GFX Labs Delegate Communication Thread

Governance Delegate Statements
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1 Poll Closing April 14, 2023

[Snapshot] AIP-1.05: Return 700m ARB to DAO Treasury
Summary: This proposal seeks to do several things:

  • Return 700 million tokens.
  • Conduct a buyback with proceeds from the unauthorized token sale.
  • Disclose terms to a nonpublic agreement with Wintermute.
  • Pause AIP-1.1 and AIP-1.2.

Recommendation: Vote Abstain.

GFX strongly supports the first goal. 700m+ is a needlessly large budget for the newly created Foundation. We fully favor the 700m being returned to the DAO, which still leaves the Foundation with significant funds to utilize, given the Foundation can always request additional funds at a future date.

We’re voting to abstain because we generally agree with the proposal’s intention. However, a buyback at this stage is unnecessary. Additionally, the market-making agreement between Wintermute and the Foundation isn’t significant to the proposal’s objective.

7 Likes
3

I am totally on the same page.

2 Likes
4

2 Polls Closing April 17, 2023

[Snapshot] AIP-1.1: Lockup, Budget, Transparency
Summary: This proposal seeks to instruct the Arbitrum Foundation to place 700,000,000 ARB into a smart contract for a 4-year, linearly vesting lockup. It also authorizes a $36,000,000/year budget for the Foundation’s operating, legal, research, and technical expenses.

Recommendation: Vote No. This is a very large budget, and no clear justification for it. The Foundation has also already chosen to engage with DAO service providers, but not disclosed who they are or the terms. We would be much more comfortable with a smaller budget to begin, and then the Foundation can return every quarter or six months to request authorization for further spending. This ensures the Foundation can be held accountable, particularly given the small number of board seats, paucity of data on who it is paying and for what services, and the directors’ fiduciary responsibility being exclusively to the Foundation itself and not to tokenholders.

[Snapshot] AIP-1.2: Foundation and DAO Governance
Summary: This proposal seeks to amend the Arbitrum Constitution, the Foundation bylaws, and memorandum of association for the Foundation. Changes are largely confined to clarifying language, removing references to AIP-1 (which did not pass), lowering the proposal threshold from 5,000,000 ARB to 1,000,000 ARB, and more details about the Data Availability Committee for Arbitrum One.

Recommendation: Vote Yes. These changes are largely housekeeping, with the most notable change being a lowering of the threshold to propose, which we support.

5 Likes
5

1 Poll Ending July 13, 2023

Fund the Arbitrum Grants Framework - Milestone 1
Summary: This poll requests input from ARB holders on whether to advance this proposal to an on-chain vote on Tally. Broadly speaking, this would allocate 3.971 ARB to a grants program overseen by Plurality Labs.

Recommendation: Vote No. The concept of this program is admirable, but it essentially adopts a diversified way of distributing grants – a council, a more decentralized approach, and through matching funds on Gitcoin. This means that the fixed drawbacks (operationally, reputationally, and for efficiency) of all three methods come into play without realizing the benefits that largely grow with scaling a grants program. Particularly with competing grants program proposals public or soon to be made public, this proposal seems like it could be stronger with a clear focus on both methodology and in specific grant categories. Also, most of the contributors are already selected via the proposal rather than being elected, so to vote Yes, we would need to be convinced of both the methodology and the contributors being the ideal choice.

1 Poll Ending July 15, 2023

AIP-2: Activate Support Account Abstraction Endpoint on One and Nova
Summary: This AIP would activate on One and Nova mainnets RPC endpoints that support EIP-4337 account abstraction. This upgrade has already been made to One and Nova testnets. There are no costs associated with this upgrade, since Offchain Labs has already performed the relevant work.

Recommendation: Vote Yes. This change keeps Arbitrum and Nova aligned technically with Ethereum, and a similar upgrade is also being explored by OP Labs.

2 Likes
6

1 Poll Closing July 21, 2023

Accelerating Arbitrum - Leveraging Camelot as an Ecosystem Hub to Support Native Builders
Summary: This proposal seeks to grant Camelot DEX 1,500,000 ARB per month for 6 month, earmarked for a variety of liquidity incentives.

Recommendation: Vote No. Camelot spends time comparing this request to the grant(s) that Velodrome got on Optimism. In hindsight – and the continuing grant requests by Velodrome on Optimism – it’s not clear that the Velodrome grant cited has produced unambiguous value for Optimism. More specifically, it’s unclear whether subsidizing incentives on Camelot would increase the number of users or assets interacting with Arbitrum.

