Proposal - Updates to the DIP, The Complete 1.7 Version

[SEEDGov]

First and foremost, we want to thank all delegates and stakeholders for their valuable feedback — both in this thread and during the two recent governance calls.

Summary of Changes - July 30th

To provide greater clarity and reassurance to all delegates and stakeholders, we confirm that the following changes have been made:

• Adjustment to Delegates’ Feedback Evaluation Criteria

  In the original proposal, point 4.3 stated:

  “3. The Program Manager may also propose outstanding contributions, provided these are submitted for validation by the OP or other relevant stakeholders.”

  This has now been amended to:

  “3. The Program Manager may also include outstanding contributions.”

  This change ensures that the inclusion of outstanding contributions is not perceived as an additional validation hurdle for participants. The updated process intends to strengthen the assessment by incorporating feedback from proposers and major stakeholders — thereby reducing overreliance on the PM’s subjectivity — not to make the program less inclusive.

• Change in TL;DR Wording

  Accordingly, we’ve updated the TL;DR phrasing for clarity:

  The Delegates’ Feedback parameter will be evaluated more objectively and robustly. (instead of “stringently”).

  This aims to avoid confusion regarding the evaluation process. As we’ve stated before, our goal is to make the process more robust and well-grounded — not more restrictive.

• Clarification on Vote-Buying Platforms. Previously, the clause stated:

  7. Exclusion of vote-buying platforms

  Vote-buying platforms will be excluded from the Delegate Incentive Program, given that these platforms operate with their own economic incentives for how the Voting Power they acquire is used.

  We’ve now introduced discretionary language to allow for future alignment if the DAO reaches consensus:

  7. Exclusion of vote-buying platforms Vote-buying platforms will be excluded from the Delegate Incentive Program, given that these platforms operate with their own economic incentives for how the Voting Power they acquire is used. The Program Manager reserves the right to revisit this decision if, in the future, the DAO gains greater clarity on the matter and finds it feasible to use the DIP as a mechanism for alignment with vote-buying platforms. This means that, if consensus is reached, pathways may be proposed to allow these platforms to participate in the program for the benefit of the DAO.

  This leaves the door open for future changes that may enable the DAO and the DIP to better align with such platforms.

• DIP’s Terms and Conditions and Requirements to Participate in the DIP

  In the original proposal, one of the Requirements to participate in the DIP stated:

  Adhere to the DIP’s Terms and Conditions and any other Social Agreement: Each DIP Participant must adhere to the DIP’s Terms and Conditions and all social agreements reached through Snapshot, including those outlined in proposals such as ‘Improving Predictability in Arbitrum DAO’s Operations,’ ‘Should the DAO Create COI & Self Voting Policies?,’ ‘Incentives Detox Proposal,’ [Non-Constitutional] Arbitrum DAO Delegate Code of Conduct + Formalizing the DAO’s Operations and any other proposals or codes of conduct that may be approved in the future. If there are contradictions between a Social Agreement (such as the DAO’s Code of Conduct) and the DIP’s Terms and Conditions, then the DIP’s policies shall take precedence.

  Now, we included a sentence that states that current DIP Participants are considered to automatically adhere to the DIP’s Terms and Conditions.

  Adhere to the DIP’s Terms and Conditions and any other Social Agreement: Each DIP Participant must adhere to the DIP’s Terms and Conditions and all social agreements reached through Snapshot, including those outlined in proposals such as ‘Improving Predictability in Arbitrum DAO’s Operations,’ ‘Should the DAO Create COI & Self Voting Policies?,’ ‘Incentives Detox Proposal,’ [Non-Constitutional] Arbitrum DAO Delegate Code of Conduct + Formalizing the DAO’s Operations and any other proposals or codes of conduct that may be approved in the future. If there are contradictions between a Social Agreement (such as the DAO’s Code of Conduct) and the DIP’s Terms and Conditions, then the DIP’s policies shall take precedence.
  Current DIP Participants are considered to automatically adhere to the DIP Terms and Conditions unless they state otherwise. In this case, they will be excluded from the program, as adherence to these Terms and Conditions is a mandatory requirement for participation.

  With this, we seek to avoid current participants having to reapply or edit their applications to indicate that they agree to the new Terms and Conditions, leaving the possibility for those who do not agree with these TyCs to withdraw their applications from the program.

• Disputes

  In the original proposal, the dispute modifications stated:

  Rubrics on DF and Bonus Points may receive feedback, but will not be altered.

  We have now included a sentence clarifying that the Program Manager reserves the right to make changes to the scoring of DIP Participants once the monthly results have been published:

  Rubrics on DF and Bonus Points may receive feedback, but will not be altered. The Program Manager reserves the right to make amendments to the scoring of a DIP Participant after presenting the results.

  The aim of this is to prevent the PM from being unable to make amendments if we overlook an important contribution.

