Proposal: Accelerating Arbitrum - leveraging Camelot as an ecosystem hub to support native builders

Proposals
282

Voting FOR the proposal

The vote in the temperature check is not a statement that this proposal is perfect but that in this multistage process, it has the likely potential to have my approval in the next stage when that is posted, including accounting for the feedback that they have provided during the forum discussion and snapshot phases.

For a moment before going into the rationale, let me touch on conflicts, being a core contributor to GMX handling integrations and ecosystem, advisor to Camelot, and more generally, an investor, advisor, and token holder in over 20 Arbitrum protocols listed across multiple DEXs, perceived or actual conflicts of interests will exist. I think it’s better to disclose our potential biases and let people view our comments through that lens; this should apply to builders and all Delegates that may have perceived or actual competing interests.

Camelot has been at the forefront of bringing new protocols into the ecosystem, putting in the groundwork needed to help the chain grow:
Showcasing Arbitrum as a builder-friendly environment.
Giving them visibility to one of the largest communities on Arbitrum and to the communities of the fellow round table members
It links Builders to potential partners across the chains to collaborate (including those outside Camelot).
It supports them with tools built on the DEX that help protocols better manage liquidity, incentives, and community staking.

I believe unequivocally that as a chain and a DAO, we can’t afford to wait; time may be our most valuable commodity, and we can’t get it back. In the meantime, all other ecosystems and their leadership want to capture the next generation of builders and users and poach existing ones from Arbitrum, depriving us of the momentum built over the last two years.

Suppose there are no incentives, especially those that help existing protocols or those deploying new protocols on Arbitrum. There is a distinct case to make for supporting native protocols, now and in the future; multi-chain DEX view Arbitrum simply as another software deployment without putting in the time and human capital of growing this specific chain and ecosystem; for them, lesser growth on Arbitrum is just redistributed by that same growth moving to another chain which better supported builders and users. That doesn’t mean we shouldn’t evaluate a multi-recipient grant framework, but we shouldn’t ignore the difference in objectives either.

This proposal will likely fail despite supportive statements by many voting against it or abstaining, with the main articulated reason being a direct request to the Arbitrum Dao rather than via a framework (that does not exist). Please take a moment to reflect that the proposers of other frameworks (Foundation, Quest book, and Plurality) have stated that this proposal does not specifically fit into their frameworks and is complimentary to their efforts. The Foundation even explicitly said in their recent blog post that proposals should come to the DAO per the Arbitrum Constitution. Before Camelot posted this proposal, the existence of such a framework for on-chain liquidity programs had yet to be discussed, commissioned, or previously made a priority by the DAO or Foundation.

I believe that the DAO should consider frameworks but deciding not to proceed with a proposal and effectively stop growth efforts is a mistake, given that it’s possible to do both things simultaneously.

While the post above is in my capacity as a Delegate, separately as a contributor at GMX, I’m left highly confused with how our protocol should engage with the DAO. We have built partnerships and integrations across the chain, with countless protocols built on top of us and relying on us. We have been preparing to engage the DAO directly for support on our V2. Still, in the last few days, the most prominent delegates have articulated that direct proposals should not come to the DAO, liquidity incentives don’t contribute positively to the chain’s growth, and Builders should not be permitted to vote for their interest. These comments have left me struggling to understand what role the DAO sees for Builders.

Irrespective of where people stand on Camelot’s proposal, it would be ideal to start a separate discussion to know if the DAO sees any urgency in resolving these matters and understand if Arbitrum DAO will aggressively support, defend and invest in keeping Arbitrum the preferred home for DeFi in the Ethereum ecosystem.

Finally, as a delegate, I focused on the work, making myself regularly available, maintaining frequent dialogue with the Foundation and Off-Chain labs who support them, attending community calls, and providing feedback to submitters of every proposal through chat and direct calls. I wasn’t active in our governance forum, which was a shortcoming; I will endeavor to do better, although I’ll probably leave Twitter mostly for others. If we want to improve Arbitrum, we can’t wait for others to do the work WE are Arbitrum.

coinflipcanada
Arbitrum Delegate
core contributor GMX

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283

A swift succor or opt for a circumspect stance,
allowing the passage of time to unveil the veritable path of action?

