How to Apply - Arbitrum Short Term Incentives Program

*Note: This program follows two tracks as outlined in the Incentive Framework Category post. The continuation of this program and any grants approved by the Arbitrum DAO are dependent upon the successful passage of AIP 9.

What is the Arbitrum Short Term Incentives Program?

The Arbitrum Short-Term Incentive Program is a one-time, community-created initiative to distribute up to 50 million ARB from the DAO treasury to active protocols on Arbitrum. The goals are to accelerate ecosystem growth, experiment with grant distribution models, generate data to inform future programs, and uncover new strategies to drive activity on the network. It spans two voting rounds and provides incentives to eligible programs designed to fund incentives through January 31, 2024.

It is expected that all funds distributed by this program will be used by the end of January 31, 2024. Participating grantees will be expected to self report data, dashboards, and summarize grant performance on an ongoing basis. Successful applicants will receive funding distributions biweekly via Hedgey streams.

Grantees must comply with spending guidelines, data reporting, and community standards or risk having their stream halted by the multisig.

How to Apply For Funding?

The Arbitrum Short-Term Incentive Program will accept applications over 2 consecutive proposal Application Rounds.

To apply, projects can follow the following steps:

  1. Review the Official Short Term Incentives Program proposal here.

  2. Draft a proposal for your project using the Application Template.

  3. Publish your proposal in the Incentive Framework category for feedback from delegates with your title formatted as: [Project Name] [DRAFT] [STIP - Round 1].

  4. Following the application, delegates will have one week to review applications. During this week, applicants may digest critiques and adjust their proposals accordingly.

  5. Once feedback has been incorporated, projects will need to change their title from [DRAFT] to [FINAL] by the deadline: October 4, 2023 11:59 PM EST. At that time, all proposals with the following formatted titles will be migrated to Snapshot to vote. The correct format for a proposal ready to move to vote looks like this: [Project Name] [FINAL] [STIP - Round 1].

  6. Voting will occur on Arbitrum Snapshot. Once voting commences, the Arbitrum Foundation will reach out with steps to KYC.

  7. Once successful votes have been confirmed, the STIP-ARB Multisig will begin the distribution of funds.

What is the Application Timeline?

This program is designed to fund incentive programs running from October 2023 through the end of January 31, 2024. While there is no hard deadline on the end of incentive programs, funds are expected to be distributed as they are received, and programs should aim to end before the end of the incentivization period on Jan. 31, 2024.

The program will comprise two application rounds. With the first application round commencing September 20, 2023.

Round 1:

  • Application Date Starts: September 20, 2023 12:00 AM EST

  • Application Deadline: September 27, 2023 11:59 PM EST

  • Review Period Starts: September 28, 2023 12:00 AM EST

  • Review Period Deadline: October 4, 2023 11:59 PM EST

  • Voting Period Starts: October 5, 2023

  • Voting Period Deadline: October 12, 2023

Towards the end of the review period, a community call will be organized to help facilitate discussion between grantees and delegates, giving each grantee a short time to respond and field questions from the community.

Round 2

Round 2 will begin directly after the end of the final voting period of Round 1. Further details will be provided in the coming weeks.

What are the Application Requirements?

Once program’s are live, protocols are responsible for upholding their end of the grant program agreement by distributing the funds as described in their approved strategy and providing dashboards for their programs based on the descriptions below.

Eligibility Requirements:

  • Grantees are required to keep distributions in ARB without converting to other assets.

  • Grantees must not farm their own incentive programs.

  • Grantees must outline a spending plan, provide a pro forma, and state the grant’s objective.

  • Grantees must commit to providing data on distributions, all ARB spending transactions, and key metrics like daily TVL, transactions, volumes, unique addresses, and transaction fees. This data should cover 30 days before, during, and after the Incentivization period, and be presented preferably in a Dune Spell/dashboard. Grantees must agree to share all contract addresses being used to distribute incentive rewards.

  • Grantees must disclose the contracts being incentivized and denote any external contracts being incentivized as part of the program.

  • Grantees can only incentivize contracts on the Arbitrum Network.

  • Grants are not to be used in DAO governance (Ie, self-delegating funds or holding funds in a wallet delegated).

  • Grantees are expected to not encourage or partake in disruptive behaviors that may delay the funding process such as intentionally directing individuals to or directly spamming the forum to obfuscate true community sentiment’

  • Grantees must agree to completing KYC verification the Arbitrum Foundation in order to receive funds.

  • Grantees must apply using the approved program application template 39.

Exceptions may be made only at delegate discretion for non-applicable points (For example, if TVL is irrelevant for a protocol’s dashboard, etc.). Any exceptions must be explicitly demonstrable to the DAO in the protocol’s application.

What Are the Additional Program Deliverables?

