any frontends or interfaces at this time, instead our goal is to empower teams already building on Uniswap, creating more opportunities in the same way that Optimism is doing so in this Protocol Delegate Proposal and with the grants awards before. We are definitely open to feedback on how we can improve generally. As a Day 1 ally of Optimism (a la unipigs), we are committed to helping increase usage of Uniswap on Optimism, but want to do so with both communities’ best interests at the forefront. Whatever metrics the community chooses to prioritize projects, we will gladly support together with committed members of the Uniswap community.
jackanorak:
what sorts of measures can we use to identify the most representative, most beneficial, and most impactful voices among the protocols?
This being the most important question for this proposal, is equally just as important for us for much of what the Uniswap Foundation does for the growth of our own protocol. As an example, when the UF kicked off the OP Liquidity Mining campaign with the $OP that was rewarded to the protocol about 2 months ago, here, we had broken it into 3 phases which get progressively larger and were designed with input from the Uniswap community.
In growing an aligned ecosystem for both the Uniswap and Optimism communities, we have been actively creating more opportunities to meaningfully contribute. As noted, the Uniswap Foundation Community Analytics Program ran an open bounty program for data analysts to analyze the first Phase of the LM program here. Looking at data from Phase 1, the LM program used only a small percentage (6.25%) of our $OP allocation in only 3 pools, brought over 200 new LPs with over $30M of TVL throughout the campaign, and maintained LP stickiness, even increasing TVL and transaction volume for 2 of the pools (credit to @springzhang). With the community’s help, we will post a retro on Phase 1 soon, integrate community feedback for tweaks to Phase 2, and launch that sometime in December to onboard even more users to Optimism!
lavande:
We’ll continue experimenting with ways to empower all types of delegates. We welcome discussion or ideas around future programs that could increase participation, balance representation, and/or get more folks involved.
This proposal is really exciting for us because Uniswap has not had the capability to participate in cross-protocol governance until now. With the UF, a core mission of ours is to be an advocate for the Uniswap community, including our governance representation on chains that Uniswap is deployed on. If we are included in the Protocol Delegation Program, our tentative plan is to propose the $OP be delegated to a multisig of 5, four being Uniswap community delegates and one representative from the UF. Our intention is to source nominations for the OP-UNI multisig from community members who are currently building on or are actively participating in Optimism ecosystem development. While the final details will not be confirmed until we receive more clarity on the Protocol Delegation Program, we are thrilled by the opportunity to be long term stakeholders in Optimism governance with help of other committed Uniswap community builders!
system: Protocols building on Optimism are among its most important stakeholders and they valu…
system: 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 an means to participate in Token House governance. Self-delegation of grants has historically been discouraged. After much debate, delegates have requested a comprehensive and consistent approach to protocol delegation. 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 delegate a portion of idle OP from the Governance Fund to value-aligned protocols based on the objective 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 . millie: I also never said that they shouldn’t have a voice, I simply pointed out that they are not nearly as committed to Optimism as other protocols are. The whole point is to take subjective assessments out of it and allocate OP to protocols based on verifiable usage metrics. You’re attempting to introduce something (commitment, interest) highly subjective into the allocation process. This program was posted on OP channels publically with requests for feedback.
StrategicReserve: millie:
you seem to be fixated on my mention of Uniswap in my original comment
I merely provided a counterpoint that “Uniswap has displayed little interest in Optimism”. Which many people would disagree with. Particularly for judging their merit on receiving an allocation in this new program.
millie:
Do you deny that had Uniswap ran the OP liquidity mining program through the official Uniswap interface, the impact of the program would be far greater?
That depends on how you define “impact”. I think running OP through liquidity managers resulted in highly optimized liquidity for Optimism on preferred pairs. Regarding smaller LP access, I think other programs like Revert and Uni V3 staker (which both got rewards) are able to cater to their needs.
millie:
Do you think that my suggestion is less optimal than relying on a sole metric of Gas Fees Generated the past season?
I don’t think Optimism native protocols should get any advantages with this program. Just because a protocol is deployed on other chains/layers, doesn’t mean they don’t care about the success of Optimism or that they should have any less of a voice here. Never will be a fan of “nativism”.
Nor do I think protocols that conduct governance on OP should get any advantage. The governance activity could be superfluous and inconsequential. Many protocols don’t have the resources to wholesale move their governance to Optimism. Many would have a conflict of interest in doing so.
As @BP_Gamma stated, I think volume is a better metric (or even fee generation) than TVL. TVL is just parked funds, with no description about what it’s actually doing or how it’s being used.
Certainly willing to entertain more objective metrics when evaluating protocol delegation rewards. But as I have stated many times before, I would avoid subjective assessments of a protocol’s “loyalty” or “commitment”, These kinds of things are poisonous for governance.
millie: I think if used in combination, the following metrics would lead to fairer results: T…
millie: I think if used in combination, the following metrics would lead to fairer results: Total Value Locked in the protocol Is the project Optimism native (deployed on OP and ETH mainnet only)? Does the Protocol conduct its Governance on Optimism? Gas Fees Generated by the protocol That was my suggestion on how to improve the the criteria for this program, you seem to be fixated on my mention of Uniswap in my original comment, so I will entertain your critiques. Do you deny that had Uniswap ran the OP liquidity mining program through the official Uniswap interface, the impact of the program would be far greater? Do you think that my suggestion is less optimal than relying on a sole metric of Gas Fees Generated the past season?
BP_Gamma: I’m glad that the conversation is shifting from Uniswap not caring about their OP distribution to now a debate about the methodology of distributing the OP rewards because the former was not a fair characterization of the situation.
I would disagree with your metric of TVL to determine the effectiveness of a DEX like Uniswap. TVL does not reveal anything about the liquidity depth. Volume should be the more relevant metric here.
Whether or not they’re optimizing their OP distribution should be analyzed on a objective basis. Just look at who is bringing in the volumes right now.
It’s bringing in 4x the volume of Velodrome on much less incentives and only 50K of OP has been distributed via Uniswap. Let’s stick with objective metrics of value added to Optimism. This is just my opinion, but I do not think the main metric should be how involved were you in these Optimism governance forums, but the MAIN metric should be how much actual value is being provided to Optimism in terms of their core product.
DefiLlama
DefiLlama
DefiLlama is a DeFi TVL aggregator. It is committed to providing accurate data without ads or sponsored content, as well as transparency.
StrategicReserve: millie:
you seem to be fixated on my mention of Uniswap in my original comment
I merely provided a counterpoint that “Uniswap has displayed little interest in Optimism”. Which many people would disagree with. Particularly for judging their merit on receiving an allocation in this new program.
millie:
Do you deny that had Uniswap ran the OP liquidity mining program through the official Uniswap interface, the impact of the program would be far greater?
That depends on how you define “impact”. I think running OP through liquidity managers resulted in highly optimized liquidity for Optimism on preferred pairs. Regarding smaller LP access, I think other programs like Revert and Uni V3 staker (which both got rewards) are able to cater to their needs.
millie:
Do you think that my suggestion is less optimal than relying on a sole metric of Gas Fees Generated the past season?
I don’t think Optimism native protocols should get any advantages with this program. Just because a protocol is deployed on other chains/layers, doesn’t mean they don’t care about the success of Optimism or that they should have any less of a voice here. Never will be a fan of “nativism”.
Nor do I think protocols that conduct governance on OP should get any advantage. The governance activity could be superfluous and inconsequential. Many protocols don’t have the resources to wholesale move their governance to Optimism. Many would have a conflict of interest in doing so.
As @BP_Gamma stated, I think volume is a better metric (or even fee generation) than TVL. TVL is just parked funds, with no description about what it’s actually doing or how it’s being used.
Certainly willing to entertain more objective metrics when evaluating protocol delegation rewards. But as I have stated many times before, I would avoid subjective assessments of a protocol’s “loyalty” or “commitment”, These kinds of things are poisonous for governance.
I’m glad that the conversation is shifting from Uniswap not caring about their OP distribution to n…
I’m glad that the conversation is shifting from Uniswap not caring about their OP distribution to now a debate about the methodology of distributing the OP rewards because the former was not a fair characterization of the situation. I would disagree with your metric of TVL to determine the effectiveness of a DEX like Uniswap. TVL does not reveal anything about the liquidity depth. Volume should be the more relevant metric here. Whether or not they’re optimizing their OP distribution should be analyzed on a objective basis. Just look at who is bringing in the volumes right now. It’s bringing in 4 x the volume of Velodrome on much less incentives and only 50 K of OP has been distributed via Uniswap. Let’s stick with objective metrics of value added to Optimism. This is just my opinion, but I do not think the main metric should be how involved were you in these Optimism governance forums, but the MAIN metric should be how much actual value is being provided to Optimism in terms of their core product. image 1574 × 1237 178 KB DefiLlama DefiLlama DefiLlama is a DeFi TVL aggregator. It is committed to providing accurate data without ads or sponsored content, as well as transparency.
millie: where in my comments did you see “governance forum activity” as a criteria for this program?
I think the volume idea is good one and I’m happy to incorporate that into one of the necessary criteria.
So let me once again quote my original suggestion just so that it is clear what I am suggesting:
millie:
I think if used in combination, the following metrics would lead to fairer results:
Total Value Locked in the protocol
Is the project Optimism native (deployed on OP and ETH mainnet only)?
Does the Protocol conduct its Governance on Optimism?
Gas Fees Generated by the protocol
alexcutlerdoteth: Looking at the top lines and saying Uniswap is bringing “4x the volume of Velodrome” is pretty disingenuous. At the time of our proposal, Velodrome supported over 29 projects with over a $100,000 in in their LPs to Uniswap’s 9. Uniswap is really primarily driving the bulk of its volume through a few highly efficient pairs. But, project’s need capital efficient liquidity to survive, even if their token isn’t driving high volume. That’s what we’re doing.
When you actually compare individual pools, Velodrome is absolutely competitive on a volume / TVL basis with Uniswap.
Volume can absolutely be considered. But, unless you think we should incentivize the abandonment of low volume but critical pools I think we can’t over-index on it.
where in my comments did you see “governance forum activity” as a criteria for this program? I thin…
where in my comments did you see “governance forum activity” as a criteria for this program? I think the volume idea is good one and I’m happy to incorporate that into one of the necessary criteria. So let me once again quote my original suggestion just so that it is clear what I am suggesting: millie: I think if used in combination, the following metrics would lead to fairer results: Total Value Locked in the protocol Is the project Optimism native (deployed on OP and ETH mainnet only)? Does the Protocol conduct its Governance on Optimism? Gas Fees Generated by the protocol
millie: you seem to be fixated on my mention of Uniswap in my original comment I merely prov…
millie: you seem to be fixated on my mention of Uniswap in my original comment I merely provided a counterpoint that “Uniswap has displayed little interest in Optimism”. Which many people would disagree with. Particularly for judging their merit on receiving an allocation in this new program. millie: Do you deny that had Uniswap ran the OP liquidity mining program through the official Uniswap interface, the impact of the program would be far greater? That depends on how you define “impact”. I think running OP through liquidity managers resulted in highly optimized liquidity for Optimism on preferred pairs. Regarding smaller LP access, I think other programs like Revert and Uni V 3 staker (which both got rewards) are able to cater to their needs. millie: Do you think that my suggestion is less optimal than relying on a sole metric of Gas Fees Generated the past season? I don’t think Optimism native protocols should get any advantages with this program. Just because a protocol is deployed on other chains/layers, doesn’t mean they don’t care about the success of Optimism or that they should have any less of a voice here. Never will be a fan of “nativism”. Nor do I think protocols that conduct governance on OP should get any advantage. The governance activity could be superfluous and inconsequential. Many protocols don’t have the resources to wholesale move their governance to Optimism. Many would have a conflict of interest in doing so. As @BP_Gamma stated, I think volume is a better metric (or even fee generation) than TVL. TVL is just parked funds, with no description about what it’s actually doing or how it’s being used. Certainly willing to entertain more objective metrics when evaluating protocol delegation rewards. But as I have stated many times before, I would avoid subjective assessments of a protocol’s “loyalty” or “commitment”, These kinds of things are poisonous for governance.
