Uniswap-Arbitrum Delegate Program (UADP) Communication Thread

Uniswap-Arbitrum Delegate Program (UADP) Communication Thread

Name: UADP
Delegate Address: ARB: 0x8326D18edfC50B4335113C33b25116ec268FF3fE
Tally Profile: UADP | Tally
Forum: @juanbug @AbdullahUmar
Arbitrum Forum Communication Thread: Here

Introduction

Hello Uniswap community, Abdullah and I here! A few months ago, when Arbitrum first airdropped ecosystem projects a significant portion of $ARB, Uniswap received a little over 4 million tokens. After some healthy discussions on how to allocate and use those tokens, a vote was passed through Uniswap governance to create a Uni-Arb Grant Program (UAGP) and Delegate Program (UADP). See the vote here.

The Uniswap-Arbitrum Delegate Program is the Uniswap community’s unique entrance into metagovernance, and Abdullah and I are excited to steward the first 6 months as the committee’s delegation facilitators.

Objectives

Abdullah and I have both led university delegate arms (at Penn and Michigan) across 10+ protocols collectively, with participation in hundreds of votes and governance decisions. This thread is a mirror of our delegate community thread on the Arbitrum forums, where we will substantiate the rationale behind our votes and detail any other works related to the UADP.

We will transparently and accountably represent both the Uniswap & Arbitrum communities’ interests throughout the governance process. In an effort to be proactive and discerning in our voting contributions, we will ensure that each decision is well-considered and thoroughly researched. Open lines of communication will be a priority, as we plan to regularly share our voting justifications and insights with delegates and community members of both Arbitrum and Uniswap.

Our goal for the UADP is to strive for transparency, efficiency, and broad community involvement.

Disclosure & Waiver of Liability

When applicable, we will disclose conflicts of interest and at times abstain from voting with proper forum rationale. Further, our votes for Arbitrum DAO are our best opinions and should not be considered an agreement on behalf of Uniswap.

6 Likes

October Voting Updates

Security Council

Vote: John (Gauntlet) and Omer (Chaos Labs)

We have divided our voting power among the two candidates who we believe can most responsibly bear this role: John (Gauntlet) and Omer (Chaos Labs). Having worked with both Gauntlet and Chaos Labs, we know the important role that they play in sustaining various protocols in the ecosystem. Namely, their work as risk assessors has been vital for DeFi money markets. So, the critical role that the companies behind these individuals play certainly lends itself to our recommendation. John and Omer also have extensive development experience behind their belts, along with skill sets in cyber security.

Empowering Early Contributors: The Community Arbiter Proposal

Vote: Yes

While it is certainly vital for the DAO to support ecosystem contributors like Arbiters, it’s also important to structure a clearly substantiated plan behind implementing such a rewards program. As far as where this proposal is in its current state, it doesn’t seem to sufficiently outline the details behind who will be distributed the stated $ARB rewards. Since there seems to be a cap of 25 recipients, it would be best to first outline those names explicitly for transparency purposes BEFORE going forward with a vote. This isn’t necessarily for the community to judge the selected individuals, it’s merely to track who is being rewarded prior to voting. It is also unclear what metrics exactly are used to determine the top 25 candidates and if 25 is in fact the optimal number. We are in favor of the spirit of this proposal and hope to enable more contributor-based reward programs in the future, but a more systematic approach at designing this initiative would, in our view, make it more compelling. For that reason, we are voting YES for the snapshot but hope to see some of the mentioned issues more fleshed out in the on chain vote.

Build Optimal Onboarding for STIP Teams (BOOST)

Vote: Yes

Creating this proposal was very much a strategic move by the Layer3 team. They could very well have applied as a participant in the STIP race, but they decided to wait until afterwards so they could frame themselves as an initiative that would tie together all the other STIPs. Another reason for not applying during the STIP round is likely because the contents of this proposal would have failed to successfully meet the criteria designated by the STIP designers. Layer3 is NOT distributing the 1M ARB as incentives. The incentives simply come from the $50M STIP pot. Instead, the 1M ARB will be used for development and marketing purposes. Although the breakdown of expenses is not fleshed out to a sufficient degree–granted it’s often hard to anticipate such expenses, but estimates wouldn’t hurt their case–we do see the merits behind questing programs. And since this one is directly tied to helping facilitate the current incentive program that has already been given $50M, it would be a shame if the STIP initiative didn’t prove to be as successful as anticipated. The current Layer3 proposal effectively helps give the STIP initiative a spurt of momentum. That being said, we are voting YES for the snapshot–but hoping to see a more comprehensive breakdown of costs during the onchain vote.

3 Likes

November Voting Updates

The Arbitrum Coalition

Vote: Fund the Coalition

Going forward, large DAOs need to begin hiring professional research and development contractors to equip voters with the information to make informed decisions. Expecting token holders & delegates to over a long period of time and remain consistently up-to-date about proposals is idealistic. Mitigating issues like groupthink is quite difficult and becomes increasingly prominent with technically complex or cumbersome proposals, like the STIP process. Funding well-known groups like Blockworks and Gauntlet to provide data-driven summaries and recommendations is a step towards alleviating voter fatigue/apathy along with groupthink.

The proposal is formatted in a manner that can reasonably prevent concentration of power amongst a small group of service providers. For example, the Advocate will act as the intermediary between the coalition and the DAO, hopefully creating proper checks and balances. We trust that the members that we are electing will act in an unbiased manner and not directionally influence voting decisions. Our previous interactions with the Blockworks and Gauntlet teams is why we can make such a statement.

One of our main concerns, however, is how turnover will be handled between service providers. If a certain SP decides to leave the coalition and they have remaining work to complete, that can become an issue. The departure of an SP that’s had a long tenure is also a friction point. Each new SP will have to go through a slight learning curve to provide services on par with the quality of the previous SP. A good example of this issue can be seen in Aave DAO, in particular with the departure of Llama.

Activate ARB Staking

Vote (Ranked Choice Voting):

1. Do not fund staking
2. Fund staking with 100M ARB
3. Fund staking with 125M ARB
4. Fund staking with 150M ARB
5. Fund staking with 175M ARB

Although the premise of this proposal is that it will create long-term ARB token holders, this activity is entirely incentivized by inflation and should therefore be discounted significantly–this is simply how all incentive programs should be viewed, especially this staking initiative. What makes an ecosystem thrive is the quality of the dapps. That’s why we were in favor of the STIP proposal. Driving users to use dapps is a more effective way to distribute treasury funds, as opposed to just paying token holders. Even though the hope is that a handful of the new ARB holders become long-term investors and/or Arbitrum ecosystem participants, stickiness is very difficult to measure. Instead, more sticky demographics should be rewarded, like builders and devoted community members, which is currently being done via the grant and STIP distributions.

Investors should, however, at some point be compensated–but a pure inflation play, without recognizable ARB utility, isn’t the best way to facilitate that goal. Sharing decentralized sequencer revenue with $ARB stakers is much better utility and can be implemented when the time is right. Incentivizing sequencer stakers is real utility, and that’s an example of where the DAO should designate its future incentive allocations.

