The Synthetix Ambassadors, in collaboration with the Synthetix Treasury Council, will receive a 2,000,000 Optimism token delegation from the Optimism Phase 0 distribution. We would like to ensure that there is advanced notice of this delegation because of anticipated community feedback.

There are a few reasons for this move; please read about them below:

1) OP Delegation Included in original SNX Ambassadors Proposal

If you look at the initial OP distribution that the SNX Ambassadors at the time (Matt, Mojo, Millie) wrote, it makes clear that there was intent (at the time) for this Optimism to be delegated to the Ambassadors.

Original Date of internal (to Synthetix governance) SIP discussing OP distribution May 18th, 2022.

See below:

This delegation was something Synthetix Ambassadors had initially pushed for under its internal proposal and was approved by the Spartan Council at Synthetix. Furthermore, these tokens were directed to be held by the Synthetix Treasury council, as they were deemed the best fit to handle distributions for incentives and so on.

Members of the Optimism forum have stated that this was not included in the proposal posted on their forums, which is correct, as when it was carried over to the OP forums, this wasn’t deemed a section of importance. That’s a mistake, yes, BUT it is important to note that there hadn’t been precedent for issues surrounding phase 0 delegations yet. Not a single protocol had delegated to themselves yet, nor sold/misused tokens or anything along those lines.

We as ambassadors, believe that this is enough information to comfortably state that we intended for these 2m OP tokens to be delegated.

2) Ecosystem Support - Overtime Markets scare

The Synthetix ecosystem is vast; it is a major part of Optimism and helps to onboard countless users onto Optimism. It is important to support this ecosystem as they request Optimism tokens, and because of the lack of governance power because of the inaccessibility of Ambassador voting power, Synthetix Ambassadors haven’t been able to properly support its ecosystem.

Due to this, it is vital to delegate these tokens to support Synthetix’s interest on Optimism and ensure that they have ample incentives to support them in the short to medium term while they grow towards product market fit.

The most notable example is when Overtime Markets requested OP tokens to incentivize users and compete with centralized competitors. They received a NO recommendation for their proposal from Optimism DeFi Committee C. For context, when a committee typically issues a recommendation there has been a 100% chance of losing their upcoming Optimism vote. Optimism C issued the following quote as the reason for their NO recommendation

Overtime Market is a good product that is getting decent early traction - with OP/Thales incentives. Looking at the analytics & current fee rebates, the fee rebates would largely accrue to current top users and would likely last a lot longer than 6 months. At the same time, the Thales team still has almost 100% of funds for ecosystem projects, and we believe this would justify reducing the fee rebate program & total grant amount at least 1/3. This recommendation should not hinder on-boarding during the world cup as max 50K of OP were suggested and we’d recommend re-submission for the next cycle

The Synthetix Ambassadors couldn’t disagree more with this recommendation, which is why we (alongside our shadow committee) submitted our own recommendation in support for Overtime markets.

The defi shadow committee 2 – which is not an official committee – supports this proposal 4.

We support the proposal and respect their path to growth on Optimism. The dual-pronged approach of fee rebates and direct marketing campaigns are likely highly catalytic for user growth on Optimism — and this would be a different user segment than typical market-dependent defi users and crypto speculators.

Overtime Markets has a unique value proposition for Optimism and stands apart from crypto-native DeFi protocols. With these fee rebates, we believe they ought be able to better compete with centralized offerings and continue the growth they’ve seen over the last 2 months since launch. We thank @Red for following up on our inquiries into this question and think Overtime have made a strong case.

We think there is an information gap that Overtime could meet by reporting more of their expected go-to-market strategy, but now is the time to give them an opportunity to jump ahead of the pack.

We’ve also rallied support in conversations in the Thales Discord, Optimism Forums, on twitter, and are also using our current voting power to support Overtime. As of right now, this support has helped put Overtime on the path of being the first proposal to overcome a NO recommendation.

Here is the current vote count:

While this is great, the Synthetix Ambassadors can’t rely on this sort of outpouring of support each and every-time. Which is why it is essential for this delegation of Optimism to occur, as it will ensure that the Synthetix Ecosystem is properly supported.

For those that don’t know, the current Synthetix ecosystem members are as follows:

Synthetix Exchange Ecosystem

1. Synthetix

2. Kwenta - Spot and Futures

3. Lyra - Options

4. Polynomial - Automated Options Strategies

5. dHEDGE - Fund Management

   1. Toros Finance

6. Atomic Swaps through 1inch/curve/ other aggregators

Greater Synthetix Ecosystem

1. Thales - Parimutuel Markets

   1. Overtime - Sports Markets

   2. Exotic Markets

   3. Etc

2. Aelin - Decentralized Funding

3) Inaccessibility of Ambassador Voting Power - Lost committee vote, inability to support ecosystem

Most Optimism governance power held by the SNX Ambassadors is inaccessible for voting. Our original wallet faced multisig issues when being used on L2, which made 1.4m OP tokens inaccessible for voting. We believe that this has created situations where Synthetix Ambassadors have been unable to support the Synthetix communities interests properly.

One of the major situations is when the Synthetix Ambassadors lost their vote to be selected as an official committee in Optimism governance by far less than the 1.5m votes that were inaccessible for voting due to this issue.

Synthetix is the top non-lending protocol by TVL and has been on Optimism from the beginning of Optimism. It is a shame that the Synthetix Ambassadors cannot utilize their original voting power.

This original voting power should be accessible in the near to medium term, which will further support the Synthetix Ambassadors in its quest to support the Synthetix ecosystem.

Support for the future of Optimism Governance

As Synthetix ambassadors we feel that we are well equipped to contribute to the improvement and maintenance of Optimism via governance, and represent the Synthetix ecosystem in the Optimism ecosystem as well. We are not going away, and we want to see Optimism flourish for many years to come.