I’m jumping into the discussion a bit late, but I wanted to share my thoughts on the election - no election topic. Generally, I’m all for elections and democratic principles as they are fundamental to decentralized governance. However, I think it’s also important to consider the context and specifics of the situation. And I agree with @JoJo on this.
The initial proposal mentioned that elections would be held for the second phase. But sometimes, to truly understand if certain choices are effective or not, you need to be in the process and see things unfold. I believe that while elections are a fundamental principle, continuity is also a key factor. Elections should only take place if they are truly beneficial in the given context. As @Immutablelawyer pointed out, holding new elections could lead to bureaucratic overhead and an inefficient use of resources due to the electoral process and the onboarding of new members.
In this case, I think continuity is crucial for achieving the established goals effectively. This is why, I believe that re-electing the current members directly would be the best course of action.
However, it’s important that this issue has been raised because it needs to be addressed when the proposal goes to Snapshot. It’s crucial to get community consensus on modifying the election process for the second phase, should the proposal be approved. But I’ve read that this last point has already been taken into consideration, so I guess that we will see it in the next steps on Snapshot.
Further to @jameskbh point on budget break down for the $360k.
Last time it was 3 providers at $8k/month x 6 months = $144k.
How does the work load and costs to provide this scale to handle 3 verticals?
Can you detail now for 3 verticals how you arrive at the $360k amount?
What are the roles and responsibilities for those in ADPC vs the new vertical leads?
Lastly, are funds distributed as a 1 off upfront payment or paid monthly, this level of detail is not in the proposal.
I also suggest for the verticals it be a formal process for:
ranked choice voting on snapshot for which verticals are chosen next (as I understand it the rank and selection was arrived at from 1-1s with delegates, but there was no option for wider global delegate input in this process, correct me if I am misunderstanding)
Selecting vertical leads (for RPC and Events) this should be an open process after the vertical is chosen for candidates to respond to and be selected for who is the vertical lead / manager
Similar to questions raised by @Avantgarde and @KlausBrave, we would like clarification on the OpEx budget and the compensation for the ADPC. Specifically:
What services do you foresee being eligible for the OpEx budget? Will it encompass many services and provide value in terms of streamlining processes, or only encompass a small select number of services?
How do you plan on using the $60k per month across the 3 members of the ADPC? How did you arrive at this number?
Hi @KlausBrave, appreciate you reading through the proposal. Since events are a selected vertical and what we propose is complementary to the GovHack format, it’s very useful to get your view as the main event organizer for the DAO!
Let us clarify some of the questions below:
How does the work load and costs to provide this scale to handle 3 verticals? Can you detail now for 3 verticals how you arrive at the $360k amount?
Tagging @PennBlockchain here as they had a similar question (also thanks for reviewing!).
In Phase I we used $144k to complete one vertical, and as stated in the proposal, the workload in the ADPC was significantly more time and capacity intensive than priced-in, but taken on by the committee as goodwill to make it work. Since we have now left the initial phase and will provide procurement services for two more verticals in Work Package 1, paired with dedicated value in the additional work packages, the budget merely reflects the capacity and time spent by the teams. Using our learnings from the initial phase, we plan to streamline the work to deliver greater output within the same timeframe and a similarly scaled budget.
We will allocate the $60k equally across each party of the ADPC. I.e., each of Areta, Axis Advisory, and Daimon Legal and their dedicated teams will be allocated $20k each per month.
Lastly, just wanted to add a bit of an explainer around the OpEx budget as per @PennBlockchain’s question. Quoting from the proposal:
This budget is designed to streamline the DAO’s interaction with ADPC-whitelisted service providers by creating a direct utilization rail. This rail will allow DAO initiatives and contributors to access and utilize these pre-approved service providers without undergoing the cumbersome proposal process for each engagement. The OpEx budget essentially bypasses the bureaucratic hurdles that currently plague the DAO’s procurement process, enabling a more agile and responsive operational framework.
As it stands and should the proposal be accepted, the DAO would then be able to solicit services re. Events, Security, and RPCs by the end of next term. Naturally as we scale our procurement efforts, the options will correspondingly increase.
Lastly, are funds distributed as a 1 off upfront payment or paid monthly, this level of detail is not in the proposal.
