[Non-Constitutional] [RFC] Arbitrum D.A.O. (Domain Allocator Offerings) Grant Program - Season 3

Proposals
1

Abstract

The Arbitrum Domain Allocator Offerings Grant Program (D.A.O.) has operated for one year across two six-month seasons. The program has evolved and improved based on previous results, growing from its first season, which allocated $250,000 across four domains, to a second season with funding of $1,000,000 per domain.

We are now proposing a third season that would run for a full year, encompassing the existing four domains (Protocols, Education/Community and Events, Dev Tooling, and Gaming) while potentially adding a fifth domain (Orbit). The vision is to create a modular program where new domains can be integrated over time based on DAO requirements and perceived needs. This new season will also improve tracking of grantee progress after funding and facilitate fast-tracking of exceptional projects into other DAO initiatives, such as Arbitrum Foundation programs and the GCP.

Questbook will serve as the technical partner of the program, offering their services through the Questbook.app portal.

Season 1 and 2 recap

Season 1 of the Grant Program was initiated through an RFC in April 2023, designed to serve four distinct domains: New Protocols and Ideas, Dev Tooling, Education/Community/Events, and Gaming. Following a successful snapshot and tally vote along with elections for the four DAs, the program officially launched in October 2023. The team consisted of JoJo, SEEDGov, Flook, and Juandi as Domain Allocators, with Srijith serving as Program Manager.

The first season operated for six months with a budget of $250,000 per domain, totaling $1 million in funding, and implemented a soft cap of $25,000 per project. In April 2024, the program was renewed for Season 2 with the same team but expanded funding to $1,000,000 per domain. The soft cap was increased to $50,000, with proposals exceeding $25,000 requiring evaluation from two Domain Allocators.

Season 2 has now completed its fund allocation phase and will continue operating at reduced capacity for the next six months to oversee milestone completion and grant disbursement. Bear in mind that Season 2 results are partial from the first 6 months, and it will have its natural end in May 2025.

The following are the numbers so far achieved:

  • Season 1
    • Amount of projects approved: 67
      • Amount of completed projects: 49 / 73%
      • Amount of uncompleted projects: 8 / 12%
      • Amount of abandoned projects: 6 / 9%
      • Amount of withdrawn projects: 4 / 6%
    • Amount of milestones approved: 207
      • Amount of completed milestones 178 / 86%
      • Amount of uncompleted milestones 23 / 11%
    • Amount of funds approved: $997,793
      • Amount of fund disbursed: $852,781 / 86%
      • Amount of funds leftover: $87,512 / 8.5%

Note: Uncompleted projects are those currently active but were either unable to complete their proposals within the last six months or pivoted to a different idea. Abandoned projects are from teams that weren’t able to operate in the market. Withdrawn projects are those that were approved but decided not to proceed with their grant.
While there was no specific timeline set, we feel Season 1 has come to its natural end, and we are in the process of informing teams and withdrawing remaining funds.

  • Season 2
    • Amount of projects approved: 127
      • Amount of completed projects: 42 / 33%
      • Amount of uncompleted projects: 85 / 67%
      • Amount of abandoned projects: 0
      • Amount of withdrawn projects: 0
    • Amount of milestones approved: 451
      • Amount of completed milestones 240 / 53%
      • Amount of uncompleted milestones 211 / 47%
    • Amount of funds approved: $2,602,247
      • Amount of fund disbursed: $1,356,181 / 44%
      • Amount of funds leftover: $1,246,066 / 41%

More details on the results can be found here.

Season 3: overview

In the last year, and potentially for the next year, the D.A.O. Grant Program has brought and will continue to bring the following value to the DAO:

  1. Introductory Grant Program: It fills the gap of Arbitrum Foundation grants (usually starting at $50,000, up to $150,000), serving as an entry-level program in our ecosystem.
  2. Transparency: All applications and judgments are available for everyone to read in the portal. Additionally, discussions with protocols are typically maintained in a public Discord with open access.
  3. Targeted Approach: The program has specialized in four specific verticals deemed key by the DAO
  4. High submission amount: between Season 1 and 2 we managed more than 700 proposals, approving around 200.

While these points have always been advocated and envisioned as the natural shape of the program, below is a non-comprehensive list of value propositions that has been provided so far through in the last two seasons of the program:

  • Enable new teams and small builders to bootstrap their projects
  • Enable mid and big team to prioritize certain deployment in Arbitrum
  • Support Hackathon and Event winners
  • Provide an alternative funding route alongside the Arbitrum Foundation or direct DAO proposals
  • Support projects building upon targeted DAO initiatives
  • Ensure builder diversity, enlarging indirectly Arbitrum mindshare for local builders.

A few specific examples of what we think can be defined as success stories:

In this new iteration, the DA program will last one year. After two six-month seasons with subsequent renewals, there is sufficient maturity in both the program and the DAO to extend it, reducing the burden on delegates for operational renewal and addressing issues such as gaps between seasons.

Funding will be proportional to Season 2, which effectively allocated $750,000 for each of the four domains for six months: for a one-year program, the funding for the four domains will be $1,500,000 per domain, for a total of $6,000,000 for the four domains excluding OpEx. Additionally, after discussions with several delegates and the Foundation, and assessment of the current DAO landscape and working groups, there is interest in a potential fifth domain related to Orbit chains. Acknowledging its experimental nature, the proposal suggests funding this domain with half the amount of other domains: $750,000 for one year.

