Catalyze Gaming Ecosystem Growth on Arbitrum

[tungle3010]

wonder if there is any update on Tally vote? cc @Djinn
Thank you guys!

[thedereksmart]

Yeah, Dan posted this on Telegram a few days ago. I suggest joining that TG channel for quick updates.

Hey everyone, quick update since we are heading towards the end of the week.

Our current goal is to work through the important feedback we have received throughout the last few weeks and submit a new draft of the proposal onto the forums by end of next week.

A few other milestones we are shooting for:

• Open Office for draft feedback (4/9)
• Finalize entity discovery (TBD - early to mid April)
• GCP team descriptions and recruiting collateral (4/12)

Our goal is to get to Tally asap, please be patient with us as we improve the proposal and socialize with all of our key stakeholders

[Epiclevel]

Thank you so much for your enthusiastic support From EPICLEVEL team! We’re thrilled to hear your excitement about the Gaming Catalyst Program. Your suggestion to prioritize community engagement is spot on. Building a vibrant gaming community on Arbitrum is essential for the program’s success, and we’re fully committed to fostering that environment. Stay tuned for exciting updates and initiatives as we continue to elevate gaming on Arbitrum together!

[Djinn]

Arbitrum DAO Gaming Catalyst Program: Tally Draft

This draft was completed after a successful Snapshot temp check for the Arbitrum DAO to empower gaming with a three year, 200m ARB with the goal of powering the Arbitrum gaming ecosystem with the best studios and games in the web3 industry.

The temp check showcased the enthusiasm to support web3 gaming, but also revealed important questions to answer when launching an ambitious, multi-year plan requiring not only a strong team to run the program, but transparent, flexible collaboration between many stakeholders.

Introduction - Gaming Catalyst Program

What changed: Added additional data points and market sizing.

The Gaming Catalyst Program (GCP) is designed to immediately expand awareness and adoption of Arbitrum/Orbit/Stylus by builders and players in the Gaming community.

Arbitrum has emerged as a leader in the competitive network race through a dynamic formula of innovation, robust technology, organic builders, and a variety of short and long-term incentives.

The proliferation of DeFi on Arbitrum showcases how quickly a snowball effect can onboard builders, users, and ultimately value for the Arbitrum DAO and other stakeholders (i.e. Offchain Labs, Ethereum, etc.). The TAM for DEFI has surged to $50B and is projected to surge to over $120B by 2030 and Arbitrum is leading the way.

We believe that the same opportunity exists to attract the best builders that will in turn create sticky high quality games that bring and retain new users within Arbitrum. The gaming vertical has a $250B TAM today that is projected to grow to $500B+ by 2030. Though the “web 3 + games” segment of today’s game TAM is relatively small, it is poised to grow exponentially this decade.

Several L1s and L2s see this opportunity (most notably Solana, Cardano, Opstack, Optimism, to name a few) and are moving to claim the builders with grants and investments.

GCP Hypothesis

What changed: General content, enhanced GCP goals.

Arbitrum has had immense success in the decentralized finance vertical, but the branding of Arbitrum as a home for gamers and game builders is nascent. As a network, Arbitrum falls behind major competitors (Immutable X, Ronin, Solana, etc) across total games migrated, games launched, and total gamers.

This educational post shares some of the pain points and metrics within the gaming ecosystem in regards to Arbitrum.

Through the Gaming Catalyst Program, we aim to establish a dedicated team and fund to provide technical and strategic support to the game industry. This dedicated team is key to attracting and retaining the best established and independent developers.

We will know we are succeeding when we achieve the following:

Rapidly Increase the number of Game Developers using Arbitrum/Orbit/Stylus

The GCP aims to provide support and resources to developers interested in building on the Arbitrum network. This includes access to funding, mentorship by vetted experts, and other forms of assistance to expedite the development process and contribute to success in the market post-launch.

Strategic Allocation of Resources via Grants and Investments

By allocating resources strategically, the program can maximize its impact by focusing on proven publishers and developers as well as promising independent projects within gaming. This ensures that resources are used efficiently and effectively to foster the growth of high-quality games on Arbitrum.

Attracting and retaining Top Talent

Just as DeFi projects have flocked to Arbitrum due to its innovative technology and incentives, the GCP aims to attract the best game developers in the industry. By offering support,incentives and game industry specific tools, Arbitrum can position itself as an attractive platform for game development, leading to a surge in high-quality gaming experiences on the network.

Expanding the Use Cases of Arbitrum

While DeFi has been a major focus of Arbitrum’s success so far, expanding into the gaming vertical opens up new opportunities and use cases for the network. By supporting game and gaming infrastructure development, Arbitrum can diversify its ecosystem and appeal to a broader range of users and developers, with results that include but are not limited to Orbit chain and Stylus adoption.

Facilitating the Development of Sticky, Quality Games

The ultimate goal of the GCP is to encourage the development of sticky, high-quality games that not only attract users but also retain them over the long term. A dedicated GCP Team and Council representing the interests of the DAO will serve as quality control mechanisms to make sure the best applicants receive the full support of the GCP.

Proposal Summary

What changed: Extended timeline to three years from two years to ensure program has room to show more results.

We are asking the DAO to earmark 200m ARB over a three year period to expand the gaming ecosystem on Arbitrum and establish the network as the top choice for game builders across the landscape.

The GCP is meant to serve as a catalyst, not a comprehensive program, with a focus around onboarding and supporting high quality builders. After the roll out of the GCP, the aim is to use its learnings to mature the organization into a longer-term gaming program with a comprehensive approach to game ecosystem growth.

Strategically, we believe that attracting, retaining, and supporting builders with a dedicated team and an ongoing investment in game developers and the technical solutions they need will be a key differentiating factor vs other competitive networks. This commitment to gaming will lead to high quality game launches that will in turn attract large numbers of engaged gamers.

Part of the fund will be utilized to co-invest into promising studios and games along with approved, Arbitrum-aligned publishers, with the belief that the business model, industry expertise, and track record of publishers will streamline the outreach, vetting, negotiation, onboarding, and support process for builders. The fund will also be available for all other game builders seeking to create games on Arbitrum.

Controls

Publishers and developers will be subject to a robust set of checks and balances to ensure alignment with this proposal’s goals and Arbitrum DAO’s values:

• A GCP Council of 5 individuals with deep gaming, venture experience, analytics / reporting, and/or DAO governance skills will be elected by the DAO and will be responsible for holding the Catalyst GCP Team accountable - with powers including general oversight, hiring / firing of staff (think of them as a Board )
• A GCP Team will be created with the support of the Arbitrum Foundation, and will collaborate with the GCP Council (which will serve as oversight):
  • An investment committee of 3 individuals including 1 Council member will approve investments
  • Funding for projects will be contingent on achieving milestones
  • A quarterly transparency report will be created with summary data on GCP performance
  • Funding of projects will include terms that are market competitive

Program Outcomes and KPIs

What changed: Adjusted KPIs to account for a three year period and more aggressive goals, added Year 1 goals.

The Gaming Catalyst program has an overarching goal to bring in talented builders, and help the builders accelerate their games through the lifecycle stages.

The highest level metric we will be tracking is studio / builder onboarding into the Arbitrum ecosystem. However, there will be a variance in the realized outcome due to publisher applications, types of builders targeted, and variables from network competition.

Primary expected outcome:

Within the initial time frame of the program (3 years), the goal is to establish Arbitrum as a de facto leader for on-chain gaming. Specifically:

• 400-600 applications
• 100-200 net funded games
• Win net migrations to Arbitrum vs other L2s
• 50+ new Orbit launches

The GCP will take time to reach its full potential, and setting milestones vs maturity of the program is prudent:

KPI	Year 1	Year 2	Year 3
Daily Active Users	40,000 - 50,000 *	To be set by the GCP Team
Orbit Launches	15
Studio Deals	20

• Most games will be in dev and not (yet) live in 2024

The GCP team will set appropriate OKRs and KPIs internally to align with the goals and milestones listed above.

An additional outcome that the program aims to achieve is incremental movement through the gaming lifecycles illustrated by the Helika presentation on 2/2/24 here (slide 15) during our open office hours.

Initiatives

What changed: Removed publisher earmark, split the Builder Onboarding & Growth section into grants and investments. RFP details adjusted.

