[Proposal] - Grants: SpecOps Roundtable

[dk3]

Grants: Special Operations Roundtable

Abstract

To establish a Special Operations Roundtable to draft, ratify, & administer a large-scale recurring grant program for projects within the Arbitrum ecosystem, run by nine projects within the Arbitrum Ecosystem.

Hold elections to fill steward roles with 8 Arbitrum Projects + Lead.
Stewards to establish the framework and procedures to ratify with the Arbitrum DAO.
Submit framework as formal AIP ratification.

Post ratification, to execute according to plan and distribute throughout 2024.

Notion Detailing the Ideas & Direction thus far → https://specops.arb.vote/ ←

Motivation

• No group exists driving a long-term vision for the Arbitrum DAO. Thought Leadership and Coordination are needed.

• The groups with the most to lose are the projects driving value to the Arbitrum Ecosystem. Thus, projects should be driving this initiative. No central point of failure should exist within this group.

• There is an opportunity cost to building on Arbitrum; other ecosystems are providing incentives like covering infra costs, funding development & investment, flagship representation & marketing, both in dollars, incentives, resourcing, and support. Projects do not want to leave Arbitrum; however, action is needed to remain competitive.

• Liquidity Incentives are nice, but projects need a mechanism to remove existing roadblocks to focus on building long-term value for the ecosystem.

• Peripheral service providers like research collectives, market makers, auditors (economic & security), marketing/growth/retention platforms, infrastructure providers, etc., want to get more involved with the ecosystem but are unsure how.

• The proposals hitting the forum are starting to get chaotic, and without proper focus and solid bedrock, we will continue to see growing governance fatigue. Teams are getting frustrated with the politics and time commitments, and we must cap the growing time waste and disdain.

Arbitrum can address these issues with a constructive and robust grant program.
We can architect an ecosystem grant program designed and overseen by elected project stewards to fund impactful projects and initiatives quickly and effectively. Constructed so that individual components can be hot-swapped when course correction is needed. This proposal aims to establish buy-in from the Arbitrum Community, elect the founding stewards, and get the process moving. The first deliverable will be the specifics of the frameworks, discussion, and submittal for ratification by formal vote.

Rationale

The roundtable model has precedent in Arbitrum’s governance through the Security Council’s and Data Availability Committee’s role in Administration. Thus, this is considered a just and fair mechanism for carrying out the process. The roundtable stewards and support team’s immediate focus would be to:

1. Onboard Support Team through RFP Process
2. Determine & Discuss the service categories eligible for shared resourcing or individual project grant spending through key pillar discussions.
3. Create procedures to onboard & approve service providers for eligibility for grant spend.
4. Create criteria for projects to apply for consideration for grant funding and to utilize shared resourcing, including reporting requirements.
5. Create documentation and procedures with clear code of conduct requirements for service providers and grant recipients.

This is an example of the documents the roundtable would look to produce for ratification; however, this will be a fluid and iterative process, and the attached links are in no way final.

To avoid doubt, this proposal requests the remit to own and execute a grant framework for established projects in 2024. For early-stage and pre-launch projects, there are other initiatives like AIP-3; these definitions will be part of the deliverable.

Stewards should be projects with a deep understanding of the Arbitrum Landscape and a community to tap into. Treasure ARC stands out to me as a great example.

Stewards should not expect compensation. The steward’s project will be eligible and encouraged to apply for grant funding post ratification (abstaining from self-voting). This can be changed after sufficient value has been established; however, it should not be expected until the grant process is in flight.

There will be a need for support. The Roundtable will need roles like:
Project Manager, Treasurer/Finance, Transparency & Reporting, Design & Marketing Assets, Technical Implementation, etc. - an initial budget to establish these roles with known Arbitrum contributors for two to three months is the only immediate funding ask.

The first month will have stewards and support focus on exploring these key pillars.

The first deliverable presenting an extensive framework for ratification.

If the proposed framework can not reach quorum or AIP ratification, then the initiative shall cease. If the proposed framework is ratified, it will continue under the terms outlined in the then-approved framework.

Specifications

The Special Operations Roundtable will oversee the administration and governance of the pilot grant program:

• 9 Total Stewards - There will be nine total stewards on the Special Operations Roundtable. 8 stewards will be democratically elected by the community to represent diverse perspectives. The 9th steward will be the proposer of this initiative; I am happy to drive the efforts forward until I am no longer needed and will abstain from voting unless, in an instance, there is a deadlock amongst the eight elected stewards. Election formalities to follow this onchain vote method.

