Proposal: Sunsetting the Delegate Incentive Program (DIP)
A Call for a Fairer, More Effective, and Accountable Arbitrum DAO
TL;DR
The Delegate Incentive Program (DIP) was created to encourage active participation in governance. However, the program has failed. Instead of fostering a healthy ecosystem, it has become unfair, unstable, and subjective.
It is run by Program Managers (PMs) at @SEEDGov who have consistently ignored community feedback, applied rules retroactively, and created a system that punishes smaller delegates while failing to hold large, inactive ones accountable. Their proposed “fix” (v1.7) only makes things worse by raising the entry barrier 10x, cutting delegate pay by 40%, and asking for a 25% raise for themselves.
The program is broken, its management has lost the community’s trust, and it is doing more harm than good. It’s time to end it.
This proposal calls for the complete sunsetting of the Delegate Incentive Program.
The Problem: A System of Patronage, Not Performance
The DIP is no longer a fair system of rewards. It has become a system of patronage, where payments depend on the personal, opaque judgment of the Program Managers, not on clear, objective work.
1. The Rules Are Subjective and Unfair
The program has shifted from a predictable system to a “black box” where the PMs decide what has “quality” and “impact.”
- Guessing Games: Previously, delegates got points for explaining their vote (CR). Now, that clear rule is gone. Your explanation only gets points if the PM decides it was “impactful.” When delegate Paulo Fonseca pointed out that this was a “conceptually dangerous” metric that could reward bad behaviour, the PMs offered no clear definition, admitting it could only be judged “in hindsight.” This forces delegates to guess what the PMs want, which is not a healthy way to run a DAO.
- A “Caste System” for Delegates: The program introduced a “VP Multiplier” that punishes smaller delegates . If you have less than 4 million ARB, your score is automatically cut by up to 20%. @paulofonseca correctly called this a “sort of caste system,” and other delegates labeled it a “penalty” that makes it nearly impossible for new, hardworking delegates to get fairly compensated.
2. A Pattern of Mismanagement and Unprofessionalism
The program’s management has been marred by constant failures, making it impossible for anyone to rely on.
- Constant, Retroactive Rule Changes: The rules change almost every month. Worse, the PMs have applied major changes retroactively , in the middle of the month. As one delegate put it, it’s like “changing the rules of the game, literally in the middle of the game.”
- Late Results and Ignored Feedback: The monthly results are almost always late, and payments have taken as long as two weeks to be signed. When Paulo Fonseca repeatedly asked for proactive communication about these delays, he was met with dismissiveness. This lack of professionalism shows a fundamental disrespect for the delegates’ time and financial stability.
- Overstepping Authority: The PMs have suspended delegates for things they said on Twitter. This is a serious overreach of their power. As multiple delegates argued, their job is to manage the incentive program based on forum activity, not to police social media.
The Evidence: The Damage Is Real and Measurable.
These aren’t just opinions. The negative impact of the DIP is clear from the data and the words of the delegates themselves.
The Numbers Don’t Lie
The moment the unfair v1.6 rules were introduced, the number of delegates getting paid fell off a cliff.
| Month | DIP Version | # of Paid Delegates | Total Payout (USD) |
|---|---|---|---|
| December 2024 | 1.5 | 49 | $262,228 |
| January 2025 | 1.51a | 32 | $205,534 |
| February 2025 | 1.6 (New Rules) | 21 | $90,244 |
| March 2025 | 1.6 | 25 | ~$100,000 |
Source: Figures discussed in delegate chat logs and forum posts.
The number of compensated delegates was cut by more than half as soon as the new rules took effect. One delegate calculated that 10 out of the 11 delegates who were disqualified in February were “small delegates” hurt by the VP multiplier.
The Program Fails Even Its Supporters’ Goals
Even delegates who supported the program’s goals, like L2BEAT, have seen it fail. @krst Urbański of L2BEAT stated the DIP should help top delegates afford staff and reward passionate, smaller delegates. Version 1.6 did the exact opposite: it punished smaller delegates and failed to hold large, inactive delegates accountable for their lack of participation. The program has failed to achieve the very outcomes that its key supporters envisioned.
Delegates Are Losing Confidence
The most experienced delegates are walking away because the program is unstable.
“We’re now reducing involvement as we can’t know what (if any) compensation we will receive. Working up front without knowing if or how much you’ll be paid isn’t sustainable .”
— cr1st0f, representing ACI, a major protocol delegate
“Most professional delegates would prefer some baseline/bottom line assurance. No bottom end confidence until two weeks after month-end isn’t consistent enough for many delegates.” — DonOfDAOs, delegate
The Final Straw: A “Fix” That Makes Everything Worse
After months of criticism, the PMs proposed an update (v1.7) that confirmed their disconnect from the community. Instead of fixing the problems, they doubled down on them:
- More Elitism: They proposed raising the minimum VP for new delegates from 50k to 500k , effectively closing the door on new community members.
- Pay Cuts for Delegates, Raises for Managers: They proposed a ~40% pay cut for all delegates while simultaneously asking for a 25% raise for themselves.
- No Accountability: They proposed removing the ability for delegates to dispute subjective scoring, cementing their own power.
This proposal is not a good-faith effort to improve the program. It is an attempt to silence critics, entrench power, and reward the program’s managers at the expense of the delegates.
The Solution: Sunset the Program and Move Forward
The Delegate Incentive Program is broken beyond repair. The consistent pattern of mismanagement, unfair rule changes, and disregard for community feedback has destroyed its credibility. The program should be sunset and the funds returned to the DAO.
By voting to sunset the DIP, we can:
- Stop Wasting Money: The DIP is expensive, with high administrative costs. In May, nearly 31% of the program’s spending went to the PMs, not delegates. This money can be put to much better use.
- Encourage Authentic Participation: Let’s reward work through more direct means, like funding research bounties, paying for governance tooling, or creating a grants program for community initiatives.
- Restore Fairness: Ending the DIP gets rid of the unfair “caste system” and the subjective “black box” scoring. It levels the playing field and allows the best ideas to win.
It’s time to trust our community. Let’s stop paying for conversations managed by a flawed system and start investing in actions that provide real, lasting value to Arbitrum.
Vote YES to sunset the Delegate Incentive Program and build a stronger, fairer DAO.
