Extension of Arbitrum’s Short-Term Incentive Program

The question is why choose an amount of 50M but not 75M, or 100M?
It’s not just about the amount, but also about the choice of DAO and the competition for allocation. Even if the program received a larger fund, there would likely be bigger requests from protocols. So, the end result would remain the same. Chosen protocol still be chosen. It doesn’t make sense to ask for an extension after losing votes, and it seems a little pathetic to me…

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I was urged to share the write-up that I posted on Twitter/X on this forum. I know its a bit off-topic to this specific discussion but may inform some more decision making going forward with the STIP program. Here you go:

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Agree with the sentiment here. Would be good to come up with the rationale for 10M, 20M, and 30M numbers though, rather than choosing an arbitary number (like 50M last time).

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Thanks for bringing this up, as I must admit I was quite disappointed to discover Round 2 would not be happening. We were preparing Matcha (matcha.xyz) / 0x (0x.org) application in the last few days with the expectation of getting the community eyes on it on what we genuinely felt was a great program (gasless trading incentives, RFQ Market Makers on Arbitrum among other things).

We’re obviously biased, but we’d like the program to be extended.
In the meantime, do you reckon it’s worth we go ahead and share our application? Should we use the legacy Round 1 folder or Round 2 (it’s empty right now)?

Thanks for spearheading this

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The categories accepted largely are Dex, agregators, options, perpetuals, lending etc.

Meanwhile everyone outside the DAO are calling for increased user on-boarding via utilities that fall largely into the “other” category. In the primary list contains 2 projects, Galxe and Tally.

This is more of an observation than a complaint.

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Thanks for this post. Similarly to many others in the reply section of this post, we are also disappointed that Round 2 will not go through. We already put together a meaningful proposal that we expect will produce a lot of value for the Arbitrum ecosystem in a capital efficient manner.

If there could be an opportunity for deBridge and many other projects aiming for Round 2 to let the DAO vote on our proposals, that would be highly appreciated. Thank you.

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all proposal are good … they have high potential to build Arb eco sys :rocket: :rocket: :rocket:

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Is this going to vote?

Seems like there is a ton of support behind this proposal.

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In my view, allocating the unclaimed 24-25M airdrop to augment the grant would be advantageous for our ecosystem. The airdrop’s primary intent was to support and nurture ecosystem expansion, especially as we are in the early phases.

However, there’s a pressing concern. Large-scale projects, given their extensive user base, could monopolize a significant portion of this grant. This dominance might overshadow smaller endeavors, potentially hindering innovation. These lesser-known projects can offer unique and valuable insights.

Therefore, I propose designating a specific portion of the grant exclusively for smaller, yet promising, projects, emphasizing those with potential for attracting funds and users.

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Hey 0xRamen,

Thanks for taking the lead on putting this framework together for extending the STIP. I have a couple of questions for you about your proposed amount. You indicate that there were ~24M of approved requests that we weren’t able to fund, AND a decent list of folks who had started putting together drafts for round 2 already. It’s clear to me that we really underestimated the demand/interest of the ecosystem in this opportunity, which is a good problem to have imo. With that in mind, do you think that the max value you proposed of 30M would sufficiently cover the opportunities we want to fund?

I also wanted to ask what your hopes are for feedback here and what you’d like to see in terms of moving this proposal forward to a vote. If I can be of any help, please let me know!

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I would like to address a discrepancy in the data you’ve presented. According to the Inspex data you referenced, JonesDAO requested 2M ARB. However, based on the actual project proposal, they only asked for 200k ARB. This error affects the total grant calculations. By my calculations, taking all project proposals into account, the correct total should be 72,250,544 ARB, not the 74,050,544 ARB you cited. (total grants - Google Sheets)

Building on this point, and acknowledging the robust enthusiasm for the STIP, I’d like to express my concerns about the proposed extension of the grant program. While there’s no doubt that all qualifying projects stand to benefit substantially from an increased pool, we must take a step back and evaluate the broader market consequences of such an expansion.

From a detailed analysis, taking into account the cumulative grant requests and the proposed 3-month program timeline, I’ve deduced that we are potentially looking at an emission rate of approximately 802,783.82 ARB/day. This number, when translated to the current market value, amounts to a staggering $642,227.05 of ARB that could be introduced into the market on a daily basis. And 72,250,544 ARB($5,7800,435.2) selling pressure in 3 months period

The market could experience significant selling pressure, leading to potential price volatility or depreciation. This doesn’t just affect traders or speculators, but every participant in the ecosystem, as the ARB’s value and stability are foundational to the success and perception of the entire project.

Lastly, while I understand the initial consensus may have leaned towards a grant program size expansion, I’d like to remind the community that our decisions should be rooted not just in present circumstances but also in considerations of longer-term sustainability and market health. It’s essential to strike a balance between incentivizing new projects and ensuring market stability.

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Really insightful breakdown, @0xRamen! Viperr from Rage Trade chiming in.

We wholeheartedly back the proposition of expanding the ARB budget for the short-term incentives program to allow protocols in round 2 a chance. Many protocols like ourselves were expecting this budget to be evenly split amongst both rounds, allowing a fair chance for all projects, irrespective of when they were onboarded to the Arbitrum ecosystem or what size community they have.

An extension of the budget not only shows commitment from the Arbitrum team towards fostering a growing and collaborative ecosystem but also ensures that emerging projects don’t get left behind.

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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

    Pros: Beneficial for projects who waited for round 2, Projects with >50% in favor votes + quorum but missed the 50m ARB cut-off get a second chance

    Cons: Projects with >50% in favor votes + quorum but missed the 50m ARB cut-off will have to canvass for votes again


  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

    Pros: Projects with >50% in favor votes + quorum but missed the 50m ARB cut-off do not have to canvass for votes again

    Cons: Projects who waited for round 2 will likely not get a chance (there are 24m ARB worth of grant requests which will likely take up a significant proportion if not all of the extension)


  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

    Pros: Better distribution of funds, not winner takes all

    Cons: If retroactive, changes the initially proposed rules, disbenefit to already selected grantees


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?

    • Option 1: 10m ARB
    • Option 2: 20m ARB
    • Option 3: 30m ARB
    • Option 4: Abstain
  • How should the extension work?

    • Option 1: Continue with round 2
    • Option 2: Extended STIP grants to go to projects with >50% in favor votes + quorum but missed the 50m ARB cut-off
    • Option 3: Abstain

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
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Do you have an anticipated timeline for when you’d like to conduct these temp checks?

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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.

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Option 2.
30m ARB
Rest of the 30m goes to second round participants, so probably like 6m.

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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.

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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.

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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.

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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.

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