Voting Rationale: Nov 29-Dec 5th, 2024
Tally
Hackathon Continuation Program
Entropy would like to first reiterate that we are aligned with the overall purpose of the proposed program. Continued support for promising builders and hackathon projects is important, and providing this support via investments instead of grants makes a lot of sense. We also appreciate the RnDAO team for adding our request of rationale reports for the projects chosen at each stage.
That being said, Entropy has decided to vote AGAINST. While both the expected terms of the investments and the program’s budget are now more clearly stated, our original concern about the contributions from each side remains unchanged. The proposal somewhat paints the picture that Arbitrum DAO and RnDAO are both putting capital into the program, but it is our understanding that the DAO is putting up $187,980 worth of monetary capital (both towards investments as well as to cover OpEx) while RnDAO is putting up what it values as $200,000 of human capital.
Thus without any monetary capital contributions, the allocations of the budget between Program Ops and Venture Support is arbitrary from RnDAO’s perspective. For example, the Snapshot version of the proposal looked like this:
Screenshot taken from the Snapshot description.
Before moving the proposal to Tally, the following updates to each party’s contributions were made:
Framing the monetary and human capital contributions as equal (50/50 split between Arbitrum DAO and the contributors) is inaccurate in our opinion due to several reasons such as adherently different risk profiles and an uneven impact of each type of contribution on the investments. Given that human capital contribution accounts for ~67% of the total dollar amount given in the proposal, we struggle to see why the DAO shouldn’t utilize $x to cover OpEx and $y for the monetary contribution, which would be matched by the proposer, with the resulting equity allocation for the DAO being ($x + $y) / ($x + 2 * $y). As such, we would echo SeedGov in that it makes more sense for the monetary investment into projects to be equal.
Additionally, Entropy agrees with the notion that builders require more support than just capital. However, the DAO has previously funded RnDAO’s CoLab, a similar program with the goal of providing network access and venture expertise, with mixed results. Although we are cognizant of the sample size being relatively small, within just a few months, three of the six funded projects disbanded and one has moved to another ecosystem. We feel it is ill-advised for the DAO to be rushed into allocating an additional ~200k ARB as this is no longer a first-time “experiment”.
Lastly, we realize the unfortunate timing of the Holiday Break has resulted in the proposal feeling rushed. This situation will be taken into account when reevaluating the guidelines in May, but we’d remind delegates that this information has been known for almost 6 months since the DAO first passed updates to its voting schedule in July. Ultimately, it is the responsibility of the proposer to be aware of important timelines, and rushing investment decisions for the sake of ~1 month’s difference is in our opinion a bad precedent.
Snapshot
[Non-consitutional] User Research: Why build on Arbitrum?
Members of our team have experience starting and operating a research business. Contingent upon a high-quality deliverable, we would expect a quote of $40k-$50k for this type of research. We mention this to highlight that the budget is relatively fair, even though it is a bit on the higher end of what we’d expect. Additionally, we do not have great familiarity with the proposer’s past research, so it is difficult to assess what quality we should expect, making this proposal somewhat of a “leap of faith”.
We also have concerns about the usefulness of this type of proposal in practice. What are we actually trying to achieve by funding this?
We would support this proposal if the report itself was for Arbitrum, Optimism, and Solana for $25k upon delivery, with an additional $60k contingent upon a successfully passed proposal as a follow-up deliverable that takes the information gathered and turns it into something actionable. For example, if it is discovered that 60% of builders are choosing Solana over Optimism or Arbitrum for XYZ reason, a follow-up proposal that aims to improve Arbitrum’s weakness in the diagnosed category would be required to receive a bulk of the funds. It is our view that research is nice to have, but what we really need are actionable takeaways with feasible paths forward.
Lastly, we also echo SEEDGov’s sentiment posted here that the ARDCv2 should be leveraged if this remains strictly a research-based task.
Therefore, our team has decided to vote AGAINST this proposal on Snapshot.
Designing and operating the reporting and information function
Entropy has voted AGAINST the proposal at this stage but looks forward to seeing a revised version.
First, we will quickly echo the common critiques from other delegates:
- Overall, the salary and bonus structure are very high for the quoted responsibilities.
- A retroactive payment of $9k per month for previous work is also extremely high.
- It is not immediately clear what Lumen and Powerhouse’s responsibilities are.
Concerns on increasing bureaucracy: The proposal states that there will be bi-weekly calls with initiative leads. Depending on the purpose & length of these calls, we fear this is overkill. With updates being provided on the monthly GRC calls and most programs including milestone/monthly updates as part of their proposals, there is already a substantial amount of “reporting” information being created by the DAO, much of which we suspect is only being read by a few delegates. For example, Entropy has been posting monthly updates to the forums and only 1 has surpassed 100 views. Entropy has discussed this with Alex and is interested in hearing other delegates’ opinions, but perhaps the DAO has a greater problem with information dissemination than reporting.
Immediate, short-term ideas that we believe would help in the dissemination of information include:
- A Getting Started + Important Resources section in the Forums that has the Delegate Code of Conduct, DAO Procedures, DIP guidelines, and Important Links. This moves important information from the Announcements section, which is mainly used by the Foundation. Optimism has a great example for inspiration and helps delegates who may be returning after an extended time period to get caught up quickly.
- An ongoing list of DAO Funded Initiatives that includes only the most necessary information for delegates, such as ARB allocated, expected end date, POC, a very short TLDR of expected deliverables, and a consolidated list of each initiative’s most recent update. While Alex has created a Governance Reporting Notion page, this should be hosted on the forums, extremely easy to skim, and pinned in a prominent place.
Replacing the Foundation for the “Open Discussion of Proposals” call: We strongly agree with @Pedro that it does not make sense to take over this responsibility from the Foundation. It is valuable to have their presence and it is a cost they have already decided to cover.
Simplify with clear deliverables: When evaluating the three phases it was difficult to come away with a clear picture of what the proposed tasks/deliverables are supposed to entail. To be frank, it feels like there are significant overestimations in the necessary responsibilities and hours required to inflate the overall costs of the proposal. While we recognize Alex’s contributions and extensive time given to the DAO, we advise against unnecessarily seeking to expand the scope of work to justify a certain salary amount. We’d like to see a proposal that is narrow-focused and has clear deliverables that are easy for delegates to digest.