Additionally, we feel Arbitrum governance should not get into the habit of supporting protocols that are already engaged in healthy competition in a robust market. Camelot is only one DEX on Arbitrum, and subsidization of a profit-seeking protocol is most appropriate if it provides a service otherwise unavailable, or if a grant plan very clearly provides a path to onboarding protocols, users, or assets to Arbitrum. That is not present in this proposal, and the administrative aspects need far more detail.

There are already several grants programs already being proposed. There is a limit to how many are required, and governance will probably have difficulty providing proper oversight, given how unstructured the two that have already passed Snapshot have been.

As a final note, we would ask that all grants proposers include the following:

  1. Clearly state that team wallets will be excluded from any rewards and reported metrics.
  2. Clearly disclose any relationships that would likely result in financial gain. An example would be serving as (or having ownership interest in an entity that is serving as) a paid consultant for grant applicants while also serving on a grant-giving body.
  3. Provide or require clear, unambiguous milestones for any grant plan, with an easy method for Arbitrum governance to claw back funds or not disburse subsequent tranches of a grant.
2 Likes
7

1 Poll Closing July 28, 2023

Update Security Council Election Start Date to Ensure Time for Security Audit
Summary: This offchain poll asks ARB holders whether to support an amendment to the ArbitrumDAO Constitution. This change would alter the election schedule of Security Council members. The relevant change is from the election beginning September 15th, to September 15th or the earliest possible date an onchain election can begin.

Recommendation: Vote Yes. This change is necessary to prevent conflict between a hardcoded constitutional requirement and practicality. In practice, there are several intermediate steps that may not take an exact amount of time, owing to the nature of smart contracts, permissionless calling of functions, and human error. In practice, Security Council terms are not a set period of time, but a minimum period of time that comes to an end when someone calls for a new election. Because of this, the proposed change harmonizes reality with the constitution.

3 Likes
9

1 Poll Closing August 15, 2023

Proposal: Security Council Elections Proposed Implementation Spec
Summary: This proposal establishes the technical implementation of the Arbitrum Security Council and its elections calendar. Full details can be found here.

Recommendation: Vote Yes. This stays true to the spirit of what was approved by Arbitrum governance previously. Some minor changes have been made since its original outline in the Arbitrum Constitution, mainly around some minor technical points. An example is elections occurring no earlier than every 6 months vs no later than every 6 months, since the function to initiate the process is permissionless and there is no guarantee it would be called exactly at 6 months.

4 Likes
10

1 Poll Closing August 19, 2023

Proposal to onboard Matrixed.Link as a validator for Arbitrum
Summary: This poll seeks approval to onboard Matrixed.Link as a validator for Arbitrum.

Recommendation: Vote Yes. Matrixed.Link has stated experience with Chainlink, as well as running infrastructure for other projects that are less well known. While there are some risks, namely a delay attack vector, that could be introduced by adding Matrixed.Link as a validator, as pointed out by Blockworks. However, Matrix.Linked has already secured large TVLs through its work with Chainlink feeds, and the risk of Matrixed.Link either acting maliciously (at cost) or being compromised seems low given their history of successfully operating infrastructure for other projects.

3 Likes
11

1 Poll Closing September 1, 2023

Building the Future of NFTs: The Rarible Protocol - Arbitrum Integration Proposal
Summary: This poll asks ARB holders to express support or opposition to granting $100,000 (payable in ETH or ARB) to Rari Foundation to integrate Arbitrum.

Recommendation: Vote Yes. Rarible has an identifiable brand/platform in the NFT industry. While we are not typically in favor of paying large sums for an integration, this provides a clear opportunity to introduce Arbitrum to new users and their assets from an established platform. The Rari Foundation is also pledging to pay an equal amount for the integration.

12

1 Poll Closing September 7, 2023

AIP-7: Arbitrum One Governance Parameter Fixes
Summary: This is a simple housekeeping fix.

Recommendation: Vote Yes

1 Like
13

1 Poll Ending September 7, 2023

Time Management In Arbitrum’s Governance
Summary: This proposal seeks to measure support for instituting a regular governance calendar for Arbitrum. It would be the responsibility of a governance facilitator to enforce it, should Arbitrum onboard one.