Plus, the $ARB token will suffer in other ways because of the alluring staking APRs. Who would want to lend $ARB or be a liquidity provider if you can just stake for a better return? If this proposal passes, the DAO should consider ways to prevent an $ARB drain from dapps. This can be addressed, for example, via protocol owned liquidity provision for particular Uniswap pools. As representatives of the Uniswap DAO and delegates in the Arbitrum DAO, we would like to explore this option.

Non-Constitutional AIP: Arbitrum Security Enhancement Fund

Vote: Against

We are concerned about the proposed funding mechanism. We share similar opinions as @pedrob as allocating 2 million dollars to a single auditor could create a monopoly situation, diminishing the incentive for high service standards due to reduced competition and possibly leading to overcharged service fees due to the large subsidy available.

Additionally, the approach suggested concentrates decision-making power, presenting a risk of centralization in the distribution of funds. This could be counterproductive to the decentralized ethos of the ecosystem​ and crate a lack of checks and balances within this security system.

Possibly, an alternative funding approach suggested in the forums that we’d like to consider more is direct subsidies to protocols that need auditing before deployment on Arbitrum, rather than to a service provider. This would allow for a more equitable and decentralized allocation of funds, ensuring a wide range of protocols can access audit services from a variety of reputable auditors, avoiding the centralization of power and potential service quality issuess.

Overall, we’re happy to see the discussion for the “Consolidate Security Proposals into a RFP Process” arise from this and believe this sets a good standard for votes to come.

Consolidate Security Proposals into a RFP Process

Vote: For

This proposal aims to create a structured and transparent approach to selecting auditors and security service providers. This move seeks to replace the current piecemeal method, where individual auditors make separate budget requests, with a comprehensive framework that ensures the community’s due diligence and financial responsibility.

The importance of smart contract security in the Arbitrum ecosystem cannot be overstated, and the proposed RFP structure is intended to attract and fairly compensate top-notch security professionals. This process would be open to all security engineers, researchers, and organizations, ensuring that the selection of service providers is based on merit and qualifications, as well as most importantly, cost-effectiveness​.

The criteria for selection would include the experience and qualifications of security professionals, their audit methodology, and competitive pricing. A committee appointed by the Arbitrum DAO would oversee this selection process, reviewing submissions and choosing the most qualified candidates based on these criteria. We are heavily in favor.

Proposal to Backfund Successful STIP Proposals

Vote: For

Distributing 50M worth of rewards for STIP round one was really based on arbitrary consensus by the DAO. Since nothing of this magnitude has previously been conducted across any DAO, it was difficult to decide how much capital should be allotted to this type of program. We, along with many others, were surprised by the number of proposals. One can argue that the 50M allotment was anticipated for a smaller number of participants, and now, back funding is our way to compensate for the unprecedented number of successful applications.

Another consideration is recognizing that the most well known protocols attracted the most voting power. This is in part due to heuristic voting–people just vote for entities that they’re familiar with. Another factor is network–larger protocols typically have more sway over the decision-making of delegates. Since not all delegates made it a priority to help fund up-and-coming protocols, back funding those smaller projects seems reasonable.

Plus, it’s too soon to conduct a round two of STIPs. The next best step would be to observe and analyze the efficacy of the current STIP round. We don’t want to go through another round of voting so soon for the protocols who didn’t make the cut. Back funding is the less operationally intensive alternative.

Funding Gas Rebate and Trading Competition Program to Amplify Arbitrum’s Ecosystem Growth

Vote: Do Not Fund

We voted against this proposal because general incentive programs initiated by individual protocols are not favorable for the DAO from an organizational perspective. It makes operations more messy. If an individual protocol has a unique contribution to propose–something that goes beyond mere user acquisition via incentive programs–then such a proposal would be intriguing. The reason the STIPs were created was to collectively enable the DAO to choose which protocols should be involved in a large-scale incentive program. Therefore, Rage Trade should have applied for the first round of STIPs. Plus, it’s probably best to ask for incentives when Rage is out of its closed beta phase. Waiting for round 2 of STIPs would therefore be best to re-propose this rebate program.

We also feel that this proposal would be better received if it were created by a collection of perp platforms, not just Rage. This would make it more of a community initiative as opposed to just a Rage Trade initiative (yes, we understand that it’s ideally meant to benefit Arbitrum as a whole, but that means other perp protocols should also be involved in the conversation). It may be wise to talk to the teams at MUX & GMX, for example, and try to co-author such an initiative. Without an inclusive ecosystem buy-in, we feel that this proposal is not as appealing as it could be.

Procurement Framework | Security: Non-Constitutional Proposal

Vote: For

In line with our prior approval, this subsequent next step is in line with our expectations.

AIP: ArbOS Version 11

Vote: For

This proposed AIP for Arbitrum introduces significant improvements, aligning with the Ethereum Virtual Machine (EVM) Shanghai upgrade and introducing the PUSH0 opcode. This upgrade ensures compatibility with Ethereum’s latest developments, potentially enhancing the efficiency and capabilities of smart contracts on the Arbitrum network. Additionally, the proposal includes miscellaneous bug fixes and technical enhancements, signaling a move towards a more stable and reliable platform. These changes are crucial for maintaining a modern and efficient blockchain infrastructure.

A notable aspect of the proposal is the refinement of fee structures, particularly regarding retryable transactions. The distinction between the network fee account and the infrastructure fee account suggests a more nuanced approach to fee management, which could lead to fairer and more efficient transaction processing. Furthermore, improvements in precompile methods, like preventing certain methods from consuming all gas upon reverting, create better resource management and efficiency. These adjustments are important for both developers and users, as they contribute to a more user-friendly and cost-effective environment.

6 Likes

December Voting Updates

Hope everyone is having a great holidays! Here are the UADP updates from @AbdullahUmar and I for the past month.

Timeline Extension for STIP and Backfund Grantees

Vote: Extend deadline for both

We see no reason to not extend the timelines and thank the teams for their transparency on this matter.

Proposal: Experimental Incentive System for Active ArbitrumDAO Delegates

Vote: Without Karma, then With Karma, then Against

We are in support of more robust delegate compensation initiatives. Most DAOs today don’t have the bandwidth, financial runway, or even the need to pay delegates for their efforts. Arbitrum, however, is a different story. Due to the broad distribution of the token and continual activity by the token holder & delegate community, multiple initiatives have been implemented. Most importantly, Arbitrum DAO has shown a culture open to experimentation, which is the only way forward for DAOs. To make sure the activity from this year persists perpetually into the future, throwing out a carrot for active delegates is not a bad idea.

