The DAO Incentive Program (DIP 2.0)

Proposals
44

gm, I voted with a feeble ABSTAIN here.

I am supportive of the general direction (I think Delegates and Contributors should have different roles while they can sit in the same program).

As I have expressed before, and on the lines of @krst, the peer voting system feels like an overkill for this stage: I would keep it as a long term evolution while in the short term we can identify

  1. What we expect contributors to do: creating categories, ares, umbrellas of initiatives would help to attract people saying “hey I have this skill → I can contribute”. A good example I bumped into recently was this form from the Localism.Fund initiative. It says "We need this this and this, to be able to do A B and C: indicate where do you excel.

  2. a leaner way to recognize these people (I’m actually not against the current more centralized system where 1 PM is proactively scouting for everything going on, something that majority of delegates will struggle with)

Thanks

45

I voted against this proposal in the current form, and I support most of the improvement suggestions shared by other participants. I would like to add an special focus on protocols that are currently actively engaging in governance as there is a monetary incentive to do so (The X tier introduced in the last iterations of the current program). As other pointed out, the proposed incentive is probably too low for the to bother to continue, and we may lose VP because of that.

46

We are voting FOR the new DAO Incentive Program (DIP 2.0), as it represents a thoughtful evolution of the previous Delegate Incentive Program.

This new framework strikes a much better balance between objectivity, accountability, and community recognition, setting a clear foundation for long-term, healthy governance participation within the ArbitrumDAO.

The previous incentive model focused almost exclusively on delegates, which was an important first step but limited in scope. DIP 2.0 expands this structure into two complementary pillars — delegates and contributors — ensuring that both governance participation and broader ecosystem engagement are recognized.

This distinction is key to building a more vibrant DAO:

  • Delegates are rewarded for their consistent participation and public reasoning, improving transparency and governance quality.
  • Contributors are acknowledged for real, measurable impact beyond voting, encouraging new voices to emerge and rewarding genuine effort.

The introduction of the Peer Recognition Program is one of the strongest aspects of this proposal.

By letting peers nominate and recognize valuable work within the DAO, the system promotes social validation, merit-based recognition, and positive reinforcement - rather than purely quantitative participation.

It formalizes what many DAOs struggle to do informally: highlight people who contribute meaningfully, even if they’re not major token holders or delegates. This helps strengthen community cohesion and makes the ArbitrumDAO more inclusive and resilient.

The Nudge Season concept is equally powerful.

Rewarding specific behaviors that the DAO wants to encourage - such as voting early, joining calls, or helping with off-chain coordination - is a pragmatic and adaptive approach to shaping governance culture.

This proposal is a well-structured continuation of the DIP framework — not a radical change, but a refinement built on real lessons learned.

It incentivizes participation, collaboration, and recognition, aligning the DAO’s culture with the long-term success of Arbitrum’s ecosystem.

A suggestion for Arbitrum, given the difficulty in reaching a consensus on the DIP, would be to temporarily pause the program. This would allow the DAO to observe its impact on participation and security, so that a new DIP could be designed based on those insights.

47

I will be voting ‘against’ for this proposal. While there are some things I do like, I cannot fully support the proposal as it stands.

Like:

  • I strongly support separating out rewards to simple delegate duties (voting + rationale) and a more lucrative, but higher effort tier for contributors. I think that has been one of the better successes we’ve seen as DIP 1.X has progressed over the past year.
  • I think the peer-to-peer project can use some tweaks and improvements, but at it’s core I do believe it’s a more decentralized system of determining rewards which should benefit if implemented properly. I would just note that they should be paid extra for this role, and it should be considered an operating cost
  • I’m not sure im 100% sold on it, but pay per vote versus pay a flat monthly cost at first thought makes sense. It solves some of the issues with feeling like you have to put in too much work in 1 month with a lot of votes (STIP for example) versus months were there is only 1 or 2 votes and as a DAO it feels like we are paying too much for not a lot of overhead. I think there should be gaurdrails to this however, in the form of oversight to vote manipulation (which it seems there will be) and also a min / max amount. Mainly again for budgeting / consistency purposes.

Dislike

  • The payout should be in USD denominated tokens - I’d prefer the consistency of USD amounts for budgeting / tax purposes
  • A few hypotheticals / pending decisions. The budget amount, the manager, etc. I’d like to see those fleshed out further. If this was my only issue, I’d probably vote to pass and resolve before Tally, but with other items needing resolved I think this needs more time in the oven
  • While I acknowledge the budget is hypothetical at the moment, it is too low. Yes, in full (and obvious) disclosure I’m voting on my own salary, but as objective as I can be I do believe its too low. It’ won’t attract new delegates and while I do agree it shouldn’t be expected to be a full time salary… there are reasons to pay a decent wage. Namely time, but there is also general doxing / legal risks taken on by being a delegate that may not be worth the pay.
    • As it currently stands (and if my math is wrong do correct) for an on-chain constitutional vote there is a 10k ARB budget. I have 1% of the voting power, so if I vote I will get 100 ARB tokens. At current price, that’s $30 for a vote. I didn’t dive into numbers but you assume at best 1-3 tally votes a month, and maybe 4-8 snapshots (which will be more like $24 a vote). Talking probably $250 or less a month. From a program that has been paying out (to me atleast) $3k or so a month on average. Thats a 90% paycut, and while its fair to say it may have been too high before… its also fair to say getting into the realm of $100s a month is too low IMO. And thats all at my relatively high % of votes, for participnats in the 50k to few 100k arb token range it’s going to be like $3 a vote which is basically nothing.