Recommendation: Vote Yes. While this cannot limit the permissionless nature of onchain proposals, much like with MakerDAO it can enforce social norms that “legitimate” proposals will appear only on specified days. This regular cadence of governance is more organized and yields more predictable voter turnout, and we fully support it.

1 Like
14

4 Polls Ending September 17, 2023

Domain Allocator Election for the Education, Community Growth and Events Domain
Summary: This poll seeks to measure tokenholder support for which candidate to elect to the Domain Allocator position.

The candidates are:
Jengajojo
Oyeniyi Abiola Peace
Steve
Dumbird
Cattin (SEED Latam)
Raj
Shreddy
Vardhanam (The Other DAO)
Zer8
Jonas

Vote Recommendation: Cattin (SEED Latam). SEED Latam has extensive expertise in community growth and education, making them ideal for this role. We have worked with or observed SEED Latam on other protocols, and their focus on educational, informational, and community-oriented content will allow them to prioritize and evaluate proposals put to them. Historically, SEED Latam communications and voting patterns across the protocols they work on have displayed an attention to detail that is beyond what most delegates provide.

Domain Allocator Election for the New Protocol Ideas Domain
Summary: This poll seeks to measure tokenholder support for which candidate to elect to the Domain Allocator position.

The candidates are:
Jojo
Ceazor
Matt (StableLabs)
McFly
Blocktools
Marc (Blockshard)
Zer8
Jonas
Apoorv Anand

Vote Recommendation: Jojo. Jojo is a contributor at JonesDAO on Arbitrum. As a prominent member of a native Arbitrum DAO, Jojo is well-placed to know the needs of a broad swath of the Arbitrum ecosystem.

Domain Allocator Election for the Dev Tooling Domain
Summary: This poll seeks to measure tokenholder support for which candidate to elect to the Domain Allocator position.

The candidates are:
Juandi
Hiko
Shlok Mange

Recommendation: Juandi. Unfortunately, we are not well acquainted with any of these candidates, and so much rely on their candidate statements. We found Juandi’s to be the most detailed and compelling. His emphasis on tooling and frameworks being compatible with mobile – where much of crypto/DeFi’s promise will be realized among developing economies – and improving the state of documentation were both appealing.

Domain Allocator Election for the Gaming Domain
Summary: This poll seeks to measure tokenholder support for which candidate to elect to the Domain Allocator position.

The candidates are:
Jeremy
Idea2IDO Investing
Bob Rossi
Adam (Flook)

Recommendation: Adam (Flook). Unfortunately, we are not well acquainted with any of these candidates, and so much rely on their candidate statements. Adam (Flook) was the candidate who appears to have the most experience in the gaming industry, as the founder of a small web3 gaming studio. This does present the possibility of some conflicts of interest, but on balance, his detailed description of how he would like to see the grants administered and the needs to prioritize make him an acceptable inaugural candidate for this role.

5 Likes
15

1 Poll Closing September 17, 2023

Arbitrum Short-term incentive Program
Summary: This poll seeks to measure tokenholder support for creating and implementing a short-term incentive program for Arbitrum protocols. The grant pool would target being fully utilized by January 31, 2024. Several smaller budgets are also included, such as retroactive pay to @tnorm for moderation, multisig signers, and “community/project facilitation.”

Possible grant pool amounts amounts are:

0 ARB
25,000,000 ARB
50,000,000 ARB
75,000,000 ARB

NB: This is a ranked choice vote.

Recommendation: Vote 25,000,000 ARB, Against, 50,000,000 ARB, 75,000,000 ARB. These are very large amounts of funding being proposed to be spent in a very short amount of time. Historically, bringing many grant proposals to a delegate-wide vote has not resulted in prudent spending (Optimism’s early grants are an excellent example). Realistically, most will receive de minimis review and likely be approved. We recognize, however, that there is a strong desire in the community to do something and this is something. So we will vote for the lower amount, to get the gears of governance moving until the more formal grants programs can become operational.

2 Likes
16

is GFX an active delegate?

1 Like
17

ok great sir :+1: :+1: :+1: :+1: :+1: :+1: :+1: :+1:

18

Yes, we are an active delegate

19

2 Polls Closing October 2, 2023

AIP: Building the Future of NFTs: Rarible Protocol - Arbitrum Integration
Summary: This proposal authorizes 127,351 ARB to subsidize Rarible supporting Arbitrum. 50% would be payable upon passage of this proposal, with the remainder at completion.