The proscenium adorns with a fervent debate,
where the Arbitrum ecosystem teeters on the brink of a momentous adjudication.

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284

@olimpio can still make this happen.

Consider the framework argument, ser, in context of the recent comments. Let’s accelerate into the curve here and not get bogged down in the quagmire of inaction and bureaucracy.

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285

404 DAO will be voting AGAINST this proposal.

As apparent by the current split of the temperature check vote, there are several valid viewpoints regarding Camelot’s proposal. @krst has summarized both arguments quite well and we recommend referencing their post for context. After many internal discussions, the 404 DAO governance team has decided to vote against for a few key reasons:

  • The “kingmaking” nature of this grant as such a large liquidity incentive will provide Camelot with a significant advantage over other DEXs. For example Velodrome was able to solidify its position through OP grants, making it difficult for other DEXs to compete. Competition is crucial to a healthy ecosystem and we align strongly with @MattOnChain regarding this point.

  • Liquidity incentives invite opportunistic capital and to date Arbitrum has been able to grow organically without these programs. As suggest by other delegates, Camelot has 2.2m ARB that they can use to test their own liquidity incentive program before asking the DAO for even more funds. A pilot program can be conducted by Camelot to prove the effectiveness of their proposed liquidity incentives.

Finally, we would also like to reiterate our support for protocols bringing proposals directly to the DAO. While more structured grants programs are on the horizon, it is important for protocols to interact directly with the DAO in order to strength the pluralistic grant system that is being built.

The Arbitrum DAO seems to still be searching for direction and identity, we agree with @Coinflip that it would be prudent to begin discussions outside of this proposal to determine how the DAO stands on matters such as liquidity mining and direct proposals from protocols.

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286

I’ll be voting AGAINST this proposal.

While I’m generally supportive of the value that Camelot has brought to the Arbitrum ecosystem, I’m also typically skeptical about proposals for short-term incentives that are likely to attract mercenary capital. Furthermore, Arbitrum already has a thriving DeFi ecosystem, and I’m worried about such a large injection of incentives to create an uneven playing-field and hurt competition.

I’d love for the DAO to find a good framework for supporting projects like Camelot that is fair to all projects and benefitting the Arbitrum ecosystem instead of simply benefitting farmers and token holders.

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287

This proposal would fulfil any reasonable guideline and Arbitrum Foundation approved posting this proposal when Camelot consulted them.

Waiting several months for it would have a high opportunity cost for Arbitrum and its ecosystem.

There is time to reconsider some votes and smash the For option to keepArbitrum as the top Layer 1 with the lead of its native Dex which has shown their capabilities to do so.

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288

“Arbitrum already has a thriving DeFi ecosystem”. Where have you been? Most native projects are struggling, 65% of TVL is in 5 projects alone, 80% of Dex volume is on Uniswap

If you want a fair grants program, you’ve already killed it. I suppose there’s a reason The Foundation created their own grants program, the DAO is slow and ineffective.

This pretty much tells any project that no matter how much you’ve done for Arbitrum and the ecosystem, you won’t be supported.

289

Can we please stop attacking delegates when they make their decisions? We know exactly why he voted as he did, let me quote him:

A lot of interest happenings are going on now that this proposal failed. Discussions are happening in the Camelot community of kicking off parties who voted no/abstain out of their round table. I think this goes to sum up what a huge issue proposals like this can be, rife with conflicts of interest everywhere–leading to some pretty unfortunate consequences. The incentives are all messed up as we have protocols debating whether getting free money is worth jeopardizing their principles as to how they involve themselves in Arbitrum governance. After all, if I’m an included project lukewarm about the future conditions of the Arbitrum DAO, I have two options in a proposal like this:

  1. Vote yes and get free money
  2. Vote no and get nothing

These are not good forces to have in a governance system.

