Optimism
Overview
Optimism DAO has pioneered innovative delegation mechanics, integrating liquid democracy and retroactive funding to incentivize meaningful governance participation. Using Agora, the DAO enables advanced delegation features, including partial delegation and redelegation, giving token holders more flexibility in governance.
To sustain engagement, Optimism rewards delegates through Retroactive Public Goods Funding (RetroPGF), aligning governance incentives with long-term protocol success. Delegates receive retroactive compensation based on their contributions and impact rather than fixed monthly stipends.
Compensation Structure & Eligibility
Compensation: Retroactively funded at 6,000 OP per month per season.
Eligibility:
Minimum 70% voting participation.
Contributions to RetroPGF rounds and alignment with Token House governance.
Engagement in governance experiments and improvement initiatives.
Governance & Oversight
Optimism DAO employs seasonal governance to iterate on its governance framework, ensuring continuous improvements.
The Anticapture Commission and Governance Reflection Periods play a key role in evaluating delegate contributions and refining the Retro Governance Reward Framework.
Delegates must maintain high voting participation and contribute to governance evolution.
Retroactive rewards provide flexibility by adjusting incentives based on performance.
Advanced delegation mechanics prevent governance stagnation and allow for smooth transitions when delegates step down.
Implementation Plan & Timeline
Q4 2023 ā Beta launch of advanced delegation for select users.
Q1 2024 ā First voting cycle with advanced delegation.
Q1 ā Q2 2025 (Season 7) ā Governance aligns with Superchain interoperability objectives.
Q2 2025 ā Retroactive rewards are distributed based on governance participation and impact.
Security Enhancements
To ensure governance integrity, Optimism has collaborated with StableLab, utilizing Forse to analyze risks and implement security improvements. The Target Votable Supply Model was applied to measure potential vulnerabilities and establish protection mechanisms.
Findings from the Analysis
Optimismās governance is at risk if voting power is too concentrated.
A dynamic quorum system would strengthen governance resilience.
A Guardian role could act as an additional security layer.
Encouraging broad participation reduces attack feasibility.
Scenarios Simulated by StableLab
We tested multiple scenarios to determine the required votable supply to prevent an attack. The neutral scenario, representing stable market conditions and moderate risk factors, was selected as the benchmark:
Neutral Market Conditions
Delegates colluding: 2
Lending strategy: Safe
Predicted cost of attack: 68.4M OP
Required votable supply for security: 155.8M OP
Real votable supply: 106M OP
Security Gap : 49.8M OP ( The gap is the difference between the target votable supply (required for security) and the actual votable supply. This means 49.8M OP more is needed in governance to reach the security threshold.)
Conclusion: Under these conditions, the governance system remains stable but could be further secured by activating inactive OP.
Other scenarios analyzed included:
Unfavorable Market Conditions: High risk due to aggressive lending strategies and three delegates colluding, reducing the attack cost to 28.96M OP and requiring 191M OP in votable supply for security.
Favorable Market Conditions: Low risk with minimal delegate collusion, increasing the attack cost to 87.62M OP and requiring only 63M OP in votable supply.
Next Steps for Optimism DAO:
Implementing a dynamic quorum model that adjusts based on voter engagement.
Introducing a decentralized Guardian role to oversee execution security.
Strengthening decentralization incentives to prevent voting power centralization.
Reducing Lost Voting Power by reactivating inactive OP through delegation optimizations and participation incentives.
Key Takeaways
Optimism DAO leverages liquid democracy with partial delegation and redelegation to enhance governance flexibility.
Retroactive funding rewards real impact, rather than paying fixed stipends, ensuring merit-based compensation.
Governance experiments and reflection periods allow for constant improvements and delegate accountability.
Delegates who contribute beyond voting, such as through governance research or mission support, receive additional incentives.
Governance security is a dynamic challenge requiring ongoing assessment and adaptation.
A robust governance framework, including a dynamic quorum and Guardian role, ensures resilience against attacks.
Further Resources
Guide: How to delegate in Optimism
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