Introducing v1.6
February 12th, 2025
Communication Rationale and Delegates’ Feedback Merge
Abstract
We are merging the Communication Rationale parameter into the Delegates’ Feedback (DF) category. As a result, the new maximum score for DF will increase to 40 points.
Motivation and Rationale
While Communication Rationale (CR) is often considered a fundamental task for any delegate, in practice, it only provides value when it includes meaningful (non-repetitive) feedback and, most importantly, when it has a real impact.
Over the past months, we have observed that high-value CRs are the exception rather than the norm. This raises questions about the actual value this parameter brings to the DAO. In practice, we have also encountered situations where rationales contain a significant amount of feedback, making it difficult to distinguish whether they should be classified as Delegates’ Feedback, Communication Rationale, or both.
On the other hand, since CR is working as a quantitative parameter, it can be easily farmable, and it weakens the framework by allowing delegates to secure 15% of the points required for compensation (65 points) with minimal effort.
By shifting these 10 points into Delegates’ Feedback (DF), the Program Administrator will have better tools to reward only those CRs that genuinely contribute value to the DAO.
One could argue that rationales are necessary, and we agree that they are important when they can influence a vote’s outcome during the vote or improve a proposal before it reaches an on-chain vote. However, the Program Administrator should be able to reward these cases without needing to incentivize every CR published in the forum.
Finally, considering that justifying a vote and providing feedback are inherently similar activities, both aiming to generate value or create an impact, and acknowledging that three months ago the DAO approved DIP 1.5, granting the Administrator the authority to use a subjective rubric to evaluate delegate feedback, it makes sense for Communication Rationale to also be included within the rubric.
Specifications
Given the motivations outlined above, we’re going to merge the Communication Rationale parameter from the framework and transfer its scoring to the Delegates’ Feedback (DF) category, thereby increasing DF’s maximum possible score to 40 points.
It is important to clarify that this does not mean the Program Administrator will ignore CRs altogether. A Communication Rationale may still be eligible for scoring under DF if it is deemed valuable to the DAO. This means that rationales that impact voting outcomes or contribute to proposal improvements before on-chain voting will still be recognized and incentivized.
Considering the multiplier detailed below, the scoring breakdown would be as follows:
Voting Scoring
Formula: (PR90 + Off-chain votes + On-chain votes) * multiplier
- Maximum possible: 60
- Minimum possible: 48
Delegate Feedback Scoring
- Range: 0 - 40
- Determined by: The quality of the comments and insights provided by delegates in the forum.
Bonus Points Scoring
- Range: 0-30
- Determined by: attendance at the monthly calls (Biweekly and GRC) - 5% of the earned TP and the rest is reserved for extraordinary contributions. A delegate can only get a total of 30 points between both concepts.
Voting Power Score Multiplier
Abstract
We are implemeting a multiplier for the Voting Score based on a delegate’s Voting Power (VP) within the DIP, with the following conditions:
- A delegate with 50,000 VP should have a multiplier of 0.8 (minimum).
- A delegate with 4,000,000 VP or more should have a multiplier of 1.0 (maximum).
- For VP between 50,000 and 4,000,000, the multiplier is calculated using the linear equation.
Motivation and Rationale
After receiving feedback from various stakeholders and delegates of ArbitrumDAO, who expressed their inclination to link the Voting Power of delegates to the compensation they receive, we have been analyzing both the reasonableness and the alternatives available. This analysis led us to two conclusions:
- On Reasonableness, It is widely understood that “with great power comes great responsibility,” and this logically implies that delegates with a higher amount of delegated Voting Power bear greater commitments: keeping Arbitrum safe and ensuring quorum. In this sense, it is reasonable that they could achieve better scoring through their voting activities. Just as their vote carries more weight during voting, it also carries weight when compensating for their participation in the DAO.
- On Alternatives, it is possible to apply a multiplier to the parameters related to the Voting Scoring of delegates. As mentioned, a direct logic exists between a delegate’s Voting Scoring and their Voting Power. This approach makes sense and is more cost-efficient since one consequence is reducing the cost per unit of VP participating in the program. Limiting it to Voting Scoring is also not arbitrary; it is publicly known that some delegates with relatively low VP make significant contributions to the Arbitrum DAO. Therefore, Voting Power is not necessarily a metric that reflects the delegate’s “capacity” to make meaningful contributions outside of off- and on-chain voting.
With these two conclusions in mind, we developed a linear function, ranging from 50,000 to 4,000,000 ARB, in which, as Voting Power increases, a multiplier is applied to the sum of the different voting scorings (PR90 + Off-chain votes + On-chain votes).
Formula
The formula for a linear function is: y = m * x + b
Where:
- y represents the multiplier.
