Hi All,
The Arbitrum Foundation has been working with the GCP Working Group, the Interim Transparency Committee and the GCP Council to put together the GCP Foundation as approved by the ArbitrumDAO.
The Arbitrum Foundation’s role, as outlined in the Tally proposal, is to help with the formation of the GCP Foundation and to put together governance documents that work in the best interest of the ArbitrumDAO.
To recap the past four months and clarify some of the misinformation spreading, here are a few key points:
a. The 225M ARB tokens approved by the DAO for the creation of the GCP are currently in the custody of The Arbitrum Foundation, as outlined in the proposal. The $180k payout for multi-sig signers mentioned in the Tally proposal is not applicable, as neither the Foundation nor any of the signers are receiving compensation for custody of the funds.
b. From the approval of the GCP program on June 10, 2024 there have been two transfers totaling 1,350,000 ARB tokens (majority equivalent in USDC, except the payments outlined at point (a) below) to the GCP Foundation in order to accommodate the following expenses: (a) payment of the proposal authors and contributors, as outlined in the proposal; (b) interim compensation for the working group for the months of June - September 2024 while the GCP Foundation is still being set-up and the final compensation for the GCP team is being negotiated; (c) GCP Council fees, as outlined in the Tally proposal; (d) other operational expenses such as payment for a compensation analyst, fees for setting up the entity etc. As of October 15, 2024, it’s important to note that the GCP Foundation still holds a significant portion of these funds since more expenses are anticipated such as insurance, legal fees etc.
In addition to the above, we want to take this opportunity to highlight changes to the GCP Foundation’s governance framework that are necessary to protect the interests of the DAO.
- Vesting Requirement. In the GCP proposal, there is no vesting requirement for the ARB allocated for investment and grant activities. The Arbitrum Foundation will work with the GCP Foundation in order to implement a form of capital call or vesting, similar to how The Arbitrum Foundation itself is operating in order to ensure long-term alignment, in line with the program’s expectations. The Arbitrum Foundation has been working with the GCP Working Group, the Interim Transparency Committee and the GCP Council on this and details will be released in the following weeks.
- Arbitrum Foundation Observer Seat. The Arbitrum Foundation will have a permanent Observer seat on the GCP Council. The Observer can participate in all GCP Council discussions and have access to the same level of information, but it is a non-voting position and this role is not compensated at all.
- Exclude Treasury from Governance. All tokens held by the GCP Foundation were excluded from governance participation, as seen here. Any tokens distributed via agreements to future grantees or investees will be permitted to be used in governance by the respective recipients.
- DAO Controlled Wallet for Proceeds. Any upside from grants or any proceeds generated from investments will be sent to a smart contract controlled by the ArbitrumDAO. The GCP Council can make a request to the ArbitrumDAO on whether the funds can be re-used for further ecosystem activities in the future. GCP Foundation cannot reinvest any potential profits without DAO approval. Note, a portion of the upside will be retained by the GCP Foundation, to facilitate long-term incentive alignment with a profit share. More details related to the profit share (also referred to as carry or promote for funds) will be released shortly to the DAO by the GCP Council.
The above changes are purely additive to the Tally proposal and there are no breaking changes with regards to what was in the proposal. The changes will also be publicly available to the DAO via the GCP Foundation’s Bylaws that are currently being worked on and will be published when finished.