Over the past month, alongside two public governance calls last week, the Arbitrum Foundation wanted to get the Arbitrum DAO’s perspective on whether we should issue L2 licenses to partners.
Governance call 1: https://drive.google.com/file/d/1UFRweX1tRkk_mXKuSXC4PWaIGqoxdp2p/view?usp=sharing
Governance call 2: Special Governance Call - L2 Licence (2023-08-10 14:05 GMT+1) - Google Drive
Key points from the discussions can be summarized as follows:
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Foundation should issue licenses. All comments have acknowledged that the Foundation is well-placed to issue a software license to allow partners to deploy their own Arbitrum L2 on top of Ethereum. Note, projects can already permissionlessly deploy Arbitrum as an L3 (“Orbit Chains”).
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Score-based Criteria. The Foundation should have a set of criteria, ideally score-based, that enables partners to launch their own chain.
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Value accrual to the DAO. If possible, the DAO would like to see value accrual back to the wider ecosystem. This can be a percentage of the chain’s revenue at the infrastructure and/or smart contract layer, contributing developer resources to the core technology stack, or the partner’s ability to onboard millions of users to the Arbitrum ecosystem. There should be a clear win for the Arbitrum ecosystem.
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Discretion of DAO governance. The DAO understands that a partner may not want to be governed by the DAO. In such a case, a moral obligation clause can be added to the agreement that reminds the partner that they should consider decisions made by the DAO in good faith.
With this in mind, we have put together some criteria that will help form the basis for a score-based system:
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Financially capable. The partner has the ability to pay the operational cost of running the infrastructure, over a multi-year horizon, to a high quality of service.
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Potential for mass adoption. The partner has the capability to attract thousands, if not millions, of users to the crypto-ecosystem.
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Commitment to giving back. The partner is commit to giving back to the Arbitrum DAO and the wider community which may be financial, community-oriented, or developer resources,
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Up to date software stack. The partner will upgrade their smart contract suites and infrastructure to the latest version in a timely manner,
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Explicit MEV strategy. The partner should disclose their intended MEV strategy and it will be evaluated by the Arbitrum Foundation on whether it is an acceptable policy.
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Independent branding. The partner’s branding should not be confused with Arbitrum One, Arbitrum Nova, or any DAO-approved chain.
At the Arbitrum Foundation, we will continue working on a scored-based criteria system that will be used to approve a new L2 license to partners and we will begin to issue licences with the above as the initial set of guidelines.
A second topic around the L2 license emerged during the discussion and it was also covered in both governance calls.
- Can the Arbitrum DAO improve the process, or remove the barriers, for authorizing a new DAO-governed chain?
The Arbitrum DAO can issue a new L2 license if a project submits a proposal to the DAO and the DAO votes for it via a Constitutional AIP. Only one project has approached the Arbitrum DAO for a license, but their efforts have stalled.
Delegates discussed the idea of a new license, accompanied by deployment code, that allows a project to deploy their own version of Arbitrum as long as it opts-in to be governed by the Arbitrum DAO. Other conditions may be included such as a share of Sequencer revenue or to be run as a Freemium model unless the project purchases a license from the Arbitrum DAO.
The enablement of seamless deployments of the Arbitrum Stack as an L2 still requires further discussion and development. All discussions will need to involve the wider community including Offchain Labs (owner of the BSL license), the Arbitrum Foundation and the Arbitrum DAO. We, the Arbitrum Foundation, will work to facilitate this discussion amongst all community members.