[Non-Constitutional] Arbitrum DAO Delegate Incentive Program

Description

This proposal has been cut to be posted on Snapshot due to the 10,000 characters limit.

You can read the full proposal here

How should I read this proposal?

First we present the general parameters and then two options on the proposal feedback (PF) parameter, each option with its own budget.

General parameters

Duration

We’ll extend the duration of the program to twelve months.

ArbitrumDAO may cancel the program or modify parameters, such as scoring methodology, through an instantaneous snapshot vote.

Requirements to Participate in the DIP

The requirements to participate in the program are as follows:

• Voting Power: >50K ARB

• Change: This parameter will remain unchanged.

• Participation Rate (Karma): >60% participation in on-chain votes in the last 90 days.

• Change: Previously, the requirement was 25% of total historical votes.

Note: A new delegate, without prior participation history, must meet the above requirements (>50k voting power and >60% participation in on-chain votes) after a period of 3 months from his first on-chain vote to be eligible for the program.

• Each delegate must adhere to all social agreements reached through Snapshot.

Number of Delegates to Receive Incentives

We will maintain this parameter at 50 delegates.

Incentive Budget

Budget Allocation: MAX 4,200,000 USD (up to 7.000 USD per delegate per month).

We propose the introduction of three compensation tiers based on the Total Participation Rate achieved by each delegate.

• Tier 3: TP between 65% and 70%. Compensation range: $3,000 to $3,250. ARB cap: 8,000.

• Tier 2: TP between 70% and 85%. Compensation range: $4,200 to $5,100. ARB cap: 12,000.

• Tier 1: TP between 85% and 100%. Compensation range: $5,950 to $7,000. ARB cap: 16,500.

Note: ARB Cap for each Tier includes a 30% buffer and will be recalculated on the basis of the ARB price at the time of submitting the proposal for voting in Tally.

Note 2: We will use the Coingecko rate at the time of payment to determine the value of ARB each month.

Payments to delegates are expected to be processed in ARB from the MSS between the 15th and 16th of each month.

Conflict resolution

Dispute

Dispute System will be maintained as the original program.

DIP Ban

You can see details about this here.

DIP Suspension

You can see details about this here.

Scoring

To determine which delegates will receive monthly payments, we will continue using the dashboard developed by Karma.

Note: The program manager may adjust the compensation parameters, provided they inform the DAO of the reasons for the changes.

Scoring Weight Changes

Participation Rate (PR)

• Change: Weight is reduced to 15%, calculated based on the participation rate of the last 90 days in on-chain votes (as calculated by Karma).

Snapshot Voting (SV)

• Change: from 15% to 20%.

Communicating Rationale (CR)

• Change: from 25% to 10% (v1.5) or 15% (v1.1)

Proposal Feedback (PF)

• Change: From 15% to 30% (v.1.5) or 25%(1.1).

Total Participation (TP)

• Change: from +60% to +65% to receive compensation.

Bonus Point (BP)

• Change: Adding Bonus Points for delegates attending the “Arbitrum Open Governance Call” and the ‘Bi-weekly Governance Call.”

For both calls, 2.5% BP will be awarded for attendance.

Delegates’ Feedback Scoring System Options

Option 1 - Delegates Incentive Program v1.1: Maintain the Current Proposed System With Some Modifications

Proposal Feedback (PF) Update - Formerly Commenting on Proposals (CP)

• Communicating Rationale (CR): Weight 15%

• Proposal Feedback (PF): Weight 25%

• 100% Weight for Early Stage Feedback (ESF): Feedback provided until the day a proposal is sent to Snapshot (typically by Thursday at 00:00 UTC) will receive 100% weight.

• 60% Weight for Late Stage Feedback (LSF): Feedback provided from the start of the voting period to the end of the month (starting Thursday at 00:00 UTC) will receive a 40% reduction in weight.

Administrative Budget v1.1 (option 1)

We have updated the operational costs for administering this new program. This payment will be distributed over 12 months and sent regularly along with the payments to the delegates.

Karma Details:

• $5800/month * 12 = $69,600 for continuing to build and enhance the dashboard.