We are asking the DAO to earmark 200m ARB to develop the gaming ecosystem on Arbitrum and establish the network as the top choice for game builders across the landscape.

The funding will be allocated towards the following initiatives over the span of a three year period:

1. Builder Onboarding & Growth (160m ARB)

Focused on bringing the best game builders into Arbitrum - open to publishers, established studios, and independent builders.

• Grants to accelerate ecosystem growth (25m)
  • Generally for smaller asks and projects
  • Commercial terms may not be required
  • Reviewed by grants manager
• Investments with commercial agreements (135m)
  • Generally for larger deals
  • Managed by an internal GCP venture team, via commercial terms (recoup + revenue share, equity, tokens, gas fees, etc…) with ROI as a main KPI
  • Full funding of projects tied to achievement of milestones

2. Infrastructure Bounties (40m ARB)

Focused on creating game specific tech needed to make Arbitrum the best choice for game builders. Deals will follow grant or investment classifications based on the same sizing requirements as the Builder Onboarding and Growth program.

• Allocated by RFP or decided by the Council on a per proposal basis for any tooling and infrastructure needed to support gaming within Arbitrum (i.e. account abstraction solutions and gasless transactions for games, payment rails, web and game engine SDKs, data analytics and attribution, etc.)
• Promote Orbit, Stylus, and other development and infrastructure growth on top of new Arbitrum technology releases

The numbers proposed represent an upper bound of ARB that could be deployed to catalyze gaming on Arbitrum. In the event there is unused ARB at the end of the GCP across any of the two initiatives, funds will be transferred back to the DAO.

A. Builder Onboarding and Growth

Total Budget: 160m ARB

Use of Funds: This funding is proposed to be reserved for established publishers, game studios and independent builders on Arbitrum to help scale the DAO’s ability to attract, secure, and accelerate talented teams on Arbitrum.

Thesis / Experiment: We are allocating a large majority of the budget to empower growth of publishers and studios on Arbitrum.

Build Grants (25m)

Grants will primarily be used to empower teams that are aiming to accelerate early stage development on Arbitrum, or to incentivize user onboarding. Other grant uses may be reviewed on a case-by-case basis.

Guidelines & Details:

• Teams may apply via the GCP Grants form
• Grants have a maximum size of 500k ARB
• Preference for user onboarding incentives or early stage development
• The grants manager has final approval on grants
  • Scorecards and details must be shared with the GCP Council
• Proposed: early grants period until legal entity is formed for GCP
  • Onboard interim grants allocator
  • Interim council of 5 members votes on individual grants
  • Maximum allocation of 10m ARB prior to GCP entity formation
• Each grant must have specific milestones agreed upon before funding

Investments (135m)

Teams seeking more than 500k ARB or additional funding for development beyond initial development must work with the GCP investment team to align on deal terms.

Publishers may submit multi-game deals to the GCP for consideration - allowing them to be more efficient and create more strategic plans for their ecosystem. As a packaged proposal, publishers and the GCP team may collaborate to set milestones, funding, kpis, etc in aggregate form or by each game, allowing for more flexible launch, development, and operational capabilities.

Guidelines & Details:

• Builders or publishers must agree on a commercial agreement value share through tokens, equity, revenue share (post recoupment), or other pathways.
  • Other considerations include active use of Orbit chains with significant sequencer revenue share as part of the default licensing structure
• More detailed deal structure guidelines will be created by the GCP Team upon its formation
• By the end of the program term, any unused ARB will be returned to the DAO

B. Game Infrastructure Bounties

Budget: 40m ARB

Use of Funds: This will be allocated by RFP or per proposal for any tooling and infrastructure needed to further support gaming within Arbitrum (i.e. gaming-centric boilerplates for Arbitrum Orbit, game contract libraries built via Stylus, account abstraction and gasless transactions solutions, payment rails for games, web and game engine SDKs (Unity, Unreal, Godot), etc.)

Thesis / Experiment: Web3 gaming is still nascent and there exists key gaps for game builders to build games and bring them to market. By incentivizing development for such infrastructure projects and tools, or accelerating development of Stylus as an Arbitrum native framework, this will help set Arbitrum further ahead in the competitive network landscape.

Current Gaps: A non-exhaustive list of gaps that currently exist within the Arbitrum ecosystem:

• Custom gaming-centric implementations of Orbit chains
• Mobile App Infrastructure with wallet that is optimized for games and asset management (See Ronin Wallet on mobile as an example)
• Web and game engine SDKs (Unity, Unreal, Godot) that allow for in-game contract calls
• Desktop launcher and distribution solutions
• Game analytics, optimization, and related tooling (tying together on-chain, off-chain, social, and player activity)

Funding Guidelines:

• The GCP Team will establish initial RFPs and funding guidelines
• An infrastructure specific rubric will be established by the Council to assess proposals
• Independent proposals that do not fit within RFP guidelines are welcome to apply separately for GCP Team consideration
• Any approved applicants for RFPs may be selected for vendor whitelisting, which allows vendors to be marketed to GCP participants
• By the end of the program term, any unused ARB will be returned to the DAO

GCP Org Structure

What changed: Added proposed org structure and relationship between each stakeholder / partie(s).

When designing the organizational structure of the GCP, two major dynamics were considered:

1. Enabling autonomy of the GCP team while setting safeguards for program success
2. Empowering the DAO to have transparency and representation without impacting compliance, disclosure, and other necessities for a grants program with commercial ties within the gaming industry

Decision making process

• Decision is made by GCP team

  • Investment committee decision, staffing, etc

• Council meetings every two weeks to discuss / veto any decisions

• Decision is ‘ratified’ and activated

• Every half year, aggregate summary of data as applicable shared in a report to DAO

GCP Team

What changed: Added roles / responsibilities, section on entity setup, team incentives, and overall costing estimates.

The GCP Team will be the primary operator of the GCP program.

Team members may join the program through a few pathways:

• Nomination through the proposal process (to help accelerate standup of the program)
• Hiring by the GCP team, with veto capabilities held by the Council

The below team roles and responsibilities are illustrative of an initial proposed structure, but may change based on industry / program demands.

GCP Team Roles & Responsibilities

1. Fund General Manager / Venture Lead

Responsibilities:

• Presents deals to the investment committee
• Responsible for strategic planning and the overall success of the program
• Managing and staffing the GCP Venture team
• Providing leadership and oversight to the Venture team
• Driving deals, partnerships and being the public face of the GCP program
• Compliance

KPIs:

• Overall investment milestones
• Deal flow
• Venture team performance

2. Program Director

Responsibilities:

• Member of investment committee
• Ensuring overall program success and sustainability
• Managing and staffing the overall GCP program (in collaboration with the Venture Lead)
• Leading marketing / program development efforts
• Establishing internal metrics for OKRs & KPIs with the Venture and Grants programs
• Align with Arbitrum DAO and other key stakeholders on strategic direction

KPIs:

• Overall program milestones

3. Venture Partner

Responsibilities:

• Member of the investment committee
• Providing support for the GM
• Negotiating with publishers and studios on deal terms
• Working with General Counsel to ensure compliance
• Overseeing portfolio management and providing strategic guidance to portcos
• Preparing deal memos for the GCP Board

KPIs:

• Funded deals
• Successful game launches
• Venture milestones
• Compliance

4. General Counsel

Responsibilities:

• Ensuring legal compliance/diligence
• Managing legal operations
• Managing documentation for investment deals
• Serving as the liaison between the GCP and DAO

KPIs:

• Average time to complete deals
• Operating within budget for Legal

5. VP Finance

Responsibilities:

• Managing all GCP council required reporting and tax requirements
• Modeling of potential deals
• Ensure budget compliance
• AR/AP, payroll, vendor management
• Maintain token calendar

KPIs:

• Budget compliance
• Program sustainability

6. Analyst x 2

Responsibilities:

• Sourcing top deals in the market
• Providing in-depth market research
• Running due diligence for deals
• Geographical focus:
  • 1-2 - Asia-focused
  • 1-2 - US/Europe-focused

KPIs:

• Venture partner satisfaction
• Number of fundable deals

7. Producer

Responsibilities:

• Establishes milestones
• Providers additional DD support for GM / Investor
• Tracks performance for games
• Collaboration with Program Director and Director of Technology to create infrastructure RFPs

KPIs:

• Games shipping at quality
• Game progress through development funnel

8. Director of Technology (implementation engineer)

Responsibilities:

• Documentation for tech onboarding of game projects
• Connect the dots with vendors and gaming teams
• Helps frame infrastructure RFPs for bounty program
• Shortlists preferred vendors

KPIs:

• Implementation throughput, onboarding pace
• Builder advancement across development phases

9. Grants Manager

Responsibilities:

• Due diligence for submitted grants
• Presentation of grants to the council in written form
• Contribution to transparency reports

KPIs:

• Performance of projects receiving grants
• Efficient distribution of grant funds

Investment Committee (separate from Council!)

