First of all, thank you for bringing this discussion to the forum. We believe that these types of debates are valuable not only for the incentive program but also for the DAO members. Additionally, this is the first time a DAO member has proposed modifications to the program, which we find truly valuable.
Before addressing specific points in your proposal, we would like to briefly review how we got here:
In the first draft of the program, we proposed the following:
After a period of feedback and meetings, the DAO members at that time expressed their disagreement with the existence of tiers, the lock mechanism, and the 100k minimum requirement for participation. The reasoning behind this was that, at that stage of the DAO, the priority was to attract more contributors and make it easier for new delegates to participate.
As a result, we introduced changes in a new proposal:
There was also debate regarding the 50k ARB minimum, as some delegates felt it was still too high. However, our reasoning for keeping it at that level was that, at the time, there were at least 194 delegates within that range, making it a reasonable number for us.
Ultimately, this was the proposal that was approved for the first version of the incentive program.
Over the six-month duration of the program, only 50% of the allocated budget was spent:
This allowed us to extend the program for an additional two months without requesting extra funds from the DAO treasury. It also gave us more time to work on version 1.5 of the program, ensuring a broader feedback window.
The proposal included the current requirements:
Once again, discussions arose regarding lowering the 50k ARB entry barrier and increasing the number of delegates eligible for rewards. However, we opposed these changes for the following reasons, which were outlined in our final report on the v1.0 program:
The number of inactive delegates within the 50k ARB range was twice that of active delegates. On average, there were 132 inactive delegates, as shown in this table:
Active delegates within this range represent approximately 98% of the VP in each proposal approved by the DAO:
These metrics reinforced our position to maintain the 50k ARB minimum, increase participation requirements, and keep the number of incentivized delegates at 50, as we did not see a need to expand this number. However, it also made us realize that a large number of inactive delegates within this range could potentially reactivate and participate in the DAO. This insight led us to increase the incentive amounts, setting them above those of other DAOs.
As seen, the 50k threshold is not arbitrary, and while it can certainly be improved, our goal is to strike a balance between keeping the entry barrier accessible, attracting new delegates, reactivating inactive ones, and professionalizing active participants.
Now let’s get into the details of this proposal.
We appreciate the effort to compare Arbitrum’s Delegate Incentives Program with other DAOs. However, the document used as the foundation for this proposal contains several inaccuracies that significantly impacts the validity of the comparison. We brought this up in the Telegram group, and for clarity, we will highlight only those errors relevant to the Arbitrum program:
- “Min 25% participation and 50k ARB delegation”: This is incorrect. Currently, a 75% on-chain participation rate over the last 90 days is required just to apply, and even then, this does not guarantee that a delegate will receive any compensation.
- “50 delegates get compensated, 194 eligible”: Not necessarily—the program has never reached 50 compensated delegates since not all eligible delegates reach the minimum required score. (Yes, there is a minimum score required, which is missing from the document.)
While we see the rationale behind these comparisons, it is important to point out that none of these DAOs operate a blockchain, making their governance structures and activity levels fundamentally different from Arbitrum DAO. Given these structural differences, a direct comparison may not fully capture the unique challenges of Arbitrum’s governance. Additionally, a quick look at the 1inch forum would reveal that the level of discussion and governance activity is nowhere near comparable to what we experience in Arbitrum DAO.
To clarify, the 3-month review period was meant exclusively for the new rubric system, as was explicitly stated in the original proposal.
That being said, as you mentioned, anyone is free to propose modifications via Snapshot, and we encourage open discussions on potential improvements.
As @jameskbh correctly pointed out, the $4.2 million budget is a maximum allocation, assuming every single compensated delegate reaches Tier 1, which is highly unlikely. Note that with the last changes + the Voting Power Multiplier, the spending will be even lower.
Your original (now edited) proposal suggested that the main motivation behind this change was to cut expenses in half.
However, under your revised model, if every small delegate secures an endorsement, there would be no savings at all, nor would there be any difference in treatment between delegates with >500k ARB and those below that threshold.
This contradiction raises an important question: What specific issue is this proposal aiming to solve?
What are your arguments to say that this “didn’t play out” when we are only 3 months into the 1.5? We had several comments from delegates who have hired/are looking to hire assistants. We still don’t understand the relationship between Hiring someone for your own delegation vs Giving an endorsement to a third party completely unrelated to your delegation.
On Endorsements
As already pointed out by other delegates, we believe this model introduces several serious challenges that could ultimately work against the DAO’s best interests:
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The number of compensated delegates is always limited, so a high-VP delegate would have no incentive to endorse someone who competes for a compensation slot.
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Endorsements could be weaponized as a tool for coercion—if a small delegate does not align with a Level 1 delegate’s preferences, they could simply be removed from the program.
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This endorsement requirement effectively shuts the door to new contributors who lack an existing reputation or connections with current DIP-participating delegates. The proposed system creates a highly permissioned program for potential new contributors.
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Operational challenges have not been considered.
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Increased Centralization & Lack of Accountability: There is no accountability for Level 1 delegates regarding how they grant endorsements. The system assumes good faith, but as we have seen in many governance models, unchecked authority can lead to unintended consequences.
We truly value constructive dialogue and would have appreciated being consulted as Program Administrators (by the way, it’s SEEDGov, not SEEDLATAM).
For context, before this discussion was brought to Twitter, we were already working on a Voting Power Score Multiplier, which essentially provides differentiated treatment for high-VP delegates while still requiring lower-VP delegates to demonstrate high-quality contributions in the forum to reach the upper tiers.
This multiplier was developed after multiple meetings with various DAO stakeholders, who provided feedback on the first two months of DIP 1.5, and it represents one of the many changes we have been making every month to improve the existing framework. Note that there is a thread in which we inform in advance about each modification.
Conclusion
SEEDGov DOES NOT SUPPORT the proposed change. We truly appreciate the effort put into this proposal and recognize the intention behind it, but after careful analysis, we have identified several issues that lead us to respectfully disagree based on our experience as Program Administrators of the DIP and thorough research into this matter.
We remain fully open to additional suggestions on how we can further optimize the program. We acknowledge that the system can always be improved, which is precisely why we are continuously refining the framework to ensure that Arbitrum DAO has the most effective Delegate Incentive Program in the crypto space.