Roles

Initial Direction - To be included in the proposed framework.

• 6-Month Terms - Stewards will serve terms of 6 months. Elections will occur every 6 months, allowing stewards to be re-elected or replaced by the community over time. This must follow strict procedures that may enable methods outside a typical AIP approval flow; however always under DAO control. To be included in the ratified framework.
• Three Seasons - The pilot grant program will target three seasons for 2024. Grants will be evaluated and approved each season. Each season to allocate 25mm ARB across projects (capped amount) and shared resourcing.
• 600k ARB Operating Budget - An additional 600,000 ARB will likely be requested to cover costs associated with administering the pilot program. To be included in the ratified framework.
• Grant Categories - The program will utilize pre-defined categories with recommended parameters around funding amounts and eligibility. To be included in the ratified framework.
• Evaluation Criteria - Grant applications will be evaluated based on criteria such as team, project details, estimated impact, and value-add to the Arbitrum ecosystem. Both quantitative and qualitative factors will be considered. To be included in the ratified framework.
• Legal Compliance - All necessary legal documentation and compliance processes will be required for funded grantees. Stewards will coordinate with the Arbitrum Foundation to ensure proper procedures are followed.
• Proof of Work and Integrity - Comprehensive data will be collected from funded projects to gauge performance and impact. Including self-reporting and third-party monitoring and enforcement. To be included in the ratified framework.

Elections

Phase 1 - Nominee Selection (7 days)

• Any Arbitrum native project who received the STIP can register as a steward candidate.
• Community members are encouraged to change delegates if desired.
• Support RFPs are encouraged to submit at this time.

Phase 2 - Member Selection (7 days)

2a - Full Weight Voting (3 days)

• Community votes with the full weight of delegated ARB.

2b - Decreasing Weight Voting (4 days)

• Community voting weight decreases linearly to 0.
• The eight nominees with the most votes at the end are elected stewards.

Phase 3 - Grace Period (7 days)

• Delay before elected stewards take office to hold official meetings.
• Stewards to discuss staff/support needs.

Implementation Timeline

If approved, post elections, the following timeline is proposed for implementing the pilot grant program:

1. Ratification by End of Year: The goal is to have the Grant Framework proposal ratified by the end of the year. (Pre Ratification)

2. Pod Set Ups: Stand Up Proof of Integrity and Proof of Work Independent Assessment Pods to monitor Grant disbursement progress. (Post Ratification)

3. Three Seasons in 2024: The pilot program will run for Three Seasons in 2024. Exact timelines to be included in the ratified framework. (Post Ratification)

The goal is to have the pilot grant program operationalized on this timeline, with 3 full seasons of funding completed within the first year. This will allow sufficient time to gauge results, correct the course, and determine any changes required before expanding the program further.

Budget Requirements

To fund the immediate coordination needs, the following budget allocation is requested from the DAO treasury:

• 200k for Onboarding Support Contributors to help research, coordinate, draft, and get the framework ratification ready.

Any ARB remaining from this operational budget at the end of the framework proposal will be returned to the DAO treasury if ratification is not reached. Any further ask will be included once value and preparedness have been established through the approved grant framework.

Transforming Vision into Action

Implementing this pilot grant program will provide tremendous value to the Arbitrum ecosystem, allowing the DAO to fund impactful projects and catalyze development. The pilot approach allows experimentation and validation of the best strategies to incentivize activity and growth.

The Vision

Projects get the funding needed to make a long-term impact on the ecosystem, and service providers have an opportunity to work directly with projects. A huge benefit of the Arbitrum Ecosystem.

Comprehensive data collection and public accountability will ensure funds are used productively and transparently, building trust in the community. Oversight by proof of work and proof of integrity pods in lockstep with elected stewards puts community representatives in control over the direction and priorities of ecosystem funding. The process will be transparent, with regular update posts on progress, recorded meetings, and verifiable steward vote tracking. The accountability will not solely lie with the Project Steward but also with their respective community, enabling far-reaching involvement.

If the pilot proves successful, the model can be expanded and refined in subsequent iterations, establishing a robust, sustainable grants framework tailored to Arbitrum’s needs. But for now, we are focused on executing this initial proposal to get a framework ratification ready and look forward to your feedback on how it can be strengthened.

