Convert your 10M USD fiat back to $ARB and send back your stolen 50M $ARB, lock what you should lock for correct years as promised. Never lie to community.
As NO. 1 in L2, you have many ways to earn more and more money in the coming future, don’t be soooooooooo shortsighted.
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Aye, The appropriate disposal method is to return 50 million coins as AIP-1 didn’t approved
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bad idea because all money not for DAO
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The most important thing is that you should bring basic confidence of ARB DAO by illustrating details of the spending of that 10m ARB. How can we trust a team casually spend investor money for beers and girls!
Secondly, further requirements of token should be with details of forward usage. Every company should have and account and budget!
BUT after all,For this api the token distribution is ok for me , hope you guys really do something !
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I want to thank the Arbitrum team for considering community feedback and updating the AIP to make it more transparent. It’s a positive step forward for the Foundation.
I’ve seen a lot of comments about the loan for MM, and while more clarification would be helpful, let’s take things one step at a time.
I plan to vote in favor of AIP-1.1.
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Is it just me or is the transparency report not saying much? Basically info of AIP 1, but in a docs format?
Also still think it is absurd that the Arb team is requesting such a huge amount in 1 go. Start small. Prove your worth. Ask for a new budget each quarter.
And ridiculous that Offchain Labs members are getting paid 5k to be on a multisig. Why the greed for this extra ARB? Compared to your company funding, salary and ARB team allocation, why do you feel the need to ask for 5k? For the other people on the multisig, there is a case to be made. But for Offchain Labs members… seriously?
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Thank you for proposing, AIP-1.1 - Lockup, Budget, Transparency, which gives us a better idea of how the Arbitrum Foundation allocation will be issued and used. However, I still have some questions.
(1) What does control mean here? Is there a wallet that collects the ETH made in fees? How does the DAO collect this revenue? Is it currently going to Offchain Labs?
(2) If this is the foundation’s yearly burn rate, and you’d like to secure a 4-year run rate from the DAO, assuming $ARB holds its price around $1.20, adjusting for the 50 million already spent, what is the need for the additional $796 million in $ARB? (50x1.2=60, 36x4=144, 1000-144-60=796).
Having experience in this realm with ENS DAO, I recognize the importance of this, but in no way see how $796 million over 4 years could be effectively allocated.
(3) What does this mean? The ask is for 750 million $ARB. Are you saying you intend to hold half and convert half to USD? $ARB might as well stay in the DAO treasury if you don’t intend to spend.
(4) What happens in the event of a budget overrun? Ask the DAO for more money again? 4 years is too long of a time horizon to fund for the DAO to assess whether or not the foundations interests align with the community and ecosystem.
The Arbitrum Foundation is the best team to handle, maintain, and enter new agreements with service providers to run infrastructure that’s critical for the ecosystem. The experience and knowledge on the team is extremely valuable. But this is the level of scrutiny needed to operate a DAO. I’ll vote against AIP 1.1 in its current form.
The criteria for me to change my vote would be to lower the dollar amount to that which the foundation has a plan ($36 million/year) to spend and make the proposal annual as opposed to once for 4 years. I would be in favor of keeping the timelock to align incentives as a bonus pool for employees and contractors, but, would like to lower this amount to a more reasonable level.
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Though the operating budget is on the higher end, it is not completely unreasonable. Hope that the foundation would make full use of these funds to grow the ecosystem as much as possible.
Will be voting yes.
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Sounds like a lot to me.
I think the most sincere way for the foundation is to return the tokens to the treasury, and then re-initiate the fund use application proposal for the purpose of using the funds. It will be more sincere. Instead of putting tokens into a smart contract for unlocking time. Because this is just spending some time and cost on the previous 750 million tokens, which are unlocked every year, and then continue to be transferred back to the foundation in batches. The latter scheme has no essential difference from the aip1 scheme.
Hi, thanks for the amendments to API 1 and the new AIP 1.1 and 1.2.
I have some concerns on AIP1.1 in its current form and some of the responses on questions raised on AIP 1.
Firstly the transparency report notes that 0.1% of the 7.5% of tokens allocated to the foundation was used in setting up the foundation, that equates to roughly $10-15M at the current price. The report further only lists the various costs these funds were used for with no monetary amounts being disclosed or the relevant service providers and what they got paid.
How could it cost $10M to setup one foundation company? A simple Google search reveals that incorporating a single company in the Cayman Islands costs about $2,000 - $5,000 for the incorporation and more complex structures such as trusts seem to run from $10k to $50k depending on complexity.
Inherently the foundation is not a complex entity as outlined by the proposed budget with 4 line items. There is no trading or high volume of transactions, the foundation will mostly pay grants and expenses so maybe a couple hundred transactions a year.
How is it that the cost to setup the foundation is so high when compared to the general setup and incorporation costs in the jurisdiction which is already high when compared to other jurisdictions.
