Thank you @SEEDGov for these Strategic Objectives. I really like the Business Units and Vertical approach. Arbitrum DAO is huge and it makes no sense to have everybody voting on everything this is clearly aligned with the recent OpCo and AF vision post.
The topic of Futarchy you mentioned in “KR 5.1: Launch two pilot programs for alternative mechanisms (e.g., Futarchy, QF),” interests us a lot. We’d like to propose that the teams from Kleros and Seer collaborate to develop a Futarchy Grant Allocation Pilot tailored for Arbitrum DAO. To give a bit of context:
Who Are We?
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Kleros is a decentralized dispute resolution protocol, live since 2018, currently launching its Kleros V2 Beta on Arbitrum. You can already explore some cases from top companies and governments solved on Arbitrum chain with Kleros V2 Beta. The final version of Kleros V2 will be Arbitrum-native and exclusive: V2 smart contracts will be deployed solely on Arbitrum. While judgments can be enforced cross-chain via bridges, all economic activity (transactions) and value (staking) will remain on Arbitrum. This commitment drives my participation as a delegate in Arbitrum’s governance with ARB tokens staked by Kleros Cooperative, our sucess is fully aligned with the success of Arbitrum.
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Seer is a next-generation prediction market allowing conditional and scalar markets with over $2M in TVL (Seer - DeFiLlama). It can be seamlessly deployed on Arbitrum and uses Kleros as its Oracle.
Why Futarchy for Grant Allocation with Arbitrum DAO?
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Higher Impact: Futarchy allows the DAO to define a clear goal like “Growing DeFI“ linked to measurable metrics (TVL). This allows us to evaluate the value grantees bring to Arbitrum, ensuring alignment with ecosystem goals. This experiment could perfectly fit in the Recommendation of @CastleCapital Report “Define clear strategic goals for the program that align with that of the DAO and link explicitly with measurable impact KPIs on a per-project basis.” (thanks @pedrob for sharing with me this great ressource)
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Competitive Edge: While Optimism experimented with ‘Play Money Futarchy,’ we believe this isn’t the right approach, as the system is vulnerable to Sybil attacks and participants have nothing to lose, making forecasts less accurate. Arbitrum could lead as the first major DAO to pilot Futarchy with real money to drive optimal outcomes.
What Can We Bring?
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Knowledge and Experience: Prediction markets are complex, but Seer has already successfully created Conditional and Scalar markets, which are the building blocks of Futarchy. This gives us a strong foundation.
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Intuitive UX: Futarchy can be daunting, so we’ll provide an easy-to-use frontend for the Grant Allocation Pilot, tailored to Arbitrum DAO’s and SEEDGov’s needs. The back-end already exists as Seer’s smart contracts.
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Real Money and Utility for ARB: Using real funds ensures participants have skin in the game, leading to more accurate and impactful results compared to play money. Moreover, ARB tokens could be used for this program, meaning anyone who wants to participate would need to buy ARB, creating utility for the token.
We see no conflict of interest, as we do not receive money from the DAO, we are not seeking compensation for developing the dedicated interface, and there are no costs to use our protocols. Arbitrum DAO could contribute by providing extra incentives to users and /or delegates to increase adoption.
We think it is the right time for Arbitrum DAO to experiment with Futarchy on a clear and defined scope with us as an aligned partner and learn from it. We’d love to discuss this further with Arbitrum DAO delegates to get their feedback!
