Arbitrum Proposal: #0x052d7e9872192f46bfb4e0a2aabd07035d0842811ca1c82d654307b5d96e2e25

Arbitrum D.A.O. Domain Allocator Offerings) Grant Program - Season 3

Status:
Closed
Renew with 5 domains (adding Orb84.7%

Renew with 4 domains: 11.2%

18,515,681 ARB

Renew with 5 domains (adding Orb: 84.7%

140,241,053 ARB

Abstain: 3.9%

6,453,240 ARB

Against: 0.2%

296,087 ARB

Voting Period

  -  

Proposer

0xAbAbE91A907fAdff921720C43ABe4098e7245E99

Discussion

Go to Discussion

Description

TLDR FOR SNAPSHOT VOTING

Abstract

The Arbitrum Domain Allocator Offerings Grant Program (D.A.O.) has operated for one year across two six-month seasons. The program has evolved and improved based on previous results, growing from its first season, which allocated $250,000 across four domains, to a second season with funding of $1,000,000 per domain.

We are now proposing a third season that would run for a full year, encompassing the existing four domains (Protocols, Education/Community and Events, Dev Tooling, and Gaming) while potentially adding a fifth domain (Orbit). The vision is to create a modular program where new domains can be integrated over time based on DAO requirements and perceived needs. This new season will also improve tracking of grantee progress after funding and facilitate fast-tracking of exceptional projects into other DAO initiatives, such as Arbitrum Foundation programs and the GCP.

Questbook will serve as the technical partner of the program, offering their services through the Questbook.app portal.

Season 1 and 2 recap

Season 1 of the Grant Program was initiated through an RFC in April 2023, designed to serve four distinct domains: New Protocols and Ideas, Dev Tooling, Education/Community/Events, and Gaming. Following a successful snapshot and tally vote along with elections for the four DAs, the program officially launched in October 2023. The team consisted of JoJo, SEEDGov, Flook, and Juandi as Domain Allocators, with Srijith serving as Program Manager.

The first season operated for six months with a budget of $250,000 per domain, totaling $1 million in funding, and implemented a soft cap of $25,000 per project. In April 2024, the program was renewed for Season 2 with the same team but expanded funding to $1,000,000 per domain. The soft cap was increased to $50,000, with proposals exceeding $25,000 requiring evaluation from two Domain Allocators.

Season 2 has now completed its fund allocation phase and will continue operating at reduced capacity for the next six months to oversee milestone completion and grant disbursement. Bear in mind that Season 2 results are partial from the first 6 months, and it will have its natural end in May 2025.

The following are the numbers so far achieved:

Note: Uncompleted projects are those currently active but were either unable to complete their proposals within the last six months or pivoted to a different idea. Abandoned projects are from teams that weren't able to operate in the market. Withdrawn projects are those that were approved but decided not to proceed with their grant. While there was no specific timeline set, we feel Season 1 has come to its natural end, and we are in the process of informing teams and withdrawing remaining funds.

More details on the results can be found here.

Season 3: overview

In the last year, and potentially for the next year, the D.A.O. Grant Program has brought and will continue to bring the following value to the DAO:

  1. Introductory Grant Program: It fills the gap of Arbitrum Foundation grants (usually starting at $50,000, up to $150,000), serving as an entry-level program in our ecosystem.
  2. Transparency: All applications and judgments are available for everyone to read in the portal. Additionally, discussions with protocols are typically maintained in a public Discord with open access.
  3. Targeted Approach: The program has specialized in four specific verticals deemed key by the DAO
  4. High submission amount: between Season 1 and 2 we managed more than 700 proposals, approving around 200.

While these points have always been advocated and envisioned as the natural shape of the program, below is a non-comprehensive list of value propositions that has been provided so far through in the last two seasons of the program:

A few specific examples of what we think can be defined as success stories:

In this new iteration, the DA program will last one year. After two six-month seasons with subsequent renewals, there is sufficient maturity in both the program and the DAO to extend it, reducing the burden on delegates for operational renewal and addressing issues such as gaps between seasons.

Funding will be proportional to Season 2, which effectively allocated $750,000 for each of the four domains for six months: for a one-year program, the funding for the four domains will be $1,500,000 per domain, for a total of $6,000,000 for the four domains excluding OpEx. Additionally, after discussions with several delegates and the Foundation, and assessment of the current DAO landscape and working groups, there is interest in a potential fifth domain related to Orbit chains. Acknowledging its experimental nature, the proposal suggests funding this domain with half the amount of other domains: $750,000 for one year.

The grant structure will remain unchanged. Grantees can request up to $25,000 with a single DA review, and up to $50,000 with two DA reviews. Grants will be paid on a milestone basis, where projects must first complete the milestone, verify it with the DA, and then receive the corresponding portion of the grant. Only in exceptional cases, such as when milestone funds are essential for completion or in situations of economic distress, may the DA, at their discretion, release milestone funds in advance.

Upon completing KYC/KYB, grantees will have up to six months to complete their proposal. If they fail to do so, remaining funds will be retained by the program and either reassigned to new projects or, if the program has naturally concluded, returned to the DAO.

