A Vision for the Future of Arbitrum

[SEEDGov]

First of all, we would like to highlight how positive it is that entities such as the Arbitrum Foundation and Offchain Labs want to take a more active role in the DAO. The truth is that we agree with many of the issues raised in this post. Today, the DAO is facing difficulties in the following areas:

• Moving forward with high-impact proposals for Arbitrum and its stakeholders: Key initiatives like ARB staking or incentive programs for protocols have failed to progress, largely due to the lack of leadership/ownership behind them. We believe that the Arbitrum Aligned Entities are perfectly positioned to lead these kinds of strategically important initiatives for the ecosystem.
• Negotiating proposal pricing: The DAO’s inability to handle this task is evident. In fact, part of the motivation behind appointing Domain Allocators in the D.A.O Grants Program is to ensure a designated counterpart for negotiating proposal pricing. This is not only due to the reasons mentioned by the Foundation, but also because it is inefficient by design to have a large number of delegates assess the pricing appropriateness of each proposal—this would be like asking a shareholder assembly to decide which internet provider to use in the company’s offices.
• Coordinating multiple initiatives: It’s been a while since each initiative has functioned in isolation. Clear mechanisms of cooperation must be established—something similar to what we are trying to implement in the Education, Community Growth and Events Domain 3.0 by coordinating with the Foundation on high-impact events and a common community growth strategy for each global region.
• Lack of Accountability: We are glad this issue was mentioned. As PM of the DIP, we follow every single publication on this forum and have noticed that some important reports, such as The Arbitrum Foundation 2024 Transparency Report: A Year of Key Milestones and Progress, the Delegate Incentive Program Accountability Report, or most of the deliverables from the ARDC, lack delegate engagement. This is not due to a lack of due diligence from delegates, but rather because they are overloaded with responsibilities. Ultimately, assigning delegates the role of overseeing proposals is a design flaw, similar to the expectation that they also negotiate pricing—this is a task typically not handled by shareholders in TradFi.

Our Contribution to the New Vision

Now, there is one statement we don’t fully align with:

@Arbitrum

The DAO lacks experts that have a holistic context of all things happening within the Arbitrum ecosystem to assist in the drafting of proposals, to provide commentary and recommendations on the state of proposals, and to steer the DAO as a whole in a direction that will propel Arbitrum forward

We believe that today the DAO does have a pool of talented delegates, contributors, and service providers with a broad understanding of the Arbitrum ecosystem, who offer recommendations during proposal drafting and who, for the most part, genuinely want to see Arbitrum succeed.

The issue, as rightly pointed out by the Foundation in this post, is that the DAO currently suffers from inefficiencies that overload its members and make it nearly impossible for new contributors to get involved. With clearer structures and objectives, it would be easier for delegates to focus on high-level decision-making, for contributors to engage in the DAO’s priority verticals, and for service providers to propose ways to support the DAO in areas where it has stated needs.

Another point concerns the definition of Arbitrum Aligned Entities:

@Arbitrum

Transformational Change #1 - Operations: The first question that comes up is what does it mean for an organization to be an Arbitrum Aligned Entity. The definition we would propose contains three prongs:

• AAE is competent to accomplish the responsibilities that it has been assigned
• Arbitrum is its primary focus
• Arbitrum winning is mission-critical to the organization’s success

We understand the rationale behind this definition and believe it makes a lot of sense. However, there should be room for a “second tier” of entities/contributors that are still strongly aligned and for whom Arbitrum winning is also mission-critical to their success. Taking ourselves as an example: SEEDGov, as an organization, along with its exclusive contributors in the Arbitrum ecosystem, has a strong vested interest in seeing Arbitrum prevail to ensure long-term success. For instance, @Gianluca, @MinistroDolar, and, more recently, @josemv work exclusively on the success of the Arbitrum ecosystem—this is the only DAO they are involved in (except for Ministro, who is also active in an Orbit Chain DAO like Everclear). Therefore, Arbitrum is also a primary focus for each of them.

As for whether we’re competent to carry out our responsibilities—we’d rather let the community be the judge of that.

What we mean is: yes, it’s true that the five AAEs undoubtedly have a superior alignment/skin in the game (however you want to call it) compared to others, but in the interest of maintaining Arbitrum as the most decentralized and mature DAO in the ecosystem, we have a responsibility to identify other contributors that are also deeply aligned and for whom Arbitrum is a top priority.

@Arbitrum

Regardless of this change, vendors and service providers will still play a critical role in the growth and success of Arbitrum. They will continue to provide support, just reporting to an AAE that defines its scope of work. In fact, we have spoken with numerous vendors who have wholly endorsed this shift because they feel that they will be able to operate their services more effectively. They will have more direct feedback, a clear reporting structure, and more guidance on when a shift in their services or offering would be most beneficial. Where today they are frequently getting contradictory guidance and feedback and are often uncertain what their priorities should be.

This is absolutely correct. As PM of the Delegate Incentive Program, we believe that greater involvement from AAEs would be highly beneficial for the program. We’ve recently paid special attention to the feedback received from the Foundation and Entropy, both in terms of driving changes in the program and evaluating delegate contributions to key initiatives led by these entities.

@Arbitrum

Transformational Change #2 - Delegates: If there were a Venn Diagram today of delegates and other Arbitrum stakeholders, there would be very minimal overlap across most categories of stakeholders. The delegate pool is well represented by professional governance participants and vendors, but its participation rates among investors, power users (e.g., liquidity providers), and arguably most importantly, builders, leaves a lot to be desired. We need the two circles of groups (delegates and other Arbitrum stakeholders) to significantly converge so AAEs receive the information and direction they need from stakeholders in a structured and aligned fashion.

Here, we partially agree. The DAO indeed needs greater participation from investors, power users, builders, and protocols—but we’re not entirely convinced that simply making it easier to interact with the DAO or reducing contributor overload will be enough to bring them onboard into the day-to-day of governance. In every industry, there are mechanisms to attract and retain talent, and this case will be no exception.

Conclusion

In summary, SEEDGov feels strongly aligned with this new vision (with the minor caveats mentioned above), and we want to offer our support in continuing to shape the future of Arbitrum. Our first step in that direction is to publish our submission for the SOS, which we believe is perfectly compatible with the ideas outlined in this post. We’re eager to combine efforts in a joint submission with any other stakeholder/AAE that considers valuable the objectives we have set.