# Extension of Arbitrum’s Short-Term Incentive Program **URL:** \ **Category:** Grants Discussions\ **Created:** [October 12, 2023, 6:11pm UTC](https://forum.arbitrum.foundation/t/extension-of-arbitrum-s-short-term-incentive-program/18800 "2023-10-12T18:11:56Z")\ **Posts on this page:** 20\ **Page:** 4
**Author:** ![0xRamen](https://yyz1.discourse-cdn.com/flex029/user_avatar/forum.arbitrum.foundation/0xramen/32/4685_2.png) [@0xRamen](https://forum.arbitrum.foundation/u/0xRamen)\ **Post date:** [October 18, 2023, 2:58pm UTC](https://forum.arbitrum.foundation/t/extension-of-arbitrum-s-short-term-incentive-program/18800/70 "2023-10-18T14:58:32Z")
Thanks all for your replies. A couple of themes have emerged in the discussion, thank you all for the input - has been incredibly valuable and had many points that we had not thought of. The main one being **how should the extension work?** We put together the discussion thus far and summarized some pros / cons. * * * 1. **Option 1: Continue with round 2.** Continue with the existing program structure where we hold a round 2, everyone from round 1 who had not qualified can retry in round 2. Supporters - @limes @DanThales @mint_cloud @deBridge * * * 1. **Option 2: Grant extension to round 1.** Give out remaining ARB grant to the projects missing the cut-off with \>50% in favor votes + quorum but missed the 50m ARB cut-off. Supporters - @teddy-notional @bflynn @blazedbison * * * 1. **Option 3: Pro-rata distribution.** Give out grants where `Project grant = ( project vote * project request ) / sum ( all project votes * all grant requests ) * budget`. Supporters - @Midgetwhale * * * > [@Arbitrum's Short-Term Incentive Program (Arbitrum Improvement Proposal)](https://forum.arbitrum.foundation/t/arbitrums-short-term-incentive-program-arbitrum-improvement-proposal/16131/1): > > In the event that the budget is exceeded, the DAO may choose to unlock further funds for a third round, or backfund successful incentive proposals. Both Option 1 and 2 are viable options but we prefer Option 1, given that: - This will give a chance to projects who were waiting on round 2 a fair chance at application - It is also not all negative for projects with \>50% in favor votes + quorum but missed the 50m ARB cut-off, since they will be getting a second chance, versus no grant currently. We are generally not in favor of retroactively changing the rules, which rules out option 3. * * * That said, we prefer for the community to decide on the nature of extension and suggest the next steps for this is to proceed with a 2x temp check votes: - How much to extend STIP by? - How should the extension work? Following which, the final vote should be a combination of the above, for example: - Option 1: Extend the STIP by 20m ARB and continue with round 2 - Option 2: Do not extend the STIP ---
**Author:** ![Britt](https://yyz1.discourse-cdn.com/flex029/user_avatar/forum.arbitrum.foundation/britt/32/4856_2.png) [@Britt](https://forum.arbitrum.foundation/u/Britt)\ **Post date:** [October 18, 2023, 4:53pm UTC](https://forum.arbitrum.foundation/t/extension-of-arbitrum-s-short-term-incentive-program/18800/71 "2023-10-18T16:53:28Z")
Do you have an anticipated timeline for when you’d like to conduct these temp checks? ---
**Author:** ![dk3](https://yyz1.discourse-cdn.com/flex029/user_avatar/forum.arbitrum.foundation/dk3/32/4808_2.png) [@dk3](https://forum.arbitrum.foundation/u/dk3)\ **Post date:** [October 18, 2023, 8:30pm UTC](https://forum.arbitrum.foundation/t/extension-of-arbitrum-s-short-term-incentive-program/18800/72 "2023-10-18T20:30:54Z")
Personally, I think you should prepare a temp check with four choices. - Round 2 - 10mm - Round 2 - 20mm - Round 2 - 30mm - No Round 2 Let any team apply that did not receive in the first round. I think you should also add some timelines to the temp check. For example. Proposals due End of November 2 Weeks for Feedback Period. 2 Weeks for Voting (Single Spend with Decay Like the Security Council) Aim for Round 2 teams to receive as Round 1 starts to phase out. You probably won’t get meaningful engagement until after DevCon (Ends Nov 20). Based on the calls this week on governance, think something like this would garner support to get over the line. ---
