Thank you @Entropy for your well thought-out proposal and all the comments you have made to the feedback so far. Apologies for us coming in a bit late to discussion period here.
We at Castle Labs strongly support the Strategic Objective Setting (SOS) framework and view it as a pivotal step toward empowering the Arbitrum DAO to operate with a structured, proactive, and decentralized governance process.
Below, we outline our general position on the SOS pathway:
Alignment with MVP: The SOS proposal inherently aligns with the DAO’s mission, vision, and purpose by establishing a decentralized, community-driven framework for defining and achieving strategic objectives. We are confident this approach will help the DAO transition from reactive governance to a more strategic and cohesive development model.
Implementation Framework: The phased approach outlined in the proposal—Phase 1 for agreeing to the SOS framework and Phase 2 for submitting strategic objective matrices—is clear and pragmatic. The inclusion of measurable key results and a standardized submission process ensures a structured mechanism for participation. We commend this clarity and look forward to engaging in the process.
Decentralization and Inclusivity: The proposal’s open submission format encourages broad participation and upholds the principles of decentralization. Anyone in the community can propose strategic objectives, fostering inclusivity. However, we suggest exploring additional mechanisms to ensure underrepresented voices in the community feel empowered to contribute.
Flexibility and Adaptability: The annual review and update of objectives and key results ensure flexibility and responsiveness to changing conditions. This adaptability is crucial for the DAO’s long-term success and aligns with our belief in iterative progress.
Key Considerations
While we support the proposal’s direction, we would like to highlight a few additional points for discussion:
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.
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.
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.
Overall, we are excited about the opportunities this framework presents and look forward to participating in Phase 2 submissions. The SOS represents a significant step forward for the Arbitrum DAO, and we are eager to see how it drives the ecosystem toward greater cohesion, transparency, and sustainable development.
“Over the period from June 2023, when the first Tally proposal was approved, to December 2024, the DAO approved 745M ARB worth of spending outlined in various proposals. This represents 21% of the DAO’s initial treasury balance of 3.6B ARB.”
Just one year ago, when the first sustainability report was released, only 5% of the treasury had been allocated to initiatives. This means that, over the past year, the DAO allocated an additional 16% of its treasury to various initiatives.
At that time, the report predicted that: “Based on current trends, the DAO’s expenditure is expected to account for roughly 10 to 15% of the treasury by the end of the ARB vesting period in March 2027.”
Well, a year later, the DAO has already allocated 21% of the treasury to initiatives—significantly ahead of what that report projected.
I’m aware that a treasury management initiative and STEP 2 were recently approved, which is a step in the right direction for generating revenue for the DAO.
However, I believe that if we do not plan carefully, we risk depleting our resources in the short-er than expected- term. With that in mind, and understanding that you don’t wish to define the budget for SOS initiatives at this stage, I propose assigning a budget for @karpatkey and/or @Aera , and/or Avant Garde to produce a new report on the treasury and its sustainability.
This report should take into account the projections made a year ago, the actual developments since then, the current state of the treasury, and the new initiatives aimed at generating revenue.
We support the SOS proposal for its structured approach to setting strategic objectives that said, 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. A working group composed of diverse stakeholders—such as delegates, developers, and researchers—could collect input from the community, synthesize insights, and propose a unified strategic objectives matrix. This would ensure objectives are cohesive, reflective of the DAO’s diverse expertise, and aligned with its overarching mission and vision. For example, the ARB Staking Working Group successfully brought community members together to collaboratively research on staking approach for Arbitrum, demonstrating how shared resources and collective efforts can achieve more effective outcome. Applying a similar approach to the SOS proposal would be highly beneficial, as it would allow everyone to pool their resources and work together toward a shared vision.
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
Arbitrum SOS Proposal Revision 1 Jan 10-Jan 19, 2025
Top 1
“This looks like a good process/protocol to define Arbitrum’s goals and objectives - and also to re-evaluate them every year. Based on these objectives, it will be easier for delegates to decide which governance proposals to support and which ones not (same goes for proposal authors).”