The grant structure will remain unchanged. Grantees can request up to $25,000 with a single DA review, and up to $50,000 with two DA reviews. Grants will be paid on a milestone basis, where projects must first complete the milestone, verify it with the DA, and then receive the corresponding portion of the grant. Only in exceptional cases, such as when milestone funds are essential for completion or in situations of economic distress, may the DA, at their discretion, release milestone funds in advance.

Upon completing KYC/KYB, grantees will have up to six months to complete their proposal. If they fail to do so, remaining funds will be retained by the program and either reassigned to new projects or, if the program has naturally concluded, returned to the DAO.

Upon proposal completion, grantees must publish a final report in the Arbitrum forum to inform the general DAO community about their project.

Three months after proposal completion, grantees must complete a survey and publish an update to their final report, aimed at tracking their success, foothold gained in Arbitrum, and adherence to or pivot from their original idea.

Before completion, a subset of projects will be internally selected by the PM and DAs for fast-tracking through a PM pitch into other ecosystem programs, such as the Arbitrum Foundation Grant Program or the GCP. While this won’t necessarily guarantee further grants from these or other entities, it will ensure exceptional protocols can continue their journey and expand within the ecosystem.

With these modifications, several gaps from previous seasons are addressed:

  1. Creating a checkpoint for approved proposals after their final milestone: This will enable better overall tracking of project outcomes.
  2. Integrating exceptional projects into DAO growth programs to establish a clear pathway for continued development within the Arbitrum ecosystem.

Program phases

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Excluding the initial phases of snapshot discussion, temp check on the proposal, candidacy for DAs, elections for DAs, and on-chain vote, the program is articulated in the following phases:

  1. A first 1 year phase: during these 12 months, funds allocated to the program will be assigned to DAs to the projects that will be evaluated as worth financing. During this phase, the green one in the graph, all the team will operate at full capacity.
  2. A second phase, at low capacity, lasting 6 months: this phase is also effectively already embedded in phase 1. During this 6 months we will assume that there won’t be any new fund to distribute from the main phase, and it will be a monitoring one. As stated, grantees, once approved and kyced, will have up to 6 months to complete their project. This means that projects approved, for example, in the last legal month of phase 1, will be able to complete their path up to 6 months after the end of phase 1. In this period, the team will work at low capacity, with a 20% cost.
  3. A third phase, potentially extending up to 3 months after the end of phase 2, related to the checkmark of projects after completion. If we consider a project that gets approved in the last month of phase 1, and needs 6 months to arrive to completion (so is completed in the last month of phase 2), we will necessarily have to place the checkmark 9 months after the legal completion of phase 1. Note: there is no opex coverage for this phase, since is effectively based on contacting projects, interviewing them likely with a google form and report in the forum, but only as said for projects that were approved in the last quarter of phase 1 AND that requires 6 months for completion (which is not always the case). This phase will be covered through the team which will have the goodwill of finishing to accompany projects in their path, and could potentially be resolved through the passing of the baton to a new team, or confirmation of the old team, in a season 4.

During all of these phases, there will be parallel communication phases related to

  • the communication and reporting of the program in the forum: we need to, indeed, cover this for 12 + 6 + 3 months of the program
  • the communication with Arbitrum Foundation: as stated, upon completion, best of breed projects will be pitched to the AF to have them continue their journey in the Arbitrum ecosystem, either through a grant, or marketing, or any other initiative that the AF might deem necessary, knowing that this internal pitch might not necessarily spark any follow up
  • the communication with GCP, in the same fashion of the AF, once the fund will have their thesis and infrastructure up
  • any communication with any other stakeholder or initiative that might be deemed relevant by the team or the DAO.

Domains

So far the program has run with four main domains:

  1. New Protocols and Ideas: A general bucket encompassing not only protocols, but also platforms, governance tooling, and other projects not specifically falling into other domains.
  2. Education, Community Growth and Events: A domain focused on physical events and educational material for Arbitrum.
  3. Dev Tooling on One and Nova: A technical domain oriented toward developer tooling and promoting Arbitrum Nova adoption.
  4. Gaming: A domain dedicated to web3 gaming and infra, web3 KOL gaming activities, and all video gaming-related projects.

All these domains remain pillars of our DAO today, even more so than a year ago. We are, for better or worse (though mostly better), the most accessible DAO in crypto, the first ecosystem to create a gaming fund of the size of GCP, and we have a technology stack that enables permissionless creation of L3s. Our ecosystem’s nature and soul, combined with the entry-level grant structure of this program and the diversity we inevitably achieve through it, provides strong justification to maintain all four domains. While most operational changes will be in the framework that moves projects from this program to others, we plan to specify domains based on relevant stakeholders’ feedback (Arbitrum Foundation, OCL, Delegates) to add more specificity and better tailored results.

Education, Community Growth and Events

The domain has seen significant attention, receiving the highest number of proposals in both seasons. Through discussions with Foundation members and key stakeholders, two additional focus areas have emerged where the grant program can provide value:

Events Focus:

  • While continuing to serve the broader community, emphasis will be placed on amplifying Arbitrum’s presence in key global markets and events
  • This will complement the Foundation’s growth efforts in specific regions such as, in random order, SEA, USA, LatAm and others
  • The program will maintain an open approach, not limiting itself to these regions
  • Regular coordination with the Foundation’s marketing department will help identify synergies between grantee proposals and events organized by the Foundation or other key ecosystem players
  • The DA will be mindful about any request of grantees for presence of personnel of the Arbitrum Foundation in the events: while this can, in some cases, be accommodated, is not always possible.

