As part of the Watchdog Program’s retrospective, the reviewing committee recommended several changes to how the program should operate going forward. These changes are informed by seven months of operational experience and were proposed to ensure the program remains a useful accountability mechanism for the DAO without consuming disproportionate resources on cases where meaningful recovery and/or severe misuse is increasingly unlikely.
The full retrospective, which covers reports received up to March 31st and other operational learnings, is available here.
Now that the retrospective has been available for delegates to review and there being no objections, the reviewing committee is moving forward with the proposed changes.
1. Time-Frame Limit on Eligible Reports
The reviewing committee is introducing a scope boundary that limits eligible Watchdog reports to ongoing and future initiatives, as well as programs launched or grants issued after January 1st, 2025.
This time frame limit would exclude, including but not limited to, the historic incentive programs (STIP & STIP Backfund, STIP Bridge, and LTIPP), the older D.D.A seasons, and other one-off grants funded by the DAO. Going forward, initiatives such as the D.A.O program (DDA season 3), the Stylus Sprint, DRIP, OpCo’s Firestarter grants, and Arbitrum Foundation or Arbitrum Gaming Ventures (AGV) grants issued after January 1st, 2025, as well as any future programs, will still be eligible under the Watchdog program.
As stated in the retrospective, the rationale for such a change is twofold. First, we aim to make it feasible for the program to be managed by OpCo. The current caseload requires context and established relationships that currently reside with the Arbitrum Foundation, which has served as the primary point of contact for reaching accused parties and facilitating recoveries. OpCo does not have these relationships today, and building them retroactively for cases rooted in 2024-era programs would be both inefficient and unlikely to produce positive outcomes. Secondly, the cases involving the legacy incentive programs are time-consuming and show diminishing severity plus likelihood of fund recovery. At this point in time, the committee feels that reports have effectively uncovered all major cases of misuse and that it is now time for the DAO to move forward and put these programs firmly in the past.
To give reporters time to submit any last possible findings, this change will go into effect in ~3 weeks at the end of Sunday, May 10th at 11:59 pm UTC. Any open investigations or reports submitted prior to this deadline in relation to programs/incidents before 2025 will be investigated by the current reviewing committee composed of Entropy, the Arbitrum Foundation, and SeedGov.
2. Transition to OpCo
The original Watchdog proposal envisioned the program eventually transitioning to the OpCo. The reviewing committee supports this transition but believes a full, direct handover is not workable without the scope boundary described above.
Once the time-frame limit is in place, the transition becomes more practical. Going forward, OpCo will begin assuming responsibility for reports involving programs meeting the time-frame limit described above, while the current committee winds down the remaining legacy investigations.
The committee is not proposing a hard handover date at this time and all 3 existing members will still be involved over the next few months. The intent is to begin working alongside OpCo so that they can become familiar with the operational details, Globaleaks platform, and investigative process, so that the transition can happen in an orderly way. The Arbitrum Foundation will remain involved for legal and technical support, meaning that they will still be the entity that technically hosts & manages the Watchdog Portal, in addition to relationship/stakeholder support as necessary. SeedGov will also still be leveraged in the event a report requires extensive onchain analysis.
3. KYC Deadline for Completed Investigations
As of today, almost all reporters who submitted a valid case or a duplicate that was later rewarded, have begun the KYC process with the Arbitrum Foundation. The reviewing committee has continued to send reminders to those select few who have not, but suspects the remaining cases are reporters who have either lost access to their portal login key or are unwilling to complete KYC regardless of the bounty value due to privacy concerns. With no way to distinguish between the two, the committee is introducing a deadline: reporters must begin the KYC process within three months of their case being closed as valid or the bounty will be forfeited.
What Is Not Changing
The program continues to operate under its current structure while the OpCo transition is designed. The budget is healthy as the program is operating with an estimated working budget of ~500K ARB after earmarked payments and outstanding opex.
The bounty structure introduced on February 18th ($200 Low / $1,000 Medium / $2,000 High, with a 15% recovery bonus) remains in effect.
A separate post will be published with the committee’s DAO ban recommendations for the three High severity cases identified in the retrospective.