Hey everyone,
Most of the queries above can be addressed by listening to the call we hosted yesterday w/DEF & Coin Center. Recording found here:
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It is very necessary for us all, and therefore Arbitrum specifically as well, to take a stand in defending the rights of crypto users and developers. That said:
- Funding seems to be entirely US based. Although the US definitely has a large sway on the rest of the world, the EU is arguably the largest exporter of regulations to other countries and there are also a lot of countries wherein there is arguably more to gain in terms of the rights to use or develop on the blockchain. Therefore, to truly protect and serve the rights of the people to use and develop on the blockchain the focus should be more globalized.
- Having just two beneficiaries of the funds seems like little, considering there are many more than two advocates/non-profits out there fighting for crypto rights.
- There is no clear oversight on the Arbitrum DAO side to safeguard how the funds will be utilized and no possibility to steer/adapt funding whenever necessary. As @ruslanklinkov mentioned: ‘Including mechanisms for reporting and controlling fund expenditure would enhance trust in the proposal.’
- There is no rationale given for the various funding amounts.
- It would be nice to see direct funding for the litigation of the Tornado Cash cases.
For these reasons, my vote will be against in its current state, but very much encouraging you or anyone else to iterate on this proposal because of its importance to crypto overall.
These comments and thoughts reflect my personal opinions on this proposal as a member of the Arbitrum Representative Council (ARC). These do not necessarily represent the overall views of the council, Treasure DAO or provide an indication of final voting decision by the ARC.
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After some reflection, I have voted against this proposal. Mainly because @matthewb comment doesn’t make me feel good (which is ironic considering charitable contributions are supposed to do this) and i see his concerns completely unaddressed in the discussion prior to moving to snapshot vote.
Overall i don’t like the thought that we have left the tornado cash devs high and dry out of some supposed legal or reputational risk, and we are making these contributions as a salve on our conscience
The Arbitrum Foundation advised us that they wouldn’t have been able to facilitate the transaction to the aforementioned parties. Hence, instead of stopping our efforts we felt that this was a good middle ground to still contribute.
Also, if you listen to the call we had w/DEF and Coin Center, you’ll realise that we actually haven’t left Alexey and Roman high and dry; as DEF + CC still aid in their litigation efforts.
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Thanks for the additional context! I have now changed my vote to supporting DEF and CoinCenter with 500k ARB each, but will monitor to see if the amount should be modified before the vote ends.
Given the limitations we face as a large DAO with lots of eyes on us, we have to be strategic in how we support important causes. Headlines such as “ArbitrumDAO funds tornado cash developers” will paint a target on our back, potentially create powerful enemies and result in us overextending ourselves too much in one direction.
I like that this proposal supports open source, routes the money to well established organizations and comes at a critical time for our industry.
Apologies to @matthewb on this direction that we’ve had to take! We would have gladly supported directly if that option had less resistance, we’ll have to make peace with not letting the perfect be the enemy of the good.
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Thank you for addressing my comments @thedevanshmehta.
As mentioned above, I am grateful to @Immutablelawyer and Axis Advisory for drafting this proposal and would encourage delegates/voters to vote in favour despite the points I addressed upthread. It is clear that both this proposal and the DEF proposal will lead to better outcomes for developers building open-source software on crypto rails. Even though I still believe we should support Roman & Alexey directly, this is a step in the right direction.
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Thanks Matthew i’ve now voted for the proposal!
I hope that CoinCenter or DEF is able to directly support you with this grant in some way. Even if not, this is a long battle in the trenches and I’m glad we made some progress here!
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Thank you @Immutablelawyer for crafting this proposal, despite Axis opting out of any remuneration.
In an effort to help delegates with their decision making, I’m wondering what framework/model could be used to choose the funding amount. I don’t feel like I have a baseline to measure cost against, and I suspect that other delegates may feel the same. The difference between 500k and 1.5M ARB is big, so maybe you could provide some more context around how you chose the funding options as well as any useful framing to help delegates measure the cost vs. the impact.
