ARDC Communication Thread

Arbitrum Research & Development Committee (ARDC) Supervisory Council
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Hello everyone!

We’re excited to kick off ARDC V2 following the success of the first iteration. A few things have changed, starting with the creation of the new Supervisory Council, which replaces the DAO Advocate role. In V2, we’re aiming to promote transparency, governance, and research outcomes for the Arbitrum ecosystem.

Here’s a quick look at who’s on the team now:

Supervisory Council

Specialized Service Providers

  1. Risk Seat: Nethermind
    Focused on evaluating and mitigating DeFi risks, building on work from V1.

  2. Security Seat: OpenZeppelin
    Ensures smart contract security and safe governance mechanisms, testing, bug detection, and thorough audits like in V1.

  3. Research Seat: DefiLlama Research & Castle Capital
    Provides data-driven insights on topics like sequencers, fraud proofs, governance best practices. Picking up where research from Delphi Digital and Blockworks left off in V1.

ARDC Public Notion Page

To keep everyone in the loop, we’ve set up an ARDC Homepage on Notion.

This page will have:

  • Task List: See what the different service providers are working on.
  • Meeting Minutes: Details from our calls, including bi-weekly Council calls and specialized discussions with Risk, Security, and Research seats.
  • Additional Resources: Any new documents, frameworks, or proposals we develop along the way.

Communication

  • We’ll be using this Forum thread as our main hub for monthly updates, Q&A, and community feedback.
  • We will set up ARDC Bi-Weekly Calls on Thursdays, beginning February 6, so the community can hear updates from the entire ARDC (Supervisory Council, Risk, Security, and Research) and share feedback.
  • Feel free to tag or DM any of the three Communications leads on Telegram: JuanRah, Alex Lumley, or Frisson if you have suggestions or questions about our announcements.

Next Steps

As we begin ARDC V2, here’s what’s currently being worked on:

Call to Action

  1. Join the Conversation
    • Share your thoughts, concerns, and ideas in this thread.
    • Propose new research tasks you think the ARDC should explore.
  2. Attend Community Calls
    • We’ll post details about our bi-weekly calls in this thread and on the ARDC Homepage. Show up, ask questions, or just listen in to stay informed. We invite all delegates to attend our first Bi-Weekly call on Thursday, February 6 at 5pm UTC.
  3. Stay Connected
    • Keep an eye on this Forum thread for real-time updates.
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I think there is a typo here—Thursday, February 6 (not 7).

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Thanks for letting me know, post has been edited with the correct date.

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Thanks for the transparency, I am very excited to see this develop and would like to ask if this will be co-created by the members of the ARDC or commisioned to a third party? As someone involved in and around grant programs, this is a great step in optimizing arbitrum daos grant programs.

Also curios what does ‘comparative’ mean, will they be compared to other grant programs or within this one? Thank you!

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Castle Capital and Defi Llama Research - the Research Service Providers are working on it.

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They will be looking at other grant programs (Lido’s LEGO, Uniswap and others) evaluate them, have conversations with those teams and eventually come up with recommendations for the Arbitrum DAO’s grants

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Ahead of tomorrow’s update call

  1. Budgets, hours worked per service provider, rates, payments etc → check out this Excel

  2. What is the ARDC working on → Website

  3. More details about each project → double click on the item see output here

  4. How is the ARDC prioritizing (not exhaustive)
    → input from delegates, OCL, AF, Entropy
    → what research moves the needle (e.g., what can be translated into actionable proposals?)
    → what will still be relevant in 1-2 months (or time it takes to complete the research)

  5. Lost in the ARDC website and still have so many questions → watch this Tutorial walking you through the page

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January 2025 Update

For the first month of the ARDC activities, I am sharing the current progress and outline our ongoing initiatives.