In addition to upholding accordance with the aforementioned requirements, protocols are required to uphold their commitment to dashboards and reporting. The expectation of participating grantees is two-fold:

  1. To create a dashboard by December 15, 2023 showing daily TVL, transactions, volume, addresses, and network fees covering 30 days before/during/after incentivization. Grantees are encouraged to expand upon these basic requirements, and the commitment to data availability and transparency shown in this program should play a key role in the application process of future programs. We recommend that prospective applicants create the infrastructure/data in place so dashboards are available throughout the incentive program.

  2. Provide bi-weekly status updates on the program posted onto the Arbitrum Forum on the application thread. These updates should report on distributions made in the preceding two week period as well as articulate any relevant refinement or adjustment to the program’s strategy.

Frequently Asked Questions

What happens if the budget is exceeded?

We do not expect applications to exceed the funding budget of 50M ARB. However, if requested grants do exceed the allocated budget, funding will be allocated based on the amount of votes in favor of a proposal, and secondly (if there are any exact ties) on a first-come, first-serve basis dependent upon the time the proposal was submitted to the Arbitrum Forum.

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.

I noticed the grant categories listed in the original proposal, are projects that aren’t DeFi allowed to apply?

The grant categories listed in the program overview are meant only as guidelines for delegates and applications to use as reference points when applying. Any protocol that meets the eligibility requirements described above may apply for a grant at the discretion of the community and delegate review.

Can I Edit my Application Once it is Posted?

Yes. All grant applications may be adjusted throughout the review period, up until the review period deadline. Once a proposal is ready to be finalized, please format your post to the correct format explained in step 5.

How does the program determine whether to halt funding streams?

Funds can be stopped by the STIP-ARB Multisig with a 5/9 consensus. Funds will be stopped in the event of negligent actions in violation of the previously defined grant requirements. If halted, the multisig must publish the justification of its decision on the Arbitrum Forum. The stream can restart either through a Snapshot Veto or if the multisig decides the grantee has corrected their actions and it’s appropriate to continue.

Can I use grant funding for operational costs?

Funds are to be kept in ARB and used to incentive Arbitrum contracts. This funding is not meant support development or operational costs.

20 Likes

Hello @tnorm.

A lot of protocols are interested in the KYC process, what info are required, where the info will be stored and to whom it will be shared. Can you share some light on this topic? Thanks!

6 Likes

@stonecoldpat @cliffton.eth are the ones to ask on this topic!

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Hello @tnorm ! Cheers for such a clear description on how everything will work. I have one doubt though.

Once feedback has been incorporated, projects will need to change their title from [DRAFT] to [FINAL]

Do protocols need explicit agreement from a delegate to change it to FINAL? Its not mentioned there but I’m guessing thats how it will work.

4 Likes

Hi JoJo,

Generally, it focuses on KYC + KYB, and we use an external provider to both collect and store it.

2 Likes

Do grant applications need to disclose contracts in the grant application itself before approval or disclose contracts before any incentivization can begin?

Our grant application can do either, but I’d like to get clarity on this, as we’d need to commit to those contracts now only now and not be allowed to adjust later.

2 Likes

Hi is it somehow possible to filter/sort grant applications according to the requested grant allocation?

4 Likes

im working on a spreadsheet feel free to help or make a copy for your use

15 Likes

Awesome, thx a lot Fren

8 Likes

@jerame20 Thank you Jerame
for tiers list

8 Likes

Are protocols allowed to apply for both Round 1 and Round 2 of the incentives program?

2 Likes

Hello, @stonecoldpat, and @cliffton.eth, this is an awesome initiative. I have several questions:

  1. Can new projects (not yet deployed to Arbitrum mainnet) participate?
  2. Can the ARB liquidity provided be used as an initial liquidity for the newly deployed protocol?
  3. Can the ARB liquidity be used to borrow other assets on lending protocols (i.e. Aave) to put into the newly deployed protocol?

On a side note, has anyone thought about the implications of this initiative? Giving out $50M in a short period of 3 months for projects that will compete with each other using that liquidity seems a bit odd. It will spur temporary activity inside Arbitrum, but may actually fail to attract liquidity from the outside. Additionally, projects confirmed for STIP get an obvious advantage over newcomers in the eyes of potential LPs: they simply pay higher APY in ARB.

1 Like

Love the spreadsheet! But what is G (Meme Quality)?

2 Likes

just a joke ser, no meaning at all

1 Like

Ha. No worries. Had my competitive juices flowing. Found a meme for you anyways :grin:

2 Likes

you have been granted an 8.5 from the judges

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Going to go away to train for 8 years like Batman and then come back with godly memes - just to get a 10 from the judges. See you in Web5. :bowing_man:

4 Likes

Hi, I’m the head of the ALAYA team.
A question here, I can’t edit the topic of the apply. Could you help me about that?
Then, here is just friendly remind that I have revised the draft as the requirement, can you please check if it is acceptable and any problem just let me know. Thanks!

2 Likes

The title cannot be edited now. How can I edit the title? Thanks @tnorm

2 Likes