[Non-Constitutional] Thank ARB by Plurality Labs - Milestone 2: Scaling Value Creation in the DAO

[Griff]

I will be supporting this snapshot proposal, but with a request that we take a large portion of the funds requested and make it subject to vesting.

Show me the incentive, I’ll show you the outcome.

To allocate this $30M in funding I would like to see long term incentive alignment between the PL & ThriveCoin decision makers and the ArbitrumDAO. Of course many people on the team can just collect a salary with no lockup, but the key decision makers will have other financial biases and probably even get bribed. If they have a large portion of their salaries actually given to them in ARB locked for a few years, it will provide a clear financial bias in the DAO’s direction, and make it a lot easier for them to stay focused on the long term success of Arbitrum.

Suggested revision:

• $1 million in ARB paid upfront (30-day moving average pricing).
• $1.75 million in ARB, secured in a Hedgey Token Lockup contract for 1 year.
• $1 million in ARB locked with a 3 year cliff and a 2 year stream

A few other notes.

I really like the diversity of programs that have emerged out of Arbitrum in the last several months, compared to other ecosystems I participate in which only have 1-3 programs. We have yet to see the full scope of impact that the work has had so far, but given the market conditions, the abundant grants funding coming out of other competing ecosystems, and progress that PL has shown so far, I think this is an easy yes for the DAO.

I do think large improvements can be made, especially in coordination and marketing around these funding opportunities, but this has all been addressed in the proposal.

I should also be clear that I have a potential conflict of interest as I am in talks with PL about using Pairwise for running a grants program this year, but that said, even without this bias I would absolutely double down on PL for this vote. Many of the most important wins for the DAO came because of the work of PL I would love to see what they can do with a larger team, a longer deadline and a larger allocation.

[Clinamenic]

Hey all! Don’t have full context on this proposal, but I see mention of using Hats protocol to facilitate roles and accountability onchain, and figured this might be worth sharing.

The Hats team made a auxiliary contract they call Signergate, which is a zodiac expansion module for Safe multisigs, and enables you to have multisigs dynamically assigned to hats, such that a community can elect their multisig signers (plus a variety of other functionalities enabled by hats).

I made this diagram to illustrate how a number of Signergate multisigs can function as committees which a larger community can oversee. The committees (depending on which chain/network you use) can also run grants rounds via grants stack, and maybe even other grants tooling.

I also wrote these brief articles explaining some of the mechanisms here:

Role-Bound Multisigs

The Failsafe Committee

What Are Onchain Organizations?

Anyway, happy to talk more about any of this if folks are interested, e.g. how to implement Hats signergate (a moloch DAO can summon a hat tree and then summon a signergate multisig within it!), but in any case, I wish you all the best in continuing to innovate upon public goods funding models.

[maxlomu]

This is one of my highest conviction vote so far.

I was initially puzzled when Plurality Labs came out with their approach - a centralized entity for a decentralized grant framework? - But I have to say, and I am glad to see others share my opinion, they have definitely overcome my expectations.

The variety of experiments and grant programs launched and planned, from the Small Grants toThank Arb, align perfectly with our DAO’s objectives:

• Move swiftly and experiment.
• Double down on successful initiatives.

Milestone 2 is ambitious.

I am eager to see:

• Clear reports on the impact of our programs, workstreams, and experiments.
• Stratospheric awareness for what we are doing. Optimism’s RPFG gets much more visibility, even if they employ a more centralized and biased approach. We are a younger, fresher, more dynamic DAO. We can have a bigger impact.
• Make the work of delegates more effective. Help us to delegate, help us to empower, help us to reward properly.

I also see a point in @Griff’s argument on vesting part of the rewards, and this is something I would advocate for multiple initiatives.
Everyone is fully committed to Arbitrum, but token-vesting (when possible!) promotes a better long-term alignment.

I feel we are on the right track to do grandiose things.
Full steam ahead: let’s Fueling Financial Sovereignty.

[krst]

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

We’ll be voting against the proposal during temp-check for the reasons outlined below.

First and foremost, we believe Milestone 2 is follow up on and an extension of Milestone 1 that should naturally happen once Milestone 1 has concluded and successfully delivered the items that it set out to accomplish. We just published our extensive review of Milestone 1 and we do not believe it was successful in that regard.

Furthermore, when it comes to the proposal of Milestone 2 itself, we believe that any proposal requesting a similar amount ($33,750,000) warrants a little more information and discussion than vaguely defined bullet-points.

Overall, we’d much rather explore how we can continue funding Plurality Labs in order to be able to properly finish and deliver on Milestone 1 before we consider scaling it 10x with Milestone 2.