The investment committee’s role is to provide extra perspective on deals brought forth by the Investment Lead and other team members, and make a final decision on investments.

The proposed investment committee structure consists of two GCP Team Members and council members - however the size and composition may change based on needs.

Our current proposed committee has 3 seats:

• Program Director
• Venture Partner
• 1 GCP Council Member (extra pay for this position)

Team Incentives

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.

The council must approve the bonus / incentives after each 6 month period (this time period may evolve over time).

GCP & Legal Compliance

The GCP will retain qualified counsel and coordinate with the Arbitrum DAO to ensure that it operates in a legally compliant manner at all times.

Team and GCP Board Costs

The GCP’s operating budget will be capped at $20m USD (excluding additional legal and financial expenses specifically required to ensure compliance with DAO/Foundation requirements).

ARB will be converted to USD or USDC by the Foundation before each quarter and sent to the GCP program account or multi-sig for disbursement.

Entity Setup and Model

The GCP working group and Arbitrum Foundation are actively exploring entity setup to ensure DAO transparency while following the rigorous compliance guidelines that surround any entity focused on investments.

This effort also involves DAO members from the M&A, Ops Co, VCDAO, and other initiatives.

GCP Council

What changed: Revised descriptions of GCP Council’s role and responsibilities that portrays it more as a collaborative body vs a governing board.

The GCP Council will be a DAO elected group of trusted professionals with backgrounds ranging across gaming, venture, grant allocation, web3 technology, and DAO relations. The group functions as a braintrust that offers their accumulated knowledge to empower the GCP Core Team.

Primary responsibilities of the GCP Council:

• Collaborate with the GM and IC on deal proposals by providing insights and identifying potential risks (can challenge based on deals not meeting very clear requirements).

• Offer recommendations on proposed deals after reviewing relevant data and analysis (this analysis would be a standard for all deal memos).

• Escalate concerns regarding deals to designated oversight bodies if necessary.

• Review and provide feedback on GCP team member nominations submitted by the GM and Program Director.

• Advise the GM and Program Director on long-term strategic plans for GCP.

Requirements:

• Council members must not be from publishers or studios intending to apply to GCP programs
• Council members with advisory, investor, or other relationships to applicants must disclose these conflicts
• Council members will go through mandatory yearly elections
• The DAO may call a snapshot vote to remove / replace council members
• Must sign NDAs and respect confidentiality agreements

Next Steps

What changed: Adjusted based on current estimates on timeline.

• [Done] Post Open Draft (Shared on 2/15/24, link within Arbitrum Gaming Education Post [Arbitrum and the Future of Web3 Gaming 89]
• [Done] Post GCP proposal to forum (3/11/24)
• [Done] Snapshot vote (3/15/24) for general delegate agreement on GCP commitment, start entity setups, and to receive detailed feedback: Snapshot 304
• Tally vote / ratification (May 2024)
• In parallel with Tally vote and /or post-ratification, GCP working group and authors will work with the Arbitrum Foundation for entity setup
  • Collaborate with Arbitrum Foundation resources and vendors for due diligence
  • Stand up legal framework and entity to support GCP
  • Initiate on elections, team recruitment, and other procedures after completion of entity setup
• GCP Council Elections (May 2024)
• GCP GCP Team formation (April - May 2024)
• Grant applications and RFPs open (May - June 2024)

Total Cost

What changed: Adjusted total cost breakdown, added more details to Program Admin and Operations.

We estimate the total cost to equal 200m ARB + operations costs detailed below under Program Administration & Operations.

This is a three-year program and forecasted amounts may change / require amendment(s) as the program evolves. Any unutilized ARB at the end of the program duration will be returned to the DAO treasury.

• Total Incentives: 200m ARB
  • Builder Onboarding and Growth: 160m ARB
  • Infrastructure, Tooling & Stylus Development: 40m ARB
• Program Administration & Operations - $20m
  • Council Members (5): $630k
    • 30k each member per year
    • 60k for investment committee representative
  • MultiSig Signers (5): $180k
  • Team Salaries: $18m
  • Legal / Compliance: $1m
    • Expecting usage for vendors, entity setup, adjustments for fast evolving regulatory environment
  • Proposal Authors and Contributors: 100k ARB

Proposal Contributors

What changed: Added new contributors.

Djinn (Dan Peng) - PM / Author

Karel Vuong - Author (Co-Founder, Treasure)

Marcus Segal - Contributor

Rick Johanson - Contributor

Xai Games - Advisor / Contributor

Helika - Advisor / Contributor

Jason Lee - Advisor / Contributor (ExPolygon Games, current web3 gaming founder)

Resources & Content

What changed: -

GCP AMA / Open Office 3/15/24 - https://twitter.com/i/spaces/1RDGllYMYvOGL?s=20 26

[samatsequence]

Proposal Name:

Response for Gaming Catalyst Program

Response:

Major props to the authors @Djinn et al, for driving this proposal forward and passing the first temperature check. We strongly believe that Arbitrum has the potential to be the destination for on-chain gaming, and the scope of the GCP outlined above looks to ignite this.

A little about us: Sequence’s mission is to make web3 easy, fun, and accessible for players, developers, and builders. Sequence has been at the forefront of innovation in web3 game development since 2017 and is backed by leaders in gaming, technology, and web3, including Take-Two Interactive (owners of Rockstar/Grand Theft Auto, 2K, Zynga, etc.), Ubisoft, Xsolla, Bitkraft, Brevan Howard, Coinbase, and other visionaries. The team pioneered many of the standards and open-source software on which web3 gaming runs, including co-authoring ERC 1155 for game items, and authoring the standards of account abstraction and smart contract wallets like ERC 1271, ERC 6492, and ERC 5189. Other leaders in web3 gaming leverage our software such as Immutable and OpenSea as well. We know first hand the needs of game developers and players as we leverage the Sequence full-stack platform in building our game, Skyweaver, that has been live since 2019. Beyond Skyweaver, Sequence supports hundreds of games and thousands of developers with our comprehensive development platform. Since the company’s founding, Sequence technology has powered more than $5.3B of transaction volume and millions of wallets across the EVM ecosystem.

Beyond web3, we have brought on legendary game-industry veterans, including Greg Canessa as our President and COO. Greg was previously at Xbox/Microsoft where he created Xbox Live Arcade, the first digital distribution business on console; was the first VP of Mobile at Activision Blizzard; Director of Battle.net; and served in executive leadership roles at PopCap, EA, GSN, and Google; was instrumental in titles like World of Warcraft, Starcraft, Call of Duty, Diablo, UNO, amongst dozens of others; and played key roles in content development and ecosystem creation in the gaming industry for 30 years. We hired Greg to drive true gaming expertise in web3, build a bridge between the blockchain and traditional gaming worlds, and leverage his unique knowledge and network to expand the web3 ecosystem and venture partnerships.

We are heavily aligned with the Arbitrum ecosystem where we have played an integral role as not only an infrastructure provider, but a strategic partner. Examples include:

• Advocating for prominent game studios & games to build on Arbitrum such as Mighty Action Heroes, soon to be announced AAA games, as well as servicing their infrastructure needs.
• Brought TapNation, a leading mobile games publisher with 60M MAU and 1B+ downloads, to Arbitrum.
• We’re white-labeling our developer console Builder for ApeChain. The Builder is a portal for game devs to leverage the comprehensive Sequence stack to easily build games on ApeChain and Arbitrum.
• Freely sharing our novel calldata compression tool to cut L2 fees by 50%, which is deployed on Arbitrum-ecosystem chains.

