Incentive alignment

RetroPGF generated a considerable amount of noise, both during and after the main event. Now that the results are in, we need to find the signal. These are the messages, intended or not, that will likely reach the wider community.

We can learn a lot by plotting and analyzing the distribution patterns of tokens to projects. In domains where the signal is too weak (ie, impact > profit) or too strong (ie, profit > impact), the Collective should be more explicit in shaping the distribution patterns it wants to see and then making tweaks to the RetroPGF process and game design.

In this post we will take a look at:

1. 30,000 foot view: the signals that everyone in crypto should pick up on
2. Box seat view: the signals that badgeholders and engaged community members should pick up on
3. In the arena view: the signals that live players and builders should pick up on

I also want to make sure I don’t bury the lead:

• Less than 20% of the RetroPGF 3 allocation went to projects that directly contribute to sequencer fees.
• Every badgeholder and citizen who wants the best for Optimism probably feels that this allocation level is too low.
• This is not a sustainable trend, given that sequencer fees are the long-term revenue engine for this whole experiment.

Many factors likely contributed to this outcome. In a previous blog post, we discussed how the round’s game dynamics could make it difficult for voters to express their true preferences.