Arbitrum Research and Development Collective V2 - Extension

[pedrob]

Hey @Immutablelawyer!

Thank you very much for the proposal.

At the OAT, we have been reviewing the work of the ARDC. I have personally had conversations with @Juanrah , and we have read the recent retrospective published by @Entropy about their work.

We believe that allocating a budget for research has brought valuable results to the DAO and the Arbitrum ecosystem in general. Despite this, the current structure has shown certain inefficiencies and frictions in the interaction among stakeholders, Council members, and service providers.

As Entropy mentions in their retrospective:

@Entropy

In our opinion, the way the ARDC model currently functions faces two main frictions:

1. Fixed-Term Research Commitments: With a specific number of service providers locked in for a set time and budget, there is somewhat of a pressure to “create work” just to justify the pre-allocated funding. Moreover, the DAO can’t assign providers or price reports based on demand, perceived importance of research, and competitive fit of researchers.

2. Lack of Defined Expectations: With the research request process being so open-ended, requests often aren’t accompanied by a laid-out path for who (or how) will turn possible research findings into deliverables. Given the high cost of quality research, reports that lead to no tangible recommendations or have no party attached to them to own the initiative are, in our opinion, an inefficient use of time & resources for the DAO.

From the last Wednesday call hosted by Entropy, it was also mentioned that ARDC research requests from key stakeholders or delegates often begin as broad ideas that require substantial refinement to clearly define the scope, objectives, and success criteria. However, once the service provider completes the work and publishes the report on the forum, there is often a lack of ownership or follow-up, resulting in stalled or abandoned outcomes.

So the current situation of most of the deliverables is that they are documents in the forum with no follow up or proposals that build over that information.

Another point of friction is the supply-based model: service providers have been allocated a retainer budget which means that ARCD has to allocate resources and work, even if it might not be valuable or demanded from the DAO or AAEs. In practice, that resulted in research that didn’t always include actionable findings, and often felt more like a standalone study or analysis disconnected from the DAO’s context or needs.

During the call, JuanRah mentioned that it makes sense to have a different structure, and that he would prefer having a list of service providers that can be engaged as needed rather than relying on a retainer model. That line of thinking was reinforced by @tamara, who supported the idea of a demand-focused model rather than a supply-driven one. She pointed out that service providers often ended up being used simply because they had won an election and were assigned a retainer fee rather than because their research was genuinely needed based on the proposals at hand.

That was ratified in his post:

@Juanrah

I agree that a more flexible, on-demand model with a pre-vetted vendor list could prove more efficient and wold enable request-driven research with flexible engagement terms. However, the current structure remains valuable, and the lessons learned during this first phase will help us address many of the concerns raised.

For all these reasons, we believe the best path forward is not to extend ARDC, at least not in its current structure and operating model.

That said, we do see strong value in having a pre-approved budget to fund research, but based on what we’ve learned from experience, it’s clear this needs to be demand-based, aligned with the DAO’s needs, and overseen by a party capable of negotiating with service providers and guiding the research toward clear deliverables.

@Entropy

When first contemplating the future of the ARDC after a few months into the initial 6-month term, our team felt that there was value in having researchers available as needed, and with the introduction of OpCo, a demand-based program could be internalized by the entity. In such a structure, delegates could make requests directly to OpCo, which could then utilize a vetted pool of service providers to facilitate the research.

At the OAT, we believe this is the direction the ARDC should take, not as a standalone structure or initiative, but rather as a USDC-denominated budget that the OpCo can draw from to engage a pool of service providers for research needs.

The idea behind having a Supervisory Council was to carry out the work that, given its mandate and the composition of the OAT, the OpCo is now better positioned than anyone else to perform: bridging the gap between the DAO, the Arbitrum Foundation, and Offchain Labs

Once operational in the coming months, the OpCo will have a team dedicated to executing DAO initiatives, along with the necessary context on the activities of other AAEs. This will allow it to take a holistic view of Arbitrum’s ecosystem development and identify research opportunities that lay the groundwork for future DAO proposals, while ensuring they neither overlap with nor interfere in the work of other AAEs and ideally, amplify their impact.

This vision was expressed by several delegates when approving this second iteration of the ARDC, and we believe it is the right path forward:

@krst

Lastly, we want to highlight that if the OpCo is set up during the ARDC’s tenure, we expect it to take ownership of the initiative and be responsible for its oversight. We think that in the event that happens, the Supervisory Council should work with the OpCo to figure out how to transition properly into the new structure.

@JoJo

As a final thought, I hope that when we are going to have to renew this initiative in 6 months, we will have opco capable of internalize this whole structure. I really think we will need risk and data analyst, constantly, moving forward.

@maxlomu

I look forward an opCO or similar structure that can better oversee these initiatives and increase their efficiency.

@Juanrah

I believe OpCo could play a valuable role in research operational activities, this would bring direct alignment with operational needs while reducing coordination overhead. The retainer model has created some pressure from service providers to justify their pre-paid hours, which has led the Supervisory Council to spend valuable time analyzing whether specific research initiatives are truly needed.

Therefore, we propose that the current proposal be amended to include this option among the alternatives to be voted on:

Option D: Do not Extend ARDC V2 & transfer the remaining funds to the OpCo and have them reserved for research under a demand-based model.