• Tier’s Caps were recalculated

  New table:

  Tier	TP%	Min (USD)	Max (USD)	ARB Cap
  1	90–100%	$3,600	$4,200	12,350
  2	75–90%	$2,500	$3,000	8,800
  3	65–75%	$1,800	$2,000	5,900
  X	50–65%	$1,000	$1,500	4,400

  The ARB Caps have been recalculated using 80% of the VWAP from the last 30 days at the time the Snapshot vote is published.

  Note: The ARB 30-day VWAP on July 31st is $0.425, therefore the 80% of the VWAP is $0.34 which is the price used to recalculate the ARB Caps.

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We’ll address the remaining comments below:

@Hawheik

I don’t think this holds up, logically speaking. The existing criteria applied by SEEDGov still remains, but now it is behind an additional sieve in that it has to fulfill additional criteria to even be considered. This is as opposed to the current situation, where all feedback should be considered.

If less feedback is considered, but is judged using the same criteria that is already applied currently, it only seems possible for overall net scores to go down, not up.

This is unless the judgement criteria becomes more permissive, but I didn’t see any mention of that and it seems contrary to the stated objective for DF to be evaluated “more … stringently”.

@0xDonPepe

DF Thresholds in Practice

@Hawheik already did the math in a previous comment, but it really hit me. If you’ve got around 50k voting power, a perfect voting record, and show up to every call (getting that 5% bonus), you’d still need to score at least 14.6 points in Delegate Feedback to qualify for Tier 3.

Now, on paper that might seem doable. But in reality? Only about 12% of delegates managed to pull that off in the last round. That’s 8 out of 66 people. And now the proposal suggests grading DF even more stringently, narrowing the pool of comments that count, and only giving credit to stuff that has some kind of external validation or clear “impact.”

I get where that’s coming from (we want quality over quantity) but if we’re already at just 12% of people passing that DF bar, making it even stricter is just going to filter out more small but active delegates. That’s not the direction we should be heading in.

We believe the clarifications above should fully address these concerns.

As for your specific points, @0xDonPepe:

1. We reiterate that we are introducing new perspectives to the evaluation process — not additional barriers. We’ve updated the wording to avoid confusion.

2. We’ve previously explained why your second suggestion was not feasible from our perspective.

3. Moving the Voting Power Multiplier (VPM) to the payment calculation would undermine its purpose, which is to adjust the scoring only for voting activity. Applying it to payments would distort results under Delegates’ Feedback and Bonus Points, potentially penalizing high-impact contributors with lower VP (e.g., Tekr0x, who was in Tier 1 in June despite limited VP).

4. In this iteration, we reserve the right to increase the BP percentage for governance calls and to include other DAO-relevant calls.

We genuinely appreciate your deep feedback and hope these responses are helpful.

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Hi @TodayInDeFi !

@TodayInDeFi

We dont have a huge pushback on this, (although it would be good to keep having a mechanism for smaller delegate participation, either through DIP or an alternate mechanism)

But we wonder if retroactive activation is necessary?

if there is a vote for DIP 1.7 and that vote retroactively determines if August is 1.6 or 1.7, that changes the participation criteria for August drastically, based on a vote which is concluding in august.

It’s an extremely strange situation that is hard for Delegates to adapt to and is not how laws work or are passed normally.

Why not simply make the DIP vote apply on the next month? this is how normal laws apply: after the vote concludes not retroactively, making it difficult or impossible for the people affected to adapt.

We believe this response should address your concern:

@SEEDGov

There will be no retroactive changes for July. However, we want to be clear that if the proposal is approved during the first half of August, the changes will apply to that month, as delegates will have already been informed of the potential updates in advance.

This RFC has been public for two weeks. Given that most of the DAO is already aware of the proposed changes — and that they were also discussed in yesterday’s Open Discussion of Proposals Governance Call — we see no reason to delay implementation further.

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Hi @lobbyfi,

Thank you for your respectful feedback and continued commitment to Arbitrum DAO.

Our intention here is not to punish, but rather to act responsibly as Program Managers by ensuring that the incentives distributed serve a meaningful purpose.

With the inclusion of Tier X, if LobbyFi votes in every proposal during a given month, it will automatically qualify. So far, this hasn’t had financial implications, but it will in the future if we don’t include this clause.

Also, while we recognize LobbyFi has contributed meaningfully to Arbitrum DAO in the past, we acknowledge that there’s no clear consensus on how the DIP will ensure long-term alignment — nor how to extend that alignment framework to other vote-buying platforms.

Ideally, we would like to use this program — or another mechanism — to align LobbyFi’s incentives with those of the DAO. But under current conditions, providing incentives without such alignment guardrails would reduce the program’s incentive to a technicality, rather than a tool for impact.

Having said that, we want to leave the door open to the possibility of revisiting this decision once the DAO has more clarity on how to best align with these platforms, which is why we changed the clause.

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Hi @karpatkey !

@karpatkey

Thank you for the detailed update — we appreciate the thoughtful revisions and the effort to adapt the program to current participation trends.

We have one clarification we’d like to ask:

• With the proposed increase of the minimum voting power threshold to 500K ARB for DIP eligibility, is it correct to assume that all DIP-eligible delegates will effectively have the option to choose between participating in Tier X (voting-only) or the standard DIP structure (voting + qualitative contributions), depending on their preferred engagement style?

