Hi all,
I’ve been following the DIP discussions over the past few months including the comments here.
As everyone is aware, there are problems with the DIP, and I’d summarise them as follows:
-
Commingling of Intents. The program is a mixture of a delegate and a contributor incentive program that should be separate initiatives. A delegate incentive program should maximize dollars spent per vote whereas a contributor program should reward volunteers for positively supporting efforts in the DAO regardless of their ARB holdings. The commingling leads to exclusionary policies as people have been required to purchase 50k ARB to simply be eligible which acts as a barrier to contributors who can have a positive impact in the DAO. At the same time, we witnessed in January 2025 that ½ of all payments went to delegates with <100k voting power which demonstrates that it was incentivising contributors, but not necessarily voting power.
-
Misuse & Farming. We have witnessed people trying to create duplicate accounts, on several occasions, with the intention of getting paid more than once per month from the program. Thankfully, we managed to catch them prior to rewards being paid out. Additionally, in a previous version of the DIP, it was common for people to craft replies using ChatGPT with the intention of maximising their payments and of course led to unnecessary spam which made the life of a delegate harder. This was the motivation to move towards more subjective interpretation of comments.
-
Overpayment. We’ve witnessed payments of >$200k per month which can be annualised at $2.4m per year. This was a higher burn rate than many Series A cryptocurrency startups and it was the largest incentive program for any DAO by a significant amount. The mistake here was that the DIP should have started on a much smaller scale and then gradually build up the size of payments. It is much easier to grow a program than it is to shrink it. The goal should be to work out the optimal payment amount in return for the metrics that the program is optimising for.
-
Rewarding Replicated Work. The initial program rewarded participation and not necessarily the strength of contribution. The only repetitive work that should be rewarded is a consistent voting record, and if desirable, rational for the vote. People should be rewarded for outstanding contributions that can be recognised by their peers which the current DIP program has attempted to pivot towards. For example, good deeds might include hosting governance calls, onboarding a big delegate or helping the DAO make a big impact at an event.
-
Perception of Payments. People are viewing the DIP as a full-time salary as opposed to being rewarded for participating in the DAO. This perception should change. In my opinion, payments should be viewed as a “tip” or “thank you” from the DAO for doing a good job. There should be another overarching reason for why people are participating in the DAO beyond direct compensation. For example, they may have an interest in governance, represent the interest of a company or protocol, looking for work in a future proposal, or a gateway towards a full-time job in the space.
-
Too many disputes & arguments. This thread, alongside the various disputes that arise every month when payments are published, is not healthy for the program. There is a joke in our DAO that people are spending more time on disputes than they are on contributing to the DAO. We need to fix this. The answer is likely to move away from mass-evaluation of comments/contributions to a recommendation system where peers in the DAO can make proposals to the program manager about good deeds in the DAO and the program manager picks the top ~5 recommendations to reward.
It is easy to point the finger at badly designed KPIs and then say the program has failed because they were not met. That is an issue with a waterfall model of governance and not necessarily with the program. We should be adjusting KPIs as the program is running and new information becomes available, especially for something as experimental as the DIP. This is something SeedGov has attempted to do with the different KPIs that emerged in the temperature check votes.
At the same time, the DIP has had some interesting and good outcomes:
-
Attracted good contributors. We’ve seen some people pop up in the DAO who saw an opportunity to earn some pocket money and then stuck around because they found the project interesting.
-
Nudged behaviour. People have carried out certain behaviours to remain eligible for payments. For example, delegate decided to cast early votes in the security council elections as this was an eligibility criteria. We should brain storm on other type of behaviours that might be positive for Arbitrum for a whole. For example, DIP could reward people who help amplify big announcements.
-
Activated voting power. There are some large delegates where the monthly payment does make a difference on whether they prioritise reviewing a proposal and voting for it.
With the above in mind, there are times when I thought it was a good idea for the DIP to be shut down, especially with the endless disputes and arguments that pop up every month. At the same time, it does lead to the loss of some perks, that could be beneficial to the DAO as a whole.
The solution is just to revamp the entire program, including its purpose / structure / expectations by the community. It needs to start on a much smaller scale and build up over time.
I’ve spoken with SeedGov on this a few times now and they appear to have taken my comments on board to date. Additionally, the AF has been working with SeedGov on V2 to help overcome some of the issues identified and hopefully lead to a more effective DIP.