Developer Relations:

  • Increased focus on DevRel content for both One and Stylus
  • Examples include, but are not limited to, video tutorials
  • Goal is to foster technology stack adoption through expanded community-created educational materials
  • This branch can partially overlap with and be covered/complemente by the Dev Tooling domain.

To reiterate: the domain won’t change its nature to only serve requests such as the one mentioned in the above examples, but might give in some cases more weights in the evaluation as there is value added in coordination with the broad ecosystem. The DA will still retain all its liberty of evaluation.

Gaming

The gaming vertical has gained increased attention throughout the year in Arbitrum, partly due to the GCP initiative. Key stakeholders, including OCL, have identified a primary need: Arbitrum Games should begin targeting the web2 gaming industry, creators and gamers.

While acknowledging that the grantee budget cap of $50,000 isn’t sufficient to attract web2 developers, we can broaden the domain’s scope by focusing on user acquisition through initiatives such as:

  • Content creation for YouTube and TikTok
  • Twitch streams
  • Other KOL initiatives targeting the web2 gaming segment
  • Grant proposal tuned toward KPI such as amount of reach, target impressions and others
  • Independent publications like newsletters, blogs, and channels.

Important notes:

  • The domain, while expanding, will still maintain its existing focus, which is financing teams to bootstrap or expand web3 games, web3 game related infrastructure and web3 gaming services in the Arbitrum ecosystem while expanding to include these new initiatives
  • Success on the expanded scope will largely depend on selecting a strong candidate or team with specific experience and reach in this segment
  • These requirements will be reflected in the election criteria.

Dev Tooling on One and Stylus

The Dev Tooling will undergo changes based on what the Arbitrum ecosystem has achieved, both technologically and in terms of PMF, in the last 12 months.

Nova, initially included in the scope, hasn’t seen the forecasted adoption. At the same time we have seen a big conviction bet on Stylus.

While it doesn’t make sense to exclude specifically Nova, it can’t be anymore one of the focus of the domain, which will be now called “Dev Tooling on One and Stylus,” incorporating the recent Stylus release. There shouldn’t be any consistent overlap with the current year-long “Stylus Spring” program for several reasons:

  • Different funding amounts (up to $50,000 in DA program vs. potentially $200-500,000 for Stylus Sprint)
  • Different application windows (always open in DA program vs. 8-weeks application period in Stylus Spring)
  • Broader scope (Dev Tooling domain will likely continue to primarily operate on Arbitrum One).

The rubric will also be modified to put emphasis on Telegram’s tooling such as trading bots, fairly available in other ecosystems but less widespread in Arbitrum.

New Protocols and Ideas

The “New Protocols and Ideas” domain will remain the most general capture-oriented domain, as it has been in the last two seasons. Its inherent generality enables it to cover both classic ideas, like financing DeFi protocols, and DAO-specific needs like governance tooling. This domain will remain largely unchanged, except for maintaining constant alignment with the Foundation and other stakeholders on what is considered important and valuable when assigning grants. Additionally, there will be attention paid to the evolving narratives driving the broader market.

Orbit Chains

There has been growing interest in a possible fifth domain related to Orbit chains. Many delegates have shown interest in or directly requested funding for an Orbit chains program, which is also supported by the existing working group.

The Orbit Chains domain will have the mission to:

  • Enable Arbitrum protocols to expand their dApps to specific Orbit chains
  • Deploy technological solutions aimed at addressing current user experience fragmentation
  • Bootstrap solutions built on top of the 2024-2025 Offchain Labs roadmap.

The Orbit chain domain won’t cover the deployment of new Orbit chains, since this is a mission that is currently facilitated by the Foundation. This doesn’t mean that a project can’t have, in its milestone, the deployment of its own chain if that is part of a broader plan; but this can’t be the main focus of the proposal.

The rubric and template will be drafted in detail with the elected team member, following the same process used for the other domain rubrics (1, 2, 3, 4).

Acknowledging that the DAO might consider it premature to launch an Orbit domain, particularly before seeing results from the related working group, the snapshot will provide an option to exclude it from the current program. This domain could then be integrated later during the program’s one-year duration.
As for the current iteration, we propose MaxLomu as lead for the Orbit domain. While we can accommodate the DAO’s preference for elections in this domain, we believe there would be no better lead than him, given his background and current working group proposal.

Modularity

Several parties have expressed interest in adding new domains to the DA program.

While it wouldn’t be wise to expand the program further at this time, new domains might be needed at different intervals, as illustrated by the Orbit domain example, where the DAO might require a new domain program six months from now. For this reason, Season 3 is designed to be modular.

