[Non-Constitutional] Invest in Builders & Ignite ARB Demand with q/acc

[Griff]

Thanks for the kind words @Tane! I’ll jump straight to answering your Q’s

@Tane

Examining the Polygon pilot, particularly the top-funded cohort such as x23.ai, the current liquidity is under $120k against a fully diluted valuation (FDV) of approximately $800k (link). Considering the scale of investment, such limited liquidity may neither significantly extend project runway nor improve token price discovery. In practice, it could inadvertently amplify token launch risks rather than alleviating funding pressures.

We ask you to explicitly evaluate the liquidity provision mechanism’s empirical effectiveness in meeting builders’ core financial needs to see if this is better than simply giving funds to them.

The $120k liquidity is just the Liquidity in the DEX, but their Augmented Bonding Curve (ABC) also has over $100k in it, it just doesn’t show on gecko terminal. Here is a screen shot of the dashboard we use for internal tracking, which shows the collateral for each ABC in the protocol:

As far as empirical effectiveness, if you go to your link and click Show X23/WPOL Price Chart in WPOL

You will see that EVERY token has beaten the price of POL, which is pretty incredible considering that the market was tanking to unexpected lows during the short 2 months that these tokens have been liquid. For a 6-figure market cap token to have such a strong resistance to downward market pressure is impressive to say the least.

You can also simply try to buy and sell the token on quickswap to see the experienced liquidity:
https://dapp.quickswap.exchange/swap/best/0x3c499c542cEF5E3811e1192ce70d8cC03d5c3359/0xc530B75465Ce3c6286e718110A7B2e2B64Bdc860

And

The token is paired with POL so it has great routing so any token can be used to buy it and $3000 moves the price 1% either direction.

As far as “meeting builders’ core financial needs.” Arbitrum has a lot of programs to do that. Questbook, AF & OCL are throwing money at builders left and right, and I am excited for their programs to recommend great builders to us.

We help them launch their token on Arbitrum, lock them into the Arbitrum ecosystem, and create demand for ARB in the process. This is not for every project, but for many projects, it is a perfect fit.

@Tane

Token issuance complexity

Requiring every recipient to spin up a live token adds a layer of operational drag that many seed-stage teams are ill-equipped to handle. Beyond smart contract deployment, founders must craft vesting schedules, mediate community expectations, often before product-market fit.

Although it seems there is some legal support provided, that’s not the entirety of this complexity. How do you think this complexity/cost can be overcome or mitigated?

You are absolutely right, most seed stage teams are not ready for a token, even though MANY want it. The key feature to mitigate this issue is the screening process, we had less than a 4% acceptance rate for projects in the first cohort. We choose teams that are ready to integrate a token into their product and have figured out where the demand will come from.

Also, as far as vesting schedules and all the other token design related issues. We have that all set for the team, they just need to say the addresses for their vested tokens and its done, and the rest of their token launch process from the technical side, is covered.

From the social side, absolutely they now have a second product to sell… their token! But we try to choose builders that have a token design that supports the needs of their core product., like the gas token for an L2 (Prismo) or creative ideas like what To Da Moon is doing.

@Tane

Sell Pressure Mitigated, or Essentially Just Burned?

We recognize the ABC mechanism significantly reduces immediate sell pressure on ARB tokens by locking them within liquidity pools. However, this approach effectively immobilizes capital in very low-turnover micro-pools (in certain amount of cases), functionally resembling a token burn. Or, is there any way the DAO can reclaim ARB provided at some point?

We aren’t just “mitigating sell pressure” the ARB is acting like a magnet, attracting more ARB! As tokens get sold via q/acc, ARB gets sucked into the ABC. We created over 400k POL demand with our program in season 1 on zkEVM, we can create even more demand for ARB given the lessons we’ve learned so far.

We don’t currently have a mechanism for the ARB to be clawed back, other than token sales.

@Tane

Incentive Alignment & Upside Capture

Although receiving 5% of each project’s token issuance is attractive, governance tokens from small-cap projects are notoriously illiquid and may impose significant portfolio-management overhead relative to the potential return. If we are to focus on this aspect, employing a dedicated investment vehicle, similar to the GCP, might offer a more strategically sound approach to capturing economic upside from supported projects. We’d love to understand the rationale of gaining tokens of projects that this type of funding mechanism targets actually benefits Arbitrum DAO financially after some operational overhead.

These tokens are very liquid by design, but I would keep the operational overhead light and just make a simple rule, like sell 1/2 tokens if they are over 20M market cap, another 1/4 at 50M, move the rest into treasury or something like that. There is no reason to bloat this proposal with bureaucratic overhead… We can let an AAE handle the treasury management.

@Tane

Comparative Precision and Evaluation Metrics

Gitcoin’s recent transition from broad quadratic funding (QF) rounds to the more focused DDA framework underscores some needs toward precision capital deployment. Likewise, Arbitrum’s own DDA pilot programs have demonstrated the operational advantages of DDA-based funding.

In that regard, it would be beneficial to outline explicitly how q/acc’s structure specifically outperforms DDA on key dimensions such as project targeting accuracy, evaluation overhead or so.

Or, it is also beneficial to demonstrate strong post-launch KPI performance (revenue, user retention, and actual product-market fit) clearly linked to the ABC and quadratic funding structures. Transparent and detailed reporting of these outcomes will ensure this design could potentially outperform the existing funding scheme.

I would consider q/acc to be a specific domain itself: Small startups that want to tokenize. This is the domain we want to support. I think its important to not be overly exposed to one narrative, AI, NFTs, DeFi, Wallets, Gaming, DAOs, Music, L2s; we have helped teams from all of these verticals launch tokens. If we were only oing AI tokens, and the AI narative dies, we are in trouble.

Instead we are going more horizontal, supporting small teams that want to launch a token for their product, and we will make it easy for them to launch their token here on Arbitrum.

I don’t see us needing to out perform DDA programs on these metrics, we work along side these programs to support the builders that go through them to help them launch their token (if they need one) and create demand for ARB while we do it!

Most of the KPIs we hope to be judged on are not even on the table for DDA grant programs, they don’t generate ARB demand and they don’t launch tokens.

