I think a better compromise would be to raise the minimum voting power requirement to 100K ARB, maybe even 250K ARB (appx. $110K at current prices), which would make gaming the system much less feasible. You’d have quite a bit of risk if the price moves downwards, and still can reasonably break-even on your expenses to buy that stake in 1-2 years. That makes it less attractive for pure short-term value extractors.
We can observe how this plays out in the coming months, and then re-adjust if needed.
The idea around endorsements of level 1 delegates complicates it too much, and opens other attack vectors, including paying someone to endorse you.
Generally, I can also live with continuing the 50K voting power requirement, but given the drastic ARB price decrease it is indeed not that large of a cost anymore to acquire that voting power yourself.
Probably, giving a range of options in the Snapshot vote, including 100K ARB, 250K ARB, and 500K ARB would make sense for delegates to choose from.
The proposed web of trust mechanism here is poor governance design. It selects for group think and not effective decision making.
For what encourages effective decisions at the individual level, we have narrowed that down to a simple model with 3 key components:
having high context
incentive aligment
(relevant) expertise
Then, from a governance process perspective you need effective steps:
sense making step requires effectively collecting insights representing the diverse stakeholder groups
proposal formation requires effective deliberatio (also amongst said groups)
decision making requires independent judgment (and ideally with representation from said stakeholder groups)
The proposed system is ill conceived of all these fronts.
context: nothing to help/evaluate
incentive aligment: misunderstood. A power user can have 0 Arb delegated to them. A relarively poor person can be aligned foe 50k while a whale can hold 5mn arb and still be incentive misaligned.
expertise: nothing here.
sense making: counterproductive, reducing sense making only to those from a cabal.
proposal formation: nothing here
decisio making: also counterproductive.
If we’re going to rethink governance, let’s not take this path.
We strongly oppose this proposal, as it will inevitably lead to only the “friends” of large delegates being allowed to participate in the program, while capable smaller delegates—who don’t spend time lobbying or have personal connections—will be excluded. The current program was designed to ensure fair competition, but this proposal instead gives large delegates the power to gatekeep, maintaining their position and avoiding competition by selectively allowing participation and removing delegates at will when they pose a risk.
This also introduces a significant governance risk, as smaller delegates who receive sponsorship from a large delegate may feel pressured to support that delegate’s proposals and positions to maintain their sponsorship. This would reduce the diversity of voices that could defend the DAO against harmful proposals that benefit large delegates at the DAO’s expense.
Additionally, some small delegates have personally invested in ARB to participate in the program, putting real skin in the game. In some cases, the value of the ARB they purchased has dropped by more than 60%. In our view, this demonstrates a stronger commitment to the DAO than simply being a friend of a large delegate.
Disclosure: We participate in this program, and our delegation is below 500k ARB, the majority of it is self-owned.
TLDR: I like the direction of where the proposal is coming from. I believe the end goal of the DAO should be to bring ARB price up. Delegates’ compensation should be vested, and there’s no need for 50k or 500k limitation - every ARB counts!
Hello, my name is Zeptimus, and I thought about joining the program right after seeing @thedevanshmehta tweet. Being compensated for sharing my insights here is what allows me to spend time on Arbitrum forums.
First of all, thanks for carrying the flag on this proposal. It shows care for the community and is pointing in the right direction, creating discussion to improve coordination in Arbitrum.
I’m very aligned with what @larva is talking about - having skin in the game. I believe the holders are the true believers, and their intentions are by no means aligned with the community. But skin in the game and having the best intentions are not correlated with capability. If I have a car accident and my mom is next to me, my best intentions won’t save her. Probably better to have a doctor or someone with expertise instead of myself there (I like to make those extremist examples to prove a point in an easy way to understand).
That’s why ARB holders choose delegates, to take decisions for them to make their bags grow. From a tokenomics perspective, the current design creates misaligned incentives - delegates are compensated for participation regardless of the result of their actions.
I believe delegates should be compensated on locked ARB, and the long-term success of Arbitrum should be what they care about. Delegates are people we value for the way they think, and we believe they will make the best decisions. I believe that’s a hell of a responsibility and it should be very well rewarded (could argue a x5 or x10, but that’s not the topic here) if the decisions taken bring success to $ARB. That’s why a vesting period would help to align incentives.
Going to the details of the proposal: 500k, 50k - in my opinion, it doesn’t matter. Everyone should be rewarded accordingly to their voting power. We could do a quadratic approach in compensation to incentivize smaller holders, but at the end of the day, if you hold millions of ARB, holders care about your guidance. If you hold 50k (AKA myself), you are just a small voice - not saying irrelevant by no means, but it shouldn’t be rewarded similarly to someone whose holders are putting their trust also anyone with great ideas can accumulate more delegations. If you like what you are reading, insert ARB here.
LMK if this looks interesting with your <3 and if I should expand on the solution.
We would cap it at 1 endorsement per delegate with 500k ARB, and who they nominate would be public so their credibility would be on the line if they nominate a slacker or their friend.
