We introduce an Experimental Incentive System aimed at the ArbitrumDAO delegates with a duration of six months. The goal is to assess the impact of the incentives on the active participation of the delegates. This proposal is subject to changes.
Inspired by the positive feedback to our initial approach to the Delegate Incentive System, we now introduce an experimental version for ArbitrumDAO's Incentive System.
As per our post [RFC-2] Delegate Incentive System for ArbitrumDAO, we believe it's essential for DAOs to provide consistent, attractive, and predictable incentives to their delegates. To bolster governance, it's vital that delegates, who guide and set the governance direction through their votes, remain active.
With the introduction of the ARB governance token, a primary goal was to enable decentralized protocol proposals and updates. ArbitrumDAO aims for decentralized decision-making: the community suggests changes, public debate ensues, followed by voting, and eventually implementation. With the rollout of the ARB token, it became clear that a secure and decentralized Layer 2 requires the elimination of centralized control points, ensuring trustless operation.
Venturing into decentralized governance is challenging. It is a difficult task to engage ARB token holders in intricate governance processes. Historically, voter apathy has been a constant issue in large DAOs. Several reasons fuel this phenomenon: a disconnect with the issues at hand, complex voting systems, lack of information, or the belief that an individual vote is inconsequential.
To counteract this, the DAO introduced a delegate system. Yet, in doing so, an unresolved issue came to light: ARB holders often lack the time and means to engage deeply in governance.
Delegates aren't just enthusiasts. They are individuals, organizations, or companies deeply committed to the protocol. They resonate with its objectives and bring their own visions to shape its future. They are more than mere technical experts; they are versatile teams, focused on comprehensively understanding a protocol. They delve beyond the technical, encompassing social and economic dimensions. Such teams invest resources in deep research for informed and effective decision-making.
It is easy to see from the above that, just as individual incumbents alone do not have the resources to carry out these in-depth analyses, neither do multidisciplinary teams. Quality time, which encompasses activities such as data analysis, research, deliberation, voting and effective communication, requires a significant dedication of resources to ensure its effective execution. Without this dedication, these critical tasks tend to be rushed or inadequately completed, which can have far-reaching consequences.
Compensating for this time is essential. Remuneration not only recognizes expertise and effort but also facilitates undivided attention to these tasks. Without compensation, the quality of work and its outcomes can suffer.
Raphael Spannocchi (Flipside Crypto) elaborates on this in a Medium post, emphasizing that the delegate role has become a full-time job. Compensation attracts talent and is pivotal for the protocol's security. Paying experts ensures that proposals do not jeopardize the protocol's integrity.
We strongly believe that achieving a decentralized and functional governance vote is unlikely without encouraging people to take on delegated responsibilities. Luckily, we get a lot of support from the community. But, as @Frisson points out, the tricky thing about incentives is how to pay for them. Also, we agree with @benhoneill that we should focus on what specific actions the community hopes to incentivize with these expenditures. Where we differ from his opinion is that we think voting and posting are the most important tasks.
In this initial phase of ArbitrumDAO governance, adaptability is key. We must experiment with incentives tailored to the needs of the Arbitrum ecosystem, being flexible and anticipating short-term changes, learning and adjusting as we go.
This proposal is structured into four main sections:
The SEEDLatam team will be attentive to feedback from ArbitrumDAO. Our goal is to craft a proposal that optimally adapts to the governance needs.
We've allocated an initial trial period of 6 months. This timeframe should allow us to gather initial metrics to gauge the system's functionality and its anticipated impact.
Note: At the conclusion of this period, ArbitrumDAO will decide whether to continue with the program or not
We have set the number at 30 delegates. This figure isn't based on specific reasoning, but we believe it's a reasonable starting point.
Note: Following the program's conclusion, should ArbitrumDAO wish to proceed, they may adjust this number up or down.
Payments to delegates should be both predictable and stable. Consequently, while we will quantify the costs in USD, we will process the payments in ARB tokens.
We've designated a total funding of 720,000 USD, represented in ARB tokens, solely to incentivize the delegates. Moreover, an additional 360,000 USD, in ARB tokens, will be requested to cushion any market fluctuations.
For price reference, please visit: https://www.coingecko.com/en/coins/arbitrum
Any surplus will be channeled back to the treasury.
Note: We assess this sum to be apt for our initial phase. Nevertheless, we welcome any suggestions or adjustments.
We've established three levels for delegate qualification:
Notes:
The idea of setting the levels is to encourage delegates to seek more delegate votes or to set a healthy %VP for both themselves and the governance. But we know that this can lead to excessive accumulation of voting power in the future. For this reason we set a maximum cap on voting power.
In the future we can establish that above a certain maximum voting power, incentives will start to be subtracted. To avoid the accumulation of voting power. We can also link the tiers to certain parameters of the chain, to incentivize the constant growth of Arbitrum. As mentioned by @benhoneill in his comment.
For the moment we believe that it is not necessary to make the incentive system complex, we should try to start with a system as simple as possible, so that ArbitrumDAO members can evaluate if this type of incentive has a positive impact for Arbitrum.
Delegates matching the tiered requirements must confirm their participation in the Incentive System in the forum (a dedicated channel will be established for this). They must post using the template provided below, within a 7-day application window.
Incentive Program Confirmation Template:
Note:
Eligible delegates for the incentive program will be announced on the forum.
To determine which delegates will be paid on a monthly basis, we will use a point system and a framework that will be made public.
We explain in detail the framework and points system.
Weights change in these tiers because delegates do not have the ability to pass votes to Tally like Tier 1 delegates do.
The activities that have been considered in shaping the framework and scope are measurable activities that we believe can have a positive impact on governance.
We have distributed the weight equally among the activities, as we believe this is the fairest way to do so for the time being. With the exception of the PSS and PST parameters, we have given them a lower weight because there will be a limited number of delegates who can pass proposals to Snapshots and Tally.
Surely both the activities and the weightings are far from being the final parameters, ideally after this 6 months we should have a clear idea on how to modify certain parameters or which ones to add/remove.
The 10 delegates who conclude the month with a TP score of +60% will be the ones to receive incentives based on the result provided by the PUSD parameter.
Should there be more than 10 delegates with a TP score of +60%, only the top 10 scores will be selected.
If there are fewer than 10 delegates with a TP score of +60%, only those meeting the criteria will be compensated, and the remaining funds will be returned to the treasury.
In the exceptional circumstance where scores are identical or there are more than 10 delegates exceeding +90%, the entire month's budget may be distributed amongst all delegates with such scores. This decision is at the discretion of the program administrator.
Should a delegate propose or actively participate in an enhancement proposal for Arbitrum DAO and execute it, like the Arbitrum’s Short-Term Incentive Program (Arbitrum Improvement Proposal), they will be granted an additional +10% to their TP score for making a valuable contribution to the DAO. This could also be a governance process enhancement proposal or a template for grant selection.
Such scenarios are highly subjective and will be left to the judgment of the incentive system administrator. For this reason, we have not included it as a parameter within the table since it can be challenging to assess what genuinely adds value to ArbitrumDAO. Thus, we have decided to handle them this way.
When we refer to a month, we consider from the first day of the month 00:00 UTC to the last day 23:59hs UTC of each month. Within these days and hours, delegates have the opportunity to perform all actions to meet the parameters. The month's activities conclude on the last day of the month, so delegates must be punctual.
The following parameters are not cumulative and are reset to 0 at the beginning of each month:
Delegates are responsible for keeping track of their actions. At the end of the month, they have until the 3rd of the following month to submit a forum post with the following requirements:
Note: Delegates failing to post the requested information will not receive incentives.
To avoid forum spam and disarray, we will ask the facilitators to add a channel for the incentive system, so delegates can input all their information there.
After the delegates post and present their results in the framework, the incentive system administrator has 10 days to gather all the information, review, verify, and unify it. Then, present all the unified data on the forum in the framework and attach a summary explaining that month's final result.
Once the final result is presented, delegates have 2 days to file a claim in case of disagreement.
Delegates have a 2-day window to dispute if they disagree with the results presented by the Incentive System Administrator.
To raise a dispute, they must do so via a forum post with the following template:
The system administrator must promptly address the issue, resolving it within a maximum of 2 days.
Should a delegate or any community member attempt to deceive or game the incentive system, they will be banned. This decision is at the discretion of the program administrator.
We must remember that this system is experimental, and we hope for community members' cooperation for its success. This could propel the governance of ArbitrumDAO.
If all goes according to plan, payments to delegates are expected to be made between the 16th and 17th.
Payments will be made in ARB tokens. For the conversion from USD to ARB, we will use the reference price of: https://www.coingecko.com/en/coins/arbitrum
Once the payments are finalized, the administrator must publish in the forum a detailed summary of all transactions and the corresponding amounts.
It is imperative to clarify that the delegate will only be paid the amount in USD converted to ARB tokens, according to the PUSD parameter.
Like every new and experimental system, there may be delays, so please be patient.