Well then we clearly disagree on many points. Once again you have inserted your own words which I h…
Well then we clearly disagree on many points. Once again you have inserted your own words which I have not expressed. I never used the word “loyalty” but I did use the word “exposure”. I think a protocol’s exposure to Optimism is directly correlated to whether the majority of the protocol’s infrastructure is deployed to Optimism, including where they conduct their governance. I will let others have the floor at this point and avoid crowding the forum discussion.
Just one last point on TVL vs Volume criteria. For a DEX, you need to analyze volumes because with …
Just one last point on TVL vs Volume criteria. For a DEX, you need to analyze volumes because with concentrated liquidity, TVL becomes less of a metric and liquidity depth becomes more important. Because DEX aggregators will route volumes to pools via liquidity depth/lower price impact, volume is more indicative of performance of a DEX than TVL.
Looking at the top lines and saying Uniswap is bringing “ 4 x the volume of Velodrome” is pretty di…
Looking at the top lines and saying Uniswap is bringing “ 4 x the volume of Velodrome” is pretty disingenuous. At the time of our proposal, Velodrome supported over 29 projects with over a $ 100 , 000 in in their LPs to Uniswap’s 9 . Uniswap is really primarily driving the bulk of its volume through a few highly efficient pairs. But, project’s need capital efficient liquidity to survive, even if their token isn’t driving high volume. That’s what we’re doing.
When you actually compare individual pools, Velodrome is absolutely competitive on a volume / TVL basis with Uniswap.
Screen Shot 2022 - 10 - 27 at 14 . 05 . 161604 × 910 185 KB
Volume can absolutely be considered. But, unless you think we should incentivize the abandonment of low volume but critical pools I think we can’t over-index on it.
BP_Gamma: Ok let’s compare on a volume / TVL basis on both a global and individual pair basis.
GLOBAL BASIS:
Velodrome has TVL at $70.17M. Uniswap has TVL at $42.61M on Optimism (Optimism TVL - DefiLlama)
Velodrome has 24 hour volume at $8M. Uniswap has 24 hour volume at $29.68M. (Dexs - DefiLlama)
Velo’s volume/TVL = $8/$70 = 11.4%
Uniswap’s volume/TVL = $29/$43 = 67.4%
Uniswap’s average volume/TVL is over 5x higher than Velodrome’s.
INDIVIDUAL BASIS:
The best comparison on an individual basis would be the pools that both Uniswap and Velodrome are concurrently incentivizing:
ETH/USDC
Uniswap = 12M / $5.3M = 226%
Velodrome = 1.5M / 2.1M = 71.4%
USDC/DAI
Uniswap = 1.6M / 3.2M = 50%
Velodrome = $162k / $2.6M = 6.2%
Source: Optimism DEX Screener
OP/USDC is one pool that Velodrome dominates on volume, but even this pool, Uniswap has $325K of volume on only $89K of liquidity = 365% Volume / TVL
Velodrome has $4.3M of volume on $2.5M of liquidity = 172% Volume / TVL
millie: alexcutlerdoteth:
Volume can absolutely be considered. But, unless you think we should incentivize the abandonment of low volume but critical pools I think we can’t over-index on it.
I think that we are all in agreement that volume would also make a good criteria type for the Protocol Delegation Program, Alex was simply asking not to over index it.
nickbtts:
Agree with the suggestions above, and perhaps a few others:
Does the project hold its treasury on Optimism?
Does the project currently have an active delegate? (we may need to wait for next season outcome on definition of delegate and activity)
Has the project been awarded a grant? (this shows at least some level of team DD, could be size proportionate)
I agree, the items above would be useful as well, but we don’t want to over-crowd the requirements either. Perhaps we can narrow everything down to 5 important and easily measurable criteria.
Fully agree with this. I think it’s important to note that some metrics, notably Volume, are more e…
Fully agree with this. I think it’s important to note that some metrics, notably Volume, are more easily or non-expensively gamed than others (such as time weighted TVL); as such I think there will have to be some governance or foundation decided metrics. I’m sure we can be a little more sophisticated than one single metric!
Agree with the suggestions above, and perhaps a few others:
Does the project hold its treasury on Optimism?
Does the project currently have an active delegate? (we may need to wait for next season outcome on definition of delegate and activity)
Has the project been awarded a grant? (this shows at least some level of team DD, could be size proportionate)
millie: alexcutlerdoteth:
Volume can absolutely be considered. But, unless you think we should incentivize the abandonment of low volume but critical pools I think we can’t over-index on it.
I think that we are all in agreement that volume would also make a good criteria type for the Protocol Delegation Program, Alex was simply asking not to over index it.
nickbtts:
Agree with the suggestions above, and perhaps a few others:
Does the project hold its treasury on Optimism?
Does the project currently have an active delegate? (we may need to wait for next season outcome on definition of delegate and activity)
Has the project been awarded a grant? (this shows at least some level of team DD, could be size proportionate)
I agree, the items above would be useful as well, but we don’t want to over-crowd the requirements either. Perhaps we can narrow everything down to 5 important and easily measurable criteria.
Ok let’s compare on a volume / TVL basis on both a global and individual pair basis.
GLOBAL BASIS:
…
Ok let’s compare on a volume / TVL basis on both a global and individual pair basis.
GLOBAL BASIS:
Velodrome has TVL at $ 70 . 17 M. Uniswap has TVL at $ 42 . 61 M on Optimism (Optimism TVL - DefiLlama)
Velodrome has 24 hour volume at $ 8 M. Uniswap has 24 hour volume at $ 29 . 68 M. (Dexs - DefiLlama)
Velo’s volume/TVL = $ 8 /$ 70 = 11 . 4 %
Uniswap’s volume/TVL = $ 29 /$ 43 = 67 . 4 %
Uniswap’s average volume/TVL is over 5 x higher than Velodrome’s.
INDIVIDUAL BASIS:
The best comparison on an individual basis would be the pools that both Uniswap and Velodrome are concurrently incentivizing:
ETH/USDC
Uniswap = 12 M / $ 5 . 3 M = 226 %
Velodrome = 1 . 5 M / 2 . 1 M = 71 . 4 %
USDC/DAI
Uniswap = 1 . 6 M / 3 . 2 M = 50 %
Velodrome = $ 162 k / $ 2 . 6 M = 6 . 2 %
Source: Optimism DEX Screener 1
OP/USDC is one pool that Velodrome dominates on volume, but even this pool, Uniswap has $ 325 K of volume on only $ 89 K of liquidity = 365 % Volume / TVL
Velodrome has $ 4 . 3 M of volume on $ 2 . 5 M of liquidity = 172 % Volume / TVL
alexcutlerdoteth: Yes, like I said Uniswap over performs on certain pools and underperforms on others, especially when incentives are added to the mix.
The headline is that broadly speaking, Velodrome is competitive on TVL/Volume basis when you look relative performance of all pools as we documented here.
alexcutlerdoteth:
Volume can absolutely be considered. But, unless you think we should incenti…
alexcutlerdoteth:
Volume can absolutely be considered. But, unless you think we should incentivize the abandonment of low volume but critical pools I think we can’t over-index on it.
I think that we are all in agreement that volume would also make a good criteria type for the Protocol Delegation Program, Alex was simply asking not to over index it.
nickbtts:
Agree with the suggestions above, and perhaps a few others:
Does the project hold its treasury on Optimism?
Does the project currently have an active delegate? (we may need to wait for next season outcome on definition of delegate and activity)
Has the project been awarded a grant? (this shows at least some level of team DD, could be size proportionate)
I agree, the items above would be useful as well, but we don’t want to over-crowd the requirements either. Perhaps we can narrow everything down to 5 important and easily measurable criteria.
Yes, like I said Uniswap over performs on certain pools and underperforms on others, especially whe…
Yes, like I said Uniswap over performs on certain pools and underperforms on others, especially when incentives are added to the mix.
Screen Shot 2022 - 10 - 25 at 16 . 27 . 451920 × 614 84 . 4 KB
The headline is that broadly speaking, Velodrome is competitive on TVL/Volume basis when you look relative performance of all pools as we documented here.
Screen Shot 2022 - 10 - 27 at 14 . 05 . 161604 × 910 185 KB
Looking at the top lines and saying Uniswap is bringing “ 4 x the volume of Velodrome” is pretty di…
Looking at the top lines and saying Uniswap is bringing “ 4 x the volume of Velodrome” is pretty disingenuous. At the time of our proposal, Velodrome supported over 29 projects with over a $ 100 , 000 in in their LPs to Uniswap’s 9 . Uniswap is really primarily driving the bulk of its volume through a few highly efficient pairs. But, project’s need capital efficient liquidity to survive, even if their token isn’t driving high volume. That’s what we’re doing. When you actually compare individual pools, Velodrome is absolutely competitive on a volume / TVL basis with Uniswap. Screen Shot 2022 - 10 - 27 at 14 . 05 . 161604 × 910 185 KB Volume can absolutely be considered. But, unless you think we should incentivize the abandonment of low volume but critical pools I think we can’t over-index on it.
BP_Gamma: Ok let’s compare on a volume / TVL basis on both a global and individual pair basis.
GLOBAL BASIS:
Velodrome has TVL at $70.17M. Uniswap has TVL at $42.61M on Optimism (Optimism TVL - DefiLlama)
Velodrome has 24 hour volume at $8M. Uniswap has 24 hour volume at $29.68M. (Dexs - DefiLlama)
Velo’s volume/TVL = $8/$70 = 11.4%
Uniswap’s volume/TVL = $29/$43 = 67.4%
Uniswap’s average volume/TVL is over 5x higher than Velodrome’s.
INDIVIDUAL BASIS:
The best comparison on an individual basis would be the pools that both Uniswap and Velodrome are concurrently incentivizing:
ETH/USDC
Uniswap = 12M / $5.3M = 226%
Velodrome = 1.5M / 2.1M = 71.4%
USDC/DAI
Uniswap = 1.6M / 3.2M = 50%
Velodrome = $162k / $2.6M = 6.2%
Source: Optimism DEX Screener
OP/USDC is one pool that Velodrome dominates on volume, but even this pool, Uniswap has $325K of volume on only $89K of liquidity = 365% Volume / TVL
Velodrome has $4.3M of volume on $2.5M of liquidity = 172% Volume / TVL
millie: alexcutlerdoteth:
Volume can absolutely be considered. But, unless you think we should incentivize the abandonment of low volume but critical pools I think we can’t over-index on it.
I think that we are all in agreement that volume would also make a good criteria type for the Protocol Delegation Program, Alex was simply asking not to over index it.
nickbtts:
Agree with the suggestions above, and perhaps a few others:
Does the project hold its treasury on Optimism?
Does the project currently have an active delegate? (we may need to wait for next season outcome on definition of delegate and activity)
Has the project been awarded a grant? (this shows at least some level of team DD, could be size proportionate)
I agree, the items above would be useful as well, but we don’t want to over-crowd the requirements either. Perhaps we can narrow everything down to 5 important and easily measurable criteria.
