SIP-242: OP Token Distribution

Author	Millie, Matt, Mojo, Afif, Bojan
Status	Implemented
Type	Governance
Network	Ethereum & Optimism
Implementor	TBC
Release	TBD
Proposal	Loading status...
Created	2022-05-19

Simple Summary

This SIP proposes a distribution mechanism for OP tokens to be claimed from the Optimism Governance Fund.

Abstract

OP tokens will be distributed to projects that have deployed on Optimism, the specifics of that distribution must be decided by Synthetix governance. This SIP proposes a distribution that aligns with the current protocol needs while accounting for the possibility of things to change over the course of six months.

Motivation

Synthetix governance must decide on how to distribute OP tokens to the community.

Specification

Overview

9m OP have been granted to Synthetix

4m will be used over six months for incentives toward an SNX/USD pool on Optimism

3m will be used for sUSD liquidity and bridge incentives for sUSD with one of our bridge partners

2m OP are to be held for potential builders grants, trading rewards, or other unforeseen incentives needed to bootstrap usage on Optimism over the course of 3-6 months. This portion of the allocation is to be held by the treasury council with the voting power delegated to the Ambassadors until it is spent for incentives.

Rationale

This SIP builds on the initial OP distribution proposal from Kain (SIP-234) which had been modified after feedback from the community. Based on further community feedback it was determined that a more targeted distribution was needed with details of how the OP allocation would be used for liquidity incentives.

In addition this SIP proposes to keep 2m OP tokens for grants or potential trading incentives or additional bridge incentives to bootstrap Synthetix usage on Optimism, while also taking into account the fact that it's unclear at the moment where the exact need for increased protocol incentives are. For example 30days after the launch of the OP token we may see that there are some liquidity bottle necks or that sUSD liquidity is not at the expected level or that KWENTA trading rewards are not stimulating trading volume, in any of those hypothetical events a portion or all of the remaining OP tokens could be used to address those needs.

The expectation is that the left over 2m OP tokens (to be held for future incentives or grants) is to be used within 3-6 months of the OP token launch and in the meanwhile have the voting power delegated to the Ambassadors so we may participate actively and represent SNX in Optimism Governance as delegates of the Token Haus.

Technical Specification

The distribution for SNX/USD incentives are to be done using the UniswapV3Staker.sol contract which was audited and reviewed by the Uniswap team and industry experts. The deployment of this contract is about as simple as the deployment of the original Synthetix staking.sol contract which has been commonly forked and used to distribute staking rewards.

Test Cases

Configurable Values (Via SCCP)

Distribution of rewards from the decided allocations