@Griff

To measure success, we will track:

Onchain Growth – 10x – Market cap growth (in ARB) compared to ARB granted to teams. E.g If we give the teams a total of 1M ARB, we will produce 10M ARB worth of market caps

ARB Demand Ratio – 25% – Ratio of ARB in protocol vs ARB granted to teams. E.g If we give the teams a total of 1M ARB, we will capture 1.25M worth of ARB in the protocol, creating 250k worth of ARB buying pressure.

Sustained Value – 1 year – Long-term market cap growth (in ARB) of tokens. E.g The 10x growth will last for at least a year.

First-time Arbitrum Users – 500 – Number of q/acc participants new to Arbitrum that buy more than $10 of tokens. E.g 500 users that pass our sybil filter will have never used Arbitrum before.

On-Chain Activity – Varied – Trading volume, user participation, and liquidity metrics. This will be tracked but it is so gameable, it’s not worth creating an exact metric, but we will create a lot of onchain activity.

[Federico]

Appreciate the energy and thinking behind this proposal. I like how you try to tackle genuine issues with traditional grant programs – especially around mitigating token sell pressure and providing the DAO with direct upside.

However, I’m not convinced that strong teams would choose to launch tokens through q/acc. Giving up 10% of total token supply in exchange for ~$50k in ARB (which is locked and not immediately usable) seems like a poor trade. This setup doesn’t offer a meaningful runway, pushing teams to prioritize token hype over genuine product development – a distraction from achieving PMF. And at that point, teams might as well use permissionless launchpads or other, less dilutive options instead.

It’d be helpful to clarify exactly what kind of teams q/acc is targeting. Later-stage projects with established PMF likely won’t accept the dilution and complexity, while high-quality early-stage projects will typically prefer to delay token launches until after achieving PMF. In my experience as an investor, most token launches are successful only after clear PMF is achieved, making the proposition here difficult for both builders and investors to justify.

While some q/acc projects (like those from Polygon Season-1) might see short-term activity, I’m skeptical they’ll sustain meaningful long-term value, which makes me think that there are better ways to spend the treasury’s ARB. I’d be more supportive of pursuing a more traditional venture investing approach (similar to what the GCP is currently doing) than adapting token launch mechanics into a grants framework.

[Griff]

@Jose_StableLab

Strengthen Long-Term Value Alignment with Arbitrum

Given q/acc’s track record on Polygon and cross-chain operability, we’d like to see stronger mechanisms that ensure enduring alignment with Arbitrum. While this deployment may initially target Arbitrum-native teams, there’s a risk that some projects might migrate or operate cross-chain post-launch, diluting the value created for the Arbitrum ecosystem.

We suggest exploring:

• Exclusive launch commitments or delayed multi-chain deployment periods to retain stickiness for teams launched through q/acc.
• ARB-denominated milestones or reward unlocks that incentivize measurable contributions to the Arbitrum ecosystem (e.g., transactions generated, unique users).
• Encouraging participating teams to explore Orbit deployment paths or integrate deeply with Arbitrum-native infra and community programs.

I love these suggestions… one important thing that maybe I didn’t make clear in the proposal is that each team is absolutely locked into the Arbitrum ecosystem and the success of ARB because their token’s price is directly pegged to the ARB price.

The Augmented Bonding Curve’s (ABC) collateral will be ARB and the LPs on Camelot will be ARB pairs so if ARB goes up 5%, the builder’s token goes up 5%, if ARB goes down 3%, the builder’s token goes down 3%. There is a direct economic connection between each team’s token and $ARB. Even if they nridge their token to other chains… their liquidity is here and denominated in ARB. I can’t think of another program that offers stronger aligned incentives.

Also, we are absolutely excited about doubling down on our successful launch of Prismo’s L2 gas token, and would love to repeat that same success with Orbit chains.

@Jose_StableLab

Reducing the per-project ARB allocation to $25–30K for initial cohorts, scaling upward based on community traction or usage milestones.

We can’t really do this, we are using bancor-style bonding curves with a 12.5% reserve ratio, this means that if we only put $25k in the bonding curve their fair launch would start at a market cap of $200k. This is too low in my opinion for most teams we are talking to. We could do funny things… like launch the ABC with less collateral than it is supposed to have, but that is very bad practice.

@Jose_StableLab

• Conditioning the release of collateral on demonstrated KPIs like volume, active users, or protocol fees.
• Defining a clawback or reallocation mechanism if projects fail to graduate or meet minimal engagement thresholds.

We are looking at a solution that could work like this, where we would put KPI vesting on the team’s tokens. This was in the original ABC design. The main KPIs we would look at are related to secondary market liquidity, circulating supply and market cap.

If we can implement KPI vesting then we could have a clawback mechanism.

[Griff]

@Federico

I’m not convinced that strong teams would choose to launch tokens through q/acc.

The twelve teams that have launched on q/acc so far can be found here:

Quadratic Acceleration

They are pretty great projects. These 12 teams wanted to launch a token, but they were short on capital. We offer them a fair launch platform, and a deep liquid low cap token. Many of these projects see ways where a token can enhance their product, or is core to their product, but the complexity of executing on a token launch is a lot of work, we streamline that process for them and they really appreciate it.

Jump to 2:19 and hear what one of our builders has to say about the experience:
https://x.com/Nofuturephoto/status/1918297827425271885

@Federico

It’d be helpful to clarify exactly what kind of teams q/acc is targeting. Later-stage projects with established PMF likely won’t accept the dilution and complexity, while high-quality early-stage projects will typically prefer to delay token launches until after achieving PMF. In my experience as an investor, most token launches are successful only after clear PMF is achieved, making the proposition here difficult for both builders and investors to justify.

We are definitely targeting the high-quality early-stage projects. The reason they need to delay their token launch is because they don’t have q/acc to handle it for them! The q/acc launch helps them build an early committed community and unlike most token launch strategies, they have an external team doing it for them and deep liquidity & a price floor once they hit dexes. They can launch and then have effectively 6 months before the tokens from the fair launch unlock, so they have 6 months to get PMF.

Not every project will benefit from launching a token before PMF, it depends on the project. But there are a lot of instances where the token is integral to the project (e.g. the gas token for an Orbit chain, but also many other instances) where a token is a core part of the product and needs to be launched, or there is a strategic benefit to building incentivized community early, or several other circumstances.