Recommendation: Vote Yes. This is a relatively small amount of ARB, and while we don’t feel it will really require the stated cost for Rarible to support Arbitrum, the potential to introduce new users and assets to Arbitrum makes this worth funding.

Arbitrum as official sponsor of Ethereum Mexico 2023
Summary: This poll seeks to gauge ARB holder support to use 9,483 ARB to sponsor Ethereum Mexico. Details of the milestones, deliverables, timeline, etc can be found on the original post.

Recommendation: Vote Yes. Normally we would consider this a poor use of ARB tokens. But the cost is very small and the proposal detailed and clear. While we don’t think this will result in any new users, assets, or developers interacting with Arbitrum, it will likely make the Arbitrum community feel positively about supporting Ethereum Mexico.

1 Poll Closing October 9, 2023

AIP 9: Arbitrum Short-term Incentive Program
Summary: This poll seeks to measure tokenholder support for creating and implementing a 50,000,000 ARB short-term incentive program for Arbitrum protocols. The grant pool would target being fully utilized by January 31, 2024. Several smaller budgets are also included, such as retroactive pay to @tnorm for moderation, multisig signers, and “community/project facilitation.”

Recommendation: Vote Yes. These are very large amounts of funding being proposed to be spent in a very short amount of time. Historically, bringing many grant proposals to a delegate-wide vote has not resulted in prudent spending (Optimism’s early grants are an excellent example). Realistically, most will receive de minimis review and likely be approved. We recognize, however, that there is a strong desire in the community to do something and this is something. So we will not play the role of obstructionist, to get the gears of governance moving until the more formal grants programs can become operational. Already there are several high-quality grant plans put forward, and trust other delegates will recognize those and prioritize them for funding.

Disclosure: GFX Labs advised several grant applicants on the preparation of their requests.

1 Like
20

97 Polls Closing October 12, 2023

IMPORTANT: A limited amount of time to review often results in suboptimal approvals of grants. GFX Labs has reviewed hundreds of grants, which received more than one hundred million of dollars in the past. The STIP process is not optimized for providing time for applicants to craft quality proposals, or for reviewers to do any significant level of diligence or evaluation. Therefore, we wish both delegates and applicants to be charitable and kind with each other, as we are all operating in a process that encourages mistakes to be made.

GFX Labs has adopted a relatively conservative stance to grants approvals, partly owing to the requirement that all grants run simultaneously. This makes some grants, which in isolation would be desirable, compete with each other, and do so at Arbitrum governance’s expense.

We will post a retrospective on the STIP process in the coming days, and constructive criticism on how to avoid creating an environment that disadvantages both applicants and reviewers in the future.

UniDex
Summary: 750,000 ARB to UniDex to incentivize or provide slippage protection.

Recommendation: Vote No. This protocol has only $1.5m TVL according to DefiLlama, with only $270k on Arbitrum. While it may be useful as an aggregator for spot and perps trading, it just doesn’t seem like a good use of ARB in a crowded field.

Good Entry
Summary: 200,000 ARB to Good Entry to incentivize usage.

Recommendation: Vote Yes. Good Entry offers leveraged trading on top of Uniswap V3. While Good Entry has a TVL on Arbitrum of only $1m, it is a new protocol and its TVL has remained steady. The requested amount is a bit high, but we’re willing to support since it is built on top of a key piece of the Arbitrum economy (Uniswap).

IZUMi
Summary: 200,000 ARB to incentivize usage.

Recommendation: Vote No. This protocol has only ~$1.5m TVL according to DefiLlama. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Synapse Protocol
Summary: 2,000,000 ARB to incentivize usage.

Recommendation: Vote No. Synapse still has more than 1m ARB it received in the initial airdrop, so does not require ARB to fund user incentives.

Jones DAO
Summary: 2,000,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or asset to Arbitrum.

D.2finance
Summary: 500,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Silo Finance
Summary: 1,000,000 ARB to incentivize 16 pools.

Recommendation: Vote Yes. While there is not an explicit emphasis on migrating new users or assets to Arbitrum, most of Silo’s existing user base is on mainnet. We can hope some will migrate to Arbitrum after Silo advertises this new incentive program.

Jojo Exchange
Summary: 200,000 ARB to incentivize usage on Jojo Exchange.

Recommendation: Vote No. This grant would be larger than the TVL according to DefiLlama.

GMD Ecosystem
Summary: 800,000 ARB to incentivize usage of GMD and GND.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Thales
Summary: 500,000 ARB to incentivize usage.