SEEDGov Details:

• 2 Program Administrators (1 Part-Time - 1 Full-time): $117,000 over 12 months.

• 1 Data Analyst (Part-Time): $35,000 over 12 months.

Total: $152,000 ($12,667 per month)

Budget Summary

• USD 4,200,000 in Incentives. Delegates' compensation is capped at 16,500 ARB per delegate per month (Tier 1), which means the maximum spending on incentives would be 9,900,000 ARB per year (16,500 ARB x 50 delegates x 12 months). The ARB cap already includes a 30% buffer, and it will be recalculated before Tally.

• USD 69,600 +30% ARB buffer for Dashboard maintenance and upgrade

• USD 152,000 +30% ARB buffer for Operational Costs/Program Administration.

Total: USD 4,421,600

Note: USD costs are fixed, meaning that if the price of ARB increases, the USD costs will remain the same. At the end of the program, any remaining ARB tokens from the program will be returned to the treasury.

Note 2: Any remaining funds from the experimental incentive program multisig will sent back to the treasury.

Note 3: Final amounts in ARB will be recalculated on the basis of the ARB price at the time of submitting the proposal for voting in Tally.

Note 4: The funds will be sent to the recently approved MSS.

Note 5: If the program exceeds 65 participants (which is the number that we believe we could cover with the budget requested) we will reopen discussions in the forum on the budget, also considering the possibility of increasing the number of delegates incentivized.

Option 2 - Introducing Delegates Incentive Program v1.5: a New Evaluation System for Delegates’ Feedback

Instead of counting comments on proposals that reach Snapshot, we propose implementing a monthly analysis of the feedback provided by delegates, regardless of whether the proposal/discussion has reached Snapshot.

In this way, the Program Administrator would be responsible for creating a rubric that evaluates the value and timeliness of the feedback provided by delegates.

Note: in this option the weight of Communicating Rationale (CR) is 10% and for Delegates’ Feedback is 30% instead of 15% and 25% like in the proposed V1.1.

Evaluation Approach

This rubric assesses the overall feedback provided by the delegate throughout the month (from day 1 at 00:00 UTC to the last day of the month at 23:59:59 UTC), based on a summary of their participation in various proposals and discussions.

• Key point: Feedback or opinions that violate community rules will not be considered.

Rubric Specifications

The parameter “Proposal Feedback” should be renamed to "Delegate’s Feedback” in this case since we’re analyzing the overall feedback provided by the delegate (not just proposals on snapshot) and will maintain a maximum weight of 30%, the score will be awarded based on the following rubric:

Monthly Evaluation Process

1. Data Collection

2. Overall Evaluation

3. Score Assignment

4. Monthly Report

Scoring Methodology

Each rubric criterion has levels with an assigned score, from 1 to 4, depending on the level achieved.

The initial score is obtained by adding the first five criteria, while the final score results from applying the “Presence in Discussions” multiplier to the initial score. The maximum Initial Score is 20 points and 30 points for the Final Score.

Also if v1.5 is chosen, this scoring system will be in a testing phase, and we, as Administrators, commit to submitting it to the DAO for consultation after three months of running the program.

Administrative Budget v1.5 (option 2)

This option changes the responsibilities and budget of the Program Administrators. It requires more human resources to expand the Delegate’s Feedback analysis and additional time and resources to develop and train the AI for automation.

New budget details:

• On the Program Administrator side: $16,000/month - $192,000/year (2 program administrators, both full-time instead of 1 part-time and 1 full-time + 1 data analyst part-time)

• On the Dashboard and Tools provider side: $7250/month - $87,000/year

• Total administrative budget: $279,000/year (6,6% of the delegates’ incentives budget)

Management and development of the Delegate Incentives Program: Responsibilities and Deliverables

The SEEDGov team and Karma will continue to collaborate to maintain and manage this new version of the DIP.

Program Dashboard Management (Karma)

See the responsibilities breakdown here.

Program Manager (SEEDGov)

See the responsibilities breakdown here.

KPIs

See the KPIs breakdown here.