@pedrob can correct me if im mistaken, but the original intention of DIP was that major delegates dont have time to stay on top of everything going on in the DAO. So the funds could be used to hire someone that would do the research for them. For many reasons that didn’t play out, what we propose here is a modified version of that goal where a major but busy delegate can “buddy” up with a small but involved delegate and thus stay on top of whats going on through them.
honestly most of the major delegates are too busy to think, let along enforce group think. I would predict that we would more likely see large delegates endorse a smaller delegate they see potential in, have weekly calls with them to understand how they should vote, and encourage them to go beyond the call of duty to also write proposals for the DAO.
Appreciate your willingness to spit facts even when its against your personal interest. These ideas of equality and ignoring power dynamics rarely end well in my experience.
As @0xDonPepe kindly pointed out, I don’t have a lot of voting power but I did delegate to you as a show of support! As ironic as it sounds in the context of this proposal, its not the size of the dog in the fight, its the size of the fight in the dog.
I think you’re missing the point here. Representative democracy is a poor system and your proposal is not addressing any of the issues but making it significantly worse
Recommendation: Adopt incremental optimization rather than a one-time overhaul. The core issue is still how to improve the quality of representation, rather than simply narrowing the group of representatives.
I don’t understand why you place more trust in delegates with over 500k voting power. You should recognize that these individuals don’t actually need to participate in the incentives program. Many of them are project teams within the Arbitrum ecosystem who already received substantial ARB airdrops in 2023, along with significant funding through STIP & LTIP.
The ones who truly need a few thousand dollars in monthly incentives are the smaller delegates—essentially, small investors. Some have dedicated immense time, effort, and even personal funds to building Arbitrum. For example, my average ARB cost is $1.3, and my ANDAO team has worked on Arbitrum for 3 years with only a 10k ARB grant (other funds from partners’ donation).
Does the DAO really prefer to allocate millions—or even tens of millions—through grant programs while refusing to spend a fraction of that to fairly compensate delegates who have invested their time, effort, and money?
I hope you understand: some costs can be cut, but some should never be. If it wasn’t for the love of arbitrum, no one would waste their time here for a couple thousand dollars a month.
We agree with the concerns raised about the current Delegate Incentives Program and recognize the need for improvements. However, rather than making immediate amendments, we believe it would be more effective to defer to @SEEDGov to lead a structured evaluation of potential enhancements.
SeedGov has successfully designed and implemented a program that has attracted valuable contributors to the Arbitrum ecosystem. As with any evolving initiative, continuous improvement is necessary, and we acknowledge the current inefficiencies.
One major issue we see is the overwhelming number of redundant delegate comments and questions. This significantly increases the friction in engaging with the DAO—whether for proposing initiatives, requesting grants, or coordinating activities. Based on our discussions with ecosystem builders and contributors, this complexity is discouraging new projects and teams from building within the Arbitrum ecosystem.
We find @thedevanshmehta’s suggestions interesting and appreciate it’s a controversial topic to raise. However, ideas proposed by other delegates suggest there are multiple paths forward. We also have our own thoughts on how to refine the program. For instance, we could introduce a trial period for new entrants joining via endorsement, ensuring that participation is based on measurable performance rather than just personal connections.
Every proposed adjustment comes with trade-offs. Instead of implementing piecemeal changes, we would like to see a more structured evaluation of all the proposed improvements—led by SeedGov, given their existing role in running the program.
To make this process more effective, we suggest organizing a focused community discussion on this specific topic involving relevant stakeholders and facilitated by SeedGov. For those familiar with it, a format similar to Uniswap’s GovSwap could be a great approach to gathering input, refining ideas, and ensuring the best path forward.
But we aren’t narrowing the group or excluding this group? We are simply requiring that delegates between 50-500k ARB get the endorsement of a larger delegate over 500k ARB. If they are talented, surely they can find at least 1 large delegate to attest to them?
It’s also a happy mix where small delegates get to increase their impact by influencing the vote of the large delegate whose endorsed them, while large delegates get to stay on top of events better by tracking whoever they have endorsed.
So its useful to have a distinction between overhead (delegate pay) and program costs (ecosystem growth). Getting overhead right is upstream of program costs for setting the larger culture
the good part is changes to the program can be made via simple snapshot vote. So rather than aim for a monolithic improvement, having it be modular with delegates only deciding, “is this change better than what we currently have” is how i would prefer going about it.
Any proposed amendments other than the 2 listed would be welcome before we take this to a vote.
Thank you for recognizing this! It’s been tough dealing with the hate and vitriol that has been thrown my way, including from top delegates influential across the ecosystem. I definitely feel like a target has been painted on my back for raising these questions.
This inevitably leads to centralization, which goes against the vision of a DAO. Imagine if small delegates had to gain approval from large delegates to join the incentive program—how could they dare to express differing opinions or even cast opposing votes for a proposal related to large delegates?
This is more likely something that should be changed.
At the AAVE DAO, no service provider is eligible for delegate incentives, as they are already paid in another way. So why shouldn’t we have this here too and stop double spending?
