Proposal: The Arbitrum Coalition

The below response 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.

TL;DR: We are stepping down from the pre-appointed role of the Advocate, and we’ll be abstaining from the vote but we still support the overall idea as we’ve seen first hand that there’s an actual need for what it tries to accomplish in the ecosystem.

A little history

First, we’d like to clarify that while our name is directly mentioned in the proposal as a pre-appointed DAO Advocate, we are not part of the coalition and did not co-author this proposal. However, we have been involved in consulting the proposal, providing our thoughts and feedback, and we support the spirit of the proposal.

As delegates, and especially with the amount of voting power we have, we feel an immense responsibility for the management of both the treasury as well as the protocol itself. Given that, we believed that having the ability to assess different proposals with feedback from people more knowledgeable in specific domains to be beneficial not just for us, but also for other delegates who face time, resources, or knowledge constraints on certain issues.

Currently delegates are willingly committing time and resources to process all the proposals that hit the forum, do the thorough research and analysis, engage in the discussions with proposers and provide constructive feedback, all as a voluntary work driven by an internal sense of responsibility for the protocol. It becomes more and more evident that this is not sustainable long-term.

The best example was STIP voting where we had to evaluate and vote for almost 100 proposals in just a week. If a single delegate spent just 30 minutes on each proposal (and just reading with understanding through most of them took more than 15 minutes) they would need a total of almost 50 hours during that week to just go through all the proposals. This does not allow for in-depth research, back and forth, or constructive feedback. And no delegate is a domain expert in each project category that we’ve seen in the STIP program, it would be great to be able to get some advice from others in the ecosystem that have more experience and knowledge in particular topics.

Of course STIP is an extreme example, but the example that illustrates that meaningful engagement in DAO management requires both time and resources. Many delegates were also actively engaged in the discussions preceding STIP, including workshops. We are already facing the issues of some ideas not even making it past the forum due to lack of interest and inability of the proposers to get the attention of the delegates, or the inability of the delegates to properly asses and evaluate the proposals.

Reasoning behind our support for the coalition

There were several ideas being discussed on how to address this problem, including delegate compensation (so delegates can devote the necessary time for the engagement in DAO governance), a delegate budget so each delegate could pay for consultation/research services, and, of course, the idea of the coalition, where three well-known entities prepare a proposal to the DAO for providing their services on a recurring basis so they can assist delegates with forming an opinion on different proposals by presenting them with unbiased facts. We feel that all these ideas are worth exploring.

When we first heard about the idea of the coalition, we too were sceptical, and shared similar concerns with the ones raised by other delegates in the responses of the proposal, as well as during the call that was held on Monday last week. In particular, we recognise the risk that the coalition will effectively have additional powers, especially it will be able to filter which proposals are even considered for voting, as those that aren’t covered may not receive the necessary attention from delegates. On the other hand, there is a risk that the coalition will waste man-hours on meaningless proposals, and that projects will abuse this mechanism to post proposals to the forum just to get coverage from the entities that make up the coalition.

In response to those concerns Matt from Blockworks suggested the idea of a DAO Advocate - someone that will be keeping the Coalition accountable and will ensure that the Coalition does not have censorship powers. In our view this role is kind of a “DAO proxy” (which we derive from “product owner proxy” role in product management) between the DAO and the Coalition, that facilitates the communication, oversees the smooth execution of services, prevents any of the two sides from getting clogged due to lack of decision-making, and ensures that resources don’t go to waste for meaningless activities.

This mechanism is obviously not perfect, as it still places a lot of responsibility and power in the hands of a few entities. However, this risk is quite transparent and easy to challenge, as both the Coalition and the DAO Advocate are still responsible to the DAO, and the DAO has all the means to easily stop them (by cutting off funding) if they are not effectively helping the delegates or replace them. And if we assume that the DAO Advocate is honestly serving the DAO and representing the DAO’s best interests, then this oversight is not just assumed, it is ingrained in this structure.

We were then asked to participate in the proposal as the pre-appointed advocate for the setup. Initially we had our reservations as we thought this role should rather be electable, but Matt presented reasonable argument that in order to make the coalition effective from day one it would be better to have this role filled by someone who feels the need for the coalition to exists and understands its’ goals.

Moving forward

Overall, we believe this initiative to be a net benefit for the DAO and something much needed. Furthermore we trust in the good intentions of the entities behind the coalition and we believe that this proposal would be a good experiment.

Perhaps the right approach should be determined and agreed upon by the whole DAO before voting on a specific proposal and introducing specific partners, and if that’s the right way to go, we’ll happily participate in ideating and structuring of such a proposal.

However, as our pre-appointment as DAO Advocate has been (understandably) controversial and our role not well understood, we have decided to step down from the pre-appointed Advocate position and we’ll suggest that this position be opened up for election. We believe that if the DAO Advocate were elected by the DAO, he or she would have a much stronger mandate to represent the DAO as a Coalition overseer. If this role is opened up for election, we don’t rule out the possibility of running in those elections.

Even though we will no longer be directly involved in this proposal we have decided that we’ll be abstaining from voting to avoid any controversy or any potential conflicts of interests down the line.