Top 2
“Ordinary users may not be skilled at crafting a complete proposal with detailed goals and key results. Could a simplified process be set up, allowing them to submit “goal ideas”? The community could then vote on which ideas are worth further exploration, better encouraging participation.”
Top 3
“6. The proposal does not delve deeply into the execution process after goals are selected—for instance, who will be responsible for implementation, how the budget will be allocated, and how outcomes will be evaluated. I suggest supplementing a detailed implementation mechanism to ensure the goals not only remain at the strategic level but also effectively drive ecosystem growth. Additionally, the proposal does not address how to adjust if a goal fails to meet expectations. A dynamic adjustment mechanism, such as quarterly reports assessing the feasibility of goals and optimizing resource allocation, should be included.”
I believe the SOS framework as presented is a necessary step for achieving strategic alignment of the DAO.
I understand what has been discussed about seasonality and the rapid changes we see in the ecosystem, and I agree with maintaining objectives with a timeline of 1-2 years. Having an adequate monitoring system in place will help to keep a mid-term structure. Besides, being able to adjust if necessary is a positive thing overall, even if for considering only emergency or not common situations. Stability in this regard is needed for a strategic map to be implemented and give time to initiatives to mature.
Once the Strategic Objectives are set, they could help balance bottom-up innovation with strategic direction. This alignment is particularly valuable as it will directly address what has been criticized before about various grants and initiatives that, while interesting, don’t always add inherent value to the ecosystem. It is important that we make sure that the SO framework keeps resources flowing toward initiatives that advance the collective goals of the DAO and at the same time maintain room for innovation.
There are valuable opportunities to enhance this foundation further down the line by incorporating indicators and metrics. I am unsure of the depth of the quarterly reports, but they could evolve into a comprehensive performance scorecard to provide early signals for strategic adjustments and enable cascading goals across initiatives and working groups.
Establishing clear strategic objectives will enhance decentralization only if they create transparent criteria for decision-making and enable more participants to contribute meaningfully. When community members understand the strategic direction and success metrics, they can more effectively propose and execute high-impact initiatives that advance our collective goals.
I appreciate how this proposal links vision and execution. The connection between the MVP, measurable objectives, and OpCo’s execution activities should provide the infrastructure needed for effective strategy implementation. To keep decentralization in the community, it is important to maintain a structured approach to gathering and synthesizing the input of the DAO in all areas while also maintaining clear accountability mechanisms. The goal should be to amplify the DAO’s collective intelligence through better coordination.
This proposal is positive regarding Arbitrum’s evolution, it could also serve as a blueprint for other DAOs to adapt their own strategic alignment.
I’m a bit late to the party but honestly I do not have anything to add to this. I was under the impression that the trickle down of MVP would be done entirely by @Entropy but I love that they have made this inclusive by giving the power back to the community.
I think the proposal is very well written, it doesn’t leave any gaps for misinterpretation of how the process will be. Having said that,
I agree with Daniel on this. We already have so many acronyms. It just makes new people more overwhelmed when they join. Let’s keep things simple!
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!
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.
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.
I would really like you to accept initiatives at any time
First, we would like to mention that the framework looks solid. While analyzing the initiative, we noticed similarities with how legislative bodies formulate governmental budgets today, even though, in this instance, we are not discussing financial allocations (which will come later with the budgeting framework).
Both in IRL governance and the digital era, budgeting is an extensive and complex process when we talk about covering countless activities, each potentially very different from the other.
From what we understand so far, aside from the ratification process of this very framework, the rest is repeated annually. This leaves us with 86 days from the start of the Notice Period to approval (both for the initial SOS strategy and for the amendments in subsequent years), except for ad hoc adjustments, which remain at the proposer’s discretion.
