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

Proposals
61

I voted FOR in this proposal.

I don’t have strong opinions on the amount requested. To be honest, at this point, focusing on growth and a robust ecosystem is important compared to other alternatives.

It also seems reasonable to focus on one ecosystem for now rather than others, particularly gaming in this case.

I do agree with some colleagues above that it should be aligned with GCP to avoid overlap and create a greater impact on the ecosystem.

With Orbit expansion, Stylus, and the entire Arbitrum infrastructure, a significant communications challenge is necessary to abstract the complexity.

Since the funds are coming from the DAO, I would appreciate a more low-level transparency report. So far, it has been high-level, which is fine, but for an exercise like this, based on precedents, it would be nice to see how this process unfolds in the future.

That’s it. I’m intrigued to see the future of the ecosystem. I genuinely believe in the potential of this to become infrastructure for L3 projects and huge on chain activity. The push for large Web2 companies jumping into this seems key to me. For example, Sony jumping into Superchain, Starknet, and gaming-focused platforms are things that we’ve been competing with so far.

I believe these resources should serve and provide relief to achieve these goals, which seems aligned to me.

62

We vote FOR the proposal on Snapshot.

If you think about the Foundation as a service provider, they have done tremendous work so far including bringing strategic partnerships, to the Arbitrum ecosystem. Expanding more partnerships to compete other networks with more budget from the party with great track record makes total sense.

However, as already pointed out, the transparency of the program and its reporting should be treated as the important deliverables to be promised by the Foundation. We also suggest the proposal to provide more break-downs of the budget with detailed objectives and plans before its onchain voting.

63

Interesting proposal, and it’s good to expand Arbitrum’s collaboration with other projects. It’s especially important to focus on RWAs, which have become quite significant lately.

Like @JoJo, I’m not sure how much budget should be added, but I would like to know more about your plans for expenditure, expected results, and the budget for each project. Maybe a bit off topic but maybe can consider partnerships with DeFi creators to strengthen the DAO’s mindshare :slight_smile:

64

The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking, and ideation of the two.

We’re voting FOR the proposal.

Having discussed the proposal directly with the Foundation, we decided that we have no apparent reason not to trust that they need the additional funds for the reasons outlined in the proposal.

The Foundation has proven to be a valuable asset for both Arbitrum and the DAO, and it makes sense to strengthen the collaboration between the two while enabling the former to execute its mission with some degree of flexibility. Strategic partnerships play a pivotal role in growing Arbitrum’s ecosystem and the Foundation is in a position to leverage them better than the DAO at this point. The opportunity cost of not providing them with the funds to do so could be more than the cost of the requested funds.

Having said that, we want to highlight that the Foundation could better communicate its plans with the DAO and coordinate with the DAO to ensure the funds are used as efficiently as possible on both ends.

65

voting Against the current offchain proposal because I believe this Arbitrum Foundation proposal, for this amount of money, should require much more transparency and discussion than what happened up until now. There was a 30 minute, non-recorded, re-scheduled call where some Arbitrum Foundation members were not able to justify this particular amount, requested at this particular moment. The Arbitrum DAO should have a much higher bar to release this amount of funds.

1 Like
66

The results are in for the [Non-Constitutional] Funds to Bolster Foundation’s Strategic Partnerships Budget off-chain proposal.

See how the community voted and more Arbitrum stats:

67

The Arbitrum Foundation plays a core role in the growth and expansion of the Arbitrum ecosystem. The Foundation’s work so far has been excellent and adhered to its mission of fostering ecosystem growth through strategic partnerships. Many elements of Arbitrum would not be what they are today without the strong results of the Arbitrum Foundation.

However, due to the sum involved we do not feel that it is our place to vote directionally on this proposal, due to the recently ratified proposal for Treasure to concentrate its next steps alongside another ecosystem outside of Arbitrum. Therefore, while in support, we have abstained from this vote.

We also want to highlight that, following the Treasure Community’s approval of TIP-44: Launching Treasure L2 on ZKsync, our involvement in Arbitrum Governance will conclude. As such, this proposal represents one of our final contributions in a delegate capacity within Arbitrum.

