Arbitrum's Memecoin Fund

Proposals
1

TLDR: WIP to initiate a memecoin fund, separate from the Arbitrum DAO, that selects, puts skin in the game, helps memecoin projects grow, and cultivates a memecoin-friendly culture in Arbitrum.

I made this in about 1 hour. Feel free to pick any holes you see. If you think it’s stupid, feel free to say so and why.

Abstract

It is undeniable at this point that memecoins bring new liquidity, users, and attention to the respective blockchain. This in turn stress-tests dApps, the chain itself, and most importantly, brings new users and attention to real utility projects.

Everyday, we see headlines of how Solana memecoins go from 0-100M+ FDVs in a matter of days. This A) brings retail in and B) provides downstream effects to Solana DeFi protocols, utility projects and more.

There is no reason Arbitrum DAO shouldn’t at least try to spur a memecoin initiative. While one may think Arbitrum is “forcing” memecoins, understand that every other blockchain is now doing it too. Avax announced a memecoin fund which got some pushback at the start, but it’s undeniable that the fund has spurred more memecoins, more eyes, and more attention to Avax.

While DeFi protocols and real utility projects are important to a chain, without new users and retail-friendly attention, growth stagnates and as the saying goes, builders go where the users are.

Motivation

While one can argue on how successful $ARB grants have been to the protocols on Arbitrum, it’s hard to argue that Solana and more recently, BASE, have taken all the attention.

Arbitrum has the highest TVL among all L2s with some of (if not the best) U/X. But, DAUs are stagnating and protocols are having a hard time attracting new users.

We see prominent VCs, and even successful DAOs and NFT projects investing in memecoins.

Memecoins have been tried on Arbitrum since inception, but the defining “DeFi-chain” narrative is hard-engrained, and will take drastic measures to not erase, but include other categories.

In short, the motivation of the memecoin fund is to help the Arbitrum ecosystem as a whole. Draw attention, new users, more chain usage, more DeFi activity, and more.

Rationale

  1. Ethereum-aligned: More usage and attention towards Arbitrum and Ethereum. Further adoption of Arbitrum.
  2. Sustainable: The primary focus of the memecoin fund will be to create and support a memecoin/left-curve ecosystem within Arbitrum. The long-term mission should be to disassociate the narrative that Arbitrum is a DeFi-only chain.
  3. Secure: All memecoin fund contributors are thoroughly vetted and made sure to be Arbitrum-aligned. All funds are stored in a multi-sig and transparent reports are released in a timely manner.
  4. Neutral and open: Memecoin fund contributors are not allowed to invest in projects the fund enters in. The fund must review every memecoin that passes the initial criteria and standard.

Specifications

Memecoin Fund Structure (WIP - needs more thought)

  1. Five board members that are not part of the memecoin fund day-to-day activities and decisions. These are trusted builders in the Arbitrum community and ecosystem.
  2. Three collaborators who run the memecoin fund
  3. 5/9 multi-sig
  • Collaborators and board members are NOT allowed to invest in tokens funded. If this is detected, the respective person(s) are automatically to removed from the fund without delay.
  • Collaborators must prove alignment to Arbitrum since the early days

Criteria for initial review (Passing this criteria does not guarantee investment or help from the fund) (WIP - needs more thought)

A lot of this was taken from the AVAX fund’s criteria.

  1. Fairly launched
  • Ownership of the community token contract was renounced.
  • Initial liquidity burned or adequately locked.
  • Initial whale protection measures, such as a purchase limit per address, were employed.
  • No allocation reserved for the team.
  • No taxes at any time of the token’s existence.
  1. Secure
  • Contracts must be verified.
  • Audits, whether by professionals, the community itself, or through the use of time-tested and widely accepted contracts, ought to have been performed by the team.
  • The contract creator’s address should have gone through community due diligence.
  • Automated tools such as DexScreener should be employed, and need to report no issues.
  1. High holder count
  • At least 1,500 holders.
  1. Low concentration
  • Whales should not hold a high percentage of the supply.
  1. Liquidity Provisioning
  • Liquidity needs to either be burned (preferred) or locked for at least 6+ months at the time of the funds review.
  1. Liquidity
  • At least $200K+ USD in liquidity.
  1. Lifespan
  • The token should be in existence for at least 30 days.
  1. Market cap
  • The market capitalization should be at a minimum $1M+ USD.
  1. Daily Trading Volume
  • Trading volume should be > $100K USD for at least one week prior to the funds review.

Supporting a token through the fund (WIP - needs more thought)

Once collaborators have aligned on tokens to support, they are presented once a week to the board for review. If an investment is agreed upon:

  • Fund invests and TWAPs between $50K - 150K USD
  • Fund optionally adds $50K-150K USD in liquidity

The fund must also offer a dedicated graphic designer/video renderer to the project.