[CastleCapital]

We’re supportive of the direction q/acc is taking, particularly its use of DeFi-native mechanisms to align incentives, reduce ARB sell pressure, and offer a more sustainable approach to token-based funding. It’s clear that the program is designed to help teams launch tokens with improved structure and community alignment, and early results from Polygon show promise.

That said, the proposal leans heavily toward projects that are already looking to launch a token. While that’s a valid subset of builders, many high-potential teams on Arbitrum are still in earlier phases focused on technical development, infrastructure, or product validation before a token is even on the table.

At present, q/acc reads more like a launchpad with some added support layers. To maximize its impact, we suggest exploring stronger collaboration with other grant domains (e.g., Domain Allocator Offering) to ensure that technical and pre-token projects also receive the resources they need. This could create a more holistic pipeline from early R&D through to tokenization while keeping Arbitrum attractive to a broader range of builders.

[Saurabh]

The following reflects the views of GMX’s Governance Committee, and is based on the combined research, evaluation, consensus, and ideation of various committee members.

@Griff

Sell Pressure on ARB: Teams sell granted tokens to cover expenses, driving down ARB’s price and reducing ecosystem stability.

In the current DDA program season three the grantees are paid in USDC. It was a similar case in season 2.

We like the new approach taken instead of traditional grant approaches. The approach is promising aligning incentives through q/acc, bonding curves, and fair launches it also resembles more like a token launchpad ( Fjord Foundry). The price of the token is very substantial and depends on the market.

Are there any legal challenges to this? If yes how do you plan to address these?

Prismo has a partnership with (DBM) of the Philippines and just has a working MVP how to do you deem this as pmf? The project is supposed to launch it’s mainnet in Q2.

While the projects might have liquidity, but there is little to no trading volumes which raises our concern on the demand for these tokens.

The success of these project also depends on how they plan to utilise the 90% tokenomics if they won’t utilise it efficiently it is most likely going to fail.

Our suggestion would be make this program more suitable for Arbitrum Native Projects since we have wider ecosystem than Polygon. Preference for Arbitrum native or Arbitrum aligned projects those from STIP, LTIPP, or other DAO efforts.

[Michigan_Blockchain]

Michigan Blockchain believes that the Quadratic Accelerator shows tremendous promise in growing Arbitrum and creating self-sustaining token economies built on the chain. DeFi is all about finding innovative ways to reimagine finance, and the traditional method of picking projects and allocating capital proves to be difficult when currencies are subject to price volatility. The q/acc addresses this problem by locking up ARB, minting tokens in accordance with supply and demand.

We are curious as to how the DAO will standardize success criteria across different projects? Will success criteria be based on tokenomics (price stability, trading volume, supply, etc.) or project-specific KPIs (user adoption, growth, cross-chain compatibility, etc.)? And will these benchmarks be determined per project, vertical, or uniform across all projects?

Thank you @Griff for the proposal, we are super excited to see how this will improve Arbitrum!

Michigan Blockchain; Jack Verrill; TG @JackVerrill

[Griff]

@CastleCapital

At present, q/acc reads more like a launchpad with some added support layers. To maximize its impact, we suggest exploring stronger collaboration with other grant domains (e.g., Domain Allocator Offering) to ensure that technical and pre-token projects also receive the resources they need. This could create a more holistic pipeline from early R&D through to tokenization while keeping Arbitrum attractive to a broader range of builders.

100% aligned on this. Already talked to @danielo about making q/acc part of his pipeline for the Hackahton Continuation Program and will absolutely connect with Questbook, AF, OCL and other programs to ensure they know to recommend builders our way.

We created a referral program last round which brought in one of our teams, and gave the program that recommended the team 0.2% of the initial token supply. We expect to do something similar.

[daveytea]

Great to see x23.ai mentioned a few times here (I’m the founder) and happy that the q/acc program wants to extend to Arbitrum.

From a builder perspective, q/acc was great as they took care of the token side of things, helping us design and launch the token. It’s true that it didn’t help with runway, since we don’t receive any direct funding from it. However it did help with growing our community, putting the token into the hands of early supporters, and ensured early backers will be rewarded.

Some of the comments seem to be overly analytical and academic towards builders and startups. The truth is startups are messy, constantly iterating, and moving towards (tighter) PMF. Outsized growth and results is by definition, an outlier. So trying to analyse so deeply the current results (after 2 seasons) is premature and better suited for business schools. Building something valuable in the real world takes time, and q/acc helps early teams achieve that goal.

FWIW I think this iteration of the q/acc program for Arbitrum is better designed than the first program

[danielo]

I’m generally supportive of this proposal as mentioned in a 1-1 conversation

It provides an interesting next step in the builder support pipeline after the sort of programs that we’re running with RnDAO.

4 requests for improvement of the proposal

I’d appreciate further clarity on the Development and Deployment costs. A breakdown separating what’s actually Dev costs and marketing is super important IMO.

I don’t understand the operations & Sacaling, is that given to the projects “given to teams” or is that basically the program manager’s fee (including overhead)?

Basically, i would suggest redoing the budget before a vote and include:

• marketing
• development+deployment
• program management
• and then the breakdown of investment capital/grants
• volatility buffer

Additionally, a fund management approach is missing (and we had a lot of issues with the Hackahton Continuation Program because of this…) See here: [quote=“danielo, post:62, topic:29064”]
Fund management process: The funds are transferred from the DAO treasury directly to the AF and the AF is instructed to swap ASAP (they can normally execute within a week). Assuming a 30% volatility buffer, the AF can most likely swap successfully and return the excess to the DAO. After the AF Swaps, stables are transferred to the MSS. After the investees complete KYC and contract signing with the AF, the program manager schedules transactions in the MSS. So it’s the MSS signers who approve but the program manager (e.g. RnDAO) who schedules the transaction. This way the funds remain under the control of the AF (the counterparty for the investment) until transferred to the investee. The program manager serves simply as an advisor/service provider for selecting the projects, suggesting the disbursement(s), and delivering some support services.
Note that one of the strengths of the HCP is having a small amount of funds disbursed each month as opposed to a lump sum upfront, so we can track progress and stop the disbursement if the projects are not executing well. Hence, the program manager serves as a scheduler for the monthly/milestone transactions.
[/quote]

Final point, I’d appreciate some mapping of the next step of the journey after q/acc based on the amounts these projects have raised. Will they go to raise a seed round and then list in CEXs? Will they…? at least some rough idea of what makes sense as next steps.

the name is horrible. Can we call it “Arbitrum Token Launchpad pilot”? or something that’s not more self-referntial web3 mental mast…? We really need to move into more user friendly language

[GozmanGonzalez]

@Griff

The Quadratic Accelerator (q/acc) is the next evolution of web3 grant programs. Instead of distributing ARB to projects, often leading to immediate liquidation and subsequent repeated funding requests, q/acc creates a self-sustaining token economies for builders.

q/acc transforms how tokens enter the market with combined competitive application processes, ABCs, quadratic funding (QF), token lock-ups, and fair-launch mechanisms. This unique approach ensures alignment between protocols, projects, and communities in a manner that no other grant program has achieved before.