68

Gauntlet voted in favor of this proposal and provided feedback to the Arbitrum Foundation before the vote. A historical pain point has been the competitive grant deployment of other L2 ecosystems, allowing them to secure large brand-name partnerships. While the long-term effectiveness of this strategy is up for debate, it does make sense to establish a budget for Arbitrum to compete with other L2s on securing key partnerships.

One area that Gauntlet would request improvement is transparency. We suggest exploring making aspects of partnership details public after a set period, similar to government disclosure practices. While we understand the sensitivities around these deals, there may be a middle ground that allows the DAO and community to learn from the Foundation’s future mistakes and successes in pursuing these partnerships.

1 Like
69

Hi @olimpio and @cp0x,

Thank you for your questions.

The partnership agreements that the Foundation is concluding are in line with its mission as stated in the bylaws, i.e. to Fostering ecosystem growth through strategic grants. We invite you to read Foundation’s latest transparency report for a detailed spending up to June 30, 2024. Additionally in our snapshot proposal we outline all of our current obligations, for an even more up to date overview.

These strategic partnerships benefit the ecosystem via things such as: revenue and technical mindshare on the Orbit stack obtained by the DAO via the Arbitrum Expansion Program, new active users that each new project building on Arbitrum brings, same with liquidity inflows and increase in total value locked on Arbitrum chains. These are important metrics that Arbitrum is leading and has been leading for some time. Maintaining and enhancing Arbitrum’s position as the leading Ethereum scaling solution with dominant market share including hundreds of apps on the platform and over 40% of all rollup liquidity does not come at zero cost.

We believe that nobody should take all these metrics and developments for granted, and we are focused on building Arbitrum and maintaining its position as the leading scaling solution.

The funds will be spent towards future growth of the chain, in line with the Foundation’s mission. As mentioned previously, the crypto space moves fast and some of the innovations that exist today in the blockchain space did not exist 5 years ago. It is impossible to predict all new narratives, technology and application innovations over the next 3-5 years. Having restrictions on specific verticals may limit our ability to keep up with a fast-paced industry. As of today, we are actively working on Defi, RWA, infrastructure, DePin and gaming (before GCP is fully setup) to name a few. We always recommend reading our transparency reports which are released every 6 months. It allows us to update the ArbitrumDAO on how our strategy for partnerships and grants has changed over time based on the latest learnings and trends in the industry. Again, we will have a special section dedicated to the partnership funds.

The Arbitrum ecosystem, like all ecosystems, relies on transparent and confidential programs. It is important that there are public transparent funding initiatives run by the DAO and at the same time highly strategic initiatives run by the Foundation which often involve traditional institutions having years of TradFi and Web2 experience. The Foundation’s program helps bolster the confidential funding programs that may ultimately help aid the transparent programs as we act as a gateway to onboard new institutions to participate in the ArbitrumDAO.

Strategic partners and major institutions often require strict confidentiality. A major partner will always request an NDA which will legally bind the Foundation to keep sensitive information confidential. Additionally, having public data on partnership terms is a significant disadvantage in the growth of the Arbitrum ecosystem because our competitors do not have open data on expenses, and if our data is public, they can use that information to outbid us on future partnership opportunities. Please note that these are usually large RFPs where all of Arbitrum’s competitors are usually present. Simultaneously, projects that are negotiating a grant will also be able to use this data to come with unrealistic expectations.

70

Actually you do not provide any additional details other than the table you already posted in the original message, it’s literally a copypaste of the original message in this discussion.

1 Like
71

Below are the opinions of the UADP:

With a degree of reluctance, we voted For this proposal. It’s often difficult to say No to such a large stakeholder since the work that they conduct is often critical. The AF plays an instrumental role in facilitating the effective continuation and development of the DAO and protocol. They have numerous existing relationships that cannot be easily outsourced and programs that require sustained funding. In that vein, we do think that the AF should have taken into account the large portion of ARB that is vested. Such budgeting would mean that a liquidity crunch for grants and partnerships would have led to better management and allocation of funds. However, due to NDAs and other variables that lead to a lack of full transparency, it’s hard to tell exactly why such budgeting decisions were made. A future plan should be implemented by the AF to reimburse the DAO at some point using the tokens that eventually vest, as opposed to continuing to grow their expenditure on grants. In other words, we are not seeing this as a growth program—but a temporary solution to liquidity issues.

1 Like
72

DAOplomats voted in favor of this proposal on Snapshot.