Based on the detailed description provided earlier, let's outline a standard cycle of the incentive system.
Note: We assume that the delegates have already been filtered during the pre-selection stage and are aware of their tier.
The only accessible parameter is PR = 100, extracted from Tally. All other parameters will be generated throughout the month.
All data has been entered into the framework, but I haven't yet announced the votes, nor have I forwarded any proposals to snapshot or tally.
1. Link with snapshot vote
2. Link with the post of the justification of my snapshot vote
3. Link with relevant comments
4. Link to Tally vote
5. Link with the post with the justification of my vote in tally
1. Link snapshot vote
2. Link with the post of the justification of my snapshot vote
3. Link with relevant comments
4. Link to Tally vote
5. Link with the post of the justification of my vote in tally
1. Link snapshot vote
2. Link with the post of the justification of my snapshot vote
3. Link with relevant comments
1. Link snapshots vote
2. Link with the post of the justification of my snapshot vote
3. Link with relevant comments
4. Snapshot of the framework with the uploaded data and link
We propose to use a configuration similar to that of Plurality Labs.
We propose that the signatories be:
Note: The signatories of the multisig could also be other delegates with minimal voting power.
It is essential that the system administrator maintains a neutral position. We propose that the governance facilitators act in this role, with the support of SEED Latam. If the facilitators decide not to assume this responsibility, which would be understandable, SEED Latam is willing to assume the administration of the incentive program.
It is important to note that the entity administering the program is SEED Latam, not the Cattin delegation. If necessary, Cattin will refrain from participating in the incentive system during this six-month period to avoid any potential conflict of interest.
We introduce an Experimental Incentive System aimed at the ArbitrumDAO delegates with a duration of six months. The goal is to assess the impact of the incentives on the active participation of the delegates. This proposal is subject to changes.
Inspired by the positive feedback to our initial approach to the Delegate Incentive System, we now introduce an experimental version for ArbitrumDAO's Incentive System.
As per our post [RFC-2] Delegate Incentive System for ArbitrumDAO, we believe it's essential for DAOs to provide consistent, attractive, and predictable incentives to their delegates. To bolster governance, it's vital that delegates, who guide and set the governance direction through their votes, remain active.
With the introduction of the ARB governance token, a primary goal was to enable decentralized protocol proposals and updates. ArbitrumDAO aims for decentralized decision-making: the community suggests changes, public debate ensues, followed by voting, and eventually implementation. With the rollout of the ARB token, it became clear that a secure and decentralized Layer 2 requires the elimination of centralized control points, ensuring trustless operation.
Venturing into decentralized governance is challenging. It is a difficult task to engage ARB token holders in intricate governance processes. Historically, voter apathy has been a constant issue in large DAOs. Several reasons fuel this phenomenon: a disconnect with the issues at hand, complex voting systems, lack of information, or the belief that an individual vote is inconsequential.
To counteract this, the DAO introduced a delegate system. Yet, in doing so, an unresolved issue came to light: ARB holders often lack the time and means to engage deeply in governance.
Delegates aren't just enthusiasts. They are individuals, organizations, or companies deeply committed to the protocol. They resonate with its objectives and bring their own visions to shape its future. They are more than mere technical experts; they are versatile teams, focused on comprehensively understanding a protocol. They delve beyond the technical, encompassing social and economic dimensions. Such teams invest resources in deep research for informed and effective decision-making.
It is easy to see from the above that, just as individual incumbents alone do not have the resources to carry out these in-depth analyses, neither do multidisciplinary teams. Quality time, which encompasses activities such as data analysis, research, deliberation, voting and effective communication, requires a significant dedication of resources to ensure its effective execution. Without this dedication, these critical tasks tend to be rushed or inadequately completed, which can have far-reaching consequences.
Compensating for this time is essential. Remuneration not only recognizes expertise and effort but also facilitates undivided attention to these tasks. Without compensation, the quality of work and its outcomes can suffer.
Raphael Spannocchi (Flipside Crypto) elaborates on this in a Medium post, emphasizing that the delegate role has become a full-time job. Compensation attracts talent and is pivotal for the protocol's security. Paying experts ensures that proposals do not jeopardize the protocol's integrity.
We strongly believe that achieving a decentralized and functional governance vote is unlikely without encouraging people to take on delegated responsibilities. Luckily, we get a lot of support from the community. But, as @Frisson points out, the tricky thing about incentives is how to pay for them. Also, we agree with @benhoneill that we should focus on what specific actions the community hopes to incentivize with these expenditures. Where we differ from his opinion is that we think voting and posting are the most important tasks.
In this initial phase of ArbitrumDAO governance, adaptability is key. We must experiment with incentives tailored to the needs of the Arbitrum ecosystem, being flexible and anticipating short-term changes, learning and adjusting as we go.
This proposal is structured into four main sections:
The SEEDLatam team will be attentive to feedback from ArbitrumDAO. Our goal is to craft a proposal that optimally adapts to the governance needs.
We've allocated an initial trial period of 6 months. This timeframe should allow us to gather initial metrics to gauge the system's functionality and its anticipated impact.
Note: At the conclusion of this period, ArbitrumDAO will decide whether to continue with the program or not
We have set the number at 30 delegates. This figure isn't based on specific reasoning, but we believe it's a reasonable starting point.
Note: Following the program's conclusion, should ArbitrumDAO wish to proceed, they may adjust this number up or down.
Payments to delegates should be both predictable and stable. Consequently, while we will quantify the costs in USD, we will process the payments in ARB tokens.
We've designated a total funding of 720,000 USD, represented in ARB tokens, solely to incentivize the delegates. Moreover, an additional 360,000 USD, in ARB tokens, will be requested to cushion any market fluctuations.
For price reference, please visit: https://www.coingecko.com/en/coins/arbitrum
Any surplus will be channeled back to the treasury.
Note: We assess this sum to be apt for our initial phase. Nevertheless, we welcome any suggestions or adjustments.
We've established three levels for delegate qualification:
Notes:
The idea of setting the levels is to encourage delegates to seek more delegate votes or to set a healthy %VP for both themselves and the governance. But we know that this can lead to excessive accumulation of voting power in the future. For this reason we set a maximum cap on voting power.
In the future we can establish that above a certain maximum voting power, incentives will start to be subtracted. To avoid the accumulation of voting power. We can also link the tiers to certain parameters of the chain, to incentivize the constant growth of Arbitrum. As mentioned by @benhoneill in his comment.
For the moment we believe that it is not necessary to make the incentive system complex, we should try to start with a system as simple as possible, so that ArbitrumDAO members can evaluate if this type of incentive has a positive impact for Arbitrum.
Delegates matching the tiered requirements must confirm their participation in the Incentive System in the forum (a dedicated channel will be established for this). They must post using the template provided below, within a 7-day application window.
Incentive Program Confirmation Template:
Note:
Eligible delegates for the incentive program will be announced on the forum.
To determine which delegates will be paid on a monthly basis, we will use a point system and a framework that will be made public.
We explain in detail the framework and points system.
Weights change in these tiers because delegates do not have the ability to pass votes to Tally like Tier 1 delegates do.
The activities that have been considered in shaping the framework and scope are measurable activities that we believe can have a positive impact on governance.
We have distributed the weight equally among the activities, as we believe this is the fairest way to do so for the time being. With the exception of the PSS and PST parameters, we have given them a lower weight because there will be a limited number of delegates who can pass proposals to Snapshots and Tally.
Surely both the activities and the weightings are far from being the final parameters, ideally after this 6 months we should have a clear idea on how to modify certain parameters or which ones to add/remove.
The 10 delegates who conclude the month with a TP score of +60% will be the ones to receive incentives based on the result provided by the PUSD parameter.
Should there be more than 10 delegates with a TP score of +60%, only the top 10 scores will be selected.
If there are fewer than 10 delegates with a TP score of +60%, only those meeting the criteria will be compensated, and the remaining funds will be returned to the treasury.
In the exceptional circumstance where scores are identical or there are more than 10 delegates exceeding +90%, the entire month's budget may be distributed amongst all delegates with such scores. This decision is at the discretion of the program administrator.
Should a delegate propose or actively participate in an enhancement proposal for Arbitrum DAO and execute it, like the Arbitrum’s Short-Term Incentive Program (Arbitrum Improvement Proposal), they will be granted an additional +10% to their TP score for making a valuable contribution to the DAO. This could also be a governance process enhancement proposal or a template for grant selection.
Such scenarios are highly subjective and will be left to the judgment of the incentive system administrator. For this reason, we have not included it as a parameter within the table since it can be challenging to assess what genuinely adds value to ArbitrumDAO. Thus, we have decided to handle them this way.
When we refer to a month, we consider from the first day of the month 00:00 UTC to the last day 23:59hs UTC of each month. Within these days and hours, delegates have the opportunity to perform all actions to meet the parameters. The month's activities conclude on the last day of the month, so delegates must be punctual.