Fully agree with this. I think it’s important to note that some metrics, notably Volume, are more e…
Fully agree with this. I think it’s important to note that some metrics, notably Volume, are more easily or non-expensively gamed than others (such as time weighted TVL); as such I think there will have to be some governance or foundation decided metrics. I’m sure we can be a little more sophisticated than one single metric! Agree with the suggestions above, and perhaps a few others: Does the project hold its treasury on Optimism? Does the project currently have an active delegate? (we may need to wait for next season outcome on definition of delegate and activity) Has the project been awarded a grant? (this shows at least some level of team DD, could be size proportionate)
millie: alexcutlerdoteth:
Volume can absolutely be considered. But, unless you think we should incentivize the abandonment of low volume but critical pools I think we can’t over-index on it.
I think that we are all in agreement that volume would also make a good criteria type for the Protocol Delegation Program, Alex was simply asking not to over index it.
nickbtts:
Agree with the suggestions above, and perhaps a few others:
Does the project hold its treasury on Optimism?
Does the project currently have an active delegate? (we may need to wait for next season outcome on definition of delegate and activity)
Has the project been awarded a grant? (this shows at least some level of team DD, could be size proportionate)
I agree, the items above would be useful as well, but we don’t want to over-crowd the requirements either. Perhaps we can narrow everything down to 5 important and easily measurable criteria.
I certainly agree there are pockets of pools where Velodrome does do better. However, it’s undenia…
I certainly agree there are pockets of pools where Velodrome does do better. However, it’s undeniable that Uniswap has provided significant value to the Optimism ecosystem despite only distributing 50 K of OP out of their 1 M allocation thus far.
They’re expending their own resources to analyze the results of that initial phase 1 of distributions and will be looking to improve upon that. I just don’t think we should be too quick to say one protocol doesn’t care about the ecosystem without analyzing their contributions to the ecosystem fairly.
But I’ve said my piece on that, and I think it’s fair to say that Uniswap has provided significant value to Optimism thus far and has shown they are committed to expending their own resources for the benefit of Optimism.
honestly I must say you are twisting the discussion here… This thread has nothing to do with protoc…
honestly I must say you are twisting the discussion here… This thread has nothing to do with protocols receiving further allocations, that will be up to the body over seeing Grants going forward [DRAFT PROPOSAL]: Moving to a Grants Council - # 40 by lavande 1 .
I, and no one else in the thread have said that Uniswap hasn’t provided value to Optimism. My criticism was that under the current single criteria, of gas fees generated, Uniswap would receive the largest delegation from the votable supply earmarked for this program. Optimism - Popular Apps and Project Usage Trends :abacus: :red_circle::sparkles: 2
Uniswap only just started distributing their OP and have done so through third parties, so I will wait until it has finished to make my judgement but I doubt that the 50 k OP that is being distributed through third party projects will move the needle much on the value they have brought to Optimism.
BP_Gamma: Apologies! You’re right that you had advocated solely on the gas fees. I went ahead and edited my post as a correction.
We would love to the see the results as well. It might or might not have. There have been other competitors who have entered the space as well. KyberSwap Elastic is doing very well on USDC-DAI because they implemented a 0.008% fee tier to undercut Uniswap’s 0.01%, and so is Balancer with their veBAL program.
StrategicReserve: millie:
Uniswap would receive the largest delegation from the votable supply earmarked for this program
Uniswap should receive one of the largest delegations for this program. They deserve it and they should have a large voice in governance.
Isn’t that the point of this program? To give protocols that are the backbone of Optimism voting power? Right now, they have zero voting power.
They have taken very little OP for their size (including sub-projects that work on them, like Gamma, xToken, Revert) compared to some other projects here. They pledged it all to incentives. They are a power player in crypto and DeFi. They’re critical to the success of Optimism competing against other Layer 2s. They have little to no voice in Optimism governance right now. They never got a committee spot.
Velodrome is well-qualified for a delegation here as well, being they pushed, I think, all of their allocations (both from op labs and governance) to incentives. Velodrome has what? 200k OP allocated to them? That’s pretty small for a protocol of their size on this platform.
Correct me if I’m wrong, but Synthetix has 2.1m OP voting right now, with another 1.28m stuck on a multi-sig. Giving them a vote power of nearly 3.4m when fixed. Far more than any other delegate.
Synthetix 3.4m OP
Velodrome 200k OP
Uniswap 0 OP
I thought the point of this program was to fix this imbalance. Not make it worse.
Ok let’s compare on a volume / TVL basis on both a global and individual pair basis. GLOBAL BASIS: …
Ok let’s compare on a volume / TVL basis on both a global and individual pair basis. GLOBAL BASIS: Velodrome has TVL at $ 70 . 17 M. Uniswap has TVL at $ 42 . 61 M on Optimism (Optimism TVL - DefiLlama) Velodrome has 24 hour volume at $ 8 M. Uniswap has 24 hour volume at $ 29 . 68 M. (Dexs - DefiLlama) Velo’s volume/TVL = $ 8 /$ 70 = 11 . 4 % Uniswap’s volume/TVL = $ 29 /$ 43 = 67 . 4 % Uniswap’s average volume/TVL is over 5 x higher than Velodrome’s. INDIVIDUAL BASIS: The best comparison on an individual basis would be the pools that both Uniswap and Velodrome are concurrently incentivizing: ETH/USDC Uniswap = 12 M / $ 5 . 3 M = 226 % Velodrome = 1 . 5 M / 2 . 1 M = 71 . 4 % USDC/DAI Uniswap = 1 . 6 M / 3 . 2 M = 50 % Velodrome = $ 162 k / $ 2 . 6 M = 6 . 2 % Source: Optimism DEX Screener 1 OP/USDC is one pool that Velodrome dominates on volume, but even this pool, Uniswap has $ 325 K of volume on only $ 89 K of liquidity = 365 % Volume / TVL Velodrome has $ 4 . 3 M of volume on $ 2 . 5 M of liquidity = 172 % Volume / TVL
alexcutlerdoteth: Yes, like I said Uniswap over performs on certain pools and underperforms on others, especially when incentives are added to the mix.
The headline is that broadly speaking, Velodrome is competitive on TVL/Volume basis when you look relative performance of all pools as we documented here.
alexcutlerdoteth: Volume can absolutely be considered. But, unless you think we should incenti…
alexcutlerdoteth: Volume can absolutely be considered. But, unless you think we should incentivize the abandonment of low volume but critical pools I think we can’t over-index on it. I think that we are all in agreement that volume would also make a good criteria type for the Protocol Delegation Program, Alex was simply asking not to over index it. nickbtts: Agree with the suggestions above, and perhaps a few others: Does the project hold its treasury on Optimism? Does the project currently have an active delegate? (we may need to wait for next season outcome on definition of delegate and activity) Has the project been awarded a grant? (this shows at least some level of team DD, could be size proportionate) I agree, the items above would be useful as well, but we don’t want to over-crowd the requirements either. Perhaps we can narrow everything down to 5 important and easily measurable criteria.
Apologies! You’re right that you had advocated solely on the gas fees. I went ahead and edited my…
Apologies! You’re right that you had advocated solely on the gas fees. I went ahead and edited my post as a correction.
We would love to the see the results as well. It might or might not have. There have been other competitors who have entered the space as well. KyberSwap Elastic is doing very well on USDC-DAI because they implemented a 0 . 008 % fee tier to undercut Uniswap’s 0 . 01 %, and so is Balancer with their veBAL program.
millie:
Uniswap would receive the largest delegation from the votable supply earmarked for thi…
millie:
Uniswap would receive the largest delegation from the votable supply earmarked for this program
Uniswap should receive one of the largest delegations for this program. They deserve it and they should have a large voice in governance.
Isn’t that the point of this program? To give protocols that are the backbone of Optimism voting power? Right now, they have zero voting power.
They have taken very little OP for their size (including sub-projects that work on them, like Gamma, xToken, Revert) compared to some other projects here. They pledged it all to incentives. They are a power player in crypto and DeFi. They’re critical to the success of Optimism competing against other Layer 2 s. They have little to no voice in Optimism governance right now. They never got a committee spot.
Velodrome is well-qualified for a delegation here as well, being they pushed, I think, all of their allocations (both from op labs and governance) to incentives. Velodrome has what? 200 k OP allocated to them? That’s pretty small for a protocol of their size on this platform.
Correct me if I’m wrong, but Synthetix has 2 . 1 m OP voting right now, with another 1 . 28 m stuck on a multi-sig. Giving them a vote power of nearly 3 . 4 m when fixed. Far more than any other delegate.
Synthetix 3 . 4 m OP
Velodrome 200 k OP
Uniswap 0 OP
I thought the point of this program was to fix this imbalance. Not make it worse.
So far you haven’t contributed even one idea on potentially fairer criteria…
So far you haven’t contributed even one idea on potentially fairer criteria…
With all due respect, I think the criteria is fair to Uniswap and many other protocols based on the…
With all due respect, I think the criteria is fair to Uniswap and many other protocols based on their utility and usage.
So why would I suggest changes?
jackanorak: StrategicReserve:
With all due respect, I think the criteria is fair to Uniswap and many other protocols based on their utility and usage.
Fairness doesn’t enter into this. That this is an arbitrary judgment of fairness is probably beside the point.
Let me explain:
I was an early, conspicuous, and hopefully consequential proponent of enfranchising protocols as crucial, often overlooked stakeholders directly shaping Optimism’s ecosystem. I won’t rehash all the arguments I’ve made on this point, but I do want to emphasize two major things.
We want to give protocols votepower because they have unmatched, necessary perspective on the current needs of Optimism from development, strategic, and bizdev standpoints, and because they represent the existing and future developer community’s interests. This is logic similar to why we encourage users to delegate their votepower to others who best reflect their priorities.
Getting the most invested, most plugged-in, and most impactful of these voices involved is good for Optimism, and we want to design this delegation program to maximize that outcome. That’s why we’re doing this in the first place – to make Optimism succeed as an ecosystem and as an organization through active, informed collaboration.
What I haven’t been saying is that protocols or projects are owed votepower simply by deploying on Optimism or being native to Optimism, nor have I been saying that protocols signal more value to governance by operating effectively or providing existing utility to users. Remember that several major protocols are immutable and autonomous – their function doesn’t even require an active team!
So weighting votes by a blunt protocol-level operating metric such as volume or otherwise appealing to the notion of the biggest and best protocols having the biggest voice is missing the entire point of this exercise. Let’s say a bridge protocol deployed everywhere had twice as much volume as all other protocols. What does giving them votepower have to do with why we are giving protocols a vote? What would Optimism possibly have to gain by giving this bridge an outsized voice, and why should we consider them the best representative of developers as a stakeholder class? What opinion can we really expect them to have about where to take Optimism?
Now, where protocols’ effectiveness, operating scale, etc. do become relevant is in grants. A good grant-issuing team would understand the relative strengths of different protocols and know to allocate grants to those protocols.
So if some protocol like that major bridge provides the best means of meeting some objective outlined in a grant, we want to make sure our resources are going toward it more than toward other protocols. That’s when we care about, e.g., whether Uniswap gets more volume than Kyber on a pool.
And guess who we want to help make this determination – and make sure that we’re chasing the right things in general: that’s right, protocols that are heavily involved in the ecosystem, not necessarily those protocols that happen to be the best means to particular ends. An incumbent multichain defi app may be a default option in a nascent ecosystem and a great grantee – but if there’s no active team to attend to Optimism’s development, it simply doesn’t make sense to give them outsized power over it. It’s not like we owe them anything.
Regarding what sorts of criteria to incorporate, I agree with @millie that it’s clearly appropriate to have a multifactorial approach, and I agree with @StrategicReserve that it can, however, be sticky to introduce subjective factors. I don’t have any strong specific recommendations at the moment.