We have added further detail around the funding mechanism into the proposal and updated it to OTC the entire requested amount into USDC upon receipt of the ARB and return the unutilized ARB to the DAO treasury. This is intended to avoid fluctuations in ARB price and ensures that the ADPC avoids using the buffer as much as possible. As such, monthly payments to the ADPC will be made in USDC instead of having to convert the ARB to USDC at the end of each month.
ranked choice voting on snapshot for which verticals are chosen next (as I under it the rank and selection was arrived at from 1-1s with delegates, but there was no option for wider global delegate input in this process, correct me if I am misunderstanding)
Great idea - also one we discussed intensively within the ADPC and delegates. We reached out to 25 delegates and stakeholders directly and via survey for their feedback. We found this to be the most effective process for balancing the high level of context needed for this decision while incorporating as many views from different stakeholders as possible. We have also already started working with Entropy and DisruptionJoe on the Events proposal to ensure that the DAO is able to have a sufficient presence at the larger events in H1 2025. However, your suggestion is well taken - if there is consensus on the DAO wanting to vote individually on the verticals and outsource this decision, we are happy to facilitate this process.
Selecting vertical leads (for RPC and Events) this should be an open process after the vertical is chosen for candidates to respond to and be selected for who is the vertical lead / manager
Could you please expand on what you mean by vertical leads here and what their responsibilities would be?
Good question, and an important point to clarify to avoid confusion - there will be no vertical leads in the sense of dedicated leaders owning any of the verticals. The essence of our process will be to run an open RFP process, giving different providers the opportunity to offer their services and providing the DAO with the most effective access to high-quality services at comparable rates.
Hi @Avantgarde, appreciate the time digesting the proposal and positive feedback. Find some details below:
(1) Re. the OpEx budget:
Regarding the OpEx budget - can you provide any insight into the oversight mechanisms for this budget? e.g., how the MSS will ensure transparency and accountability in spending and what processes will be in place to report back to the DAO on fund utilisation?
The proposal published by Entropy already binds MSS participants to a transparency and accountability policy relating to breach of duties, conflicts of interest, etc. and there is also a process for the removal of a member if this occurs (if 8/12 agree that this has occurred).
(2) Re. the management of the Security Services Subsidy Fund
On the management of the Security Services Subsidy Fund (kudos for waiving management fees for the pilot phase) - how are you thinking about this long term, including if the fund grows in size/scope etc?
For future iterations we aim to open up management of the fund to other parties who can apply to be selected to manage the fund, akin to our previous proposal to establish a sub-committee for the Security Services Subsidy Fund. In alignment with delegates and the DAO, we believe that the ability to select projects to receive subsidies benefits from having more parties/stakeholders involved in the long-term. Given the operational effort to set up and run such a fund, we propose these parties charge a management fee including operational expenses as a percentage fee of the value of the fund.
(3) Re. Reporting
As far as is understood, the multi-sig management will be handled by the MSS established by Entropy - but what does the specific roles and responsibilities look like? who holds decision-making authority and how would potential conflicts of interest be addressed?
As funds will be endowed in the MSS, they will be subject to the MSS reporting requirements which are currently being handled by R3gen Finance through token flow reporting. This report will detail expenditures, inflows from Sequencer Flows, and other direct outflows from the Arbitrum Treasury. The report will also include ancillary items such as include transaction fees, treasury holdings, spending estimations, and contributor analyses.
Hope that helped to clarify some of the open items. Let us know if you have any further questions!
Thank you so much for you taking the time to provide feedback. We appreciate the level of engagement and alignment on key items! Below, we list some of the amendments to the proposal.
Amendments
Added that this proposal includes the re-election of the current members of the ADPC.
Updated the weighted average price of ARB to 0.5425 to account for the last 14 days (21 August 2024 to 03 September 2024) and therefore updated the total ARB requested. Please find the calculations here.
Updated the proposal to OTC the entire requested amount into USDC upon receipt of the ARB and return the unutilized ARB to the DAO treasury. This is intended to avoid fluctuations in ARB price and ensures that the ADPC avoids using the buffer as much as possible. As such, monthly payments to the ADPC will be made in USDC instead of having to convert the ARB to USDC at the end of each month.