The following parameters are not cumulative and are reset to 0 at the beginning of each month:
Delegates are responsible for keeping track of their actions. At the end of the month, they have until the 3rd of the following month to submit a forum post with the following requirements:
Note: Delegates failing to post the requested information will not receive incentives.
To avoid forum spam and disarray, we will ask the facilitators to add a channel for the incentive system, so delegates can input all their information there.
After the delegates post and present their results in the framework, the incentive system administrator has 10 days to gather all the information, review, verify, and unify it. Then, present all the unified data on the forum in the framework and attach a summary explaining that month's final result.
Once the final result is presented, delegates have 2 days to file a claim in case of disagreement.
Delegates have a 2-day window to dispute if they disagree with the results presented by the Incentive System Administrator.
To raise a dispute, they must do so via a forum post with the following template:
The system administrator must promptly address the issue, resolving it within a maximum of 2 days.
Should a delegate or any community member attempt to deceive or game the incentive system, they will be banned. This decision is at the discretion of the program administrator.
We must remember that this system is experimental, and we hope for community members' cooperation for its success. This could propel the governance of ArbitrumDAO.
If all goes according to plan, payments to delegates are expected to be made between the 16th and 17th.
Payments will be made in ARB tokens. For the conversion from USD to ARB, we will use the reference price of: https://www.coingecko.com/en/coins/arbitrum
Once the payments are finalized, the administrator must publish in the forum a detailed summary of all transactions and the corresponding amounts.
It is imperative to clarify that the delegate will only be paid the amount in USD converted to ARB tokens, according to the PUSD parameter.
Like every new and experimental system, there may be delays, so please be patient.
Based on the detailed description provided earlier, let's outline a standard cycle of the incentive system.
Note: We assume that the delegates have already been filtered during the pre-selection stage and are aware of their tier.
The only accessible parameter is PR = 100, extracted from Tally. All other parameters will be generated throughout the month.
All data has been entered into the framework, but I haven't yet announced the votes, nor have I forwarded any proposals to snapshot or tally.
1. Link with snapshot vote
2. Link with the post of the justification of my snapshot vote
3. Link with relevant comments
4. Link to Tally vote
5. Link with the post with the justification of my vote in tally
1. Link snapshot vote
2. Link with the post of the justification of my snapshot vote
3. Link with relevant comments
4. Link to Tally vote
5. Link with the post of the justification of my vote in tally
1. Link snapshot vote
2. Link with the post of the justification of my snapshot vote
3. Link with relevant comments
1. Link snapshots vote
2. Link with the post of the justification of my snapshot vote
3. Link with relevant comments
4. Snapshot of the framework with the uploaded data and link
We propose to use a configuration similar to that of Plurality Labs.
We propose that the signatories be:
Note: The signatories of the multisig could also be other delegates with minimal voting power.
It is essential that the system administrator maintains a neutral position. We propose that the governance facilitators act in this role, with the support of SEED Latam. If the facilitators decide not to assume this responsibility, which would be understandable, SEED Latam is willing to assume the administration of the incentive program.
It is important to note that the entity administering the program is SEED Latam, not the Cattin delegation. If necessary, Cattin will refrain from participating in the incentive system during this six-month period to avoid any potential conflict of interest.
DAOStewards supports this approach of incentivizing delegates
DAOStewards supports this approach of incentivizing delegates
https://forum.arbitrum.foundation/t/proposal-experimental-incentive-system-for-active-arbitrumdao-delegates/19467/28?u=itublockchain
Agreed, delegates need some incentive.
https://twitter.com/CarlZielinski/status/1747223754227458083
I think this is wildly complicated and will lead to low quality interactions. I'd rather see retroactive rewards.
https://forum.arbitrum.foundation/t/proposal-experimental-incentive-system-for-active-arbitrumdao-delegates/19467/54?u=karelvuong
I feel like I'm bias and should have to Abstain... cause I am an active delegate and will absolutely get this. :-P But if we all abstain, who will vote on this!!!
I largely think this is a great initiative. I do additionally feel that while the program is structured to not be gamed, it also comes off a bit overly complex. I feel a certain amount of conflict of interest voting for something that would potentially benefit myself, so I am opting to abstain.
Good governance requires properly incentivized delegates. I'd be curious to see further experimentation around the vesting of delegate incentives.
https://forum.arbitrum.foundation/t/proposal-experimental-incentive-system-for-active-arbitrumdao-delegates/19467/28?u=itublockchain
Agreed, delegates need some incentive.
https://twitter.com/CarlZielinski/status/1747223754227458083
I think this is wildly complicated and will lead to low quality interactions. I'd rather see retroactive rewards.
https://forum.arbitrum.foundation/t/proposal-experimental-incentive-system-for-active-arbitrumdao-delegates/19467/54?u=karelvuong
I feel like I'm bias and should have to Abstain... cause I am an active delegate and will absolutely get this. :-P But if we all abstain, who will vote on this!!!
I largely think this is a great initiative. I do additionally feel that while the program is structured to not be gamed, it also comes off a bit overly complex. I feel a certain amount of conflict of interest voting for something that would potentially benefit myself, so I am opting to abstain.
Good governance requires properly incentivized delegates. I'd be curious to see further experimentation around the vesting of delegate incentives.
I understand that in this situation there was a miscommunication between @cattin and the Foundation, but I see a terrible precedent here when one thing is written in the tally in the body of the vote, and then it is discussed on the forum that, regardless of what is written in the official vote, another will be carried out (even if it was due to miscommunication).
cp0x believes that the voting text on the site where we vote is what we vote for and nothing else. If it is necessary to correct a decision in any way, then this must go through the appropriate procedure.
I understand that in this situation there was a miscommunication between @cattin and the Foundation, but I see a terrible precedent here when one thing is written in the tally in the body of the vote, and then it is discussed on the forum that, regardless of what is written in the official vote, another will be carried out (even if it was due to miscommunication).
cp0x believes that the voting text on the site where we vote is what we vote for and nothing else. If it is necessary to correct a decision in any way, then this must go through the appropriate procedure.
There may be some clarification if the text is written ambiguously. But in this situation I do not see any ambiguity.
A standout after a first read is the previous activity required on Tally to qualify as a delegate.
- Historical Participation Rate (Tally): Over 25%
A standout after a first read is the previous activity required on Tally to qualify as a delegate.
- Historical Participation Rate (Tally): Over 25%
Whilst I appreciate that an understanding of the DAO and understanding of a delegates reliability is important, I feel this sets a high barrier to entry for new delegates who may not be able to dedicate that amount of time to governance without the compensation, yet may be able to provide valuable advice and guidance if that time was made available.
It seems like the payment mechanic sets this intention, so wondering if there are alternate ways to onboard delegates to the DAO. Referrals may be one way, for example.
I understand that in this situation there was a miscommunication between @cattin and the Foundation, but I see a terrible precedent here when one thing is written in the tally in the body of the vote, and then it is discussed on the forum that, regardless of what is written in the official vote, another will be carried out (even if it was due to miscommunication).
cp0x believes that the voting text on the site where we vote is what we vote for and nothing else. If it is necessary to correct a decision in any way, then this must go through the appropriate procedure.
I understand that in this situation there was a miscommunication between @cattin and the Foundation, but I see a terrible precedent here when one thing is written in the tally in the body of the vote, and then it is discussed on the forum that, regardless of what is written in the official vote, another will be carried out (even if it was due to miscommunication).
cp0x believes that the voting text on the site where we vote is what we vote for and nothing else. If it is necessary to correct a decision in any way, then this must go through the appropriate procedure.
There may be some clarification if the text is written ambiguously. But in this situation I do not see any ambiguity.
A standout after a first read is the previous activity required on Tally to qualify as a delegate.
- Historical Participation Rate (Tally): Over 25%
A standout after a first read is the previous activity required on Tally to qualify as a delegate.
- Historical Participation Rate (Tally): Over 25%
Whilst I appreciate that an understanding of the DAO and understanding of a delegates reliability is important, I feel this sets a high barrier to entry for new delegates who may not be able to dedicate that amount of time to governance without the compensation, yet may be able to provide valuable advice and guidance if that time was made available.
It seems like the payment mechanic sets this intention, so wondering if there are alternate ways to onboard delegates to the DAO. Referrals may be one way, for example.
I am opposed to the current incentive proposal program as stated in this post.
My analysis and thought process on the above.
Lack of Clear Objectives:
I am opposed to the current incentive proposal program as stated in this post.
My analysis and thought process on the above.
Lack of Clear Objectives:
Arbitrary Delegate Selection aka Trust Us Bro:
Complexity of Scoring Framework:
Bonus Point Subjectivity:
Lack of Community Input on Bonus Points:
Dispute Resolution Period is Insufficient:
Thanks for writing up the proposal I believe it is a very good starting point but a bit insufficient as it stands today imho.
I think the original intention of representative Dao is to better perform his duties, and it is a good proposal to give $ARB appropriate incentives.