We’d be curious to see what material changes occur after this initial 6-month pilot phase concludes. One worry that we’ve always had regarding delegate compensation is selecting data points for rewarding certain behaviors. Should voting be the main criteria? Do you get penalized for voting in a non-consensus direction? Does the quality of your comments count towards your reward? The weighted point system described in this proposal makes sense for this pilot and does address some of our concerns behind what is rewarded. We are glad that it takes into account forum participation and not merely voting participation. Again, this has a good side and a bad side. It’s likely that we’ll see multiple throw-away comments just so users can increase their participation rate for the sake of it. Important discussions will become cluttered with fluff. In an ideal world we’d be able to automate reading responses and devise how “thoughtful” a comment was or how much attention it received. From there, thoughtful comments attain points, while fluff is penalized. These intricacies are to be thought about in the future.

All this being said, we are in favor of the manual option for implementing this proposal. Automating this process can be very valuable, but we believe that testing it out manually will help the SEED Latam team become subject matter experts in this compensation process, and with that experience, they can later collaborate with Karma more effectively, introducing more intricate ways to reward participation in the DAO.

Proposal [Non-Constitutional]: Establish the ‘Arbitrum Research & Development Collective

Vote: Don’t Fund, then Abstain, then the values in increasing order

We are not in favor of this proposal due to its overly broad nature and lack of receptivity from the DAO. There are a lot of new functions that the proposal seems to address, and each of these four divisions could easily have their own proposal. Predetermining the cost of each division is also, in our view, premature. We’d like there to be increased discussion around what exactly each division does more specifically—and then ascertain a more detailed compensation plan. Broad proposals like this should start simply by asking for community feedback.

Once enough conversation has transpired, the proposal should be divided up into multiple parts, each detailing more intricately the job of each division and how exactly the RFP process will be conducted. It would also be nice for the proposal author to have potential candidates for this program to comment their perspectives on the program. Post discussion, it should be decided how the voting should take place. One vote may just be a snapshot around the structure of the program, without any mention of compensation. This aspect would determine if there is a need for such a program and what the true job-to-be-done is. Assigning budgets could be a separate discussion and should be better outlined.

Overall, this proposal moved too swiftly to snapshot without nearly enough debate. We’d like to see the DAO create working groups such as the ones proposed—but this must be done in a more precarious manner.

4 Likes

January 2024 Voting Updates

AIP: ArbOS Version 11

Vote: For

Confirming our prior reasoning and Snapshot vote onchain.

Proposal [Non-Constitutional]: Establish the ArbitrumDAO Procurement Committee

Vote: Establish Procurement Committee

We are voting in favor of this proposal but have our reservations with the continuity of this program.

The ARDP and ARDC are both examples of how a DAO can become more sophisticated in terms of professionalizing its operations. Creating subcommittees is a good practice for effective decision making and proposal creation. But the introduction of numerous subcommittees can also create unnecessary overlap in jobs. In our eyes, the functions of the ARDP and ARDC have enough overlap to justify combining them to an extent in the long run. Either way, they’ll need to be in close communication. A natural point for something like the ARDP would be to create frameworks based on the interactions they have during their tenure, this way the frameworks are empirically designed. But that’s likely too much to ask for. To establish strong frameworks there should be a dedicated task force like the ARDP, but the current six month timeline, along with the corresponding compensation package, should be limited to 6 months and not subject to an automatic reelection period. Unlike the ARDC, which is more-so a continual program, the ARDP can likely accomplish its tasks within the 6 month period. The hard part about creating these frameworks is the initial stage. Afterwards, it’s about monitoring and revamping current frameworks. Therefore, this committee should be ascribed a passive role long-term. In its passive state, the ARDP should also begin resorting to the ARDC and the DAO for continual feedback. We believe it’s fine for the working group to be limited to 3 competent people, but during the passive lifetime of the ARDP after the initial 6 months, it may be a good idea to add more members to the team. Again, this later stage ARDP is mostly a monitoring committee.

Long-Term Incentives Pilot Program

Vote: Fund Program with 25,815,000 (then increasing numbers and lastly don’t fund)

We are in support of the Long Term Incentives Pilot Program as its structured approach to enhancing the Arbitrum ecosystem takes into account much of the negative feedback from prior proposals and finds a nice common ground between many different opinions. The program addresses key issues from STIP Round 1, like delegate workload and feedback for protocols, and offers a more streamlined and equitable process. The introduction of a council for application evaluation and Application Advisors for feedback ensures a more fair and efficient selection of deserving protocols. This structure promises a more transparent and balanced allocation of resources.

Opting for the smaller 25 million ARB option is prudent for several reasons. It allows for a cautious approach to gauge the effectiveness of the new system without overcommitting resources. Starting smaller provides a controlled environment to test the new incentive structures and make adjustments based on real-world trial outcomes. This conservative start can lead to more informed decisions in scaling up the program in the future, ensuring the long-term sustainability and success of the initiative. Overall, we would like to see some more clarity and communication on some of the budgets, such as for example we think the milti-sig signers are compensated a bit too much.

Experimental Delegates Incentive System

Vote: For
Type: Onchain

As per our previous Snapshot vote, we still believe that this initiative should not incorporate Karma to start with. Once the program matures and it becomes clear what exactly needs to be optimized after manually operating this initiative, then Karma should ideally be incorporated. Regardless, we voted FOR the onchain proposal because, on the whole, we believe in the positive impact that this program can have on delegate participation. One aspect we’d like to flag one more time is the ability for the DAO to weed out pointless contributions–those done for the sake of contribution.

Proposal to Establish the Arbitrum Research & Development Collective

Vote: For
Type: Onchain

We voted FOR the initial coalition proposal but voted against this proposal during the Snapshot. However, our position has since changed, so we voted FOR this proposal onchain. Our general stance is that the DAO should have committees for facilitating various critical DAO functions. The initial release of this proposal was met with a lack of engagement, so we wanted more conversation to transpire before being in favor. Although the feedback for this initiative still hasn’t met the same level of engagement as the coalition proposal in the forums, when observing conversations in private channels, it became clear that there is appetite from most delegates to see this through.

We also suggested previously that this proposal can be divided up into multiple proposals to prevent bundling too many decisions into one vote. The broad nature of the proposal may still make this the better approach, however, we do realize that unbundling this proposal may be operationally difficult, requiring multiple snapshots /onchain votes.

Pilot Program Council Elections

Vote: 404DAO, GFX, Wintermute, Karpatkey, Bob Rossi
Type: Snapshot

Pilot Program Advisor Elections

Vote: Seed Latam, JoJo, Boardroom
Type: Snapshot

We’re excited to see the next step of the Pilot Program being voted on, and we’re happy the individual council elections are taking place democratically. We believe these 5 councilors and 3 program advisors are best suited for the first iteration of the role. When choosing our reviewers, we looked for people that have been long involved in the Arbitrum ecosystem and have also had a great track record in Arbitrum and other DAOs; bonus points for being on other grant councils and delegates. When choosing our advisors, we looked for teams or individuals that high a great holistic understanding of the DAO, were involved in various aspects, and also held and had experience with other web3 communities.