If the DAO votes to allocate capital for a new domain, it can be integrated into the current program by leveraging the existing infrastructure and Program Manager. The costs for adding domains would vary based on specific implementation requirements:

  • For domains requiring no additional Questbook expansion and maintaining equivalent PM workload:
    • Platform costs: Additional $1K/month
    • PM costs: Additional $1K/month
    • One new Domain Allocator required

Note that:

  • New programs may operate with their own independent teams
  • Integration of the Orbit Chains domain, whether at the start of Season 3 or later, will not incur additional costs

What does success look like

Evaluating success for an entry-level grant program can be challenging. The evaluation primarily focuses on three key metrics:

  1. Number of Grant Applications: The program has grown over the past two seasons with increased proposal submissions. We expect to maintain or exceed this level of interest. This KPI should be primarily compared to Season 2’s metrics, as Season 1 had both lower funding and a lower cap ($25,000).
  2. Grant Completion Rate: As an entry-level program serving primarily small and new teams, the risk of incomplete projects is higher compared to more mature programs. The completion rate will largely depend on DAs’ judgment in approving teams they trust to deliver. This metric should also be benchmarked against Season 2’s performance for consistent comparison.
  3. Long-term Project Sustainability: A new metric will track how many teams are still building on their original project and remaining on Arbitrum three months after grant completion. As this is a new measurement not present in previous seasons, we won’t have comparative data unless we retroactively measure Season 2 projects in nine months.

Election Process

The election process will follow established best practices as outlined in the Code of Conduct:

  • Two-week candidacy period
  • Candidates (person, entity or team) may apply for only one domain
  • Entities or Teams applying for any domain must designate a single individual as their point of contact
  • One-week snapshot election with shielded option enabled and weighted voting.

Resignation of DAs and PMs

In recognition that one year is a relatively long period for a DAO’s program, procedures must be established for cases where team members cannot complete their tenure. If a member resigns, they will assist with the transition, and the team will attempt to source a replacement. A snapshot vote will be held with two options: “Yes, proceed with the new member” or “No, hold elections.”

If approved, the new member will be onboarded to the team. If rejected, a standard election process will occur over three weeks (two weeks for candidacy, one week for voting). During any transition period where the former member cannot fulfill their duties, the current DAs and PM will temporarily manage the domain, including grantee collaboration, proposal evaluation, and milestone payments. Any compensation due to the departing member during this interim phase will be fairly distributed among contributing team members.

Budget

The RFC will request $1,500,000 for each of the four domains “New Protocols and Ideas”, “Education, Community Growth and Events”, “Dev Tooling on One and Nova”, and “Gaming”, for a total amount of $6,000,000 excluding OpEx. The requested amount will be in ARB and, upon receiving, will be converted into USDC.

Earmarked costs are as follows:

  • Questbook Platform: $84,000 total ($7,000/month for 12 months)
    • Includes platform maintenance
    • Synapse subscription for KYC/KYB of teams and grantees
    • DocuSign subscription
  • Domain Allocator Compensation: $422,400 total
    • $8,000/month for 12 months (four DAs)
    • Plus $1,600/month for 6 months during low capacity phase
  • Program Manager Compensation: $85,800 total
    • $6,500/month for 12 months
    • Plus $1,300/month for 6 months during low capacity phase
  • Legal Expenses: $30,000 earmarked

Total operational costs: $622,200

If the Orbit Chains domain is added as a fifth domain:

  • Additional $750,000 to total budget
  • DA compensation of this domain remains unchanged
  • No additional PM or platform costs
  • Total program cost would increase to $727,800.

Note: If approved, JoJo will forfeit any remaining payments from Season 2 at the start of Season 3. Similarly, if any of the current Domain Allocators will participate in the elections and will be re-elected, they will forfeit any remaining payments from Season 2.

Reporting

A more clear and standardized reporting will take place going forward. Specifically

  • The PM will report, once per month, in the Arbitrum Governance call
    • This type of reporting might change format and/or schedule: if the DAO is interested, for example, it could be a specific DA call, or it might fall into any of the new governance DAO’s calls that we could change or spin up in future
  • The PM and the DAs will publish, once per month, a single unified report highlighting the status of the program
  • All grantees, of all domains, at completion will have to publish a report in the Arbitrum forum
  • All grantees will have to follow up the aforementioned report, after three months, with a survey prepared to understand the effectiveness of both the grant itself and the idea from the team, including but not only understanding if the team has decided to keep building in Arbitrum, expanding in other chains etcetera.

Vote specification

The DAO vote on Snapshot will be a single choice vote:

  • Yes: renew the program with $7,477,800 and 5 domains
  • Yes: renew the program with $6,622,200 and 4 domains
  • No: don’t renew the program
  • Abstain

Steps to Implement and Timeline

  • 19th of November: RFC for Season 3 and discussion with the DAO
  • 5th of December: Snapshot for Season 3
  • 16th of December - 5th of January: candidacy for the domains
  • 9th of January - 16th of January: Snapshot elections for the domains
  • 23rd of January - 6th of February: Tally voting
  • First half of February: refinements of rubrics with the new team
  • Mid February: start of the program

Fund Management

ARB received from Tally, with a 35% buffer, will be transferred to the Arbitrum Foundation for the conversion in USDC of only the amount approved; any ARB surplus will be returned to the DAO. Upon completion, funds will be split as per the following

  • OpEx safe: managed by the MSS, it will be in charge of payment of suppliers and partners (Questbook, Synapse) and salaries
  • Domains’ safes: managed by PM + DAs, one for each vertical with a 2/3 setup (the PM, the main DA, and a second different DA), will be linked to the specific domain through the Questbook website and will be used to disburse the grants. The safes will have the Zodiac Module for the clawback of funds.

