ARDC Communication Thread

Arbitrum Research & Development Collective Supervisory Council
27

ARDC V2: First Three Months Recap

Hello Arbitrum DAO delegates and community members!

We’re excited to share a comprehensive recap of the first three months of the Arbitrum Research & Development Collective (ARDC) V2. In this period, we’ve established operational processes, published several key research deliverables, and laid the groundwork for upcoming strategic initiatives.

1. Governance Structure & Operations

From the outset, we focused on establishing clear operational frameworks and communication channels:

  • Regular Meeting Cadence: Weekly Supervisory Council meetings, weekly Service Provider & Operations meetings, and bi-weekly Community Calls
  • Transparent Documentation: Created an ARDC Homepage on Notion for tracking tasks, meeting minutes, and resources
  • Communication Channels: Established forum communication threads, Telegram channels, and bi-weekly delegate calls
  • Budget Management: Implemented detailed tracking of service provider hours

2. Completed Research Deliverables

Over the first three months, our service providers have completed several high-impact research projects:

  1. Grants Program Analysis (DefiLlama Research & Castle Capital)
  • External review of grant programs across Layer 1 and Layer 2 ecosystems (Optimism, Scroll, Ethereum, Solana, Uniswap, and Lido)
  • Internal assessment of Arbitrum’s Delegated Domain Allocation (DDA) program across Seasons 1 and 2
  • Recommendations for standardized reporting templates and improved impact measurement frameworks
  1. Sequencer Revenue Sustainability Analysis (Nethermind)
  • Revealed revenue concentration with 46.4% of sequencer revenue from the top 10 highest-earning days since Dencun upgrade
  • Documented shifting revenue sources: DeFi declined from 50% to 20.4%, while CeFi transactions now account for 21.8%
  • Identified challenges with market share decreasing from 22% to 10% due to competition
  • Highlighted Arbitrum’s competitive strengths: highest Total Value Secured ($14.2B) and dominant share in DeFi volumes
  1. Security Council Enhancement Recommendations (OpenZeppelin)
  • Defined ideal Council Member qualities: impartiality, trustworthiness, technical competency
  • Assessed the benefits of allowing organizations with 1-of-N multisig configurations
  • Analyzed Council powers regarding emergency actions versus veto-only authority
  • Recommended 12-month terms with staggered elections to balance continuity with community input
  1. Governance Attacks Analysis - Part 1 and Part 2 (Nethermind & Castle Capital)
  • Comprehensive examination of Arbitrum’s governance framework and proposal lifecycle
  • Analysis of historical governance exploits across various DAOs and their implications
  • Assessment of potential governance attack scenarios unique to Arbitrum
  • Recommendations for mitigating governance risks

3. Budget & Resource Utilization

As of our latest reporting, the ARDC has utilized approximately 22.5% of the 6-month budget allocation. Here’s the breakdown of service provider utilization:

  • DeFi Llama: 529 hours completed (32.1% of 6-month hours allocation)
  • Castle Capital: 487.5 hours completed (29.6% of 6-month hours allocation)
  • Nethermind (Mid Level): 235 hours completed (22.4% of 6-month hours allocation)
  • Nethermind (Senior): 141 hours completed (37.1% of 6-month hours allocation)
  • OpenZeppelin: 62 hours completed (11.3% of 6-month hours allocation)

Total expenditure to date: $194,780 of the $865,000 6-month budget (22.5%)

4. Ongoing Research Projects

Several important research initiatives are currently in progress:

  1. Incentive Programs Analysis (DefiLlama Research & Castle Capital)
  • Comprehensive evaluation of Arbitrum’s incentive programs (STIP, STIP Backfund, LTIP, STIP Bridge)
  • Assessment of external incentive programs (Avalanche, ZKsync Era, Sonic, Optimism)
  • Lessons, Takeaways, and Recommendations based on historical incentive programs
  1. Vote Buying Services Analysis (DefiLlama Research)
  • Examination of various vote-buying and lobbying mechanisms (MetaDAO, LobbyFi, Event Horizon)
  • Focus on implications for Arbitrum governance and potential risks/benefits
  1. Technical Decision-Making Process Improvement (DefiLlama Research)
  • Research on enhancing the DAO’s evaluation process for technical proposals
  • Development of frameworks for better delegate understanding of technical trade-offs
  1. Arbitrum Ecosystem Positioning (DefiLlama Research & Castle Capital)
  • Research that aims to map verticals and product-level opportunities across the broader crypto ecosystem where Arbitrum:
    1. Has minimal presence
    2. Has not yet achieved a stable or dominant market share
    3. Faces meaningful gaps in product features
    4. Growth in a specific vertical/product can, even if already established, be catalyzed sustainably via a systemic shock, together with incentives
  • It is intended to:
    1. Inform strategic incentive deployment across verticals
    2. Identify products or features missing from the Arbitrum ecosystem
  1. Supervisory Council Changes

As a reminder, the ARDC Supervisory Council has recently undergone a few changes:

  • Tamara and Frisson have stepped down from their roles on the ARDC Supervisory Council
  • @Entropy has taken over the operations responsibilities
    • @Pruitt is managing day-to-day operations
    • @Brick & @MattOnChain are handling research deliverables review and providing strategic oversight
  • The Communications Role has been consolidated to just me, as announced by Entropy last week.

6. Key Learnings

From our first three months of operations, we’ve identified several important learnings for future iterations of the ARDC:

  1. Planning and Setup: Allow 1.5 months between vote completion and full team start date for proper onboarding
  2. Stakeholder Alignment: Early coordination with Offchain Labs and the Arbitrum Foundation helps avoid duplicate research efforts
  3. Scope Definition: Service providers should explicitly exclude charges for routine communication (1 hour per week on calls + daily/weekly updates) when quoting services
  4. Report Format: Research deliverables benefit from including both comprehensive technical analysis and concise, actionable summaries for broader community understanding
  5. Right-sizing Roles: Don’t overstaff for roles. Having two people in charge of communications created more operational friction than benefits
  6. Research Guidance: People guiding research service providers need significant context to bring them up to speed and ensure valuable output. The time required to align with SPs should not be underestimated
  7. Demand-based Research: The DAO doesn’t need continuous research. Reports should be demand-based rather than created simply because providers are in the ARDC
  8. Meeting Efficiency: Minimize the number of calls. Meetings are seldom valuable unless something very specific needs to be solved

Update on Bi-Weekly Call

Please note that the ARDC Supervisory Council decided to push this week’s regular bi-weekly call as the service providers are currently in the final stages of completing several important research initiatives and, at the moment, do not have new information to share with the community. Both the service providers and the ARDC Supervisory Council are working diligently to ensure these deliverables meet the high standards expected by the Arbitrum community. With several deliverables in the final stages of review, we expect completed reports to be hitting the forum shortly. We’ll resume our regular bi-weekly calls with our next session scheduled for May 15th, and we will promptly let everyone know if we decide to pull it forward a week as research deliverables are completed.

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