I very much like the experiment. I was always hesitant to implement a reward mechanism for governance participation as it might increase bots & nonsense contributions. But I guess the only way to validate that is to do it. As it is engineered now, needing 50k ARB is the barrier that keeps those aforementioned away. Super curious to see this come to life
Treasure DAO’s Arbitrum Council (ARC) has voted FOR this proposal (with Karma).
The Arbitrum DAO's ability to consistently make high-quality decisions is integral to the growth and prosperity of the ecosystem. Delegates, as the key decision-makers in the DAO, currently fulfil their crucial role without compensation and delegates proactively participate out of goodwill. The proposed solution aims to address these issues by introducing incentives and rewards for delegates actively engaging in governance activities. We do think substantial changes will need to be made to accommodate a future in which separation of verticals within Arbitrum becomes more of a reality, but given the experimental and short-duration basis of the program we are supportive of the proposal as it currently stands.
Delegates matching the requirements must confirm their participation in the Incentive System in the forum (a dedicated channel will be established for this)
is the channel already created?
Is anyone else having a problem voting it just keeps spinning!!! tested with different extensions and browsers and still the same
I am opposed to the current incentive proposal program as stated in this post.
My analysis and thought process on the above.
Lack of Clear Objectives:
I am opposed to the current incentive proposal program as stated in this post.
My analysis and thought process on the above.
Lack of Clear Objectives:
Arbitrary Delegate Selection aka Trust Us Bro:
Complexity of Scoring Framework:
Bonus Point Subjectivity:
Lack of Community Input on Bonus Points:
Dispute Resolution Period is Insufficient:
Thanks for writing up the proposal I believe it is a very good starting point but a bit insufficient as it stands today imho.
I think the original intention of representative Dao is to better perform his duties, and it is a good proposal to give $ARB appropriate incentives.
I very much like the experiment. I was always hesitant to implement a reward mechanism for governance participation as it might increase bots & nonsense contributions. But I guess the only way to validate that is to do it. As it is engineered now, needing 50k ARB is the barrier that keeps those aforementioned away. Super curious to see this come to life
Treasure DAO’s Arbitrum Council (ARC) has voted FOR this proposal (with Karma).
The Arbitrum DAO's ability to consistently make high-quality decisions is integral to the growth and prosperity of the ecosystem. Delegates, as the key decision-makers in the DAO, currently fulfil their crucial role without compensation and delegates proactively participate out of goodwill. The proposed solution aims to address these issues by introducing incentives and rewards for delegates actively engaging in governance activities. We do think substantial changes will need to be made to accommodate a future in which separation of verticals within Arbitrum becomes more of a reality, but given the experimental and short-duration basis of the program we are supportive of the proposal as it currently stands.
Delegates matching the requirements must confirm their participation in the Incentive System in the forum (a dedicated channel will be established for this)
is the channel already created?
Is anyone else having a problem voting it just keeps spinning!!! tested with different extensions and browsers and still the same
Treasure DAO’s Arbitrum Council (ARC) has voted FOR this proposal (with Karma).
The Arbitrum DAO's ability to consistently make high-quality decisions is integral to the growth and prosperity of the ecosystem. Delegates, as the key decision-makers in the DAO, currently fulfil their crucial role without compensation and delegates proactively participate out of goodwill. The proposed solution aims to address these issues by introducing incentives and rewards for delegates actively engaging in governance activities. We do think substantial changes will need to be made to accommodate a future in which separation of verticals within Arbitrum becomes more of a reality, but given the experimental and short-duration basis of the program we are supportive of the proposal as it currently stands.
While we acknowledge the positive steps taken by this proposal, it's important to recognize its potential imperfections and incompleteness. The quantitative approach to delegate engagement within this framework, even with the Bonus System, may struggle to capture the nuanced aspects of good delegate action, for example providing feedback on pre-forum ideas and attending calls and workshops. Additionally, we also recognize the maximum monthly reward of 5,000 ARB may not sufficiently compensate delegates for full-time engagement and activity within the DAO.
We feel that arbitrarily capping the number of delegates to receive incentives for their governance efforts is unnecessary given there already being requirements, like the voting power and historical participation, that significantly filter and reduce the eligibility for this program. Although this plateau gives delegates a clear and static amount of incentives for their contributions, it also favours the conglomeration of governance efforts through not extending incentives to lesser contributing delegates at all and could therefore by proxy increase delegate centralization. On this same note, the proposed tier system in the ‘DRAFT’ version seems rigid, by having arbitrary cut-offs on incentives awarded to each tier. We feel that having a more dynamic system of incentives on a continuum, instead of strict tiers, makes more sense in getting a fairer amount of incentives for the efforts put in by the delegates.
In light of these considerations, we express our support for this experimental framework. However, we advocate for its complementation and augmentation with additional contribution and incentive frameworks. These frameworks should be designed to encourage and reward delegates and community members who contribute in less easily quantified ways. Furthermore, we advocate for a more dynamic and wider range of incentivisation of delegates by removing the cap and tier system and replacing it with a more direct continuum based incentivisation system. This way, smaller delegates who can put in less hours but still contribute their part will also get incentivized for their work, leading to a more inclusive and decentralised Arbitrum.
We applaud Seed Latam for addressing this important topic head on, and look forward to the introduction of a starting framework which can be further refined and built upon over time.
Opting for Option 1 as it offers a comprehensive point system, ensuring a nuanced evaluation of delegate contributions. Transparency and detailed assessment are key for fostering a fair and accountable incentive structure within ArbitrumDAO.cheers
While I appreciate the merits of this proposal, I have concerns about the method for selecting the 50 delegates. If the criteria rely on the Dune Dashboard, I find it suboptimal. To illustrate, 21 out of the top 50 received delegation from fewer than 100, and 13 from fewer than 10.
Option 1 presents a comprehensive and manually driven incentive system, involving detailed scoring criteria and community involvement. The proposed scoring system, although complex, aims to fairly evaluate delegates' participation. It allows the community to assess and vote on delegate performance, promoting transparency.
Option 2 introduces automation through Karma, providing a more efficient process but relying on predefined algorithms. While automation reduces the burden on delegates to report, it may lack the nuanced evaluation that a community-driven approach offers. Karma's features streamline the process, but may not capture the full spectrum of delegate contributions.
Option 1 presents a comprehensive and manually driven incentive system, involving detailed scoring criteria and community involvement. The proposed scoring system, although complex, aims to fairly evaluate delegates' participation. It allows the community to assess and vote on delegate performance, promoting transparency.
Option 2 introduces automation through Karma, providing a more efficient process but relying on predefined algorithms. While automation reduces the burden on delegates to report, it may lack the nuanced evaluation that a community-driven approach offers. Karma's features streamline the process, but may not capture the full spectrum of delegate contributions.
Considering the experimental nature and the goal of assessing community impact, Option 1 aligns better. Its detailed framework encourages community engagement, ensuring a more inclusive and subjective evaluation. However, continuous feedback and adjustments are crucial for refining this experimental system over time.
This proposal is excellent, but the incentive scope needs further consideration. I believe incentives should cover a broader range, not just limited to the 50 delegates holding over 50,000 votes. Those holding a significant amount of ARB tokens already have a greater motivation to care about ARB and may not require special incentives. We must not forget those who hold fewer ARB tokens but still actively contribute to the development of ARB. If we only reward those with large holdings, it may create a perception of making the rich richer.
This proposal is not just about tokens; it's about our shared destiny.
In the heart of our Arbitrum DAO lies a fundamental principle: decentralization. It's not just a buzzword; it's the very essence of our community-driven ecosystem. As we deliberate on proposals, we must remember that every active delegate contributes to our shared vision. Let's explore why rewarding all participants, regardless of voting power, is not just fair—it's essential for our collective success.
This proposal is not just about tokens; it's about our shared destiny.
In the heart of our Arbitrum DAO lies a fundamental principle: decentralization. It's not just a buzzword; it's the very essence of our community-driven ecosystem. As we deliberate on proposals, we must remember that every active delegate contributes to our shared vision. Let's explore why rewarding all participants, regardless of voting power, is not just fair—it's essential for our collective success.
The Power of Inclusion:
Our DAO thrives when everyone has a seat at the table. Excluding delegates based solely on voting power undermines the very fabric of decentralization. Imagine a vibrant marketplace where every voice matters—a place where a newcomer's idea can be as transformative as that of a seasoned delegate. By embracing all contributors, we foster innovation, resilience, and diversity.
The Fallacy of Centralization:
Centralization creeps in when decisions are monopolized by a select few. High-voting-power delegates wield influence, but at what cost? We risk becoming an oligarchy, where the fate of Arbitrum rests in the hands of a privileged minority. Decentralization, on the other hand, ensures that power is distributed widely. It's a safeguard against undue concentration and promotes transparency.
The Unsung Heroes:
Consider the delegates who diligently participate, even if their voting power isn't astronomical. They attend meetings, contribute ideas, and engage with the community. Their commitment fuels our progress. Let's recognize their efforts. After all, decentralization isn't about the loudest voices—it's about amplifying the quiet ones too.