Deliverables In Progress

Nethermind (Risk)

Analysis of the sustainability of sequencer revenue

  • Completed extraction of data on gas fees from various smart contracts
  • Finished grouping protocol contributions to sequencer fees
  • Currently analyzing trends by vertical (DeFi, CEX, cross-chain, gaming)
  • Examining impact of Arbitrum Nova and Orbit on total sequencer revenue
  • Expected completion: ~2 weeks

DefiLlama Research & Castle Capital (Research)

Analysis of the Arbitrum DAO’s grants program

  • Developed evaluation framework for ecosystem program assessment
  • Completed initial analysis of historical reports and resources
  • Currently conducting stakeholder outreach and engagement
  • Analyzing feedback from Discord discussions
  • Expected completion: ~2 weeks

OpenZeppelin (Security)

Current ARDC Work

The Supervisory Council is actively working with service providers to prioritize upcoming initiatives:

  • Nethermind: Upcoming analysis on governance attack viability and quorum risks (AMA scheduled for February 20th)
  • Research Members: Analysis of the Arbitrum DAO’s incentive programs (STIP, STIP Backfund, LTIP, STIP Bridge)

Communication Channels

We’ve established multiple channels for delegate engagement:

  1. Bi-Weekly Calls: Every other Thursday at 11:00 AM CST
  2. ARDC Homepage: Comprehensive resource for tracking deliverables and progress. You can find several resources within:
  1. Forum Communication Thread: Updates and final reports
  2. ARDC space in Delegate Chat / Telegram: Direct communication channel - @JuanRah - @AlexLumley - @Frisson

Next Steps

  • Next bi-weekly call: February 20th
  • Upcoming deliverables expected in mid February

Call to Action

We invite delegates to:

  • Join our bi-weekly calls for updates and feedback
  • Submit research initiatives through any of our communication channels
  • Reach out to Communications leads with questions or suggestions

The ARDC is here to support the DAO’s research needs. We encourage active participation and feedback from the community to help guide our initiatives.

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We just wrapped up a comparative study in grant programs, maybe this helps

If you need more details kmk

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Thanks @zer8, sharing this with the teams!

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My pleasure ser! Happy to assist/consult as a delegate in any way I can, been involved in web3 grants for almost 3 years now and gathered very diverse insights

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@Juanrah shall we connect @ZER8 with the teams researching grants?

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Yes, I already shared the comparative study with them. I’ll DM you on Telegram @ZER8 ! Thanks for your disposition.

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ARDC Update: February 17, 2025

Highlights

Process and Ops

  • Established regular meeting cadence:

    • Weekly Supervisory Council meetings

    • Weekly Service Provider & Operations meetings

    • Bi-weekly Community Calls (next call scheduled for February 20 at 5pm UTC)

  • Created ARDC Homepage on Notion for transparent tracking of tasks, meeting minutes, and resources

  • Service Providers completed compliance requirements + KYC process and have received their 20% retainer payment

  • Task selection and prioritization process set up. Prioritization happens weekly in collaboration with delegates, Arbitrum Foundation and OCL with the goal to focus on high-impact initiatives aligned with DAO objectives

  • LlamaPay setup in progress for Supervisory Council payments

Finances and Budget

Status as of February 12th, 2025:

  • Service Provider Hours Logged (Jan 13 - Feb 12):
    • Castle Capital & DeFi Llama Research: 27.5 hours (DL: 15 hours; Castle: 12.5 hours)
    • Nethermind: 135 hours (Mid level: 80 hours; Senior level: 55)
    • OpenZeppelin: 28
  • MSS wallet established at: arb1:0x8deBa81C874C68C27a09706CdEa50d4F727E0711
  • See the full report here: ARDC V2 hours log - Google Sheets

Deliverables Status

Currently Active Projects:

Analysis of the Arbitrum DAO’s Grants Program (Castle Capital & DeFi Llama)

  • Status: In Progress
  • Framework development completed
  • Stakeholder surveys initiated
  • Analysis of external grant programs underway
  • Expected draft: February 19

Sustainability of Sequencer Revenue (Nethermind)

