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

Hello! @tnorm

Looks like new projects aren’t eligible to participate, is this intentional?

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Ok thanks, I get it now.

Let’s trust delegates then. I hope they advocate for common sense over all.
Fairness and inclusion should be prioritized imo in order to avoid/minimize any further anger and discomfort within the devs community.

Last thing we want is a general feeling of discrimination from the ones who meet the requirements and fully comply with the application guidelines.
Otherwise could easily trigger an exodus leaving us with a least competitive space after the program than the one we had before it.

It’s all in your hands delegates, be aware of your power/responsibility and don’t disappoint please. I’m sure you won’t.

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Post the Short Term Incentive Program, what are the long-term plans for sustaining the growth and engagement within the Arbitrum ecosystem?

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The below response reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking and ideation of the two.

We voted in favour of the proposal during the temp-check with our option being to distribute up to 50M ARB through the program. We’re happy to see that the temp check resulted in that being the most popular option.

We’ll also be voting in favor of the proposal at the on-chain vote.

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I have voted yes on Tally for this. I have some reservations about some of the decisions made for this, but I acknowledge that:

  1. This has been the work of lots of contributors over an extended period of time. Decentralized governance (during a bear, no less!) is messy, and the solution was never going to be perfect given the circumstances.

  2. We shouldn’t let perfect be the enemy of good. Inertia works both ways, and I’d rather the ball start imperfectly rolling towards a comprehensive framework then away from it. As others have acknowledged, if this were to fail the grant requests will come rolling in regardless. At least we have some guiderails.

  3. I have not been as active as I have wanted to during the last few months or so due to personal reasons, and in fairness to those who put in the hard work my concerns should of been voiced earlier. However, I see there has been a lot of thought that went into this and respected contributors are agreeing to it.

  4. The size of grant requests is fairly large. Whether that is people looking for handouts or genuine success of the program is to be determined… but it does indicate there is a “market demand” for this in some manner. It will be a tall order, but hopefully delegates will do their due diligence when voting occurs. Although I fear the sheer volume may not allow for that.

Apologies if I missed it. I saw some discussion in the OP about KPIs for the program and determining the success. Has there been talk about what post-grant looks like? Who will use this info to keep the ball rolling into a more fleshed out, long term grants program?

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Hi @tnorm,

As this is my first time posting on the Arbitrum forums, by way of introduction I am API3 DAO’s ecosystem lead and work closely with our ecosystem, developer relations and business development functions to engage various elements of the Arbitrum community. Thank you for your efforts in driving this initiative and facilitating an open discussion around the Arbitrum DAO. It is great to see somebody taking ownership of ecosystem engagement and by no means is this as easy of a task as it may seem. Kudos to yourself for taking the lead and for the retrospective support from the DAO.


Overview

To date, API3 DAO has deployed a range of oracle services that are accessible to the Arbitrum community. Specifically, we have:

  • Deployed API3 QRNG to Arbitrum One and Arbitrum Nova in Q2 2022 and have seen just over 200k requests since.
  • Ensured developer learning resources are easily accessible and supported Arbitrum builders through considered ecosystem activities, community building events and direct builder engagement.
  • Deployed 120+ decentralized data feeds that provide access to crypto, equities, commodities and forex price reference data through the API3 Market: API3 Market
  • Upon the request of DeFi protocols have activated 4x price feeds at a 0.25% deviation that are now accessible for all in the ecosystem: API3 Market

Building on that last point, as of August 2023 decentralized data feeds called dAPIs were accessible to builders on Arbitrum One. dAPIs are data feeds powered by first-party oracles, which means that the API provider is running the required Oracle infrastructure without introducing additional third parties between the data producer and data consumer. Managed dAPIs see multiple first-party oracles aggregated on Arbitrum to provide a verifiably decentralized data feed that significantly enhances transparency within decentralized oracles. Since August we have seen dAPIs be utilized in a small number of DeFi dApps within the Arbitrum ecosystem with some updates to official TVS imminent.


What is the query?

Since the introduction of managed dAPIs, API3 has been utilizing the ARB grant from the Arbitrum DAO distribution to activate data feed required within the ecosystem. As of writing, we have utilized just over 1/3 of the initial 75k ARB to subsidize price feed operation for DeFi protocols on Arbitrum. With the introduction of this initiative, we have been considering how we can best support the growth of the Arbitrum ecosystem through the provision of oracle infrastructure within this framework.

  • Support Network Growth: Accelerate the distribution of incentives to Arbitrum dApps to drive network and ecosystem growth.

With the operation of API3 data feeds, we need to cover gas costs associated with oracle transactions. This means if we are to activate a feed on Arbitrum we would require a conversion from Arbitrum to Eth. With consideration of the below, we wanted to openly communicate this and understand if this is an acceptable scenario or whether we should consider alternate mechanisms to reach this end goal within a request. Or consider an alternate framework.

  • Grantees are required to keep distributions in ARB without converting to other assets.