Constitutional AIP - Security Council Improvement Proposal

Vote: Increase the threshold to 9/12
Type: Snapshot

We respect the L2Beat team’s continual efforts to bring awareness towards the risks surrounding L2s as they continually mature. Our vote went towards increasing the threshold from 7/12 to 9/12 since this approach is the simplest way to null the second multisig. It also allows for more flexibility in the future than entirely removing the second multisig. Increasing the delay has its merits, but we feel that it’s a topic that the DAO should discuss in further detail before executing. To us, this proposal is meant to be a quick response to a potential security concern as opposed to implementing a more sticky alteration like the delay increase.

Election of Procurement Committee Members (ADPC)

Vote: Bernard & Joseph
Type: Snapshot

We have decided to split our vote evenly between Bernard and Joseph because we believe that their professional backgrounds outside of the crypto industry have enabled them to bring a degree of financial, strategic, and legal acumen to DAO space. Both have historical involvements in other protocols, collectively including Trader Joe, dydx, Olympus, Uniswap, and Safe. We have personally collaborated with Bernard in the past, so we can attest to his ability to manage and run programs/working groups. We also appreciate the efforts Joseph has recently made to make the Arbitrum DAO more structured and organized.

3 Likes

February 2024 Voting Updates

[Non-Constitutional]: Arbitrum Stable Treasury Endowment Program

Vote: For
Type: Snapshot

We believe that one predominant way by which DAOs mature and become sustainable organizations is by establishing a strong runway in the form of a diversified portfolio of assets. Selling off $ARB tokens for ensuring Arbitrum’s future success is an important financing lever. So far, most initiatives that we’ve seen in the past year have revolved around grants. These initiatives are important, but they should be balanced by making sure the protocol remains sustainable with a multi-year horizon.

The forum post raises good points around having a clear and informed roadmap for how the treasury will be deployed. The DAO is, in the short term, not strapped for cash. There’s no immediate need to cover particular expenses, so one could argue that it’s worth waiting before the DAO sells off ARB for RWAs. The best time to reduce native token exposure is when the markets are most frothy. This way, during the bull market, ARB can be sold at a higher price, and those reserves can be rotated into RWAs since stable assets are best held onto during drawdowns. This particular proposal acts simply as a pilot program, so it’s important to highlight that the diversification effort won’t happen immediately–it’s using an insignificant amount of capital relative to the entire DAO treasury. The sourcing component of this proposal is therefore most compelling to us. We’d rather have the DAO be in a position to buy and sell assets effectively, even if the bulk of that diversification effort will occur later on.

Proposal [Non-Constitutional]: Establish the ArbitrumDAO Procurement Committee

Vote: For
Type: Onchain

We are excited to see these elected members lead the first iteration of the Procurement committee and our reasoning is in line with our prior Snapshot vote.

[Constitutional] Changes to the Constitution and the Security Council Election Process

Vote: For
Type: Snapshot

We are in favor as many of these changes operationally enhance the process. The introduction of a dedicated 7-day “Contender Submission” stage ensures more opportunities for all candidates to get their submissions in, giving potential candidates more chances to be noticed and considered. Secondly, the requirement for candidates to provide a signed message from their wallets is great with respect to the security and integrity of the election process. The proposed updates to the constitution’s wording about the election process and quorum handling, including ‘abstain’ votes, are vital for clarity and transparency. In summary, these changes should create a more equitable and transparent election structure.

Long Term Incentives Pilot Program

Vote: For
Type: Onchain

Our reasoning stays the same as prior. We are excited that the program will be represented by such talented reviewers.

AIP: ArbOS Version 20 “Atlas”

Vote: For
Type: Snapshot

We’re excited for these network upgrades and thank the core devs for their hard work. The ability to leverage EIP 4844 to post batches of L2 transactions as blobs on L1 at cheaper rates will be super useful and we’re also looking forward to updates from Dencun.

​​AIP: Batch Poster Manager and Sequencer Inbox Finality Fix

Vote: For
Type: Snapshot

Similar to the other snapshot vote on ArbOS Version 20, we are in favor of this sequencer finality fix and again thank the core devs for their hard work.

Empowering Early Contributors: The community Arbiter Proposal 2.0

Vote: For
Type: Snapshot

We voted FOR this proposal since v2 brings clear improvement to the initial proposal from a couple of months ago. Retroactive rewards, we believe, are important for showing appreciation to initial contributors.

Generally speaking, community management is not an easy task, and the allotted compensation to these contributors seems reasonable–the reduction of the ARB distribution should make this easier to pass at the onchain stage. The transparency in who contributed to the community efforts is also appreciated. Previously, we stated that “as far as where this proposal is in its current state, it doesn’t seem to sufficiently outline the details behind who will be distributed the stated $ARB rewards. Since there seems to be a cap of 25 recipients, it would be best to first outline those names explicitly for transparency purposes BEFORE going forward with a vote.” V2 addresses these concerns to a degree. We understand that collecting data for this topic is not the easiest task and that screenshots of contributions are a non-customary form of collecting data–but we cannot think of a more effective mechanism, so we’ll resort to deeming this acceptable. Another point of feedback is that the proposal format here was a bit messy. We’d recommend that proposers in the future make their data more formatted and a bit easier to follow.

Proposal: [Non-Constitutional] Funding for Into the Dungeons: Machinata - a PvP Digital Miniature Game V2

Vote: Against
Type: Snapshot

We voted against this proposal because it doesn’t seem befitting to request funding directly through the DAO on a one-off basis.

The game looks pretty cool. Seems like an interesting initiative that likely would’ve been funded by Questbook. From reading over the forums, it seems that “Ali was the first founder to apply AFTER the Gaming Domain was fully allocated and as a result was not able to funded in the first round of Questbook grants.” So, this proposal seems to be an attempt at attaining funding from the DAO since the grant program ran out of allocations. Although the DAO could give case-by-case funding exemptions, we believe that this practice is very much a slippery slope. To preserve a standard for the DAO, regardless of the degree of promise presented by a project, the developing team should seek alternative forms of funding apart from the DAO. It seems thechaingamer.eth is now looking to create a developer grant framework for games, which to us, is a much more promising endeavor. This would reduce the DAO’s overall overhead, prevent bias toward individual project selection, and create a standardized structure for project evaluation.

Changes to the Constitution and the Security Council Election Process

Vote: For
Type: Onchain

As per our Snapshot vote, we voted in favor of this proposal since the stated “changes should create a more equitable and transparent election structure.”

1 Like

March 2024 Voting Updates

[Non-constitutional] Proposal to fund Plurality Labs Milestone 1B(ridge)

Vote: For
Type: Snapshot

We voted FOR this proposal. The UADP is excited to see the maturation of Plurality Labs from its acquisition by ThriveCoin. The Plurality team should now have more bandwidth to address some of the issues that they previously ran into, such as communications.

“We funded 250+ projects, and spurred movement all over the DAO. But we didn’t document our work and value well”

“Our bias was for action. We cared about creating value and learning - and put blinders on for everything else. We should have hired a Marketing or Comms person.”

