After consideration Treasure’s Arbitrum Representative Council (ARC) would like to share the following feedback on the proposal
TreasureDAO’s ARC will vote AGAINST this proposal. Although we do agree with the need for incentivization for the original STIP participants to stay competitive in relation to other projects and chains that incentivize usage in whatever form (points, funding etcetera), and as they cannot enter the LTIP under its current form, we think that the STIP has taught us valuable lessons to proceed towards more sustainable forms of funding like the LTIPP and the soon to be PIP.
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Motivation. There isn’t enough research done on the STIP metrics to conclude that the STIP has been successful in sustainably growing the network (i.e. network growth that will stay even when incentives are taken away). Even if this has not been the case, an argument could be made that projects need incentivization to winter a period of other chains heavily incentivizing competition. Yet, a lot of the early STIP participants have been competitive without incentivization and are well-established projects within Arbitrum, and should therefore be robust enough to function irrespective of incentivization so that a stronger and more sustainable program can be applied than the more immediate extension of the STIP. @pedrob also makes a solid argument that this period can be used to study the effectiveness of the STIP (in terms of stickiness, performance without incentives and in regards to incentivized competitors).
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Rationale. Although definitely possible, there is no proof to show that the STIP will lead to ‘the imminent risk of losing key ecosystem participants to competitors.’ Furthermore, the top 10 wallet addresses to receive STIP incentives through the STIP have gotten a combined 18.43% (6.22 million $ARB) of all the incentives, and the top 100 wallets 44.83% (15.43 million $ARB). Sure, having high value users on board is a good thing, but questions can be drawn about the nature of usage and if these users would stay equally as active on these platforms regardless of the incentives. For this reason, research on these metrics is important to make verifiable claims of the effects that either extending or moving away from the STIP will have.
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Addendum. As said above, more research on the effects of the STIP is needed. The Addendum paragraph talks about the STIP proposals needing: ‘Data on the performance of their activities during STIP’. Having individual projects report on data of their STIP incentivization is problematic because it will lead to data being used differently by the projects and therefore making them less comparable to each other, and other non-incentivized projects.
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Voting mechanism. From a psychological perspective, requiring the delegates to ‘challenge’ individual applications on their own takes a lot of courage and will therefore have a higher chance of leading to passive acceptance (see: trolley problem, bystander effect). We are all for having a more streamlined voting process, but it shouldn’t come at the cost of proper review. On top of that, as @pedrob and @Bob-Rossi have also mentioned, the burden to review these applications is effectively still on the delegates and is therefore a step back from the lessons we learned from the STIP and applied to the LTIPP (i.e. ‘Too large a burden placed on delegates’, ‘protocols did not receive adequate feedback on their proposals’ and ‘Strict limitations on Incentives Mechanisms’).
In our opinion the best way to move forward would be to research the effects of the STIP to see which conclusions can be drawn from it that can be applied in future incentive mechanisms; including a period of non-incentivization that can be used to gather more data to be able to create even more robust incentive mechanisms. Other potential options would be to research the effects of the STIP as is, and directly apply these to an improved STIP or propose to up the funds for the LTIPP and go through the LTIPP approval process.