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cp0x fully support this proposal, because in code we trust and
Voted: FOR, Fund with 1,500,000 ARB each
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your remark
in code we trust
is a little ironic since Walchian approach is
in code(rs) we t(h)rust
What is the principle at stake? I would argue that it is the difference between actual and constructive knowledge (plus its junior offshoot imputed
Let’s run a thought experiment
-
a truck designer puts a speed governor so it doesn’t spin out of control when going downhill
-
a mechanic puts in a switch (default on) to turn this governor off or on
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the truck driver to make a deadline delivery turns it off to speedrun
Later on the journey back, the drivers son is taking the wheel (whilst dad sleeps) it skids out of control going down a slope and kills … a black cat. Who is at fault?
a) the truck designer for not sealing the speed governor from interference
b) the mechanic for weakening the desgn parameter
c) the driver for not turing the governor back on
d) the son for not checking the switch setting
e) the “but for” test in that if the speed govenor wasn’t available the driver wouldn’t have turned it off
Now govt stupidity aside, the question for Arbitrum is to what degree open source developers should be responsible for the release of their code into the world where it might end up in the hand of idiocy (which includes NKackers).
The designer would say MIT license, I do not want any actual knowledge of what the software gets up to
The mechanic would say GPL-affero … the end user has the final decision
The insurance company says sue eveyone and find out what sticks. But lets map this back onto Tornado Cash … should there have been constructive knowledge the service could be exploited by (in US govt eyes) evildoers … or is evil not a trait that should be a criteria for refusal of the service. Is the software a mere mechanical machine and not under any control? Is that socially responsible? Or is it not a question for the technical echo-chamber isolated from society.
Perhaps once Arbitrum users can come to consensus, retroPGF could be an option to reward those closest to the concensus view.
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Hi Rika,
This was a point that was discussed on the call w/CC & DEF. Right now, both institutions are undergoing or will potentially have to undergo, litigation proceedings in relation to certain crypto-specific matters in the US. The legal costs for such an endeavor costs upwards of 500,000USD most of the time (based on the discussions w/CC and DEF, this sometimes is actually a minimum for litigation lawyers in the US where the case would potentially also need to go through circuits and, potentially, the Supreme Court where necessary).
This is why were I to be a delegate, I’d be voting for the 1Million+ARB range here to give them some much needed cushion re. these costs.
Several have also asked ‘Why are we funding US Institutions’. The answer from my end at this point in time (and this is coming from a European’s perspective), is that what happens in the US influences regulators worldwide but especially the EU (for example). Hence, in light of the several pivotal (emphasis here) issues that are being discussed in the US, we feel that funding these two high-quality and effective institutions will have a positive trickle-down effect on the digital asset industry globally.
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Voted FOR 500,000 each
Hopefully the funds will be spent wisely. Good luck 
gm all, voted FOR this proposal - Amount 1m ARB.
I believe both Coin Center and DeFi Education Fund are doing important work for the crypto ecosystem. Even if initially focused on the US, the consequence of their work cascades to all jurisdictions and all web3 projects.
Given that the teams estimate a need of $500k for their current process, 1m ARB should give them enough cushion to succeed.
Best of luck, and will be looking forward to some report on the results.
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We would like to thank @Immutablelawyer for coming up with this proposal and facilitating the communication between involved parties. After following the discussion here, we will support the proposal to fund the DeFi Education Fund and Coin Center as we believed that they are doing the improtant work for our industry.Our support is rooted in the commitment to protect open-source software development and uphold developers’ rights. By supporting these organizations we could help improve legal clarity and defend privacy free speech within the web3 space. .
Based on the context on cost of $500k for their current process, 1M ARB should give them enough cushion to succeed.
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Here are some comments from the UADP:
The legal terrain is a tough one to navigate, and it’s seldom top of mind for builders in the space until the community faces some sort of calamity. It’s therefore vital to fund groups that have the connections and competency to effectively court the ears of politicians and regulatory bodies. Both organizations have a strong history in shaping the landscape of digital asset regulation and defending the rights and freedoms within the blockchain community. Since we are by no means legal experts, we have resorted to the comments of folks more acclimated with this subject matter to decide our vote. Lobbying and litigation initiatives are quite expensive, so it doesn’t seem prudent to simply give the entities $500k each. It seems wiser to deploy $1M - $3M per organization so they can more effectively implement their plans. If we’re going to fund this, might as well make it worthwhile. An aspect that we hope will better be addressed in the future, however, is clearly reporting back to the DAO the successes and failures of the programs taken by Coin Center and DEF. Other DAOs have previously funded such groups, but they never returned to the DAO with KPIs and success metrics. We are curious if @Immutablelawyer/Axis will be actively involved as a liaison between CC/DEF and the DAO from a communications perspective.