[jengajojo]

thanks @dk3 While I applaud the thought and effort which has been put into this proposal, according to Tally | Arbitrum Proposal PL labs was already given a mandate to ‘Construct best-in-class Pluralistic Grants Program and Facilitate its successful execution’. I understand that the rationale here is

@dk3

enhancing the efficiency and effectiveness of the Arbitrum DAO grant program

however, spinning new groups which go in independent directions to test different strategies should already be covered in a pluralistic strategy. How about including your plan of action in the PL mandate and coming back with results of a test case?

[dk3]

Hey!
Plurality and Questbook are more positioned for microgrants, focusing on small grant items, whereas this is more for the next evolution of STIP for larger ticket grants.

However, I do see some benefits in reviewing the recommendations and processes that will likely come out of AIP3.

Think the next step of STIP will be a large undertaking, and necessitate a large number of community members to actively participate in gathering consensus, thus, tapping projects with active communities will be key.

[englandzz]

Hey @dk3, I appreciate the detailed proposal for the Special Operations Roundtable and its potential to enhance the Arbitrum DAO grant program. I’m interested in understanding how this new initiative aligns with the existing grant framework approved in AIP-3. Could you provide clarity on how the roles, responsibilities, and processes of the Roundtable will integrate with or differ from the AIP-3 framework? Additionally, how will the Roundtable contribute to the efficiency and effectiveness of the grant allocation, and what mechanisms will be in place to ensure transparency and community involvement? Clarifying these points will help the community grasp the synergy between the Roundtable and the established grant framework, ensuring aligned efforts and collective progress.

[tnorm]

Hey, awesome to see a wave of new grant proposals including this one!

Definitely supportive of new initiatives. A quick note to clarify (since I’ve received a couple questions on this): Although I’m honored to receive to have received the nod , I am not formally involved with this proposal nor was I aware that the authors planned to propose me as the project manager.

I’m currently still focused on research and WG meetings to help support the DAO discover a long-term program!

Look forward to following this thread and doing a deeper dive on Special Operations Roundtable soon!

[dk3]

Ya, my bad. I should have clarified that better. But your not saying you are not interested haha

[dk3]

@englandzz

I’m interested in understanding how this new initiative aligns with the existing grant framework approved in AIP-3

AIP-3 is more focused on microgrants or prototypes for projects typically in the early stages of development. However, I believe there will be some shared learning, AIP-3 is more of a shotgun type of allocation of small grants, whereas the Roundtable will be larger allocations to established projects building on Arbitrum. The Roundtable will target larger research projects like shared standardization or cross-project margin. Ecosystem level bug bounties, auditing agreements, or marketing campaigns. Syndicated deals to reduce infrastructure costs, think pooled RPC costing, Graph costing, etc. Establish streamlined ways to remove hurdles that Arbitrum Projects face, so Arbitrum Projects can focus on building.

@englandzz

ould you provide clarity on how the roles, responsibilities, and processes of the Roundtable will integrate with or differ from the AIP-3 framework?

I made this fancy graphic for you.
AIP-3 is ran by Plurality Labs and their delegates to explore funding exploratory projects or early-stage ideas and is limited in grant allocation. The Roundtable will focus more on established projects and shall act as the spiritual successor to STIP.

The Roundtable will be made of 9 Arbitrum Projects - Their appointed Steward, and their communities. The Steward’s focus will to establish the procedures to request larger ticket grants, what those grants can be spent on, to help coordinate on shared research, resources, or costs. They should have communities to lean on for example Treasures ARC program, the Premia Parliament, GMX Blueberry Club, etc. As a Steward it will be important to gather their community’s interest when passing a vote on any contested decision.

The support group will be specific service providers that carry out unique tasks or responsibilities on behalf of the Roundtable. This could be onboarding approved third-party vendors that grant spend can be used on, to create research reports on the most effective grants, to monitor approved grants for compliance, etc.

@englandzz

what mechanisms will be in place to ensure transparency and community involvement?

The Calls of the Roundtable will be recorded or even streamed if there is interest to ensure nothing is hidden, any contested decision that would require a vote by the roundtable would be done on an Arbitrum subspace so the Arbitrum DAO could see how each steward is voting as well as for what reason. Regular updates will be posted on the forum so the community has ample capacity to weigh in on what has been achieved or the direction the Roundtable is headed. Then as stated above, Stewards should be working with their respective communities to address any community-specific desired outcomes.

The ultimate deliverable being a framework for a cyclical grant process that can be streamlined, removing unneeded bureaucracy and governance fatigue by the wider DAO. However, with mechanisms in place to hot-swap stewards or components out if the DAO thinks the program is not going in the desired direction. Then to kickoff this process in early 2024.

