Thanks for your feedback @AranaDigital . A few comments to clarify, I’d love to know your thoughts after.
An oversight committee does create some costs (about $150k/year in our case as the programs are self-sufficient and the committee is just for oversight not for executive capacity). This is not a very significant cost for the DAO (a fund would easily spend 2%+ on management fees which for Arbitrum is $60mn year). That being said, I do agree oversight costs should be managed and reduced whenever possible!
Our current thinking based on the feedback so far is that a temporary oversight committee can be setup and as soon as a more robust structure is in place (e.g. AVI) then the temporary committee is replaced. That would ensure that the DAO is not paralysed and at the same time costs are not duplicated. Would this setup (pre-empted transition) address your concern?
The design of AVI is one where it would be the vehicle that oversees multiple programs such as the ones we’re proposing. AVI is designed to deploy capital into the programs we put forward (equally AVI without programs to oversee is pointless). In that sense, these initiatives shouldn’t be viewed as competitive but rather as different pieces of the same puzzle of building the greatest innovation ecosystem in Web3 and beyond.
I’d like to understand why you believe Arbiturm shouldn’t act as an incubator. My thoughts: I see a risk with incentive programs and not offering a path for builders to repeat what happened in Canada with supermarket chains. The Canadian gov wanted to fight international competitors so they gave incentives to the already mature supermarkets, which grew a lot as a result. But soon very few players ended up controlling the market, stifled competition and raised prices, later forcing the Canadian government to give incentives to foreign supermarkets to enter their market and stabilise competition. Incentives can be counterproductive, and even when they’re not, their impact is often short-lived (especially in Web3) as they attract not organic users but airdrop hunters and speculators who quickly move on to the next shiny thing when we stop paying them.
This is not to say that incentive programs are always bad, but they’re best viewed as part of a mix. To give the best chances to Arbitrum, it’s best to not focus only on gaming, nor focus only on mature projects, but support a variety of projects across a few verticals (business clusters). As long as said support is executed well, these activities will give high ROI to Arbitrum, providing more funds to incubate more stuff (or give more incentives). I’d argue that at this stage, Arbiturm shouldn’t discount incubation, one of the most established mechanisms for innovation.
I understand the Gaming Catalyst proposal’s large budget was a very significant ask (200mn) but then that’s over 3 years (potentially not used completely). And that’s still only 0.6% of the treasury. We’re currently working on projecting the ROI, as Arbiturm has already generated over 16k ETH in sequencer fees (over 3k ETH in the last 5 months so over $10mn). This significant revenue makes us bullish on the value of Arbitrum investing to sustain and expand its leadership amongst L2s, especially at a time when competition is rapidly increasing. And we see incubation as a powerful mechanism to invest (not as an expense but as an investment) into growing sequencer revenue and making Arbiturm the best place for builders.
I’d appreciate a chance to hear how the above is landing with you and any remaining concerns (or some further understanding on the ones you shared), so we may find a way to work with Arbitrum and grow this ecosystem together. Thanks in advance