Invitation to Discussion

We understand that we might be missing something or we might be seeing things from the wrong perspective. Therefore we invite all the delegates that disagree with our point of view to a discussion so we can better inform our decision.

There’s a call being hosted to discuss Plurality Labs’ Milestone 2 proposal on Wednesday 31st of January at 4:30 pm UTC. We’d also like to invite all delegates and Arbitrum DAO participants to discuss Milestone 1 and our review during our Arbitrum Office Hours on Thursday 1st of February at 4 pm UTC.

[DisruptionJoe]

I am hearing that these are your expectations:

• Plurality Labs does not propose a second milestone until all the current programs have run their course and individually been evaluated.
• Plurality Labs must provide the framework in a well-documented way such that a greenfield team could take it and run with it.
• Plurality Labs must clearly define the actionable insights derived from the experiments/learnings and document the reasons for continuing or cutting programs
• Plurality Labs must provide well-scoped and defined deliverables for Milestone 2 that we can be held accountable for afterwards.

It seems that you would like to see us take a bridge of some type to continue on and finish a clean execution of the milestone 1 deliverables. Is that correct?

[GFXlabs]

Is it possible to bring down the administrative costs? They’re more than 6% of the total request. Leaving aside lively discussion here and on the Milestone 1 thread, it’s just hard to see how high administrative costs can be justified.

To invert things a bit, would you provide a grant to an applicant that included costs that high? It’s not as if the funds are going to pay for developer hours or large legal expenses.

Many grants programs in the real world cap administrative costs at 5% or even 2%. We believe that no one should work for free, but the cost structure seems like it can be better optimized, especially since Arbitrum Foundation presumably continues to bear costs of KYC/KYB compliance for onboarding of grantees?

For a comparison, let’s put it side by side with the upcoming LTIP pilot. Dollar amounts just plug in today’s price of ARB and should be taken as just rough estimates.

	Milestone 2	LTIP Pilot
Grants Budget	30,000,000 ARB	45,100,000 ARB
Administrative Budget	$3,750,000	715,000 ARB (~$1,200,000)
Admin Costs as % of Total Request	~6.5%	1.6%

LTIP Pilot is meant to be over a smaller period of time, but it’s still even more grants money and the easiest comparison. What accounts for the several million dollars in additional overhead for Milestone 2? How can we bring those down to around 2-3% of the total spend?

[krst]

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

Going from the last item to the first one:

• Plurality Labs must provide well-scoped and defined deliverables for Milestone 2 that we can be held accountable for afterwards.

That is correct. We believe that to be a reasonable expectation for any proposal that comes to the DAO for funding, let alone for such amounts.

• Plurality Labs must clearly define the actionable insights derived from the experiments/learnings and document the reasons for continuing or cutting programs

That is also correct, and again an expectation which we believe is reasonable.

• Plurality Labs must provide the framework in a well-documented way such that a greenfield team could take it and run with it.

We expect Plurality Labs to provide a framework in a well-documented way. And while we don’t necessarily expect a greenfield team to be able pick up and run with the framework, we expect a framework that could potentially be picked up by other DAO contributors with relevant experience and be used as the basis on which they’ll build on.

• Plurality Labs does not propose a second milestone until all the current programs have run their course and individually been evaluated.

It’s not necessary to wait until all current programs have run their course before proposing a second milestone. However, we believe that moving forward with Milestone 2 should only come after enough insights from Milestone 1 have been gathered and used to form and evaluate a framework which can be scaled during Milestone 2.

[Griff]

I think @krst makes a lot of valid points, and I would like to see a revised proposal addressing them. The PL team has added a lot of value to the DAO and clearly deserves a second milestone, however, I think there are some easy improvements that should be made before we go forward with the proposal.

[DisruptionJoe]

Based on feedback during the call today, we are asking @Griff to remove the vote from Snapshot. We aren’t looking to see if by chance it passes. We want overwhelming support from the DAO.

We will revise and post when we think we have better sensed the desire of the DAO as a whole.

[Griff]

I didn’t see a way to withdraw the vote within snapshot, so that it would stay on the frontend… the only thing available for me to do was to delete it.

I will put the text here so it is saved:

WITHDRAWN - [Non-constitutional] Scaling Value Creation in Arbitrum - Milestone 2 - Plurality Labs

We’re pleased to announce the next phase in our journey with the Arbitrum DAO community. Following extensive dialogue with delegates and insights from our overwhelmingly positive forum poll, we are presenting a streamlined temperature-check on Snapshot.

This proposal is the second milestone of our originally proposed three milestone phased approach to bring scalable and capture-resistant governance to Arbitrum DAO.