“There seems to be wide agreement that we created value but need to scale, document, and showcase.”

One of the most important aspects of any grant program, working group, or sub-DAO is relaying information to the stakeholder who initially entrusted you with a particular task and set of capital. In this instance, we are appreciative of Plurality’s work and effort that has gone into providing resources for numerous projects.

Another aspect that we’re fans of is the funding of grant programs upon reaching particular milestones. This will allow for funds to be disseminated in a more calculated manner–it’s important to double down on the success stories and move on from defunct projects. As mentioned by a couple of other folks, we would like to see some general KPIs implemented for tracking the continual progression of a project–these can be a mix of both qualitative and quantitative metrics. They can also be done on an ad hoc basis since each grant may be unique.

ARDC Research Member Election

Vote: Blockworks/Delphi Digital
Type: Snapshot

Blockworks Research and Delphi Digital are exemplary candidates for the ARDC Research member role. Both entities demonstrate their mastery in dissecting the complex Arbitrum and Ethereum ecosystems through comprehensive reports and technical evaluations. For instance, Blockworks Research’s analytical deep dives into Arbitrum’s staking proposal and Delphi Digital’s early insights into Ethereum’s scaling solutions underscore their capability to navigate and elucidate sophisticated blockchain mechanisms.

Out of the two groups, we’re more intimately familiar with the Blockworks folks due to their historical involvement with Arbitrum. We look forward to seeing research groups like Delphi follow suit.

ARDC DAO Advocate Election

Vote: L2BEAT/Ant Federation
Type: Snapshot

Krzysztof and DK have been active community members, continually providing input into various discussions and acting in the best interest of the Arbitrum DAO. Therefore, we believe that L2Beat and Ant Federation are a strong group to act as the oversight committee/liaison between the ARDC and the DAO.

ARDC Security Member Election

Vote: OpenZeppelin & Trail of Bits
Type: Snapshot

Both Jun and I have been involved in the Compound DAO for the past few years, and OpenZeppelin is the DAO’s go-to security provider. Due to our familiarity with them and direct interactions with their work, we have given them 50% of our votes. The other 50% goes to Trail of Bits, another group that we’ve seen continually deliver via direct work with various protocols as well as their tools like Slither for contract vulnerability detection.

ARDC Risk Member Election

Vote: Elect Chaos Labs
Type: Snapshot

Chaos Labs has a strong background in assisting DAOs like Aave and GMX with risk assessment. We believe that extending this role to Arbitrum would serve to be beneficial. They’ve published various data-driven analyses in the past, and their CEO is already a part of the Security Council, making their organization an apt candidate.

[Non-Emergency Action] Fix Fee Oversight ArbOS v20 “Atlas”

Vote: Choice 1 as “Set L1 surplus fee and L2 min”
Type: Snapshot

We voted with the above decision since by aligning Arbitrum’s fee structure with these enhancements, the network can support increased transaction throughput while reducing costs for users, which is critical for maintaining Arbitrum’s appeal in a competitive Layer 2 landscape. Sure, we’ll see a revenue decrease, but that’s a needed sacrifice to make sure Arbitrum is able to price compete. The hope is that higher volume compensates for lower marginal revenues, thereby returning total revenue to its previous level–and ideally beyond that.

[Non-constitutional] Proposal to fund Plurality Labs Milestone 1B(ridge)

Vote: For
Type: Onchain

In line with our position during the Snapshot, we will be voting FOR this proposal. We are looking forward to seeing Plurality expand its operations after their recent acquisitions–we hope that the influx of manpower and capital will enable them to deliver on their promise to better “scale, document, and showcase.”

Request for Continuation of the Arbitrum DDA Program Request

Vote: For
Type: Snapshot

The UADP is supporting this proposal since we believe that continuation of this grants program will have an overall net benefit to the Arbitrum ecosystem. Since the program is in its second inning, we believe that the experience garnered by the four domain allocators will serve to be valuable for funding future projects. The budget increase also seems reasonable since there is clear demand for these grants, as highlighted the other week by @thechaingamer.eth–Machinata had to turn directly to the DAO to request funds for their game since the Questbook budget ran its course. Reporting from this program has also been better than other grant programs that we’ve reviewed across other DAOs. We’ve appreciated the disclosure of txns, PPTS, and reports produced by JoJo, cattin, Juandi and Flook.

This question is more for Questbook–is there a plan to do a retroactive analysis of the impact produced by these grant programs? We have disclosure reports, but going through and assessing which projects have succeeded would be helpful. A VC fund for instance would typically look at ROI, and of the funded projects, only a minority really succeed. Grant success is likely the same. Perhaps later on an analysis can be done regarding volume driven, sticky TVL, increase in user base, etc around the projects. Each domain will have its unique KPIs. This would be something to consider at the termination of this grant program and would allow us to make a more informed decision on whether to continue such grants in the future.

[Non-Constitutional AIP] Front-end interface to force transaction inclusion during sequencer downtime

Vote: For
Type: Snapshot

The UADP strongly endorses this initiative proposed by WakeUp Labs for creating a front-end interface that enables direct L1 transaction submissions during Arbitrum Sequencer downtimes. This solution enhances the network’s resilience, allowing users to continue their transactions uninterrupted, and will be a big help to non devs during downtimes.

Overall, the expertise and track record of WakeUp Labs in delivering these blockchain solutions are extensive and we believe ensure the reliability and effectiveness of the project. This proposal not only bolsters the network’s operational ease but also will ensure no temporary “mass drama” when systems inevitably go down for a time.

Catalyze Arbitrum Gaming: HADOUKEN!

Vote: Against
Type: Snapshot

Although we are generally in support of initiatives to further strengthen Arbitrum’s gaming ecosystem, we simply believe that the ask of nearly $400M here is exorbitant. One thing we’ve been thinking about is L2s having more of a concrete identity. Naturally, Arbitrum’s identity has become DeFi-biased. And although there are strong gaming initiatives that have sprouted out of Arb, like Treasure, we feel that doubling down on what we’re good at is what we should focus more attention on. That being said, we’re not in favor of eliminating gaming in its entirety. There should still be programs to support game devs and attract publishers–but to a smaller account. Game development is very much an all or nothing task. Either we go all in or keep it light.

Everyone saying these sorts of funding programs will seed the next AAA game are simply incorrect. The entire $400M budget would easily be spent curating a AAA game and would take numerous years. The goal of this proposal is to play catch up, it seems. Hence, the focus should be on a handful of strong indie games. This budget could address that market, but we still feel that a smaller budget can be more prudently allocated to serve that purpose. We would encourage this proposal to go forward with a much smaller ask and collaborate with the grant groups, like the gaming domain allocator, to come up with a way to grow gaming. That way, some data points are present to help guide the funding initiative.