- x denotes the Voting Power (VP).
- m is the slope of the line.
- b is the y-intercept.
Objective
To determine a multiplier based on a delegate’s Voting Power (VP) within the DIP, with the following conditions:
- A delegate with 50,000 VP should have a multiplier of 0.8 (minimum).
- A delegate with 4,000,000 VP or more should have a multiplier of 1.0 (maximum).
- For VP between 50,000 and 4,000,000, the multiplier is calculated using the linear equation.
Why a 4,000,000 cap?
This amount of Voting Power currently represents approximately 2% of the Constitutional Quorum. Considering that (as of today) there are a maximum of 50 incentivized delegates, a total of 200 million VP in the DIP is a target value that would allow the DAO to more easily reach the constitutional quorum.
We understand that the quorum is a value that increases over time, but this is not currently the case with the delegates’ Voting Power, which, apart from some rare changes, tends to remain stable or even decline over time:
SOURCE
This indicates that a moving target would likely become increasingly difficult for delegates to achieve unless mechanisms are implemented to encourage the distribution of VP toward the most active governance participants. For this reason, the cap will temporarily remain a fixed value, which can be adjusted if necessary.
Why the minimal multiplier is 0.8?
80% of the maximum possible Voting Scoring today is 48 (0.8 * (15 for PR90 + 20 for Off-chain votes + 25 for On-chain votes). If a delegate within the range of 50,000 to 100,000 ARB (as an example) voted on all possible proposals, their Voting Score would hover around that number. This means they would need 17 points to qualify for Tier 3 compensation and 27 points for Tier 2.
This analysis shows that delegates with limited Voting Power but who provide valuable contributions in the forum are likely to reach Tier 2. Tier 1, on the other hand, would remain reserved for “Excellence” and delegates with higher Voting Power who maintain a reasonable and good-quality level of forum activity.
Steps to Derive the Formula
- Calculate the Slope (m):
The slope (m) indicates the rate at which the multiplier increases as VP increases.
m = (Change in y) / (Change in x)
m = (1.0 - 0.8) / (4,000,000 - 50,000)
m = 0.2 / 3,950,000
m ≈ 0.00000005063
This means that for every additional unit of VP, the multiplier increases by approximately 0.00000005063.
- Determine the Y-Intercept (b):
The y-intercept (b) is the value of y when x is 0.
Using the point (50,000, 0.8):
0.8 = m * 50,000 + b
b = 0.8 - (m * 50,000)
b = 0.8 - (0.00000005063 * 50,000)
b ≈ 0.7974685
- Construct the Linear Equation:
Multiplier = m * VP + b
Multiplier = 0.00000005063 * VP + 0.7974685
Example Calculations:
- For VP = 1,000,000:
Multiplier = 0.00000005063 * 1,000,000 + 0.7974685
Multiplier ≈ 0.848
- For VP = 50,000:
The multiplier is 0.8
- For VP = 5,000,000:
Since 5,000,000 is greater than 4,000,000, the multiplier is capped at 1.0
Formula’s Visual Explanation
What happens if a Delegate’s Voting Power changes during the month?
We will use the weighted average of the delegate’s Voting Power over the month. This means that a snapshot of each delegate’s VP will be taken once per day, and this data will then be used to calculate the weighted average.
To calculate the average Voting Power (VP) of a delegate over a month, we will follow these steps:
- Daily VP Recording: Record the delegate’s VP for each day of the month.
- Total VP Calculation: Sum the daily VP values to obtain the total VP for the month.
- Average VP Calculation: Divide the total VP by the amount of days in the month to determine the average VP for the month.
Formula:
Average VP = (VP₁ + VP₂ + VP₃ + … + VP₃₀) / days amount
Where:
- VP₁ is the Voting Power on day 1.
- VP₂ is the Voting Power on day 2.
- This pattern continues up to VP₃₀, which is the Voting Power on day 30.
Practical Example:
Assume the delegate has the following VP for the first 5 days of the month:
- Day 1: 10,000
- Day 2: 12,000
- Day 3: 11,500
- Day 4: 13,000
- Day 5: 12,500
To simplify, we’ll calculate the average for these 5 days:
- Total VP: 10,000 + 12,000 + 11,500 + 13,000 + 12,500 = 59,000
- Average VP: 59,000 / 5 = 11,800
Therefore, the average Voting Power over these 5 days is 11,800.
To find the average VP for the entire month, you would continue this process for all 30 days and then divide the total by 30.
More examples:
Minor Changes
As part of our monthly adjustments, we will implement some additional changes beyond those previously mentioned.
Changes
-
DF Scoring Methodology: The scoring range in the rubric for each comment included in the Delegates’ Feedback parameter will be adjusted from 0 to 10 (previously 0 to 4).