A Proportional Approach:
Rewarding higher-voting-power delegates isn't inherently wrong. But let's refine our approach. Why not distribute rewards proportionally? Imagine a system where each delegate's share aligns with their contribution. It's a win-win: influential delegates receive their due, and active participants feel valued. This balance ensures that no one is left behind.
Our DAO is more than a collection of wallets; it's a living, breathing organism fuelled by passion, ideas, and collaboration. Let's champion decentralization, celebrate all active delegates, and pave the way for a future where every voice echoes through the halls of Arbitrum. Together, we'll redefine what it means to be decentralized—one reward at a time.
Hello everyone! - I am the founder of Karma, we have been working with a number of DAOs over the last 2 years building governance tools (primarily contributor reputation tools). I am excited to collaborate with SeedLatam on this proposal. I am happy to answer any questions on the Option 2 of the proposal which involves automating tracking of delegate activity metrics.
Treasure DAO’s Arbitrum Council (ARC) has voted FOR this proposal (with Karma).
The Arbitrum DAO's ability to consistently make high-quality decisions is integral to the growth and prosperity of the ecosystem. Delegates, as the key decision-makers in the DAO, currently fulfil their crucial role without compensation and delegates proactively participate out of goodwill. The proposed solution aims to address these issues by introducing incentives and rewards for delegates actively engaging in governance activities. We do think substantial changes will need to be made to accommodate a future in which separation of verticals within Arbitrum becomes more of a reality, but given the experimental and short-duration basis of the program we are supportive of the proposal as it currently stands.
While we acknowledge the positive steps taken by this proposal, it's important to recognize its potential imperfections and incompleteness. The quantitative approach to delegate engagement within this framework, even with the Bonus System, may struggle to capture the nuanced aspects of good delegate action, for example providing feedback on pre-forum ideas and attending calls and workshops. Additionally, we also recognize the maximum monthly reward of 5,000 ARB may not sufficiently compensate delegates for full-time engagement and activity within the DAO.
We feel that arbitrarily capping the number of delegates to receive incentives for their governance efforts is unnecessary given there already being requirements, like the voting power and historical participation, that significantly filter and reduce the eligibility for this program. Although this plateau gives delegates a clear and static amount of incentives for their contributions, it also favours the conglomeration of governance efforts through not extending incentives to lesser contributing delegates at all and could therefore by proxy increase delegate centralization. On this same note, the proposed tier system in the ‘DRAFT’ version seems rigid, by having arbitrary cut-offs on incentives awarded to each tier. We feel that having a more dynamic system of incentives on a continuum, instead of strict tiers, makes more sense in getting a fairer amount of incentives for the efforts put in by the delegates.
In light of these considerations, we express our support for this experimental framework. However, we advocate for its complementation and augmentation with additional contribution and incentive frameworks. These frameworks should be designed to encourage and reward delegates and community members who contribute in less easily quantified ways. Furthermore, we advocate for a more dynamic and wider range of incentivisation of delegates by removing the cap and tier system and replacing it with a more direct continuum based incentivisation system. This way, smaller delegates who can put in less hours but still contribute their part will also get incentivized for their work, leading to a more inclusive and decentralised Arbitrum.
We applaud Seed Latam for addressing this important topic head on, and look forward to the introduction of a starting framework which can be further refined and built upon over time.
Opting for Option 1 as it offers a comprehensive point system, ensuring a nuanced evaluation of delegate contributions. Transparency and detailed assessment are key for fostering a fair and accountable incentive structure within ArbitrumDAO.cheers
While I appreciate the merits of this proposal, I have concerns about the method for selecting the 50 delegates. If the criteria rely on the Dune Dashboard, I find it suboptimal. To illustrate, 21 out of the top 50 received delegation from fewer than 100, and 13 from fewer than 10.
Option 1 presents a comprehensive and manually driven incentive system, involving detailed scoring criteria and community involvement. The proposed scoring system, although complex, aims to fairly evaluate delegates' participation. It allows the community to assess and vote on delegate performance, promoting transparency.
Option 2 introduces automation through Karma, providing a more efficient process but relying on predefined algorithms. While automation reduces the burden on delegates to report, it may lack the nuanced evaluation that a community-driven approach offers. Karma's features streamline the process, but may not capture the full spectrum of delegate contributions.
Option 1 presents a comprehensive and manually driven incentive system, involving detailed scoring criteria and community involvement. The proposed scoring system, although complex, aims to fairly evaluate delegates' participation. It allows the community to assess and vote on delegate performance, promoting transparency.
Option 2 introduces automation through Karma, providing a more efficient process but relying on predefined algorithms. While automation reduces the burden on delegates to report, it may lack the nuanced evaluation that a community-driven approach offers. Karma's features streamline the process, but may not capture the full spectrum of delegate contributions.
Considering the experimental nature and the goal of assessing community impact, Option 1 aligns better. Its detailed framework encourages community engagement, ensuring a more inclusive and subjective evaluation. However, continuous feedback and adjustments are crucial for refining this experimental system over time.
This proposal is excellent, but the incentive scope needs further consideration. I believe incentives should cover a broader range, not just limited to the 50 delegates holding over 50,000 votes. Those holding a significant amount of ARB tokens already have a greater motivation to care about ARB and may not require special incentives. We must not forget those who hold fewer ARB tokens but still actively contribute to the development of ARB. If we only reward those with large holdings, it may create a perception of making the rich richer.
This proposal is not just about tokens; it's about our shared destiny.
In the heart of our Arbitrum DAO lies a fundamental principle: decentralization. It's not just a buzzword; it's the very essence of our community-driven ecosystem. As we deliberate on proposals, we must remember that every active delegate contributes to our shared vision. Let's explore why rewarding all participants, regardless of voting power, is not just fair—it's essential for our collective success.
This proposal is not just about tokens; it's about our shared destiny.
In the heart of our Arbitrum DAO lies a fundamental principle: decentralization. It's not just a buzzword; it's the very essence of our community-driven ecosystem. As we deliberate on proposals, we must remember that every active delegate contributes to our shared vision. Let's explore why rewarding all participants, regardless of voting power, is not just fair—it's essential for our collective success.
The Power of Inclusion:
Our DAO thrives when everyone has a seat at the table. Excluding delegates based solely on voting power undermines the very fabric of decentralization. Imagine a vibrant marketplace where every voice matters—a place where a newcomer's idea can be as transformative as that of a seasoned delegate. By embracing all contributors, we foster innovation, resilience, and diversity.
The Fallacy of Centralization:
Centralization creeps in when decisions are monopolized by a select few. High-voting-power delegates wield influence, but at what cost? We risk becoming an oligarchy, where the fate of Arbitrum rests in the hands of a privileged minority. Decentralization, on the other hand, ensures that power is distributed widely. It's a safeguard against undue concentration and promotes transparency.
The Unsung Heroes:
Consider the delegates who diligently participate, even if their voting power isn't astronomical. They attend meetings, contribute ideas, and engage with the community. Their commitment fuels our progress. Let's recognize their efforts. After all, decentralization isn't about the loudest voices—it's about amplifying the quiet ones too.
A Proportional Approach:
Rewarding higher-voting-power delegates isn't inherently wrong. But let's refine our approach. Why not distribute rewards proportionally? Imagine a system where each delegate's share aligns with their contribution. It's a win-win: influential delegates receive their due, and active participants feel valued. This balance ensures that no one is left behind.
Our DAO is more than a collection of wallets; it's a living, breathing organism fuelled by passion, ideas, and collaboration. Let's champion decentralization, celebrate all active delegates, and pave the way for a future where every voice echoes through the halls of Arbitrum. Together, we'll redefine what it means to be decentralized—one reward at a time.
Hello everyone! - I am the founder of Karma, we have been working with a number of DAOs over the last 2 years building governance tools (primarily contributor reputation tools). I am excited to collaborate with SeedLatam on this proposal. I am happy to answer any questions on the Option 2 of the proposal which involves automating tracking of delegate activity metrics.
Hi Cattin (and SEEDLatam) :wave:,
I was excited to see this proposal for Arbitrum delegates to receive compensation for their time and work. This is a really tricky aspect of DAO governance that I have spent a huge amount of time personally considering, so please take any criticism as it is intended, to be constructive in order for you to improve your proposal. I believe that ArbitrumDAO should be striving to make the best implementation possible of delegate compensation.
Hi Cattin (and SEEDLatam) :wave:,
I was excited to see this proposal for Arbitrum delegates to receive compensation for their time and work. This is a really tricky aspect of DAO governance that I have spent a huge amount of time personally considering, so please take any criticism as it is intended, to be constructive in order for you to improve your proposal. I believe that ArbitrumDAO should be striving to make the best implementation possible of delegate compensation.
I suggest taking the time to properly think through the implications of this proposal will lead to a much better outcome. Once a version of compensation has been launched, it will become much harder to change it later due to the vested interests of those who are benefitting from the implementation.
