Some thoughts about SAFE governance

[sunita_berma]

Dear SAFE Team,

The world of decentralized finance (DeFi) has witnessed rapid growth and innovation over the past few years. New projects and platforms have emerged, offering solutions to various financial needs. SAFE, a decentralized multi wallet platform, is one such project that aims to provide users with the power to shape the blockchain’s future. However, there is a critical aspect that seems to have been overlooked – the inclusion of L2 users in the token distribution.

Factually speaking, less than half of the SAFE governance token has been claimed. This can be attributed to the fact that L2 users, who make up a significant portion of the platform’s user base, were abandoned in the token distribution process. This exclusion of L2 users is concerning, especially considering that there are far more L2 users than L1 users.

Currently, SAFE supports 13 L2 networks! Safe{Wallet} – Welcome, as highlighted on the app.safe.global website. With such comprehensive support for L2, it is disheartening to witness the exclusion of these users from governance. Why should they be denied the opportunity to play an active role in shaping the future of the SAFE?

Another crucial aspect to consider is the scale of the SAFE Governance Token distribution. When compared to successful token distributions like UNI, OP, ARB, and TIA, SAFE falls short in terms of token distribution size. These projects have managed to attract a substantial number of users, ranging from 100,000+ to 400,000+ addresses. The ongoing success of these programs is a testament to the effectiveness and appeal of their token distribution models.

It is worth noting that the best decision, from a self-interest perspective, for those who have already received the SAFE token is to deflate its value. This could be accomplished by disapproving the allocation of SAFE tokens to L2 users or dividing unclaimed SAFE tokens equally among existing token holders. While this may not be immediately apparent to the SAFE team, it is a circumstance they should be aware of to ensure a fair and inclusive governance model.

It is of utmost importance for SAFE to reconsider its governance token distribution strategy. The inclusion of L2 users is not only fair but also a strategic move considering their significant presence within the platform. By recognizing the importance of L2 users and rectifying the existing distribution imbalance, SAFE can forge a path towards a more robust and diverse governance structure. The success of projects like UNI, OP, ARB, and TIA serves as a reminder that inclusivity and fairness are key attributes of a thriving decentralized ecosystem.

Finally, I think it’s only a matter of time before Safe Wallet’s TVL exceeds $100 billion.

Sincerely hope that L2 users will participate in this great project!

[kutubu]

Right on point, inclusivity is the fundamental gateway to decentralization.

[Andre]

Hey @sunita_berma,

Before I want to hear what other think, I would like to clarify that the SAFE team (Safe Ecosystem Foundation and Core Contributors) is not in charge of the allocation of the treasury of SafeDAO. Best way to get heard is to address active SafeDAO members like guardians and delegates (see their delegates threads) and to get their feedback on this.

Personally I don’t see a connection between half of the initial user allocation not being claimed and L2 users not being eligible. Also just to make clear the token is neither inflationary nor deflationary but has a fixed supply.

In the meantime, pursuant to SEP #5 half of the non-redeemed token are being allocated to those who claimed the first user allocation. SEP #5 decided that the other half is up for SafeDAO to decide via a separate SEP. Here L2 users are explicitely mentioned as an option.

@Daniel

If either Option 4 or 5 receives the most votes, the tokens allocated to B would be considered “set aside” and could be used, for example, for airdrops to L2 Safes, to reward contributors behind public goods, to give those who failed to redeem the original airdrop a second chance, or for other causes that aren’t mentioned here but expand the number of token holders.

There is also a separate discussion around including L2 users here.

[sunita_berma]

@Andre

Personally I don’t see a connection between half of the initial user allocation not being claimed and L2 users not being eligible

In fact, you can’t rule out the possibility that the behavior of only accepting a few noble ETH users is affecting the decentralized distribution of SAFE. Because the number of L2 users is obviously larger.

@Andre

Also just to make clear the token is neither inflationary nor deflationary but has a fixed supply

You misunderstand me, the deflation I’m talking about is on the basis of users who have already received SAFE tokens, and the point they are considering is simply that the SAFE tokens they have won’t be diluted .
That’s why the community is discussing the proposal for L2 users to get airdrops will most likely be rejected
So the proposal to allocate unclaimed SAFE tokens to users who have already claimed them will be very much favored by the community
This is obvious

[papa_raw]

@Andre

Also just to make clear the token is neither inflationary nor deflationary but has a fixed supply.

This isn’t exactly true.

Inflation/deflation are processes relative to current holder distribution, not fixed definitions. The distribution of additional tokens is inflationary vis-a-vis current holders (dilutes their relative holdings as % of circulating supply). This creates an disincentive for holders to inflate circulating supply.

This being said SAFE has no secondary market at this point, nor circulating supply given its nontransferability, so any talk of “inflation” or “incentives” or market dynamics is moot.