Proposal - Delegate Incentive Program (DIP)

[PennBlockchain]

We voted for DIP v1.5 and believe it would be a good idea to experiment with a more qualitative approach. We all want genuine, quality, self-driven participation in the DAO, and we think this new program would help steer delegates toward that direction. Thank you to the @SEEDGov Team.

[krst]

The following 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’re voting FOR the proposal and opting for v1.5.

Introducing qualitative criteria is a step in the right direction. Even though the assessment will be subjective, we still believe it’s better than relying merely on quantitative criteria, especially given the increased number of rewards delegates can receive.

However, we’d like to suggest that if things do not work out as expected and there are complications with using subjective criteria, the program must be flexible and should revert to v1.1. We want SEEDGov to be responsible for deciding whether or not the program should revert to v1.1 based on feedback from delegates and doing so at their discretion.

We also want to raise some points that we want to see addressed before the proposal moves to an onchain vote:

• We find that being eligible by having a Participation Rate (Karma) >60% is too low of a standard when thinking of the considerable amount of money a delegate can get through the program. We’d suggest increasing the threshold even further (e.g., 80%) and allowing program managers the discretion for exceptions in case a delegate falls below that for important reasons (e.g., being in the hospital and missing a vote).

• As far as the bonus % points for attending the monthly governance calls and the biweekly proposal discussion calls go, we want to suggest extending the idea to other DAO initiatives with a small twist; instead of having to attend ALL calls, delegates should be able to get a bonus percentage (maybe another 2.5% trimmed from elsewhere) for attending and contributing to an initiative they choose from a list of eligible initiatives that the program managers maintain. For example, the ‘Incentives Detox’ proposal introduced an Incentives Working Group that delegates could choose to attend.

• DAO activities are outlined as

  …feedback on proposals, attending to Governance Calls, maintaining high voting participation on Snapshot and Tally, and providing a rationale for such votes…

  We want to point out that the responsibilities of delegates go beyond that. It’s difficult to define or measure it clearly, and that’s why we won’t suggest doing so at this point, but it’s worth keeping in mind that the above activities are, in our mind, a small portion of the overall activities a delegate should be involved in.

• There are three TP tiers proposed:

  • Tier 3: TP between 65% and 70%. Compensation range: $3,000 to $3,250. ARB cap: 8,000.
  • Tier 2: TP between 70% and 85%. Compensation range: $4,200 to $5,100. ARB cap: 12,000.
  • Tier 1: TP between 85% and 100%. Compensation range: $5,950 to $7,000. ARB cap: 16,500.

  But in the above setup, if a delegate is exactly at 85% participation, would they get $5,100 or $5,950? We don’t understand why, in %, a tier begins where the previous tier ended, but in $ terms, a tier starts at a gap from the previous tier’s end ($950 from Tier 3 to 2, $850 from Tier 2 to 1).

Overall, we’re happy to see SEED iterating on the previous program based on learnings and feedback and attempting to provide options that introduce qualitative criteria. We’d be happy to work with them to address the aforementioned points before the proposal can go to an onchain vote.

[Pepperoni_Jo3]

After consideration Treasure’s Arbitrum Representative Council (ARC) would like to share the following feedback on the proposal

We voted FOR the v1.5 of this proposal.

The Delegate Incentive Program has significantly increased delegate engagement, marking a pioneering effort to enhance participation within the DAO and thus improve the overall decision-making processes.

While the V1 program was perfect, it never could be, and we felt the program was managed well by the team and led to strong outcomes. We fully support the introduction of DIP v1.5 as a trial to better capture the complexities of delegate engagement. Additionally, we appreciate @krst’s excellent suggestions for further refinements, particularly the proposal to include a bonus for active contributions to whitelisted initiatives.

We also want to highlight that, following the Treasure Community’s approval of TIP-44: Launching Treasure L2 on ZKsync, our involvement in Arbitrum Governance will conclude. As such, this proposal represents one of our final contribution in a delegate capacity within Arbitrum.

[BlockworksResearch]

We’re in favor of this proposal and will vote for its approval on Snapshot.