  • Status: In Progress
  • Completed initial data extraction and vertical analysis
  • Deep dive into sector-specific revenue drivers ongoing
  • Expected completion: February 19

Security Council Enhancement Recommendations (OpenZeppelin)

  • Status: In Progress
  • Research phase completed
  • Draft preparation ongoing
  • Expected draft completion: February 19

Next Allocated Projects:

Call for Delegate Input

We have established a strong initial research agenda based on Arbitrum Foundation recommendations, inputs from the Supervisory Council, and a few delegates that have reached out to us. We want a broader community engagement so we encourage all delegates to propose research topics, share feedback on ongoing projects, or request specific analyses that could benefit the DAO’s decision-making processes. A reminder that you can submit your suggestions through:

  • Comments in this forum thread

  • Direct messages to our Communications leads (@JuanRah, @AlexLumley, @Frisson)

  • Participation in our bi-weekly community calls

  • The ARDC Homepage on Notion

Learnings for future versions of the ARDC

  • Allow 1.5 months between vote completion and full team start date

  • Operations should begin 1 month prior to other team members to facilitate compliance agreements and payment setup to avoid delays

  • Early alignment with Offchain Labs + AF can help avoid duplicate research efforts

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March 7, 2025 Update

Introduction and Context

We’re pleased to share the first major research deliverables from the ARDC V2 team. Since our launch, our service providers have been diligently working on several high-priority research initiatives that will help inform the Arbitrum DAO’s strategic decision-making.

Completed Deliverables

DefiLlama Research & Castle Capital - Grants Program Analysis

  1. External Grant Programs Analysis: A comparative study of grant programs across Layer 1 and Layer 2 ecosystems (Optimism, Scroll, Ethereum, Solana, Uniswap, and Lido). The analysis explores diverse governance models, funding mechanisms, accountability structures, and success metrics used by each ecosystem. Some key discoveries:
    • Optimism’s RetroPGF model effectively rewards past contributions but struggles to drive strategic direction
    • Lido’s tiered approval approach (“Sandgrain”, “Pebble”, “Boulder”, and “Mountain” grants) reduces friction for small grants and preserves a broad oversight by the DAO for major funding.
    • Solana’s hackathon-to-accelerator pipeline creates a structured path for project development
    • Most successful programs use stablecoin-centric payouts to provide predictability for grantees
  2. Internal DDA Program Analysis: A review of Arbitrum’s Delegated Domain Allocation program across Seasons 1 and 2, focusing on operational effectiveness and impact measurement. The report examines:
    • Program objectives and success metrics across its four domains (New Protocols, Education/Community, Developer Tooling, and Gaming)
    • Funding allocation and utilization statistics (87.3% disbursement rate for Season 1, 70% for ongoing Season 2)
    • Workload disparities between Domain Allocators, with some domains experiencing significantly higher application volumes
    • Approval and disbursement timelines, with overall first-disbursement process improving by 7.5% in Season 2
    • Impact assessment challenges, including inconsistent KPI tracking and limited post-funding verification
    • Detailed recommendations for governance improvements, standardized reporting templates, and better impact measurement frameworks

Deliverables in review by the Supervisory Council

Nethermind - Sequencer Revenue Sustainability Analysis

Nethermind has completed their comprehensive analysis of Arbitrum’s sequencer revenue sustainability. Key findings include:

  • Revenue Concentration: 46.4% of sequencer revenue comes from the top 10 highest-earning days since the Dencun upgrade
  • Changing Revenue Structure: DeFi’s contribution declined from over 50% in late 2023 to 20.4% year-to-date, while CeFi (primarily MEV/bot transactions) now accounts for 21.8% of revenue
  • Market Share Challenges: Arbitrum’s market share has decreased from 22% to 10% due to rising competition
  • Competitive Strengths: Arbitrum maintains advantages as the L2 with the highest Total Value Secured ($14.2 billion) and dominant share in DeFi volumes

The full report provides detailed analysis of vertical breakdowns, competitive positioning, and recommendations for maintaining Arbitrum’s market leadership.