Background

Ethereum provides a digital public infrastructure which no single entity controls. Who remembers “unstoppable code”? In web2, we saw developers rugged by the platform they built on too many times. From Facebook banning Zynga to build their own version of popular games, to Apple’s app store battles today, web2 was and is built on politically centralized platforms.

We wanted unruggable money. We wanted to build applications not dependent on the executive of a platform - and we got it! Almost…

• Bitcoin showed us that decentralized and autonomous organizing is possible
• Ethereum brought decentralization to computation
• Arbitrum is leading the technology race to scale Ethereum

L1 grant programs have seen hundreds of millions of dollar value not to mention the myriad of new L2s launching. Optimism alone just allocated over $100 million in RPGF 3 and is poised to allocate almost $1 billion in a few years. Avalanche has allocated 4M AVAX ($290M USD), Polygon Village has a budget of 110M MATIC, Uniswap has a $72 million grant program, Binance, Polkadot, DFINITY; the list goes on. We believe we can match their impact with much less funding using the Pluralist Grants Framework.

Aribtrum’s credible neutrality is dependent on the enduring political decentralization of Arbitrum DAO, but we all know that over time, DAOs tend to recentralize. This is CAPTURE.

Political power builds around the entities which distribute resources. Even the time spent together by top decision makers create social bonds that create bias and “circles of influence”. This is how capture happens.

Our Pluralist Grants Framework

Plurality Labs brought the idea of a pluralist grants framework to Arbitrum. It distributes power across a larger set of actors. A pluralist democracy in governance can both enhance political decentralization and accelerate the growth of the ecosystem by scaling faster than a traditional hierarchical system. It uses evolutionary mechanics which are responsive to the needs of an infinite game.

The only way for Arbitrum to become a truly neutral digital public infrastructure is to solve capture-resistance. The strange thing is that it requires some level of centralization to do it.

In this proposal, we are asking the community to continue their trust in our processes and our ability to lead the effort to find a capture-resistant model for distributing resources. We do this in a “container” we call Thank ARB. Within this container we intend to scale the framework that we have been working on the last 6 months.

During the first milestone, we allocated 3 million ARB to over 200 projects via 12 distinct programs. These programs included over 30 governance experiments. We learned the realities of dealing with compliance issues and have now built out both a process and technical infrastructure for collaborating with the foundation which has served other grant programs such as STIP, Backfund STIP, and the upcoming LTIPP. We plan to bring on additional staff to provide capacity for improvements in professionalization of our documentation, much better marketing reach, and to allow us to provide immediate impact upon approval of Milestone 2.

We are much more like a startup than an enterprise. We are responsible for innovation which requires our ability to execute and learn. We are in a technological race which requires us to execute with speed. We are in a cultural revolution fueling financial sovereignty which requires your trust in us to remove ourselves from the position you are granting us. Designing onchain accountability processes resilient to centralizing pressure without a sustaining administrative entity is the primary objective of Plurality Labs.

Our first milestone mandated the allocation of 3 million ARB. Our second milestone was originally proposed to be 30M ARB - and our third milestone was proposed to be 100M ARB! But, because of the rapid price increase of ARB we are choosing to denominate the second milestones in USD instead. Therefore, this milestone we will request $30M as the size of the allocation fund we are responsible to deliver during 2024.

The allocation fund will be used to fund initiatives aligned with the DAOs strategic priorities. This happens in parallel to the experimentation and design work needed to deliver our overarching goals. The intention of the second milestone is to scale the amount the DAO can safely fund while also decentralizing from Plurality Labs being the primary funder for DAO operational costs. By empowering workstreams and working groups as Program Providers, Plurality Labs can remove itself from being the sole allocator funding DAO operations and focus.

Based on our learnings, our plan for 2024 is to cleanly wrap up the allocation of the fund prior to December allowing for multiple months of review time for delegates to investigate our work before the Milestone 3 proposal.

Funding Request Overview

• Allocation Fund Size: $30 million in ARB, priced based on the 30-day moving average as of the day it’s posted on Tally.
• Plurality Labs Funding: $3.75 million, consistent with market rates, structured as follows:
  • $1 million in ARB paid upfront (30-day moving average pricing).
  • $2.75 million in ARB, secured in a Hedgey Token Lockup contract for 1 year.

Funding Considerations:

Throughout Milestone 2, we’ll allocate our service fee between the Plurality Labs and ThriveCoin teams, in recognition of their contributions.