We want to discuss a few points for clarification on the proposal:

• Distinction and overlap between the Infrastructure Bounties fund vs. the Builder Onboarding & Growth fund.
  • From our perspective, there is overlap in that publishers or games will build infrastructure. Can games and publishers apply for both the Builder Onboarding & Growth Fund and the Infrastructure Bounties Fund OR do proposals for the Builder Onboarding & Growth Fund include infrastructure development as a cost? We believe that infrastructure should be a part of the overall request from the Builder Onboarding & Growth fund.
• Significant historical contributions should be taken into account when considering requests for funds.
  • Building high-quality and seamless infrastructure for web3 games is a high-skill, laborious, and time-consuming effort. It takes years to deliver properly. We recommend that infrastructure providers’ track records and contributions to the Arbitrum ecosystem are considered when allocating Infrastructure Bounties. We needn’t wait to accelerate the Arbitrum ecosystem. Many of the tools required to build, launch, and scale the biggest games are available today, and ARB allocation can be used to accelerate and enhance existing tools to better support game developers, and ultimately solidify Arbitrum’s position in web3 gaming.

Overall, the structure of the proposal is great, and we believe that the right GCP team combined with some elaboration on the above concerns, will help propel Arbitrum as the leader in on-chain gaming.

To further excite the community, we believe the total addressable market is actually much larger than described in the proposal. The author cites a projected $500B gaming TAM by 2030, and we believe it’s important to consider the $10T metaverse opportunity. Gaming and blockchain play a critical role in the metaverse, and establishing Arbitrum as a gaming leader also helps establish Arbitrum as a metaverse leader. We are excited to collaborate with the Arbitrum DAO and other stakeholders to participate in the GCP to drive the adoption, utility, and success of the Arbitrum ecosystem.

[duokongcrypto]

@Epiclevel

Thank you so much for your enthusiastic support From EPICLEVEL team! We’re thrilled to hear your excitement about the Gaming Catalyst Program. Your suggestion to prioritize community engagement is spot on. Building a vibrant gaming community on Arbitrum is essential for the program’s success, and we’re fully committed to fostering that environment. Stay tuned for exciting updates and initiatives as we continue to elevate gaming on Arbitrum together!

OK, we will continue to follow the development of your project.

[Djinn]

Additional clarification of Council, Investment Committee, and GCP Core Team roles and responsibilities (thanks to Rick Johanson)

GCP Ecosystem Working Norms and Mechanics:

TL;DR: This collaborative structure aims to achieve program objectives while maintaining DAO oversight and transparency.

1. Funding and Oversight

• Arbitrum DAO: Allocates xxx million ARB tokens over xxx years to fund the GCP.
• GCP Council: Elected by the DAO, the council provides oversight and collaboration for the GCP team. They review proposals, offer insights, and can challenge a deal by majority vote and through a collaborative process of escalation with GCP Core Team.

2. Program Execution

• GCP Core Team: Executes the program’s day-to-day operations. This team identifies deals, negotiates terms, manages grants, and tracks progress.
• Investment Committee (IC): A small group with representation from all entities within the GCP ecosystem. They make final decisions on investment deals brought forth by the GCP Core team.

3. Collaboration and Decision Making

• GCP Core Team & Council: Collaborate on program strategy, deal evaluation, and identifying potential risks. The council provides expert advice and can challenge deals that don’t meet clear requirements or are not aligned to established program objectives…
• Investment Committee: Reviews investment proposals from the GCP team and makes final funding decisions. Additionally, they help resolve issues or concerns surfaced by the GCP Council related to deals.

4. Transparency and Accountability

• GCP Core Team: Provides regular reports to the DAO on program performance, including metrics, risk response, and progress reports.
• GCP Council: Ensures transparency by reviewing and providing feedback on team performance, nominations and decisions. The Arbitrum DAO can also call for council member removal.

Simple flow of responsibilities:

1. Arbitrum DAO allocates funds and elects the GCP Council.
2. The GCP Core Team identifies deals and negotiates terms.
3. The Investment Committee makes final decisions on investments.
4. The GCP Council provides oversight and collaborates with the team.
5. The GCP Core Team reports program performance to the DAO.

Key areas of ownership:

• The DAO maintains ultimate control through funding and council elections.
• The GCP Council provides expert guidance, escalates deal concerns and ensures transparency.
• The GCP Core Team defines strategy, executes the program, and makes funding recommendations.
• The Investment Committee has final say on investment decisions.

GCP Ecosystem Accountability Methodology:

TL;DR: A structure to ensure each entity is held accountable to the other to serve the best interests of the Arbitrum DAO and the overall success of the program.

Accountability is achieved through a multi-layered system that provides transparency but maintains collaborative work relationships.

Arbitrum DAO holds accountable:

• GCP Council: Through yearly elections and the ability to call a snapshot vote for removal/replacement of council members.
  • Elections and Removal: The DAO and council can remove members who underperform or violate trust/terms of agreements (NDA, PIIA, etc).
• GCP Core Team: By receiving regular reports on program performance and having the ability to influence program strategy through the council.
  • Transparency Reports: Regular reports from the GCP Core Team to the DAO showcase program performance and resource allocation, allowing the DAO to assess effectiveness.

GCP Council holds accountable:

• GCP Core Team: By observing team member nominations and performance, providing feedback on decisions, and having the ability to challenge deals through collaborative escalation.
• Themselves: By maintaining transparency through disclosure, NDAs, and facing potential removal via Arbitrum DAO, etc.
  • NDAs and Disclosure: These ensure confidentiality and prevent conflicts of interest within the council and team.

GCP Core Team holds accountable:

• Themselves: By meeting program goals like attracting builders, achieving milestones, and delivering results outlined in the proposal.
  • Performance-based Incentives: The GCP Core Team’s incentives are tied to performance, further aligning their goals with program success.
  • Performance Metrics: Program success is measured against KPIs, holding the core team accountable for results.
• Investment Committee: By providing justification and data for investment proposals.
• GCP Council: By requesting clear, consistent, and actionable rationale when deals are challenged.

Investment Committee holds accountable:

• Themselves: By making funding decisions based on sound analysis and alignment with program goals.
• GCP Core Team: By potentially requesting additional information or revisions to investment proposals when needed.

[Djinn]

After a review with key delegates, the Arbitrum foundation, and other key stakeholders, we present our final (really this time) draft before we go live on Tally.

Thank you everyone for your contributions, feedback, and invaluable support throughout this process!

Arbitrum DAO Gaming Catalyst Program: Final Tally Draft - 5/10

This draft was completed after a successful Snapshot temp check for the Arbitrum DAO to empower gaming with a three year, 200m ARB with the goal of powering the Arbitrum gaming ecosystem with the best studios and games in the web3 industry.

The temp check showcased the enthusiasm to support web3 gaming, but also revealed important questions to answer when launching an ambitious, multi-year plan requiring not only a strong team to run the program, but transparent, flexible collaboration between many stakeholders.

Introduction - Gaming Catalyst Program

What changed: No changes

The Gaming Catalyst Program (GCP) is designed to immediately expand awareness and adoption of Arbitrum/Orbit/Stylus by builders and players in the Gaming community.

Arbitrum has emerged as a leader in the competitive network race through a dynamic formula of innovation, robust technology, organic builders, and a variety of short and long-term incentives.

The proliferation of DeFi on Arbitrum showcases how quickly a snowball effect can onboard builders, users, and ultimately value for the Arbitrum DAO and other stakeholders (i.e. Offchain Labs, Ethereum, etc.). The TAM for DEFI has surged to $50B and is projected to surge to over $120B by 2030 and Arbitrum is leading the way.

We believe that the same opportunity exists to attract the best builders that will in turn create sticky high quality games that bring and retain new users within Arbitrum. The gaming vertical has a $250B TAM today that is projected to grow to $500B+ by 2030. Though the “web 3 + games” segment of today’s game TAM is relatively small, it is poised to grow exponentially this decade.

Several L1s and L2s see this opportunity (most notably Solana, Cardano, Opstack, Immutable, Optimism, to name a few) and are moving to claim the builders with grants and investments.

