Agreed rules were not very clear, they kept changing.
Initially, it was supposed to be first come first serve. That’s what was voted on Snapshot. Then it changed to this random number of yes vote which makes no rational sense.
Also, it was also voted as part of the STIP the possibility of an extension in case of the progrom being oversubscribed.
Finally, delegates voted on a proposal by proposal basis which is what they were missioned to. The PVP part was not part of the exercise. I don’t think any delegate withdrew their vote on one side to favor one project over the other, seeing the project being oversubscribed.
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Same protocols, same people. Where are the new projects? Where are the new excited devs willing to build on Arbitrum? Prioritizing Round 1 is giving priority to large groups and stifling good intentions that require way less funding. Many have prepared for Round 2 and it is quite disappointing wait for a final decision. There aren’t dev-rel projects, how do we expect to create solutions directly in code, culture etc? I hope for a Round 2 and concrete solutions instead of same liquidity and rewards programs.
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I am a strong believer that it makes sense to wait until after round 1 has concluded and proper analysis (multiple!) have been done before funding another round, given that 3 months is an extremely short period of time. This way, we can take into account lessons learned from round 1 surrounding what types of incentives work best in order to maximize the value of treasury funds toward future expenditure. Additionally, the voting process in round 1 had many inefficiencies that need to be addressed in any further STIPs.
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Max the original STIP post (that eventually passed) states that it would be an option for the DAO to choose to backfund successful incentive proposals … if budget is exceeded, no?
This proposal is well within the original rules/guidelines?
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Rules highlighted above.
I don’t think an extension of the STIP round 1 is fair - While I support the idea of creating a round 2, or a new independent proposal.
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Rules highlighted above.
The next sentence after your highlight is part of the rules as well, is it not @Max?
Not a rule, but an option for the DAO.
One that I support as a separate round, as I have expressed before.
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Respectfully, why should projects that went to so much effort to be included in round 1, and that campaigned hard to meet quorum AND received over 50% For votes, have to go through the process a 2nd time? Why would we not just reward those projects and extend the grant to them when
i. The demand was totally unprecedented (a good thing)
ii. The vast majority are smaller, new, and different (read: not defi) projects that could contribute massively to the ecosystem
iii. The unclaimed airdrop amount was more than expected and would easily cover the ~ 22m additional being requested?
Anyway, I look forward to the AIP for the extension going live and hope you and other delegates can see that this is a net positive for the Arb ecosystem
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To be honest, I still fail to understand the arguments against backfilling the projects that met the criteria and didn’t get funded.
If these projects met the requirements it is because the great majority of the DAO’s voting power assessed the proposals and deemed them valid of getting the grant. The reason that these projects did not get filled comes from the fact that we pulled the figures of 25M, 50M and 75M $ARB out of a hat without first probing around to figure out if this even sufficient to satisfy demand. The total demand was for around 120M $ARB and the DAO decided that projects’ requests amounting to around 74M $ARB should pass and get the funding, that’s the only valid piece of data we have. Everything else are just conjectures and what ifs.
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Very bad take, we’ve dropped the ball on not forecasting properly demand for STIP in terms of total ARB required. We’ve allowed for backroom deals and most delegates-connected protocols to meet the threshold and get funded. Arbitrum is not 29 projects. If swift extension with round 2 doesn’t get voted in, it will be catastrophic to rest of the ecosystem projects that can’t compete with others due to zero sum game. You should know better Matt, you guys specialize in research right? How about some research piece on the impact of 100s of Arbitrum projects that will suffer major decline in activity and potentially be forced to seek activity outside of Arbitrum ecosystem because they can’t compete without incentivization. 3 months of time is enough to create permanent damage to ecosystem with negative long term impact. Who knows but this type of unbiased research could actually score you some points for your coalition proposal ( feedback coming soon )
The STIP voting results made it clear, the process favors protocols selected by essentially the top 3 delegators to be winners. This punishes those who are not among the chosen (and those who didn’t submit their STIP proposal in time), with little regard to the value they provide to the ecosystem. As a result, they are destined to be short term losers and might even end up turning lights off for good.
