Overview & Objectives

Introduction to DIVS

Decentralization Ideal Votable Supply (DIVS) represents the votable supply required to maintain decentralization and safeguard the DAO from governance attacks at the current circulating supply level.

Objective

The objective of DIVS is to determine the ideal votable supply needed to protect the DAO from hostile takeovers in a scenario where all existing governance safeguards are removed and the DAO operates fully decentralized. The current safeguards for Optimism DAO are the foundation and security council. In the event of their removal so that the DAO can be completely decentralized, we need to determine the votable supply that needs to be achieved.

| What is a successful attack? | In the attack where the attacker gets the positive $ terms exit.  For example, an attacker invested $500 million & was able to secure a $550 million from the attack. | | --- | --- |

Factors that Affect the DIVS

Here we have compiled a list of factors that will have an influence on the votable supply and attack. Based on assessment and reasoning we have determined how to utilize them in our calculations.

• Token in the treasury
  • DIVS invariably depends on the tokens left in the DAO treasury since those are the tokens that would be the target of any attacks.
  • At the time of this report, there are 1.71Bn OP tokens in the treasury i.e. about 40% of the total supply. We should note that this is not the number we are targeting. Only 138 million OP tokens are under the token house so that is where we are focusing.
  • This is important because there is a direct correlation between treasury tokens and DIVS.
• Turnout
  • There is never 100% participation when voting is involved. Hence the turnout is an important factor to take into account.
  • Usually, a 70% turnout rate would be considered ideal but for the sake of our calculations, we will be considering the turnout from the last 180 days.
• Depreciation and time
  • Depreciation is the fall in the price of OP tokens. A sudden attack on the OP is bound to cause a fall in price due to unusual changes in supply and demand. We have taken this into consideration while calculating DIVS.
  • For this, we have calculated the usual volume that is traded and taken that into consideration.
  • There is also a time factor. The period over which tokens are acquired would yield different results.
• Acquired Tokens
  • This parameter helps us understand how many tokens an attacker will acquire from the existing votable supply.
  • When this parameter is set to 0, we assume that all tokens acquired by the attacker originate exclusively from the existing votable supply.
  • When this parameter is set to 100, we assume that all tokens acquired by the attacker originate exclusively from the outside of existing votable supply.

Framework for DIVS

The formula for DIVS is defined as:

$$ DIVS = \frac{(200 - s)(100 - d)}{d \cdot t} \cdot T $$

Eq(1)

Where:

• T: Number of tokens in the treasury or the tokens that the attacker is targeting via the proposal.
• t: Maximum turnout percentage of the votable supply in the past 180 days.
• d: Depreciation in OP price incurred by the attacker relative to the acquisition price.