Hello everyone!
SEEDGov would like to thank the whole community for their efforts in drafting this proposal. We know it has not been easy and we really like the result, we see a generally well-structured proposal that could boost the development of games within the Arbitrum ecosystem and that is why we initially gave our support in the Snapshot voting instance.
However, there have been a few changes since the Snapshot approval (especially of a budgetary nature) that have given us some doubts.
On March 22 of this year, when the proposal was approved on Snapshot, the budget was as follows:
Despite the proposal mentioning that it was a:
200M ARB + 10M was requested for Administration and Operations, making it the largest funding request ever approved by the DAO.
The initial goal for the 2-year period was as follows:
It appears that since its approval on Snapshot, both the design and the budget of the proposal have changed significantly, as published on Tally. On April 18, the proposal’s timeframe was extended from 2 years to 3 years “to ensure the proposal has more time to show results” (question: does it continue to be a catalyst?). The proposal does not set KPIs for this third year. We believe that, despite possible variations, it is important to establish a minimum threshold.
Regarding the KPIs, the targets have been significantly expanded. The goals for applications and Orbit Launches have been doubled:
On this date (April 18), the description of the GCP team and their roles (7 members) was also included, along with the Investment Committee (3 members).
In an initial iteration of the description of these teams, it was mentioned that
“GCP team members may receive incentives every 6 months based on performance. These incentives will be established with the approval of the Council and KPIs will be set for each team member.”
However, this same iteration, between April 18 and May 6 (last edit), expanded the operational budget by 100%:
Council Member compensation increased from 25K to 30K per year.
Initial Legal structuring was removed.
Legal Compliance was reduced by 50%.
The Fund Manager / Venture Lead budget of “up to 2M” (which was important because it was 200K per year + bonus) is no longer included but is replaced with “Team Salaries of 18M” without any justification of how it would be spent.
Multisig signers (5) are added for 180K.
This was the proposal as of May 4.
Now, on May 10, six days later, the final version is published. The operational budget is 25M, which is 5M (25%) more than the last edited proposal and 15M (150%) more than the amount approved on Snapshot.
The difference between what was proposed in April/May and this latest version lies mainly in four points:
- A Marketing Infrastructure budget of 2M is created.
- The legal budget is tripled, from 1M to 3M.
- A 100K compensation for drafting the proposal is proposed.
- GPC Team budget went from 10M to 18M
We believe that some figures are not correct. Correct us if there are any errors on our part.
The proposal mentions 600K for the Council and breaks it down into 30K per member per year (5 members) and 80K for the Committee Representative.
30 * 5 * 3 = 450
80 * 3 = 240
450 + 240 = 690
The other option is that the budget for the Committee Representative is for the 3 years, which would be 450 + 80 = 530.
In neither case does it amount to 600K.
As I mentioned above, the overall cost is claimed to increase by 5 million, but the added expenses for the April/May issue amount to 4.1 million.
Calculations show that 23.8 or 23.9 million is requested (depending on the Committee representative’s budget) instead of the stated 25 million. What is the reason for this discrepancy?
25M ARB represents 12.5% of the program’s cost, which we believe is somewhat high compared to other large programs due to administrative fees. For example:
- The STIP had a cost of 94K ARB on an expenditure of 50M, a cost of less than 1%.
- The LTIPP had a cost of 435K ARB on an expenditure of 45M, a cost of less than 1%.
- The STEP estimates a cost of 300K ARB on an expenditure/investment of 35M, a cost of less than 1%.
Note: We understand that these incentive programs are also of different durations, the administration lasted approximately 6 months. In addition, the number of administrators varies between proposals.
Of the total cost, several aspects are unjustified.
The budget for the GPC TEAM has been added and is estimated at 18M ARB. This is more than 100% of the originally requested and approved amount on Snapshot for the total cost, . considering that the GPC team consists of 7 people, we are talking about more than $70,000 per month average per member (18,000,000/36 months/7 members). However, it does not explain how much will be paid to each of these roles. Moreover, both the responsibilities and KPIs are very generic and difficult to monitor.
An investment committee was also created, which was not in the original proposal. Why is there an additional budget for the members of this Investment Committee when they are part of the GPC team, which already has a budget of 18M ARB or the Council which are paid positions?
Why is there 180K allocated for the multisig when: 1- the foundation provided a multisig, and 2- there is a proposal to control the multisig and avoid adding such unnecessary costs?
You are proposing 2M for Marketing. This was also not in the original proposal and has not been justified within the proposal. This proposal asks for 10% of what you are requesting but has received a lot of criticism and questions.
Why did the legal compliance budget go from 2M originally, then to 1M, and now to 3M?
Finally, the explanations given about how the DAO can “hold accountable” the GCP team are crucial but definitely insufficient. You are requesting an 18M ARB budget for salaries. It is mentioned in a generic manner that “regular transparency reports” should be submitted.
This should be much more detailed, explaining precisely what the DAO should expect to see in these reports. Additionally, this commitment to transparency should be included in the proposal.
In conclusion, we have followed the proposal since its inception and agree that gaming is important for Arbitrum to take the lead in this market. But the changes in the proposal have been significant. We also know that there have been people working on this proposal for quite some time so it is possible that we have missed some information, if so do not hesitate to tell us if there has been an error or if there is any information that has already been published.