A good idea may be to switch the framing of this program to an incubator/accelerator that is paid out in tranches. A big issue with this proposal is that longevity is not addressed. We need follow-on investments to support the groups who are the most promising, and the best way to do so is track and monitor continual performance relative to given KPIs. As soon as KPIs are met, those teams attain more funding. This would elongate the timeline here from 2 years to many more. It would also reduce the ask of $400M to something smaller due to the tranched setup. This way, we are thinking more long-term and in an organized manner. Currently, it seems things are being rushed, which sounds like a recipe for disaster.

The other aspect that we feel is unclear is how tangibly the reward will circle back to the DAO. There are two aspects this proposal can optimize for: increasing Arbitrum’s gaming presence and returning value to the DAO. Of course, both can theoretically be achieved, but there’s a very real likelihood that only one or none will be accomplished. If we are competing with groups like Immutable, who’ve spent the past several years throwing money at game studios, gaming partnerships, and tooling like their SDKs and custom APIs, it’s hard to justify spending this much capital to potentially see little return when a direct competitor is miles ahead and thinks about nothing else but gaming. What we could focus on instead is a chain agnostic approach, where the DAO truly runs a VC gaming arm for the sake of profit, and of course, has a bias towards developing on Arbitrum. That way, at least we can more reasonably forecast ROI.

Arbitrum Stable Treasury Endowment Program

Vote: For
Type: On Chain

In line with our past rationale, we are still fully in support of this program and look forward to this pilot program of sorts spinning up. Eventually, we look forward to expanding and allocating more and more funds to treasuries for passive yields.

Expand Tally Support for the Arbitrum DAO

Vote: For
Type: Snapshot

Tally has been of great help to the DAO and the customizations they have done for Arbitrum have been very helpful and useful. We are in full support of them expanding support for the DAO and the funding request they have targeted in both in line with our expectations and also very reasonable for this task.

Double-Down on STIP Successes (STIP-Bridge)

Vote: Abstain
Type: Snapshot

Our team is generally in favor of supporting incentive programs. We voted FOR the previous STIP initiatives, as well as the LTIPP. This proposal, however, caused us to pause. There’s a degree of ambiguity present that leaves too many questions unanswered, and we are unsure if further incentivizing these protocols is the best use of treasury funds. There needs to be a more comprehensive analysis of the impact of the STIPs–hard numbers and data.

It seems many are beginning to justify large incentive spending as a way to compete with other L2s. Vampire attacks become especially rampant during bull markets, with new protocols offering exorbitant APRs. We’re of the opinion that enough incentives should be paid out to worthy protocols–and those incentives must be coupled with products that have market fit. If STIP incentives for a protocol don’t work, the cop out cannot simply be “there are higher yields elsewhere”. We have to consider if the products we are incentivizing actually have merit. Sure, capital chases yields, but consumers chase good products. Before providing STIP projects with more incentives, the DAO should conduct a more comprehensive analysis of the failures and successes of the already deployed incentives.

Furthermore, capital inflows shouldn’t be the only metric for judging the success of the incentives. Stickiness of capital and users is perhaps a better measure for sustainability. It’s great that these incentive programs have increased Arbitrum TVL. And we get that there’s a desire to grip onto that capital, making sure it stays in the ecosystem. But we should also consider the lasting impact of these incentives. A good way of putting it perhaps–the current TVL is like pouring water into a glass…but that glass has a hole in the bottom. Instead of continually filling up the glass with incentives, maybe we should figure out how to patch the hole.

The UADP will abstain from voting for this proposal. We hope that the authors take the DAO’s constructive feedback and provide delegates with more substantive reasoning behind why this proposal is worthwhile. If the provided reasoning is sufficient, we may alter our vote to FOR later on either during a new snapshot or the onchain vote.

Security Council Nominee Selection

Vote: Certora, Mudit Gupta, Raf (1/3 each)
Type: On Chain

We split our vote equally on these three nominees due to their experiences and personal experience working with them which makes us think they would be a great fit going forward for the council. Certora has proven itself valuable with its formal verification services. Mudit has done a great job at Polygon and we have personally worked with Raf on Uniswap and has been really helpful with issues we’ve had in the past with Tally.

Arbitrum LTIPP Application

We have applied for a grant for Uniswap in the latest round of Arbitrum funding! Here is our proposal.

For the last few weeks, we have been working with @Gauntlet to create a Uniswap on Arbitrum incentivized liquidity program that will work hand in hand with the prior approved Dynamic Incentive Optimization program Gauntlet proposed with the Uniswap Arbitrum airdrop.

Here are the main relevant sections of our grant proposal:

GRANT INFORMATION

Requested Grant Size: 1.0M ARB

Justification for the size of the grant: Prior to this application, Uniswap passed a DAO vote to use 2M of its Arbitrum airdrop to instantiate liquidity mining on its Arbitrum deployment. Since then, Gauntlet has been actively managing this incentive program, resulting in an increase of ~$1.01B in volume and ~629% in TVL attributable to incentives. Based on the success of this program and the continued partnership with Gauntlet, we expect similar/greater results with the requested amount. For a full breakdown, see Gauntlet’s mid-point retrospective 2.

Grant Matching: The Uniswap DAO has been voting on incentive packages since February 2024. The goal of this program is to increase liquidity providers to Uni pools, thereby providing depth for users swapping between assets. We have so far passed incentive programs to 8 different chains, representing ~$4M worth of $UNI. The members of the UADP are also prominent Uniswap delegates and are therefore able to post a temperature check to the Uni DAO to include Arbitrum in the incentive program. So, during March, the UADP will request the Uni DAO to decide whether or not it wants to partially match this 1.0M ARB ask. The options the DAO has to vote on are four: $250k, $500k, $750k, and $1M. We cannot guarantee that the DAO will vote to match incentives, but we will make a best effort attempt and report the results of the temperature check in this forum post.

Grant Breakdown:

  • 900k ARB for incentives:
    • 882k ARB: The bulk of these funds will be used to incentivize liquidity providers on Uniswap using Gauntlet’s dynamic optimization engine. Gauntlet takes a quantitative approach to determining which pools should be incentivized. Their simulation models predict the changes in a pool’s liquidity and volume market share across DEXs for a given level of incentive spend. Gauntlet has already integrated Uniswap V3’s Arbitrum deployment into their incentive recommendation engine. Integration and analysis ensure the pools selected offer the most ROI for the incentive program.
    • 18k ARB: For Merkl to distribute the funds. Merkl charges based on a percentage of the incentives distributed. We were able to negotiate a discount to a 2% fee since Abdullah and I also helped with Uniswap’s Growth Incentive Packages for new chains, and Gauntlet uses Merkl for their prior mentioned Dynamic Incentive Optimization for Uniswap V3 1.
  • 85k ARB for Gauntlet
    • Gauntlet will dedicate part of its Applied Research team, the same team currently managing the Uniswap/Arbitrum liquidity mining program, to this initiative. This team will focus on active management of incentive allocations, bi-weekly updates, and an external facing dashboard.
  • 15k ARB for UADP
    • These funds will be sent to the UADP multisig with the goal of making this meta-governance initiative a self-sustaining program. This will allow Uniswap DAO to maintain its voting participation in the Arbitrum DAO.