My only add would be I actually disagree with other delegates on seprating this out. i see why, but I think this should be a combined project as proposed. I think seperating it out will just lead to potential overhead or long-term mis-alignmnet of goals. Since at its core the idea is to incentive DAO activity. Although if I mis-interpreted and the real goal is just to have 2 separate temp checks into one tally vote that makes sense

48

Thank you for casting your votes and providing feedback. We are in the process of aggregating all feedback and reaching out to those who cast votes without providing feedback, in order to determine the next steps on how to progress with the DIP. This is a program at the heart of the DAO, so it will be a big focus for us over the coming days and weeks.

2 Likes
49

We’ll reiterate that we don’t feel this is the highest priority, particularly with the lack of clear objective. A simple plan, even if it overpays for now, would be preferable to doing many more calls on a complex plan.

We would much rather see delegate and Foundation efforts put towards creating a plan to stabilize Arbitrum finances, as well as an updated business plan.

1 Like
50

I agree. It seems futile to always reward novelty over sustained growth. Perhaps there can be a separate compensation program for people who perform administrative tasks?

51

We voted Against on this proposal.

Really appreciate the work of putting up the proposal. We are aligned with the direction of separating Delegates and contributors.

There are many new roles introduced in the program, which complicates the process and rules for every party. One key concern here is that with so many extra efforts made, will it be significantly better results comparing to current DIP program? And if we want to give it a try, We didn’t see the end goal of the proposal either.

There are also some details in the proposal that we think could be concerns, mentioned by many delegates here:

  • payouts in fiat instead of arb.
  • The vague definition of contributors - hard to define “positive support”

Overall, we might support if the proposal could address these problems in the future.

52

Hey everyone,

We decided to abstain from voting on this proposal — not only because we were the potential Program Managers in discussions for this proposed DIP, but also because, judging by the voting trends, we anticipated that our vote would not change the final outcome.

That said, we would like to sincerely thank the Arbitrum Foundation for not only publishing this proposal but also for the follow-up process that included three governance calls specifically dedicated to the DIP 2.0 discussion. These efforts clearly demonstrate the importance that the Foundation assigns to this program, as also reflected in this comment.

Our Perspective as PMs of DIP 1.0, 1.5, and 1.7

Having worked on previous iterations of the DAO Incentive Program for nearly two years, we would like to share some reflections from that experience.

Initially, we prepared our own draft and shared it with the Foundation and other stakeholders. At a later stage, the Foundation expressed the view that this AAE should take ownership of the new program and develop its own draft, partially based on similar principles to ours. We then offered our full collaboration and feedback on the Foundation’s version, always maintaining our willingness to continue managing the program given our deep understanding of its design and operational challenges.

While this new DIP shares some similarities with our early draft, there are also substantial differences worth noting:

  • Denomination of incentives: We agree with the majority of delegates that incentives should be denominated in USD rather than ARB. This not only ensures predictability, given the volatility of ARB, but also maintains consistency between the contributors’ and voters’ incentive buckets.

  • On the Arbitrum Peer Assembly (APA): Our original idea of an APA was meant exclusively for contributors. Delegates meeting specific VP or participation thresholds were not required to join the APA to earn rewards for voting. Their participation as contributors would remain optional. Requiring large stakeholders to participate in the APA — seeking and granting vouches — adds a layer of responsibility and bureaucracy that may discourage involvement from those with limited time. Moreover, unifying both the delegate and contributor incentives under one framework was one of the main flaws of earlier versions. As reflected in the delegates’ feedback, there is a broad consensus that the Delegate Incentive Program and the Contributor Incentive Program should remain separated.

  • On rationales as a mandatory condition: We understand the intent behind requiring voting rationales; however, we believe this should remain optional — perhaps incentivized as a bonus rather than a baseline requirement. Many delegates prefer to focus their efforts on voting itself, and making rationales compulsory could unintentionally discourage participation in both the program and DAO activities. This principle inspired the successful introduction of Tier X in version 1.7.

  • Complexity of the APA mechanism: While we were prepared to handle the added complexity from a PM standpoint, we understand why delegates found the APA concept confusing and burdensome. Its purpose — preventing sybils and unnecessary noise while building a reputation layer — remains valuable, and if it is removed from the next iteration, an alternative mechanism should be designed to address those same issues.

  • Budget transparency: One major issue repeatedly raised was that neither the incentives budget nor PM compensation were detailed at the time of voting. This effectively meant delegates were being asked to approve a program without clarity on future spending — something akin to signing a blank check.

