This proposal raises significant concerns from a market-driven perspective. While I appreciate the goal of increasing DeFi activity, I’m skeptical about the approach and execution framework.
First, the tokenomics don’t make sense. Artificially incentivizing liquidity through emissions often creates mercenary capital rather than sustainable ecosystems. Market forces should determine which protocols deserve capital - not committee-driven subsidies that distort natural competition.
Several key issues stand out:
- The proposed committee structure lacks clear accountability mechanisms. Who judges performance, and what happens if KPIs aren’t met?
- The excessive allocation seems disproportionate without proven methodology
- The program appears to reward projects based on popularity metrics rather than actual value creation
- There’s minimal skin in the game from recipients
I’ve seen similar incentive programs across ecosystems, and they typically lead to temporary TVL pumps followed by immediate exits once incentives dry up. This doesn’t build sustainable value for ARB holders.
If we’re serious about DeFi growth, we should consider alternatives:
- Retroactive airdrops to protocols that demonstrate organic growth metrics
- Revenue-sharing models where incentives are tied directly to protocol profitability
- Protocol achievement bounties that reward specific ecosystem milestones rather than general activity
I understand the desire to compete with other L2s, but copying ineffective token emission strategies won’t differentiate Arbitrum.