I think it’s clear we need a round based grants program to help prevent any singular party from monopolizing the ecosystem through a first-of-its-kind kingmaker proposal. By all grants going to vote at once, we can be sure that we don’t create a perverse metagame of “who can get through governance first” by essentially bribing ecosystem partners with free money. Instead, the DAO will get to see many proposals and only then can they make an informed decision on what might be the best allocation strategy while minimizing the negative externalities we’ve seen be discussed surrounding this proposal.

Edit: It appears as if someone is flagging this post an inappropriate, making it invisible until it’s edited. I think we can all see that is not the case here, pretty gross to see that happening.

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290

A lot of interest happenings are going on now that this proposal failed. Discussions are happening in the Camelot community of kicking off parties who voted no/abstain out of their round table.

To be extremely clear, since this sentence can be read in multiple ways, there is absolutely no ongoing discussion to “kick off parties”, any Round Table member has every right to vote for whatever option he thinks is the best for his protocol.

I guess some users from our community might have expressed their anger and disappointment and have been a bit aggressive, as it usually happens in defi on multiple occasions (this thread is actually a good example), but there is absolutely no way that a protocol would be kicked out from the Round Table because of their vote not being aligned with ours.

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291

I blame perma naysayers like you for dragging ARB ecosystem down to drainage and nullifying proposal grants system. You are not happy with DAO grants, you will most probably cry for framework as well.

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This is tragic, and should be addressed if true, but it doesn’t change my perspective that Arbitrum’s governance system should not be funding individual projects directly like this, nor are we in a rush to spend ARB on liquidity mining (unless I missed that memo). I do however think that Camelot can find a way to fit into at least one of the grant frameworks. Do you really think they won’t make any proposals to any of the grant systems?

That is fair. I was at EthCC and wanted to keep it short and sweet, but as a top 5 delegate (no one is more surprised about this than me!) you do deserve a more complete explanation.

I think it is good DAO practice to ONLY make high-level macroeconomic decisions and be delegating one-off decisions like this to smaller groups that can create a competitive space and accountability systems, otherwise we are likely to spend our ARB frivolously. This is not an attack on this proposal or Camelot, but more of an observation of the spending habits of many other DAOs. I don’t need to name DAOs, it is very easy to point to countless DAOs that went and spent their treasury inefficiently by doing direct governance like this. IMO large DAO’s simply don’t have the context needed make these kinds of decisions.

Camelot seems like a great project, I went and played with it, checked out the docs and yeah it seems like a legit project that I would love to see supported.

But I don’t believe this is the right place or at the very least the right time for these types of proposals, for various reasons:

  1. We have no high level strategy for what we want to accomplish with our expenditures, so there is no context or mandate for how much we want to support development, or do liquidity mining.

  2. Therefore, we have no budget set aside for these types of proposals, I would want to have a yearly budget so we can invite others to also propose, and we know what it means to give out 1.5M ARB.

  3. We don’t have a proposal framework or any other systems in place to support people in making these kinds of proposals to the DAO. Without this, it is WAY too much of an insider’s game.

  4. We have no systems in place to hold recipients accountable to executing on these types of proposals. It’s great that there will be transparency reports
 but who’s job is it to read them?

and most importantly

  1. The passage of this proposal would invite every project out there to propose to the highest level Arbitrum governance. I really hope this group doesn’t end up being forced to vote on winners and losers. This should be delegated and we should develop systems to hold those groups accountable, which is much easier than doing it by a project by project basis.

We should be like the Federal Reserve

I’m not stoked about this analogy but it makes sense. We should be more like the Federal Reserve, working with the US Treasury (the Foundation) and Banks (Sub-DAOs that give out grants or execute on some other protocol level need), but not actually be giving out direct loans to companies and individuals (executing on grants like this). Our task is to manage an economy, not make one-off small decisions.