In total, $33.75 million USD of ARB will be sent to the PL-ARB Grant Safety Multisig upon a successful vote on Tally. We intend to increase participation to be a 4/9 from 4/6 current setup prior to Tally. This includes only 2 Plurality Labs signers and the rest top 50 delegates. The DAO retains a clawback option for 2.75 million ARB from the fee portion and the entirety of the $30M allocation fund.

Upon approval, we’ll refine any emerging details and proceed to Tally.

This is a very brief summary of the proposal, written by Plurality labs and reviewed by me (Griff). For more details and to participate in the decision-making process, visit our forum post: https://forum.arbitrum.foundation/t/non-constitutional-thank-arb-by-plurality-labs-milestone-2-scaling-value-creation-in-the-dao/20534.

[olimpio]

Withdrawing and deleting a proposal in Snapshot if it’s not looking good to pass, in my opinion, is not a good practice and we shouldn’t endorse it. We should have left it live, and abide by the result. Either by moving forward with it if it passed or by considering resubmitting if it failed. That’s why we create them.

[grills-untold]

you could’ve also just let the voting run until the end date and not delete all the data of the 24261 votes that were already submitted.

it’s pretty ironic that we complain so much that people don’t participate in DAO governance, and then when they do, we just delete the records of their participation.

for those that are curious about it, here is the dataset of all submitted votes on this snapshot proposal, until January 31, 2024 at 19:12:08 GMT, which I assume was moments before the proposal was deleted from snapshot by @Griff.

at that time, the proposal results were:
25,474,939 ARB – Do Not Fund PL’s 2nd Milestone
23,832,630 ARB – Fund PL’s 2nd Milestone
20,514,270 ARB – Abstain

also here is a plot of the decision flipping over time:

[Englandzz_Curia]

After joining yesterday’s discussion call, I agree with @krst point about needing to look more closely at this topic for improvements. I would appreciate a detailed cost breakdown and additional documents for better clarity. I’m already pleased with PL’s contributions to the DAO and am excited to see an improved version of their work. Also, I’d like to thank everyone for their valuable discussions, which have been instrumental in enhancing this process.

[DisruptionJoe]

I did not realize this was an issue. This was 100% because I asked Griff to take it down and I should take responsibility.

These are the reasons I thought it was not a problem to ask for it to be taken down:

1. Data isn’t lost - Griff posted the screens and the original ask.
2. Data isn’t lost - The data is on IPFS
3. Legitimacy - I didn’t see anything saying not to do this in the constitution
4. Legitimacy - Snapshot is a “temp check” according to the constitution, not a vote
5. Intended outcome - Even if it passed, we would not have put it to Tally knowing there wasn’t broad support

Honestly, I had no clue this would be an issue. In some DAOs where Snapshot is considered a vote, I would never think of doing this. I thought the “temp check” is clear and explicit. No harm intended.

I only see “this is bad practice” as a reason to not do it.

I don’t really agree or disagree with the logic, but I respect your voice here. Can you help me understand what problem it might cause?

[pedrob]

I agree with @olimpio comment. Even though the partial result of the vote was recorded, it is now in a comment on a post that will eventually be lost in the forum and only those who participated in this thread will remember it.

The purpose of the temp-check is not only for the proposers to obtain detailed feedback and certainty about the widespread support or lack thereof for a proposal. It is also to keep a record of how the DAO voted, to maintain an easily understandable and accessible database to understand “what the DAO wants,” and even more importantly, what it does not want.

If we erase everything that seems to be disapproved (this was the partial result, although it’s impossible to know the final outcome), we won’t have a detailed record of what is not wanted, and as a result, it will be more difficult for third parties that bring new proposals to understand the general sentiment of the delegates. Note that Tally is not an ideal source for this kind of data, as everything put up for a vote there is generally known beforehand to be likely approved.

In this specific case, for example (although it would be the same in any case), a new participant in the DAO (delegate or stakeholder) will find it more difficult to understand the reasons behind the content and/or modifications of the future proposal. I believe that we should always strive to facilitate the understanding of the processes and motivations of governance for those who are not immersed in it.

The more information available, the better. Not the other way around.

@DisruptionJoe

Legitimacy - I didn’t see anything saying not to do this in the constitution

Although it is not expressly stated in the constitution, Section 2 of the same states that “If an AIP fails the temperature check, or has not undergone a temperature check, as a matter of good governance practice, it is recommended that voters strongly consider voting to reject it.”

A logical interpretation of this good governance practice implies the intention that the results of proposals on Snapshot should be maintained so that they can be known by the voters. However, a discussion about interpretations may not be very meaningful. It would be good to explicitly state that a vote on Snapshot should not be deleted unless it contains some technical issue.