But I do want to remind people what we’re aiming for in doing this and encourage more thinking along these lines. The question to be asking is: “what sorts of measures can we use to identify the most representative, most beneficial, and most impactful voices among the protocols?” Certainly scale is meaningful here, but there’s much more to it than that.
Yes, like I said Uniswap over performs on certain pools and underperforms on others, especially whe…
Yes, like I said Uniswap over performs on certain pools and underperforms on others, especially when incentives are added to the mix. Screen Shot 2022 - 10 - 25 at 16 . 27 . 451920 × 614 84 . 4 KB The headline is that broadly speaking, Velodrome is competitive on TVL/Volume basis when you look relative performance of all pools as we documented here. Screen Shot 2022 - 10 - 27 at 14 . 05 . 161604 × 910 185 KB
I certainly agree there are pockets of pools where Velodrome does do better. However, it’s undenia…
I certainly agree there are pockets of pools where Velodrome does do better. However, it’s undeniable that Uniswap has provided significant value to the Optimism ecosystem despite only distributing 50 K of OP out of their 1 M allocation thus far. They’re expending their own resources to analyze the results of that initial phase 1 of distributions and will be looking to improve upon that. I just don’t think we should be too quick to say one protocol doesn’t care about the ecosystem without analyzing their contributions to the ecosystem fairly. But I’ve said my piece on that, and I think it’s fair to say that Uniswap has provided significant value to Optimism thus far and has shown they are committed to expending their own resources for the benefit of Optimism.
honestly I must say you are twisting the discussion here… This thread has nothing to do with protoc…
honestly I must say you are twisting the discussion here… This thread has nothing to do with protocols receiving further allocations, that will be up to the body over seeing Grants going forward [DRAFT PROPOSAL]: Moving to a Grants Council - # 40 by lavande. I, and no one else in the thread have said that Uniswap hasn’t provided value to Optimism. My criticism was that under the current single criteria, of gas fees generated, Uniswap would receive the largest delegation from the votable supply earmarked for this program. Optimism - Popular Apps and Project Usage Trends :abacus: :red_circle::sparkles: 2 Uniswap only just started distributing their OP and have done so through third parties, so I will wait until it has finished to make my judgement but I doubt that the 50 k OP that is being distributed through third party projects will move the needle much on the value they have brought to Optimism.
BP_Gamma: Apologies! You’re right that you had advocated solely on the gas fees. I went ahead and edited my post as a correction.
We would love to the see the results as well. It might or might not have. There have been other competitors who have entered the space as well. KyberSwap Elastic is doing very well on USDC-DAI because they implemented a 0.008% fee tier to undercut Uniswap’s 0.01%, and so is Balancer with their veBAL program.
StrategicReserve: millie:
Uniswap would receive the largest delegation from the votable supply earmarked for this program
Uniswap should receive one of the largest delegations for this program. They deserve it and they should have a large voice in governance.
Isn’t that the point of this program? To give protocols that are the backbone of Optimism voting power? Right now, they have zero voting power.
They have taken very little OP for their size (including sub-projects that work on them, like Gamma, xToken, Revert) compared to some other projects here. They pledged it all to incentives. They are a power player in crypto and DeFi. They’re critical to the success of Optimism competing against other Layer 2s. They have little to no voice in Optimism governance right now. They never got a committee spot.
Velodrome is well-qualified for a delegation here as well, being they pushed, I think, all of their allocations (both from op labs and governance) to incentives. Velodrome has what? 200k OP allocated to them? That’s pretty small for a protocol of their size on this platform.
Correct me if I’m wrong, but Synthetix has 2.1m OP voting right now, with another 1.28m stuck on a multi-sig. Giving them a vote power of nearly 3.4m when fixed. Far more than any other delegate.
Synthetix 3.4m OP
Velodrome 200k OP
Uniswap 0 OP
I thought the point of this program was to fix this imbalance. Not make it worse.
Apologies! You’re right that you had advocated solely on the gas fees. I went ahead and edited my…
Apologies! You’re right that you had advocated solely on the gas fees. I went ahead and edited my post as a correction. We would love to the see the results as well. It might or might not have. There have been other competitors who have entered the space as well. KyberSwap Elastic is doing very well on USDC-DAI because they implemented a 0 . 008 % fee tier to undercut Uniswap’s 0 . 01 %, and so is Balancer with their veBAL program.
millie: Uniswap would receive the largest delegation from the votable supply earmarked for thi…
millie: Uniswap would receive the largest delegation from the votable supply earmarked for this program Uniswap should receive one of the largest delegations for this program. They deserve it and they should have a large voice in governance. Isn’t that the point of this program? To give protocols that are the backbone of Optimism voting power? Right now, they have zero voting power. They have taken very little OP for their size (including sub-projects that work on them, like Gamma, xToken, Revert) compared to some other projects here. They pledged it all to incentives. They are a power player in crypto and DeFi. They’re critical to the success of Optimism competing against other Layer 2 s. They have little to no voice in Optimism governance right now. They never got a committee spot. Velodrome is well-qualified for a delegation here as well, being they pushed, I think, all of their allocations (both from op labs and governance) to incentives. Velodrome has what? 200 k OP allocated to them? That’s pretty small for a protocol of their size on this platform. Correct me if I’m wrong, but Synthetix has 2 . 1 m OP voting right now, with another 1 . 28 m stuck on a multi-sig. Giving them a vote power of nearly 3 . 4 m when fixed. Far more than any other delegate. Synthetix 3 . 4 m OP Velodrome 200 k OP Uniswap 0 OP I thought the point of this program was to fix this imbalance. Not make it worse.
So far you haven’t contributed even one idea on potentially fairer criteria…
So far you haven’t contributed even one idea on potentially fairer criteria…
With all due respect, I think the criteria is fair to Uniswap and many other protocols based on the…
With all due respect, I think the criteria is fair to Uniswap and many other protocols based on their utility and usage. So why would I suggest changes?
jackanorak: StrategicReserve:
With all due respect, I think the criteria is fair to Uniswap and many other protocols based on their utility and usage.
Fairness doesn’t enter into this. That this is an arbitrary judgment of fairness is probably beside the point.
Let me explain:
I was an early, conspicuous, and hopefully consequential proponent of enfranchising protocols as crucial, often overlooked stakeholders directly shaping Optimism’s ecosystem. I won’t rehash all the arguments I’ve made on this point, but I do want to emphasize two major things.
We want to give protocols votepower because they have unmatched, necessary perspective on the current needs of Optimism from development, strategic, and bizdev standpoints, and because they represent the existing and future developer community’s interests. This is logic similar to why we encourage users to delegate their votepower to others who best reflect their priorities.
Getting the most invested, most plugged-in, and most impactful of these voices involved is good for Optimism, and we want to design this delegation program to maximize that outcome. That’s why we’re doing this in the first place – to make Optimism succeed as an ecosystem and as an organization through active, informed collaboration.
What I haven’t been saying is that protocols or projects are owed votepower simply by deploying on Optimism or being native to Optimism, nor have I been saying that protocols signal more value to governance by operating effectively or providing existing utility to users. Remember that several major protocols are immutable and autonomous – their function doesn’t even require an active team!
So weighting votes by a blunt protocol-level operating metric such as volume or otherwise appealing to the notion of the biggest and best protocols having the biggest voice is missing the entire point of this exercise. Let’s say a bridge protocol deployed everywhere had twice as much volume as all other protocols. What does giving them votepower have to do with why we are giving protocols a vote? What would Optimism possibly have to gain by giving this bridge an outsized voice, and why should we consider them the best representative of developers as a stakeholder class? What opinion can we really expect them to have about where to take Optimism?
Now, where protocols’ effectiveness, operating scale, etc. do become relevant is in grants. A good grant-issuing team would understand the relative strengths of different protocols and know to allocate grants to those protocols.
So if some protocol like that major bridge provides the best means of meeting some objective outlined in a grant, we want to make sure our resources are going toward it more than toward other protocols. That’s when we care about, e.g., whether Uniswap gets more volume than Kyber on a pool.
And guess who we want to help make this determination – and make sure that we’re chasing the right things in general: that’s right, protocols that are heavily involved in the ecosystem, not necessarily those protocols that happen to be the best means to particular ends. An incumbent multichain defi app may be a default option in a nascent ecosystem and a great grantee – but if there’s no active team to attend to Optimism’s development, it simply doesn’t make sense to give them outsized power over it. It’s not like we owe them anything.
Regarding what sorts of criteria to incorporate, I agree with @millie that it’s clearly appropriate to have a multifactorial approach, and I agree with @StrategicReserve that it can, however, be sticky to introduce subjective factors. I don’t have any strong specific recommendations at the moment.
But I do want to remind people what we’re aiming for in doing this and encourage more thinking along these lines. The question to be asking is: “what sorts of measures can we use to identify the most representative, most beneficial, and most impactful voices among the protocols?” Certainly scale is meaningful here, but there’s much more to it than that.
StrategicReserve:
With all due respect, I think the criteria is fair to Uniswap and many other…
StrategicReserve:
With all due respect, I think the criteria is fair to Uniswap and many other protocols based on their utility and usage.
Fairness doesn’t enter into this. That this is an arbitrary judgment of fairness is probably beside the point.
Let me explain:
I was an early, conspicuous, and hopefully consequential proponent of enfranchising protocols as crucial, often overlooked stakeholders directly shaping Optimism’s ecosystem. I won’t rehash all the arguments I’ve made on this point, but I do want to emphasize two major things.
We want to give protocols votepower because they have unmatched, necessary perspective on the current needs of Optimism from development, strategic, and bizdev standpoints, and because they represent the existing and future developer community’s interests. This is logic similar to why we encourage users to delegate their votepower to others who best reflect their priorities.
Getting the most invested, most plugged-in, and most impactful of these voices involved is good for Optimism, and we want to design this delegation program to maximize that outcome. That’s why we’re doing this in the first place – to make Optimism succeed as an ecosystem and as an organization through active, informed collaboration.
What I haven’t been saying is that protocols or projects are owed votepower simply by deploying on Optimism or being native to Optimism, nor have I been saying that protocols signal more value to governance by operating effectively or providing existing utility to users. Remember that several major protocols are immutable and autonomous – their function doesn’t even require an active team!
So weighting votes by a blunt protocol-level operating metric such as volume or otherwise appealing to the notion of the biggest and best protocols having the biggest voice is missing the entire point of this exercise. Let’s say a bridge protocol deployed everywhere had twice as much volume as all other protocols. What does giving them votepower have to do with why we are giving protocols a vote? What would Optimism possibly have to gain by giving this bridge an outsized voice, and why should we consider them the best representative of developers as a stakeholder class? What opinion can we really expect them to have about where to take Optimism?
Now, where protocols’ effectiveness, operating scale, etc. do become relevant is in grants. A good grant-issuing team would understand the relative strengths of different protocols and know to allocate grants to those protocols.
So if some protocol like that major bridge provides the best means of meeting some objective outlined in a grant, we want to make sure our resources are going toward it more than toward other protocols. That’s when we care about, e.g., whether Uniswap gets more volume than Kyber on a pool.
And guess who we want to help make this determination – and make sure that we’re chasing the right things in general: that’s right, protocols that are heavily involved in the ecosystem, not necessarily those protocols that happen to be the best means to particular ends. An incumbent multichain defi app may be a default option in a nascent ecosystem and a great grantee – but if there’s no active team to attend to Optimism’s development, it simply doesn’t make sense to give them outsized power over it. It’s not like we owe them anything.
Regarding what sorts of criteria to incorporate, I agree with @millie that it’s clearly appropriate to have a multifactorial approach, and I agree with @StrategicReserve that it can, however, be sticky to introduce subjective factors. I don’t have any strong specific recommendations at the moment.