Recommendation: Vote No. This grant request is more than half the TVL of Thales on Arbitrum. Also, no clear focus on onboarding new users or assets to Arbitrum.

Rysk
Summary: 500,000 ARB to incentivize usage.

Recommendation: Vote No. This grant request is equal to a third of the TVL on Arbitrum. Also, no clear focus on onboarding new users or assets to Arbitrum.

Sanko GameCorp
Summary: 500,000 ARB to incentivize viewership.

Recommendation: Vote Yes. The amount requested is high and we are not familiar with the applicant’s past work or track record beyond what a cursory search shows. That being said, the grant is at least moderately tailored to appeal to users that may not already be onboarded into Arbitrum

Wombat Exchange
Summary: 750,000 ARB to incentivize usage.

Recommendation: Vote Yes. Half of this amount is intended to incentivize Wombat’s cross-chain swaps/pools. That helps connect the Arbitrum economy to other chains, such as Binance and L2s. More commerce between chains is a net positive, and it also exposes new users to Arbitrum and lowers the friction for them to move assets to the chain via swaps.

Camelot
Summary: 3,090,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Rodeo Finance
Summary: 250,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Dolomite
Summary: 1,000,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum. Also, this grant request is almost 20% of the TVL of the protocol.

Furucombo
Summary: 59,500 ARB to incentivize usage.

Recommendation: Vote Yes. This grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on bringing new users to Arbitrum. It is, however, a very small grant, and given the alternative grant proposals, worth seeing if it has any effect.

Vertex Protocol
Summmary: 1,800,000 - 3,000,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum. Also, this grant request is almost 20% of the TVL of the protocol.

ALAYA
Summary: 500,000 ARB to incentivize users to help train and use the AI.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Curve
Summary: 1,600,000 ARB to incentivize usage.

Recommendation: Vote Yes. While there is not an explicit emphasis on migrating new users or assets to Arbitrum, most of Curve’s existing user base is on mainnet. We can hope some will migrate to Arbitrum after Curve advertises this new incentive program.

ZKasino
Summary: 300,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Thetanuts
Summary: 200,000 ARB to incentivize usage.

Recommendation: Vote Abstain. Onboarding new users for onchain options is the first stated goal of the grant plan. We are unfamiliar with the applicant, however, and have not performed diligence given the compressed timeline for voting on these proposals. The grant request is also several times the entire Arbitrum TVL of the protocol.

PancakeSwap
Summary: 200,000 ARB to incentivize usage.

Recommendation: Vote Yes. A stated goal of the grant is to incentivize PancakeSwap’s existing user base on other chains to bring assets to Arbitrum. PancakeSwap has a large existing user base, primarily on Binance’s chain. The requested amount is also modest compared to many competing proposals.

Beefy
Summary: 900,000 ARB to incentivize usage.

Recommendation: Vote Yes. A stated goal of the grant is to incentivize Beefy’s existing user base on other chains to bring assets to Arbitrum. Beefy has users on a large number of chains, including several where it has a bigger footprint than Arbitrum.

TimeSwap
Summary: 200,000 ARB to incentivize usage.

Recommendation: Vote No. The project looks interesting and novel, but the requested amount is close to half the Arbitrum TVL of the project, which only has ~$1m TVL across all instances according to to DeFiLlama

QiDAO
Summary: 500,000 ARB to incentivize usage.

Recommendation: Vote Yes. While there is not an obvious attempt to migrate or attract users to Arbitrum that are not already present, a deep, competitive stablecoin market is important for the Arbitrum economy to prioritize. The grant size, while not small, is also considerably more modest than many others.

DeFi Edge
Summary: 200,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum. The requested amount is also a significant percentage of the current TVL on Arbitrum.

StakeDAO
Summary: 200,000 ARB to incentivize usage.

Recommendation: Vote No. This is not yet live on Arbitrum.

Vaultka
Summary: 600,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum. The requested amount is also relatively large vs the size of Vaultka.

WOOfi
Summary: 1,000,000 ARB to incentivize usage.

Recommendation: Vote Yes. A stated goal is to onboard users of their centralized products onto Arbitrum. Given time constraints to review, no significant diligence on WOOfi was performed in making this recommendation.

Quadrat
Summary: 1,000,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

CVI
Summary: 200,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Artichoke Protocol

Summary: 370,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

HMX
Summary: 750,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Gamma
Summary: 750,000 ARB to incentivize usage.

