Entropy is providing this update on behalf of the reviewing committee.
As of today, a total of 56 reports have been submitted through the Watchdog portal. Of those, 42 are unique reports, while the remaining 14 are considered duplicate reports. Please refer to the October 14th update for how the reviewing committee is approaching duplicates.
Diving deeper into the status of these unique reports, the reviewing committee has completed its investigation into 26 and have found 19 to be cases of valid misuse:
- 3 reports in which the reporter has completed KYC, and the payment has been completed.
- 1 report in which the reporter has completed KYC and payment is processing.
- 15 reports in which the reporter has been told to begin the KYC process, but that process has either not been started or is in progress. Currently 2 of these reports had a duplicate report that provided additional value, so that reporter will also be rewarded. As of today, Entropy has followed up through the Watchdog portal to remind each of these cases to begin this process, but it is up to the reporter to initiate the process.
- 11 of these cases have resulted in recovery of assets, which to date have only been in ARB and totals 256,423 ARB (more details on finances below)
In terms of severity, 3 of these reports were deemed High, 2 Medium, and the remainder Low. At its next meeting, the reviewing committee will discuss if the High reports warrant a wider DAO-ban vote, but to remind delegates and community members of the language in the Watchdog proposal, the reviewing committee does not intend to publish in detail every single case and may only do so on a case by case basis.
We strongly believe that publishing the details of minor instances would be of detriment to Arbitrum’s builder culture and community. The primary goals of the program are to recover funds when possible, identify possible improvements to programs, and have a mechanism to deter outright malicious behavior.
However, to give more insight into the cases that the Watchdog program is receiving, all but 2 of the total 42 unique reports (~95%) have involved participants in the DAO’s previous incentive programs: STIP, STIP Bridge, and LTIPP. The cases normally involve some combination of unreturned funds, late distribution of funds, or distribution of funds to ineligible users. Given the structure and goals of these programs, not all participants used the same method to distribute or manage their incentives. Additionally, the previous incentive programs did not have an end date to claim rewards, so what often appears as unreturned funds is actually ARB that belongs to users. These factors have led to the reviewing committee often having to clarify transaction activity or contract purposes with teams, which has contributed to a slower turn around time as these teams have to recall decisions/context from events over 18 months ago.
Having said that, we recognize and acknowledge that communication with reporters and the DAO can be more frequent. Going forward we will commit to providing a status check-in to reports on a bi-weekly basis, even if there is no substantial update. Additionally, we will be providing updates on a monthly basis rather than periodically.
The committee is currently working through the remaining 16 unique cases and we appreciate reporters’ patience as we verify the onchain activity and attempt to contact teams.
Finances
The Watchdog wallet currently holds ~601.7K ARB, with the current working budget being ~504.67K ARB.
To date, a total of 256,423 ARB has been recovered and 141,423 ARB ARB is budgeted as rewards for valid reports. From that ~141.4K ARB, 44,308 ARB has already been paid out to reporters from the above-mentioned 3 completed cases and ~97,115 ARB remains reserved for cases where misuse has been found but the KYC is still pending or payment is processing.
In terms of operational costs, SeedGov has contributed 106 hours to reviewing reports, primarily assisting with onchain analysis and verification of the claims being submitted. They have submitted 2 invoices for their work, with the 2nd invoice currently processing with the Arbitrum Foundation. Based on the price of ARB at the time of each invoice, a total 20,295.49 ARB has been spent on operational costs.
Based on additional feedback from reporters and the current ARB price level, the reviewing committee will discuss additional changes to compensation structure at our next meeting.