Resources

Season 1 RFC
Season 2 RFC
Season 2 update thread
New Protocols and Ideas RFP
Education, Community Growth and Events RFP
Gaming RFP,
Dev Tooling on One and NOVA RFP

Acknowledgements

There are a lot of people to thank for this proposal. In random order: Cliffton/David/Mariam from the Foundation, Krzysztof, Max, Dan Peng, Kiet from OCL, DK, the Seed team, Callen from Wintermute, and many more for the feedback to draft this proposal. I literally chased some of you, physically, in bkk, thanks for the patience.

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Changelog:

27/11/2024: changed timeline. Unfortunately, with the code of conduct stating that candidacy window should be at least 2 weeks and all voting having to be wrapped up by the 19th of December, there was no material way to have DAs elections before that date. For these reasons:

  • the proposal will stay in discussion on the forum before snapshot for a further week
  • the candidacy window will be extended to 3 weeks: no point in not taking advantage of the higher amount of time available.

30/11/2024: added explanation of the different phases of the program. Check the section “Program Phases”

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That is a very bold acronym :grinning:

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Well everything including the name is negotiable I guess :sweat_smile:

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There have been a lot of amazing projects funded so far from the second phase of the program, and we are looking forward to renewing for a third season with more improvements. Please do share any feedback here on the program to iterate on for the next season!

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Thank you @JoJo - we are supportive of the Grant Program and believe this is a great way to continue growing the ecosystem, without burdening small teams with the requirement of going through the longer DAO process.

One question - we noticed a significant drop in project completion rates from Season 1 (73%) to Season 2 (33%). Is this because Season 2 is still ongoing or what is the reason for this?
Understanding this could help ensure better outcomes and higher success rates in the upcoming season.

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Yes this is indeed the case.
Basically, the season 1 and 2 lasted for 6 months of what was the effective execution of the program. After that, we had a 6 months low capacity monitoring, because what happens is that once you approve a grant, the grantee has up to 6 months to execute. Naturally, most of the grants approved in july, august, sept, october, are yet to be completed, and should be completed by april 2025 (if not, funds for remaining milestones will be sent back to the dao). We completed the execution phase of the program a couple of weeks ago give or take, and we are in the low capacity monitoring phase.

If I look at the numbers tho, we have had, in season 2, a faster completion rate compared to season 1, probably also because we had explicit safetriggers like this time limit (which was not present in season 1).

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This is a great program for the DAO and this iteration looks very solid. It is a great idea to include Orbit, we should continue adapting this program with the ecosystem’s evolution as time goes by. I would only suggest increasing grant allocation transparency and to be more focused on the real impact of funded projects.

It’s great to add a new metric for the program, however instead of emphasizing completion rates alone, grants should prioritize projects that make measurable contributions to the ecosystem. Measuring growth in transaction volume or liquidity and onboarding new developers and users could help assess real traction.

On transparency it could be helpful to have detailed criteria for grant selection such as alignment with each of the domain’s objectives, the expected scalability of the project, and its potential ecosystem impact. Improving visibility into the decision-making process could also enhance accountability.

These developments would help in making sure that resources are allocated efficiently, and it will raise meaningful and measurable contributions to the Arbitrum ecosystem. It’s great to see this program’s continuity.

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First, I want to extend my gratitude to the team for the incredible work done so far with the program. The work done by the domain allocators has been remarkable and unbiased. Thank you for your continued effort and commitment. It’s also evident how much thought has gone into this initiative.

I’ve personally witnessed the tangible benefits this program has brought to individuals I know. It has empowered them to bring their ideas to life, which speaks volumes about its impact. Programs like this are vital for boosting innovation and creativity within our ecosystem.

I also support the addition of Orbit to the framework. I’m optimistic that this inclusion will help further boost its adoption and expand its reach. It’s a strategic move, and I’m excited to see the outcomes it will bring.

That said, I’d like to ask about the current incentives in place for domain allocators. Have you considered a model with bonuses for exceptional allocation performance—such as funding projects that exceed expectations or make substantial contributions? On the flip side, would it make sense to include a mechanism for penalizing allocations that consistently underdeliver? While these measures might be challenging to implement, they could potentially drive higher accountability and better results.

Additionally, regarding the program length, I wonder if there is a plan for interim reviews to assess performance across domains. Such reviews could allow for flexibility in adjusting funding, focus, or strategy as needed, ensuring the program stays aligned with its objectives.

Overall, this is a strong proposal, and I firmly believe in the continuation of the program given its proven track record. I’m eager to see the projects and initiatives that will be funded throughout the next year.

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The proposal is logically structured, clearly targeted, and outlines well-defined improvements.

Seasons 1 and 2 have established a solid foundation, particularly in terms of the number of supported projects (200+), success rate (73% completion), and transparency in fund allocation. This type of entry-level funding is crucial for supporting new projects and small teams, helping to attract more developers to the Arbitrum ecosystem.

Thoughts on Orbit Chains:
The Orbit Chains proposal indeed showcases potential for a new domain; however, I personally feel that the DAO’s demand and direction for Orbit are not yet sufficiently clear. It may be more prudent to start with a standalone pilot program with a lower budget ($375K for 6 months) to establish proof of concept before scaling further.

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Hi! Thanks for the proposal.