We support experimental approaches and believe that this is a step in the right direction; however, as others have noted, due to the qualitative and subjective nature of this new system we would like to see a failsafe included in case delegate feedback becomes too negative.

We do think that certain activities within the DAO are dynamic. While delegate responsibilities can go beyond the forum, there are plenty of meetings that do not necessarily acquiesce into DAO action, thus we would advise caution in including too many calendar calls or alternate actions.

[snowdot]

Gm, gm

The results are in for the [Non-Constitutional] Arbitrum DAO Delegate Incentive Program off-chain proposal.

See how the community voted and more Arbitrum stats:

[Non-Constitutional] Arbitrum DAO Delegate Incentive Program

[SEEDGov]

Hey everyone!

First, we would like to thank all community members who participated in the discussion, contributed to the development, and supported the recently approved temp-check regarding the Delegates Incentive Program.

We’re pleased to see that nearly 81% of votes favored keeping the program, with only 0.86% voting to deprecate it.

Additionally, the v1.5 has been overwhelmingly supported, and we are deeply grateful for this demonstration of trust.

That said, we know the work is not yet complete:

We’ll deprecate all the information from v1.1 and add some valuable feedback we received in the last few days.

@JoJo

• As suggested, I think the spread of costs between 1.5 and 1.1 of around 40k is too small. We could find ourself to have a (positive) explosion of delegates presence between this program, the staking program and all the initiatives we have. The amount of work is almost linear with the amount of delegates we have, and since this program is a 1y long one my strong suggestion is to add a clause, on the tally vote, for which that if we will be above X amount of delegates, they might ask for some further funds to cover opex, which is mostly manual labour

@Euphoria

We would love to see how the upper cap of 50 delegates could be lifted if the $7,000 per delegate budget is not exhausted, and the 51st delegate qualifies for the last tier allowing more delegates to qualify for incentives.

We believe 50 compensated delegates is a fair number (at least by now), as there’s still room for 16 more delegates compared to v1.0. Also, it’s worth noting that a limit on the number of delegates who will receive incentives levels up the quality of the contributions.

We’ve taken into consideration both feedbacks and added this clause regarding this topic:

@SEEDGov

Although the proposed administrative budget is sufficient in both versions, we understand that if there is a considerable increase in registrations, the workload would increase significantly. That is why we will incorporate a clause where if the program exceeds 65 participants (which is the number that we believe we could cover with the budget requested) we will reopen discussions in the forum on the budget, also considering the possibility of increasing the number of delegates incentivized.

@krst

However, we’d like to suggest that if things do not work out as expected and there are complications with using subjective criteria, the program must be flexible and should revert to v1.1. We want SEEDGov to be responsible for deciding whether or not the program should revert to v1.1 based on feedback from delegates and doing so at their discretion.

We’ve also thought about this. V1.5 will be reevaluated after three months:

@SEEDGov

Regarding the methodology’s testing, if v1.5 is chosen, this scoring system will be in a testing phase, and we, as Administrators, commit to submitting it to the DAO for consultation after three months of running the program.

@krst

• We find that being eligible by having a Participation Rate (Karma) >60% is too low of a standard when thinking of the considerable amount of money a delegate can get through the program. We’d suggest increasing the threshold even further (e.g., 80%) and allowing program managers the discretion for exceptions in case a delegate falls below that for important reasons (e.g., being in the hospital and missing a vote).

Based on this feedback and after consideration, we will increase the threshold to ≥75%.

@krst

• As far as the bonus % points for attending the monthly governance calls and the biweekly proposal discussion calls go, we want to suggest extending the idea to other DAO initiatives with a small twist; instead of having to attend ALL calls, delegates should be able to get a bonus percentage (maybe another 2.5% trimmed from elsewhere) for attending and contributing to an initiative they choose from a list of eligible initiatives that the program managers maintain. For example, the ‘Incentives Detox’ proposal introduced an Incentives Working Group that delegates could choose to attend.

This is an interesting idea. We’ve been debating it internally and with some delegates about Working Groups. Our approach is to take it one step at a time. Since we are already introducing many experimental changes with v1.5, we would like to test that first and then iterate it before introducing new modifications.