Snapshot
This proposal will be live on Snapshot from 11.00 UTC on Sep 5 to 11.00 UTC on Sep 12. You can find the Snapshot link here. Please vote!
Hey @sid_areta, thank you for providing this update.
Re Point #1, I don’t think the Snapshot proposal clearly asks the DAO whether it would be happy to change the rules governing future ADPC elections, as per the terms of the ADPC’s initial Tally proposal.
It should be made explicitly clear that voting in favor of this proposal either changes the rules governing future ADPC elections, or that this re-election is a one-off exception to the ADPC election process that was ratified in the initial Tally proposal.
In its current format, the DAO is not given the possibility to change the rules governing future ADPC elections but rather the current ADPC members are proposing a re-election with no optionality regarding candidates, and without a clear structure for how elections in the future will look like.
Hey @sid_areta, thank you for the response. We understand that the scope for Phase II has expanded to cover more verticals and may require additional time and resources. For this reason, we voted FOR this proposal on Snapshot.
I will be voted for because this proposal is ideal to simplify communication about the ADPC through clear summaries and promote it on social media. This would increase community understanding and participation. Additionally, greater flexibility in budgeting would allow adaptation to new opportunities, enhancing efficiency in the long term.
Another small question about the 2025 strategy
You wrote that it is being prepared, but when will it be presented and suddenly there won’t be enough $360k for it?
ADPC has done a lot of outstanding work for Arbitrum DAO over the past few months, and I am very grateful to it. In fact, I fully support the proposal, because a good thing needs to be sustainable, and it makes sense to have the necessary budget to accomplish it. I have carefully reviewed the budget mentioned in the proposal, and I think it is relatively reasonable, and there is no over-exaggeration.
We’re fully aligned with providing clarity around this. This proposal does not aim to permanently change the ADPC election process that was established in the previous Tally vote. Our opinion, which is echoed by @JoJo and @0x_ultra, is that extending the tenure of the current members of the ADPC for this Phase II is the most effective and efficient use of resources for the DAO.
For any future extension terms of the ADPC, the process outlined in the original Tally vote will stand unless automatic renewal of the then-current members is proposed. Of course, this will be subject to the potential OpCo that gets formed and any implications that may have on the structure of the ADPC.
We will add the above explanation to the proposal - thank you for clarity on the election requirements and appreciate the engagement on this!
ADPC created one of a kinda entity in arbitrum and I think in crypto in general, and goes in what I think is an extremely good direction for high decentralized orgs like our dao: bridge well known framework and way to solve problems from more traditional industries to ours.
We don’t need to reinvent the wheel everytime, we can easily adapt what already exists in professional world into crypto, with a tailoring for the specific tools and needs we have, and this is what is happening here in my opinion.
I also like the expantion in scope, and I partially share the concern of @Frisson about it potentially be a big too big as workload; at the same time, knowing the parties involved, I think they can pull it off.
As a final note, in this case, like in the stylus sprint, I am strongly against any new election. While I think there could be others that potentially have the knowledge to move this forward (even tho 90% of the lawyerish force of arbitrum is in the parties above), even just the handover, and the reshape of vision, would literally eat on the whole mandate time wise with suboptimal results.
We do recognize the work that has been done and achieved during the pilot phase. And this is a well-thought proposal, generally we support, only with one suggestion:
Based on the achievement that has been done in the first 6 month, the work packages of the 2nd 6 months is way too ambitious. We saw that the budget has also been increased due to the expansion of the scope of work. This makes sense. But with so many verticals, shall we put some priority to certain verticals? What are must do and what are potentially be done if have capacity.
I will be voting for the proposal to extend the ADPC’s tenure into Phase II on Snapshot.
The ADPC has proven its effectiveness in Phase I, delivering tangible benefits like cost savings and establishing essential procurement frameworks. The plans for Phase II show they’re ready to keep delivering value, and the proposed budget is well-justified with the committee’s emphasis on transparency ensuring continued alignment with DAO values. Keeping the same team ensures continuity, they’ve already shown they know what they’re doing, so it makes sense to let them keep the momentum going in Phase II.
ADPC has done an excellent job in the first phase, and at the same time, in terms of cost savings and establishment of the necessary procurement framework.
The proposal demonstrates its core values and program of work, as well as transparency. Step by step, it realizes its complete plan.
