The Watchdog: Arbitrum DAO's Grant Misuse Bounty Program

I’m supportive of the Watchdog proposal and will be voting yes in the onchain vote.

That said, as someone who’s worked in Operations Security and Risk Management, I want to highlight that this program addresses only one side of the risk equation.

The risk we’re trying to reduce here is misuse of funds. The Watchdog program functions as a detective control: it helps us catch fraud after it has occurred. But what are we doing to prevent fraud in the first place?

That’s where preventative controls come in, and that’s the role I believe SafeNotes (my own product) can play for Arbitrum. Safenotes is used to track and publicly document every transaction carried out by multisig signers, giving the community a clear, human-readable record of what’s happening with DAO funds before something goes wrong.

We’ve currently applied for a Questbook grant to bring SafeNotes to Arbitrum, but my goal is to have a successful intro period and make it available DAO-wide. I see it as a natural complement to the Watchdog program: Watchdog helps catch what slips through, SafeNotes helps watchdogs identify what is what and ensures fewer things slip through in the first place.

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This seems similar to the Safeguard initiative, which was discussed last year in this forum and is currently in development. Perhaps we should have a chat and see if we can align efforts?

Have a link? I’m not able to find it

Of course! Here’s a quick video walkthrough of the platform: 03.05.2025_17.34.00_REC and 03.05.2025_22.22.03_REC. We’re still moving things around, still looking for a way to simplify things, and most of the content is currently simulated. As you’ll see in the video, we have a grantee list page where AI helps track issues to support human oversight.

The Watchdog proposal is now pending on Tally with the vote scheduled to start this Thursday, May 8th. As a reminder, the language of the proposal has been update since Snapshot so that funds are no longer sent to the MSS, but instead an Arbitrum Foundation controlled address.

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voting Against on the current onchain vote because despite personally pushing for this program to exist in the DAO, and even trying to help it come to fruition since October, the latest last minute changes to the program changed the nature of it significantly, namely: GlobaLeaks as a platform will not act as a neutral third-party and therefor it doesn’t ensure the anonymity of the whistleblowers; and more problematic, the inclusion of the Arbitrum Foundation and SeedGov into the reviewer set creates an explicit conflict of interest where the entities responsible to adjudicate grants will be the same that will review the reports of wrongly adjudicated grants and therefor undermining the neutrality and then the effectiveness of this program.

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LobbyFi’s rationale on the price and making the voting power available for sale for this proposal:

A proposal as this one clearly benefits all ARB token holders, hence the auction will be on for this proposal.

The instant buy price will be set at 1% of the requested amount, 400k ARB * 0.01 ≈ 0.67 ETH.

Voting in favor.
The platform that was chosen, as mentioned in private, is a standard for whistleblowing. We don’t really need to reinvent the wheel here and addresses concerns of people who, rightfully so, mentioned how a simple protonmail would have not been enough.

I am also ok with the committee: being a 3 members one, if there is any conflict the other 2 parties will provide the valuation while the interest one will just recuse. It’s the most streamline process.

People really need to understand how, often times, protocols did want in the past communicate information regarding bad behaviour of certain actors, and refrained in doing so because it would have been negative for their reputation. So I really welcome this watchdog program.

We are voting FOR this proposal.
The proposal creates a system that encourages people to bring complaints to the Arbitrum DAO and, if the program is successful (and the misuse is found), the system can feed back - or even bring money back to the DAO.
The work carried out by Entropy, Seed and Foundation in reviewing these submissions is crucial. Not only to assign a fair reward value to informants, but to avoid potential cases where there is no misuse of resources.

Having already voted FOR on Snapshot, I will also vote FOR on Tally, even despite recent changes that I understand may compromise the effectiveness or intent of the program as a whole as this, like many other, proposals would be affected by the upcoming OpCo era changes.

Hi, voted FOR.
Echoing @JoJo - this is a straightforward solution that works. I’m sure we will have time to iterate on the committee / portal in the future, but it’s important to ship this.

Thanks Entropy for your efforts.

I voted in favor on Snapshot and will continue to support this proposal onchain.

Besides the positives I shared earlier, I believe Watchdog could set a strong precedent for transparent grant oversight across DAOs, especially with so many funding and grant activities happening right now to support builders and projects in the web3 ecosystem.

I agree but wanted to add one point (hope it’s not too late lol), in high level cases involving large-scale abuse, after internal efforts fail, we could also consider posting the accused party’s info on social media so other DAOs or ecosystem partners can blacklist them.

I don’t think this is overreacting, it’s about protecting our partners and and the space from bad actors.

I’m voting FOR this on Tally because it’s a solid move to keep grant funds in check and make sure they’re used right. The Watchdog setup, with its rewards and anonymous tips, feels like a real way to build trust and keep the Arbitrum DAO strong.

FOR should conduct a detailed follow-up on previous fund mismanagement plans and implement future fund tracking and oversight. I’m optimistic that this project can achieve great success and create a fair environment for everyone.

Voted For: I think this program is good enough to add transparency and security to the Arbitrum DAO. The idea itself is inspired by many other organizations, and I definitely see how we could benefit from it.

There were some concerns on the call about edge cases, but as the team justified — I think it’s better than nothing. Let’s see the program in action and then, based on that, we can improve and adjust it. Overall, I like and fully support programs like this.

I voted FOR this proposal

DAOplomats voted FOR this proposal on Tally.

We initially supported this proposal during the temp check and maintained our stance during the onchain vote.

There were some modifications to the proposal going into the onchain vote, however, we are comfortable with these changes.

The Watchgod proposal is innovative, I’ve never seen anything similar mechanism being implemented in web3 and will be voting yes on it because I’m curios how it will deliver. That being said, here are the things that I believe the proposal are lacking are:

1) Transparency and a plan into CTAs, in the sense that:

  • who will drive the people/entities that will actually do the detection? The action plan is not described in the proposal itself.
  • how will the DAO know if they are doing a good job?
  1. Neutrality
  • Arbitrum Foundation being an allocator themselves cannot always act as a neutral party, also it is not stated who exactly from the foundation and entropy will act as a reviewer, in this sense the proposal operates a bit like a black box- is this an intentional ?
  • recruiting additional reviewers from programs that actually allocate is not ideal, I recommend removing the D.A.O program from the additional reviewers list to eliminate any backlash and to maintain the neutrality of the additional reviewers- they could consult because of the experience tho.

Resonate with @limes thinking and indeed it would be optimal if the DAO, possibly the ARDC would consider options to try to avoid fund misuse before the need to recover them.

PS. As a former reviewer myself I know it’s sometimes hard in practice to maintain neutrality on all levels and that anti-fraud work always requires a bit of trust in the parties involved.

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I support this proposal on Tally as well. Here (The Watchdog: Arbitrum DAO's Grant Misuse Bounty Program - #59 by 0x_ultra)’s my previous rationale. I also support the changes that were made following the off-chain vote. Additionally, after giving the platform a look, I believe it effectively addresses our needs. Voting in favor.

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