The DAO Incentive Program (DIP 2.0)

[Arbitrum]

@cp0x

1. Contributor definition
The term “positively supports” could benefit from clarification. Constructive criticism can also be positive, especially if it helps identify issues or improve the DAO.
Could you clarify how “positive” will be assessed, and who determines it?

You make a good point that constructive criticism can also be positive. Ultimately, whether something is positive is subjective and is up to the Peer Assembly members who vouch for one another.

@cp0x

2. Incentives vs. salary
I agree that the program should not replace a full-time salary. At the same time, delegates spend a meaningful amount of time (20–30 hours per month), and incentives should reasonably reflect this effort.
Could we aim for rewards that are competitive with market standards?

Delegates should primarily participate for reasons beyond compensation. Perhaps it is their full-time role within an organization, they are part of a project that depends on Arbitrum’s success, or they personally need Arbitrum to thrive. The reward is simply an incentive grant, so it is unlikely to be substantial enough to serve as the sole motivation for participation.

@cp0x

3. Assembly System
The proposed assembly mechanism could unintentionally create barriers for new participants. It might be helpful to clarify why a delegate should need to be part of a “club” in order to access rewards. And there are many questions in this part:

1. What criteria will members use, especially given many members have only interacted online?
2. How will penalties for a sponsored delegate be applied, and what form will they take?
3. Why should OpCo be the final arbiter in disputes, rather than the members themselves?
4. When does sponsorship end? (criteria)
5. How can new participants join if they are not yet known? Could this discourage newcomers?
6. What happens if a member leaves the program and no sponsor can be found?

1. As mentioned above, it is up to each Peer Assembly member’s value system to determine whether they would vouch for someone’s character.
2. The PM, with the OpCo’s approval, will determine the appropriate penalty based on the severity of the case. Penalties may include reduced rewards, temporary suspension, or, in the worst case, permanent removal from the Assembly.
3. The OpCo is responsible for overseeing the entire program and ensuring it operates as intended. It is their duty to resolve any issues with the program, including disputes.
4. Vouches do not expire; however, they can be intentionally revoked by a Peer Assembly member or removed if the member who provided the vouch leaves the Peer Assembly.
5. It is possible to submit recommendations for contributors who are not yet part of the Peer Assembly, recognizing meaningful contributions they have made to the Arbitrum ecosystem (assuming they have an open application thread on the Forum). If their contribution is deemed worthy, the PM or OpCo may assist the contributor in obtaining vouches to join the Peer Assembly and claim the reward. In fact, one of the program’s design goals is to identify and engage individuals who might not normally participate in the DAO or join such an assembly.
6. If a member cannot secure a replacement vouch within two months, they will be removed from the Peer Assembly.

@cp0x

4. Long-term Goals

1. Increased active voting power:
   Could we set a specific target (percentage or absolute numbers) to measure success, rather than a broad goal?
2. Reduced voter apathy:
   Could you clarify how delegate incentives would realistically reduce voter apathy? Many tokens are in the hands of investors or yield protocols, so incentives alone might not shift delegation behavior. What would be considered a successful outcome here?

1. We agree that setting quantifiable targets will help the DAO evaluate the program’s effectiveness over time. If and when this program is implemented, the PM, under the OpCo’s oversight, can define specific metrics to measure success.
2. Voter apathy refers to tokens that have been delegated but are not actively participating in governance. It does not include token holders who have not delegated their tokens. In other words, within the set of all delegated tokens, the goal is to increase the percentage that actively participates in governance.

@cp0x

5. Dollar Spent per Vote Cast
It may not be accurate to include all delegates in this metric, since many already vote consistently regardless of incentives. Would it make sense to count only delegates who are active participants in the program (e.g., those who applied)?
Do you want this parameter to be the defining factor for the delegation system? If so, the question is: is the best outcome - not spending a single dollar on voting - what will the program strive for?

The metric only includes delegated voting power that is registered in this program and receiving rewards.

Paying zero is not an ideal outcome, as it defeats the purpose of an incentive program. At the same time, overpaying should be avoided, as it does not represent good value for money. The optimal outcome is to find a balance—rewarding delegates fairly for their participation while keeping the program cost-effective and sustainable over the long term.

@cp0x

6. Non-voting Contributions
The proposal focuses mainly on voting. However, many valuable contributions happen before votes – including technical discussions and analysis.
Could these also be recognized, so that the DAO doesn’t unintentionally devalue important types of work?

The primary goal of the Peer Recognition Program is to identify and reward contributions that go beyond what is visible on the forum. As you mentioned, much of the meaningful work happens before votes take place and within private discussions. The program aims to recognize and reward those efforts that help drive progress.

@cp0x

7. Recurring Tasks
The draft suggests that recurring tasks should rarely be rewarded.
Could you clarify the reasoning? For example, if someone organizes useful community calls each month, that seems like an ongoing valuable contribution.
Why should it be treated as diminishing over time?

Recurring tasks or initiatives that need to be kick-started should be funded through a different program. This could include a potential Firestarter Program or a budget allocated by the OpCo for essential operational tasks.

@cp0x

8. Budget and Payments

1. The program manager may adjust the budget with OpCo’s approval. Since the overall budget is set by the DAO, could you clarify why this extra step is needed?
2. Payments should ideally follow clear, consistent timelines. Could we define a fixed date for monthly payouts to avoid uncertainty?
3. The proposal mentions an initial budget of $50k per year. Could you clarify whether this is for the program manager only, or for the entire delegation program?

1. The DAO approves the program’s annual budget; however, the PM, with OpCo’s approval, determines the more detailed, season-based budgets.
2. As with the previous Delegate Incentive Program, variations may occur early on as new processes are introduced, trialed, and refined. Over time, we expect greater consistency to develop, particularly around payment schedules.
3. The $50k budget is designated for miscellaneous and operational expenses. The PM’s service fee is separate.

@cp0x

10. Transparency of Recommendations
Under this design, only the program manager would see recommendations, which raises concerns about subjectivity. Previously, assessments were visible to all, ensuring accountability. Could we keep evaluations transparent, so that rewards are based on usefulness rather than loyalty? This would also help safeguard Arbitrum’s reputation: constructive criticism may look negative in the short term but is valuable for long-term improvements.

The proposal already contains principles on how recommendations can be ranked. The PM is responsible for ranking them, and the OpCo must approve the final rankings.

@Curia

Looking ahead, we see the Peer Assembly as the most exciting part of this proposal - not just for what it is, but for what it can become. As the Assembly matures, it creates the perfect foundation for these more decentralized mechanisms. We believe a system like our Peer Recognition Score could add significant value here. We understand that a culture of active peer recognition is a prerequisite, and the Assembly is the ideal incubator for that culture. Once established, we envision a pilot program where a peer-based evaluation model could complement the Program Manager’s work. This hybrid approach would reduce subjectivity and decentralize the rewards process, making it more resilient and reflective of the community’s collective wisdom.

This is something the DAO could consider in the future. For now, we want to avoid adding extra responsibility onto the Peer Assembly.

@cp0x

The answer to this on the call was that it was SeedGov, and regarding the salary, Raam clarified that they had not yet agreed on it (and it is unlikely that they will tell us this figure, since the salary will probably be from the Foundation, and not from DAO directly).

To clarify, once the PM’s agreement terms have been finalized, the scope and compensation will be shared with the DAO.

@cp0x

I don’t really understand why three vouchers after reaching 50 delegates is a problem in this system.

It is mostly to make sure that there is a good spread among members who are vouching for others. If the program allows for unlimited vouches, then the same 3 people can vouch for everyone.