That’s almost three months (which is standard for traditional governance, although, in this case, it doesn’t include the fund allocation process). This raises some items for consideration:
1. Maintaining continuity during the review phase:
While the review process does not coincide with the final three months of each year (something understandable in this case, unlike traditional governance mechanisms, which are more refined), safeguards must be considered to ensure the continuity of the SOS.
During the review phase, the parameters from the previous year should remain in effect. This makes sense knowing that the plan will have a Year 1 and Year 2 each time it’s renewed. However, we wanted to emphasize this point, as it will be important to consider when defining the budgeting framework. In traditional governance, when a new financial allocation isn’t approved for the following year, mechanisms usually “renew” the previous year’s allocation automatically. This would be a reasonable option for the three months (proportionally) during which the review and budgeting framework phases are executed. Note: We are assuming the budget for each objective will also undergo an annual review.
The goal of ensuring continuity is to keep a framework in place during the three months of review that encourages “having a north” so there isn’t a gap in both social agreements and budget allocations.
2. Optimizing timelines in the future:
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.
On the other hand, we had previously provided some key points for the elaboration of the SOS that we would like to share again:
We believe that the flexibility aspect is particularly addressed by the potential ad-hoc modifications. As @JoJo rightly mentioned, crypto is a market that evolves faster than DAOs or plans can adapt, making it essential to have mechanisms that provide the necessary flexibility to adjust the plan or allocate new funds as needed.
In the case of a major event, such as the example JoJo provided regarding AI, where a strong narrative emerges that the DAO may find worth supporting, we trust that this ad-hoc adjustment mechanism will be useful for modifying the plan on the fly.
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 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:
Below are replies to the most recent comments and feedback.
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.
Regarding incentivizing submissions, we’ve touched on this point earlier here:
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.
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.
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.
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.
Delegates will vote on one matrix (or abstain). For a further explanation of how single-choice voting works, please refer to this documentation.
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.
We’ve covered this in our previous answer here:
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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.
Yes, your assumption is correct—we’ve planned to have a yearly cycle for capital allocated to each objective as well.
The wording has been changed to be in line with the minimum discussion period mentioned in the DAO’s standardized operations.
Thank you for the SOS. I like this proposal, I think is very well written and thank you for your time working on this; The presentation, the feedback, the revision and the voting period seems quite right and I agree with maintaining objectives with a timeline of 1-2 years. Im voting FOR on Snapshot
We are voting FOR this proposal. The DAO needs strategic direction and hopefully this initiative can work to provide some of this for the community while streamlining operations.
We strongly recommend that a focus be put on how best to allocate resources and diminish spending. We will continue to push this agenda in our voting and communications.
Im voting for this, even though i have my remarks, I do think @Entropy is aware of those and will find a fitting solution. If not, we should adjust accordingly to get the best possible solution in the end.
I voted in favor on Snapshot. The entire process, from the proposal’s initial drafting to the feedback and revisions, was exceptionally well-executed. Thank you for your dedication and effort. This proposal provides a more systematic and actionable approach to achieving the MVP, clarifying governance while improving its efficiency. The periodic review mechanism and the allowance for interim adjustments ensure that objectives can dynamically adapt to changes in market conditions and the competitive landscape, offering both long-term vision and flexibility.
I think this is fair. I totally understand how a quarter or 6 months might just not be enough to evaluate the mid term status of a goal, I did personally face the same thoughts on the D.A.O. program.
The proposed solution is good enough then (having the entity responsible for that goal being able to steer it if deemed necessary + quarterly report from ARDC on metrics), because yes DAOs are slow.
Thank you for addressing my concerns here, I am in generally voting in favor and would have had despite the clarification above, because we need to make concrete what we started with MVP and we need to move from a high level vision to more tangible goals. It’s a long process but I bet will bring a new level of maturity in our DAO.
