We have voted AGAINST this proposal
Changing how quorum is measured is a delicate matter.
Below, we describe why, before any change is considered, attempts should be made to improve voting power delegation/delegated token actively participating on governance on Arbitrum.
Decrease in Arbitrum Security
As the core of blockful lies in our security-oriented approach, we’ll begin by bringing a governance security perspective to the discussion:
Currently, the quorum for proposals is 3% and 5% for non-constitutional and constitutional proposals, respectively. Looking at the Votable Supply, this equates to 141M and 212M $ARB. In terms of value, this means that to reach the quorum for a proposal in the Arbitrum Treasury, it costs $56M; in Arbitrum Core, $84M.
Considering the liquid assets (specifically in “ETH Holdings” - 11.021 ETH Held on Treasury U$49M and/or Non-native DAO Allocated assets U$183.34) in the Arbitrum treasury, and over $1B in $ARB — both stored in the Arbitrum Treasury — the cost to reach quorum is low. Mainly because the number of votes obtained in Arbitrum proposals does not exceed 240M votes in 2025. In many cases, it did not even reach 200M $ARB.
With the current proposal, considering ~50% of Delegate Voting Power as the quorum for constitutional/non-constitutional proposals, we set the quorum at 100 million/150 million $ARB.
We know that ɑ will be discussed in the future. But if we set ɑ to a value below the current suggestion, Arbitrum makes it even cheaper to reach the quorum for a proposal in the DAO, by ~30%.
If it costs $40M to reach quorum on Arbitrum and the DAO has more than $50M in liquid assets - disregarding $ARB - we will have a profitable attack on the DAO.
Just a reminder:
Attack profitability is not merely a mechanism design vulnerability — it’s a business model.
Here’s an example from ENS, where we identified and mitigated an attack that could have drained $150M in liquid treasury with an initial investment of only $3M.
Of course, the DAO has protections against this—the Security Council, for example - and reaching quorum does not mean approving a proposal.
But we want to make it clear how Arbitrum reduces the security of its governance, simply because it has no tokens in circulation being delegated—a problem that needs to be solved first.
Risk of Repeating the Current Problem, Considering DVP
We understand that the idea of considering Delegate Voting Power for quorum is to have a metric that varies according to delegations. Thus, with less delegated power, we will have a smaller quorum and, theoretically, less difficulty in approving proposals in the DAO.
The problem is that with DVP, there is a risk of the same problem occurring: paralysis/standstill in the DAO.
Since DVP is considered for the quorum, it is expected that all delegates with voting power will participate. Especially the majority, who are responsible for helping proposals reach their quorum. However, those who help approve a proposal may be the same ones who can block it.
If the majority delegates (top 10) do not vote, and DVP is considered for the quorum, there will be an even greater difficulty in reaching the amount necessary for the proposal to be approved.
In numbers: the 10 largest delegates represent 128M $ARB, ~40% of the Delegated Voting Power. If they fail to vote, and 50% of the DVP is used for quorum, it would be almost impossible to coordinate all other delegates to reach the necessary 150M $ARB. This is because there would only be 189M $ARB delegates left to vote.
It is an extreme situation, but again, such a delicate change in governance needs to consider the extremes. That is why the Security Council was created: to protect the DAO and Arbitrum from attacks.
To try to solve this problem without changing how quorum is measured, one alternative is to encourage $ARB holders to delegate their tokens to active delegates in the DAO.
With more DVP, and less delegates participating, we will have a quorum with an inflated number - uncorrelated with the reality.
Encouraging Delegators, Not Just Delegates
There is currently a movement to encourage inactive governance token holders to delegate their tokens to delegates with a high participation rate in a DAO.
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blockful is designing an incentive program for the ENS DAO, where delegators are rewarded with governance tokens for delegating their tokens. The profitability of delegation depends on several factors, such as the delegate’s recurring participation.
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Event Horizon proposed a similar system for Uniswap, but restricted to a certain number of delegates with a high degree of participation in the DAO.
Regardless of the model, both focus on one problem: the increase in circulating supply, the stagnation/decrease in delegation, and the decrease in DAO participation.
While Arbitrum tried to take steps in this direction — such as the (Re)delegation Week — the effective and sustained impact of these initiatives has yet to be achieved. There are more efficient mechanisms that, with slightly greater coordination and effort, could deliver far stronger and longer-lasting results.
What is (Re)delegation Week? (+Application thread)
With more tokens in circulation, mechanisms must be created to attract delegations from people who choose to invest in tokens and can earn an annualized return simply by keeping them delegated to an active DAO participant.
Can this be seen as a cost to the DAO? Yes, but it is the price of increasing the cost of improving the DAO’s economic security.
This model can be discussed in Arbitrum governance, and all delegates can verify whether this is a good idea for the DAO. We see it as an alternative to try to improve the relationship between DVP x Votable Supply/Circulating Supply without necessarily changing the way the quorum is measured.
We are available to discuss this topic with the community and also to include Arbitrum on our governance risk assessment dashboard.