Recommendation: Vote Yes. While there is not an obvious attempt to migrate or attract users to Arbitrum that are not already present, Gamma has a significant active user base on a number of competing chains that will be alerted to these incentives.

Perennial Finance
Summary: 750,000 ARB to incentivize usage.

Recommendation: Vote Yes. The grant plan has a stated goal of “bringing new users, projects, and developers to Arbitrum,” which is what we view as the primary reason to offer grants.

Wormhole
Summary: 1,800,000 ARB to incentivize migration of USDC to Arbitrum.

Recommendation: Vote Yes. A deep, competitive stablecoin market is important for the Arbitrum economy to prioritize. Wormhole has a significant active user base on a number of competing chains that will be alerted to these incentives. As a secondary effect, this will help the Arbitrum ecosystem begin to migrate from bridged USDC to Circle-minted, native USDC, which would be facilitated by Wormhole. GFX Labs advised the Wormhole Foundation on this grant plan.

Angle Protocol
Summary: 700,000 ARB to incentivize usage.

Recommendation: Vote Yes. A deep, competitive stablecoin market is important for the Arbitrum economy to prioritize. Angle also provides a stable denominated in non-USD, which offers the opportunity for activities centered on euro stables to concentrate on Arbitrum.

OmniBTC
Summary: 200,000 ARB to incentivize usage.

Recommendation: Vote Yes. The grant will subsidize bridging new assets to Arbitrum.

Magpie, Penpie, Radpie, Campie
Summary: 1,250,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Galxe
Summary: 500,000 ARB to incentivize usage.

Recommendation: Vote Yes. A stated goal of the grant plan is to onboard new users and increase community participation. While it’s not clear how Galxe will onboard new users, its core product is often used to increase the intensity and frequency of community interactions.

Solv Protocol
Summary: 150,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Realm
Summary: 300,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum. We would have preferred to see a focus on new user acquisition for the Realm gaming ecosystem.

Wombex
Summary: 200,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum. We do appreciate the stated goal of increasing user activity, but it’s not clear from the grant how the funds would achieve that goal specifically.

dForce
Summary: 1,000,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Relay Chain: James Bot
Summary: 400,000 ARB to incentivize usage.

Recommendation: Vote No. This product is not live on Arbitrum.

Equilibria
Summary: 750,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Balancer
Summary: 1,200,000 ARB to incentivize usage.

Recommendation: Vote Yes. While there is not an explicit focus on migrating users and assets to Arbitrum, Balancer has a large following and user base on other chains, who presumably will be exposed to the existence of these incentives and migrate some of their assets to Arbitrum.

Arrakis
Summary: 806,000 ARB to incentivize usage.

Recommendation: Vote Abstain. Arrakis is a well-known protocol, but the TVL on Arbitrum is less than $2m, which makes this grant size quite large. The majority of its users on Ethereum are also utilizing inexpensive leverage from MakerDAO that’s not available on Arbitrum, so it’s unclear how many of those users would be responsive to migrating assets to Arbitrum.

tBTC
Summary: 750,000 ARB to incentivize usage.

Recommendation: Vote No. This is simply a large grant considering the ~$3m of tBTC currently on Arbitrum. Given time to prepare a grant plan tailored to sourcing new users and migrating them to Arbitrum, we would support seeing Threshold seek a grant in the future.

Vela Exchange
Summary: 1,000,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Socket
Summary: 1,000,000 ARB to incentivize usage.

Recommendation: Vote Yes. Socket is a cross-chain protocol, and the stated goal of the grant plan is to drive usage onto the various Arbitrum chains. Socket has become well-known in the L2 space, and has a good reputation.

Lido
Summary: 4,000,000 ARB to incentivize usage.

Recommendation: Vote Abstain. This is a very large grant request, and directed at one of the few crypto assets to have already found extensive product-market fit. It’s difficult to see how this can meaningfully increase liquidity for wstETH on Arbitrum. We do support that outcome, but subsidizing an already successful product is difficult – at some point you’re just pushing on a string.

Stargate Finance
Summary: 2,000,000 ARB to incentivize usage.

Recommendation: Vote No. Stargate still has 1.5m ARB from its initial airdrop, which it hasn’t used.

MUX Protocol
Summary: 6,000,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Tally
Summary: 200,000 ARB to incentivize usage.

Recommendation: Vote Yes. This is targeted at growing the number of DAOs on Arbitrum and using onchain governance.