But I do want to remind people what we’re aiming for in doing this and encourage more thinking along these lines. The question to be asking is: “what sorts of measures can we use to identify the most representative, most beneficial, and most impactful voices among the protocols?” Certainly scale is meaningful here, but there’s much more to it than that.
ken: Really appreciate all the insightful discussion here. Since Uniswap’s deployment on Optimism, we have been committed to ensuring the user experience is as accessible and seamless as possible.
millie:
there is no doubt that Uniswap offering the LM program on their interface, would have a much greater impact on participation.
Just to clarify, the Uniswap Foundation does not host any frontends or interfaces at this time, instead our goal is to empower teams already building on Uniswap, creating more opportunities in the same way that Optimism is doing so in this Protocol Delegate Proposal and with the grants awards before. We are definitely open to feedback on how we can improve generally. As a Day 1 ally of Optimism (a la unipigs), we are committed to helping increase usage of Uniswap on Optimism, but want to do so with both communities’ best interests at the forefront. Whatever metrics the community chooses to prioritize projects, we will gladly support together with committed members of the Uniswap community.
jackanorak:
what sorts of measures can we use to identify the most representative, most beneficial, and most impactful voices among the protocols?
This being the most important question for this proposal, is equally just as important for us for much of what the Uniswap Foundation does for the growth of our own protocol. As an example, when the UF kicked off the OP Liquidity Mining campaign with the $OP that was rewarded to the protocol about 2 months ago, here, we had broken it into 3 phases which get progressively larger and were designed with input from the Uniswap community.
In growing an aligned ecosystem for both the Uniswap and Optimism communities, we have been actively creating more opportunities to meaningfully contribute. As noted, the Uniswap Foundation Community Analytics Program ran an open bounty program for data analysts to analyze the first Phase of the LM program here. Looking at data from Phase 1, the LM program used only a small percentage (6.25%) of our $OP allocation in only 3 pools, brought over 200 new LPs with over $30M of TVL throughout the campaign, and maintained LP stickiness, even increasing TVL and transaction volume for 2 of the pools (credit to @springzhang). With the community’s help, we will post a retro on Phase 1 soon, integrate community feedback for tweaks to Phase 2, and launch that sometime in December to onboard even more users to Optimism!
lavande:
We’ll continue experimenting with ways to empower all types of delegates. We welcome discussion or ideas around future programs that could increase participation, balance representation, and/or get more folks involved.
This proposal is really exciting for us because Uniswap has not had the capability to participate in cross-protocol governance until now. With the UF, a core mission of ours is to be an advocate for the Uniswap community, including our governance representation on chains that Uniswap is deployed on. If we are included in the Protocol Delegation Program, our tentative plan is to propose the $OP be delegated to a multisig of 5, four being Uniswap community delegates and one representative from the UF. Our intention is to source nominations for the OP-UNI multisig from community members who are currently building on or are actively participating in Optimism ecosystem development. While the final details will not be confirmed until we receive more clarity on the Protocol Delegation Program, we are thrilled by the opportunity to be long term stakeholders in Optimism governance with help of other committed Uniswap community builders!
StrategicReserve: With all due respect, I think the criteria is fair to Uniswap and many other…
StrategicReserve: With all due respect, I think the criteria is fair to Uniswap and many other protocols based on their utility and usage. Fairness doesn’t enter into this. That this is an arbitrary judgment of fairness is probably beside the point. Let me explain: I was an early, conspicuous, and hopefully consequential proponent of enfranchising protocols as crucial, often overlooked stakeholders directly shaping Optimism’s ecosystem. I won’t rehash all the arguments I’ve made on this point, but I do want to emphasize two major things. We want to give protocols votepower because they have unmatched, necessary perspective on the current needs of Optimism from development, strategic, and bizdev standpoints, and because they represent the existing and future developer community’s interests. This is logic similar to why we encourage users to delegate their votepower to others who best reflect their priorities. Getting the most invested, most plugged-in, and most impactful of these voices involved is good for Optimism, and we want to design this delegation program to maximize that outcome. That’s why we’re doing this in the first place – to make Optimism succeed as an ecosystem and as an organization through active, informed collaboration. What I haven’t been saying is that protocols or projects are owed votepower simply by deploying on Optimism or being native to Optimism, nor have I been saying that protocols signal more value to governance by operating effectively or providing existing utility to users. Remember that several major protocols are immutable and autonomous – their function doesn’t even require an active team! So weighting votes by a blunt protocol-level operating metric such as volume or otherwise appealing to the notion of the biggest and best protocols having the biggest voice is missing the entire point of this exercise. Let’s say a bridge protocol deployed everywhere had twice as much volume as all other protocols. What does giving them votepower have to do with why we are giving protocols a vote? What would Optimism possibly have to gain by giving this bridge an outsized voice, and why should we consider them the best representative of developers as a stakeholder class? What opinion can we really expect them to have about where to take Optimism? Now, where protocols’ effectiveness, operating scale, etc. do become relevant is in grants. A good grant-issuing team would understand the relative strengths of different protocols and know to allocate grants to those protocols. So if some protocol like that major bridge provides the best means of meeting some objective outlined in a grant, we want to make sure our resources are going toward it more than toward other protocols. That’s when we care about, e.g., whether Uniswap gets more volume than Kyber on a pool. And guess who we want to help make this determination – and make sure that we’re chasing the right things in general: that’s right, protocols that are heavily involved in the ecosystem, not necessarily those protocols that happen to be the best means to particular ends. An incumbent multichain defi app may be a default option in a nascent ecosystem and a great grantee – but if there’s no active team to attend to Optimism’s development, it simply doesn’t make sense to give them outsized power over it. It’s not like we owe them anything. Regarding what sorts of criteria to incorporate, I agree with @millie that it’s clearly appropriate to have a multifactorial approach, and I agree with @StrategicReserve that it can, however, be sticky to introduce subjective factors. I don’t have any strong specific recommendations at the moment. But I do want to remind people what we’re aiming for in doing this and encourage more thinking along these lines. The question to be asking is: “what sorts of measures can we use to identify the most representative, most beneficial, and most impactful voices among the protocols?” Certainly scale is meaningful here, but there’s much more to it than that.
ken: Really appreciate all the insightful discussion here. Since Uniswap’s deployment on Optimism, we have been committed to ensuring the user experience is as accessible and seamless as possible.
millie:
there is no doubt that Uniswap offering the LM program on their interface, would have a much greater impact on participation.
Just to clarify, the Uniswap Foundation does not host any frontends or interfaces at this time, instead our goal is to empower teams already building on Uniswap, creating more opportunities in the same way that Optimism is doing so in this Protocol Delegate Proposal and with the grants awards before. We are definitely open to feedback on how we can improve generally. As a Day 1 ally of Optimism (a la unipigs), we are committed to helping increase usage of Uniswap on Optimism, but want to do so with both communities’ best interests at the forefront. Whatever metrics the community chooses to prioritize projects, we will gladly support together with committed members of the Uniswap community.
jackanorak:
what sorts of measures can we use to identify the most representative, most beneficial, and most impactful voices among the protocols?
This being the most important question for this proposal, is equally just as important for us for much of what the Uniswap Foundation does for the growth of our own protocol. As an example, when the UF kicked off the OP Liquidity Mining campaign with the $OP that was rewarded to the protocol about 2 months ago, here, we had broken it into 3 phases which get progressively larger and were designed with input from the Uniswap community.
In growing an aligned ecosystem for both the Uniswap and Optimism communities, we have been actively creating more opportunities to meaningfully contribute. As noted, the Uniswap Foundation Community Analytics Program ran an open bounty program for data analysts to analyze the first Phase of the LM program here. Looking at data from Phase 1, the LM program used only a small percentage (6.25%) of our $OP allocation in only 3 pools, brought over 200 new LPs with over $30M of TVL throughout the campaign, and maintained LP stickiness, even increasing TVL and transaction volume for 2 of the pools (credit to @springzhang). With the community’s help, we will post a retro on Phase 1 soon, integrate community feedback for tweaks to Phase 2, and launch that sometime in December to onboard even more users to Optimism!
lavande:
We’ll continue experimenting with ways to empower all types of delegates. We welcome discussion or ideas around future programs that could increase participation, balance representation, and/or get more folks involved.
This proposal is really exciting for us because Uniswap has not had the capability to participate in cross-protocol governance until now. With the UF, a core mission of ours is to be an advocate for the Uniswap community, including our governance representation on chains that Uniswap is deployed on. If we are included in the Protocol Delegation Program, our tentative plan is to propose the $OP be delegated to a multisig of 5, four being Uniswap community delegates and one representative from the UF. Our intention is to source nominations for the OP-UNI multisig from community members who are currently building on or are actively participating in Optimism ecosystem development. While the final details will not be confirmed until we receive more clarity on the Protocol Delegation Program, we are thrilled by the opportunity to be long term stakeholders in Optimism governance with help of other committed Uniswap community builders!
Just want to come in and say that I completely agree with Millie’s views here.
I think it’s importa…
Just want to come in and say that I completely agree with Millie’s views here.
I think it’s important to consider more than just gas fees generated when deciding how to delegate Optimism to protocols. Gauging just gas fees is a flawed metric, and will come with some very flawed results in my opinion. There’s no reason that something like Quests or Perp Protocol should have outsized influences on Optimism governance. Both of those have varying reasons, but still.
I do think there should be a metric to properly support new projects, and ensure that they’re able to obtain a say in governance as well. But then again, this sort of thing can be rewarded medium/long term with better metrics and involvement from these new protocols.
It’s also worth considering the fact that many protocols on Optimism have been building, innovating, experimenting, and helping to grow Optimism for so long now. It seems only fair to reward these protocols for their efforts while still allowing newer protocols to have a say in the direction of Optimism and continue innovating.
Thanks for bringing up this important issue. I hope the Optimism Foundation and other delegates take your suggestions into consideration.
thank you for all the feedback, the Foundation is working on an update to post shortly
thank you for all the feedback, the Foundation is working on an update to post shortly
Just want to come in and say that I completely agree with Millie’s views here. I think it’s importa…
Just want to come in and say that I completely agree with Millie’s views here. I think it’s important to consider more than just gas fees generated when deciding how to delegate Optimism to protocols. Gauging just gas fees is a flawed metric, and will come with some very flawed results in my opinion. There’s no reason that something like Quests or Perp Protocol should have outsized influences on Optimism governance. Both of those have varying reasons, but still. I do think there should be a metric to properly support new projects, and ensure that they’re able to obtain a say in governance as well. But then again, this sort of thing can be rewarded medium/long term with better metrics and involvement from these new protocols. It’s also worth considering the fact that many protocols on Optimism have been building, innovating, experimenting, and helping to grow Optimism for so long now. It seems only fair to reward these protocols for their efforts while still allowing newer protocols to have a say in the direction of Optimism and continue innovating. Thanks for bringing up this important issue. I hope the Optimism Foundation and other delegates take your suggestions into consideration.
Great to see the active discussion here, you’ve raised a lot of good points that we’d like to addre…
Great to see the active discussion here, you’ve raised a lot of good points that we’d like to address.
The main goal of this program is to enable protocols with active usage on Optimism to participate in governance without self-delegating grants. It will also increase the votable supply, the importance of which has been raised by delegates several times. The goal is not to measure the relative value a protocol contributes to the ecosystem.
Given the above context, we’d like to get your feedback on an alternate design for the program:
All qualifying protocols would receive the same amount of OP, rather than on a pro-rata basis.