[limes]

Overall, I’m supportive of a Large Grants initiative with a trusted and capable group but have a few questions:

If you were benevolent dictator, how would you allocate $75 million in ARB? What does the allocation look like and what is the estimate on how effective it is?

What metrics will be used to quantify success for the pilot program? I see the evaluation criteria, which evaluates the project team, but do you have grant evaluation KPIs.

How were the budget amounts determined?

These are my initial questions

[dk3]

@limes

If you were benevolent dictator, how would you allocate $75 million in ARB? What does the allocation look like and what is the estimate on how effective it is?

Ultimately up to the roundtable, however, my recommendation would be:
25mm per quarter

• 5mm for Shared Resources
  • 1mm for Financial Statements
  • 1mm for Smart Contract Auditor on Retainer
  • 1mm for Economic Auditor on Retainer
  • 500k for Bug Bounty (Must have Prior Audit to be Eligible)
  • 500k for Market-Maker Services on Retainer
  • 250k for Infrastructure Costs
  • 250k for Integrity/Work Pods (Monitor Grant Recipients/Onboard Service Providers)
  • 250k for Reputation, Retention & Engagement (Galaxe, Layer3, etc)
  • 100k for Technology Research & Recommendations
  • 100k for Legal Services on Retainer
  • 50k for Recruitment Services

20mm for Projects
Cap on a per-project basis at 500k = 40 Projects

If larger than 500k per quarter, ask to go through an off-cycle process.

I believe most economies of scale will come from shared resourcing, which will be on a first come first served basis. By grouping needs of a per-project basis together costing should drop significantly as well as operational hurdles that each project faces in isolation today.

@limes

What metrics will be used to quantify success for the pilot program? I see the evaluation criteria, which evaluates the project team, but do you have grant evaluation KPIs.

The proof of work/proof of integrity pods would be in charge of establishing standardized metrics or KPIs on what makes a successful grant allocation. Some may be more qualitative than quantitative, but will ultimately depend on the sector of the project. For example, a governance-based KPI may not have the same KPI as a DeFi Project. However each initiative that a grant allocation is used for should establish baseline reporting that can be found here: Memo: Report Reqs for Grants.

@limes

How were the budget amounts determined?

25mm per quarter for three quarters I think, is a good round number for a pilot program.
Regarding the 500k for 2024 Operational costs, I figured 3 full-time roles to support at 150k per individual, plus 50k for small project spend. With this said, depending on feedback to either scale up or scale down happy to change this. Right now, I am expecting the roundtable members and their communities to work pro-bono on this initiative, as they ultimately benefit from a robust grant framework.

[Sminem]

I personally think this is a very good idea, to have “team” specialized for Arbitrum grants. And best of all it would consist of projects that are big and active players in the ecosystem so interests are aligned. Also by having team specialized for that a lot of things could be done in a more efficient manner.

[vxToasted]

Hello all,

Makes sense to me to have a council of sorts for the largest/most engaged Arbitrum projects to meet, discuss and plan both STIP grants as well as network and discuss whatever needs to be said with each other directly in a group setting. I’ve seen and participated in various projects where the largest stakeholders have group meetings to discuss and plan anything from allocations, governance as a whole, and even just feedback to core team members and it’s been helpful every time.

Handling STIPs, and also generally having meetings of the minds, I think also would be best separate from the new-project funding discussed in the first reply in this thread, which seems it will focus on finding new projects and applications to persuade to join Arbitrum (and is mostly made up of a singular team of people), whereas it seems this will focus more on the more institutional/established side of funding. Letting people focus on specific things seems better than having the 6+2 people in the other proposal do the whole thing.

[dk3]

After discussing with some delegates, a visual of how we envision the Roundtable sitting in the greater arbitrum dao seemed helpful.

You can see how a polycentric framework makes sense given all the initiates going on.

Also a reworking of timelines to allow for 3 “Seasons” in 2024 makes sense, with Introspective Review periods to pivot and course correct if needed, I will fold in.

Another topic that came up is when there is a conflict of interest for example a grant proposal from a competitor for any projects in that sector to abstain, should we have extended roundtable members to tap in/out in those scenarios, I think its a good idea, and will work that into the proposal as well.

Lastly, it has been raised that 500k may not be enough for an operational budget, will take a deep dive and revisit, also 1mm for Smart Contract Audits will not go very far, so will need to establish rules for what type of use cases qualify for shared resourcing spend. Will add this to the list of deliverables the Roundtable will be expected to produce.

Happy to have 1:1 discussions with other delegates as well, feel free to reach out via DM and I will set up time.