@krst

But in the above setup, if a delegate is exactly at 85% participation, would they get $5,100 or $5,950? We don’t understand why, in %, a tier begins where the previous tier ended, but in $ terms, a tier starts at a gap from the previous tier’s end ($950 from Tier 3 to 2, $850 from Tier 2 to 1).

First of all and since we’ve been asked a lot about tiers, we would like to clarify it:

Tier 3: TP ≥ 65 < 70

Tier 2: TP ≥ 70 < 85

Tier 1: TP ≥ 85

In v1.0, we noted that, from how it was stated, there was not much difference between being in the top 5 or top 30. We introduced the gap in compensations to have a mechanism that allows the delegate to feel the difference between a good and a great delegate, working as an incentive to keep improving their work.

[JoJo]

can we have a run down of the last formula and parameters and ranges that will be used pls?

[APE]

Thank you for this comprehensive proposal to renew the Delegate Incentive Program. The changes address many issues and we appreciate the effort to improve the quality of delegate participation.
However, I have concerns about the feasibility of option v1.5. While we agree that a qualitative assessment could potentially lead to better outcomes, the proposed implementation seems extremely labor-intensive:

1. Manual review of all delegate contributions across all forum discussions each month.
2. Qualitative assessment of each contribution based on a complex rubric.
3. Compilation of monthly reports for each delegate.

This approach raises several issues:

1. As the number of delegates and discussions grow, can this system keep up?
2. How can we ensure fair and consistent application of the rubric across all evaluations?
3. Will assessments be completed quickly enough to not delay incentive payments?

While the increased administrative budget for v1.5 acknowledges the additional work, I’m skeptical it’s sufficient for such a time-consuming process. The mention of eventually developing AI tools for assessment is promising, but seems speculative at this stage.

[Camelot]

Camelot has voted FOR 1.1.

While we appreciate that the proposer is attempting to shift towards what is perceived as a more qualitative approach with 1.5, we believe the previous iteration of the program was the right path forward. In our view, the program should not only be easy to implement and execute but should also incorporate mechanics that are as objective as possible, without increasing bureaucracy.

We have already seen an evaluation of impactful versus non-impactful comments, and expanding this into a full-fledged evaluation of all discussions within the DAO could introduce too much subjectivity and friction, particularly because this task is centralized within the organizers. We think 1.1. is good enough, and should be maintained as it is now.

[SEEDGov]

Hi everyone, we present the completion report of the first phase of the Experimental program, covering the first 6 months (March to August). Any feedback will be welcome

From Engagement to Rewards: A Comprehensive Analysis of Participation and Incentives (Part 2 - Final Report)

This is the second and last report of the Experimental Delegate Incentive Program, in compliance with the proposal approved at Tally. TL;DR There has been a steady increase in the number of registrations and the number of delegates eligible to participate in the program, with a 16.2% increase in the number of participants and a 21% increase in the number of registrations between the first 3 months of the program and the last 3 months of the program. DAO activity has remained fairly high. F…

[AbdullahUmar]

Below are the opinions of the UADP:

Due to the increased participation in voting and engagement on forums as a result of the delegate incentive program, we are directionally in favor of this proposal. V1.5 makes more sense to incorporate over v1.1 since 1.5 attempts to encourage more proactive and natural conversation than 1.1. The old model, to an extent, can feel forced. Our team has sometimes felt this way as well. It is also more valuable for proposers to attain feedback early on before going to a vote. Delegates also change their behavior on forums with the 1.5 setup since they are now actively perusing through open discussions as opposed to solely justifying votes.

[WinVerse]

DAOplomats voted in favor of implementing v1.5 of DIP.

The initial iteration of the program has been good but there were some loopholes to game it. Introducing v1.5, although subjective, addresses these and provides a platform for a more intentional commitment from delegates.

We are also generally satisfied with your answers to our initial questions regarding the bonus criteria, DIP bans, and the implementation of expert coalition, and we would love to see how this program evolves in the future. Thank you SEEDGov for all the work put into this.

