Arbitrum's Short-Term Incentive Program (Arbitrum Improvement Proposal)

[mfer]

The amount of applications submitted in the last 48h went crazy. I lost the count at 80. lol

50MM ARB / 80 applicants (at least) = 625K ARB each.

I’ve seen some asking for 3M, others 2M, others 1M and not so many asking for less than 625K. What does that mean? Well, I’m sorry to say but…

… Houston, we have a problem.

I didn’t do the math to see what is the exact total sum requested for, but I’m afraid we can’t serve everyone and make everyone happy. I would’t be surprised if we are exceeded by 20-30M. I wish someone with time and patience could provide accurate data about this numbers.

According to the program’s guidelines:

@tnorm

What happens if the budget is exceeded?

We do not expect applications to exceed the funding budget of 50M ARB. However, if requested grants do exceed the allocated budget, funding will be allocated based on the amount of votes in favor of a proposal, and then on a first-come, first-serve basis dependent upon the time the proposal was submitted to the Arbitrum Forum. In the event that the budget is exceeded, the DAO may choose to unlock further funds for a third round, or backfund successful incentive proposals.

Now that this scenario is a reality, can you @tnorm elaborate or give some example to make it more clear?

I’m not sure if I get it right. Does that mean that every application that passes the vote will get paid only the same percentage of the total amount requested as the percentage of the votes received in favor? And then if the budget is still exceeded, the FCFS on application submission will apply to exclude the latest ones?

I wonder if given the unexpected outcome it could be a better option to apply new measures like: (just as examples)

1. Size of grants for each tier could be lowered by like 20%.
2. Pinnacle grants could be capped to 2.5M or 3M max.

Not only everyone asked for the max amount in their tier but also many asked for bigger amounts out of the range. I know the amounts so far are just suggestions, but maybe
another measure could be:

3. Turn the amount suggestions into mandatory so everyone should stick within their tiers.

Let me give an example:

[DODO] [DRAFT] [STIP - Round 1]

SECTION 1: APPLICANT INFORMATION Provide personal or organizational details, including applicant name, contact information, and any associated organization. This information ensures proper identification and communication throughout the grant process. Applicant Name: DODO DAO Project Name: DODO Project Description: DODO is a decentralized trading platform that uses the innovative Proactive Market Maker (PMM) algorithm to provide efficient on-chain liquidity for Web3 assets, making it easy for…

This application requests for 1.8M ARB with a TVL of only $3M. They belong to the Beacon Grant tier with a recommendation of 200K ARB to be requested. 9x difference.
However they are still allowed to go through vote since there’s no limitations.

Knowing already at this point that there is no ARB enough to satisfy everyone, and knowing that many will have to be left out to allow others stay in, should this kind of greedy applications even being allowed to go through vote? In case it passes the vote, is it efficient and fair to other protocols with 10x more TVL and almost same grant? or to other protocols being left with 0 ARB?

Wouldn’t make more sense to make them lower that amount by mandatory to one reasonable for their TVL and sensitive to the budget reach like the recommended one? Even more likely to pass the vote.

If everyone sticks to their tier recommendations it might be room for everyone.

I apologize to DODO for using them as an example. My intention isn’t to point to anyone in specific. To begin with they are not doing anything illegal and mostly everyone is doing similar. It’s just that I needed to use some real example to argument what I want to explain.

In summary:

We could make the application process more strict and selective to direct the applications to the voting process with a much more reasonable requests and more likely to pass.

This way our limited budget not only will reach more projects but also the distribution will be more fair, inclusive and reasonable in terms of grant size related to protocol size.