The DDA model has been working well, and I think it makes a lot of sense to renew it for another year. Overall, I strongly agree with the proposal in all aspects. Congratulations for the great work during seasons 1 & 2.

I just have a few questions.

Regarding Season 1, is there any data or report showing the continuity of the projects that were funded? Excluding events and community-related initiatives, the other funded domains focused on tooling or development for deploying on Arbitrum. Is there any kind of follow-up on these?

As for Orbit, I fully agree with incorporating the domain. Not only that, but I also support allocating the same budget to this domain as the others. L2s and L3s built with Orbit technology will start to gain traction and momentum, so it’s better to have a well-funded domain capable of providing grants. In any case, if there is no demand, the funds will always return to the DAO.

Regarding the following

As I’ve seen mentioned on a few occasions, I believe that for roles with longer terms (not as short as six months), the compensation model should include a fixed payment in USD plus vested ARB tied to the completion of a 12-month term. This would incentivize full commitment and discourage resignations (although they can still happen—no one is exempt from new opportunities).

I propose slightly reducing the monthly amount and reallocating that reduction into ARB vested upon completing the 12 months.

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Thanks for the proposal!

I must say I find it missing a category for DeFi that mirrors the one for Gaming with the proposed expanded scope. We saw a few times DeFi protocols requesting help/resources from the DAO regarding content/marketing creation & amplification to expand beyond the current audience. It seems that the “New Protocols and Ideas” bucket does not cover it, neither the " Education, Community Growth and Events".

I’m not sure how to frame it, but in theory we are the “DeFi L2” by definition, but we are not providing funding to advertise this.

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Hey @JoJo - thank you for the proposal with the funniest acronym!

I think this initiative provides great value to the Arbitrum ecosystem, supporting its growth with a more streamlined process for small to medium sized grants.

As the initiative’s scope is to support the Arbitrum ecosystem, I agree with the need of adding a fifth track that specifically focuses on Orbit chains. Arbitrum Orbits is a key element of the Arbitrum ecosystem and narrative, so it seems fitting for the Arbitrum D.A.O. program to have a dedicated track. I also support the decision of funding it with 750k, given its experimental nature.

One suggestion I have is for the program to work closely with other DAO-funded initiatives, such as the DAO Events budget for 2025 and the Security Services Subsidy Fund. I believe there are close synergies between the Arbitrum D.A.O. and these other initiatives, that could be used to benefit the entire Arbitrum ecosystem.

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Good work on the Season 3 proposal! It looks solid, but I have a few questions:

.In Season 2, 127 projects got the green light, but 67% of them haven’t hit their targets yet, and 47% of the milestones are still up in the air. As we look to reallocate unused funds, how can we make sure that new grantees have a better chance of success? For instance, did we consider more frequent audits or prior reliability metrics, such as success in previous seasons? Also, was there any talk about penalizing teams that abandon projects without good reason?

The proposed way of measuring teams three months after finishing their projects is interesting but might not have a lasting impact on the ecosystem. This only measures whether teams are active for a short time. It doesn’t look at things like how stable they are or if they have what they need to grow.
Have you thought about monitoring projects for longer than three months? This would help ensure that projects evolve and become fully integrated into the Arbitrum ecosystem.
Could a mentorship program help teams with key areas like funding, scalability, and user adoption? Without this, promising projects might not overcome initial challenges and end up abandoned.

The push into Web2 gaming is an interesting strategic move, but it looks like there’s a mismatch between the goal and the resources being used. we all know that the current budget of $50,000 per project isn’t enough to attract web2 developers. you mention possible KPIs like reach and impressions, but you haven’t set any concrete targets or defined the metrics.
Also, how will you make sure that resources are allocated to proposals that actually contribute to these objectives? For example, could you give priority to projects that already have a Web2 user base or use hybrid tools that reduce adoption friction?
Could we think about other ways to attract developers and creators from the Web2 ecosystem without relying only on budget?

The proposal says that the reports will be sent out every month and published together by the Program Manager and the Domain Allocators. While this is a great improvement, how do you plan to get the community excited about actively participating in their review? It’s not uncommon for lengthy reports to be overlooked. Have you considered creating an interactive or visual executive summary that’s accessible to the general community?

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A lot of messages, this is nice. Let’s go step by step.

While this work theoretically, doesn’t necessarily work practically. Being the program basically the entry level of the DAO, evaluating on the basis on tx volumes, users and liquidity will just show skewed results. Let’s explain with the example of Pear protocol. If we look in their dune dashboard, they have generated since inception around $300M in volume and onboarded around 2k users. And this is great.
But, this protocol is in the categories of the big guns: we have a few each season, and if we went to measure in term of DeFi numbers, they would likely account for 99.99% of the numbers generated in the whole season. Because, inherently, we can’t compare a protocol such as this one with a startup in the African region that wants to serve on and offramp and access to stablecoin.
For sure, there could be maybe a way to normalize meausures. But knowing the place of this program, which again is the entry grant program of the DAO, it likely makes more sense to understand how many of the project financed are effectively sticking around in Arbitrum with their initial idea + if they pivoted. And, for outstanding results like Pear, we can just highlight how even an entry program can deliver more “fat” results if targeted toward specific areas.
Obviously open to suggestion on this topic.

This is already available in the questbook platform, in which the proposal is present in his final form alongside the review both from a rubric standpoint and a general review from the DA. We can try and make this info available also in the forum in the reporting for convenience if this is what the DAO desires.