If you are already compensated for work, then governance should be included.
Indeed. A significant portion of these large delegates’ voting power comes from the 2023 airdrop, meaning their cost is almost 0. If small delegates need their approval to join the incentive program, it will severely hinder newcomers from contributing to the Arbitrum DAO.
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.
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:
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.
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.
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.
Operational challenges have not been considered.
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.
There is a lot here. I won’t dive into all the details, but i do want to echo one important piece:
I want to echo this sentiment, if we are rethinking this program, we should rethink the distribution of 100% liquid ARB. If we can instead increase the amount rewarded but lock 75% of the ARB rewarded for 4 years (i’d say 2 year cliff 2 year stream), we could really align incentives of delegates, to selfishly care about the future value of ARB.
I think most of the people discussing here are delegates and have a conflict of interest, like me.
But I will try to be objective (Sorry in advance for the verbosity)
After the pilot incentive for delegates, the author had 2 months to rework the proposal. We considered various options for improvement as a community, and no decision was made to increase the threshold.
Why was this not done? It seems to me because the number of delegates never reached 50, although the community had a goal to increase the number of delegates and attract more votes. It was logical not to increase the threshold, which would lead to a decrease in delegates and a decrease in decentralization, as the basis of DAO.
The ability to allow a second-category delegate to participate in the program is a corruption-prone proposal. I am sure that most delegates are honest people, but why initially create a system that can lead to a situation where small delegates will start offering bribes to larger ones. I think this should be avoided.
The second problem with appointing second-category delegates is that first-category delegates will approve of those who approve of their opinion and can exclude them at any time for an opinion different from the “correct” one.
Too sharp an increase in the threshold during the project (changing the rules during the game) will have a negative impact on the reputation of the Arbitrum. It’s like promising a grant and then taking it away from some people by changing the rules. In addition, I think most people know that gathering delegations is not an easy task. Due to the decrease in the cost of ARB, many people have started selling their delegations, and their numbers are decreasing.
You didn’t suggest this, but you were going to think about how to evaluate the number of delegated votes for ownership. Again, you need to understand the goal of this task - to increase delegations. And I don’t understand how buying a certain amount of ARB can help with this. Any user will be able to pledge USDC and take ARB for themselves: they will seem to own them, but in fact they have borrowed them. In general, I don’t think this will help matters.
Regarding industry standards. Lido should base its program on Arbitrum, not vice versa. And at the moment there are only 7 delegates who can receive a reward. I am sure that Lido will lower this threshold (in particular, one of the 7 delegates did not have the corresponding threshold, but was admitted to the program due to his active participation).
You write that it is easy to make a profit in the program by investing only $30,000 (and what if people bought them when ARB cost $2?). Thus, I understand that you are saying that rewarding delegates should not bring them profit. But this is the goal of the program - to encourage more delegates to come. If you give only to those who have a lot of money, then they will not be motivated by money in this way.
In the end, I want to say that it may be worth increasing the threshold, but it should be done carefully, gradually and not so significantly.
I cannot support this proposal for the following reasons:
If the minimum voting power requirement is 500k ARB, how many people will actually be able to participate?
If Delegates between 50k - 500k ARB wishing to become part of the program need an endorsement, won’t decision-making power remain concentrated in the hands of a very few Level 1 delegates? I deem that community-wide delegates, rather than delegates of a specific project, are not suitable for using endorsement methods.
If this continues, the power of community voting will ultimately rest in the hands of a very small circle. What, then, is the purpose of having delegates?
Expand the circle of delegates rather than shrink it is necessary, we still have a long way to go.
I agree that there are inefficiencies in the current Delegate Incentives Program, and I appreciate the discussion around improving it. However, the proposed solutions—both in the original post and in the comments—come with critical downsides that could introduce more problems than they solve.
For one, holding ARB does not automatically equate to valuable contributions. This is similar to holding ETH versus being able to run an Ethereum node—owning the asset doesn’t mean you have the knowledge, expertise, or dedication to contribute meaningfully. The same applies to governance: a delegate who was entrusted with votes by the community is not inherently less valuable than someone who simply holds ARB.
Additionally, delegation size is not necessarily a reliable indicator of contribution quality. Some protocols have large delegations due to receiving significant ARB airdrops, but that alone doesn’t make them more valuable participants in governance. Contributions should be assessed on their actual impact, not just the amount of ARB held or delegated.
Another suggestion has been to push for more proactivity in governance. While I understand the intent, this risks generating even more noise. The DAO already struggles with a high volume of comments, and incentivizing activity for its own sake could lead to chaotic, misaligned goal-setting and wasted resources. It took significant effort to align on a mission for the Arbitrum DAO—do we really want to undo that progress by creating a system that rewards volume over value?
We need thoughtful, targeted improvements to the incentives program, but I don’t believe the proposed solutions move us in the right direction.
Because other large delegates would appreciate the small delegates critical voice and take them under their wing if they were cut loose.
As part of our earlier token swap proposal, we actually studied who held on and who sold off ARB. We need to reward those projects who held on to ARB is my opinion.