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293

There seems to be a common theme of people requesting a framework, whilst also not knowing what this framework is, what it would contain, and most importantly who would create it.

By freezing all actions of the DAO until “a framework” is in place, Arbitrum will continue to fall behind its peers. The DAO does not have a year to spend creating a perfect and flawless framework. A framework that pleases everyone will never exist, and if it comes too late then the value of the treasury decreases significantly too.

Optimism will soon have BASE launch and will continue to aggressively incentivise its native builders like Velo and Synthetix. Linea is now launching, backed by Consensys. Mantle has a billion dollar warchest that they are already using. Several ZK chains will launch in the coming months.

If you do not think that incentives make a difference to where protocols deploy, then please do not be surprised when you see a massive shift from Arbitrum to other ecosystems. It is just a matter of time if the DAO continues to do nothing.

Who is creating it? Are you aware of anyone creating this, or are you personally involved with contributing to this? Who is the decider of what the high level strategy is, the DAO? Who is the DAO at this point? It seems no one wants to claim responsibility.

What would the framework include? What types of systems would apply? Are you aware of anyone creating it, or are you personally involved? Who would lead these efforts?

Surely this would be the job of an Arbitrum governance delegate?

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294

Please do not take this as “scare mongering”, but in my opinion Arbitrum has approximately 3 months to pick up steam again before it risks losing momentum to another ecosystem.

Of course, if the DAO never spent a single token, then Arbitrum would still be a strong chain. However, inaction still leaves a large opportunity for competition. We are not here because we want Arbitrum to be an “okay” chain. It needs to be the best L2.

You do not become the best through inaction.

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295

There are 3 grant frameworks that are spinning up right now, one from the foundation, and 2 that passed votes here.

This is something I would vote for, and was why I was excited to support the previous grant frameworks that were proposed.

When things like this are everyone’s job, they are nobody’s job.

You also don’t become a healthy DAO by just throwing money at projects with no accountability framework. I’ve seen too many DAOs go wrong and blow their war chest on lots of their friends projects and the projects that can navigate the chaos DAO governance. This is not the way.

I don’t see the urgency to compete as important as the opportunity to set good precedent for good governance practices.

I am just one delegate tho, with my own perspective. And you are not wrong that it’s a good idea to get incentives flowing, and Camelot is a great project to support. My issue is more with the high level processes here. I think thats why people delegated to me so I’m doing my best to support in that way.

Thank you for the healthy discourse tho @himago2816

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296

IMO this is best forum for continuing discussion: Arbitrum — Grant Program

(somewhat discussed my thinking here: Proposal: Accelerating Arbitrum - leveraging Camelot as an ecosystem hub to support native builders - #196 by jacobpphillips)

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297

Has anyone caught wind of any updates regarding the framework?

I must admit, it’s quite perplexing to witness the notable delegates barely broaching the subject, following the failed snapshot. One would assume that from this point we can expect numerous months of framework discussions followed by an equally extended period for voting before any tangible progress is achieved. And even then, there’s no guarantee it will yield fruitful results.

At best case we would be looking at a framework in 2024? We will likely require an updated framework by that point.

Meanwhile, my attention is drawn to the growing ascent of other L2s. OP, in particular, is surging ahead by cleverly implementing direct protocol incentives, and the momentum continues with its development grants now in full swing. A project now must decide if they want to go through Arbitrum’s entirely unknown grant process where they may or may not receive incentives or development grants, or, they can go to OP and likely be welcomed with both.

Notably, this week marked a pivotal moment as OP transactions surpassed Arbiturm’s count for the first time in half a year. BASE eagerly awaits its debut, while the Superchain narrative looms on the horizon.

It’s becoming increasingly evident that the absence of clear guidance and structural framework for the Arbitrum DAO has caused everything to grind to a halt presently.

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298

If I was an investor, builder, or stakeholder in the Arbitrum ecosysytem I would be rather concernced by this statement, if I am honest.