GRANT OBJECTIVES, EXECUTION AND MILESTONES

Objectives:

  • Optimize Incentive Budget and Allocations: The benefits of an incentive program should outweigh its cost. In the case of Arbitrum, the primary cost is the token budget set aside for distribution. Gauntlet aims to set optimal budgets and allocate incentives to LPs based on the value they contribute. By incentivizing LPs to bring and maintain meaningful liquidity and volume, we look to operate an incentive program that creates value for all stakeholders.
  • Drive Network Effects: Implementing a well-designed incentive program will attract LPs and encourage deeper liquidity pools, attracting volume. This will help Arbitrum bolster its market competitiveness among L2s. Enhancing this can lead to a flywheel effect of liquidity, trading volume, and platform growth.
  • Generate Sustainable Growth: A successful incentive program should incentivize LPs who continue to provide liquidity and contribute to Uniswap’s growth and utility. With this strategic goal in mind, Gauntlet approaches our work for Arbitrum with the view of supporting growth beyond the immediate time frame of the incentive program.

Execution Strategy:

Gauntlet has built a simulation engine for understanding the effects of changing yield conditions on pool liquidity and volume. It consists of a liquidity model that determines how LPs would react to increased yield (in the form of liquidity mining incentives) and a volume model that determines at the per-swap level how historical swaps would be redirected or changed in size based on counterfactual updates to liquidity. Gauntlet is currently applying the simulation engine to our analysis of Uniswap’s fee switch, as a protocol fee works as a negative incentive for LPs that decreases yield. More information about our simulation can be found in our fee report.

When it comes to determining incentive allocations to pools, Gauntlet will be using our simulation to determine projections of liquidity and volume given various levels of incentive spend. From those projections, Gauntlet will optimize the choices of incentive allocation across available pools in order to maximize the program ROI. Gauntlet will balance this optimization against considerations of the strategic benefits that certain token pairs provide to the Arbitrum ecosystem as a whole. In order to adjust to changing market conditions and improve our allocations through experimentation, Gauntlet will be providing updates to incentive allocations.

What mechanisms within the incentive design will you implement to incentivize “stickiness” whether it be users, liquidity or some other targeted metric?:

In our prior Uniswap Incentive Design Analysis, Gauntlet identified the Liquidity → Volume bootstrapping flywheel as the best way to generate lasting liquidity mining impact. This works as follows:

  1. Liquidity mining incentives begin
  2. LPs add liquidity to the pool, which improves execution quality for traders
  3. Traders route more of their swaps through the pool and thus pay more fees to LPs
  4. Fees from traders further attract liquidity to the pool until a stable equilibrium between liquidity and LP returns (fees + incentives) is reached.
  5. Liquidity mining incentives end
  6. Some liquidity is removed due to the reduced LP returns
  7. The final equilibrium level of liquidity is higher than initially because of the greater fee incentives enabled by sustained trading volume.

In order for this flywheel to work, the following must hold true:

  • Liquidity must increase as a result of liquidity mining incentives
  • Trading Volume must increase as a result of the increase in liquidity.

Therefore, it is necessary to allocate incentives to pools for which LPs are elastic to incentive yield, and traders are elastic to increases in liquidity. It is for this reason that Gauntlet is taking a simulation-based approach to incentive allocation and projecting the lasting impact of incentives as opposed to simply spending incentives on blue-chip trading pairs.

Specify the KPIs that will be used to measure success in achieving the grant objectives and designate a source of truth for governance to use to verify accuracy?:

While we will ultimately optimize incentive allocation via a data-driven process and results may vary with market conditions, we are targeting about $200M in additional volume due to incentives and a 2X increase in TVL for incentivized pools. We believe our prior incentive program’s performance allocating 2M ARB over 7 months and driving $1B+ of additional volume and 6X+ increasing TVL justifies these targets.

The two main KPIs we will be tracking are:

  1. TVL gained per incentive spend

Across all incentivized pools, we will track the dollar value of change in TVL from the start of the incentives divided by the dollar value of incentive spend. Both TVL and ARB spend will be normalized based on token prices at the start of the incentive distribution for the pool. This metric will ensure that LPs are elastic to incentives, and that the incentives are effective in deepening Arbitrum liquidity.

  1. Volume gained per incentive spend

Across all incentivized pools, we will track the dollar value of change in average daily trading volume from the start of the incentives divided by the dollar value of incentive spend. To normalize for changing market demand, this value will be benchmarked against the Arbitrum trading volume of the pool’s token pair. This metric will ensure that traders are elastic to incentives, and that the incentives are effective in bolstering trading demand.

Grant Timeline and Milestones:

How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?:

As highlighted above with the data we provided, we believe this will provide long term sticky liquidity and ecosystem wide incentives for Arbitrum, particularly with the depth and use of native tokens and projects which we intend to emphasize.

Additionally, we have primarily been incentivizing a diverse set including a few majors and larger Arbitrum-native projects (including MAGIC, VELA, GMX, RDNT, and others). Improving liquidity for these Arbitrum-native projects will be beneficial for the larger Arbitrum ecosystem.

Data and Reporting

Is your team prepared to comply with OBL’s data requirements for the entire life of the program and three months following and then handoff to the Arbitrum DAO? Are there any special requests/considerations that should be considered?

Yes. Note that Gauntlet is in the process of building a new dashboard for its current engagement with the Uniswap DAO (also focused on Arbitrum liquidity mining). We’d like to request that this be used to avoid duplicitous work in the form of standing up a second dashboard. This dashboard will be live by the time this program starts.

Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread that reference your OBL dashboard?: Yes, UADP will work with Gauntlet, Merkle, and other data providers to ensure that the requested data is displayed on Gauntlet’s dashboard or queryable by OBL. Gauntlet is already reporting 1 on relevant liquidity mining metrics through their current initiative with the Uniswap DAO, and Merkle captures LP and rewards data. Their new dashboard will include additional features and metrics.

CC: @eek637

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https://forum.arbitrum.foundation/t/ltipp-council-screening-period-results/23029

The council reviewers posted their results today and we’re excited to announce that they have approved our 1m $ARB grant for this trial period!

Next steps:

  • There will be a snapshot vote for the general Arbitrum DAO to officially approve this grant.
  • If approved, we will continue to work with @Gauntlet to set up everything and monitor the grant.
  • Start the discussions and draft for the “official” LTIPP proposal after this trial period (not yet confirmed)

Thank you to everyone involved!

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April 2024 Voting Updates

Expand Tally Support for the Arbitrum DAO

Vote: For
Type: On Chain

We are voting in line with our prior snapshot vote. We look forward to the support Tally will provide and increased updates they will continue to push our for the governance support and UI.

