No DAO is perfect, but I would argue that the Arbitrum DAO is extremely well-designed and valuable. I think this is an important long-term bullish driver for Arbitrum. We should actively seek to export the beneficial qualities of the DAO to projects in the ecosystem, because it will make Arbitrum grow even faster.
What are the beneficial qualities of the Arbitrum DAO?
Revenue from the sequencer flows into the onchain treasury, which the DAO controls.
Protocol upgrades are controlled by the DAO.
There are safety mechanisms built in (e.g. Security Council) that are appropriate for the maturity of the technology, and (critically) these safety mechanisms are controlled by the DAO.
There is a robust social layer that informs onchain governance via Discourse and Snapshot.
There is a foundation that can move quickly on strategic opportunities that are hard to address via DAO governance, and (critically) this foundation is controlled by the DAO.
The token distribution was fair, recognizing all contributing parties to Arbitrum, allowing for legitimate community control, and aligning the incentives of projects involved in the ecosystem.
I would like to see Arbitrum’s DAO model replicated into the rest of the ecosystem. Today, many of the largest projects on Arbitrum are operated in a somewhat less-than-optimal fashion, without all of the beneficial characteristics described above.
I propose an initiative to support Arbitrum DAOs in transitioning to more robust governance. Anyone interested in working with me on this?
You have a point!
In the ecosystem, many DAOs weren’t decentralized at all and much tokenomics are only good for funders, but we alsa have some successful examples.
Maker DAO for instance. They created a stablecoin (DAI) that endured market crashes and developed a complex structure. Now, they propose an endgame plan we should follow to learn from their hits and fails.
I agree that projects on ARB should embrace Arbitrum’s values, and we can promote initiatives in that direction. However, we need to be patient because changes like this takes time and starts with shifting people’s mindset.
Old mentality: Compete, buy low, sell high
New mentality: Cooperate, extract value together, get value as a member of a DAO in a way that you won’t want to sell
You’re right no DAO is perfect and we’re learning and making it more efficient day by day. I’m excited to see how MakerDAO endgame transitions happen and we can get more learning’s from there.
Down to help! The areas @gauntlet can be most impactful are:
Safety mechanisms and controls. we’ve thought a lot about fast and slow paths of governance related to risk management.
Ecosystem growth: Members of the teams have been grant committee members and delegates for Aave, Compound, dydx, Maker, Uniswap, and others. Lots of learnings from these programs.
I agree that the Arbitrum DAO has valuable qualities that contribute to its success. Replicating this model in the ecosystem would be beneficial.
But To transition other Arbitrum DAOs to robust governance, we can educate project teams on the advantages and mechanics of the Arbitrum DAO model. Sharing case studies, providing resources, and facilitating collaboration among projects can help improve their governance structures.
Encouraging transparency and community engagement, such as using Discourse and Snapshot, will enhance the ecosystem.
Promoting the Arbitrum DAO model and supporting projects in implementing robust governance will strengthen the ecosystem’s long-term success.