If Arbitrum can not stay competitive then the value of governance becomes irrelevant, no matter how “good” it may be.

Apologies to press this, but someone else highlighted it above and I am rather intrigued. 80% of your voting power is from 1 wallet, 10,000,000 ARB tokens. Do you have any insight into who that might be? I fear this may be a conflict of interest that hasn’t been made transparent.

Highly concentrated voting power is the opposite to “good” governance practices.

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299

Questbook’s proposal is being processed via the on-chain vote: Tally | Arbitrum Proposal

There are a few days left to vote, still hasn’t reached quorum

Plurality Labs on-chain vote starts Tomorrow:

They will both post their updates to get this process going, but it takes time, and they don’t yet even have the capital to start the process, so we will have to be patient. That said, we can learn sooooo much from Optimism, the things they did right and the things they did wrong. They evolved to have a grants council that is working really well
 Then they experimented with fast paced on chain direct to vote governance again in the last round and there has been a lot of feedback that it was a mistake (I think so as well).

I could not in good conscience vote for an ad-hoc one-off spending proposal like this seeing the things I’ve seen go down in DAOs. Even if its a great project, it’s a bad precedent.

I completely disagree with that. DAOs tend to spend toooo much money, not to little
 no investor wants ARB being issued loosely.

giphy

One of the competitors, Mantle (formerly BitDAO) passed a proposal for 20 million dollars to AfricaDAO
 and in the end, the whole project went under
 It wasn’t their only huge misstep
 they learned the hard way. Optimism has been experimenting with L2 governance for over a year now. We shouldn’t have to learn the hard way, there are clear best practices.

“Slow is smooth, and smooth is fast.” I think any investor can get behind that.

I wish I knew too
 I’d love to get their input so I can be a better delegate for them. But I have to assume the reason they delegated to me is for my DAO experience, not for my Arbitrum experience
 so until they open up a line of communication with me, thats what I’m going with when voting.

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300

On the Monthly Open Governance call last Wednesday, we had questions about how long it would take to get a framework ready to deploy funds. The concern being that (at least part of the ecosystem) believes liquidity incentives are important to deploy ASAP.

This gives us two high level considerations

  1. If Plurality Labs proposal is passed, when/how would it help us begin to allocate funds?
  2. Considering this will be at least 2-3 months away before funds could be deployed, what might we do to get something passed in less than 30 days?

Plurality Labs Framework Design

This process involves multiple rounds of feedback from the DAO. In the Camelot discussion, we found 2 principles where the DAO needs to understand the tradeoffs and signal their interest before the DAO can make a LEGITIMATE decision.

1. Should the DAO give grants that could reduce competition commonly called “kingmaking”?

2. Does the DAO want to incentivize usage (liquidity incentives)?

To understand what the DAO thinks about this, we would need to get a statistically significant number of responses to well thought out questions. If the Plurality Labs proposal passes, this would likely happen during september with a framework available sometime in October. Then the DAO would have to vote meaning if all goes perfectly, the liquidity incentives start in November.

How we can get there faster

GMX expressed that the path is unclear for them to put up a proposal now that Camelot proposal failed and with the upcoming grants program still mid-swing. We decided to gather the people who are feeling strongly about the need for a liquidity mining program and delegates with experience deploying these programs.

The goal of this conversation is to understand what needs to be true to pass a liquidity incentive proposal in the next 30 days.

ARB Liquidity Incentive Workshop

I will be facilitating a session to better understand what is needed on Thursday, 8/2 at 4pm UTC.

Current attendance list includes:

Please dm me if you are a stakeholder with interest in participating. I can’t guarantee open participation due to the limits of how this type of conversation and software work, but we will preference representatives of DEXes & Delegates.

(This is not part of Plurality Labs proposal, only a contribution as a delegate.)

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Good Catch. Those accounts are all set up to support this proposal. We need a way to show the account tenure here.

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