In reflecting on the STIP process, I believe there are valuable lessons to be learned, particularly in the realm of governance and decision-making for ArbitrumDAO. While STIP's intent was commendable, the execution demonstrated some challenges, notably during the voting period. The compressed timeframe for assessing and voting on numerous proposals highlighted the importance of thorough evaluation in governance. This experience suggests that a measured, careful approach is beneficial, especially when dealing with proposals involving significant decisions or expenditures. With this in mind, I would recommend a more deliberate pace for the delegate compensation proposal, ensuring ample time for consideration and discussion. This approach aligns with the principle of 'measuring twice and cutting once,' prioritizing thoughtful deliberation over speed in the interest of robust and effective governance. I don't believe that the experience of STIP should be used as a justification for this proposal, as in your Motivation section, as the aim should be to avoid a repeat of that experience in the first place.
Until August this year, I was Facilitator of the GovAlpha Core Unit at MakerDAO. One of our responsibilities was the management of the Recognized Delegate compensation program at Maker, which was later removed as part of the transition to the Endgame Plan. Maker was the first major DAO to implement a form of delegate compensation, and the initial program led to a number of Recognized Delegates coming onboard before the DAO voted to move in a different direction.
GovAlpha was not the primary author of the compensation scheme at Maker; it was written by a community member, although we provided feedback and, over time, updated some language and mechanisms. We were, however, responsible for its maintenance, monitoring, and ensuring payments were included in executive votes (bundled onchain proposal at Maker) in a timely manner.
The Maker model has been adapted and refined by a number of DAOs, although it is by no means a perfect model. I would not advocate for it to be adopted by Arbitrum DAO, as I believe there are many ways the original design could be improved. However, I believe our hands-on experience running a delegate compensation program at one of the oldest and largest DAOs in the ecosystem gives me, and the rest of the GovAlpha team, a unique expertise and perspective to provide feedback on this proposal. I aim to offer constructive feedback on this proposal, and I will certainly highlight areas that I think are strong, as well as areas that could be improved.
Maker also started with a trial of delegate compensation, first proposed by our team over two years ago. Through this trial, we were able to identify multiple pain points and iterate on the design to improve the draft of the MIP prior to implementation. I think starting with a trial of your proposed implementation is a very good idea. Six months seems like a reasonable amount of time if you are committed to actively iterating and improving the methodology through learned experience.
We believe that keeping delegates active and incentivized is important as they are the basis of decentralization for ArbitrumDAO.
I could not agree more with this statement from your Motivation section. However, I am somewhat confused by the choice of the multi-tier system described in your proposal. I believe it fails to respect the will of Arbitrum delegators while remaining potentially open to griefing attacks.
The idea of setting the tiers is to encourage delegates to seek more delegate votes or to set a healthy %VP for both themselves and the governance - while also enabling smaller delegates to be compensated for their active contributions to the DAO.
I am not convinced that the proposal necessarily achieves this, as smaller delegates are still potentially at risk of foregoing any reward for their time.
The primary issue with your design for tiers is that it places arbitrary criteria for deciding which tier delegates should fall into. Delegates and their delegated votes represent the liquid will of ARB token holders. The more votes delegated to them, the more trust that holders have placed in a Delegate to represent them. Due to the cut-offs of the tier system, your model does not respect the will of token holders.
Imagine a scenario where the 11-15th delegates fall within Tier 1; they will not receive any reward for the size of their delegation. The 16th delegate falls within Tier 2, and they will receive compensation. A scenario hereby develops where delegates may be perversely incentivized to lose a portion of their delegation to fall into the lower tier to gain access to rewards, which is not a healthy scenario for delegates to find themselves in. Or, a scenario exists where the number 1 delegate in Tier 2 will want to actively discourage new delegations to their platform because it will push them into Tier 1, but they will not form part of the top 10, and they will no longer receive any compensation.
Similarly, there is a potential griefing attack here, where if the 16th place delegate is close to the Tier 1 threshold, the 11th placed delegate in Tier 2 may be incentivized to grief them by pushing them into the Tier 1 bracket through delegating their own tokens to them, in order to become eligible.
Upon reviewing the Dune dashboard linked in your post (which is great, by the way!), you are currently proposing to reward the following ranks of delegates by ARB delegated (ignoring other qualifying factors and assuming everyone opts in):
These ranks seem quite arbitrary. Do the delegates between 11 and 51 provide no value? Why is rank 61 valuable to the DAO to the extent of receiving compensation, but rank 62 is not?
There is nothing wrong with trying to foster a spirit of competitiveness among delegates, but achieving this through the arbitrary setting of compensation tiers seems counterproductive and is likely to lead to frustration and disillusionment amongst the delegates.
Similarly, it is not logically consistent to state that this empowers smaller delegates, since there are many more small delegates that do not qualify for compensation than those that do under this proposal.
Remedies for this may include increasing the size of the tiers, but I would seriously suggest rethinking how you decide which delegates qualify for compensation in the first place and consider scrapping the tier system entirely.
Alternatively, you could have an infinite number of (larger) tiers that automatically adjust their proportion of allocated ARB as more tiers come online using a pre-defined mathematical formula. Although this is more complex it would remove any subjectivity from the process.
For the moment we believe that it is not necessary to make the incentive system complex, we should try to start with a system as simple as possible so that ArbitrumDAO members can evaluate if this type of incentive has a positive impact on Arbitrum.
I don't think this is a sufficient justification for adopting a system with the flaws outlined above. It is evidently difficult to come up with a workable solution; we certainly faced challenges at Maker, and other DAOs have also been grappling with this. However, this solution has significant flaws, and its perceived "simplicity" is not enough to counter the issues present. That said, the proposed system is already quite complex, so it seems like an inconsistent position to leave the tiers as they currently are to preserve simplicity.
Why is Tally participation a measure for qualification, but not Snapshot? Is this an issue with data availability? Surely, participation at both stages of voting is part of the actions of delegates that you want to reward?
Making this opt-in is a good idea. I would suggest the addition of something like requiring delegates to agree to follow a Code of Conduct that we had at Maker. A similar code of conduct is currently used by Aave.
In general, I quite like this section and the breakdown of contributing elements. It all makes sense, and these are mostly items that you would want delegates to be performing.
It's unclear to me whether a delegate's TP can exceed 100%; you may wish to clarify whether it is capped at 100% or whether it is possible to get up to 125%. This may become relevant in the event of a tie-break scenario.
One note on communication tracking: this is a surprisingly large amount of work. We spent a significant amount of hours tracking this at Maker, and you are looking at doing this for more delegates, and across more criteria. You should seriously consider whether you could use some automated system such as SourceCred or Karma to generate scores for the Commenting Proposals segment of this, otherwise, it may quickly become unmanageable.
I would suggest you consider using a rolling measure over the most recent 3 months rather than monthly resets. This strikes a nice balance by rewarding both recent performance and also rewarding delegates who have been consistently active, although I think this is a minor issue.
As you note, this is a very subjective category for rewarding delegates. In general, I would suggest trying to make the criteria as objective as possible to avoid disagreements further down the line.
Arbitrum has an active Tally instance which is more than capable of executing payments to delegates through an on-chain vote. The use of a multisig adds the possibility that multisig signers will wield undue influence over delegates, either knowingly or unknowingly.
In the event that the multisig signers are corrupted, there is almost zero chance that the DAO will be able to claw back funds by drafting and executing an on-chain vote without the corrupted signers simply transferring the funds to a new wallet. This protection is a paper tiger and should not be relied upon.
I would urge you to try and identify signers who are not delegates. This is a potential conflict of interest.
Please correct me if I'm wrong, but to my knowledge, the role of Governance Facilitator is currently not official in the ArbitrumDAO. Therefore, this proposal effectively gives SEEDLatam control of the incentive program. However, as written, the proposal does not reflect the current status of Arbitrum governance.
Similarly, as someone with experience in both governance facilitation and facilitation of delegate compensation programs, I can attest that both roles require a significant time commitment. Your proposal appears more complex than the system I have experience with. I am not sure that governance facilitators will necessarily have the time to do this properly. However, I concede that the governance facilitation role at Maker is significantly different from the role in other DAOs that have adopted the nomenclature used by Maker without the same roles and responsibilities.
I actively support the use of tools such as Karma for measuring delegates' contributions to governance. This will save a significant amount of time for the administrators of the program, while also removing potential sources of bias. If the DAO votes to support this proposal I am of the strong belief that they should also approve the Karma component. The price is also very reasonable for a six-month trial period.
yes right we are here to support :stuck_out_tongue: :stuck_out_tongue: :stuck_out_tongue: :stuck_out_tongue: :stuck_out_tongue:
How many delegates are there for each different area? Would love if someone could share that info
Hi @cattin, @noturhandle from Butter. Excited to see an initiative like this at Arbitrum.