  • Centralized vs. decentralized review: The DAO must eventually decide whether contributor incentives should be assessed via centralized or decentralized review. Based on our experience and recent feedback, many large stakeholders are reluctant to spend time voting on contributor-level incentives, even if done annually. In our view, centralized review by a qualified service provider remains the most effective and consistent approach — not perfect, but more reliable in terms of accountability and expertise.

  • On the issue of delegated Voting Power: While several delegates raised valid concerns about the program not addressing the amount of delegated VP, there is still no clear consensus on how such a mechanism should work. In our view, there could be room to reward top-performing delegates with VP delegated from the treasury, but this should only happen with broad DAO consensus.

  • Program goals: We respectfully disagree with the notion that the program lacks clear objectives. Many of them — particularly those related to voting incentives — are well defined, and the AF’s examples, along with precedents from past Bonus Points allocations, set strong behavioral expectations. The “nudge seasons” also serve as an effective soft-alignment tool (e.g., amplifying DRIP announcements, encouraging quality SC nominees, etc.). From our standpoint, the Contributors Program should act as the primary entry point for new participants in Arbitrum DAO — a space where contributors can be rewarded for diverse efforts, from volunteering at IRL events to testing apps or organizing initiatives. While this scope is intentionally broad, it ensures inclusivity and fosters long-term engagement.

Closing Thoughts

We would like to express our concern about the lack of continuity of the DIP and the potential negative effects this could have on DAO participation — especially regarding voting incentives.

In our view, the most pressing issue is ensuring that delegates remain incentivized to continue voting and engaging with DAO proposals.

This program is one of the cornerstones of Arbitrum DAO governance, and a discontinuation could undermine outreach efforts from DIP 1.7 that successfully attracted new large delegates. So far, these efforts have resulted in more than 25 million ARB in VP from new DIP Participants, whose continued engagement could be at risk if the DAO fails to maintain a proper incentive framework.

For this reason, we believe the DAO should first prioritize establishing continuity for delegate incentives and, once that is in place, take the time necessary to reach consensus on how to structure the contributors’ incentive framework.

1 Like
53

Just gonna throw it there while travelling, and is something we discussed also yesterday in the call.

There is the ground for either

  • extending the DIP 1.7 into end of jan, with retroactive analysis of november
  • extending tier X of DIP into the same time terms.
    This should be paired with the mandate (to whom? IMHO seed as principal actor) to explore a further delegate incentive program, voted on snapshot before the Christmas’ pause, and a potential tally vote in january.

Main concern i have: both Seed and other actors have put a lot of effort in include old, dormant delegates in the new voting system. This work will just be wasted with no continuity.

Open to suggestions here.

2 Likes
54

Thank you @SEEDGov for sharing your reflections. We want to begin by recognizing your hard work as well as the commitment the Arbitrum Foundation has made toward building a sustainable delegate incentive program. The program has evolved significantly through extensive discussion and iteration, and we are confident that the next version of the DIP will be more focused and better aligned with the DAO’s needs.

That said, we want to emphasize that competitive rewards for delegates are essential for the long-term health of governance. Incentivizing consistent and meaningful participation is not a bonus; it is foundational to ensuring informed decision-making, accountability, and diversity of opinions and ideas.

Looking ahead, we hope the next iteration of the DIP focuses on clarity and simplicity while preserving the nuance necessary for Arbitrum’s governance. Echoing a point raised in yesterday’s Governance and Reporting Call, the SOS process could be closely linked to the redesign of the program. Aligning these initiatives could also serve as a catalyst to restart the SOS process.

There is currently ~7M ARB remaining in the DIP multisig. During this transition period and in the spirit of continuity, as mentioned in yesterday’s GRC call, one of the most valuable activities to incentivize is the co-design process itself. If the DIP program is at the heart of the DAO, as the Foundation shared in their comment, then its next phase must be shaped collaboratively by governance participants.

1 Like
55

Thanks for the summary – I agree with much of it, but I’d like to address some controversial points:

I believe this is a necessary step to ensure that delegates aren’t just voting for rewards, but understand what they’re voting for and why. If someone voted, they have a few minutes to write a justification.

Actually, the question is a bit different – ​​is the review objective or not. This problem could be solved by decentralization, but that’s just one solution.
Initially, in DIP 1.0 there was no such problem when only objective factors were used for evaluation.

Perhaps everyone understands this differently, but for me, goals are specific values ​​for specific parameters that can be objectively assessed.
I would appreciate it if you could write down these specific values ​​– in that case, we can discuss them. For example, increasing engagement isn’t a goal – it’s an intention or a desired effect

56

I believe it would be more appropriate to split this program into two parts:

  1. Incentives for big delegates (500k+)
  2. Incentives for active delegates

And only put the first part to a vote, which, by general agreement, is objective and non-controversial, and can also be implemented completely automatically.
This way, we will maintain a quorum, and we will discuss the issue of active delegates until we reach a consensus.