ADPC Update Thread (Phase II)

[pedrob]

gm

After reviewing the list of protocols that received a subsidy fund once again, I would like to reiterate the point I previously raised in the public telegram channel regarding the rationale behind the selection of applicants for the subsidy fund.

Considering that when the subsidy fund was proposed, the following was mentioned, with a particular focus on “smaller projects”:

@Bernard

The reason for this approach over a purely quantitative approach is that most projects, especially the smaller ones being targeted within this subsidy program do not possess obvious immediately measurable metrics.

The development of this Means Test aims to provide a structured approach for the ADPC to evaluate applications for financial assistance. This tool is designed to identify applicants who would benefit most from support, ensuring equitable access to subsidies within the Arbitrum Ecosystem, particularly for smaller entities with valuable contributions.

The intent is to allocate subsidies to those most in need, avoiding exploitation by larger players looking for a ‘free lunch/handout’. Such an event could give recipients an unfair advantage over their competitors or be an inefficient use of the DAO’s funds if they do not bring about a net positive change.

As I mentioned previously, I believe that obtaining details about the reasons for approval and the circumstances that led to the rejection of other applicants will be valuable for other projects looking to apply in future subsidy programs, as it helps them understand the evaluation criteria. Secondly, it ensures transparency and a fair process.

Additionally, I have noticed that among the selected projects, the following was included:

@Immutablelawyer

Arb Staking

Arb Staking consists of contracts whose audit also received funding through the proposal for their development, which was approved in August of last year.

I reached out to the ADPC team, and they promptly informed me that they were aware of the situation and considered that, since the request was for an audit contest, there was no issue in granting the funding.

To be clear: I do not believe the program’s rules were broken.

However, I do think this situation highlights the point that a bit more transparency regarding the rationale behind decisions would be beneficial.

Additionally, I would interpret the outlined principles differently in this particular situation:

@Bernard

All applicants should keep in mind the following key principles:

1. Transparency & integrity - Applicants must disclose any potential conflicts of interest and receipt of any prior funding.

2. Encouragement of investment - Subsidies should incentivise investment that would not otherwise occur without the subsidy. They should not cover costs that the beneficiary would have funded independently in the absence of any subsidy.

3. Proportionate and necessary - Subsidies should be proportionate to their intended objective and limited to what is necessary to achieve it.

4. Economic neutrality - The requested subsidy amount should not confer an economic advantage. It should be provided on fair terms, comparable to what could reasonably be obtained on the market.

5. Consideration of funding options - Applicants are expected to explore all available funding options and responsibly choose the option that best suits their needs.

6. Enhancement of beneficiary security - Subsidies should bring about changes that enhance the security of the beneficiary’s protocol.

7. Positive impact on the Arbitrum ecosystem - Subsidies should have a beneficial effect on the Arbitrum ecosystem, contributing to its growth and sustainability.

8. Value for Money - The evaluation method should ensure decisions maximize both financial and non-financial value to Arbitrum.

9. Probity - Subsidies should be issued in an environment that ensures fairness, impartiality, and compliance with established guidelines and rules. There will be an emphasis on transparency, accountability, and integrity throughout the procurement process, evidenced by the development of this publicly documented Means Test methodology. This focus on Probity will mitigate procurement risks and safeguard the integrity of the procurement process.

10. Risk Management - Risk management policies will be implemented to identify and mitigate procurement risks.

11. Engagement with SMEs - We have invited a wide range of organisations to participate, all of whom will be subject to the eligibility criteria.

12. Cyclical Whitelist events - We will have clear rules for cyclical whitelist reviews to open a pathway for future applicants and new market entrants.

I believe that a large company, which the DAO is already funding for the development and audit of contracts, should not be eligible to receive subsidies from another DAO program for those same contracts. But that’s my opinion and interpretation of what the subsidy fund was for.

Once again, this is not a criticism of either the ADPC team or Tally. It is simply an opinion regarding the future implementation of subsidies, both in the rules and in the transparency of the decisions.