Arbitrum is the leader in defi among L2s, so it’s fitting and inevitable that q/acc, a defi powered grant program, should be added to its orbit. We can predictably grow TVL, create demand for ARB and improve other onchain metrics for the ecosystem. For builders, we create revenue streams through mint and burn fees, give a subsidized path for tokenization and create DEEP liquidity. And for the Arbitrum community, we enable early access and ownership, fulfilling the dream of web3.

We have had great success working out the kinks of this novel program with Polygon, running our first season on zkEVM, then migrating to POS. We are finishing up the second season over the next few weeks, and expect to run many more seasons with them. The early results of the first season though are impressive already, especially considering it was done on zkEVM.

We are actively following SOS discussions and will ensure our cohorts focus on builders that directly support Arbitrum and advance the priorities established through that process. We could not be more excited to start this program with a clear direction established for the DAO.

Motivation

The Problem with Traditional Web3 Grant Programs

Grant programs are essential to ecosystem growth, but many fail to create sustainable, lasting impact. Key issues include:

• Sell Pressure on ARB: Teams sell granted tokens to cover expenses, driving down ARB’s price and reducing ecosystem stability.
• Misaligned Incentives: Grants provide one-time funding, with no mechanisms to provide revenue, market validation or adoption.
• Dependency & Unsustainability: Some projects become experts at writing grant proposals rather than building great products.
• Lack of Community Engagement: Grants rarely create viral marketing effects or drive sustained community involvement beyond the initial funding, QF being a notable exception.

The q/acc Solution

q/acc flips the script on grants with a mechanism-driven, on-chain approach that allows for investment into small and medium-sized enterprises while creating lasting alignment between Arbitrum DAO, projects, and the community. It can’t replace all grant programs, as many teams should not tokenize; however for the ones that want to, this is an incredible opportunity for them.

Here’s how it works:

• Applicants chosen: Taking referrals from other grant programs and ecosystem leaders as well as hosting an open application round, our team will filter for the best builders. We would love AAE’s support in choosing the best candidates.
• Initialization: ARB is used to initialize the token economy for each chosen team, giving the team 90% of the tokens generated, while Arbitrum DAO and q/acc split the other 10% equally. All tokens are locked.
• ABCs: The ARB is locked in these bancor-style bonding curves which include tributes on mint and burns, creating recurring revenue for the builders, while locking up ARB as collateral, generating demand for ARB if there is demand for the builder’s tokens.
• q/acc rounds: These are fair launch token purchasing events where all participants get the same price for the locked tokens they buy (an actual fair launch) and they are run like a QF round where the matching pool is used to create secondary market liquidity.
• Liquid token listings: When the liquidity pool hits the open market, it is listed at a higher price than the locked tokens purchased in the q/acc round, but these are the only liquid tokens that exist so a price floor is guaranteed for several months, creating the ideal conditions that speculators crave to ape into.
• Graduation: If the builders succeed, and outgrow their bonding curve, achieving a reasonably sized market cap, as well as other KPIs, the minting of tokens is turned off, and the underlying collateral in the bonding curve is given to builders.

q/acc fundamentally changes how projects can be funded. By subsidizing the launch of projects’ token economies, Arbitrum DAO and the supporting community get to share in the upside of the project’s success.

Proven Success: Polygon zkEVM Season 1 Results

Our recent Season 1 cohort on Polygon has demonstrated the powerful impact of the q/acc model. Selected from over 200 applications (most having no prior plans to launch on Polygon), our first eight projects drove significant ecosystem value:

• Total Raised: 342,262 POL
• Unique contributors: 1,253
• First-time zkEVM users: ~97%
• Protocol Sponsorship: 1.76M POL
• Protocol Locked POL: 2.15M POL
• Onchain Growth: Total market cap of ~$4.5M (≈ 17M POL), representing a 10x grant multiplier

Spotlight: Top Projects from Polygon’s First Cohort

1. x23.ai

Official website: https://www.x23.ai/

X23 is automating the future of decentralized organizations by integrating AI tools to streamline the operation and governance of DAOs. Their platform brings together over 50,000 sources of data to provide a comprehensive overview of DAO activities, making governance more efficient and accessible.

Their AI Gov Assistant (available 24/7 via Telegram) has become a vital tool for DAO delegates, providing detailed and accurate answers to specific governance questions within seconds. By applying state-of-the-art machine learning and LLMs, x23 is solving critical information and decision-making challenges in the web3 space.

X23’s participation in q/acc has accelerated their development and provided the tokenomic structure to align their service with the communities they serve. Their token economy now directly benefits from Polygon’s growth.

2. Prismo Technology

Official website: https://prismo.technology/

Prismo is a layer-2 hybrid public-private blockchain platform already making significant real-world impact. Their solution addresses a critical need: allowing enterprises and governments to maintain data confidentiality while leveraging blockchain’s transparency benefits.

Even before completing the q/acc program, Prismo had implemented a functioning MVP within the Department of Budget and Management (DBM) of the Philippines, where it’s securing critical budget documents. This real government adoption demonstrates Prismo’s product-market fit and utility.

In December 2024, they launched their gas token $PRSM through q/acc, with a testnet planned for early 2025 and mainnet launch expected by Q2 2025. Prismo exemplifies how q/acc can support projects that bring blockchain solutions to traditional institutions, creating substantial ecosystem value.

3. Xade Finance

Official website: http://www.xade.finance/

Xade Finance, led by 18 yr old whiz kid Harshal Madnani, is building the AI-powered “Robinhood of DeFi” - a decentralized platform that makes sophisticated trading accessible through AI insights and tools. Their platform allows users to easily launch, interact with, and invest in no-code AI agents that can trade, tweet, and leverage over a thousand integrations.