The fund is not allowed to day-trade. Once an investment decision is agreed upon, the investment must be held for three months. At the end of the three month mark, collaborators can deliberate on A) unwinding assets or B) continuing for another three months.

The fund cannot announce an investment until a TWAP ends. The fund must announce the investment after the TWAP ends.

Steps to Implement (WIP - needs more thought)

  1. Elect board
  2. Elect collaborators
  3. Fund msig
  4. Find 10 graphic designers/video renderers ready to assist
  5. Start investing

Timeline (WIP - needs more thought)

As soon as possible.

Propagation of the fund should be for at least 6 months. Afterwards, the Abitrum DAO can vote to increase funding or terminate the memecoin fund in it’s entirety. Any unwinded assets are converted to $ARB and sent back to the Arbitrum DAO if the fund is dissolved.

The 6 month period should be a relatively low-risk way to test the appetite and early success of the fund.

Overall Cost

  1. $1.5k USD/month worth of $ARB for each board member
  2. $5k USD/month worth of $ARB for each collaborator
  3. $3k USD/month worth of $ARB for each graphic designer (if they are actively working on projects)
  4. $3,000,000 USD worth of $ARB to kickstart the fund (initial 6 month allocation)

Total cost: $3,315,000 USD worth of $ARB

EDIT: To be considered, additional funding ($1-2M worth of $ARB) - reserved as grants to Arbitrum DeFi protocols incorporating funded memecoins into their product offerings. This bridges the memecoin <> DeFi landscape.

14 Likes
2

I’m in strong favor of this concept. Getting more people to transact and stay on Arbitrum includes not just defi usecases but all types of users which include memecoin enjoyers. To simply ignore that entire slice of crypto users will be a short term and a long term loss for Arbitrum. This proposal won’t be the silver bullet to solve everything but it would be a strong step in a direction that showcases the Arbitrum is willing to support all types of users.

This proposal would send a good signal and would likely capture new users who haven’t made the journey to Arbitrum because there is extremely limited meme interest right now relative to almost every other place. Some of those users will stay and continue using the entire ecosystem and become a net positive.

Edit: If anything, perhaps increasing the memecoin fund by 3-4x above the current proposal would make sense imo.

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Strongly in favor. If we’re going to spend effort promoting activity, let’s go where the activity is.

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In favour, $smol is culture

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In favour, $smol is culture

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6

Sounds good. I think this is a good proposal.

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Love that this has been started. Onboarding is a huge consideration for the success of any chain. I have some thoughts that I want to write down to help add to this proposal, but wanted to reply to demonstrate support. Arbitrum has a significant edge to Solana on speed and reliability of transactions, and now is nearly comparable in fees. There’s no reason we can’t try to support the memecoin narrative with more liquidity, access, and marketing.

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Also Strongly in favour. Arb’s tech and positioning is rock solid but is so far failing to capitalise on one of the strongest narratives in this bull so far and that undeniably is memes. There are very strong OG projects such as Smol Brains (Smolverse) and their community coin $smol that have been staunch supporters of Arb. Others have come along to attempt to capitalise but have little community or culture to associate with it. I see this as a prime initiative to support those that have supported the chain throughout the bear and believed strongly that they’re in the right place.

3 Likes
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In favor. However, we must not put $smol under this initiative, since it was deceptively launched by a founder of Treasure (provably through the blockchain).

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10

beyond buying meme coins, some actionable steps to reduce friction of using arb the dao can do are:

  1. put a bounty on trading bots to integrate arbitrum, bonus if they can integrate an arb bridge (hardly any tg bots have arb integrated
  2. put another bounty on the top TG scanners to integrate arbitrum, help ppl quickly determine whether lp is locked/burned, ca is renounced, etc etc.
  3. pay @a1lon9 to integrate arb on pump.fun, once you get familiar this is a no brainer

allocating to memes is great but removing friction by offering tools to bridge liquidity and degen on arb is crucial

3 Likes
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I am in favor of this proposal, $boop is culture and wants to help build the Arbitrum community.

2 Likes
12

Firstly, I commend OP for putting something forward that aims to take a different approach with eco/community development on Arbitrum. Proposals such as this are important to shake up existing status quo. This has been a discussion elsewhere and I’ve shared some thoughts ad-hoc on this already (outside of forum) and will reiterate the same thoughts here.

While a memecoin fund might seem like a pragmatic way to foster greater community activity and culture on Arbitrum, what we’ve seen play out in other ecosystems is that memecoin activity stems from a catalyst that is an organically driven success story. This is evident in every ecosystem that currently has attention for memecoins. Once you get a success story, you can boost development around that with amplifying programs, such as this.

What we’ve also seen in day to day operations via the DAO is that proposals take many months to come to fruition. Proposals such as this, will be on the longer end before agreement and activation (if passing). The DAO is anything but nimble, so reacting to market trends now is IMO not a diligent focus for the resources of the DAO.