When considering this it is worth noting that API3 does not have margins built into our data feed pricing. Any funds provided for data feed operation exclusively cover gas overheads associated with maintaining price on-chain from multiple first-party oracles, with a small buffer to account for abnormal chain behaviors that may see these costs spike. This does not include operational overheads such as contributor grants or API access costs.

Many thanks
Ben

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Clarification on Abstain Votes
After multiple questions regarding the nature of Abstain votes, it’s been decided to publicly and preemptively clarify the role of Abstain in the Voting Round.

To succeed, a proposal must receive greater than 50% of votes in favor of the proposal and a quorum greater than 71.51M ARB.

Voters can either vote FOR, AGAINST, or ABSTAIN.

FOR: A vote in favor of the grant application.
AGAINST: A vote against the grant application.
ABSTAIN: Neither a vote FOR nor AGAINST the grant application, but a vote towards quorum.

As such, the success conditions of an application can be calculated as the following:

Percent in Favor = FOR / (FOR + AGAINST)

Quorum = FOR + AGAINST + ABSTAIN

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Thank you for the clarification.

What most are interested tho, is in the mechanism about distribution of funds since we are around a total request of 100M proposals.
In the initial STIP framework, two rules were quoted: a vote-based distribution and a first-come-first-served.

Could you clarify, maybe with an example?

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Out of Successful applications, STIP awards grants based first on the amount of votes FOR each proposal.

In the event there is a tie in the amount of votes FOR, the application that was first to publish their application will receive priority.

Let me know if that makes sense.

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it reads like it requires both 1. 50% in favor; 2.71.45m FOR vote (not quorum).

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Hey @Mindao, yes that was also clarified here: Arbitrum's Short-Term Incentive Program (Arbitrum Improvement Proposal) - #106 by tnorm.

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Thanks for the clarification

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Hey delegates!

Here is a simple checklist to help keep track of all the proposals

You can make a copy of this version and use it to organize all your votes and comments.

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Plurality Labs will be funding a grant for monitoring and reporting on this program. For those interested in applying, check out RFP - Abitrum Short-Term Incentive Program (STIP) Data Monitoring and Reporting

Award Timeline

RFP Live - Oct 8

RFP Submissions Open: Oct, 08 to Oct 015, 2023.

RFP Interview and Submission Reviews: Oct 15 to Oct 22, 2023.

RFP Decision: Oct 22 - Oct 27 2023.

Grant awarded - Oct 27

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We are considering applying for round 2 of the current grant cycle, but it is looking increasingly like the entire 50M tokens could be allocated during the first round. As of right now, 30M are spoken for, and another 11M are pretty close to reaching quorum with 3 days left in the voting period. Do we have an idea of if/how the second round will proceed? Are there any active conversations on this that I could join?

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Hi @Britt, the StableLab team is watching the status of the budget closely and will publish an update in the next 48 hours.

If meaningful budget remains, the one-week application period for Round 2 will take take place shortly after the end of Round 1.

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Thanks for the quick reply. Just to confirm, the 1 week application window will be the same as previously planned, correct? Applications due by Oct 18th?

Also, do you happen to know what they’ll use as criteria to determine what is meant by meaningful budget?

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This sheet is good enough. No need to waste more money on that. Honestly.

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General Communication SEEDGov

As already noted by @cattin, the @seedlatam delegation has created this account in collaboration with several partners, with the objective of evaluating grant proposals related to Arbitrum Short-Term Incentives. Here are the evaluation criteria adopted:

Evaluation Criteria:

Despite the large volume of proposals received, with more than 106 submissions in a short period, the team defined several essential criteria to determine which initiatives to support:

  • Protocol metrics in relation to the requested grant.
  • Innovation inherent to the protocol.
  • Potential impact of the proposal and acquisition of new users.
  • Reputation of the applying team.
  • Ability to attract liquidity.
  • Impact on the Latin American ecosystem, in line with our vision and mission to support the region

We leave a spreadsheets with our results

Voting Process:

As usual, the vote of the @cattin delegation is made in consensus with the community. Although this voting process remains consistent with our standard practice, we have made some adjustments. Given the high number of proposals, and in a joint work with @cattin, we have conducted an initial assessment, selecting 32 proposals that amount to a total of 54,398,000 ARB.
The community will have the opportunity to vote for the proposals they deem most relevant. The final determination will fall on those that receive the most votes, up to reaching the figure of 50M USD, as previously stipulated.

We remind you that the next governance call will take place on Tuesday the 10th at 19:45 UTC on our Discord server.

Acknowledgments:

We wish to express our gratitude to all the protocols and community members who have reached out to us through various means. We regret not being able to respond to everyone due to the high workload this week.

Special recognition goes to @tnrom for his constant dedication and effort in this incentive program, and to @stablelabs for their management in the forum.

Additionally, we want to thank @BlockworksResearch, @jerame20, @archipelabro, among others who, with their contributions, facilitated the evaluation process. Their collaboration has been invaluable. Thank you all!

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The authors (grant recipient) of any DAO-endorsed grants will need to work with the Arbitrum Foundation on KYC/compliance. I always recommend to start that process sooner rather than later.

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