Originally conceived as a “super decentralized bank” providing on-chain banking services through in-house DeFi protocols, Xade has evolved into a powerful gateway for AI-powered trading. Through q/acc, they’ve created a token for the first AI Agent on their platform, Alpha Chad. Holding the $ACHAD token gives you access to the AI trading tools they are developing..

Xade demonstrates how q/acc can help sophisticated DeFi protocols build token economies that drive adoption while creating lasting ecosystem value, while also demonstrating the AI Agent use case.

4. The Grand Timeline

Official website: https://grandtimeline.org/

The Grand Timeline is creating the first comprehensive, interactive visualization of blockchain and Web3 history. This historical research project has been developed over three years and will result in collectible NFTs and wearables that document the evolution of our industry.

This project exemplifies how q/acc can support public goods that serve the broader ecosystem. By tokenizing this historical archive, The Grand Timeline can sustain ongoing research and documentation while offering collectors ownership in this valuable historical record.

The creator, a product designer named Igor, considers this work a public good born from his fascination with Web3 history. Through q/acc, this labor of love has become a sustainable initiative with its own token economy.

5. Citizen Wallet

Official website: https://citizenwallet.xyz/

Citizen Wallet is bridging the gap between digital tokens and physical community engagement. Their mobile app and NFC wallet solution empowers communities and events to easily launch, use, and manage community tokens, bringing blockchain utility to everyday situations.

By focusing on accessible tools for real-world adoption, Citizen Wallet exemplifies how q/acc can support projects that extend blockchain’s reach beyond crypto-native audiences. Their token economy now benefits from every new community and event that adopts their platform.

—
And that’s just the beginning!

This next cohort is shaping up to be strong as well! We just launched Season 2 for To Da Moon, Web3 Packs, Gridlock & How To DAO. These 4 projects are launching their tokens on Polygon, because of our program, none of them have any requirements to launch on Polygon. If Arbitrum had q/acc, they could have launched here.

Rationale

Scope & Objectives

q/acc will launch with the following key deliverables:

1. Deploy q/acc smart contracts on Arbitrum One.
2. Integrate with Camelot & other leading ecosystem partners.
3. Run a campaign collecting applications from the most promising teams in the Arbitrum ecosystem (and beyond).
4. Launch 10 projects in Season 1— carefully selected for product-market fit, utility and aligned with SOS strategy.
5. Host the q/acc round for Season 1 projects on a new, optimized platform.
6. List the projects on Camelot.
7. Evaluate performance and propose expansion for Season 2 based on results.

Project Selection & Quality Assurance

Our selection process ensures we only support projects with real utility and potential—not speculative tokens:

1. Rigorous Application Process: Only 8 out of 200+ applicants were accepted in our first Polygon cohort, maintaining a <4% acceptance rate to ensure quality.
2. Product-First Evaluation: We prioritize projects that already have working products or compelling MVPs, ensuring tokens support existing utility rather than being the product themselves.
3. Experienced Team Assessment: Our evaluation includes team background checks, code & legal assessments, and business model validation. We are open to actively engaging AAEs to ensure alignment and value creation with the broader Arbitrum Ecosystem goals.
4. Diverse Vertical Selection: We select projects across various sectors (DeFi, AI, gaming, infrastructure) to maximize ecosystem coverage and minimize short term narrative risk. We will however consider the outcomes of the SOS process heavily when selecting builders.
5. Community Validation: The quadratic funding mechanism ensures projects must attract genuine community support to succeed, providing market validation.

Life Cycle of a q/acc Project

Marketing and Mindshare

The q/acc team are masters at driving narrative and mindshare. Our involvement in new ecosystems promotes broader interest and attention among token engineers, DAO operators, capital allocation designers, and crypto-native communities. This attention value is automatically included in new deployments. See:

1. First Place in EthDenver’s Peoples Choice competition: “WTF is Protocol Sponsored Tokenization?!”
2. Featured in the new “Onchain Capital Allocation” handbook: qacc | Allocation Mechanism
3. VCs: Unlikely Heroes of Crypto Fundraising? Expert Says Current System Is Flawed, Better Models Exist
4. Quadratic Accelerator Launches on Polygon zkEVM - Altcoin Buzz
5. q/acc Goes Live on Polygon zkEVM to Support Sustainable Token Launches - Crypto Daily
6. Quadratic Accelerator Launches on Polygon zkEVM, Redefining Token Launches - TheNewsCrypto
7. Quadratic Accelerator: The New Launchpad for Fair and Sustainable Token Economies on Polygon zkEVM | Blockster
8. q/acc Goes Live on Polygon zkEVM to Transform Token Launches | Currency News
9. q/acc Goes Live on Polygon zkEVM to Transform Token Launches (12 Dec): Guest Post by Chainwire | CoinMarketCap
10. q/acc Goes Live on Polygon zkEVM to Transform Token Launches - Benzinga
11. https://www.binance.com/en/square/post/17471786358626
12. q/acc Launches on Polygon zkEVM to Redefine Token Economies

Funding Request

We request $1.05M in ARB ($1.3M to protect from volatility) to launch q/acc on Arbitrum, allocated as follows:

Expense Category	Amount	Details
Initialize Projects ABCs	$500k	Launch up to 10 projects, each getting $50,000 of ARB locked in their ABC (Released to team upon graduation)
ABC Bots	$50k	$5000 for each team to bridge liquidity to DEX from ABCs (Released to team upon graduation)
Matching Pool	$250k	Used to create protocol-locked liquidity pools (Held in perpetuity by the protocol)
Development & Deployment	$170k	Deployment, infrastructure, initial marketing, BD, and partnerships (Overhead, one-time cost)
Operations & Scaling	$80k	10% of the grants given to teams, used to run and operate the q/acc program (Overhead, recurring cost)
Volatility Buffer	$250k	Ensures total USD amount is available in ARB when needed (To be returned to the DAO if not impacted by ARB depreciation during the period)

KPIs & Success Metrics

To measure success, we will track:

Onchain Growth – 10x – Market cap growth (in ARB) compared to ARB granted to teams. E.g If we give the teams a total of 1M ARB, we will produce 10M ARB worth of market caps

ARB Demand Ratio – 25% – Ratio of ARB in protocol vs ARB granted to teams. E.g If we give the teams a total of 1M ARB, we will capture 1.25M worth of ARB in the protocol, creating 250k worth of ARB buying pressure.