The proposal is a first extension and focus, with clear guidelines in terms of people, finances, priorities, planning and principles.
Feedback:
But I think its focus is on converting arb to usdc, which is a one-time thing, and if the price is below 0.5425 for a long period of time, does it require a higher budget, and at the same time the strategy and method of using the price of arb as a strategy and method of selling arb for a long period of time, which I don’t think is desirable. Would like to set up a program to pay fees in arb
Overall, APDC has established a procurement framework, conducted benchmark evaluations of security providers, and passed a proposal to fund security subsidies, continuing the work and processes from Phase 1. I believe they are trustworthy and commendable. At the same time, I think it’s necessary to hold a work progress communication and summary every two months and make it public.
Thank you very much for the proposal and congratulations on the work accomplished over the past months.
I’ve taken some time to review both the Phase I final report and the new proposal. I believe you’ve done a great job, and the DAO should pay special attention to Section VI, “Complexities,” and Section VII, “Key Learnings and Recommendations,” as they are crucial for the future of all committees that will be formed.
That being said, I have several questions that overlap somewhat between the information provided in the Phase 1 report and the proposal for Phase 2, as well as some unrelated to the proposal itself but relevant to its operations.
First, I would like to ask about your work in general as a committee. Do you believe it was efficient? Did you face organizational challenges? Do you think you effectively balanced the decentralization and oversight that a DAO requires with the efficiency needed to execute your tasks? Was it worth implementing the work as a three-member committee? Why continue with that composition? Why not -for instance- concentrate the work on a single member or increase the number to five?
Regarding your Phase I Report and the Phase II proposal
In the introduction of the Phase 1 report, you highlight:
Regarding the procurement frameworks, -which is definitely the most important according to the mandate — I notice that the work is still unfinished:
My first question is: What are the reasons you identify for not being able to complete the entire work in 6 months?
As an example, I understand that the STEP, without being called a procurement framework committee, did similar work (RFP, applications, selection of service providers, and fund distribution). They completed all the steps in less than 3 months, from the on-chain proposal approval executed in April to the communication of the chosen service providers in June, ultimately approved during the first days of July.
What differences do you identify between your work and the delay compared to theirs? An obvious one is that the Subsidy Fund had to be discussed and voted on separately from the ADPC proposal. I ask, wouldn’t it be better if this temp check included signaling that the DAO intends to allocate “x” amount of resources to those service providers, justifying the procurement framework? That would also give more weight to the budget you’re requesting to carry out that work.
Would that be the OpEx budget you mention? Another alternative could be that if this temp check is approved, the budget is included before the proposal goes to Tally.
On the other hand, if the first procurement framework — the Subsidy Fund — took more than 6 months to complete, why are you requesting a renewal for 6 months to develop double the work — RPC and events providers — instead of, for example, one year?
Regarding community engagement, in the report you highlight:
But then you mention it as a situation that took more time and effort than you initially expected
What have you learned from this? What concrete measures will you take to manage your time more efficiently without compromising the culture of transparency and collaboration?
For example, according to your Notion notes, the public bi-weekly calls are only attended by ADPC members (which is definitely not your fault). Couldn’t something more efficient and less time-consuming be done so that the information is available without having to prepare so many calls? What do you think?
Regarding the budget for Phase 1, in the introduction of the report, you mention a cost-benefit analysis:
which is not followed up in Section IV (Financial Review). Only the distribution of funds is mentioned. (Or did I miss it?)
I’d like to hear more about that cost-benefit analysis, especially since you’re now requesting $500K USD versus the $144K USD (+ msig funds). The increase is considerable.
What is the cost-benefit analysis of the DAO investing half a million dollars in procurement frameworks? Have you conducted any analysis? For example, could you perform this exercise based on the results of Phase 1? How much do you estimate the DAO will save due to the work done in whitelisting security service providers?
Final comment.
I understand that I’ve asked many questions that could have been addressed when the Phase 1 report was shared, so I apologize for the timing. I also understand if you’re unable to answer them before the snapshot ends.
I truly admire the work you’ve done. If I’m able to ask so many questions, it’s because you’ve provided a lot of information about what you’ve done, and your work is of high quality. I really like the structure of your reports. Thank you so much for everything.