Optimism DAO Members Clash Over Token Buyback Proposal

Optimism's decentralized governance is hitting a snag—members are deeply split over a proposed token buyback. The vote has sparked fierce debate, revealing fundamental rifts in how the community views treasury management and long-term value.

The Core Conflict

Proponents argue a buyback signals strength and returns value directly to token holders, a classic corporate finance move dressed in DAO clothing. They see it as a strategic use of protocol treasury funds to boost tokenomics and investor confidence.

Opponents fire back, labeling it a short-sighted ploy that drains the community treasury. They'd rather see funds funneled into grants, developer incentives, or ecosystem growth—the very things that built Optimism in the first place. It's a classic clash: return capital versus reinvest for the future.

Governance Under the Microscope

The deadlock puts DAO decision-making on full display. Can a decentralized collective efficiently execute a nuanced financial strategy? Or does it devolve into a tug-of-war between speculative and foundational interests? The process is messy, public, and utterly fascinating.

Market Mechanics & The Bigger Picture

Beyond the governance theater, the proposal touches on core market mechanics. A successful buyback could create buy-side pressure, potentially supporting the token price. Critics, however, call it a superficial fix—financial engineering that does nothing for the underlying tech or adoption. After all, what's a bit of buyback pressure against the next macro crypto winter?

This isn't just about Optimism's treasury. It's a stress test for DAO maturity. The outcome will signal whether decentralized collectives can wield sophisticated financial tools or if they're better off sticking to the basics. The vote isn't just moving tokens—it's moving the goalposts for on-chain governance. And somewhere, a traditional finance exec is sipping a martini, muttering about 'committee decisions' and 'too many cooks.'

DAO members split over OP’s buyback plans

But the proposal has split the DAO. Some delegates support the plan, while others think it wastes funds and weakens Optimism’s financial runway.

Critics point out that Optimism is currently a net seller of OP.

PaperImperium, an Optimism DAO delegate, believes OP holders should vote against this buyback proposal. He thinks it is illogical to use valuable assets to buy back OP while continuing to sell tokens, especially if it shortens the project’s runway. 

PaperImperium is also concerned about OP buybacks execution. He said, “…This proposal uses an OTC desk instead of using Optimism’s own chain, which is a bad look.”

The program is planned to operate over the counter (OTC) rather than on open markets. This means purchases would not directly affect OP market prices.

Michael Vander Meiden, an Optimism DAO delegate, warned in a forum post that OTC buybacks could allow employees or investors to sell unlocked tokens into the program.

He said, “This would be concerning because it defeats the purpose of aligning incentives, with unlocks currently happening at a rate much higher than the planned buybacks.”

The Optimism Foundation said it chose OTC execution to simplify the process. It pledged to publicly report all OTC trades on stats[dot]optimism[dot]io or the governance forum.

The debate comes in spite of Optimism’s expanding role in blockchain technology. Its OP Stack powers over 50 blockchains, such as Uniswap’s Unichain, Coinbase’s Base, Kraken’s Ink, Zora Network, Sam Altam’s World Chain and other blockchains.

Can buybacks fix token slumps?

Skepticism toward buybacks extends beyond Optimism.

Researchers at Messari say that buyback strategies often waste money. They divert funds from marketing and growth, and the overall impact of buybacks on token prices is minimal.

Several crypto projects considered ending token buyback programs.

Siong Ong, founder of Jupiter DEX asked community members if the exchange should stop buying JUP tokens back since it did not benefit the price. The DEX spent more than $70 million on buybacks last year, and the price didn’t move much.

GFXlabs argued in a forum post that Optimism should prioritize creating and sharing a business plan for long-term financial sustainability. He added that a buyback does not address this issue and could make it worse. Several DAO members have echoed these points.

Supporters of the proposal think it represents progress.

Milo Bowman, an Optimism DAO delegate, said that running buybacks alongside emissions is acceptable even if they partially offset each other. He added that the buyback framework allows participants to better model the outcomes of a potential 100-fold growth of the Superchain.

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