Arbitrum Strategic Objective Setting (SOS) – Defining the DAO’s Interim Goals

[Entropy]

This proposal is now up for a vote on Snapshot.

The following minor edits were implemented on January 23rd:

• Added clarifying language to indicate that previously chosen, not yet achieved objectives/key results will remain active during a Review/Ad Hoc Strategic Objective Adjustments Phase to ensure continuity, replaced only once a new objectives matrix has been selected through a dedicated voting process. I.e., unless the DAO votes to remove its objectives, the continuity of the SOS is ensured.
• Changed the wording related to a proposer moving a forum post to the Snapshot voting stage to be in line with the minimum discussion period mentioned in the DAO’s standardized operations. “Reasonable time for discussion“ has been changed to “Allowing for at least one week for discussion”.
• Modified text and added the below sentence to the Notice Period section to enable people who don’t want to create a full-fledged submission but have one-off objectives/key results in mind to contribute in a structured way:

@Entropy

Link to an open channel through which anyone can submit one-off objectives and related key results for consideration by those looking to develop a full-fledged objectives matrix submission.

Below are replies to the most recent comments and feedback.

@EzR3aL

Because otherwise we will end up in thousands of possible categories and it may happen that some submissions may be similar but the topic is different, as anyone can decide it on his own behalf.

One could similarly argue that even with predefined categories, there could be variance in how objectives are categorized since some might not fit nicely within one single predefined category. However, we don’t foresee this or the case you describe being a problem—as long as submitters read each other’s submissions/delegates scan through submissions, it should be clear when two submissions have overlapping objectives. The objectives and associated key results statements shouldn’t be that extensive, meaning that understanding a submission’s key takeaways, what it strives for, and how it might overlap with other submissions wouldn’t be a time-consuming task.

@CastleCapital

Incentivizing Submissions:

• Is there any incentive for community members to lead a submission? We are concerned that individuals best suited to contribute may lack the time or resources to do so effectively.

@CastleCapital

Encouraging Broader Participation:

• How can the DAO engage parties who may not feel equipped to create a full submission but still have valuable insights?

• Would a pre-review feedback period allow for these contributions to be captured and incorporated into the process?

• Some exercises, such as the suggested OKR Gathering from @ChrisB, may be helpful here.

@Amira

This is another good point that we should consider. We have very talented people in the DAO but they can be discouraged by the load of work that this requires. We should incentivise final proposals to keep the members motivated!

Regarding incentivizing submissions, we’ve touched on this point earlier here:

@Entropy

We are afraid that such a structure could lead to unintended consequences, with proposers creating submissions that are the most likely to pass instead of optimal for the ecosystem. Ideally, proposers would be naturally encouraged to produce optimal submissions by being intrinsically aligned with the ecosystem and having skin in the game, such as being ARB tokenholders. Additionally, many delegates are already receiving incentives to participate in governance processes through the Delegate Incentive Program.

When it comes to individuals lacking time to create a submission, forming the base for a short- to medium-term strategy for a blockchain ecosystem is naturally not an easy task and something that will inevitably be time-consuming. We’ve tried our best to make the process as inclusive as possible, which is why the length of Phase 2 is quite extensive. We’re currently looking into the best way to enable anyone to submit one-off OKRs in a structured way during the Notice Period for consideration by any submitter during the Submission Period.

@CastleCapital

Volume and Quality of Submissions:

• What is the expected number and quality of submissions during Phase 2?

• How will the DAO manage potential “copycat” submissions that offer minor tweaks to existing proposals?

• A consolidation mechanism of some sort could be helpful here.

As the process is open to anyone but no single party is forced to create a submission, it likely isn’t feasible to estimate the number of upcoming submissions. However, we hope to see as many participants as possible. Given the importance of objectives and key results for Arbitrum, we expect submissions to be of extremely high quality. Having said that, there are no “quality criteria” that a submission must fulfill (partly because some aspects of assessing a submission are subjective). As long as a submission meets the minimum information inclusion requirements given in this proposal, it will be considered through the framework.

Since full-fledged submissions also have to include information such as a view of Arbitrum’s current state and what its strengths/weaknesses are as well as the rationale explaining how the objectives align with Arbitrum’s MVP and why the objectives were chosen given Arbitrum’s current state, someone copying another proposer’s submission and making minor tweaks to it should be easily recognizable. We expect that such behavior would be criticized by delegates, creating notable badwill for the copying party at minimum. Ideally, any obvious copycat submitters would be pressured to withdraw their submissions, but if not, we anticipate that delegates would naturally refrain from voting on such submissions. If two or more independently created submissions happen to have similar OKRs, submitters can consolidate their submissions during the Revision Period, but this is not a requirement.

@pedrob

Are we sure we want to move forward with designing objectives without allocating a budget?

@SEEDGov

• Clearly, we understand that this is the beginning, and as we learn how this framework works in practice, adjustments to the timelines can be made (by both Entropy, DAO, and also OpCo in the future).

• Within this process of timeline optimization, integrating budget allocations into the review phase could help avoid extending the process unnecessarily in the future.