We recently ran a 3-month Incentivized Delegate Pilot at Aave, so we wanted to add another voice of support for delegate compensation as a useful feature of DAO Governance.
Hi @cattin, @noturhandle from Butter. Excited to see an initiative like this at Arbitrum.
We recently ran a 3-month Incentivized Delegate Pilot at Aave, so we wanted to add another voice of support for delegate compensation as a useful feature of DAO Governance.
Not only is it important to compensate individuals for their time and increase the pool of individuals that can sustainably participate in governance full-time, but it's also a valuable tool for exercising fine-grained control over the incentives driving decision-making in a DAO.
If a DAO isn't explicitly defining the incentives that drive governance, they're being defined elsewhere on its behalf. As you acknowledge, it's not a silver bullet—too many incentives can drown out the signal from voters, undermining the process.
You can read the analysis from the Aave pilot here.
Happy to share our experience and findings if useful. You can reach us on Twitter.
Look forward to reading the proposal.
With this, you are trying to solve one of the BIGGEST and HARDEST problems DAOs have nowadays. So you have my full support.
Specially in this
With this, you are trying to solve one of the BIGGEST and HARDEST problems DAOs have nowadays. So you have my full support.
Specially in this
Metrics and monitoring: The system should establish clear and measurable parameters to evaluate the impact of incentives on delegate participation and commitment. Monitor the growth and diversity of the delegate community in terms of new members and active participation.
Continuous improvement: The system should not be rigid; on the contrary, it should be flexible and open to constant improvement: It should evolve over time and according to the needs of Arbitrum DAO and its delegates.
For example, what will be the key metric or KPI to define when a Delegate is doing a 'decent job' vs a 'great job' ?
Great work @seedlatam
DAOs absolutely should be looking to fund and incentivize contributors, but, as the saying goes "show me the incentives and I'll show you the outcome." As was seen with MakerDAO up until the return of Rune in 2022, delegates were compensated based on their voting weight and in turn, the forum was overrun with pontification and debate while none of the delegates were held responsible for protocol metrics, KPIs, or growth.
If Arbitrum is serious about delegate compensation, it should start the design process from the ground up and focus on what specific actions is the community hoping to incentivize from these expenditures. Voting and posting are unlikely to be the most important avenues to drive material impact for each dollar spent on participation.
Hello everyone!
We want to express our sincere gratitude to all of you for your valuable feedback to our proposal.
Hello everyone!
We want to express our sincere gratitude to all of you for your valuable feedback to our proposal.
This coming Monday 25th at 3pm GTM-3, (6pm UTC), we will be hosting a community call on our Discord server to address any questions or doubts regarding this proposal. That's why we would like to invite all interested Arbitrum delegates and community members to join us and be a part of the discussion. We look forward to seeing you there!
Join us: comunidad.seedlatam.org at #💙charla-general channel
Have a great weekend!
CC @noturhandle @tnorm @benhoneill @Bobbay @Frisson @jengajojo @DisruptionJoe @krst @Sinkas @RikaGoldberg
Hi Cattin (and SEEDLatam) :wave:,
I was excited to see this proposal for Arbitrum delegates to receive compensation for their time and work. This is a really tricky aspect of DAO governance that I have spent a huge amount of time personally considering, so please take any criticism as it is intended, to be constructive in order for you to improve your proposal. I believe that ArbitrumDAO should be striving to make the best implementation possible of delegate compensation.
Hi Cattin (and SEEDLatam) :wave:,
I was excited to see this proposal for Arbitrum delegates to receive compensation for their time and work. This is a really tricky aspect of DAO governance that I have spent a huge amount of time personally considering, so please take any criticism as it is intended, to be constructive in order for you to improve your proposal. I believe that ArbitrumDAO should be striving to make the best implementation possible of delegate compensation.
I suggest taking the time to properly think through the implications of this proposal will lead to a much better outcome. Once a version of compensation has been launched, it will become much harder to change it later due to the vested interests of those who are benefitting from the implementation.
In reflecting on the STIP process, I believe there are valuable lessons to be learned, particularly in the realm of governance and decision-making for ArbitrumDAO. While STIP's intent was commendable, the execution demonstrated some challenges, notably during the voting period. The compressed timeframe for assessing and voting on numerous proposals highlighted the importance of thorough evaluation in governance. This experience suggests that a measured, careful approach is beneficial, especially when dealing with proposals involving significant decisions or expenditures. With this in mind, I would recommend a more deliberate pace for the delegate compensation proposal, ensuring ample time for consideration and discussion. This approach aligns with the principle of 'measuring twice and cutting once,' prioritizing thoughtful deliberation over speed in the interest of robust and effective governance. I don't believe that the experience of STIP should be used as a justification for this proposal, as in your Motivation section, as the aim should be to avoid a repeat of that experience in the first place.
Until August this year, I was Facilitator of the GovAlpha Core Unit at MakerDAO. One of our responsibilities was the management of the Recognized Delegate compensation program at Maker, which was later removed as part of the transition to the Endgame Plan. Maker was the first major DAO to implement a form of delegate compensation, and the initial program led to a number of Recognized Delegates coming onboard before the DAO voted to move in a different direction.
GovAlpha was not the primary author of the compensation scheme at Maker; it was written by a community member, although we provided feedback and, over time, updated some language and mechanisms. We were, however, responsible for its maintenance, monitoring, and ensuring payments were included in executive votes (bundled onchain proposal at Maker) in a timely manner.
The Maker model has been adapted and refined by a number of DAOs, although it is by no means a perfect model. I would not advocate for it to be adopted by Arbitrum DAO, as I believe there are many ways the original design could be improved. However, I believe our hands-on experience running a delegate compensation program at one of the oldest and largest DAOs in the ecosystem gives me, and the rest of the GovAlpha team, a unique expertise and perspective to provide feedback on this proposal. I aim to offer constructive feedback on this proposal, and I will certainly highlight areas that I think are strong, as well as areas that could be improved.
Maker also started with a trial of delegate compensation, first proposed by our team over two years ago. Through this trial, we were able to identify multiple pain points and iterate on the design to improve the draft of the MIP prior to implementation. I think starting with a trial of your proposed implementation is a very good idea. Six months seems like a reasonable amount of time if you are committed to actively iterating and improving the methodology through learned experience.
We believe that keeping delegates active and incentivized is important as they are the basis of decentralization for ArbitrumDAO.
I could not agree more with this statement from your Motivation section. However, I am somewhat confused by the choice of the multi-tier system described in your proposal. I believe it fails to respect the will of Arbitrum delegators while remaining potentially open to griefing attacks.
The idea of setting the tiers is to encourage delegates to seek more delegate votes or to set a healthy %VP for both themselves and the governance - while also enabling smaller delegates to be compensated for their active contributions to the DAO.
I am not convinced that the proposal necessarily achieves this, as smaller delegates are still potentially at risk of foregoing any reward for their time.
The primary issue with your design for tiers is that it places arbitrary criteria for deciding which tier delegates should fall into. Delegates and their delegated votes represent the liquid will of ARB token holders. The more votes delegated to them, the more trust that holders have placed in a Delegate to represent them. Due to the cut-offs of the tier system, your model does not respect the will of token holders.
Imagine a scenario where the 11-15th delegates fall within Tier 1; they will not receive any reward for the size of their delegation. The 16th delegate falls within Tier 2, and they will receive compensation. A scenario hereby develops where delegates may be perversely incentivized to lose a portion of their delegation to fall into the lower tier to gain access to rewards, which is not a healthy scenario for delegates to find themselves in. Or, a scenario exists where the number 1 delegate in Tier 2 will want to actively discourage new delegations to their platform because it will push them into Tier 1, but they will not form part of the top 10, and they will no longer receive any compensation.
Similarly, there is a potential griefing attack here, where if the 16th place delegate is close to the Tier 1 threshold, the 11th placed delegate in Tier 2 may be incentivized to grief them by pushing them into the Tier 1 bracket through delegating their own tokens to them, in order to become eligible.
Upon reviewing the Dune dashboard linked in your post (which is great, by the way!), you are currently proposing to reward the following ranks of delegates by ARB delegated (ignoring other qualifying factors and assuming everyone opts in):
These ranks seem quite arbitrary. Do the delegates between 11 and 51 provide no value? Why is rank 61 valuable to the DAO to the extent of receiving compensation, but rank 62 is not?
There is nothing wrong with trying to foster a spirit of competitiveness among delegates, but achieving this through the arbitrary setting of compensation tiers seems counterproductive and is likely to lead to frustration and disillusionment amongst the delegates.
Similarly, it is not logically consistent to state that this empowers smaller delegates, since there are many more small delegates that do not qualify for compensation than those that do under this proposal.
Remedies for this may include increasing the size of the tiers, but I would seriously suggest rethinking how you decide which delegates qualify for compensation in the first place and consider scrapping the tier system entirely.
Alternatively, you could have an infinite number of (larger) tiers that automatically adjust their proportion of allocated ARB as more tiers come online using a pre-defined mathematical formula. Although this is more complex it would remove any subjectivity from the process.