On the other hand, part of the delegates’ commitment to the holders is to participate in debates and vote on proposals. This is what they have committed to their delegators. Proceeding in this manner is to erase their work, something no one is entailed to do.

Finally, I believe that Plurality Labs is also harmed, as by waiting, you could have obtained detailed feedback from a greater number of delegates who had not yet voiced their opinion, and have an even greater understanding of the strengths and weaknesses of the proposal for its improvement. That’s the whole point of the Snapshot voting.

This opinion is my own and does not reflect the one of SEEDLatam Gov.

[DisruptionJoe]

I probably acted in haste. Being human, I naturally was upset as I realized our baby (the proposal) was dying. I also probably should have recognized that I shouldn’t make any rash decisions at that time.

I had no malicious intent. We simply wanted to revise the proposal and not confuse people with a proposal for something we didn’t intend to see through.

In my mind, taking it down because the proposer no longer intended to see it through was reasonable, though I should have recognized that even I felt awkward about it. I had hoped that we could just stop the vote, but Snapshot did not have that feature.

I understand the suggestion that it is easier for people if the data is in one place.

I also understand the suggestion that allowing others to vote would be helpful to others looking to understand how delegates think about different issues.

@pedrob

Although it is not expressly stated in the constitution, Section 2 of the same states that “If an AIP fails the temperature check, or has not undergone a temperature check, as a matter of good governance practice, it is recommended that voters strongly consider voting to reject it.”

A logical interpretation of this good governance practice implies the intention that the results of proposals on Snapshot should be maintained so that they can be known by the voters. However, a discussion about interpretations may not be very meaningful. It would be good to explicitly state that a vote on Snapshot should not be deleted unless it contains some technical issue.

This totally makes sense. I guess I didn’t consider that only I truly know that my intention is not to submit the same proposal to Tally. To clarify, it is not our intention to post the same vote to Tally as though this had passed.

Our intention is to rethink how we can best serve the community, take the feedback to heart, and draft something that works for the delegates.

[Griff]

I don’t want to totally say it was all Joe’s decision, I could have said “No” and kept it up. In the end I should have asked here or in the call if people felt fine deleting the proposal. Here was my thought process.

As I saw it the ideal option wasn’t available on snapshot. I would have liked to Withdraw the proposal, stop the voting, leave it on the UI and make an easy UX for voting history.

But the options were either delete or leave it up.

In the end I made the proposal and didn’t want to support it anymore as I was convinced by L2beat’s argument that more time and work is needed by PL to finish out Milestone 1 and prove they can this work in a more professional manner, I wanted to withdraw my support of the proposal in its current form.

Joe didn’t want the proposal up anymore, and my thought process was that, is it valuable for me, joe and everyone else to go tell everyone to vote no on the proposal as its not ready yet? Sounds like a waste of everyones time.

I value the time of other delegates. I know how it is, as a founder of many projects, trying to balance my delegate responsibilities with rest of my life really takes a toll, either on my projects or my personal time.

Everyone is busy and the idea of making the DAO waste cycles on voting on a proposal that isn’t going to be carried out anyway was the tipping point for me to agree with the idea of deleting the proposal as opposed to leaving it up. Deleting the proposal just gives everyone more focus. PL can go back to finishing Milestone one, and repropose when they are ready, while no one else is distracted from real work, with needless DAO bureaucracy.

I wish there was a withdraw feature in snapshot, as that would have been ideal… Either way, we probably acted a little too quickly and should have gotten advice here.

[cp0x]

Hi, @Griff
It seems to me that any option was acceptable, whether deleting or voting against.
Perhaps the forum should be given more time for discussion before putting it up for voting.

[JoJo]

let’s just put it this way. Milestone 2 was up for voting. It could have gone through, or not.

1. if it would have gone through, all good, move to tally etcetera
2. if not, vote rejected, back to drawing board (which is what I guess is gonna be done now) to make it in a way that is “better” for the DAO

Thing is, assuming path 2 would be taken, then in a new proposal, on snapshot, we could have linked the previous one, see the vote, see it was not voted, and in a new one maybe get a positive vote that would have been considered even stronger thanks to the flip of the previous downvote.

Keeping history afloat, and transparent, and constantly account for that even by just saying “look, you said no before, we changed this, let’s vote and take a yes” would just make the overall decision process stronger and more assertive.

Don’t get me wrong, a yes vote is a yes vote, regarding of what there is behind, but the legitimacy in the sense of how the DAO feels about it would have just benefit by keeping the previous vote live.

But no worries, what is done is done, we can just all learn about this experience, and know how to do stuff better next time (and I am talking about everybody here just to be crystal clear, we are constantly experimenting with democracy basically).