Optimism DAO Passes OP Buyback Proposal With 84% Approval – What’s Next?
The Optimism Collective approved a proposal directing 50% of Superchain revenue towards month-to-month OP token buybacks with 84.4% assist.
The 12-month program beginning in February transforms OP from a pure governance token into one straight tied to sequencer income generated throughout Base, Unichain, Ink, World Chain, Soneium, and OP Mainnet.
Based on the 5,868 ETH collected over the previous twelve months, the initiative would deploy roughly 2.7k ETH, or roughly $8 million at present costs, into open-market purchases executed via an OTC supplier.
Purchased tokens movement again to the collective treasury, the place they might finally be burned, distributed as staking rewards, or deployed for ecosystem enlargement because the platform evolves.
Revenue Mechanism Ties Token Demand to L2 Growth
The Foundation will companion with an OTC supplier to execute month-to-month ETH-to-OP conversions inside predetermined home windows, no matter value, starting with January’s income in February.
According to the proposal, conversions pause if month-to-month income falls under $200,000 or if the OTC supplier can not execute beneath most allowable charge spreads, with any paused allocation rolling over to the next month.
All trades will probably be reported publicly via Optimism’s stats dashboard or the governance discussion board for transparency, with the Foundation publishing an execution dashboard monitoring fills, pacing, pricing, and balances.
The remaining 50% of ETH income stays versatile for improvement, ecosystem development, and shared infrastructure throughout the Superchain’s 30+ companions, decreasing governance overhead that traditionally restricted lively treasury administration.
While this system begins small, it scales with Superchain enlargement, the place each transaction throughout taking part chains expands the buyback base and creates structural demand for OP tokens.
The mechanism operates on collected sequencer income from chains that contributed the complete 5,868 ETH to a treasury managed by Optimism governance over the previous 12 months.
Foundation Sees Buybacks as First Step in Token Evolution
Optimism Foundation Executive Director Bobby Dresser framed the approval as a turning level for the token’s financial function.
“Governance approval of the buyback proposal marks an thrilling first step in increasing the function of the OP token,” Dresser mentioned.
“Optimism’s OP Stack is changing into the settlement layer for the following era of monetary programs, and this program will assist align the OP token’s worth with the success of the Superchain ecosystem.“
Speaking with Cryptonews, Dresser defined the strategic rationale behind the shift. “The objective of this proposal is to align the OP token straight with the success of the Superchain,” he mentioned.
“Optimism earns actual, rising income from Superchain utilization, however traditionally, the OP token has solely been used for governance. Buybacks create a direct hyperlink between Superchain demand and OP, making OP the shared instrument of the ecosystem.“
When requested what success appears like on the program’s conclusion, Dresser emphasised long-term infrastructure over short-term value motion.
“Success to us means constructing an ecosystem that may final, which implies placing the precise infrastructure in place to create a brand new paradigm for Optimism and the OP token,” he mentioned. “Ultimately, the governance group will resolve if this could turn into a long-term mechanism.“
Implementation Begins Despite Governance Concerns
The proposal confronted preliminary scrutiny from delegates involved about bundling buyback authorization with expanded Foundation treasury discretion right into a single vote.
GFXlabs urged splitting the 2 coverage selections, arguing that combining them prevented correct analysis of every element and created dangers that delegates would possibly approve treasury administration authority primarily due to anticipated value appreciation from buybacks.
Delegates additionally raised considerations in regards to the OTC execution technique, with critics arguing that off-chain purchases lack transparency, create corruption dangers, and sign that Optimism can not assist fundamental buying and selling exercise by itself DeFi infrastructure.
Some group members proposed that on-chain execution would higher align with the community’s decentralized ethos and supply needed transparency to stop potential conflicts of curiosity.
Despite these considerations, the proposal handed Special Voting Cycle #47 beneath Joint House approval on the required 60% threshold, clearing the way in which for quick implementation.
Initial operations will probably be executed by the Foundation beneath predetermined parameters, eliminating discretion, with the mechanism probably transferring more and more on-chain via Protocol Upgrade 18, which ensures all sequencer income from OP Chains will get collected with out Foundation involvement.
Notably, this system comes as buyback mechanisms proliferate throughout crypto, although with combined outcomes.
Jupiter just lately questioned whether or not to proceed its $70 million buyback program after JUP fell practically 90% from early-2024 highs, whereas Helium halted HNT buybacks regardless of producing $3.4 million in month-to-month income, with each initiatives discovering that offer dynamics persistently overwhelmed demand.
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