Protocols that are OP Native would receive a small multiplier on the flat rate
Protocols that already have an Optimism delegate would receive a multiplier on the flat rate (slightly larger than the OP Native multiplier)
Protocols may receive both multipliers, if they meet both criteria
As a reminder, delegations will be made up to a cap of 2 M total OP delegated. That means that protocols that already have 2 M OP delegated to them are not eligible to receive any additional delegation and protocol delegations will be capped at the point at which they would push a protocol’s delegation above 2 M total delegated OP.
We understand your concerns about the criteria to derive the list of qualifying protocols. It’s a challenging problem as most criteria are imperfect. We’ve very intentionally selected the criteria to be:
Applicable across protocols
Not easily gameable
Objective (to limit the Foundation’s involvement in this process)
Simple (given this is a temporary pilot program, lasting a maximum of 2 Seasons)
We suggest the following alternative:
The top 15 protocols, based on gas fees generated on Optimism, will receive delegation (flat distribution with multipliers, as described above). If any qualifying protocols have misused grant funding in the past, they will not be eligible.
Protocols that have not qualified, can self-nominate for one of 8 additional spots in the program. The intent is to broaden the stakeholders that are represented and to take into account factors that cannot easily be quantified or standardized.
The Token House would vote on the 8 protocols that are added to the program in Special Voting Cycle # 9 b. Self-nominations would run from Dec 21 st - January 5 th.
As in the original design, all qualifying protocols will need to opt into the program in Season 3 , creating a delegate commitment and agreeing to abide by the delegate code of conduct. Delegations will not be made without this commitment to participate. Protocols receiving delegation through this program must maintain > 70 % participation rate to continue to receive delegation in Season 4 . Any protocol violating the code of conduct will have their delegation removed.
This program is temporary and will be run for a maximum of 2 Seasons, after which point qualifying protocols will need to maintain their voting power via their own treasuries. Protocols that are active and engaged in the Optimism ecosystem, but that are not part of this program, may still participate in governance via their own treasuries or increase their delegation via other means.
We appreciate your feedback on these proposed changes. Final proposals for the Grants Council and the Protocol Delegation Program will be posted as new posts on the forum later this week.
OPUser: On the multiplier, I think its not a right move.
A protocol being OP native should get highest weight but we should also give equal voice to protocol bringing more user/trust to the chain even if they are multi-chain in comparison to an OP native project.
Beefy/Curve/Uni to name some, they are funneling more users, transaction and TVL in comparison to few OP native project ( Optimism TVL - DefiLlama ) and giving multiplier to OP native will not give justice to such multi-chain project, given that they are interested in gov.
For me its more important on which project is keeping the sequencer busy as its revenue will help our other house, Citizen house, so I will work towards giving them equal voice.
Also would like to echo Joxes view that this will discourage independent or individual delegates.
millie: I think this is definitely an improvement over pro-rata delegation based on gas fees generated.
Overall I support the idea and this change
thank you for all the feedback, the Foundation is working on an update to post shortly
thank you for all the feedback, the Foundation is working on an update to post shortly
As we know, Optimism is not a simple Ethereum protocol, but a chain on top of Ethereum to host prot…
As we know, Optimism is not a simple Ethereum protocol, but a chain on top of Ethereum to host protocols inside. As a direct consequence, the Optimism governance is of interest to the protocols within it (this is not new but good to remember).
On the other hand, fair distribution of a token for governance purposes is an extremely difficult task, and releases seen as “fair” no longer exist in this space. No token will be distributed in this process, yes, but meets the same criteria. Regarding this, as members of this governance we have been discussing these topics 2 , mainly the cases of self-delegation and how it provides access to the protocols to have representation without it being an unfair or advantageous game. On this we have a proposal in preparation to discuss in the coming days.
Sharing our thoughts
Definitely talking about this is a good idea, a way to insert a new type of delegate is fascinating to diversify with differents types of governance participants that can contribute to the enrichment of Optimism ecosystem and its future.
For now, this new proposed base of 5 M is a good start to offer to projects deployed in Optimism participation. According to Defillama, Optimism currently has 36 protocols with a TVL above $ 1 M, while the addresses per day metrics indicate that 47 projects are used by at least 100 addresses according to Dune on Optimism protocols metrics. Ideally, this removes all doubts about the activity and purpose of Optimism being fulfilled.
Now, we’re going to assume that most of the protocols have the same level of intentions to participate in the program; What would be a good criterion to measure a good voting power allocation method?
system:
total gas fees generated on Optimism during the proceeding Season
As discussed above, this measure alone cannot make a good fit from the subjectivity of benefiting the protocols that provide more benefits to Optimism: We should take into account that some even grant subsidies for use sponsored by the same governance (in the form of OP tokens) so add a weighting of other metrics like:
Active addresses per week
TVL
Volume
Other metrics combined (same treatment as recent airdrop criteria).
For those projects that are encouraging activity with $op distribution, we will possibly find oversized data, the metrics regarding: Active addresses per week, TVL and volume, will not be taken according to current data; In these cases, each project must resolve the way in which they present this data. Pre-distribution metrics can be a parameter, but it will not be applicable to all (this is because many projects deployed with the grant and their distribution is not yet complete) along with their declaration of participation as delegates. These are just criteria ideas to consider.
You could even think of a previous protocol classification:
DeFi
Bridges
Games
Others
And from there, use one or a maximum of two objective metrics (gas and active addresses, for example, as applicable). The first classification would have to be approved and adjusted by governance, we would recommend doing it through a weighted vote (where each delegate expresses what % of allocation each category deserves, of the total proposed), and the rest according to the results of the metrics taken.
The limits, participation requirement and code of conduct seem reasonable to be in line with the progress of governance, and not a big change from the current climate.
One of the points that remain open is how to obtain a diverse participation of protocol representatives in Optimism before large lobbies repel other participation intentions, and at the same time, adjust to the processes that each protocol organization has to follow in order to be able to participate. exercise their work (what is the opportunity cost for a DAO to organize to elect a member dedicated to a possible delegation with potential concrete benefits) that doesn’t discourage the desire to participate in this initiative. Small DAOs or reputable teams could quickly get up to speed but large protocols with governance such as Uniswap or Aave can lead to cumbersome processes.
In addition, Optimism should be careful about endorsing representations to protocols that are not legitimate or agreed with the governance/DAO/community or whoever conforms to the protocol set, for example, let’s imagine the following scenario: What happens if a founder decides to participate in the delegation on behalf of the protocol without explicit approval of the protocol (DAO/governance/community)? How can the Optimism collective deal with scenarios like this and distinguish legitimate entries?
About an alternative proposal issued by @lavande
Receiving the same voting power base for protocols is a better approach for the participation in a fairer way, but it is essential to evaluate how much the base would be equivalent to the multiplier.
Resolving this, said proposal looks more solid and easier to reach a consensus regarding the use of metrics and objective and subjective classifications that will lengthen the discussion.
For this reason, we consider it important to summarize the following advantages and disadvantages of this proposal:
Advantages
On the original proposal: prioritize participation in probably more genuinely used protocols, indirectly representing Optimism users not yet involved in governance.
On the alternative proposal: equal and fair treatment to begin with for all interested protocols.
Disadvantages
About the original proposal: too complex and it will take a long discussion without reaching a consensus of the majority (say > 70 %).
About the alternative proposal: we do not like the proposed selection mode of 15 predefined and 8 additional by voting. We prefer to vote all 23 in a single round or faithfully follow the order of a table; since they result in better and simpler resolution paths (for example, discovering the protocols that are really interested from those that are not).
A final concern
We cannot rule out that the sudden appearance of a new group of delegates may further discourage the work of independent or individual delegations, which at the end of the day, may reduce the diversity of participation in governance and, if unsuccessful, the delegations to protocols and have to be modified, reduced or eliminated, it’s likely that some individual delegates have already left.
On the multiplier, I think its not a right move.
A protocol being OP native should get highest weig…
On the multiplier, I think its not a right move.
A protocol being OP native should get highest weight but we should also give equal voice to protocol bringing more user/trust to the chain even if they are multi-chain in comparison to an OP native project.
Beefy/Curve/Uni to name some, they are funneling more users, transaction and TVL in comparison to few OP native project ( Optimism TVL - DefiLlama 4 ) and giving multiplier to OP native will not give justice to such multi-chain project, given that they are interested in gov.
For me its more important on which project is keeping the sequencer busy as its revenue will help our other house, Citizen house, so I will work towards giving them equal voice.
Also would like to echo Joxes view that this will discourage independent or individual delegates.
Great to see the active discussion here, you’ve raised a lot of good points that we’d like to addre…
Great to see the active discussion here, you’ve raised a lot of good points that we’d like to address. The main goal of this program is to enable protocols with active usage on Optimism to participate in governance without self-delegating grants. It will also increase the votable supply, the importance of which has been raised by delegates several times. The goal is not to measure the relative value a protocol contributes to the ecosystem. Given the above context, we’d like to get your feedback on an alternate design for the program: All qualifying protocols would receive the same amount of OP, rather than on a pro-rata basis. Protocols that are OP Native would receive a small multiplier on the flat rate Protocols that already have an Optimism delegate would receive a multiplier on the flat rate (slightly larger than the OP Native multiplier) Protocols may receive both multipliers, if they meet both criteria As a reminder, delegations will be made up to a cap of 2 M total OP delegated. That means that protocols that already have 2 M OP delegated to them are not eligible to receive any additional delegation and protocol delegations will be capped at the point at which they would push a protocol’s delegation above 2 M total delegated OP. We understand your concerns about the criteria to derive the list of qualifying protocols. It’s a challenging problem as most criteria are imperfect. We’ve very intentionally selected the criteria to be: Applicable across protocols Not easily gameable Objective (to limit the Foundation’s involvement in this process) Simple (given this is a temporary pilot program, lasting a maximum of 2 Seasons) We suggest the following alternative: The top 15 protocols, based on gas fees generated on Optimism, will receive delegation (flat distribution with multipliers, as described above). If any qualifying protocols have misused grant funding in the past, they will not be eligible. Protocols that have not qualified, can self-nominate for one of 8 additional spots in the program. The intent is to broaden the stakeholders that are represented and to take into account factors that cannot easily be quantified or standardized. The Token House would vote on the 8 protocols that are added to the program in Special Voting Cycle # 9 b. Self-nominations would run from Dec 21 st - January 5 th. As in the original design, all qualifying protocols will need to opt into the program in Season 3 , creating a delegate commitment and agreeing to abide by the delegate code of conduct. Delegations will not be made without this commitment to participate. Protocols receiving delegation through this program must maintain > 70 % participation rate to continue to receive delegation in Season 4 . Any protocol violating the code of conduct will have their delegation removed. This program is temporary and will be run for a maximum of 2 Seasons, after which point qualifying protocols will need to maintain their voting power via their own treasuries. Protocols that are active and engaged in the Optimism ecosystem, but that are not part of this program, may still participate in governance via their own treasuries or increase their delegation via other means. We appreciate your feedback on these proposed changes. Final proposals for the Grants Council and the Protocol Delegation Program will be posted as new posts on the forum later this week.
OPUser: On the multiplier, I think its not a right move.
A protocol being OP native should get highest weight but we should also give equal voice to protocol bringing more user/trust to the chain even if they are multi-chain in comparison to an OP native project.
Beefy/Curve/Uni to name some, they are funneling more users, transaction and TVL in comparison to few OP native project ( Optimism TVL - DefiLlama ) and giving multiplier to OP native will not give justice to such multi-chain project, given that they are interested in gov.
For me its more important on which project is keeping the sequencer busy as its revenue will help our other house, Citizen house, so I will work towards giving them equal voice.
Also would like to echo Joxes view that this will discourage independent or individual delegates.
millie: I think this is definitely an improvement over pro-rata delegation based on gas fees generated.