Rationale: A broader range allows us to better reflect the scoring of each comment. In practice, under the current scheme, it has been challenging to differentiate the quality of some comments.
Conclusions and Upcoming Challenges
Having reached the three-month mark of the program, and as we mentioned when presenting the proposal for DIP 1.5, we would like to gather feedback from DAO members regarding the rubric introduced in this iteration. The goal is to determine whether we should continue in this direction or revert to a quantitative approach.
From SEEDGov’s perspective—and considering that some delegates have already pointed out the presence of “unnecessary noise” due to the volume of comments on proposals—we believe that returning to a purely quantitative scheme would only exacerbate the issue. Instead, we are implementing the changes mentioned above to discourage actors who may be attempting to farm scoring in the Delegates’ Feedback parameter through excessive commenting.
With the proposed changes, if a delegate within the range of 50,000 to 100,000 ARB (as an example) voted on all possible proposals, their Voting Score would hover around 48. This means they would need 17 points to qualify for Tier 3 (almost half of the new DF score) and 27 points for Tier 2.
This analysis shows that:
-
Delegates with limited Voting Power but who provide valuable contributions are likely to reach Tier 2 or 3.
-
Tier 1, on the other hand, would remain reserved for “Excellence” and delegates with higher Voting Power who maintain a reasonable and good-quality level of forum activity.
-
Delegates with limited Voting Power and poor contributions won’t receive compensation.
We are aware that these proposed changes may make it more challenging to access incentives, but we want to be clear about one thing:
The goal of the program is not just to incentivize delegates, but to improve and professionalize them, ultimately leading to better proposals and better outcomes for Arbitrum DAO.
Our goal is to develop a program capable of recognizing all types of contributions—not just forum comments, but also other off-chain delegate activities, such as engaging in the Telegram group or participating in various calls.
As part of our roadmap, we aim to evolve the Delegates’ Feedback parameter so that the rubric is applied per delegate rather than per comment or based only on forum activity. This will allow us to reflect not only the feedback provided in the forum but also all forms of participation within the DAO, as mentioned earlier.
At the same time, we are evaluating the following changes:
- Partially liquid payments: A portion in vesting and another in liquid tokens, with the sole purpose of better-aligning delegates with Arbitrum DAO.
- Early quorum achievement incentives: If Arbitrum DAO’s on-chain votes reach quorum within the first week on average, DIP delegates receive 5 points within the framework.
- DIP Voting Power Usage Incentives: For example, if DIP participants together have 100m VP and its usage is above 90 or 95% average for each on-chain vote, every participant gets 5 points within the framework.
- Alignment with DAO objectives: Introducing rewards or penalties based on whether the DAO meets the objectives outlined in the approved SOS Matrix. If the DAO fails to achieve its goals, delegate compensations could be adjusted accordingly.
- Automatic removal from the program: One option would be that if a delegate doesn’t achieve some objectives (for example, if remains in Tier 3 for three consecutive months) the delegate could be automatically removed from the program.
These are just some (not all) of the ideas we are considering to further improve the program. We are currently seeking community feedback on these potential changes.
At SEEDGov, we remain committed to continuously gathering community feedback and making the necessary decisions to ensure that Arbitrum DAO has the best Delegate Program in the space.
On the other hand, the recent inclusion of Delegates with significant Voting Power into the program excites us, as it demonstrates the interest of key stakeholders in the future of the DAO. However, we are concerned about contributors who have consistently provided valuable insights to discussions but currently lack representation or influence in voting. The concern lies in the fact that the merit of being a highly reputable contributor is not enough to motivate delegators to update their choice, nor investors/holders to leave their ARBs “idle” in their wallets. Vesting for DIP compensations was previously considered as a potential mechanism to increase Delegates’ VP. But, after analyzing its potential impact, we found that a Delegate receiving the maximum ARB compensation (16.5k tokens) with a 75% vesting schedule (12,375 ARB per month) would need approximately 7 years to reach 1M ARB in VP—assuming they never sell.
For this reason, vesting has been discarded as a mechanism to increase the VP of underrepresented delegates.
While we have previously mentioned that no single program can solve all of the DAO’s challenges, the fact that excellent delegates with limited Voting Power exist today highlights the urgent need for changes or new initiatives in the short term to encourage a more active distribution of Voting Power. Without such measures, we may face difficulties in meeting the increasing quorum requirements.
The DAO has a significant opportunity with the Staking. However, SEEDGov will also analyze other alternatives with the potential for short-term impact and invite all DAO stakeholders to collaborate or provide feedback on this matter.
Note: The changes mentioned above become effective retroactively as of February 1, 2025.