Hello Arbitrum delegates,
I edited the original post, as well as the title of this thread, to reflect our updated proposal.
We received three major categories of constructive feedback on this proposal.
- Delegates including @swmartin @pedrob @BlockworksResearch and others are not ready to come to consensus on committing 50% of future surplus sequencer fees to staking. While there is strong agreement that the DAO will share rewards in some form with token holders in the future, we need more time to develop a plan for treasury diversification and sustainable operations before moving forward with the plan originally outlined in this proposal.
- Delegates including @JoJo @cp0x @Englandzz_Curia @Mehdi_eth @SEEDGov and others have strong ideas on how staker rewards and delegate incentives should work in the context of ARB Staking that go beyond the original scope of this proposal.
- Delegates including @fred @0x_ultra and others were concerned about the details of how we proposed to implement Karma to define “active delegate” as a criteria for rewards eligibility.
We’ve rewritten the proposal to account for this feedback by making the following changes.
- Instead of directing 50% of future surplus sequencer fees to stakers, we leave the DAO to decide later how to fund rewards.
- Instead of directing 1% of staking rewards to delegates, we leave the DAO to decide how to fund delegate incentives via staking. We note that additional mechanisms like a per delegate voting power cap can be introduced to ensure ARB Staking does not lead to increased centralization of voting power.
- Instead of pre-setting a Karma Score requirement, we leave the DAO to decide this in the future. We also enable the DAO to change the Karma Score formula in the future. We implement multiple guardrails to ensure the implementation of Karma score is robust and decentralized.
We plan to contribute actively to all of these work streams in the future (deciding how to fund rewards, deciding how to incentivize delegates via staking, deciding on Karma Score requirement and formula). In the meantime, we will implement the staking system so that it can be funded in the future. We will also implement an ARB LST (tARB) via the Tally Protocol so that ARB can be used in restaking and defi while returning voting power to the DAO.
In addition to the above changes based on delegate feedback, we made a change to the overall cost. Previously, we proposed to fund the work via a retroactive payment of 100,000 ARB to help cover the cost of development. Instead, we propose to fund the work at the beginning via an onchain proposal for $120,000 USD in ARB. We priced the ARB in USD to account for price volatility. We increased the cost slightly to account for the development of Karma decentralization guardrails. We shifted to requesting funding at the start of the development process because we think it is important for the DAO to have some skin in the game if it approves development, especially given the proposal no longer includes a decision to distribute 50% of surplus sequencer fees to stakers.
The first post in this thread contains the latest version of the proposal.
Thank you very much for your feedback and contributions to the proposal so far. Looking forward to continuing the conversation!