Sustained Value – 1 year – Long-term market cap growth (in ARB) of tokens. E.g The 10x growth will last for at least a year.

First-time Arbitrum Users – 500 – Number of q/acc participants new to Arbitrum that buy more than $10 of tokens. E.g 500 users that pass our sybil filter will have never used Arbitrum before.

On-Chain Activity – Varied – Trading volume, user participation, and liquidity metrics. This will be tracked but it is so gameable, it’s not worth creating an exact metric, but we will create a lot of onchain activity.

Risks & Mitigation Strategies

Risk	Mitigation Strategy
Smart Contract Exploits	Conduct rigorous security audits.
User Friction	Create a UX similar to Polymarket
Market Volatility	Hold treasury in stables, rebuy ARB right before it is needed
Regulatory Uncertainty	Ensure compliance conforms with conservative norms (Geoblocking, low limits without KYC)

Governance & Execution

• Multisig DAO Oversight – q/acc operations will be managed transparently via an AAE, likely the foundation.
• Monthly Reports – Clear metrics and updates provided to Arbitrum DAO.
• Performance-Based Scaling – Detailed evaluation after Season 1 to inform expansion plans.

Conclusion

The q/acc model has proven its ability to create sustainable token economies that drive lasting ecosystem value. By implementing q/acc on Arbitrum, we can attract quality projects, increase ARB demand, and position Arbitrum as the premier L2 for token launches.

Our focused 10-project first season allows us to demonstrate value while managing risk, and minimizing overhead due to deployment costs. We have clear metrics to evaluate performance and inform future scaling. We invite Arbitrum DAO to join us in pioneering this next evolution of ecosystem growth.

This is the kind of mechanism Web3 desperately needs. q/acc doesn’t just hand out grants — it engineers aligned incentives , sustainable token economies, and real builder momentum. You’ve taken the flaws of traditional funding models and turned them into a flywheel for innovation, demand, and community ownership.

[cp0x]

Thank you for the offer, I like the principle of the ABC model itself, but there are many questions:

1. In essence, this is a parallel investment, in addition to another project - AVI
   Why not combine these programs?
   If we invest money in projects, then we can launch them through ABC pools, which will give us a guarantee that the project tokens will not be dumped
2. Why will new projects choose Arbitrum if there are other more well-known and chain-independent products:
   – Balancer LBP (where there is a different principle with a gradual decrease in cost, but also protects against dumping)
   – Sushi MISO (with different principles to choose from, but also with the ability to protect against dumping)
   What advantages do we provide?
3. For how long will such a pool be created, and will there be a limit for the project initial release on other projects?
4. On finances:
   – why pay projects that have not lost the value of their tokens for the withdrawal of funds to DEX due to the Arbitration?

• why are we spending 17% of funding on Development & Deployment. This is too much expense. In addition, if this principle has already been implemented for several projects, then the code base has already been developed, what will this money be spent on - $ 170,000?
• what are the overhead costs? What is needed for as much as 80,000 odllars?
• why were the amounts of $ 50,000 chosen for the project. What should the project be assessed at, that it only needs $ 50,000 for liquidity?

[Griff]

@Saurabh

Are there any legal challenges to this? If yes how do you plan to address these?

Launching tokens is legally challenging of course. From our side, we have 2 legal entities one that accepts the grant from Arbitrum and distributes the grants to the teams, and then one that supports the team and their token economy. In our terms and smart contracts, the project launches their own token and supporting contracts. We advise them to use a one time-use EOA to do this and load it with ETH from a mixer to avoid anyone having weird personal liability.

We are mitigating the legal issues for the teams as much as possible, first by selecting teams that are legit & have a clear utility for their token, and also we give their token utility right away with a token gated chat. We have a partnership with MIDAO to set teams up with a legal solution for their token if they don’t have one.

@Saurabh

Prismo has a partnership with (DBM) of the Philippines and just has a working MVP how to do you deem this as pmf? The project is supposed to launch it’s mainnet in Q2.

True, I am probably overstating the PMF. They have validated market demand from governments… but that is different.

@Saurabh

While the projects might have liquidity, but there is little to no trading volumes which raises our concern on the demand for these tokens.

The success of these project also depends on how they plan to utilise the 90% tokenomics if they won’t utilise it efficiently it is most likely going to fail.

We are not a silver bullet for a project of course, but our set up gives builders a great chance to succeed and gives the community ample opportunities to get in to their token early and safely.

We are not designed to be a gambling machine like pump fun, so we miss out on a lot of the gambling volume, and we aren’t running bots to fake anything.

@Saurabh

Our suggestion would be make this program more suitable for Arbitrum Native Projects since we have wider ecosystem than Polygon. Preference for Arbitrum native or Arbitrum aligned projects those from STIP, LTIPP, or other DAO efforts.

100% agree.

[Griff]

@Michigan_Blockchain

Michigan Blockchain believes that the Quadratic Accelerator shows tremendous promise in growing Arbitrum and creating self-sustaining token economies built on the chain.

Thx for the vote of confidence!!

@Michigan_Blockchain

We are curious as to how the DAO will standardize success criteria across different projects? Will success criteria be based on tokenomics (price stability, trading volume, supply, etc.) or project-specific KPIs (user adoption, growth, cross-chain compatibility, etc.)? And will these benchmarks be determined per project, vertical, or uniform across all projects?

In general we tend to focus on the token KPIs. They are easier and more fair to measure.

[maxlomu]

This, this, and this.

@Federico

I’m not convinced that strong teams would choose to launch tokens through q/acc. Giving up 10% of total token supply in exchange for ~$50k in ARB (which is locked and not immediately usable) seems like a poor trade. This setup doesn’t offer a meaningful runway, pushing teams to prioritize token hype over genuine product development – a distraction from achieving PMF. And at that point, teams might as well use permissionless launchpads or other, less dilutive options instead.

It’d be helpful to clarify exactly what kind of teams q/acc is targeting. Later-stage projects with established PMF likely won’t accept the dilution and complexity, while high-quality early-stage projects will typically prefer to delay token launches until after achieving PMF. In my experience as an investor, most token launches are successful only after clear PMF is achieved, making the proposition here difficult for both builders and investors to justify.