**Author:** ![Achi](https://avatars.discourse-cdn.com/v4/letter/a/ba8739/32.png) [@Achi](https://forum.arbitrum.foundation/u/Achi)\ **Post date:** [October 18, 2023, 11:51pm UTC](https://forum.arbitrum.foundation/t/extension-of-arbitrum-s-short-term-incentive-program/18800/73 "2023-10-18T23:51:06Z")
Option 2. 30m ARB Rest of the 30m goes to second round participants, so probably like 6m. ---
**Author:** ![Dog](https://yyz1.discourse-cdn.com/flex029/user_avatar/forum.arbitrum.foundation/dog/32/2564_2.png) [@Dog](https://forum.arbitrum.foundation/u/Dog)\ **Post date:** [October 18, 2023, 11:53pm UTC](https://forum.arbitrum.foundation/t/extension-of-arbitrum-s-short-term-incentive-program/18800/74 "2023-10-18T23:53:20Z")
Out of curiosity, is there a specific reason you are so against allowing others to get funds during/before the round 1 starts? The goal of the STIP is to incentivize in the short-term, thus the more incentives during the same time period, the larger influx of capital/impact. Hamstringing this explosive growth seems counterintuitive. ---
**Author:** ![dk3](https://yyz1.discourse-cdn.com/flex029/user_avatar/forum.arbitrum.foundation/dk3/32/4808_2.png) [@dk3](https://forum.arbitrum.foundation/u/dk3)\ **Post date:** [October 19, 2023, 12:15am UTC](https://forum.arbitrum.foundation/t/extension-of-arbitrum-s-short-term-incentive-program/18800/75 "2023-10-19T00:15:26Z")
In my eyes it is more likely that the same two protocols will be competing for the same dollar at the same time frame. Wouldn’t you rather have the capital flow from DexA to DexB to DexC over three different durations to ensure you maximize the users on each platform so they get exposure to trying out all three Dexes? Then they can come back after the program and now they have tried all three decide which they like most? Otherwise, it is cannibalizing the same ecosystem, so in my opinion, this is a better use of ARB tokens. To get the benefits of the program participants need adequate time to experience and learn all the different projects they wouldn’t have tried without the juice. LPs I have discussed this with, want to deposit capital in Project A for a month, Project B for a month, and so on, to get a real feel for the returns and have adequate time for decision making, I am interested to hear the feedback LPs have given your team. ---
**Author:** ![Dog](https://yyz1.discourse-cdn.com/flex029/user_avatar/forum.arbitrum.foundation/dog/32/2564_2.png) [@Dog](https://forum.arbitrum.foundation/u/Dog)\ **Post date:** [October 19, 2023, 12:35am UTC](https://forum.arbitrum.foundation/t/extension-of-arbitrum-s-short-term-incentive-program/18800/76 "2023-10-19T00:35:35Z")
I understand that if it was a closed loop, but the entire point of the STIP is to bring NEW capital into the system. Socket got 1m ARB to promote bridging into Arbitrum. Fresh and new capital WILL bridge in for good incentives, as is what we want. DexA-DexB-DexC are not necessarily fighting for the same capital. It’s as simple as X% yield is desirable by LPers, they dilute each exchange to the point where those yields align. Higher yield on all of them, more capital flight to achieve that target APR. This is very common and “cannibalize” isn’t a real concern here-- we want to promote competition on fair grounds, not asymmetric advantages. ---
**Author:** ![dk3](https://yyz1.discourse-cdn.com/flex029/user_avatar/forum.arbitrum.foundation/dk3/32/4808_2.png) [@dk3](https://forum.arbitrum.foundation/u/dk3)\ **Post date:** [October 19, 2023, 1:04am UTC](https://forum.arbitrum.foundation/t/extension-of-arbitrum-s-short-term-incentive-program/18800/77 "2023-10-19T01:04:12Z")
If this was true I would think this would be the case for the dollars already on Arbitrum. But it seems that not to be true: DexA 3mm LP 5%-15% APR DexB 723k LP 14%-31% APR Same Pair Was just giving my explanation on what types of proposals I would support. But I am just a single opinion, maybe other delegates disagree. ---
