Gov-Acc Pipeline.

O P T I M I S M Legitimacy Framework The Optimism Collective The Optimism Collective is the group of contributors working to reward public goods and build a sustainable future for Ethereum via Optimis Optimism is a composable network of blockchains powered by the OP Stac The Optimism Foundation is stewarding the development of the system that governs Optimism Governance participants make decisions about the technical and economic parameters of Optimism The goals of this governance system are: Legitimacy Effective Resource Capture Resistance OPTIMISM Allocation Capture Resistence No single party can unilaterally control, censor, halt, or otherwise extract rent from Optimism

 Optimism has a bicameral governance system OPTIMISM EEffffeeccttiivvee RReessoouurrccee AAllllooccaattiioonn Credibly neutral allocation of resources supported by a combination of short and long-term thinking The primary grant mechanism of Optimism is Retro Funding OOPPTTIIMMIISSMM @@llaallaallaavveennddrr Legitimacy Governance participants accept and play their part to enact governance outcomes, in part because they believe everyone else will do so DAO governance systems can collapse without legitimacy This is a major failure mode of DAOs OOPPTTIIMMIISSMM @@llaallaallaavveennddrr OPTIMISM Optimism’s Legitimacy Framework OPTIMISM Credits to Vitalik OPTIMISM Source Theory into Practice How do we use this framework in practice? All Foundation governance team goals must tie to a source legitimacy Tactics to achieve goals can be evaluated based on their ability to increase or decrease the sources of legitimacy Decisions can be made by the entire team with an understanding as to whether they would increase or decrease a source of legitimacy Why open source this framework? Representative structures in the Collective can now adopt and adapt this framework to their operations, so that decision making frameworks are consistent across the Collective The maturity of multiple DAOs could be compared based on their varying levels of each source of legitimacy [Other applications that I haven’t thought of, which is the beauty of open source!] OPTIMISM Participation Individual governance participants are able to influence governance outcomes. Participation increases buy-in. Increases legitimacy via high participatio High voter turnout Give participants a voice Collective definitions (like values) This doesn’t mean all participation should be permissionless Decreases legitimacy via low participation Low voter turnout Only select participants have a voice No ability for participants to set the agenda OPTIMISM Performance The outputs of governance lead to results that achieve the DAO’s strategic goals. Much of the financial industry derives legitimacy through this source (track record of results.) Increases legitimacy via good performanc Protocol upgrade increases performance of the network and results in market share gains Grant allocations generate positive ROI Treasury management strategies generate positive returns Efficient DAO budgetin Decreases legitimacy via bad performance Protocol upgrades are detrimental to the performance of the network Grant allocations generate negative ROI or grants are misused Treasury management generates negative returns Budget cuts OPTIMISM Credible Neutrality By looking at the mechanism’s design, it is easy to see that it doesn’t discriminate for or against any specific people. This creates a notion of fairness. Increases legitimacy via high credible neutralit Onchain execution Stage 2 decentralization (for L2s) Public votin Independently verifiable outcomes Third party watchdogs Decreases legitimacy via low credible neutralit Unilateral control (often by Foundations) Private data sources and/or selection methods Self-monitoring OPTIMISM Process Governance processes are consistently upheld (don’t break your own rules!) Increases legitimacy by upholding proces Pre-defined change processes Ensuring everyone, including the Foundation, is subject to the same rules Decreases via breakdown in proces Revotes Making exceptions to the rules for select participants Rewriting the rules without a pre-defined change process OPTIMISM Continuity Participants can reasonably anticipate the outputs given a set of inputs. Precedent is a source of continuity. Increases legitimacy via high continuity Pre-commitments (backstop grants, forward looking allocations) Precedent Staggered elections Decreases legitimacy via low continuity High variability of rewards Inconsistently applied rules High changeover in positions that require high context Low predictability OPTIMISM Brute Force A powerful party imposes their will on the DAO to achieve a governance outcome. “Because I said so.” Decreasing legitimacy via brute forc This may be via hard power: Someone has enough voting power to unilaterally impose their will on the DAO This may be soft power: “Someone convinces everyone that they are powerful enough to impose their will and resisting them will be very hard. This drives most people to submit because each person expects that everyone else will be too scared to resist as well.” - Vitalik The perception may be that the system is rigged OPTIMISM DAO Failure Modes Undermined Legitimac Mismanagement of the Treasur Stakeholder Captur Stagnatio Loss of contex Misalignment or directionless OPTIMISM O P T I M I S M We need your gigabrain