For example, in coming months Uniswap and Sushi will lose volume to Camelot, TraderJoe and Balancer due to incentivization. Premia, Dopex, Rysk and Good Entry will dominate over Hegic, Lyra and other A+ option protocols, yet without incentives Hegic currently organically dominates options category in terms of fees ( top 8 in fees from all protocols on arbitrum in last 30 days per defilama ) . Where is the logic in punishing indirectly Hegic here for example? Why aren’t “research” firms asking those questions? Unless protocols come up with their own incentivizes to compete, they will underperform.
I’ve listened to your spaces on Friday and it seems like you, @maxlomu, Gauntlet and few other large delegates internally agreed to go against any extension plans. To me it looks more like a coup against Arbitrum ecosystem. Please provide some stats on potential positive / negative impact that no additional funding + round 2 will have on rest of the ecosystem. We can’t drop another ball here on all the legit projects that are building in the space and simply want to fairly compete with those that got grants approved and soon to be funded.
To summarize - Arbitrum risks losing builders and legit projects because of zero sum game. You can’t compete organically with incentivized projects hence 29 projects will succumb most of activity in their respected categories, where the rest will suffer drop in activity.
We need to act NOW, without unnecessary delays and support plans for extension and round 2. I’m completely outraged that some of the large delegates don’t see this or choose to turn the blind eye on destructive impact this decision might have on entire ecosystem.
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Hey folks!
Dennison from @tally.xyz here!
The STIP proposal has been incredible to see, so much activity! I’ve been thinking about this problem a bit: allocating incentive funding across a diverse ecosystem of builders.
I was curious as I go through the problem maze- would it make sense to set a budget that is distributed to teams based on the percentage of votes they win, potentially with a cap? (So that there is an upper ceiling to the grant with the expectation that more teams could be funded?)
Another way of doing it might be to set a budget, and then allocate some number of spots to fund, with each spot receive a decreasing portion of funds? So Top spot gets 10% of the budget, second spot gets 7%, and so on and so on?
While I’m not addressing the current discussion about a round two, I am thinking about how at Tally we could help make this process more scalable and inclusive for everyone.
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Hey Dennison, I think certain grant structures could definitely have some sort of weighted distribution of funds in an overflow scenario.
For this specific STIP framework, the data to back budgeting wasn’t there - and it was very difficult to project with unlimited proposal limits for the largest projects, BUT the creators knew this and had backup options just incase the exact overfunding scenarios were met, which is great.
An extension reduces workload on everyone, and adjusts a weakness of the STIP process into a strength that supports all projects across verticals and project size.
My concern around having a scaling funding model like you mentioned is that it hurts the smallest projects with the least political pull even more than the STIP process currently does, and it just means that their already smaller asks would be trimmed down even more.
Another option would be a way to just proportionally allocate funds based on the amount proposed, as long as the proposal passed quorum and other requirements.
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Hmm yeah thats a great point, what if there was a maximum cap as well as a minimum cap? You of course will still need the political strength to be included at all, but at least a minimum cap would mean folks don’t get percentage wise pennies.
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That could make sense, I think the challenge is creating a framework that sits as the foundation of future grants but offering levers like caps, max allocations, overflow mechanics that can adjust per each grant type.
Keep up the good feedback.
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Thanks! I’ll keep thinking about this, there is probably some MVP version of this which could streamline the process more so that we could do it more often and for more types of things. I’m excited to think about it!
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ICYMI there’s a new vote ending on 11/14 pushing for option 2.
I will vote against it as I believe we should
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
selfishly we from matcha.xyz were awaiting round 2 to apply and find it not unfair to not been given the opportunity to participate
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Dennison. Thanks so much for the awesome feedback!
As I mentioned to @mint_cloud in the STIP Backfund Proposal post, we have put together an STIP Inclusion Working Group that is thinking about Backfund AND round 2 - would love to add you. We believe they work better TOGETHER.
We are having an AMA tomorrow to discuss the STIP Backfund and Frisson is joining us. Would love if you also attended!
Please reach out - tg: AlexLumley
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Thanks! I’ll see if I can attend! (Not sure, but yeah excited to see this come together)
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thanks @SavvyDAO , it’s great to hear a round 2 is in motion too. It looks like I defaulted to quickly on the hypothesis that backfunding round 1 implied a less likely round 2. I will hit you up on tg, talk to you soon 
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Appreciate the support ser!
Please let us know when you have reached out - haven’t seen your message come through yet. =)
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