**Author:** ![Dog](https://yyz1.discourse-cdn.com/flex029/user_avatar/forum.arbitrum.foundation/dog/32/2564_2.png) [@Dog](https://forum.arbitrum.foundation/u/Dog)\ **Post date:** [October 19, 2023, 1:23am UTC](https://forum.arbitrum.foundation/t/extension-of-arbitrum-s-short-term-incentive-program/18800/78 "2023-10-19T01:23:09Z")
There’s lots of nuance in that, but I’m not sure how to prove a point with fake variables. An anecdotal example I can give is that we are in close contact with large capital providers and it’s as simple as: “show us the X% yield and we will deploy all capital feasible to it.” Full stop. Dexes aren’t the only ones to compare. Lending markets experience the same thing. The only place there is asymmetric yield is typically more obscure and less proven protocols. Besides the point, fresh capital will bridge over to Arbitrum (as it has in the past), with incentives. There is frankly no reason a top chain like arbitrum would experience zero growth and create a capital vacuum/closed loop. I can assure you with full confidence TVL on chain will skyrocket as a result. Competition is good, and the whole point of decentralization is to allow competition to thrive innovation on seemingly level playing fields. ---
**Author:** ![dk3](https://yyz1.discourse-cdn.com/flex029/user_avatar/forum.arbitrum.foundation/dk3/32/4808_2.png) [@dk3](https://forum.arbitrum.foundation/u/dk3)\ **Post date:** [October 19, 2023, 6:33am UTC](https://forum.arbitrum.foundation/t/extension-of-arbitrum-s-short-term-incentive-program/18800/79 "2023-10-19T06:33:13Z")
I think you are missing my points. I’m not arguing that those things won’t happen. Best of Luck. ---
**Author:** ![Lunaman](https://avatars.discourse-cdn.com/v4/letter/l/8dc957/32.png) [@Lunaman](https://forum.arbitrum.foundation/u/Lunaman)\ **Post date:** [October 19, 2023, 5:20pm UTC](https://forum.arbitrum.foundation/t/extension-of-arbitrum-s-short-term-incentive-program/18800/80 "2023-10-19T17:20:14Z")
I think Option 2 makes the most sense. It is true projects that haven’t applied will not get a chance however opening a Round 2 rises some logistic issues. As Dog stated above, the goal of STIP is to incentivize short-term. There will be 50M in ARB given already which will create explosive growth and delaying the incentive extension can be counterproductive. Furthermore, agreeing again on a sum for a hypothetical Round 2 means repeating the exact same mistake of this past round. That is we are agreeing on a sum without knowing the demand for incentives and again creating a bottleneck that can repeat ad infinitum. Extending round 1 for the projects that achieved quorum + the 50% for/against gives us a known demand quantity with the extra benefit that these proposal HAVE already been approved by the delegates in both extent and size. A round 2 where all this projects submit a replica proposal as in round 1 just unnecessarily complicates the work of delegates. ---
**Author:** ![blazedbison](https://yyz1.discourse-cdn.com/flex029/user_avatar/forum.arbitrum.foundation/blazedbison/32/4096_2.png) [@blazedbison](https://forum.arbitrum.foundation/u/blazedbison)\ **Post date:** [October 19, 2023, 8:57pm UTC](https://forum.arbitrum.foundation/t/extension-of-arbitrum-s-short-term-incentive-program/18800/81 "2023-10-19T20:57:18Z")
You have eloquently transcribed my exact thoughts, sank u This approach seems common sense to me The thesis is simple©️ ---
**Author:** ![Midgetwhale](https://avatars.discourse-cdn.com/v4/letter/m/eb8c5e/32.png) [@Midgetwhale](https://forum.arbitrum.foundation/u/Midgetwhale)\ **Post date:** [October 19, 2023, 9:30pm UTC](https://forum.arbitrum.foundation/t/extension-of-arbitrum-s-short-term-incentive-program/18800/82 "2023-10-19T21:30:57Z")
Thank you for your thoughtful summary. I would say that my comment about the pro rata proposal was not so much to be applied retroactively to the vote of round 1, but just to get the idea out there for future STIP-like contests or thus, perhaps for round 2. As such, I would not necessarily see it as a competing third option but rather something that could be implemented if the community would either agree to move forward with a Option 1: Continue with round 2, or even if the community selects option 2 but does not want to provide funding to the full 24M extent. In both cases, a pro-rata approach could make for a more sensible distribution of funds. ---
**Author:** ![0xRamen](https://yyz1.discourse-cdn.com/flex029/user_avatar/forum.arbitrum.foundation/0xramen/32/4685_2.png) [@0xRamen](https://forum.arbitrum.foundation/u/0xRamen)\ **Post date:** [October 20, 2023, 2:27am UTC](https://forum.arbitrum.foundation/t/extension-of-arbitrum-s-short-term-incentive-program/18800/83 "2023-10-20T02:27:26Z")
Appreciate the clarification, I misunderstood. Agree this is an option we should consider in the future. ---