[AlexLumley]

Vote: FOR v1.5

Type and Proposal Link: Snapshot –> Non-Constitutional: Arbitrum DAO Delegate Incentive Program V1.5

Voting Rationale Link: Alex Lumley (Savvy DAO) Delegate Communication Thread - #26 by AlexLumley

=== COMMENTS ON PROPOSAL: ===

I voted FOR DIP V1.5 because it emphasizes high-quality contributions from delegates, a necessary shift in incentivizing thoughtful participation within the Arbitrum DAO. The proposed rubric-based evaluation system offers a more nuanced approach to reward those who provide timely and impactful feedback. While I recognize concerns regarding the subjectivity of this new structure, I believe it is worth experimenting with, given that it encourages meaningful engagement early in the proposal process.

The SEEDGov team has done a commendable job administering the program so far, and I trust their ability to manage this iteration effectively. That said, I will monitor how the rubric is applied and whether it can be refined further if any issues arise. Overall, DIP V1.5 represents a positive step forward in increasing the depth and quality of participation within the DAO.

[SEEDGov]

Key Updates – October 2, 2024

• We have incorporated @krst’s feedback by increasing the minimum participation requirement for on-chain votes from 60% to 75% over the past 90 days. Consequently, delegates must now participate in at least 3 out of 4 on-chain votes within the last 90 days to remain eligible for the program.
• As the DAO expressed a preference for option 2 (v1.5), all references to option 1 (v1.1) have been removed. The tables, framework, and terminology, as well as the related formulas, have been updated accordingly.
• Clarification has been added to indicate that aspects of v1.0 that remain unchanged will be retained.
• Existing delegates in the program will be required to renew their KYC, though they will not need to re-register for the program.
• Minor changes have been made to improve wording and organization throughout the proposal. This includes moving certain notes to more prominent clauses, updating the TP ranges in the tiers with symbols ≥ and <, and adding links to relevant BP calls.
• We would like to emphasize the experimental nature of the new delegate feedback evaluation system (which will be evaluated after the first three months) and the recently added clause that allows SEEDGov to reopen budget discussions if delegate enrollment exceeds 65 participants. These items have been elevated from simple notes to clauses with dedicated titles for increased visibility.
• The definition of a new delegate participating in the program has been expanded, providing greater clarity on the onboarding process:

@SEEDGov

Onboarding new delegates

A new delegate, without prior participation history, can join the program starting in the third month after casting his first on-chain vote, as long as he meets the specified requirements (>50k voting power and ≥75% participation in on-chain votes) during that third month.

• Lastly, we aim to submit this proposal for a vote on Tally by Monday, October 7, 2024, with the voting process starting on Thursday, October 10, 2024, due to the three-day voting delay.

Thanks again everyone for the feedback! We are open to further input or questions in the coming days.

[Djinn]

Voted For - the approach is working in the right direction, although I do think that more analysis and structuring of incentives are necessary to really get great feedback and participation from delegates.

Some key topics:

• How do we increase overall ARB holder participation to delegate and redelegate based on the actions of delegates?
• How can we make sure that we encourage new delegates to step up and start their journey?

[ITUblockchain]

We have voted FOR the DIP V1.5 option.

We believe that as DAO members, it is our responsibility to continuously generate new ideas for the DAO and the future of Arbitrum. These ideas should be thoroughly discussed to ensure the most beneficial course of action is taken in the most efficient manner. DIP V1.1 falls short in identifying which delegates contribute the most significantly to the DAO. In contrast, DIP V1.5, with its additional criteria, represents a significant improvement and fosters a dynamic environment of ongoing discussion.

[Bob-Rossi]

@SEEDGov

Existing delegates in the program will be required to renew their KYC, though they will not need to re-register for the program.

During the initial 6 month trial DIP period, KYC was a little messy as the ask was to not do KYC until people were confirmed receiving funds. While I understand from an administrative standpoint, something I wanted to ask is if for the KYC renew for the next DIP iteration… is it possible those who have a history of meeting the thresholds can apply early to avoid some of the possible delays this go around?

Just a thought to improve the end experience for both the delegates and SEEDGov as the admins. Even if it’s as strict as “had to have gotten ARB payouts all 6 periods” that may help.