Overall I support the idea and this change
As we know, Optimism is not a simple Ethereum protocol, but a chain on top of Ethereum to host prot…
As we know, Optimism is not a simple Ethereum protocol, but a chain on top of Ethereum to host protocols inside. As a direct consequence, the Optimism governance is of interest to the protocols within it (this is not new but good to remember). On the other hand, fair distribution of a token for governance purposes is an extremely difficult task, and releases seen as “fair” no longer exist in this space. No token will be distributed in this process, yes, but meets the same criteria. Regarding this, as members of this governance we have been discussing these topics 2 , mainly the cases of self-delegation and how it provides access to the protocols to have representation without it being an unfair or advantageous game. On this we have a proposal in preparation to discuss in the coming days. Sharing our thoughts Definitely talking about this is a good idea, a way to insert a new type of delegate is fascinating to diversify with differents types of governance participants that can contribute to the enrichment of Optimism ecosystem and its future. For now, this new proposed base of 5 M is a good start to offer to projects deployed in Optimism participation. According to Defillama, Optimism currently has 36 protocols with a TVL above $ 1 M, while the addresses per day metrics indicate that 47 projects are used by at least 100 addresses according to Dune on Optimism protocols metrics. Ideally, this removes all doubts about the activity and purpose of Optimism being fulfilled. Now, we’re going to assume that most of the protocols have the same level of intentions to participate in the program; What would be a good criterion to measure a good voting power allocation method? system: total gas fees generated on Optimism during the proceeding Season As discussed above, this measure alone cannot make a good fit from the subjectivity of benefiting the protocols that provide more benefits to Optimism: We should take into account that some even grant subsidies for use sponsored by the same governance (in the form of OP tokens) so add a weighting of other metrics like: Active addresses per week TVL Volume Other metrics combined (same treatment as recent airdrop criteria). For those projects that are encouraging activity with $op distribution, we will possibly find oversized data, the metrics regarding: Active addresses per week, TVL and volume, will not be taken according to current data; In these cases, each project must resolve the way in which they present this data. Pre-distribution metrics can be a parameter, but it will not be applicable to all (this is because many projects deployed with the grant and their distribution is not yet complete) along with their declaration of participation as delegates. These are just criteria ideas to consider. You could even think of a previous protocol classification: DeFi Bridges Games Others And from there, use one or a maximum of two objective metrics (gas and active addresses, for example, as applicable). The first classification would have to be approved and adjusted by governance, we would recommend doing it through a weighted vote (where each delegate expresses what % of allocation each category deserves, of the total proposed), and the rest according to the results of the metrics taken. The limits, participation requirement and code of conduct seem reasonable to be in line with the progress of governance, and not a big change from the current climate. One of the points that remain open is how to obtain a diverse participation of protocol representatives in Optimism before large lobbies repel other participation intentions, and at the same time, adjust to the processes that each protocol organization has to follow in order to be able to participate. exercise their work (what is the opportunity cost for a DAO to organize to elect a member dedicated to a possible delegation with potential concrete benefits) that doesn’t discourage the desire to participate in this initiative. Small DAOs or reputable teams could quickly get up to speed but large protocols with governance such as Uniswap or Aave can lead to cumbersome processes. In addition, Optimism should be careful about endorsing representations to protocols that are not legitimate or agreed with the governance/DAO/community or whoever conforms to the protocol set, for example, let’s imagine the following scenario: What happens if a founder decides to participate in the delegation on behalf of the protocol without explicit approval of the protocol (DAO/governance/community)? How can the Optimism collective deal with scenarios like this and distinguish legitimate entries? About an alternative proposal issued by @lavande Receiving the same voting power base for protocols is a better approach for the participation in a fairer way, but it is essential to evaluate how much the base would be equivalent to the multiplier. Resolving this, said proposal looks more solid and easier to reach a consensus regarding the use of metrics and objective and subjective classifications that will lengthen the discussion. For this reason, we consider it important to summarize the following advantages and disadvantages of this proposal: Advantages On the original proposal: prioritize participation in probably more genuinely used protocols, indirectly representing Optimism users not yet involved in governance. On the alternative proposal: equal and fair treatment to begin with for all interested protocols. Disadvantages About the original proposal: too complex and it will take a long discussion without reaching a consensus of the majority (say > 70 %). About the alternative proposal: we do not like the proposed selection mode of 15 predefined and 8 additional by voting. We prefer to vote all 23 in a single round or faithfully follow the order of a table; since they result in better and simpler resolution paths (for example, discovering the protocols that are really interested from those that are not). A final concern We cannot rule out that the sudden appearance of a new group of delegates may further discourage the work of independent or individual delegations, which at the end of the day, may reduce the diversity of participation in governance and, if unsuccessful, the delegations to protocols and have to be modified, reduced or eliminated, it’s likely that some individual delegates have already left.
On the multiplier, I think its not a right move. A protocol being OP native should get highest weig…
On the multiplier, I think its not a right move. A protocol being OP native should get highest weight but we should also give equal voice to protocol bringing more user/trust to the chain even if they are multi-chain in comparison to an OP native project. Beefy/Curve/Uni to name some, they are funneling more users, transaction and TVL in comparison to few OP native project ( Optimism TVL - DefiLlama 3 ) and giving multiplier to OP native will not give justice to such multi-chain project, given that they are interested in gov. For me its more important on which project is keeping the sequencer busy as its revenue will help our other house, Citizen house, so I will work towards giving them equal voice. Also would like to echo Joxes view that this will discourage independent or individual delegates.
I think this is definitely an improvement over pro-rata delegation based on gas fees generated.
Ove…
I think this is definitely an improvement over pro-rata delegation based on gas fees generated.
Overall I support the idea and this change :slight_smile:
We understand the concerns about the potential for this program to discourage independent or indivi…
We understand the concerns about the potential for this program to discourage independent or individual delegates from participating in Optimism governance. Individual delegates and value-aligned protocols are both extremely important ecosystem stakeholders.
While we cannot entirely limit the potential impact this program may have on individual delegates, the program has been designed to incorporate several measures to limit any impact:
The program is temporary and will only last 2 Seasons, after which point protocols will need to maintain their voting power via their own treasuries
Delegations are capped at the point at which a protocol reaches a total of 2 M delegated OP (which is just below the amount of OP delegated to the top individual delegate)
All protocols are subject to the same code of conduct as individual delegates, which prohibits self-dealing and other violations. Protocols determined to be in violation of the code of conduct will have delegations received through this program removed.
Based on delegate feedback, the total program size has been updated to reflect active votable supply (adjusted program size downwards from 8 M OP to 5 M OP)
We’ll continue experimenting with ways to empower all types of delegates. We welcome discussion or ideas around future programs that could increase participation, balance representation, and/or get more folks involved.
ken: Really appreciate all the insightful discussion here. Since Uniswap’s deployment on Optimism, we have been committed to ensuring the user experience is as accessible and seamless as possible.
millie:
there is no doubt that Uniswap offering the LM program on their interface, would have a much greater impact on participation.
Just to clarify, the Uniswap Foundation does not host any frontends or interfaces at this time, instead our goal is to empower teams already building on Uniswap, creating more opportunities in the same way that Optimism is doing so in this Protocol Delegate Proposal and with the grants awards before. We are definitely open to feedback on how we can improve generally. As a Day 1 ally of Optimism (a la unipigs), we are committed to helping increase usage of Uniswap on Optimism, but want to do so with both communities’ best interests at the forefront. Whatever metrics the community chooses to prioritize projects, we will gladly support together with committed members of the Uniswap community.
jackanorak:
what sorts of measures can we use to identify the most representative, most beneficial, and most impactful voices among the protocols?
This being the most important question for this proposal, is equally just as important for us for much of what the Uniswap Foundation does for the growth of our own protocol. As an example, when the UF kicked off the OP Liquidity Mining campaign with the $OP that was rewarded to the protocol about 2 months ago, here, we had broken it into 3 phases which get progressively larger and were designed with input from the Uniswap community.
In growing an aligned ecosystem for both the Uniswap and Optimism communities, we have been actively creating more opportunities to meaningfully contribute. As noted, the Uniswap Foundation Community Analytics Program ran an open bounty program for data analysts to analyze the first Phase of the LM program here. Looking at data from Phase 1, the LM program used only a small percentage (6.25%) of our $OP allocation in only 3 pools, brought over 200 new LPs with over $30M of TVL throughout the campaign, and maintained LP stickiness, even increasing TVL and transaction volume for 2 of the pools (credit to @springzhang). With the community’s help, we will post a retro on Phase 1 soon, integrate community feedback for tweaks to Phase 2, and launch that sometime in December to onboard even more users to Optimism!
lavande:
We’ll continue experimenting with ways to empower all types of delegates. We welcome discussion or ideas around future programs that could increase participation, balance representation, and/or get more folks involved.
This proposal is really exciting for us because Uniswap has not had the capability to participate in cross-protocol governance until now. With the UF, a core mission of ours is to be an advocate for the Uniswap community, including our governance representation on chains that Uniswap is deployed on. If we are included in the Protocol Delegation Program, our tentative plan is to propose the $OP be delegated to a multisig of 5, four being Uniswap community delegates and one representative from the UF. Our intention is to source nominations for the OP-UNI multisig from community members who are currently building on or are actively participating in Optimism ecosystem development. While the final details will not be confirmed until we receive more clarity on the Protocol Delegation Program, we are thrilled by the opportunity to be long term stakeholders in Optimism governance with help of other committed Uniswap community builders!
I think this is definitely an improvement over pro-rata delegation based on gas fees generated. Ove…
I think this is definitely an improvement over pro-rata delegation based on gas fees generated. Overall I support the idea and this change :slight_smile:
We understand the concerns about the potential for this program to discourage independent or indivi…
We understand the concerns about the potential for this program to discourage independent or individual delegates from participating in Optimism governance. Individual delegates and value-aligned protocols are both extremely important ecosystem stakeholders. While we cannot entirely limit the potential impact this program may have on individual delegates, the program has been designed to incorporate several measures to limit any impact: The program is temporary and will only last 2 Seasons, after which point protocols will need to maintain their voting power via their own treasuries Delegations are capped at the point at which a protocol reaches a total of 2 M delegated OP (which is just below the amount of OP delegated to the top individual delegate) All protocols are subject to the same code of conduct as individual delegates, which prohibits self-dealing and other violations. Protocols determined to be in violation of the code of conduct will have delegations received through this program removed. Based on delegate feedback, the total program size has been updated to reflect active votable supply (adjusted program size downwards from 8 M OP to 5 M OP) We’ll continue experimenting with ways to empower all types of delegates. We welcome discussion or ideas around future programs that could increase participation, balance representation, and/or get more folks involved.
ken: Really appreciate all the insightful discussion here. Since Uniswap’s deployment on Optimism, we have been committed to ensuring the user experience is as accessible and seamless as possible.
millie:
there is no doubt that Uniswap offering the LM program on their interface, would have a much greater impact on participation.
Just to clarify, the Uniswap Foundation does not host any frontends or interfaces at this time, instead our goal is to empower teams already building on Uniswap, creating more opportunities in the same way that Optimism is doing so in this Protocol Delegate Proposal and with the grants awards before. We are definitely open to feedback on how we can improve generally. As a Day 1 ally of Optimism (a la unipigs), we are committed to helping increase usage of Uniswap on Optimism, but want to do so with both communities’ best interests at the forefront. Whatever metrics the community chooses to prioritize projects, we will gladly support together with committed members of the Uniswap community.
jackanorak:
what sorts of measures can we use to identify the most representative, most beneficial, and most impactful voices among the protocols?