GCP Hypothesis

What changed: Minor language updates

Arbitrum has had immense success in the decentralized finance vertical, but the branding of Arbitrum as a home for gamers and game builders is nascent. As a network, Arbitrum falls behind major competitors (Immutable X, Ronin, Solana, etc) across total games migrated, games launched, and total gamers.

This educational post shares some of the pain points and metrics within the gaming ecosystem in regards to Arbitrum.

Through the Gaming Catalyst Program, we aim to establish a dedicated team and fund to provide technical and strategic support to the game industry. This dedicated team is key to attracting and retaining the best established and independent developers.

We will know we are succeeding when we achieve the following:

Rapidly Increase the number of Game Developers using Arbitrum/Orbit/Stylus

The GCP aims to provide support and resources to developers interested in building on the Arbitrum network. This includes access to funding, mentorship by vetted experts, and other forms of assistance to expedite the development process and contribute to success in the market post-launch.

Strategic Allocation of Resources via Grants and Investments

By allocating resources strategically, the program can maximize its impact by focusing on proven publishers and developers as well as promising independent projects within gaming. This ensures that resources are used efficiently and effectively to foster the growth of high-quality games on Arbitrum.

Attracting and retaining Top Talent

Just as DeFi projects have flocked to Arbitrum due to its innovative technology and incentives, the GCP aims to attract the best game developers in the industry. By offering support,incentives and game industry specific tools, Arbitrum can position itself as an attractive platform for game development, leading to a surge in high-quality gaming experiences on the network.

Expanding the Use Cases of Arbitrum

While DeFi has been a major focus of Arbitrum’s success so far, expanding into the gaming vertical opens up new opportunities and use cases for the network. By supporting game and gaming infrastructure development, Arbitrum can diversify its ecosystem and appeal to a broader range of users and developers, with results that include but are not limited to Orbit chain and Stylus adoption.

Facilitating the Development of Sticky, Quality Games

The ultimate goal of the GCP is to encourage the development of sticky, high-quality games that not only attract users but also retain them over the long term. A dedicated GCP Team and Council representing the interests of the DAO will serve as quality control mechanisms to make sure the best applicants receive the full support of the GCP.

Proposal Summary

What changed: No changes

We are asking the DAO to earmark 200m ARB over a three year period to expand the gaming ecosystem on Arbitrum and establish the network as the top choice for game builders across the landscape.

The GCP is meant to serve as a catalyst, not a comprehensive program, with a focus around onboarding and supporting high quality builders. After the roll out of the GCP, the aim is to use its learnings to mature the organization into a longer-term gaming program with a comprehensive approach to game ecosystem growth.

Strategically, we believe that attracting, retaining, and supporting builders with a dedicated team and an ongoing investment in game developers and the technical solutions they need will be a key differentiating factor vs other competitive networks. This commitment to gaming will lead to high quality game launches that will in turn attract large numbers of engaged gamers.

Part of the fund will be utilized to co-invest into promising studios and games along with approved, Arbitrum-aligned publishers, with the belief that the business model, industry expertise, and track record of publishers will streamline the outreach, vetting, negotiation, onboarding, and support process for builders. The fund will also be available for all other game builders seeking to create games on Arbitrum.

Controls

Publishers and developers will be subject to a robust set of checks and balances to ensure alignment with this proposal’s goals and Arbitrum DAO’s values:

• A GCP Council of 5 individuals with deep gaming, venture experience, analytics / reporting, and/or DAO governance skills will be elected by the DAO and will be responsible for holding the Catalyst GCP Team accountable - with influence including general oversight, visibility of performance reviews for GCP team members, offering a channel for constructive feedback.**
• A GCP Team will be created with the support of the Arbitrum Foundation, and will collaborate with the GCP Council (which will serve as oversight):
  • An investment committee of 3 individuals including 1 Council member will approve investments
  • Funding for projects will be contingent on achieving milestones
  • A quarterly transparency report will be created with summary data on GCP performance
  • Funding of projects will include terms that are market competitive

Program Outcomes and KPIs

What changed: Adjusted KPIs for year 1 and year 2 to account for infrastructure setup time

The Gaming Catalyst program has an overarching goal to bring in talented builders, and help the builders accelerate their games through the lifecycle stages.

The highest level metric we will be tracking is studio / builder onboarding into the Arbitrum ecosystem. However, there will be a variance in the realized outcome due to publisher applications, types of builders targeted, and variables from network competition.

Primary expected outcome:

Within the initial time frame of the program (3 years), the goal is to establish Arbitrum as a de facto leader for on-chain gaming. Specifically:

• 400-600 applications
• 100-200 net funded games
• Win net migrations to Arbitrum vs other L2s
• 50+ new Orbit launches

The GCP will take time to reach its full potential, and setting milestones vs maturity of the program is prudent:

KPI	Year 1	Year 2	Year 3
Daily Active Users	20,000	50,000	To be set by GCP Team
Orbit Launches	5	20	To be set by GCP Team
Studio Deals	10	20	To be set by GCP Team

Most games will be in dev and not (yet) live in 2024

The GCP team will set appropriate OKRs and KPIs internally to align with the goals and milestones listed above.

An additional outcome that the program aims to achieve is incremental movement through the gaming lifecycles illustrated by the Helika presentation on 2/2/24 here (slide 15) during our open office hours.

Initiatives & Budgeting

What changed: Formatting changes, combined sections for readability

We are asking the DAO for 200m ARB to develop the gaming ecosystem on Arbitrum and establish the network as the top choice for game builders across the landscape.

The funding will be allocated towards the following initiatives over the span of a three year period:

1. Builder Onboarding & Growth (160m ARB)

Focused on attracting and supporting the best game builders into Arbitrum - open to publishers, established studios, and independent builders.

Use of Funds: This funding is proposed to be reserved for established publishers, game studios and independent builders on Arbitrum to help scale the DAO’s ability to attract, secure, and accelerate talented teams on Arbitrum.

Thesis / Experiment: We are allocating a large majority of the budget to empower growth of publishers and studios on Arbitrum.

Build Grants (25m)

Grants will primarily be used to empower teams that are aiming to accelerate early stage development on Arbitrum, or to incentivize user onboarding. Other grant uses may be reviewed on a case-by-case basis.

Guidelines & Details:

• Teams may apply via the GCP Grants form
• Grants have a maximum size of 500k ARB
• Preference for user onboarding incentives or early stage development
• The grants manager has final approval on grants
  • Scorecards and details must be shared with the GCP Council
• Proposed: early grants period until legal entity is formed for GCP
  • Onboard interim grants allocator
  • Interim council of 5 members votes on individual grants
  • Maximum allocation of 10m ARB prior to GCP entity formation
• Each grant must have specific milestones agreed upon before funding

Investments (135m)

Teams seeking more than 500k ARB or additional funding for development beyond initial development must work with the GCP investment team to align on deal terms.

Publishers may submit multi-game deals to the GCP for consideration - allowing them to be more efficient and create more strategic plans for their ecosystem. As a packaged proposal, publishers and the GCP team may collaborate to set milestones, funding, kpis, etc in aggregate form or by each game, allowing for more flexible launch, development, and operational capabilities.

Guidelines & Details:

• Builders or publishers must agree on a commercial agreement value share through tokens, equity, revenue share (post recoupment), or other pathways.
  • Other considerations include active use of Orbit chains with significant sequencer revenue share as part of the default licensing structure
• More detailed deal structure guidelines will be created by the GCP Team upon its formation
• By the end of the program term, any unused ARB will be returned to the DAO

2. Infrastructure Bounties (40m ARB)

Focused on creating game specific tech needed to make Arbitrum the best choice for game builders. Deals will follow grant or investment classifications based on the same sizing requirements as the Builder Onboarding and Growth program.

• Allocated by RFP or decided by the Council on a per proposal basis for any tooling and infrastructure needed to support gaming within Arbitrum (i.e. account abstraction solutions and gasless transactions for games, payment rails, web and game engine SDKs, data analytics and attribution, etc.)
• Promote Orbit, Stylus, and other development and infrastructure growth on top of new Arbitrum technology releases

Use of Funds: This will be allocated by RFP or per proposal for any tooling and infrastructure needed to further support gaming within Arbitrum (i.e. onboarding documentation, gaming-centric boilerplates for Arbitrum Orbit, game contract libraries built via Stylus, account abstraction and gasless transactions solutions, payment rails for games, web and game engine SDKs (Unity, Unreal, Godot), etc.)