[SEEDGov]

First, it’s important to clarify that the Arbitrum Foundation carries out the KYC process and is not the program administrator’s responsibility. We act as intermediaries between the delegates and the AF by trying to make the workflow as simple as possible. The process for KYC is something like this:

1- A delegate qualifies to receive incentives.

2- The Program Administrator sends a forum message to the delegate to ensure they start conversations with AF’s Compliance Team.

3- The delegate completes KYC process with AF.

4- The Program Administrator receives an email from AF telling them that X delegate has completed KYC.

5- The Program Administrator sends a forum message to the delegate to double-check if the KYCed address is correct.

6- The Program Administrator asks MSS (previously the Program’s Multisig) to execute the payment.

7- Payments are published in our Payment Distribution Thread.

We know that the KYC process can be a bit tedious for delegates who qualify for compensation, and sometimes even for the program administrator, as there are sometimes some problems:

• Coordination issues between Compliance and Delegates.

• Delegates do not entirely understand the necessary steps to do KYC.

• Fractal ID being hacked.

• Long wait periods until delegates can receive payments.

• Delayed payments mean angry delegates.

• Delayed KYCs also mean that the Program Administrator must critically monitor payment flow to avoid a mistake, which can be critical for DIP. You can see payment flow in our Payment Distribution Thread

@Bob-Rossi

is it possible those who have a history of meeting the thresholds can apply early to avoid some of the possible delays this go around?

Since KYC’s amendments must be done again for DIP Temporary Extension, we started conversations with the AF team to accelerate the process. We tried to start the KYC process early for those delegates who received incentives during the six months of the original program (your delegation included). Still, unfortunately, we weren’t allowed to proceed until we had the monthly results.

We know that the KYC process is critical and that some points can be improved to make it less tedious for delegates. We are happy to look for solutions for this process.

@cliffton.eth @raam, how do you guys think we can smooth the process and improve the experience for all the parties involved?

[raam]

Thank you for your input.

As communicated to you previously, there is no additional KYC process involved for the extension of the DIP, only amendments for those that qualify for October and November.

In general, the compliance process has to be robust as possible and and a little tedious, because otherwise it creates room for human error, as seen in the past with certain incentive programs

ArbitrumDAO Multi-Sig Best Practices

The ArbitrumDAO is one of the best examples of decentralized, permissionless and autonomous governance being applied at scale. As the DAO continues to grow, it uses a polycentric governance approach, where each of its approved initiatives (e.g. ARDC, ADPC, Delegate Incentive Programme, LTIPP, STIP, etc.) has unique governance structures and operational procedures. It is common for these initiatives to have a multi-signature wallet (multi-sig) committee responsible for managing and dispersing DA…

[SEEDGov]

@Djinn

How do we increase overall ARB holder participation to delegate and redelegate based on the actions of delegates?

DIP as a program has no scope over the decisions of holders on how to delegate their tokens. We believe this should be discussed within the Delegation Working Group of the Staking proposal.

@Djinn

How can we make sure that we encourage new delegates to step up and start their journey?

Some of the adjustments we’ve implemented were designed to attract new delegates, such as modifying the participation rate required to apply for the program.

Additionally, as Program Administrators, we will be reaching out to delegates who are eligible to participate in the program but have yet to do so:

@SEEDGov

What else can we do?

We are committed to reaching out to each of the delegates who meet the requirements to be part of the program but are not yet enrolled. Our goal is to encourage everyone to join, helping to maintain and increase the diversity of voices in Arbitrum DAO.

@raam

Thank you for your input.

As communicated to you previously, there is no additional KYC process involved for the extension of the DIP, only amendments for those that qualify for October and November.

In general, the compliance process has to be robust as possible and and a little tedious, because otherwise it creates room for human error, as seen in the past with certain incentive programs

Hi raam! Thanks for the clarification.

Apparently there has been a miscommunication on our side regarding the extension of DIP v1.0. However, we would like to take this opportunity to ask you if the delegates already enrolled in the first iteration will need to complete the KYC again if v1.5 is approved.