Hello Arbitrum DAO delegates and community members,
As the initial six-month term of the Arbitrum Research & Development Collective (ARDC) V2 concluded on July 12, 2025, we are writing to provide our final update. Following a Snapshot vote, the DAO has decided not to extend the ARDC V2 for an additional term.
This post serves as a comprehensive summary of all research deliverables produced during our tenure. We aimed to provide valuable, data-driven insights to support the DAO’s strategic decision-making. We are grateful for the opportunity to have served the Arbitrum community and are proud of the work completed by our dedicated service providers.
I. Final Deliverable: Arbitrum Ecosystem Mapping & Positioning
Our final research initiative was a comprehensive ecosystem mapping report led by DeFiLlama Research and Castle Capital. This report was presented to the DAO during the office hours on July 10, 2025.
- Objective: To conduct a deep analysis of Arbitrum’s position within the broader crypto ecosystem by comparing it against key competitors and evaluating strategic verticals to identify gaps and opportunities.
- Methodology: The analysis included:
- Chain-Level Analysis: A feature and go-to-market comparison of Arbitrum against Ethereum, BSC, Base, Tron, Solana, and Sui.
- Vertical-Level Analysis: An in-depth review of key sectors including Lending, DEXs, Liquid Staking, CDPs, Liquid Restaking, Derivatives, and Real-World Assets (RWAs), featuring analysis of leading protocols like Morpho, Lido, Ethena, Uniswap, and GMX.
- Status: The final report has been completed and delivered.
II. Complete Summary of Research Deliverables
Throughout the six-month term, the ARDC’s service providers produced a wide range of research on critical topics for the Arbitrum DAO.
DeFiLlama Research & Castle Capital
- Grants Program Analysis:
- This report provided a comparative study of grant programs from leading ecosystems like Optimism, Solana, and Lido. It highlighted successful models, such as Solana’s hackathon-to-accelerator pipeline and Lido’s tiered grant approval process. It also included an internal analysis of Arbitrum’s DDA program, recommending improvements for impact measurement and reporting.
- Incentive Programs Analysis:
- This research assessed Arbitrum’s various incentive programs (STIP, LTIPP, etc.) and compared them to external examples. Key findings emphasized the need for clear goals and KPIs, the value of a dedicated operations team for continuity, and the importance of gradually tapering rewards to avoid cliff effects.
- Arbitrum Ecosystem Mapping & Positioning:
- The final and most recent deliverable, this report provides a strategic overview of Arbitrum’s competitive landscape. It shortlists high-potential chains and verticals, offering go-to-market frameworks to capitalize on identified opportunities.
Nethermind & Castle Capital
- Governance Attacks Analysis, Part I and Part II:
- This two-part research examined the state of Arbitrum’s governance and its resilience to attacks. It analyzed historical exploits from other DAOs, studied the impact of quorum thresholds, and provided recommendations to mitigate governance risks.
DeFiLlama Research
- Analysis of Vote Buying Services:
- This research explored the impact of vote-buying platforms on Arbitrum governance, noting the significant presence of services like LobbyFi. It concluded that while Arbitrum voting remains largely decentralized, the DAO should consider a flexible framework to address potential risks from these services.
- Analysis of the DAO’s Technical Decision-Making Process:
- This report identified gaps in support for delegates evaluating complex technical proposals. It recommended implementing structured workshops, a technical contributor program, and standardized proposal metadata to improve the process.
Nethermind
- Sequencer Revenue Sustainability Analysis:
- This analysis found that a significant portion of sequencer revenue was concentrated in a few high-earning days. It also documented a shift in revenue sources, with DeFi’s contribution declining while transactions from MEV and bots increased. The report highlighted Arbitrum’s strengths in Total Value Secured but noted challenges from rising competition.
OpenZeppelin
- Security Council Enhancement Recommendations:
- This research provided actionable recommendations for the Security Council. Key suggestions included defining ideal member qualities (impartiality, technical competency, etc.), allowing organizations as members under specific configurations, and maintaining emergency action capabilities.
III. Financial Summary
Over the six-month term, the total amount paid to Service Providers (SPs) was $294,880.00 USD, which covered both hours worked and retainer. Below is a breakdown of the amount spent per provider:
- DefiLlama: $94,200
- Castle Capital: $78,750
- Nethermind (Mid Level & Senior): $55,930
- OpenZeppelin: $66,000
- Hours worked: $37,200
- Remaining retainer: $28,800
- OpenZeppelin has agreed to credit the Arbitrum Foundation’s Audit Subsidy program the equivalent of the remaining 48 hours in audit weeks.
Final invoices for DefiLlama Research and Castle Capital are being processed by the Arbitrum Foundation.
A total of $266,080 was spent on reports, with $264,580 being spent on the 8 completed deliverables and $1500 on the eventually paused Builder Growth Funnel & Future of the ARDC reports. Below is a breakdown of the amount spent per report:
- Analysis of the Arbitrum DAO’s grants program (Questbook, DDA): $24,600
- Security Council Enhancement: $37,200
- Sustainability of Sequencer Revenue: $34,990
- Governance Attacks Part 1 & 2: $26,040
- Future of the ARDC (Paused): $200
- Incentive Program Analysis: $54,650
- Analysis of Vote Buying Research: $16,200
- Suggestions To Improve the DAO’s Technical Decision-Making Process: $21,300
- Growth Funnel (Paused): $1,300
- Arbitrum Ecosystem Mapping: $49,600
IV. Key Learnings & Reflections
Our six-month term provided valuable lessons on operating a research body within a DAO structure.
- A Shift to Demand-Based Research: We observed that a fixed retainer model can be inefficient. Future research functions could benefit from a more agile, demand-based system where projects are commissioned based on specific, timely needs of the DAO.
- Actionable Summaries are Crucial: Comprehensive technical reports are valuable, but they must be paired with concise, actionable summaries to ensure the broader community and delegates can easily digest the findings and make informed decisions.
- Operational Planning is Key: Sufficient time must be allocated for operational setup, including compliance and payment systems, before research work fully commences to avoid delays.
- Bridging Research to Implementation: There remains a challenge in translating research findings into concrete, actionable proposals that navigate the DAO’s governance process. This is a broader structural challenge for the DAO to consider.
V. Concluding Remarks
The ARDC V2’s term is now complete. We want to extend our sincerest thanks to our service providers: @DefiLlama_Research, @CastleCapital, @Nethermind, and @OpenZeppelin for their diligent and insightful work.
I also want to thank members of the Supervisory Council during this term, @Entropy and @Tamara for their operational leadership, as well as @Frisson for his communication efforts.
Most importantly, we thank the Arbitrum DAO and the entire community. Your engagement, feedback, and participation were essential to this initiative. All reports and meeting minutes remain available for public review on the ARDC Homepage on Notion.
Thank you for your trust and support.