Upon proposal completion, grantees must publish a final report in the Arbitrum forum to inform the general DAO community about their project.

Three months after proposal completion, grantees must complete a survey and publish an update to their final report, aimed at tracking their success, foothold gained in Arbitrum, and adherence to or pivot from their original idea.

Before completion, a subset of projects will be internally selected by the PM and DAs for fast-tracking through a PM pitch into other ecosystem programs, such as the Arbitrum Foundation Grant Program or the GCP. While this won't necessarily guarantee further grants from these or other entities, it will ensure exceptional protocols can continue their journey and expand within the ecosystem.

With these modifications, several gaps from previous seasons are addressed:

  1. Creating a checkpoint for approved proposals after their final milestone: This will enable better overall tracking of project outcomes.
  2. Integrating exceptional projects into DAO growth programs to establish a clear pathway for continued development within the Arbitrum ecosystem.

Program phases

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Excluding the initial phases of snapshot discussion, temp check on the proposal, candidacy for DAs, elections for DAs, and on-chain vote, the program is articulated in the following phases:

  1. A first 1 year phase: during these 12 months, funds allocated to the program will be assigned to DAs to the projects that will be evaluated as worth financing. During this phase, the green one in the graph, all the team will operate at full capacity.
  2. A second phase, at low capacity, lasting 6 months: this phase is also effectively already embedded in phase 1. During this 6 months we will assume that there won't be any new fund to distribute from the main phase, and it will be a monitoring one. As stated, grantees, once approved and kyced, will have up to 6 months to complete their project. This means that projects approved, for example, in the last legal month of phase 1, will be able to complete their path up to 6 months after the end of phase 1. In this period, the team will work at low capacity, with a 20% cost.
  3. A third phase, potentially extending up to 3 months after the end of phase 2, related to the checkmark of projects after completion. If we consider a project that gets approved in the last month of phase 1, and needs 6 months to arrive to completion (so is completed in the last month of phase 2), we will necessarily have to place the checkmark 9 months after the legal completion of phase 1. Note: there is no opex coverage for this phase, since is effectively based on contacting projects, interviewing them likely with a google form and report in the forum, but only as said for projects that were approved in the last quarter of phase 1 AND that requires 6 months for completion (which is not always the case). This phase will be covered through the team which will have the goodwill of finishing to accompany projects in their path, and could potentially be resolved through the passing of the baton to a new team, or confirmation of the old team, in a season 4.

During all of these phases, there will be parallel communication phases related to

Domains

So far the program has run with four main domains:

  1. New Protocols and Ideas: A general bucket encompassing not only protocols, but also platforms, governance tooling, and other projects not specifically falling into other domains.
  2. Education, Community Growth and Events: A domain focused on physical events and educational material for Arbitrum.
  3. Dev Tooling on One and Nova: A technical domain oriented toward developer tooling and promoting Arbitrum Nova adoption.
  4. Gaming: A domain dedicated to web3 gaming and infra, web3 KOL gaming activities, and all video gaming-related projects.

All these domains remain pillars of our DAO today, even more so than a year ago. We are, for better or worse (though mostly better), the most accessible DAO in crypto, the first ecosystem to create a gaming fund of the size of GCP, and we have a technology stack that enables permissionless creation of L3s. Our ecosystem's nature and soul, combined with the entry-level grant structure of this program and the diversity we inevitably achieve through it, provides strong justification to maintain all four domains. While most operational changes will be in the framework that moves projects from this program to others, we plan to specify domains based on relevant stakeholders’ feedback (Arbitrum Foundation, OCL, Delegates) to add more specificity and better tailored results.

Education, Community Growth and Events

The domain has seen significant attention, receiving the highest number of proposals in both seasons. Through discussions with Foundation members and key stakeholders, two additional focus areas have emerged where the grant program can provide value:

Events Focus:

Developer Relations:

To reiterate: the domain won’t change its nature to only serve requests such as the one mentioned in the above examples, but might give in some cases more weights in the evaluation as there is value added in coordination with the broad ecosystem. The DA will still retain all its liberty of evaluation.

Gaming

The gaming vertical has gained increased attention throughout the year in Arbitrum, partly due to the GCP initiative. Key stakeholders, including OCL, have identified a primary need: Arbitrum Games should begin targeting the web2 gaming industry, creators and gamers.

While acknowledging that the grantee budget cap of $50,000 isn't sufficient to attract web2 developers, we can broaden the domain's scope by focusing on user acquisition through initiatives such as:

Important notes:

Dev Tooling on One and Stylus

The Dev Tooling will undergo changes based on what the Arbitrum ecosystem has achieved, both technologically and in terms of PMF, in the last 12 months.

Nova, initially included in the scope, hasn’t seen the forecasted adoption. At the same time we have seen a big conviction bet on Stylus.