I thought about that, yes. The simplest and maybe most effective mechanism would be a bonus per completed project. But it would introduce a bit of a perverted mechanism: a DA would be encouraged to not only approve only the proposal that he/she thinks can be delivered but also make the team modify the proposal in a way that milestones are way easier to complete and reach, thus reducing the effectiveness of the whole proposal. Remember: most of the times, in season 1 and 2, the proposal has been actively discussed with the grantees (in the questbook discord, accessible to everybody btw), with a back and forth toward the modification of milestones. The activity of DA is to try and tailor the proposal: if we move toward a completion bonus for DAs (or a penalty slash for uncompleted projects) we might just lose alignment of incentives.

This was something that was also brainstormed in the proposal. Main problem is the following: after 6 months, both in the orbit domain and in the other domains, we will only see partial results, because projects once approved will have 6 months to complete. The main issue I have with a 6 months trial is that that 6 months trial can’t be properly evaluated before 10-12 months, thus making it potentially ineffective.

Unfortunately, no. This data point was never added to season 1 and 2, and had no ownership for this task to be completed. I know that some delegates are looking into samples of this data and want to show off some partial results during this discussion to have more clarity.
For what is worth, this is exactly why the 3 months check after completion was added: tracking what grantees have been doing after the program.

I can totally see the point here. Here is also the current counterargument, from the perspective of someone that has been on the other side of the barricade (aka the DAs one): while compensation is for sure good, is also slightly undervalued in my opinion. Reason is simple: this program is growing overtime, which means more and more projects will come to apply. As you remember from LTIPP, the workload is basically almost linearly related to the amount of proposal. Season 1 and 2 saw a surge, due to both more popularity of the program and increased cap. I personally expect in season 3 to have even more requests. Considering the 4 domains have had an average amount of proposals of 128, it means that technically in Season 2 the DAO has paid through the 6 months salary of each DA every evaluation $375 (8k*6/128). And yes, there is a ton of variance here but we need to give reference numbers as well. To give a comparison, in Season 1 this cost was $654. I expect this cost to drop lower in Season 3.
Why am I saying all of this? The cost of labour for DAs is directly dependant on the commitment and analysis and time and energy that each DAs put in every proposal. My fear is that if we lower the base salary, DAs won’t be incentivised to do a good job to be honest. And so to apply your framework, I would only see it possible if we effectively increase, by a semi-decent amount, overall opex, which I am not sure this is what the DAO wants.
Again, on this I am open to any suggestion. All the data above comes from a mix of objective data point, and also having the pulse and experience of day to day operation on my side.

Effectively the whole DeFi part is covered in the “New Protocols and Ideas”. If you look at the Season 2 report for New Protocols and Ideas you will see that there has been a certain amount of DeFi protocols approved. Likely, this % is higher depending on the definition that you give to DeFi.
On the marketing/incentives: a lot of grantee ask, in their milestones, a part of funds to be used for this purpose. On a general note, we have tend to cut these milestones, either to reallocate to others or just save on the proposal, for 2 main reasons: the program always been oversubscribed means that trimming the nice-to-have compared to the must-have has allowed for more accepted grantees, and also sometimes is quite difficult to evaluate how a team can be effective on marketing, especially if they are bootstrapping a project. This is also one of the reasons why we have created this secondary tunnel (for a subset of proposals) in the AF/GCP/whatever other program we will have: collaborating with them might translate in marketing from these entities that have skillset and capacity of reach that single teams don’t usually have.
Let me know if i answered your question, or if i misunderstood it.

As told to @raam, open to any change here as well :slight_smile: But while I am not a marketing person, the choice was made to give a better brand identity to the program.

I am pretty sure we will see proposals and sinergies materialize in relation to the DAO event budget, like side events attached to the main ones through this program for example. Excited tbh to see what will happen.
On the Security Service Subsidy Fund, we can for sure try to work and see what type of cointegration can happen. Top of my head, I’ll be honest, I don’t see it right away due to their scope being extremely more narrow (audit) and larger (capital), but I also see how a program that has been approved in Season 3 here being directed in future to the SSSF, or even viceversa.

Maybe here there is a misunderstanding: while the active phase of Season 2 has completed a couple of weeks ago, we have now a period of low capacity of 6 months in which grantees will keep working toward their goal. The results above, for season 2, are partial, and will be de facto complete in around 5 and a half months from now.
As indication tho I can tell you that the rate and speed of completion is higher in season 2 so far compared to season 1. And, to be brutally honest, most of this comes from the experience that has been accrued by the team that has managed both seasons.

Yes. Ideally you would check in 3 months, 6 months, 12 months after completion. There is only a problem: who can do that?
Let me explain. This program will last 1 year at full capacity + 6 months at low capacity. Let’s say it will start in january (as it is now probably february btw). Let’s say in December 2025 you approve, for example, 10 projects. These projects will have 6 months to complete their path: june 2026. PM and DAs have expenses covered up until that date. But the check after completion for these 10 projects will happen only in september 2026. Which, is a time that is not covered currently by OpEx. The main idea is that there will only be a tail of projects falling into a window that could not be covered (not necessarily a project needs 6 months), and that there will be goodwill from the team/pm as well. A more robust solution is continuity through a renewal into a season 4, but it poses a problem in case team will change, because checking in on grantees that you didn’t specifically approved can be quite hard.
There is definitely margin of improvement here, which should come from a more robust structure that is potentially internalized by the DAO. I am not sure we are there yet.

