[Non-Constitutional] Funds to Bolster Foundation’s Strategic Partnerships Budget

Proposals
27

Thanks for your questions:

  1. Please see the Foundation’s Bi-Annual Progress Update here where we have expanded on Foundation’s ecosystem spendings: https://docs.arbitrum.foundation/assets/files/ArbitrumFoundationBiannualReport2024H1-c8e9ab997fe68ad09c0105181f9826d8.pdf. In addition, the proposal outlines all the current signed agreements, as well as the pre-agreement offers that the Foundation extended. Please note that as it is often normal in the blockchain space, long-term plans of 3-5 years might not always be feasible. The Foundation has an annual budget that it is using based on the opportunities that are currently available on the market.

  2. As per our understanding, AF is the only Foundation with a vesting from its DAO. While we cannot speak for others, the main purpose of this budget is to have the funds available to pursue significant partnership deals, not to spend the entire amount of funds at once. For example, the Optimism <> Coinbase deal was 118m OP tokens (~2.3% of all OP tokens) over 6 years: https://www.theblock.co/post/247532/base-optimism-revenue. That single deal alone is larger than AF’s unlocked budget and we have never been in a situation to consider a partnership of that size. The situation you describe about the Governance Fund is the inverse situation. We are asking for a budget from our DAO, whereas the OP Foundation is proposing a budget to their DAO. That is very different in nature. Please see here Foundation’s Bi-Annual Progress Update where we have expanded on Foundation’s ecosystem spendings: https://docs.arbitrum.foundation/assets/files/ArbitrumFoundationBiannualReport2024H1-c8e9ab997fe68ad09c0105181f9826d8.pdf.

  3. Under this thread (Arbitrum Foundation Transparency Report 2023 - #4 by Mark1) you will find the Grant Transparency Report that shares more details on how grant decisions are made. In the upcoming transparency report to be published in Q1 2025, Arbitrum Foundation will be having a dedicated section to report how the funds in this proposal are allocated. Please note many grants are with institutions that have strong confidentiality requirements, therefore Arbitrum Foundation would only be able to share high level details of strategic grants. There are significant trade-offs in making the information on expenses and agreement sizes public. In this case, if the Arbitrum Foundation does make it public, it can put us at a disadvantage relative to our competitors, and we could also inadvertently disclose contract terms if it’s obvious who received the grant. Nearly all our competitors have no obligation to make their data publicly available. If our data is public, they can simply look at the data and then use it to over bid us on future partnership deals. Simultaneously, projects that are negotiating a grant will also be able to use this data to come with unrealistic expectations. That asymmetric disadvantage will impact our ability to grow the Arbitrum ecosystem.