The ideal scenario would likely be for the DAO to decide on the objectives and an associated budget simultaneously, but we foresee that the process might stall completely if we go this route as there are too many variables over which the diverse delegate base could disagree. Here, we are not taking a stance on whether the DAO has recently overspent, but would like to point out that even given the treasury data brought up by @pedrob, we know that many delegates would still argue that capital usage has recently been appropriate due to, e.g., Arbitrum being in a “growth stage”.

By splitting the objectives and budgeting decisions into two separate parts, we increase the likelihood of the process moving forward and thus that the DAO reaches clearer strategic alignment. If the DAO progresses to the budgeting framework stage, Entropy will strive to present adequate data and engage with the correct parties such that delegates can make a well-informed decision based on objective factors. If both the initial SOS and budgeting processes finalize smoothly, we agree that it might make sense to combine them into one in the future, for example, such that a budget is reformulated simultaneously with a Review/Ad Hoc Strategic Objective Adjustments Period instead of it being done subsequently.

@Curia

What do you think about establishing a working group for delegates to collaboratively brainstorm and develop strategic objectives? We’d love to hear your thoughts on this approach and understand why you believe empowering individual contributors to submit proposals might be more effective. While empowering individual contributors to propose objectives is valuable, it risks creating fragmentation across categories, leading to misaligned or siloed efforts.

We’d argue that if the actual submission isn’t led by a single person (or a small group of people) who decides what to include/exclude, chances are that a working group will not come to a consensus on what objectives to propose. An example of this would be the incentives working group, where although conversations have been extremely valuable and ongoing for several months now, there are still several factors over which there seems to be disagreement.

We fully agree that an objectives matrix submission should be based on a broad set of perspectives deriving from a diverse set of stakeholders, and encourage submitters to gather as much information as possible on this front. We’ll also ensure that contributors who only want to bring forward a one-off objective and related key results for the consideration of those who submit complete matrices can do so with low friction. The Feedback and Revision Periods are in place for submitters to gain an understanding of any shortcomings their matrices might have while ensuring that efforts aren’t siloed as matrices can be consolidated in situations where it is synergistic to do so.

@Curia

and one more question on the snapshot voting, to clarity how the snapshot stragy work, will us delegate pick the best one or divided in percent

Delegates will vote on one matrix (or abstain). For a further explanation of how single-choice voting works, please refer to this documentation.

@cp0x

I would like to propose extending the deadline for sending proposals from delegates.

The thing is that when some idea appears, it is often developed for many weeks or months before it gets to the forum for discussion, much less to the Snapshot.

But you are proposing that everyone get it done in 2 weeks.

Delegates will have at least 44 days to formulate and submit objectives matrices (14 days Notice Period + 30 days Submission Period). In addition, the SOS process isn’t initiated abruptly. This initial, ongoing process began ~14 days ago, and it’ll take at least 7 more days until the Notice Period begins as the proposal still has to go through Snapshot. Similarly, the initiation of a Review Phase/Ad Hoc Strategic Objective Adjustments in the future requires at least 14 days (7 days for discussion and 7 days for Snapshot voting), As the Review Phase should begin 12 months after the previous Voting Period has ended, delegates have visibility into when to start preparing for this event. We feel as though ~60 days should be enough for most delegates to formulate a submission, and we are hesitant to stretch out the timeline further as the total process is already quite prolonged.

@cp0x

What happens if someone has a great idea in a month? I think setting a goal for a year or more is good, but you can’t limit yourself to just these goals. If something good appears, you shouldn’t wait a whole year to accept it.

We’ve covered this in our previous answer here:

@Entropy

Compare this to the current structure, where ad hoc objective adjustments can be proposed by anyone at any time, but this requires them to post reasoning for the change together with adjusted objectives and key results. As such, objectives could still be changed 2/4/6/etc. months after their implementation, but the proposer must be able to clearly justify the reasoning and exert effort in creating an adjusted objectives matrix. This ensures that proposals for change are tied to accountability and require proposers to deeply think about the current objectives as well as what should be changed and why. The proposal also suggests instructing the research member of the ARDC to create quarterly reports on how the DAO is doing against its objectives, meaning that active delegates will receive timely updates on any potential changes that might be needed.

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@SEEDGov

1. Maintaining continuity during the review phase:

We’ve added clarifying language that previously chosen, not yet achieved objectives will stay in place even during a Review/Ad Hoc Strategic Objective Adjustments Phase to ensure continuity. When it comes to the budgeting framework for objectives, we will similarly establish a structure that maintains continuity on this front.

@SEEDGov

Note: We are assuming the budget for each objective will also undergo an annual review.

Yes, your assumption is correct—we’ve planned to have a yearly cycle for capital allocated to each objective as well.

@SEEDGov

The only thing we are not sure about is whether to leave this the time of discussion so open, We think that a minimum amount is what is established in the Code of Conduct, and being something so important the reasonable should be higher than this, but we would at least change the wording to conform to the recently approved code:

The wording has been changed to be in line with the minimum discussion period mentioned in the DAO’s standardized operations.