Arbitrum has huge depth and talent in its DeFi arena, and is setting itself up for a surge in growth within the gaming sector. The DAO must embrace Arbitrums core strengths today and aim to build new narratives around those core strengths, rather than chase trends we see unfold now and try to force narratives.

I’m keen to see how discussion spans from here, the above is my personal view but i think proposals, such as this, are important to help broaden views and kickstart new conversations and ideas.

3 Likes
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If supported by this fund I would like to see a % of a successful memecoin’s treasuries going back into more productive means within the ecosystem.

3 Likes
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Thanks for your thoughts. Responding since it was my post.

The issue here is that Arbitrum is known as a Defi-chain. This narrative is so engrained that it won’t change without drastic measures. I don’t think you will see a success story without some help. So this is effectively saying “memecoin projects, you are on your own. Goodluck.” Why would they pick Arbitrum over Base/Sol?

Arbitrum today is a game of chairs between DeFi protocols and participants. You want to embrace Arbitrums core strengths? Bring in more users. Memes are proven to work. The downstream effects to DeFi protocols (Arbitrums core strength) are evident - Solana being the case study.

Ok, so if takes some time, we shouldn’t entertain the idea at all? That is the reason why I introduced the 6-month test period. I find it ironic how STIP round 2 is being rushed to a vote so quickly.

Not sure how familiar you are with the gaming category, but it takes years for game development. I would ask you to provide evidence on how Arbitrum is winning in gaming or it being a core strength. Solana, Ronin, Avax, Immutable are winning web3 gaming. There’s no evidence anywhere that Arbitrum is winning any AAA games. Fine, if you want to slice out Indie games, ok.

There is no “chasing” narratives here. Memecoins are not a narrative anymore. They’ve solidified their use-case in crypto and it would be foolish of Arbitrum to not even try. Speaking with some DeFi founders - they want memes.

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a strong initiative. $smol needs an LP on sushi or uniswap.

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I support . It will help to onboard new ppl.

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Your initiative to establish a memecoin fund within the Arbitrum ecosystem is not only timely but also strategically sound. Memecoins have undeniably become a significant force driving liquidity and attention to blockchain platforms, as evidenced by their impact on other chains like Solana. By embracing this trend, Arbitrum has the opportunity to not only attract new users and attention but also to diversify its ecosystem beyond the confines of DeFi.

The rationale for creating this fund is compelling, particularly in addressing the stagnation in daily active users and the dominance of other projects like BASE. Emphasizing the need to adapt to the evolving landscape of blockchain technology, your proposal aligns with the broader goal of fostering growth and innovation within the Arbitrum ecosystem. Additionally, your commitment to transparency and accountability, as demonstrated through the rigorous vetting process for fund contributors and the implementation of multi-sig security measures, inspires confidence in the integrity of the initiative.

Furthermore, the outlined specifications for the fund, including criteria for selecting memecoins and the process for supporting them, reflect a thoughtful and systematic approach to mitigating risks and maximizing impact. The proposed timeline for implementation, coupled with the provision for ongoing evaluation and potential adjustments, underscores a commitment to adaptability and responsiveness to the evolving needs of the ecosystem. Overall, the initiative holds great promise for energizing the Arbitrum community, attracting new participants, and enriching the platform’s offerings beyond traditional DeFi, thereby positioning Arbitrum as a vibrant and dynamic hub for blockchain innovation.

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This is a wonderful proposal, i am in full support for this. Diversification into different areas will be an added advantage to Arbitrum network to attract more active users and liquidity to Arbitrum network

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19

In favour of the proposal.

Using memes to bring more users/ attention to a already strong Defi ecosystem can only help arbitrum as a whole.

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First and foremost, I want to applaud OP for presenting an initiative that seeks to approach eco/community development on Arbitrum from a different angle. Proposals like this are crucial for disrupting the current status quo. This matter has been debated elsewhere, and I’ve already expressed some spontaneous thoughts on it (outside this forum), which I’ll reiterate here.

While establishing a memecoin fund might appear as a practical means to encourage increased community engagement and foster a distinctive culture on Arbitrum, we’ve witnessed in other ecosystems that memecoin activity typically arises from a naturally occurring success story. This pattern is observable across various ecosystems currently witnessing memecoin phenomena. Once a success story emerges, it becomes feasible to enhance development around it through supplementary programs, akin to this proposal.

Furthermore, our experiences in day-to-day operations via the DAO reveal that proposals often take several months to materialize. Proposals like this one are likely to undergo an extended process before reaching consensus and activation (if approved).

Arbitrum can boost considerable depth and talent in its MEMEFi sector and is positioning itself for significant growth, particularly within the gaming industry, that can corelate.
I’m eager to observe how the discussion progresses from here.

Also in favour, $smol is culture