We, the DAs, have partially done this. Was not part of the mandate, but in some cases, also for rejected proposals, there have been mentorship calls. Especially @Juandi is a dragon due to his experience with his company.
Trust me tho, this requires an amount of time and energy that is not trivial. Including mentorship in the program means creating an overarching structure that is not here yet. I think the low hanging fruit of having successful projects going from the program to the Arbitrum Foundation as a growth path is something that should be implemented first.

There is a misunderstanding here. Is pretty clear that a 50k budget won’t suffice for developers, at all. The goal is mainly on what we can achieve with this budget: KOL, streams, newsletter, advocacy, and in general involvement of web2 users through web2 personas that should be funneled in the program through a strong person/team that has enough connection to bridge this gap (and we are working behind the scene to source strong candidates for this).

We will do our best to create reports that will be appealing. However, to be extremely honest, we are talking about report such as amount of proposals, budget, milestones, % of completion, specific notes etc. Something that by nature, I am afraid, is a bit boring.

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Thanks for your reply, and to provide more arguments for a dedicated Domain for DeFi, with an extended scope for marketing.

  • There is a significant amount of DeFi protocols in the “New Protocols and Ideas”, The program is always oversubscribed, the marketing budget for it is most of the time trimmed. Having a dedicated domain for it, like Gaming, would give more room for it;
  • When I see “New protocols and Ideas”, I see something more experimental. Having DeFi protocols in this category also limit funds for even other “Fi” initiatives, ReFi, AI, etc.
  • Regarding marketing/content: As in the Gaming category, the expanded scope could be done by people with the right skillset, not the project itself.
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I see your point: a specific DeFi domain.

For what is worth, this season is framed to be modular for this very reason: we should be able to add any type of domain, in an easy way, by just providing the capital, the goals behind the capital, and eventually 1 person to manage the domain.

If there is more interesting from other delegates to fork the “New Protocols and Ideas” domain in “New Protocols and Ideas” + “DeFi”, we can surely do, knowing that

  • overall budget should increase by $1.5M (we could define different budgets but I think it would be not necessarily a cohesive and consistent discussion: there are likely opinions for which a domain should get a certain amount of capital for some, half for others, double for othes)
  • overall OpEx should increase linearly (around $105,600).

This is trickier. In gaming we were able to lay down the best growth path (users from web2) thanks to extensive talks with gaming department of OCL. By sourcing the right person to lead the domain, that can have web2 gaming kol connections for example, we can try to aim toward that goal.
I don’t see the same path for protocols tho. While the overarching goal should always to bring new users in arbitrum, and not necessarily users from sol/tron/bnb/others, is way easier to identify and execute a strategy for certain verticals (ie gaming) than other more general purpose (ie: new protocols and ideas). Which means, same scope there might just spread the whole domain too thin. Unless I am missing something specific here.

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Hola Don Pepe,

I’m just scrolling through the forum, answering questions about the DDA program, and sharing some thoughts from the perspective of a DA.

While the incentives are certainly noteworthy for all parties involved and have been discussed extensively in previous reviews, I’m personally against them. My concern is that they could lead to “review bias,” where the focus shifts towards inflating internal DA metrics rather than genuinely supporting builders and entrepreneurs who rely on grants to kickstart curiosity and project development.

The current compensation structure for DAs works well. It’s designed to ensure that delegated domain allocators provide value to grantees as elected by popular vote from DAO members and delegates.

I’d love to hear other perspectives from the community, but I firmly believe that introducing such incentives could skew milestone reviews and hinder outcomes for grantees and their projects in the post-grant phase. Our role is to foster activity and innovation in the Arbitrum ecosystem—not to obsess over milestones for the sake of additional compensation. Domain Allocators already receive a standard DAO rate, which has been effective across multiple iterations of grant programs in the industry.

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Hey DuoKong,

We could also consider reducing the initial budget for the Orbit domain, especially since other grant programs, like Compound, allocate different budgets to their domains. While Arbitrum has a much broader ecosystem than a single DeFi protocol, testing a different budget size for the Orbit domain could serve as a great proof of concept (PoC) to evaluate whether doubling down on funding for sidechains is worthwhile.

During our time in the Developer Tooling domain, we had opportunities to fund certain milestones using Arbitrum Nova. However, in the second iteration of the Developer Tooling domain, we’ve seen increased demand and even better results—for example, the block explorer Dora. I’d love to hear more about your reasoning behind advocating for a leaner budget in this domain rather than maintaining parity with the others.

Personally, I’m open to both outcomes for the available funding. There’s already demonstrated demand, and in the worst-case scenario, unused funds can always be returned to the DAO treasury.

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Hey Pedro,

Thanks for taking the time to reply on the forum! I’d love to connect and discuss the continuation of projects from the first season of the Developer Tooling Domain. If you could reach out on Telegram (@jewandidi), we can chat about successful use cases and the results achieved post-grant delivery.

Looking forward to hearing from you!

PS – While JoJo’s comment of not having those data points available is extremely valid as our responsibility is start-to-end, at the Developer Tooling domain we have been helping early stage infrastructure companies getting subsequent funding from formal investors and establishing a proper pitch deck and GTM strategy.