Dopex
Summary: 1,500,000 ARB to incentivize usage.

Recommendation: Vote Yes. A stated goal of the grant plan is to onboard new users. We wish there was more clarity about how that will be done, but given the time constraints when writing these grant plans, that’s perhaps to be expected.

GMX
Summary: 14,000,000 ARB to incentivize usage.

Recommendation: Vote No. This is just too large a proportion of the total ARB available for this grants wave.

Prime Protocol
Summary: 300,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Lodestar Finance
Summary: 750,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

KeplarHomes
Summary: 960,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

LogX
Summary: 750,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Range Protocol
Summary: 450,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Frax Finance
Summary: 1,500,000 ARB to incentivize usage.

Recommendation: Vote Yes. Frax’s suite of products – with FRAX and Frax ETH in particular - provide important infrastructure for the economy of Arbitrum. This grant plan is intended to use Frax’s large existing user base and community to migrate more of those assets to Arbitrum, creating deeper liquidity in the stablecoin market and increase the capital flowing to the chain with Frax’s yield-bearing asset (staked ETH). GFX Labs advised Frax Finance on this grant plan.

Abracadabra
Summary: 1,500,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum. We would have preferred to see an emphasis on Abracadabra encouraging its user base on other chains to give Arbtirum a try.

Umami

Summary: 750,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Webacy
Summary: 812,600 to incentivize usage.

Recommendation: Vote Yes. While this grant plan does not explicitly attempt to onboard new users to Arbitrum, making wallet security products available is akin to vaccination. It makes everyone safer when even some people use the product. Making Arbitrum a less inviting target for malicious actors, even by a modicum, is worth this grant. Wallets with assets the size of this grant request are drained every week (or maybe even every day) across DeFi.

Chronos Finance
Summary: 525,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

OpenOcean
Summary: 500,000 ARB to incentivize usage.

Recommendation: Vote Yes. This grant plan includes subsidizing cross chain asset swaps, making Arbitrum more interconnected to other crypto ecosystems. That makes it easier for new users to find and use Arbitrum.

Cryptex
Summary: 1,300,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Florence Finance
Summary: 250,000 ARB to incentivize usage.

Recommendation: Vote Abstain. In theory, any RWA protocol is by definition onboarding new users and assets to Arbitrum – and importing capital to the chain by paying interest. We’re not familiar with Florence, though, and have had a front row seat to how complex RWA implementation can be. So we support this conceptually, but feel much more diligence would be needed before disbursing a grant.

0xGen
Summary: 250,000 ARB to incentivize usage.

Recommendation: Vote Yes. 0xGen is a cross-chain liquidity aggregator. Cross-chain commerce introduces new users and assets to Arbitrum.

Stella
Summary: 186,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Notional Finance
Summary: 500,000 ARB to incentivize usage.

Recommendation: Vote Yes. While this proposal doesn’t explicitly attempt to onboard new users, Notional dominates the fixed lending vertical on Ethereum, and this is an opportunity to build that functionality out on Arbitrum, while the incentives will be advertised to Notional’s existing user base.

Gains Network
Summary: 7,000,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Tide Protocol
Summary: 80,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Trader Joe
Summary: 1,510,000 ARB to incentivize usage and onboarding new protocols to Arbitrum.

Recommendation: Vote Abstain. This grant request is not a small sum. It does, however, stand out for emphasis on bringing new protocols and developers to Arbitrum and providing incentives for some cross-chain activities. Unfortunately, those are not the majority of the grant plan, which makes it hard to support, since it would direct ARB inwards to users and assets already on Arbitrum.

Archi Finance
Summary: 750,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

KyberSwap
Summary: 1,500,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Cian
Summary: 380,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Modular Wallet
Summary: 200,000 ARB to incentivize MOD/ARB liquidity.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Savvy
Summary: 200,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

XY
Summary: 500,000 ARB to incentivize usage.

Recommendation: Vote Yes. This grant is to subsidize onboarding new users via XY’s cross chain element. As a reminder, we have not had time or opportunity to diligence this protocol or its team.

Pendle
Summary: 2,000,000 ARB to incentivize usage.

Recommendation: Vote Yes. While this proposal doesn’t explicitly attempt to onboard new users, Pendle has a broad user base on other chains that these incentives will be advertised to, and seems likely to generate some user or asset migration.

Ramses
Summary: 1,248,000 ARB to incentivize usage.