I don’t believe this structure does not fit early stage projects looking for bootstrapping grants: it could actually set them up for failure.

They are forced to launch a token and collect no direct funding from it.

And anyone who’s launched a token backing a serious product knows what follows:

• You lose focus.
• You waste time navigating regulatory minefields while speculators shout “wen Binance?”

Now imagine doing that before you’ve even built the product, and for only a small amount.

It’s a misaligned, high-friction path.

This is not what real builders need at this stage.

Yes, we need better ways to deploy capital.
Yes, we need fewer frictions for top teams to get funding.

But forcing a premature token launch is not the right way:

• It kills your ability to build momentum pre-token.
• It locks in valuation too early, making follow-on rounds harder.
• It incentivizes hype, not substance.
• in this case, it doesn’t help you raise meaningful money

This setup suits memecoins and hype cycles - which they do have of course a fit in crypto.
But our builders’ pipeline should do better.

Federico is right: strong teams with real products will raise at the right time, and if they want to go public with a token, they’ll have no shortage of options. Let’s not drive them away with the wrong ones.

Thanks

[Griff]

@danielo

I’d appreciate further clarity on the Development and Deployment costs. A breakdown separating what’s actually Dev costs and marketing is super important IMO.

I don’t understand the operations & Sacaling, is that given to the projects “given to teams” or is that basically the program manager’s fee (including overhead)?

Basically, i would suggest redoing the budget before a vote and include:

• marketing
• development+deployment
• program management
• and then the breakdown of investment capital/grants
• volatility buffer

We have several external contractors that we work with, most notably Inverter Network, and out of professional curtesy, we can’t itemize every cost publicly. So we broke it down along the lines of what is a one-time, setup cost, and what is an on going recurring cost for the program. We intend on running this program for multiple seasons, and have a 10% overhead on the program, but the set up is not free. I can go deeper into what those different bucket include, but because of external agreements, I can’t itemize them to the detail you are asking, and I think it makes more sense to itemize it based off what is a one time setup cost and what will be the cost that is repeated every season

$800k goes to creating liquidity for the teams in various ways, as outlined in the three buckets: Initialize Projects ABCs, ABC Bots & Matching Pool.

$170k is a one-time setup cost. The bulk of the setup cost is deploying the Inverter Network infra to Arbitrum which is a powerful piece of infra that can be used by projects in the ecosystem besides q/acc. It has a lot of cool modules, to allow for very complex token design, and no-code economic management. It’s similar to Aragon. The rest of the cost in this bucket is just the general work to initiate the project on Arbitrum from a program perspective. We are going to build a completely new front-end, so it looks less like Giveth and more like an exchange where you buy small-cap tokens. We will also need to do Arbitrum specific partnerships and BD/Marketing work to kick start the program here.

$80k is the program execution cost. This will be a recurring cost every season. It is just 10% of what is given to the teams, and it covers collecting and reviewing applications to choose the teams; the 8-week program to get the teams prepared for their token launch, supporting the teams in marketing their token launch; the deployment of each team’s token, and development improvements and maintenance of the software. Deploying 10 tokens for 10 different teams for $80k is an audaciously good deal, that is made possible by the Inverter infra and setup costs. The more seasons we have the better this deal gets.

$250k is just extra ARB to make sure that everything can be converted to stables so we get the right amounts of funds for everything to work. We really can’t manage the volitility risk appropriately without this… I am hopeful the DAO has a solution in place before my proposal passes so that we never have to hold this extra ARB and we just get all our funds in Stables… which we will use to buy ARB at the right moment

@danielo

2. Additionally, a fund management approach is missing

I am talking about this with the AF a this week, I think a more global solution is in the works.

@danielo

3. Final point, I’d appreciate some mapping of the next step of the journey after q/acc based on the amounts these projects have raised. Will they go to raise a seed round and then list in CEXs? Will they…? at least some rough idea of what makes sense as next steps.

This is an impossible question to answer, as each team is totally different. The only similarity that all of the teams have is to grow their user base.

Some teams that we launched with had already had a seed round, so they set their team lockups for their investors once it is minted and locked. Other teams can go and sell equity and their token lock ups, later. Some teams aren’t looking for investment and are looking to be crowdfunded, then they will build revenue/utility into their product and hope to get big enough to get to graduation, where the ARB in the bonding curve is released and they can use that to fund their operations.

It really depends on the team, we just help them tokenize, they have the freedom to do what it takes to make their start up a success.

@danielo

4. the name is horrible. Can we call it “Arbitrum Token Launchpad pilot”? or something that’s not more self-referntial web3 mental mast…? We really need to move into more user friendly language

HAHAHAHA You mean q/acc? We will absolutely make the new platform we are building extremely accessible for a variety of token buyers, and you are absolutely right we need to do a better job at saying how all this works w/o the web3 jargon.

But q/acc (Quadratic Accelerator) is the name of the game. We can name the Arbitrum program something basic though if we want, for listing out Arbitrum opportunities, like Launchpad for Liquid Utility Tokens… I slept on it and nothing better came up… will keep thinking about it.

[Griff]

@GozmanGonzalez

This is the kind of mechanism Web3 desperately needs. q/acc doesn’t just hand out grants — it engineers aligned incentives , sustainable token economies, and real builder momentum. You’ve taken the flaws of traditional funding models and turned them into a flywheel for innovation, demand, and community ownership.

Wow! Thanks for the kind words @GozmanGonzalez !

[cp0x]

@Griff

$170k is a one-time setup cost. The bulk of the setup cost is deploying the Inverter Network infra to Arbitrum which is a powerful piece of infra that can be used by projects in the ecosystem besides q/acc. It has a lot of cool modules, to allow for very complex token design, and no-code economic management. It’s similar to Aragon. The rest of the cost in this bucket is just the general work to initiate the project on Arbitrum from a program perspective. We are going to build a completely new front-end, so it looks less like Giveth and more like an exchange where you buy small-cap tokens. We will also need to do Arbitrum specific partnerships and BD/Marketing work to kick start the program here

I also care about this funding point
Sorry, but I still don’t see that kind of cost in development.
Let’s say we have a team of programmers, where the lead high-level gets $10k and 3 regular programmers get $3k. Are they really going to implement this in 9 months? It’s very expensive and time-consuming

[WinVerse]

Thank you for putting this up, @Griff.