Yes — in practice, that’s exactly right. Eligible delegates can opt for voting-only participation and fall into Tier X, or engage more deeply and qualify for higher tiers. No declaration is needed — the scoring process will determine the outcome.

Hi @404DAO

@404DAO

Compensation Reduction: Questioning the 40% Cut

The proposal suggests an ~40% reduction in rewards across all tiers. We believe this reduction is premature and potentially detrimental for several reasons:

• Insufficient justification: There is no clear rationale for why the number is set at 40%. Was this based on cost modeling, delegate output metrics, or private discussions with stakeholders?
• Misaligned with stated objectives: The proposal itself notes, “It is a fact that a significant number of stakeholders require these incentives to justify the time they dedicate…” This makes a 40% cut contradictory to the program’s goals of improving delegate quality and consistency.
• Risk of talent flight: Lowering compensation makes delegate participation less competitive relative to other DAOs. This risks reducing Arbitrum’s ability to retain or attract experienced contributors—something even highlighted in Entropy’s recent funding proposal.

We encourage the proposers to delay any reduction in compensation until a more rigorous evaluation of delegate workload and contribution quality can be completed under the new structure.

We understand your concern, but we don’t believe the rationale is lacking in justifications.

Objectively, voting volume has declined significantly since 2024, which is well-supported in our midterm report. Additionally, several structural changes are already in place, and those changes will lower the workload for delegates going forward — not just DRIP, but also the ATMC, increased Foundation involvement, and the OpCo’s new setup (which eliminates the need for Snapshot votes to approve Service Provider contracts in many cases).

As for talent retention, we believe the revised compensation structure remains highly competitive, especially in the top tiers.

@404DAO

Tier X Participation Requirements

We acknowledge that Tier X participants likely do not have governance as their primary focus, but we urge caution in relaxing their participation requirements too much. We want to ensure voting remains high-context and avoid incentivizing low-context voting to meet quorum:

• Tier X participants bring valuable context to proposals and governance discussions. Providing a “handicap” in the name of flexibility may unintentionally reduce the diversity of high-context feedback the DAO needs.
• A better model may be to pair Tier X members with DAO-provided support (e.g. part-time governance interns) rather than reduce expectations outright.

There may be some confusion here. Tier X is designed to acknowledge delegates with significant VP who consistently vote but currently lack the bandwidth to contribute beyond that. It’s also a mechanism to re-activate voting from delegates who’ve been passive despite holding large amounts of VP.

@404DAO

Delegate ROI Framing Is Too Narrow

We caution against evaluating delegates purely through a “return on incentivized VP” lens. Participation from smaller or newer delegates brings:

• Unique perspectives and skillsets
• Diverse backgrounds
• Accountability to larger delegates

Cutting off their funding purely based on raw VP efficiency undermines basic talent retention principles, community building, and decentralization.

We agree — ROI should not be reduced to just ARB per USD spent.

That’s why our KPIs include a specific section recognizing high-impact contributors, regardless of VP:

@SEEDGov

Identify at least 5 contributors who can add value in specific verticals: So far, the DIP has demonstrated some success in attracting, identifying, and guiding contributors — especially those with lower VP — to deliver value within specific verticals. Examples include:

• Tekr0x for organizing side events at ETH Bucharest and ETHcc, as well as contributions to the AGV.
• Paulo Fonseca for facilitating and organizing the ETH Bucharest event and for creating the New Delegates’ Telegram Group.
• Tempetechie for contributions to the SOS process.
• Tamara and JoJo for providing valuable perspectives and feedback across various discussions.
• Pedrob, who was an active participant in the program and was later onboarded to the OAT.
• Organizations like Castle Capital and 404DAO have not only actively contributed through feedback and valuable input but have also participated in or continue to participate in key initiatives. (For example, Castle Capital was recently onboarded to the AGV in a communications role.)
• Organizations like L2BEAT have helped the DAO in various ways, including conducting the SOS process, engaging with builders to encourage their participation, and identifying structural problems. They have also collaborated horizontally with Arbitrum to contribute to its success.
• Blockworks Research for making a podcast with AJ Warner that actually had outreach (+15k views), giving Arbitrum an important communication channel.

We are likely forgetting to mention others (apologies if that’s the case). The key point is that, after speaking with most of them, it’s clear they’ve all been able to affirm that the DIP allowed them to dedicate meaningful time and effort to Arbitrum DAO — and that, without programs like this, they likely wouldn’t have found a sustainable path to long-term collaboration.

@404DAO

Business Development Reporting

We encourage SeedGov to provide regular reporting on their business development efforts, including visibility into the protocols they are engaging with and updates on the progress of those conversations.

Great point — we’ll include updates on our BD efforts in future monthly reports.

Thanks again for all your feedback. While we may not agree on every point, we deeply value the time and care you’ve put into these discussions — and we hope this latest round of clarifications and improvements reflects that.