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Appreciate the logic provided behind selecting 1 m ARB to each organization. I’ve followed your recommendation & gone with this amount too 
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@AbdullahUmar - We won’t as, to be quite frank, this proposal (discussions, liasing w/stakeholders, delegates, contributors, CC & DEF, outside counsel of our own etc.), took up quite a bit of billable hours on my team’s end that I naturally cannot afford to do on a continuous basis. The total cost on our end to get this proposal to Snapshot was 10k+ (in consideration of the factor aforementioned - but this is primarily billable hours + outside US Counsel which is naturally not free of charge - we are not US Lawyers, but have US Partners we utilise when we have US Inquiries).
Hence, unfortunately, our firm will not be serving as a liaison between the parties. However, I am sure that CC & DEF will not have any issues w/establishing a channel of communication w/the ArbitrumDAO - such as a monthly update call for example or some other form.
I hope that clarifies our position 
To add; we did not (and won’t) request a reimbursement or a payment for this - we deem the above as an indirect contribution from our end to this cause.
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There are simpler examples.
- Can cash be used by a criminal? Should they be banned then?
- Can words offend? Should words be banned then?
The conclusion is simple - any achievement of humanity can be used for good or used with evil intent, a tool is just a tool.
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you are conflating means (money, language) with motive @cp0x … means are neutral to the extent they are not customised with intention (eg a swiss army knife != stiletto) but motive, the mens rea (what goes in the person’s head) is very much a factor is legal judgements. Now that we’ve disposed of the contributory aspects, go back to the original focus … what should be in the minds of people designing DeFi tools given they could be used from by everyone from grandma to NKorean tinpot dictator … apologies to all tinpots out there for the insulting comparison.
PS any anyone who tries the Szaboan stance of code’slaw is really going to get the full weight of court evidence of rebuttal xref hot pursuit … to paraphrase 1 US judge
" ok you claim you work in no jurisdiction, but now you’re in front of me so mine is as good as none of the others"
PPS Developers might have zilch interest in rarified international jurisprudence, but you can be sure international jurists will take a keen interest in secretive shadowy supercoders. Arbitrum participants can either take the plunge and deal with it NOW … or deal with it whilst in involuntary vacation at His Majesty’s (dis)pleasure.
PPPS … imagine if the US unilaterally declared that any stablecoin pegged to the USD will become part of its custom zone and thus subject to its enforcement area unless excepted under existing bilateral agreements … don’t laugh … it happened during prohibition. See current criminal knowledge in Samourai
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After consideration Treasure’s Arbitrum Representative Council (ARC) would like to share the following feedback on the proposal
TreasureDAO’s ARC will vote in favor (FOR) of this proposal, choosing the ‘500k each’ option.
Although this proposal might be imperfect, we can also not expect an initial proposal to fund web3/crypto litigation to be perfect. We do however realize that there is some time-sensitivity at play, because court cases continue regardless of Arbitrum DAO funding. On top of that, funding crypto litigation sends a clear signal that Arbitrum DAO is willing to stand alongside the institutions that are defending our rights to privacy, as well as our rights to develop (on) and make use of blockchain technology. This way, Arbitrum DAO can potentially grow towards a better and more organic way of funding the institutions that defend our rights. For these reasons, the Treasure ARC has decided to fund both DEF and Coin Center with 500.000 $ARB each, instead of the 1.000.000 $ARB that @immutablelawyer would have voted for if he were to be a delegate. This gives the DAO more control over the situation and hopefully motivates one or both of these parties (or any other party standing up for crypto rights) to come to the DAO themselves if (additional) funding is needed.
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