Thesis / Experiment: Web3 gaming is still nascent and there exists key gaps for game builders to build games and bring them to market. By incentivizing development for such infrastructure projects and tools, or accelerating development of Stylus as an Arbitrum native framework, this will help set Arbitrum further ahead in the competitive network landscape.

Current Gaps: A non-exhaustive list of gaps that currently exist within the Arbitrum ecosystem:

• Custom gaming-centric implementations of Orbit chains
• Mobile App Infrastructure with wallet that is optimized for games and asset management (See Ronin Wallet on mobile as an example)
• Web and game engine SDKs (Unity, Unreal, Godot) that allow for in-game contract calls
• Desktop launcher and distribution solutions
• Game analytics, optimization, and related tooling (tying together on-chain, off-chain, social, and player activity)

Funding Guidelines:

• The GCP Team will establish initial RFPs and funding guidelines
• An infrastructure specific rubric will be established by the Council to assess proposals
• Independent proposals that do not fit within RFP guidelines are welcome to apply separately for GCP Team consideration
• Any approved applicants for RFPs may be selected for vendor whitelisting, which allows vendors to be marketed to GCP participants
• By the end of the program term, any unused ARB will be returned to the DAO

GCP Org Structure

What changed: No changes

When designing the organizational structure of the GCP, two major dynamics were considered:

1. Enabling autonomy of the GCP team while setting safeguards for program success
2. Empowering the DAO to have transparency and representation without impacting compliance, disclosure, and other necessities for a grants program with commercial ties within the gaming industry

Decision making process

• Decision is made by GCP team
  • Investment committee decision, staffing, etc
• Council meetings every two weeks to discuss / veto any decisions
• Decision is ‘ratified’ and activated
• Every half year, aggregate summary of data as applicable shared in a report to DAO

GCP Team

What changed: Added roles / responsibilities, section on entity setup, team incentives, and overall costing estimates.

The GCP Team will be the primary operator of the GCP program.

Team members may join the program through a few pathways:

• Nomination through the proposal process (to help accelerate standup of the program)
• Hiring by the GCP team, with veto capabilities held by the Council

The below team roles and responsibilities are illustrative of an initial proposed structure, but may change based on industry / program demands.

GCP Team Roles & Responsibilities

These roles are understood to be the MVP in order to stand up successful programming. The roles and titles may adjust based on needs. Any adjustment of budget will be reviewed with the council and put forth for the DAO to vote if needed.

1. Fund General Manager / Venture Lead

Responsibilities:

• Presents deals to the investment committee
• Responsible for strategic planning and the overall success of the program
• Managing and staffing the GCP Venture team
• Providing leadership and oversight to the Venture team
• Driving deals, partnerships and being the public face of the GCP program
• Compliance

KPIs:

• Overall investment milestones
• Deal flow
• Venture team performance

2. Program Director

Responsibilities:

• Member of investment committee
• Ensuring overall program success and sustainability
• Managing and staffing the overall GCP program (in collaboration with the Venture Lead)
• Leading marketing / program development efforts
• Establishing internal metrics for OKRs & KPIs with the Venture and Grants programs
• Align with Arbitrum DAO and other key stakeholders on strategic direction

KPIs:

• Overall program milestones

3. Venture Partner

Responsibilities:

• Member of the investment committee
• Providing support for the GM
• Negotiating with publishers and studios on deal terms
• Working with General Counsel to ensure compliance
• Overseeing portfolio management and providing strategic guidance to portcos
• Preparing deal memos for the GCP Board

KPIs:

• Funded deals
• Successful game launches
• Venture milestones
• Compliance

4. General Counsel

Responsibilities:

• Ensuring legal compliance/diligence
• Managing legal operations
• Managing documentation for investment deals
• Serving as the liaison between the GCP and VCDAO

KPIs:

• Average time to complete deals
• Operating within budget for Legal

5. VP Finance

Responsibilities:

• Managing all GCP council required reporting and tax requirements
• Modeling of potential deals
• Ensure budget compliance
• AR/AP, payroll, vendor management
• Maintain token calendar

KPIs:

• Budget compliance
• Program sustainability

6. Analyst x 2

Responsibilities:

• Sourcing top deals in the market
• Providing in-depth market research
• Running due diligence for deals
• Geographical focus:
  • 1-2 - Asia-focused
  • 1-2 - US/Europe-focused

KPIs:

• Venture partner satisfaction
• Number of fundable deals

7. Producer

Responsibilities:

• Establishes milestones
• Providers additional DD support for GM / Investor
• Tracks performance for games
• Collaboration with Program Director and Director of Technology to create infrastructure RFPs

KPIs:

• Games shipping at quality
• Game progress through development funnel

8. Director of Technology

Responsibilities:

• Speed and ease of onboarding for builders
• Documentation for tech onboarding of game projects
• Connect the dots with vendors and gaming teams
• Helps frame infrastructure RFPs for bounty program
• Shortlists preferred vendors

KPIs:

• Implementation throughput, onboarding pace
• Builder advancement across development phases

9. Grants Manager

Responsibilities:

• Due diligence for submitted grants
• Presentation of grants to the council in written form
• Contribution to transparency reports

KPIs:

• Performance of projects receiving grants
• Efficient distribution of grant funds

Investment Committee (separate from Council!)

The investment committee’s role is to provide extra perspective on deals brought forth by the Investment Lead and other team members, and make a final decision on investments.

The proposed investment committee structure consists of two GCP Team Members and council members - however the size and composition may change based on needs.

Our current proposed committee has 3 seats:

• Program Director
• Venture Partner
• 1 GCP Council Member (extra pay for this position)

Team Incentives

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.

The council must approve the bonus / incentives after each 6 month period (this time period may evolve over time).

GCP & Legal Compliance

The GCP will retain qualified counsel and coordinate with the Arbitrum DAO to ensure that it operates in a legally compliant manner at all times.

Team and GCP Board Costs

The GCP’s operating budget is capped at $25m USD (excluding additional set-up, legal and financial expenses specifically required to ensure compliance with DAO/Foundation requirements). Any expenditures above the $25m cap must be approved by the GCP council and may either be deducted from grant budgeting or increased through a DAO vote.

Performance against budget will be reviewed by GCP Council as part of the regular transparency reports.

ARB will be converted to USD or USDC by the Foundation before each quarter and sent to the GCP program account or multi-sig for disbursement.

Entity Setup and Model

The GCP working group and Arbitrum Foundation are actively exploring entity setup to ensure DAO transparency while following the rigorous compliance guidelines that surround any entity focused on investments.

This effort also involves DAO members from the M&A, Ops Co, VCDAO, and other initiatives.

GCP Council

What changed: Additional requirements added

The GCP Council will be a DAO elected group of trusted professionals with backgrounds ranging across gaming, venture, grant allocation, web3 technology, and DAO relations. The group functions as a braintrust that offers their accumulated knowledge to empower the GCP Core Team.

Primary responsibilities of the GCP Council:

• Collaborate with the GM and IC on deal proposals by providing insights and identifying potential risks (can challenge based on deals not meeting very clear requirements).
• Offer recommendations on proposed deals after reviewing relevant data and analysis (this analysis would be a standard for all deal memos).
• Escalate concerns regarding deals to designated oversight bodies if necessary.
• Review and provide feedback on GCP team member nominations submitted by the GM and Program Director.
• Advise the GM and Program Director on long-term strategic plans for GCP.

Requirements:

• Council members must not be from publishers or studios intending to apply to GCP programs
• Council members may not represent network competitors or have significant conflicts of interest due to investments, advisory, etc with competitors (Solana, Polygon, etc)
• Council members must align with the values within the Arbitrum constitution
• Council members with advisory, investor, or other relationships to applicants must disclose any conflicts of interest
• Council members will go through mandatory yearly elections
• The DAO may call a snapshot vote to remove / replace council members
• Must sign NDAs and respect confidentiality agreements

Kickstarting the Team and Program

What changed: New section

To facilitate the stand up of the overall GCP programming and start funding talented teams within a reasonable time frame, we propose the following phases.