We’ve reviewed the proposal and appreciate the intention and vision behind it. The early outcomes from Season 1 at Polygon look promising, and the featured projects reflect thoughtful curation.

That said, as we consider bringing this initiative to Arbitrum, there are several key concerns we’d like to highlight, particularly around operational structure and the timeline.

Lack of a Dedicated Program Manager

@CastleCapital

Assign a DAO-experienced Program Manager (PM) with greater involvement and oversight of DA processes

We strongly agree with the ARDC’s recommendation for DAO grant programs to include a dedicated, DAO-appointed Program Manager. The q/acc team is designed as an accelerator, but this role is currently missing from the structure.

This gap becomes especially relevant given how Polygon-centric the current q/acc material is, particularly the Protocol Knowledge Hub, where Polygon and its builder ecosystem are mentioned severally. For a program stewarded by the Arbitrum DAO, we must ensure:

• Continuous alignment with Arbitrum’s unique ecosystem and builder base.

• Robust feedback loops between the DAO, the program team, and participating projects.

• Transparent communication that extends beyond the SOS objectives.

Community participation via quadratic funding is valuable, but it’s not sufficient as a substitute for proper DAO oversight and stewardship.

Ambiguity Around Oversight

@Griff

Multisig DAO Oversight – q/acc operations will be managed transparently via an AAE, likely the foundation.

Involving the Foundation in a multisig is a good step, but if they would eventually serve as the dedicated Program Manager, this needs to be clearly stated and their scope of responsibilities must be fully fleshed out.

Without this, the current oversight structure appears too passive for a program of this magnitude, particularly given its ambitions and funding request.

Insufficient Time for Season 1 Impact Evaluation

The Detox proposal happened because the DAO spent a lot of money, saw little ROI, and thus needed some time to properly analyze all of these efforts to come up with a better structure for grants.

From the timing of the S1 impact report release, we can say the cohort likely wrapped up around late March or early April. Six weeks is not ample time for analysis of the results, especially after stating this as a KPI:

@Griff

Sustained Value – 1 year – Long-term market cap growth (in ARB) of tokens. E.g The 10x growth will last for at least a year.

What happens after the one year?

There’s no clear plan for what happens after the one-year mark or how teams are expected to continue delivering after vesting ends.

Recommendation: Defer by Six Months

We recommend this proposal be pushed back by at least six months (September 2025), to:

• Allow for proper analysis of the Season 1 cohort’s outcomes and sustainability.

• Ensure alignment with the final outcomes of SOS.

• Give room to design a more robust oversight structure with DAO-integrated governance roles.

This time buffer would enable more informed decision-making and better community alignment.

Thanks again for putting forward this proposal. We see the potential here, but believe a slightly more cautious and structured approach will yield significantly better results for the Arbitrum DAO.

[Griff]

@cp0x

1. In essence, this is a parallel investment, in addition to another project - AVI
   Why not combine these programs?
   If we invest money in projects, then we can launch them through ABC pools, which will give us a guarantee that the project tokens will not be dumped

We will absolutely coordinate with Lino and AVI. The scope though is very different. This is more of a narrowly scoped support program that helps builders tokenize on Arbitrum. The upside in the projects is less of a focus. I don’t think the AVI is actively investing right now in anything.

@cp0x

2. Why will new projects choose Arbitrum if there are other more well-known and chain-independent products:
   – Balancer LBP (where there is a different principle with a gradual decrease in cost, but also protects against dumping)
   – Sushi MISO (with different principles to choose from, but also with the ability to protect against dumping)
   What advantages do we provide?

Advantages:

LBP and MISO are launch tools projects can use in isolation. q/acc is an Arbitrum-native accelerator that makes it a community event and creates a cohort of builders that can share learnings with each other.

The big trade off for teams, is that they have to peg their token price to ARB, but they are willing to do this for the sponsored token launch.

We are more of a full-service token launch support program for builders… not just a tool.

And of course the token design we have is based on bonding curves, not LPs, which creates a much safer environment for retail… the token cannot go to zero. And with our standardized lock up schedule, the community has 2 types of fair launches to participate in:

1. The q/acc round which let’s true believers buy locked tokens at a very low market cap
2. The DEX listing which let’s speculators get in after the community at a higher price, but with a price floor so they know that for the first 6 months, the price won’t drop below the listing price.

@cp0x

3. For how long will such a pool be created, and will there be a limit for the project initial release on other projects?

I might not fully grok this question, but I think you are asking: How long will the project’s ABC and LPs be on the platform.

Their liquidity is controlled by the protocol, but will be released to them when their token hits market cap, circulating supply and liquidity KPIs which make the ranged liquidity we provide for bootstrapping not useful for their token economy.

@cp0x

4. On finances:
   A. Why pay projects that have not lost the value of their tokens for the withdrawal of funds to DEX due to the Arbitration?

B. Why are we spending 17% of funding on Development & Deployment. This is too much expense. In addition, if this principle has already been implemented for several projects, then the code base has already been developed, what will this money be spent on - $ 170,000?

C. What are the overhead costs? What is needed for as much as 80,000 odllars?

D. Why were the amounts of $ 50,000 chosen for the project. What should the project be assessed at, that it only needs $ 50,000 for liquidity?

A. I don’t understand this question.

B. Inverter’s Smart Contract system is an incredibly powerful piece of modular infrastructure. They spent years building it and the Audits were not cheap! This is how the upfront cost get’s recouped. They charge to have it deployed to chains. Also, they made a custom set up for us on top of it all, and this is part of the deal. We can nickel and dime it down, but this a common business model for building smart contract infra.

C. We will help 10 teams launch 10 tokens… Find someone who will provide a full service token launch solution like we provide for 8k per token. That’s an incredible deal. And it’s set at 10% of the capital allocated, which is very reasonable for grant programs.

D. We are using a 12.5% Reserve Ratio which is a little low, but not unreasonable from a token engineering point of view, and at 50k, this sets the teams starting token market cap at $400,000. This is attractive enough to the community of buyers, low but not too low for the builders and $50k locked up in ARB is only about twice the average questbook grant… and this grant creates ARB demand instead of ARB inflation so we think it’s reasonable for Arbitrum. So $50k just hits that sweet spot.