After thoroughly reviewing the proposal and the thoughtful discussion from delegates, I believe there are compelling arguments on both sides.
On one hand, onboarding a major player like Kwenta from Optimism to the Arbitrum ecosystem could bring significant net new users and volume. Kwenta has a proven track record and loyal user base that could benefit Arbitrum’s DeFi activity if successfully migrated over. The proposed incentive mechanisms seem well-designed to drive usage and retention.
Partnering with Perennial, an Arbitrum-native protocol, is also a positive sign of ecosystem alignment. Perennial’s capital efficiency and novel market offerings could create a strong foundation for Kwenta’s expansion on Arbitrum. The two teams appear to have a genuine integration plan beyond just incentives.
However, valid concerns have been raised around Kwenta’s long-time Optimism loyalty and whether this proposal truly demonstrates sufficient commitment to Arbitrum for the long haul. There is a risk of “incentive mercenary” behavior where Kwenta funnels the ARB incentives then shifts focus back to Optimism/Base once the rewards dry up.
While Kwenta has taken initial steps like exploring KWENTA token deployment on Arbitrum, delegates are right to want to see more evidence of “skin in the game” before committing such a large grant. The Synthetix factor also muddies the waters in terms of where Kwenta’s priorities will ultimately lie.
Kwenta’s argument that Arbitrum is the ideal home for their aggregation plans is compelling. But actions need to back up those words. A phased approach where Kwenta first proves out the integration and volume, then receives progressive incentives, may be more appropriate than a huge upfront grant.
In summary, while I’m excited by the potential user acquisition opportunity here, the concerns over long-term alignment are valid. Therefore, on behalf of the Arbitrum community members who delegated voting power to me, I lean towards voting AGAINST this proposal in its current form.
I would be open to reconsidering a modified proposal with stronger commitments from Kwenta, a more modest initial grant size, and clear milestones for earning additional incentives based on proven results. But at this stage, 1.9M ARB feels premature given the open questions around Kwenta’s ultimate loyalty to the Arbitrum ecosystem.