**Author:** ![JoePadawan1](https://avatars.discourse-cdn.com/v4/letter/j/a6a055/32.png) [@JoePadawan1](https://forum.arbitrum.foundation/u/JoePadawan1)\ **Post date:** [October 20, 2023, 8:24am UTC](https://forum.arbitrum.foundation/t/extension-of-arbitrum-s-short-term-incentive-program/18800/84 "2023-10-20T08:24:44Z")
Extend STIP with a 500k cap / project. This way all the remaining projects can get funded for a small price, it brings some fairness back to this fiasco of overinflated asks. ---
**Author:** ![Djinn](https://avatars.discourse-cdn.com/v4/letter/d/65b543/32.png) [@Djinn](https://forum.arbitrum.foundation/u/Djinn)\ **Post date:** [October 24, 2023, 4:27am UTC](https://forum.arbitrum.foundation/t/extension-of-arbitrum-s-short-term-incentive-program/18800/85 "2023-10-24T04:27:37Z")
I have the same question - this should be done now. Waiting is just going to make this proposal discussion lose pull as we’ll be moving to new proposals. ---
**Author:** ![SavvyDAO](https://yyz1.discourse-cdn.com/flex029/user_avatar/forum.arbitrum.foundation/savvydao/32/4578_2.png) [@SavvyDAO](https://forum.arbitrum.foundation/u/SavvyDAO)\ **Post date:** [October 25, 2023, 2:18am UTC](https://forum.arbitrum.foundation/t/extension-of-arbitrum-s-short-term-incentive-program/18800/87 "2023-10-25T02:18:02Z")
Gm. We are working towards draft of the temp checks, just getting the relevant feedback now. We have a loose draft but plan to post it very soon. > **[Extension of Arbi STIP AIP \[Draft\] 1.1](https://docs.google.com/document/d/1VS5YvLJuE7fH6KjNUM4x0nwzoSB9CCMsfXYrNXzb10U/edit)** > > Extension of Arbi STIP AIP \[Draft\] 1.1 Note to readers: STATUS: 2nd draft done Friday, October 20th at 4pm EST How to provide feedback: General comments, send to the TG working group Notes on specific parts - add a comment to the doc Moving... Welcome to DM me. TG: AlexLumley Also planning to have an open working group call on Friday. ---
**Author:** ![sahijeevan](https://yyz1.discourse-cdn.com/flex029/user_avatar/forum.arbitrum.foundation/sahijeevan/32/3415_2.png) [@sahijeevan](https://forum.arbitrum.foundation/u/sahijeevan)\ **Post date:** [October 25, 2023, 4:08pm UTC](https://forum.arbitrum.foundation/t/extension-of-arbitrum-s-short-term-incentive-program/18800/88 "2023-10-25T16:08:50Z")
great community support here 🙏 🙏 🙏 🙏 ---
**Author:** ![maxlomu](https://yyz1.discourse-cdn.com/flex029/user_avatar/forum.arbitrum.foundation/maxlomu/32/1282_2.png) [@maxlomu](https://forum.arbitrum.foundation/u/maxlomu)\ **Post date:** [October 25, 2023, 7:25pm UTC](https://forum.arbitrum.foundation/t/extension-of-arbitrum-s-short-term-incentive-program/18800/89 "2023-10-25T19:25:37Z")
Hi, just caught up with reading this and I want to echo @dk3 and @limes. One thing the advocates of the **Option 2: Grant extension to round 1** are not considering is that delegates knew and did vote according to the agreed rules, which were very clear: **Only 50m were going to be allocated, only with those criteria.** Implying that the other protocols that didn’t meet the threshold would have automatically achieved it with a larger grant cap, is not correct. Delegates could have voted more strongly against proposals - instead, we abstained or didn’t vote against projects that were not meeting that **specific** threshold. **The options here should be only to create a new independent proposal, or run a round 2.** Changing anything for round 1 would be unfair. STIP round 1 ended with those results, and I understand it’s frustrating for protocols/communities that didn’t make it, but there will be (and we can create) new initiatives. ---
**Author:** ![patheboi](https://yyz1.discourse-cdn.com/flex029/user_avatar/forum.arbitrum.foundation/patheboi/32/4896_2.png) [@patheboi](https://forum.arbitrum.foundation/u/patheboi)\ **Post date:** [October 26, 2023, 4:00am UTC](https://forum.arbitrum.foundation/t/extension-of-arbitrum-s-short-term-incentive-program/18800/90 "2023-10-26T04:00:03Z")
I’ve just finished reading. Thank you for the draft. I believe it’s crucial to onboard more new projects, which will, in turn, diversify Arbitrum’s ecosystem. Also, I agreed with @maxlomu on the [comment](https://forum.arbitrum.foundation/t/extension-of-arbitrum-s-short-term-incentive-program/18800/89) that we should focus on creating a new independent proposal. [Previous page](https://forum.arbitrum.foundation/t/extension-of-arbitrum-s-short-term-incentive-program/18800.md?page=3) [Next page](https://forum.arbitrum.foundation/t/extension-of-arbitrum-s-short-term-incentive-program/18800.md?page=5)