I will vote in favor of this proposal during the Temp Check. I am highly aligned with the framework developed to discuss and establish the short- and medium-term goals of the DAO with a view towards the MVP. Thank you for this.
That said, I want to reiterate my concern regarding the treasury—not just from the perspective of the percentage of spending relative to the total available, as I can understand (though subjective) the interpretation tied to the “growth phase” that Arbitrum is currently undergoing.
It’s worth noting that 2025 will once again be a year of massive ARB unlocks.
As Arbitrum grows, the incentives to attack it also increase. Continuously dumping ARB to fund initiatives without a proper plan to minimize its impact on the token’s price only heightens the risk of such attacks becoming feasible.
For example, although it acknowledges the issue—which I think is appropriate—the OpCo does not outline a specific plan to mitigate that impact.
The approved STEP 2 the same:
This year, three initiatives have already been approved to dump 80M ARB for stables (OpcCo, STEP, and Treasury Management v2), with more to come.
If we are going to continue pricing incentives/payments in USD instead of ARB as if they were equivalent, and covering everything with ARB, we need a plan to mitigate the price impact asap
With that in mind, I will refer to the principles outlined in the Constitution.
This is why I believe initiatives like ARB staking with a lock-up period and yield that makes holding ARB attractive, or proposals to deepen ARB liquidity, should be a priority before allocating and executing additional budgets for other initiatives.
I understand that discussing the budget alongside initiatives is more complex, but I believe it is the right approach to mitigate security risks.
I really appreciate the motivation behind this proposal, so I cast a “Yes” vote on Snapshot. After having a grand and clear vision, we also need concrete plan that can be implemented effectively. This proposal provides a clear framework to systematize short- and mid-term objectives, which will help the DAO Allocate resources more efficiently, focus on core tasks, and avoid issues like scattered goals and inefficiencies····
At the same time, I have a few suggestions: I hope we can enhance the participation opportunities for regular members in submitting proposals, such as creating a dedicated channel to amplify community voices. Additionally, the budget allocation process could be made more transparent by clarifying the priorities and details of fund usage. This would make the process fairer and more convincing for everyone involved.
1/ The Arbitrum DAO needs direction.
Diversity is our strength, but without clear objectives, it becomes challenging to focus our energy and resources. The SOS initiative is exactly what we need to unite the DAO behind short- and mid-term goals that align with our mission, vision, and purpose.
2/ Proactive over reactive governance.
Right now, DAO decision-making often feels reactive. SOS allows us to move beyond that by setting a proactive roadmap with measurable objectives. It’s time to stop guessing and start building with purpose.
3/ Accountability and transparency.
Quarterly progress reports from the ARDC research team will keep us informed, ensuring we stay on track. This level of transparency is crucial for trust and alignment within the DAO.
4/ Efficient resource allocation.
With a structured budgeting framework tied to strategic objectives, the DAO can ensure that resources are directed toward initiatives with the highest impact. This makes our DAO more effective and focused.
5/ Room for innovation.
Although SOS prioritizes alignment with set objectives, contributors still have the freedom to propose standalone initiatives. It’s a balanced approach that encourages both structure and creativity.
6/ Learning from others.
The SOS framework is inspired by proven strategies like Lido’s OKR system. By adopting these best practices, Arbitrum DAO can achieve better outcomes without reinventing the wheel.
7/ Regular reviews keep us agile.
The annual review cycle ensures our objectives stay relevant to changing market conditions and opportunities. This adaptability is key for any DAO aiming for long-term success.
8/ My personal belief:
I believe that a DAO as diverse and ambitious as Arbitrum needs a solid foundation to grow. SOS is more than a proposal—it’s a step toward becoming the most innovative, cohesive, and efficient DAO in the ecosystem. I want to be part of this change.
9/ Closing thought:
By voting FOR SOS, we’re not just setting objectives—we’re shaping the future of Arbitrum DAO. I’m proud to support this initiative and encourage others to do the same. Let’s build together.