OpenZeppelin - Security Council Recommendations

OpenZeppelin has delivered recommendations to enhance the functionality of the Arbitrum Security Council, addressing:

  • Ideal Council Member Qualities: Impartiality, trustworthiness, and technical competency
  • Organizations as Members: Benefits and considerations of allowing organizations with 1-of-N multisig configurations
  • Council Powers: Analysis of maintaining emergency action capabilities versus restricting to veto-only powers
  • Term Length: Recommending 12-month terms with staggered elections to balance continuity with community input

Ongoing Workstreams

DefiLlama Research & Castle Capital

Beginning their analysis of Arbitrum’s incentive programs (STIP, STIP Backfund, LTIP, STIP Bridge) as part of a broader investigation into the DAO’s ecosystem funding structure. The team will study past incentive programs and compare with other crypto ecosystems to develop best practices and recommendations.

Nethermind

Currently researching the viability of governance attacks at the current quorum and analyzing the risks involved in potentially reducing quorum. This analysis will help the DAO understand governance security risks, potential token redistribution impacts, and strategic options for protecting governance.

OpenZeppelin

Working on a Stylus best practices guide that will include SDK usage guidance, contract library recommendations, and development tools. This guide will incorporate testing and deployment best practices.

Shortlisted Projects

The Supervisory Council has identified several high-priority research areas for upcoming work:

:books: Future State of the ARDC

This research project will explore what the DAO’s research function should look like in the future, including:

  • How to ensure research is followed by strategy and execution
  • How ARDC should interface with Arbitrum Foundation and OffChain Labs
  • Whether the DAO should have dedicated full-time employees for research and strategy
  • Analysis of research functions in other DAOs (Maker, Lido, Optimism) and their effectiveness
  • Recommendations for potential structure options to ensure research translates into action

:classical_building: Pricing for Vote Buying Services

Requested by OffChain Labs, this project will analyze the pricing economics of vote buying in governance systems. The research will determine appropriate pricing models for vote-buying services, assess potential risks to governance, and provide recommendations for protective measures.

:locked_with_key: BoLD Bond Optimization

This research will explore how to lower the current 3600 ETH bond requirement for BoLD v1 without compromising security. The project will investigate alternative designs that maintain the security properties of the system while reducing the financial barriers to participation, potentially enabling more validators to help defend the network.

Service Provider Collaboration Update

After reviewing the first round of deliverables, the ARDC Supervisory Council has decided to partner Castle Capital with Nethermind for future reports. This collaboration will allow Nethermind to leverage Castle Capital’s deep Arbitrum ecosystem knowledge, resulting in more actionable recommendations that address both technical and ecosystem considerations.

Next Steps

  • We will have our first Twitter Space next Thursday, March 13 at 10:00 AM CST.
  • Our next bi-weekly call with delegates is scheduled for March 20 at 11:00 AM CST.
  • Join the Bi-weekly ARDC Office Hours Video call with this link: meet.google.com/ras-qcrd-dqz

Contact and Communication Channels

  • For more detailed information, check the ARDC Homepage on Notion where we’ve posted the complete reports
  • We have createc the ARDC Content Calendar for everyone to be informed of future events and meetings.
  • Join our bi-weekly calls for direct interaction with researchers
  • Tag any of our communications leads on Telegram (@JuanRah, @Frisson, or @AlexLumley) with questions or feedback
  • Follow this forum thread for ongoing updates on ARDC progress

Learnings for future versions of the ARDC

(Each monthly report will contain learnings to be consolidated into the final report)

  • Service providers should explicitly exclude charges for communication and updates (1 hour per week on calls + daily and weekly async updates) when quoting their services
  • Research deliverables benefit from including both comprehensive technical analysis and concise, actionable summaries for broader community understanding
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