Empowering Early Contributors: The community Arbiter Proposal 2.0

Vote: For
Type: On Chain

These members should be compensated for their work that they diligently worked on during this time period and these amounts are just. We are in continued support as we were earlier from the snapshot.

Request for Continuation of the Arbitrum DDA Program Request

Vote: For
Type: On Chain

We are voting in line with our prior snapshot vote. We have voiced that the past program has done a great job and the in depth updates on the performance and related metrics is very helpful in our decision.

LTIPP Council Votes

Vote: 76 votes
Type: Snapshot

We are voting in line with the LTIPP council’s decisions. For any proposal that was 3/5 votes or higher, we have voted yes. For any proposal that was 2/4 (50% yes), we abstained. Any vote that was less, albeit didn’t make it to the snapshot vote, we would have voted no. Thanks to the LTIPP reviewers for their hard work these last few weeks.

Security Council Member Election

Vote: Certora, Raf (1/2 each)
Type: On Chain

We are voting in line with our prior member selection votes. We split our vote equally on these two nominees due to their experiences and personal experience working with them which makes us think they would be a great fit going forward for the council.

Delegate to Voter Enfranchisement Pool — Event Horizon

Vote: For
Type: Snapshot

Our team has had communications in the past around increasing EH’s involvement in both Uniswap and Arbitrum. The general idea around providing “the little guy” with more say in voting decisions is well-founded–but we do have concerns regarding how legitimate this assumption is. Voter apathy often festers when a large group of people have a singular vote. One person begins to believe that their measly single vote will not materially change the direction of a proposal. As a result, that voter ceases voting. A domino effect of apathy leads to lackluster participation, and then we’re back to square one–this is one reason why single-vote NFT models may not be the strongest systems. Equalizing everyone’s voice reduces the marginal incentive to put effort into making informed decisions. This is a phenomenon we could see with EH. The remedy this proposal displays, however, is:

“When participation is low… each voter receives a larger slice of the public access pie. This means the fewer people there are voting, the more incentive there is for someone new to come and participate.”

We are very curious to see where the equilibrium point lies. At this point, each voter will likely perceive the cost of voting (which is just effort) to be less than the amount of voting power that they are mobilizing. The more people that vote, the less marginal voting power there is–and vice versa. Since we are also Uniswap stakeholders, seeing the results here will also help inform our decision making on the Uniswap front.

Another concern that we initially had was sybil. The EH team has addressed this well via incorporating the Gitcoin Pass. Generally speaking, the Gitcoin Passport setup isn’t perfect, but we feel that it provides a sufficient enough cost for a sybil attack to be thwarted. We also don’t see the appeal for a large sybil attack on 7M ARB worth of voting power–it’s not large enough in our eyes. The cost to sybil this system simply seems too high to be worth swaying a particular vote.

Subsidy Fund for Security Services

Vote: 100% for 1 cohort of 8 weeks, $2.5M fund
Type: Snapshot

Directionally, we are in favor of this proposal. There is clearly a need to help front some of the costs associated with audits. However, the proposal does seem a bit rushed. There are a couple of aspects that could have been addressed prior to taking this proposal to snapshot, which would’ve assured a higher success rate as opposed to the current divisiveness we’re seeing in the polls.

“we are in the process of sourcing a neutral security expert as an advisor to aid us in judging both, applications from service providers during the RFP process and applications from projects looking to receive subsidies from the Subsidy Fund”

“the ADPC is currently in the process of setting up the procurement framework to whitelist security service providers for the DAO. Given the large amount of legal work required to structure an RFP, it is still in the drafting phase and has not yet been published to procure any security service providers.”

The above illustrate some pending work that should be completed before snapshot.

Perhaps a better order of operations is to attain a soft commitment from the DAO regarding how much an initial pilot cohort will require. Say, the snapshot vote leads to the $2.5M fund being selected. Then, the ADPC can run an RFP process, collect the projects that require subsidy, present the findings to the DAO, then follow up with an onchain vote finalizing the payment transfer from the DAO to the ADPC for distribution. This way, there’s a soft commitment present from the DAO, and the contingency at hand is that the initiative attains the earmarked funds only if it’s run in a reasonable manner. What if the DAO disapproves the onchain vote? I doubt that this will happen as long as the ADPC delivers on its promises properly. To those ends, we would like to signal our support for $2.5M for a single cohort, treating this as a pilot. If this proposal fails the snapshot, the ADPC should return to the DAO with a more comprehensive proposal once the aspects from the above quotes have been addressed.

Also, regarding the stated areas of interest–RWA, gaming, and collab tech are noted as the main sectors for audits since there are many developments occurring here. I may be wrong in my assumption, but isn’t the best use of audits for protocols that perhaps have the most value at risk? This would largely include DeFi protocols, especially high TVL ones like money markets. RWA seems like another sector that falls under this umbrella. I’d assume the cost for audits regarding tooling/collab tech and even gaming is properly lower. All this to say I’d think critically about what teams really need an audit to begin/sustain operations–versus those who can delay a full-fledged audit until they either raise more or earn more revenue.

Safeguarding Software Developers’ Rights & the Right to Privacy

Vote: 100% for Fund with 1,500,000 ARB each
Type: Snapshot

The legal terrain is a tough one to navigate, and it’s seldom top of mind for builders in the space until the community faces some sort of calamity. It’s therefore vital to fund groups that have the connections and competency to effectively court the ears of politicians and regulatory bodies. Both organizations have a strong history in shaping the landscape of digital asset regulation and defending the rights and freedoms within the blockchain community. Since we are by no means legal experts, we have resorted to the comments of folks more acclimated with this subject matter to decide our vote. Lobbying and litigation initiatives are quite expensive, so it doesn’t seem prudent to simply give the entities $500k each. It seems wiser to deploy $1M - $3M per organization so they can more effectively implement their plans. If we’re going to fund this, might as well make it worthwhile. An aspect that we hope will better be addressed in the future, however, is clearly reporting back to the DAO the successes and failures of the programs taken by Coin Center and DEF. Other DAOs have previously funded such groups, but they never returned to the DAO with KPIs and success metrics. We are curious if @Immutablelawyer/Axis will be actively involved as a liaison between CC/DEF and the DAO from a communications perspective.

March Delegate Incentive Program

The UADP received its first delegate incentive from the Arbitrum DAO’s Delegate Incentive Program.

A total of 4324.68 ARB was sent to our multisig (0x8326D18edfC50B4335113C33b25116ec268FF3fE) and can be found here. This amount is based on a couple of criteria: snapshot participation, onchain participation, communicating rationale behind the votes, and productive forum conversation, based on the quality of the feedback provide on the forums.

This first initiative is a 6 month period with a goal to renew it continuously. We are planning on splitting these tokens in the following manner:

  • 50% of the ARB stays with the UADP multisig for the sake of increasing the longevity of this program with the goal of one day self being self-funded

  • 50% is split evenly among the two UADP contributors

We will communicate future monthly delegate “scores” and incentives in this thread going forward.

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