This being the most important question for this proposal, is equally just as important for us for much of what the Uniswap Foundation does for the growth of our own protocol. As an example, when the UF kicked off the OP Liquidity Mining campaign with the $OP that was rewarded to the protocol about 2 months ago, here, we had broken it into 3 phases which get progressively larger and were designed with input from the Uniswap community.
In growing an aligned ecosystem for both the Uniswap and Optimism communities, we have been actively creating more opportunities to meaningfully contribute. As noted, the Uniswap Foundation Community Analytics Program ran an open bounty program for data analysts to analyze the first Phase of the LM program here. Looking at data from Phase 1, the LM program used only a small percentage (6.25%) of our $OP allocation in only 3 pools, brought over 200 new LPs with over $30M of TVL throughout the campaign, and maintained LP stickiness, even increasing TVL and transaction volume for 2 of the pools (credit to @springzhang). With the community’s help, we will post a retro on Phase 1 soon, integrate community feedback for tweaks to Phase 2, and launch that sometime in December to onboard even more users to Optimism!
lavande:
We’ll continue experimenting with ways to empower all types of delegates. We welcome discussion or ideas around future programs that could increase participation, balance representation, and/or get more folks involved.
This proposal is really exciting for us because Uniswap has not had the capability to participate in cross-protocol governance until now. With the UF, a core mission of ours is to be an advocate for the Uniswap community, including our governance representation on chains that Uniswap is deployed on. If we are included in the Protocol Delegation Program, our tentative plan is to propose the $OP be delegated to a multisig of 5, four being Uniswap community delegates and one representative from the UF. Our intention is to source nominations for the OP-UNI multisig from community members who are currently building on or are actively participating in Optimism ecosystem development. While the final details will not be confirmed until we receive more clarity on the Protocol Delegation Program, we are thrilled by the opportunity to be long term stakeholders in Optimism governance with help of other committed Uniswap community builders!
Really appreciate all the insightful discussion here. Since Uniswap’s deployment on Optimism, we ha…
Really appreciate all the insightful discussion here. Since Uniswap’s deployment on Optimism, we have been committed to ensuring the user experience is as accessible and seamless as possible.
millie:
there is no doubt that Uniswap offering the LM program on their interface, would have a much greater impact on participation.
Just to clarify, the Uniswap Foundation does not host any frontends or interfaces at this time, instead our goal is to empower teams already building on Uniswap, creating more opportunities in the same way that Optimism is doing so in this Protocol Delegate Proposal and with the grants awards before. We are definitely open to feedback on how we can improve generally. As a Day 1 ally of Optimism (a la unipigs), we are committed to helping increase usage of Uniswap on Optimism, but want to do so with both communities’ best interests at the forefront. Whatever metrics the community chooses to prioritize projects, we will gladly support together with committed members of the Uniswap community.
jackanorak:
what sorts of measures can we use to identify the most representative, most beneficial, and most impactful voices among the protocols?
This being the most important question for this proposal, is equally just as important for us for much of what the Uniswap Foundation does for the growth of our own protocol. As an example, when the UF kicked off the OP Liquidity Mining campaign with the $OP that was rewarded to the protocol about 2 months ago, here 1 , we had broken it into 3 phases which get progressively larger and were designed with input from the Uniswap community.
In growing an aligned ecosystem for both the Uniswap and Optimism communities, we have been actively creating more opportunities to meaningfully contribute. As noted, the Uniswap Foundation Community Analytics Program ran an open bounty program for data analysts to analyze the first Phase of the LM program here 1 . Looking at data from Phase 1 , the LM program used only a small percentage ( 6 . 25 %) of our $OP allocation in only 3 pools, brought over 200 new LPs with over $ 30 M of TVL throughout the campaign, and maintained LP stickiness, even increasing TVL and transaction volume for 2 of the pools (credit to @springzhang). With the community’s help, we will post a retro on Phase 1 soon, integrate community feedback for tweaks to Phase 2 , and launch that sometime in December to onboard even more users to Optimism!
lavande:
We’ll continue experimenting with ways to empower all types of delegates. We welcome discussion or ideas around future programs that could increase participation, balance representation, and/or get more folks involved.
This proposal is really exciting for us because Uniswap has not had the capability to participate in cross-protocol governance until now. With the UF, a core mission of ours is to be an advocate for the Uniswap community, including our governance representation on chains that Uniswap is deployed on. If we are included in the Protocol Delegation Program, our tentative plan is to propose the $OP be delegated to a multisig of 5 , four being Uniswap community delegates and one representative from the UF. Our intention is to source nominations for the OP-UNI multisig from community members who are currently building on or are actively participating in Optimism ecosystem development. While the final details will not be confirmed until we receive more clarity on the Protocol Delegation Program, we are thrilled by the opportunity to be long term stakeholders in Optimism governance with help of other committed Uniswap community builders!
Thanks for jumping in here Ken, I’m a big Uniswap fan, perhaps such a big fan that I may even be ov…
Thanks for jumping in here Ken, I’m a big Uniswap fan, perhaps such a big fan that I may even be overly critical at times :smile:
ken:
Just to clarify, the Uniswap Foundation does not host any frontends or interfaces at this time, instead our goal is to empower teams already building on Uniswap, creating more opportunities in the same way that Optimism is doing so in this Protocol Delegate Proposal and with the grants awards before. We are definitely open to feedback on how we can improve generally. As a Day 1 ally of Optimism (a la unipigs), we are committed to helping increase usage of Uniswap on Optimism, but want to do so with both communities’ best interests at the forefront.
I fully appreciate the totally separate entities that make up Uniswap as we know it, however in your own quote above, you mention that the UniswapFDN doesn’t have any influence over the Uniswap Labs inerface, then go on to say that “As a Day 1 ally of OP (a la unipigs)…”, while at the time of UniPigs there was no Uniswap Foundation. I feel like even you are (perhaps by accident) referencing Uniswap Labs synonymously with the Uniswap Foundation :sweat_smile:
Any way I don’t want to get semantical but I think it’s fair to say that “empowering” protocols building on top of Uniswap, clearly doesn’t have the same reach as an Uniswap Labs initiative. Another issue I have is that the protocols selected to carry out the OP distribution on behalf of UniswapFDN, are leveraging semi-custodial at worst and more centralized at best, solutions for the OP distribution. Liquidity managers are not high trust among LPs in DeFi and rightfully so, since they come with added smart contract risks.
I’m disappointed that the open source UniswapV 3 staking.sol contract (which is quite secure) wasn’t used or recommended by you guys. There’s also a variation of that contract built by @david with a small modification to allow for more passive LPing using the UniV 3 staker.
Uniswap is obviously one of the most important protocols in crypto and so I hold anyone repping that name to a high standard. I’m really glad that you are taking interest in the forum and I think this is a positive development. I’d be happy to continue some of this discussion in the Uniswap forum but I’m equally as pleased to see you active here as well, so thanks :pray:
Really appreciate all the insightful discussion here. Since Uniswap’s deployment on Optimism, we ha…
Really appreciate all the insightful discussion here. Since Uniswap’s deployment on Optimism, we have been committed to ensuring the user experience is as accessible and seamless as possible. millie: there is no doubt that Uniswap offering the LM program on their interface, would have a much greater impact on participation. Just to clarify, the Uniswap Foundation does not host any frontends or interfaces at this time, instead our goal is to empower teams already building on Uniswap, creating more opportunities in the same way that Optimism is doing so in this Protocol Delegate Proposal and with the grants awards before. We are definitely open to feedback on how we can improve generally. As a Day 1 ally of Optimism (a la unipigs), we are committed to helping increase usage of Uniswap on Optimism, but want to do so with both communities’ best interests at the forefront. Whatever metrics the community chooses to prioritize projects, we will gladly support together with committed members of the Uniswap community. jackanorak: what sorts of measures can we use to identify the most representative, most beneficial, and most impactful voices among the protocols? This being the most important question for this proposal, is equally just as important for us for much of what the Uniswap Foundation does for the growth of our own protocol. As an example, when the UF kicked off the OP Liquidity Mining campaign with the $OP that was rewarded to the protocol about 2 months ago, here 1 , we had broken it into 3 phases which get progressively larger and were designed with input from the Uniswap community. In growing an aligned ecosystem for both the Uniswap and Optimism communities, we have been actively creating more opportunities to meaningfully contribute. As noted, the Uniswap Foundation Community Analytics Program ran an open bounty program for data analysts to analyze the first Phase of the LM program here 1 . Looking at data from Phase 1 , the LM program used only a small percentage ( 6 . 25 %) of our $OP allocation in only 3 pools, brought over 200 new LPs with over $ 30 M of TVL throughout the campaign, and maintained LP stickiness, even increasing TVL and transaction volume for 2 of the pools (credit to @springzhang). With the community’s help, we will post a retro on Phase 1 soon, integrate community feedback for tweaks to Phase 2 , and launch that sometime in December to onboard even more users to Optimism! lavande: We’ll continue experimenting with ways to empower all types of delegates. We welcome discussion or ideas around future programs that could increase participation, balance representation, and/or get more folks involved. This proposal is really exciting for us because Uniswap has not had the capability to participate in cross-protocol governance until now. With the UF, a core mission of ours is to be an advocate for the Uniswap community, including our governance representation on chains that Uniswap is deployed on. If we are included in the Protocol Delegation Program, our tentative plan is to propose the $OP be delegated to a multisig of 5 , four being Uniswap community delegates and one representative from the UF. Our intention is to source nominations for the OP-UNI multisig from community members who are currently building on or are actively participating in Optimism ecosystem development. While the final details will not be confirmed until we receive more clarity on the Protocol Delegation Program, we are thrilled by the opportunity to be long term stakeholders in Optimism governance with help of other committed Uniswap community builders!
Thanks for jumping in here Ken, I’m a big Uniswap fan, perhaps such a big fan that I may even be ov…
Thanks for jumping in here Ken, I’m a big Uniswap fan, perhaps such a big fan that I may even be overly critical at times :smile: ken: Just to clarify, the Uniswap Foundation does not host any frontends or interfaces at this time, instead our goal is to empower teams already building on Uniswap, creating more opportunities in the same way that Optimism is doing so in this Protocol Delegate Proposal and with the grants awards before. We are definitely open to feedback on how we can improve generally. As a Day 1 ally of Optimism (a la unipigs), we are committed to helping increase usage of Uniswap on Optimism, but want to do so with both communities’ best interests at the forefront. I fully appreciate the totally separate entities that make up Uniswap as we know it, however in your own quote above, you mention that the UniswapFDN doesn’t have any influence over the Uniswap Labs inerface, then go on to say that “As a Day 1 ally of OP (a la unipigs)…”, while at the time of UniPigs there was no Uniswap Foundation. I feel like even you are (perhaps by accident) referencing Uniswap Labs synonymously with the Uniswap Foundation :sweat_smile: Any way I don’t want to get semantical but I think it’s fair to say that “empowering” protocols building on top of Uniswap, clearly doesn’t have the same reach as an Uniswap Labs initiative. Another issue I have is that the protocols selected to carry out the OP distribution on behalf of UniswapFDN, are leveraging semi-custodial at worst and more centralized at best, solutions for the OP distribution. Liquidity managers are not high trust among LPs in DeFi and rightfully so, since they come with added smart contract risks. I’m disappointed that the open source UniswapV 3 staking.sol contract (which is quite secure) wasn’t used or recommended by you guys. There’s also a variation of that contract built by @david with a small modification to allow for more passive LPing using the UniV 3 staker. Uniswap is obviously one of the most important protocols in crypto and so I hold anyone repping that name to a high standard. I’m really glad that you are taking interest in the forum and I think this is a positive development. I’d be happy to continue some of this discussion in the Uniswap forum but I’m equally as pleased to see you active here as well, so thanks :pray:
