Proposal - Delegate Incentive Program (DIP)

[SEEDGov]

@Englandzz_Curia

I think this could be difficult for delegates from the Asia region to participate in since these calls are often scheduled in US or European time zones. Do you have any thoughts on how to address this?

We understand that it may be an inconvenient time for some delegates who are not in the time zone, so these are additional Bonus Points and do not form part of the main program scoring. We have raised this time zone issue in previous programs (which even affects us as well), but we believe it is worth promoting to more delegates to attend the governance calls.

@KlausBrave

Agree with the timezone challenges for Asia and Oceania. This program effectively disincentives participation from delegates in these regions.

Optimising the timezones for global participation needs consideration.

Also consider a way delegates can watch the recordings and provide async after that fact comments to qualify as engaged in these meetings.

We agreed with this, in fact we have mentioned this problem in the past, but we believe this is more of a structural problem of how DAO activities are managed. Maybe the Foundation should add a meeting within the time slot that covers the area of these delegates?

In fact, for example the Onboarding group, had this problem and solved it by organizing calls in different time zones.

As for the delegates viewing the async recordings, how do we verify that they have actually viewed the recording? Is there a reliable mechanism? This is a good problem to solve, we are open to suggestions on this aspect.

Anyway, we understand these problems and how difficult it can be to solve. But this is why we don’t think we should remove these BPs as they are used to incentivize delegates who can or make the effort to attend the calls.

@0xDonPepe

I’m not sure how this would affect the budget, but I’d suggest raising the cap above 50 delegates, especially since the program is set to run for the next 12 months. We’re already over the limit with the number of delegates currently enrolled. Even though not all are eligible for incentives yet, I think we’ll reach that ceiling soon.

Thank you for bringing this point up, we have discussed it a lot internally. So far approximately 34 delegates are managing to qualify for incentives and we hope to achieve in this iteration to reach 50 as stated in the KPI.

@SEEDGov

KPIs

In this new iteration of the DIP, we aim to establish the following KPIs:

• Achieve that 50 delegates receive incentives.

• Engage 100 delegates in the program.

• Achieve an average Total Participation (TP) of 80% among participants in the program within six months.

• Introduce improvements to the program after six months.

We believe that, if we manage to complete this goal quickly and the DAO sees good results and participation, we will be able to request by vote to expand this number and, if necessary, a larger budget. Our philosophy is to move forward step by step, demonstrate results and take care of ArbitrumDAO’s treasury.

@KlausBrave

@SEEDGov - how was the 50k ARB threshold set? how do we determine if it’s appropriate and how do we change it? Would you consider 10k, 20k and why not? what’s the logic behind this specific threshold.

I ask this as for a newcomer delegate like myself this represents a significant hurdle to get going, attracting attention to be re-delegated to is very hard, in the absence of that working I notice when analysing newer smaller delegates many are buying their way in, spending 50k ARB (approx $26500 USDC atm) to just clear this threshold.

The number is set in part by the amount and by the number of delegates in that range, currently 176. We also set that amount to avoid sybil attack, we prefer to scale the program a little at a time as we believe that a possible sybil damages the program.

We also have to be realistic with numbers that are manageable for the administrators. Behind the scenes we did a lot of administrative (KYC), communication and delegate support work. If it was decided to lower the number to 10k ARB we are talking about a number of 485 delegates that can apply, this could become unmanageable for the administrators and we could also receive several sybil attack.

We also take into account this number based on the report we made in the middle of the program.

@SEEDGov

On-Chain Votes

Tally Votes are the most important as they are binding or execute protocol updates.

For this analysis, we divided voters into ranges based on their %VP:

• 0 - 1

• 1 - 1K

• 1K - 50K

• Over 50K

The following graph shows the percentage of voters according to the VP range in each vote:

We can observe that the majority of voters fall within the 0-1 (red) and 1-1K ranges (blue). This pattern is consistent across all votes. However, despite the number of voters, these participants do not determine the outcomes. Approximately 97% of the total VP in each vote is concentrated among voters in the Over 50K range (green), followed by 1.5% from voters in the 1K-50K range (yellow).

As we can see, delegates with over 50K ARB VP are essentially responsible for the effective functioning of the DAO. They play a crucial role in ensuring the quorum is met and good practices are implemented. This is why we ultimately decided against lowering the threshold from 50K to 25K. Currently, Arbitrum DAO relies on these approximately 60 addresses that hold the majority of the Voting Power, determining the direction and decisions within the DAO. Expanding the incentive program could increase participation from smaller delegates. While adding new voices is always positive, it’s essential to support, incentivize, and continue creating tools for the ongoing professionalization of those delegates who significantly contribute to the quorum.

In the study we conducted and in our research work, we realized that delegates with more than 50k of VP play a vital role in the DAO’s decision making process, as this is where the highest delegate/VP ratio is concentrated. However, despite all this, there are still a large number of delegates with more than 50k of VP who are not active in the DAO, so we want to work to reactivate these delegates who we believe can contribute positively to the DAO. This is important because as more ARBs become unlocked and enter circulation, it becomes more difficult to reach quorum, something that is extremely important to pass proposals in Tally, as our research shows:

@SEEDGov

Quorum

It’s really important to start paying attention to the quorum. Since a large number of tokens have been put into circulation since the DAO began, the required quorum has been increasing significantly. However, the growth of ARBs in voting has not increased at the same rate. This can be seen in the following graph:

@KlausBrave

I assert there is much potential new delegate talent that has time and skill to be high context in Arbitrum and contribute meaningful intellectual capital to advance proposals yet lacks either

1. the social capital to attract re-delegation

2. or the financial capital to float themselves, and

3. the track record of Snapshot and Tally voting to onboard and become a new delegate.

Number 3 anyone can get started with, I’m doing that myself now with voting history the last 6 weeks with minimal ARB VP.

I appreciate this program, and this is a good conversation to have.

How might we design the full Delegate Development Life Cycle to ensure fresh recombination of talent has a means and the path is accessible and realistically achievable to become a delegate?

On this we agree 100%, we know that there are many delegates with little VP. Even what surprised us during the previous iteration is that some have sought on their own who delegated VP (and also bought ARB token) to participate in the program and really made a great contribution to the DAO.

But as mentioned here:

@SEEDGov

It’s important to note that while managing the incentive program, we realized that it doesn’t address all the challenges faced by the DAO, such as vote distribution, attracting new contributors, and other aspects. Expecting a single strategy to tackle all issues overlooks the diversity of factors involved. However, we’re pleased to see initiatives like ARB Staking, (Re)delegation Week , and the Public Good Citizen Enfranchisement Pool are underway to address these challenges. As each initiative matures, we can align them to achieve a more significant collective impact.

We understand that the program cannot cover all the problems that exist in the DAOs. Even if we wanted to do so, we would need a large amount of human resources and budget, which we believe would be inefficient, not only because of the costs, but also because we are trying to solve everything at the same time (DAOs are plutocratic, there should be changes in the governance system). So we think it is healthy for the DAO to have several incentive programs that focus on different problems and are administered by different entities and, among all the programs, collaborate to make the ArbitrumDAO broad and diverse.