Hello,
As an initial reflection, I believe that the process of public outrage on Twitter followed by launching a proposal without much analysis is not ideal.
There are reasons why the program is structured the way it is—each parameter was carefully discussed, and the trade-offs involved were examined in great detail. You could have discussed these details with @SEEDGov -the Program Manager- before submitting this proposal, as they have a dedicated team that studies the program’s outcomes and evaluates potential modifications for improvement.
In fact, more than a year ago, you agreed with the initial design, which has undergone many changes—though not the specific one you are now questioning.
The parameter you are now questioning so emphatically was already in place then:
There is absolutely nothing wrong with changing your mind. In fact, this incentive program is designed to adapt and improve over time. However, based on what you posted on Twitter, it seems like you only just found out about this parameter.
Fortunately, there is an active delegates incentive program that remains experimental in how it evaluates the contributions and values and rewards constructive feedback. So, despite your proposal’s lack of fair logical motivation, I will share my thoughts on it.
The first thing I notice: there is no connection between the identified “problem” and the proposed solution. From what I read, larger delegates should be better rewarded—or the only ones rewarded—because they have greater responsibility than “minor” delegates. On the other hand, reducing the program’s cost to save funds for the DAO is also mentioned.
So I ask you: Will not paying minor delegates make larger delegates feel better rewarded? What is the appropriate amount to compensate for that responsibility?
On the other hand:
That is not the case at all. Properly exercised governance—debating the proposal and understanding the necessary context—takes the same amount of time for a large delegate as it does for a small delegate. It will obviously change the impact of one vote versus another.
In my opinion, such a comparison is not appropriate. You cannot compare a program in Arbitrum, where what is being governed is a multipurpose chain that contains an ecosystem in itself with a wide diversity of actors., with Maker or AAVE, where governance focuses on a specific product. The considerations, needs, delegate profile, and required skills are all different.
You also say that this could create a better environment for organic participation. Explain to me how stopping compensation without an alternative plan will achieve that. In your text, you mention rewarding participation that adds value, but you don’t specify how to do so.
So basically, your argument is: Let’s stop paying those with less than 500K voting power because the program over-rewards small delegates and is potentially gameable.
Once again, I ask: Is it really necessary to change this parameter to achieve the goals of your proposal? Can’t other parameters be adjusted to double the rewards for those actually contributing to the DAO, regardless of how much VP they have? Is there no other way to recognize the value of larger delegates without excluding smaller ones?
As I understand and recall, the 50K threshold was set as a low parameter to encourage the participation of new delegates joining the DAO. One of the great benefits of DAOs is plurality, but that plurality is meaningless if those participating lack the proper context and proper knowledge of what is going on.
What’s interesting is that, despite the 50K delegation threshold, the first iteration of the program never reached the cap of 50 incentivized delegates:
In fact, participation never exceeded 30 delegates receiving payments. This led to the inclusion of that metric among the KPIs for the current version. One of the program’s objectives is to increase payments, as that would indicate (tbd with results) that delegates are engaged in discussions.
In the last month of the program, in December, 49 delegates qualified for incentives:
So, in the current version, which already rewarded participation for November and December, incentives are still not being distributed at 100% of their potential. In this regard, this data allows me to question the ease of gaming the system. However, that doesn’t mean it’s not possible, and there are certainly parameters that can be adjusted to better reflect and reward the work of delegates who add value.
Regarding the proposed threshold: What was your reasoning for deciding on 500K? The number of delegates above that threshold, the cost—why 500K and not 1M or 5M? I also don’t see the logic behind how modifying this parameter will help achieve the goals of the program that the DAO has agreed upon.
Raising it to 500K—will that allow more delegates to join the DAO? Will it bring in new contributors? Will it ensure that more delegates maintain a high and consistent level of participation?
Another question is: what is the opportunity cost of not incentivizing the delegates who are currently being incentivized and below the proposed 500K threshold?
I do think there’s merit in discussing the results of the DIP and how to make it more cost-efficient (which, I reiterate, is not proposed here).
However, for me to support a modification of parameters, I need at least a justification for why that modification would improve the program, prevent it from being gamed, and bring us closer to achieving the goals that were set. Do we want to incentivize those with a lot of VP, or do we want to incentivize constructive participation that creates value for the DAO? And how can we do this in a cost-efficient way?
One thing you could have done, but didn’t, was engage in the discussion of the program, which was highly debated and received a lot of feedback. The proposal was in the forum for over three months, with back-and-forth discussions until its final approval.
There, you will be able to see feedback from both myself and many delegates who proposed alternative models or ideas on how to reward quality work over routine or potentially spammy contributions. One that I particularly liked was @maxlomu :
To me, one signal that raises alarms is the “consensus” (assuming it exists—though it hasn’t been discussed in depth) to not make the discussion of SOS “mandatory” for qualifying for the incentives program. This was just one of many suggestions from 404DAO, which I supported.
We are incentivizing delegates to participate constructively, but when it comes to the most important discussions, it’s better not to get them involved because of the noise. I understand where this suggestion is coming from, and I even think it makes sense given the current state of the program. However, I believe we should aim for compensated delegates to participate in those types of discussions that are so crucial for the DAO and its future.
That’s why there are many things to improve, and experimentation is needed to understand what works and what doesn’t. But that takes time and experimentation (three months into the current version, and several changes have already been introduced, with more to come).
So before saying that you’re bearish on the Arbitrum DAO, it would be really great to hear your ideas on how to improve the program and make it more cost-efficient, in order to ensure it rewards quality participation over spam.
Finally, I prefer spending money to incentivize quality participation rather than relying on “organic” participation with the expectation that it will be free and of high quality. No, we can’t expect people to donate their time to the DAO “organically” and maintain enough context over a long period. It may work for a while, but it won’t be sustainable or viable.
Just to clarify, I’m not against the discussion of the threshold. However, it should come with a rationale explaining why this modification will improve the program, help it achieve its objectives or how this will benefit the DAO. Other than let’s save money.
*COI disclosure: I am an incentivized delegate under the 500K proposed threshold, and if this were to go to Snapshot, I would normally abstain. However, given my rationale, if this proposal goes to Snapshot under these conditions, I will vote against it because it does not solve any problems. It doesn’t even propose a solution that, even if I disagree with it, could work.
**Writing this response took me over 30 minutes.