Recommendation: Vote Abstain. This grant request is large. It does, however, have a goal of bringing new protocols and developers to Arbitrum. Unfortunately, those are not the majority of the grant plan, which makes it hard to support, since it would direct ARB inwards to users and assets already on Arbitrum.

Shell
Summary: 750,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Guru Network
Summary: 133,700 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

unshETH
Summary: 375,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Premia
Summary: 900,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

RabbitHole
Summary: 1,000,000 ARB to incentivize usage.

Recommendation: Vote Yes. While this proposal doesn’t explicitly attempt to onboard new users, this is to incentivize quests on Arbitrum, which are a widely used method of increasing community engagement and user acquisition.

ArbiDEX
Summary: 240,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Radiant Capital
Summary: 2,852,044 ARB to incentivize usage.

Recommendation: Vote Yes. While this proposal doesn’t explicitly attempt to onboard new users, Radiant’s niche is cross-chain money market.

WINR
Summary: 500,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

ApolloX
Summary: 640,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

NFTEarth
Summary: 195,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

SpartaDEX
Summary: 500,000 ARB to incentivize usage.

Recommendation: Vote No. While it may be useful, this grant looks like it would only spend DAO funds to compete with other liquidity programs on Arbitrum, with no clear focus on onboarding new users or assets to Arbitrum.

Tales of Elleria
Summary: 50,000 ARB to incentivize usage.

Recommendation: Vote Yes. Gaming is a potential route to onboard new users. We’re not familiar with this game company, but the amount requested is small, so it’s acceptable to take a risk on this grant plan.

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21

1 Poll (Voting Weight Decay Beginning October 13, 2023)

NB: When voting, we encountered an issue that resulted in the entirety of our votes going to the first of our choices. This was a result of misunderstanding how to enter votes with the election format (splitting your total votes amongst multiple candidates) and was unintentional. Our full recommendations are below.

Final Round Security Council Elections
Summary: Tokenholders are asked to vote for up to five choices to hold seats on the Arbitrum Security Council.

Recommendation: Vote Pablito.eth, Harry Kalodner, Phillip Jovanic, Emiliano Bonassi, Matt Fiebach

Briefly, what made each candidate stand out to use:
Pablito is a career cybersecurity professional, including on blockchain.

Harry Kalodner is the Chief Technology Officer of the DevCo that built Arbitrum.

Phillip Jovanic is a professor of Information Security at University College London and has cybersecurity experience in both academia and the private sector.

Emiliano Bonassi is a security researcher who has identified security issues or assisted in war rooms at protocols such as Yearn, Convex, and Aura.

Matt Fiebach is an analyst at Blockworks, which has been a leader in governance news and research on Arbitrum.

22

1 Poll Closing October 31, 2023

Empowering Early Contributors: The Community Arbiter Proposal
Summary: This poll asks ARB holders whether they support giving 20,000 ARB each to 25 early contributors. This document provides loose guidelines on what may trigger payment.

Recommendation: Vote Abstain. This would benefit from a list of the exact 25 recipients and what contribution merits 20,000 ARB. The amounts and concept are good, but we can’t vote for just sending money to 25 someones. We would vote in favor with this list.

2 Polls Closing November 1, 2023

Activate ARB Staking
Summary: This poll asks ARB holders whether they support creating a staking mechanism for ARB. ARB would be staked for 365-day periods, with a penalty for early unlock. Staked ARB would earn yield in the form of additional ARB, with a suggestion of 1.25% of total supply being distributed annually (125,000,000 ARB). Additional options are available for voting:

Fund with 100,000,000 ARB
Fund with 125,000,000 ARB
Fund with 150,000,000 ARB
Fund with 175,000,000 ARB
Do not fund staking

Recommendation: Vote Do Not Fund Staking. There are many good reasons to fund staking. Yield is one of them. However, all yield would come through dilution of existing ARB holders, since there’s not a large stream of revenue to distribute.

Build Optimal Onboarding For STIP Teams
Summary: This poll asks ARB holders whether they support 1,000,000 ARB tokens to fund quests for users of STIP-approved protocols.

Recommendation: Vote No. We’re leery of approving more funds when the 50,000,000 ARB of the STIP program has not yet begun to be digested by markets. Also, there is not robust oversight of this program, relying upon “Should we fall short of fulfilling our obligations at any point within the specified period, a new proposal can be initiated to stop the stream of funds.”

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