I think its important to disclose the process in selecting and vetting the service providers, and listing the amounts and costs in detail to setup the foundation to set a precedent of transparency and trust and to make sure that the foundation, the DAO and the community are not being taken advantage of and has clear insight into this process.
This concern is further justified when looking at the proposed budget for the next 12 months.
The biggest line item is General and Admin with no breakdown of what these costs will entail and who the service providers are. This expense line is also almost double any of the other proposed items such as R&D and technical infrastructure which seem much more important to the success of the ecosystem, which again brings me to my question how could it cost this amount of money to run a foundation company? What exactly are the costs and if it costs $16M a year to run a company in this jurisdiction is it the best choice for the Arbitrum Foundation to be incorporated here?
For comparatives in the hedge fund industry which is what the Cayman Islands are know for administration costs are typically charged based on the assets under management of the fund and range between 1 to 10 basis points of assets under management. One basis point is equal to 0.01%. So lets take Arbitrium’s fully diluted valuation which currently is $12B on Coin Gecko as a metric for AUM and a mid range of fees so 5 BPS which gets us to a yearly admin fee of $6M, and this would be for a complex hedge fund with many investors, trades, and total transactions in the 1,000s to 10,000s per year.
As a note administration fees would include, investor communication, legal and compliance, KYC, accounting and reporting and the facilitation of payments and expenses.
Why is the foundation budgeting 3X that of a hedge fund for general and administrative fees when it is not nearly as complex as a fund and the more import items such as R&D and Technical Infrastructure is assigned considerably less?
The next question would be if the burn rate with the current budget is $36M per year why does the foundation need $1B in token allocations in the first place? A reasonable allocation would be current budget adjusted for inflation times a runway of 5 years so at most $150m to $200m.
I think the foundation needs to publish a detailed report on the cost expenditure so far and break down the budget for the year and future years in more detail. A list of all the service providers engaged and the process of how they were engaged should also be published as well as how these service providers performance will be assessed and the contract renewal process going forward and if this will be put to a vote for members.
In far too many cases we see ecosystem funds disappearing into a black box of expenses with no accountability of these expenses to the community and assessment if what the foundation is paying is reasonable and fair and if the foundation is being run effectively and efficiently in the best interest of the ecosystem.
In its current form I cannot vote for AIP1.1 and would ask the foundation to produce a detailed budget for the next 12 month, a list of service providers and their function and to justify why the general and admin expenses are being allocated 45% of the total budget.
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These funds are directly sent to the treasury by the protocol - there are no intermediaries in that process. It’s part of how the L2 transaction execution goes (like in the L1 part of the tx fees get burnt, in the L2 part of the fees get sent directly to the treasury address)
These funds allow the foundation to be competitive with other foundations when seeking/negotiating partnerships with projects/enterprises.
Many times these negotiations can’t go into the public until they are agreed upon, but the foundation will make them available through transparency reports once these deals are out in the public eye.
Also note that these funds are locked up and released throughout the 4 year window, the DAO is able to control to adjust this unlock schedule. Its what section (3) around Ecosystem Growth Initiatives talks about.
Some of the foundations costs are denominated in USD terms, others in tokens. For example, operational costs (ie staplers for the office) are usually in dollars. But when entering a partnership with a project to help them join the Arbitrum ecosystem there might be a dollar part but also a token part to the deal. In these token parts of the deal they usually also have lockups built into them. If these funds stay in the DAO treasury and not in the foundation’s balance sheet, then the foundation is not able to negotiate and participate in these deals (as mentioned above many of them are required to not be on the public eye until agreed upon).
Also worth reiterating that all these are subject to the vesting schedule controlled by the DAO.
That is a good point and part of the reason why there is a vesting lockup schedule. At the same time having the foundation well capitalised for the coming years is a strong signal for big potential partners - they like knowing that their partners are capitalised and able to be around 4 years from now.
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Though there are larger topics being discussed here, I saw the mention for smart contracts to manage a 4 year lockup w/ linear unlocking and wanted to share the Hedgey time-lock contracts if they are useful for doing this in a transparent way.
Our time-lock contracts are used by Gitcoin, Shapeshift, and others and can manage the linear unlock w/ any cliff/unlock schedule you want. Happy to also make a community dashboard as well to allow anyone to view the unlock schedule + amount claimed w/ reporting in real time.
This would all be a public good on our end.
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It feels much more detailed than before. Made most of the concerns clear. btw,I am more interested in recruitment. What are the 15 positions and in what form?
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Do we get to vote on this?
Thank you for the answer, do you mean the vesting contracts included in here? And have they been audited?
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Yup, here’s the timeline from the post
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this is great work support waiting
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For linear unlocking these are the right contracts. And they have been audited - attaching the most recent audit here.
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waiting for passing to vote