Phase 1: Early Activation (1-2 months)

• Focus/Goal: Establish core operational framework.
• Activities:
  • Finalize entity setup for legal compliance.
  • Working Group selects two interim council members with relevant expertise (gaming, industry influence, venture capital, DAO governance).
  • Working Group, in collaboration with the interim council, selects initial team members for critical roles (Program Director, Analyst).
  • Develop and present a clear timeline for council elections and full team buildout.

Phase 2: Program Development (2-4 months)

• Focus/Goal: Build operational infrastructure and initiate program activities & tactics.
• Activities:
  • DAO elects remaining three council members & votes to confirm/reject interim council members.
  • Establish key program infrastructure: website, grant application process, communication channels.
  • Issue first RFP for infrastructure development.
  • Open grant applications for game developers and studios.
  • Develop initial marketing, brand, and outreach strategy (this includes identifying agency partners if needed).
  • Finalize onboarding process for funded projects (includes research and team/project leader interviews).
  • Begin recruiting for additional team members based on a prioritized hiring plan (which will be clarified early phase two).

Phase 3: Program Acceleration (4-6 months)

• Focus/Goal: Achieve momentum, establish presence, and scale funding activities.
• Activities:
  • Full GCP team is operational, with all key roles filled (may be additional roles to consider based on learnings from prior months).
  • Grant applications reviewed, and first grants awarded to qualified projects.
  • Infrastructure RFPs reviewed, and contracts awarded to selected vendors.
  • Implement marketing and outreach strategy.
  • First program transparency report issued outlining performance against KPIs to DAO, Council, etc. Adjust strategies as needed.

Next Steps

What changed: Adjusted based on current estimates on timeline.

• [Done] Post Open Draft (Shared on 2/15/24, link within Arbitrum Gaming Education Post [Arbitrum and the Future of Web3 Gaming 89]
• [Done] Post GCP proposal to forum (3/11/24)
• [Done] Snapshot vote (3/15/24) for general delegate agreement on GCP commitment, start entity setups, and to receive detailed feedback: Snapshot 304
• Tally vote / ratification (May 2024)
• In parallel with Tally vote and /or post-ratification, GCP working group and authors will work with the Arbitrum Foundation for entity setup
  • Collaborate with Arbitrum Foundation resources and vendors for due diligence
  • Stand up legal framework and entity to support GCP
  • Initiate on elections, team recruitment, and other procedures after completion of entity setup
• GCP Council Elections (June 2024)
• GCP GCP Team formation (Starting in May/June 2024)
• Grant applications and RFPs open (June/July 2024)

Total Cost

What changed: Adjusted total cost breakdown, added more details to Program Admin and Operations.

We estimate the total cost to equal 200m ARB + operations costs detailed below under Program Administration & Operations.

This is a three-year program and forecasted amounts may change / require amendment(s) as the program evolves. Any unutilized ARB at the end of the program duration will be returned to the DAO treasury.

• Total Incentives: 200m ARB
  • Builder Onboarding and Growth: 160m ARB
  • Infrastructure, Tooling & Stylus Development: 40m ARB
• Program Administration & Operations - $25m
  • Council Members (5): $600k
    • 30k each member per year
    • 80k for investment committee representative
  • MultiSig Signers (5): $180k (the multi-sig holding the total sum will have signers from the Arbitrum Foundation and Offchain labs - these individuals will not be paid)
  • Team Salaries: $18m
  • Marketing and Infrastructure: $2m
    • Includes website standup, conference spend, travel expenditure, and other costs
  • Legal / Compliance: $3m
    • Expecting usage for vendors, entity setup, adjustments for fast evolving regulatory environment
  • Proposal Authors and Contributors: 100k ARB

The funding for operations will be calculated at the USD value of ARB at the time of the Tally vote setup (5/21/24). In the case of overfunding, the program will return any funds to the DAO treasury.

In the case of underfunding, the GCP team will have two options to continue operations:

• Utilize any earmarked amounts for investments or grants to close the gap on funding up to the total allocated amount for operations
• Stand up a vote to add additional operational funding to continue running the program

Proposal Contributors

What changed: Added new contributors, working group

Working group:

• Dan Peng (PM / Author)
• Karel Vuong (Author)
• Marcus Segal
• Rick Johanson

Djinn (Dan Peng) - PM / Author

Karel Vuong - Author (Co-Founder, Treasure)

Marcus Segal - Contributor

Rick Johanson - Contributor

Xai Games - Advisor / Contributor

L2Beats - Delegate Feedback

Helika - Advisor / Contributor

Jason Lee - Advisor / Contributor (ExPolygon Games, current web3 gaming founder)

Resources & Content

What changed: -

GCP AMA / Open Office 3/15/24 - https://twitter.com/i/spaces/1RDGllYMYvOGL?s=20 26

GCP AMA 5/8/24 - https://twitter.com/arbitrum/status/1788281797081456938?s=46

[stonecoldpat]

The Arbitrum Foundation has put together a multisig to hold the 200m ARB in custody:

Safe{Wallet}

Note: We do not have an opinion on whether the proposal should be approved or rejected by the ArbitrumDAO. The Arbitrum Foundation is simply supporting the potential implementation of the proposal, should this be approved by the ArbitrumDAO.

[Djinn]

Since the multisig will be receiving the ARB in lump sum to fund both the program and operations, we added a section to specify how we approach underfunding or overfunding of the operational cost.

The funding for operations will be calculated at the USD value of ARB at the time of the Tally vote setup (5/21/24). In the case of overfunding, the program will return any funds to the DAO treasury.

In the case of underfunding, the GCP team will have two options to continue operations:

• Utilize any earmarked amounts for investments or grants to close the gap on funding up to the total allocated amount for operations
• Stand up a vote to add additional operational funding to continue running the program

[axlvaz_SEEDLATAM.eth]

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:

@Djinn

[The current Program Administration & Operations budget is being verified by working group team members and will be adjusted prior to the Tally vote.]

• Total Incentives: 200m ARB
  • Builder Onboarding and Growth: 160m ARB
  • Infrastructure, Tooling & Stylus Development: 40m ARB
• Program Administration & Operations - $10m in ARB
  • Council Members (5): $25,000 per year ($250k total)
  • Initial Legal Structuring: $250k
  • General Legal / Compliance: $2m
  • Fund Manager / Venture Lead: Up to $2m per year ($200k base + bonuses)
  • Analysts (3): $125-$200k per year
  • Proposal Authors and Key Collaborators: Retrofunded from administration flex fund, determined by council
  • Program Insights and Analysis: TBD
  • Multisig Signers (5): TBD
  • Flex Spend - Remaining amount earmarked for any additional staffing needs, vendors, ops, retro funding, and research

Despite the proposal mentioning that it was a:

@Djinn

The GCP is meant to serve as a catalyst, not a comprehensive program, with a focus around onboarding and supporting high quality builders.

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:

@Djinn

Within the initial time frame of the program, establish Arbitrum as a de facto leader for on-chain gaming:

• 200-300 applications

• 20%+ of all web3 games selecting Arbitrum as their network

• Win net migrations to Arbitrum vs other L2s

• 25+ new Orbit launches

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:

@Djinn

Within the initial time frame of the program (3 years), the goal is to establish Arbitrum as a de facto leader for on-chain gaming. Specifically:

• 400-600 applications
• 100-200 net funded games
• Win net migrations to Arbitrum vs other L2s
• 50+ new Orbit launches

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%:

@Djinn

• Total Incentives: 200m ARB

• Builder Onboarding and Growth: 160m ARB

• Infrastructure, Tooling & Stylus Development: 40m ARB

• Program Administration & Operations - $20m

• Council Members (5): $630k

• 30k each member per year

• 60k for investment committee representative

• MultiSig Signers (5): $180k

• Team Salaries: $18m

• Legal / Compliance: $1m

• Expecting usage for vendors, entity setup, adjustments for fast evolving regulatory environment

• Proposal Authors and Contributors: 100k ARB

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.