While it doesn’t make sense to exclude specifically Nova, it can’t be anymore one of the focus of the domain, which will be now called "Dev Tooling on One and Stylus," incorporating the recent Stylus release. There shouldn’t be any consistent overlap with the current year-long "Stylus Spring" program for several reasons:

The rubric will also be modified to put emphasis on Telegram’s tooling such as trading bots, fairly available in other ecosystems but less widespread in Arbitrum.

New Protocols and Ideas

The "New Protocols and Ideas" domain will remain the most general capture-oriented domain, as it has been in the last two seasons. Its inherent generality enables it to cover both classic ideas, like financing DeFi protocols, and DAO-specific needs like governance tooling. This domain will remain largely unchanged, except for maintaining constant alignment with the Foundation and other stakeholders on what is considered important and valuable when assigning grants. Additionally, there will be attention paid to the evolving narratives driving the broader market.

Orbit Chains

There has been growing interest in a possible fifth domain related to Orbit chains. Many delegates have shown interest in or directly requested funding for an Orbit chains program, which is also supported by the existing working group.

The Orbit Chains domain will have the mission to:

The Orbit chain domain won’t cover the deployment of new Orbit chains, since this is a mission that is currently facilitated by the Foundation. This doesn’t mean that a project can’t have, in its milestone, the deployment of its own chain if that is part of a broader plan; but this can’t be the main focus of the proposal.

The rubric and template will be drafted in detail with the elected team member, following the same process used for the other domain rubrics (1, 2, 3, 4).

Acknowledging that the DAO might consider it premature to launch an Orbit domain, particularly before seeing results from the related working group, the snapshot will provide an option to exclude it from the current program. This domain could then be integrated later during the program's one-year duration. As for the current iteration, we propose MaxLomu as lead for the Orbit domain. While we can accommodate the DAO's preference for elections in this domain, we believe there would be no better lead than him, given his background and current working group proposal.

Modularity

Several parties have expressed interest in adding new domains to the DA program.

While it wouldn't be wise to expand the program further at this time, new domains might be needed at different intervals, as illustrated by the Orbit domain example, where the DAO might require a new domain program six months from now. For this reason, Season 3 is designed to be modular.

If the DAO votes to allocate capital for a new domain, it can be integrated into the current program by leveraging the existing infrastructure and Program Manager. The costs for adding domains would vary based on specific implementation requirements:

Note that:

What does success look like

Evaluating success for an entry-level grant program can be challenging. The evaluation primarily focuses on three key metrics:

  1. Number of Grant Applications: The program has grown over the past two seasons with increased proposal submissions. We expect to maintain or exceed this level of interest. This KPI should be primarily compared to Season 2's metrics, as Season 1 had both lower funding and a lower cap ($25,000).
  2. Grant Completion Rate: As an entry-level program serving primarily small and new teams, the risk of incomplete projects is higher compared to more mature programs. The completion rate will largely depend on DAs' judgment in approving teams they trust to deliver. This metric should also be benchmarked against Season 2's performance for consistent comparison.
  3. Long-term Project Sustainability: A new metric will track how many teams are still building on their original project and remaining on Arbitrum three months after grant completion. As this is a new measurement not present in previous seasons, we won't have comparative data unless we retroactively measure Season 2 projects in nine months.

Election Process

The election process will follow established best practices as outlined in the Code of Conduct:

Resignation of DAs and PMs

In recognition that one year is a relatively long period for a DAO's program, procedures must be established for cases where team members cannot complete their tenure. If a member resigns, they will assist with the transition, and the team will attempt to source a replacement. A snapshot vote will be held with two options: "Yes, proceed with the new member" or "No, hold elections."

If approved, the new member will be onboarded to the team. If rejected, a standard election process will occur over three weeks (two weeks for candidacy, one week for voting). During any transition period where the former member cannot fulfill their duties, the current DAs and PM will temporarily manage the domain, including grantee collaboration, proposal evaluation, and milestone payments. Any compensation due to the departing member during this interim phase will be fairly distributed among contributing team members.

Budget

The RFC will request $1,500,000 for each of the four domains "New Protocols and Ideas", "Education, Community Growth and Events", "Dev Tooling on One and Nova", and "Gaming", for a total amount of $6,000,000 excluding OpEx. The requested amount will be in ARB and, upon receiving, will be converted into USDC.

Earmarked costs are as follows:

Total operational costs: $622,200

If the Orbit Chains domain is added as a fifth domain:

Note: If approved, JoJo will forfeit any remaining payments from Season 2 at the start of Season 3. Similarly, if any of the current Domain Allocators will participate in the elections and will be re-elected, they will forfeit any remaining payments from Season 2.

Reporting

A more clear and standardized reporting will take place going forward. Specifically

Vote specification

The DAO vote on Snapshot will be a single choice vote:

Steps to Implement and Timeline

Fund Management

ARB received from Tally, with a 35% buffer, will be transferred to the Arbitrum Foundation for the conversion in USDC of only the amount approved; any ARB surplus will be returned to the DAO. Upon completion, funds will be split as per the following

Resources

Season 1 RFC Season 2 RFC Season 2 update thread New Protocols and Ideas RFP Education, Community Growth and Events RFP Gaming RFP, Dev Tooling on One and NOVA RFP