The Foundation has been doing good work and is transparent with its responsibilities. The ask in comparison with the previous is way more but we agree with many delegates on giving the FDN freedom and flexibility. We also support the Foundation’s remarks on confidentiality in securing these strategic partnerships.

They have been a net positive to Arbitrum and its community and we would love to see them continue making these moves to secure key partnerships for the community and the broader Arbitrum ecosystem.

73

Vote: FOR

Type and Proposal Link: Snapshot –> Funds to Bolster Foundation’s Strategic Partnerships Budget

Voting Rationale Link: Alex Lumley (Savvy DAO) Delegate Communication Thread - #25 by AlexLumley

=== COMMENTS ON PROPOSAL: ===

I voted FOR this proposal because I believe that the Foundation plays an essential role in securing partnerships that are critical to the growth and sustainability of the Arbitrum ecosystem. While I do share some concerns about transparency, especially regarding how funds will be spent and the longer-term plan for resource allocation, I think the opportunity cost of not acting is too high.

The Foundation has consistently shown its ability to execute on key initiatives, and providing them with the flexibility to move quickly on strategic partnerships is necessary in the competitive landscape of L2 solutions. However, I do hope to see improved reporting and some form of oversight, such as a DAO council, as mentioned by other delegates. This would help balance the need for confidentiality with accountability.

74

Voted For - I hear the concerns about more ‘centralization’ but the reality of this competitive network vertical is that other teams have a massive advantage when creating impactful strategic relationships.

The Foundation has an oversight mechanism from the DAO and the DAO is not capable of managing strategic partnerships. Unless there is a strong alternative, I don’t see why this is not an acceptable solution.

75

No vote, missed this vote unfortunately also.

76

voting Against on the current onchain proposal because this is too big of an ask, with too little oversight and transparency on how this money will be spent.

2 Likes
77

The proposal sends 250M ARB (Tally shows it as ETH, but that’s probably a frontend mistake) to this address: 0x140e4D8d4229D5437EfD6FC1BEeB86Cb2bCF9D98

Where can we verify that this address is a legit Arbitrum Foundation address? I searched via Google and social media, and couldn’t find anything about the address. The blockchain explorer shows an empty Safe account for that address (no prior txs)…

It would be great if there was a way to verify receiving addresses in any proposal, especially the ones which send large amounts of money.

A few ideas: Arbitrum Foundation could have this address listed somehwere on the website (e.g. in the docs). Safe signers could post that address on their social media to confirm that it’s legit, etc.

4 Likes
78

Good catch @TempeTechie.
That is the correct transfer address that will receive the 250m ARB according to the Tally interface.

It’s a Gnosis Safe multisig wallet & has 7 signers.

Each of the 7 signers are brand new wallets with no history which is alarming.

CleanShot 2024-10-04 at 20.12.30@2x
CleanShot 2024-10-04 at 20.12.30@2x1822×806 144 KB

You can see that detail here:
https://platform.arkhamintelligence.com/explorer/address/0x140e4D8d4229D5437EfD6FC1BEeB86Cb2bCF9D98

Can the Foundation weigh in on this @cliffton.eth, @stonecoldpat, by what policy are you managing the multisig and selecting who are the signers. Can you detail this?

2 Likes
79

Hi all,

I can confirm that Safe{Wallet} – Dashboard is a multisig under the control of the Arbitrum Foundation.

We plan to keep the identities hidden for operational security purposes (given the quantity of funds), but we can acknowledge there is a special and lengthy communication protocol with several steps before any transfers can be initiated and approved. The same protocol has been used for the GCP multisig which we are protecting on behalf of the program.

6 Likes
80

Thanks, @stonecoldpat. That explanation makes sense in protecting the security of the individual signers.
If this is a common policy we have to protect individuals also with the GCP, should we also have that to protect all the individuals in the MSS? How should OpSec be handled there?

I do wonder though is there some ZK technology that exists or could be created to protect the identity of signers but verify to the public the signers have a track record as good guardians of these funds? Sounds like a worthy pursuit in service of making the highest integrity system for the long term. I am not making this comment for this case alone, this comment is in service of us as an industry developing great systems for 21st century institutions and beyond, and Arbitrum playing it’s part as a pioneer leading by example in the development of best practices for this emergent field.

3 Likes