@Djinn

• Program Administration & Operations - $25m
  • Council Members (5): $600k
    • 30k each member per year
    • 80k for investment committee representative
  • MultiSig Signers (5): $180k (the multi-sig holding the total sum will have signers from the Arbitrum Foundation and Offchain labs - these individuals will not be paid)
  • Team Salaries: $18m
  • Marketing and Infrastructure: $2m
    • Includes website standup, conference spend, travel expenditure, and other costs
  • Legal / Compliance: $3m
    • Expecting usage for vendors, entity setup, adjustments for fast evolving regulatory environment
  • Proposal Authors and Contributors: 100k ARB

The funding for operations will be calculated at the USD value of ARB at the time of the Tally vote setup (5/21/24). In the case of overfunding, the program will return any funds to the DAO treasury.

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.

[Djinn]

Hey Axlvaz - thanks for the in-depth questions and feedback.

A lot of the changes had to do with further discovery and feedback from both potential team members and industry professionals that come from venture / gaming / legal after the Snapshot vote.

Another major change was the extension from 2 years to 3 years after discussing heavily with investors in the gaming space and DAO stakeholders. Their concern was that gaming is so long tail for quality titles that 2 years would be a little too short of a time period to see the best results - which makes sense given how resource heavy game development is.

• A Marketing Infrastructure budget of 2M is created.

We realized that we had 0 budget to attend conferences for BD, sponsor events, digital efforts etc.

This program comes with high expectations, and we have to put our best foot forward to get in front of the best studios and compete with other networks for top of funnel attention.

There will be professionals handling the marketing efforts, and we want to make sure they are well equipped with resources from day 1, without having to constantly come back to the DAO for funding requests.

• The legal budget is tripled, from 1M to 3M.

This budget changed as a result of more due diligence with legal professionals and venture folks who have spent time navigating through compliance / legal.

Legal setup is included, and some estimates showed a range of 100k-500k for setup depending on the structure.

If we put a thesis of 50-100 games funded by the GCP, with a typical compliance/legal fee of 10k-20k per, the dollar amount would already start to bump up against the 3m number over 3 years.

• A 100K compensation for drafting the proposal is proposed.

It’s been a 6+ month effort with 100s of hours between different DAO members to get this passed. Given the amount of time, we thought it was fair to ask for the 100k ARB. A program of this size takes time and resources to create - happy to ask folks for notes on time etc if really needed.

I think this is a broader question too of how we incentivize proposal authors to create great proposals for the DAO and there have been many ideas thrown around to create a better system so happy to chat on this.

• GPC Team budget went from 10M to 18M

Some of the increase came from the change to a 3 year program, but scoping was overall was done with the help of potential venture and operational candidates from top firms that we are trying to recruit.

A single venture partner in the gaming space that has a great network / experience can easily command a base salary in the high 6 figures - this is without incentives for performance.

Delphi Digital had an independent analysis of staffing costs based on the known needs for the program that came to about $3-4.5m per year.

This is not including a compliance officer (300-500k a year potentially) and other team needs that are not known as of now such as additional marketing, bd, other roles. We want to be smart and give ourselves buffer room to equip the GCP team with the largest change of success.

Our estimates were higher than Delphi’s, specifically on producer and CTO roles, with totals ranging from $4m - $6m per year for staffing costs.

Regarding programs like STIP - remember that those programs do not have a full time staff and is not considered an investment entity, both which substantially increase the cost.

• For the investment committee members, there is not additional pay to anyone on the committee that is a GCP team member.

We assumed one member of the DAO would be an investment committee member out of five members.

80k * 3 = 240k
30 * 4 * 3 = 360k
240k + 360k = 600k

It might have been a little confusing how the cost breakdown for council members was structured, will see if we can tidy that section up a bit.

All really good questions, I will reach out to you to schedule time to review any additional feedback!

[pedrob]

@Djinn

If we put a thesis of 50-100 games funded by the GCP, with a typical compliance/legal fee

gmgm. Reading this the following question came to my mind. Is there any plan regarding IP management? Is it the intention of this proposal for the DAO to retain full or partial IP rights over the games it is investing in? Or is the intention for the games to be open source? Will there be any exclusivity imposed to ensure deployment only on Arbitrum, preventing them from moving to other chains? Or how this will be handled?

Thank you

[Djinn]

Hey hey Pedro, thanks for the questions.

Intellectual property - we would empower games to own their own IP

Exclusivity - 100%, if we invest in a game to build on Orbit or the general Arbitrum ecosystem, the investment is to stand up the game here - not other places. There may be unique cases where a game is in multiple ecosystems but it would be a rare case.

I’m assuming that in any agreements, there would be clauses to denote what happens if a game / studio breaks terms

[thedevanshmehta]

I have voted FOR the proposal after due consideration. I was a little torn about this one for several reasons, but overall the importance of standing up a gaming vertical overshadows these concerns. I have spoken to the GCP team and have confidence in them adequately resolving them.

1. Creation of offchain legal entities: I am skittish about the recent move by many proposals in the dao (AVI, M&A, GCP, OpCo) to incorporate on their own but be funded by the DAO. We see enough disputes and business partners screwing each other over in the real world, its probably much easier to do this to a DAO. How do we know that any upside from these investments will be returned to our treasury?

This makes the agreements signed with the Arbitrum Foundation very important. @Djinn did mention they are exploring various ways to ensure profits get streamed back to the treasury through creation of separate wallets.

2. Compensation : @axlvaz_SEEDLATAM.eth has separately raised concerns over the 18 million compensation amount. I too was concerned about it given the @Delphi-Digital report recommended 4 million, and i feel implementation budgets need to become less politicized and more bureaucratic (following recommendation of ARDC rather than coming up with it on their own).

After speaking with the GCP team, i found that there is no carry in this proposal so we need higher amounts to compensate for it, and their role goes beyond investment to marketing support, liquidity provisioning, & other support functions that make such roles necessary. Our benchmark should be Immutable and Ronin, not the general VC structure. Delphi also got involved late with the GCP proposal, in the future i would like proposals to follow their recommendations.

[SavvyDAO]

Savvy DAO has voted FOR this proposal. See voting rationale here:

Savvy DAO - Delegate Communication Thread

Savvy DAO votes FOR the proposal to launch the Gaming Catalyst Program (GCP) on Arbitrum. Key Reasons: Expand the Arbitrum Gaming Ecosystem: The GCP aims to attract top game developers and studios, fostering a thriving gaming ecosystem on Arbitrum. A $250 billion gaming market today is expected to grow to over $500 billion by 2030, presenting a significant opportunity for Arbitrum. Strategic Resource Allocation: The proposal earmarks 200 million ARB over three years to support game deve…

[krst]

The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking, and ideation of the two.

We have been following the progress of the GCP proposal since its inception and have also been involved by providing feedback through the different iterations that led to the proposal’s current form. We’re happy for the support the proposal has garnered so far and for the fact that it’s finally at the on-chain vote stage of its lifecycle, months after its inception.

It’s one of the first initiatives of this size and time horizon. It’s also one of the first initiatives of its kind with a strong focus on investment, rather than just distributing grants. We believe this approach will result in a much better alignment between the funded projects and the DAO. We hope this proposal (and the underlying legal structure) will lay the groundwork for other similar initiatives, such as M&A, AVI, and others currently being discussed in the DAO.

However, we know that with this amount of funding, the program is taking on an enormous responsibility for the entire ecosystem, as it will set the standards for proper investment decision-making and future accountability and oversight. We already declare that we will pay close attention to its execution and reporting, ensuring that the DAO remains informed and in control of the overall direction of the program.

[GFXlabs]

How did this go from 200m ARB on Snapshot to 225m ARB on Tally?

[Djinn]

Hey GFX. A $10m operational budget with detailed breakdown was specified in the Snapshot draft but it was not included in the overall headline number.

We did have many opportunities within open community calls with delegates and DAO members to review the proposal, and had extensive collaboration across many months - transparency was super important to us (see timeline below!).

I responded to another question above about the budget breakdown as well. Feel free to reach out if you have more in-depth questions / feedback.

[GFXlabs]

@Djinn

The 200m on snapshot did not include the operational expenses (which were also updated to reflect more accurate budget assessments as well).

An extra $25m is not a small amount. We think it’s a mistake and against the spirt of open governance to simply add in a discretionary $25m. Even a couple hundred thousand dollars after getting bids or collecting new information would be one thing. But you have added more than 10% to an already enormous cost. This is a very bad look, and has raised alarm bells amongst some investors and community members.

We have voted against this proposal and ask other delegates to defeat this proposal, which is far too expensive.