For the moment we believe that it is not necessary to make the incentive system complex, we should try to start with a system as simple as possible so that ArbitrumDAO members can evaluate if this type of incentive has a positive impact on Arbitrum.
I don't think this is a sufficient justification for adopting a system with the flaws outlined above. It is evidently difficult to come up with a workable solution; we certainly faced challenges at Maker, and other DAOs have also been grappling with this. However, this solution has significant flaws, and its perceived "simplicity" is not enough to counter the issues present. That said, the proposed system is already quite complex, so it seems like an inconsistent position to leave the tiers as they currently are to preserve simplicity.
Why is Tally participation a measure for qualification, but not Snapshot? Is this an issue with data availability? Surely, participation at both stages of voting is part of the actions of delegates that you want to reward?
Making this opt-in is a good idea. I would suggest the addition of something like requiring delegates to agree to follow a Code of Conduct that we had at Maker. A similar code of conduct is currently used by Aave.
In general, I quite like this section and the breakdown of contributing elements. It all makes sense, and these are mostly items that you would want delegates to be performing.
It's unclear to me whether a delegate's TP can exceed 100%; you may wish to clarify whether it is capped at 100% or whether it is possible to get up to 125%. This may become relevant in the event of a tie-break scenario.
One note on communication tracking: this is a surprisingly large amount of work. We spent a significant amount of hours tracking this at Maker, and you are looking at doing this for more delegates, and across more criteria. You should seriously consider whether you could use some automated system such as SourceCred or Karma to generate scores for the Commenting Proposals segment of this, otherwise, it may quickly become unmanageable.
I would suggest you consider using a rolling measure over the most recent 3 months rather than monthly resets. This strikes a nice balance by rewarding both recent performance and also rewarding delegates who have been consistently active, although I think this is a minor issue.
As you note, this is a very subjective category for rewarding delegates. In general, I would suggest trying to make the criteria as objective as possible to avoid disagreements further down the line.
Arbitrum has an active Tally instance which is more than capable of executing payments to delegates through an on-chain vote. The use of a multisig adds the possibility that multisig signers will wield undue influence over delegates, either knowingly or unknowingly.
In the event that the multisig signers are corrupted, there is almost zero chance that the DAO will be able to claw back funds by drafting and executing an on-chain vote without the corrupted signers simply transferring the funds to a new wallet. This protection is a paper tiger and should not be relied upon.
I would urge you to try and identify signers who are not delegates. This is a potential conflict of interest.
Please correct me if I'm wrong, but to my knowledge, the role of Governance Facilitator is currently not official in the ArbitrumDAO. Therefore, this proposal effectively gives SEEDLatam control of the incentive program. However, as written, the proposal does not reflect the current status of Arbitrum governance.
Similarly, as someone with experience in both governance facilitation and facilitation of delegate compensation programs, I can attest that both roles require a significant time commitment. Your proposal appears more complex than the system I have experience with. I am not sure that governance facilitators will necessarily have the time to do this properly. However, I concede that the governance facilitation role at Maker is significantly different from the role in other DAOs that have adopted the nomenclature used by Maker without the same roles and responsibilities.
I actively support the use of tools such as Karma for measuring delegates' contributions to governance. This will save a significant amount of time for the administrators of the program, while also removing potential sources of bias. If the DAO votes to support this proposal I am of the strong belief that they should also approve the Karma component. The price is also very reasonable for a six-month trial period.
yes right we are here to support :stuck_out_tongue: :stuck_out_tongue: :stuck_out_tongue: :stuck_out_tongue: :stuck_out_tongue:
How many delegates are there for each different area? Would love if someone could share that info
Hi @cattin, @noturhandle from Butter. Excited to see an initiative like this at Arbitrum.
We recently ran a 3-month Incentivized Delegate Pilot at Aave, so we wanted to add another voice of support for delegate compensation as a useful feature of DAO Governance.
Hi @cattin, @noturhandle from Butter. Excited to see an initiative like this at Arbitrum.
We recently ran a 3-month Incentivized Delegate Pilot at Aave, so we wanted to add another voice of support for delegate compensation as a useful feature of DAO Governance.
Not only is it important to compensate individuals for their time and increase the pool of individuals that can sustainably participate in governance full-time, but it's also a valuable tool for exercising fine-grained control over the incentives driving decision-making in a DAO.
If a DAO isn't explicitly defining the incentives that drive governance, they're being defined elsewhere on its behalf. As you acknowledge, it's not a silver bullet—too many incentives can drown out the signal from voters, undermining the process.
You can read the analysis from the Aave pilot here.
Happy to share our experience and findings if useful. You can reach us on Twitter.
Look forward to reading the proposal.
With this, you are trying to solve one of the BIGGEST and HARDEST problems DAOs have nowadays. So you have my full support.
Specially in this
With this, you are trying to solve one of the BIGGEST and HARDEST problems DAOs have nowadays. So you have my full support.
Specially in this
Metrics and monitoring: The system should establish clear and measurable parameters to evaluate the impact of incentives on delegate participation and commitment. Monitor the growth and diversity of the delegate community in terms of new members and active participation.
Continuous improvement: The system should not be rigid; on the contrary, it should be flexible and open to constant improvement: It should evolve over time and according to the needs of Arbitrum DAO and its delegates.
For example, what will be the key metric or KPI to define when a Delegate is doing a 'decent job' vs a 'great job' ?
Great work @seedlatam
DAOs absolutely should be looking to fund and incentivize contributors, but, as the saying goes "show me the incentives and I'll show you the outcome." As was seen with MakerDAO up until the return of Rune in 2022, delegates were compensated based on their voting weight and in turn, the forum was overrun with pontification and debate while none of the delegates were held responsible for protocol metrics, KPIs, or growth.
If Arbitrum is serious about delegate compensation, it should start the design process from the ground up and focus on what specific actions is the community hoping to incentivize from these expenditures. Voting and posting are unlikely to be the most important avenues to drive material impact for each dollar spent on participation.
Hello everyone!
We want to express our sincere gratitude to all of you for your valuable feedback to our proposal.
Hello everyone!
We want to express our sincere gratitude to all of you for your valuable feedback to our proposal.
This coming Monday 25th at 3pm GTM-3, (6pm UTC), we will be hosting a community call on our Discord server to address any questions or doubts regarding this proposal. That's why we would like to invite all interested Arbitrum delegates and community members to join us and be a part of the discussion. We look forward to seeing you there!
Join us: comunidad.seedlatam.org at #💙charla-general channel
Have a great weekend!
CC @noturhandle @tnorm @benhoneill @Bobbay @Frisson @jengajojo @DisruptionJoe @krst @Sinkas @RikaGoldberg
DAOs absolutely should be looking to fund and incentivize contributors, but, as the saying goes "show me the incentives and I'll show you the outcome." As was seen with MakerDAO up until the return of Rune in 2022, delegates were compensated based on their voting weight and in turn, the forum was overrun with pontification and debate while none of the delegates were held responsible for protocol metrics, KPIs, or growth.
If Arbitrum is serious about delegate compensation, it should start the design process from the ground up and focus on what specific actions is the community hoping to incentivize from these expenditures. Voting and posting are unlikely to be the most important avenues to drive material impact for each dollar spent on participation.
There are many avenues to pursue here, and it is worth potentially funding a small group to explore, flesh out, and propose more detailed options to the community for feedback and discussion (similar to the Uniswap bridge committee), but there is one I've been thinking about for a while...
Instead of funding contributors to vote and post across the forum, empower small groups of delegates with clear mission alignment and KPIs to work for and deliver on behalf of the DAO. In exchange for real ownership and responsibility, the community should see an increase in output and dedication from these incentivized parties.
Instead of funding actors solely to participate in governance, the community outlines top strategic needs (growth, operations, engineering, security, etc.) and builds an incentive system by which domain experts can provide advice, guidance, and proposals for the betterment of the protocol.
Each strategic need is allocated a budget for "delegates" and, potentially, a budget for "grants". The delegates, like other councils and committees as outlined in the constitution, will be publicly elected based on:
Each delegate is then judged across two parallel considerations:
Though this is a very high-level overview, the DAO could use this structure to compensate "delegates" while ensuring they are spending time and effort furthering Arbitrum based on their expertise and putting in real work alongside governance participation.
Hi all,
Just to clarify the situation. It was suggested that the program's funds are initially transferred from the DAO's treasury to a community run multisig who can hold the funds for the program. Then, every month, when the top 50 delegates are picked by the committee, then the recipients for the rewards can go through the Foundation's compliance process and once that is complete the multi-sig can trigger the payments that go to the recipients. It is the same setup for the STIP ("incentive multisig") and the STIP backfund. The advantage of this approach is that it allows the funds to be unlocked when the program begins, the funds can be accessed by the program managers when needed, and it provides time for the winning delegates to go through the compliance process before receiving their rewards.
Hi all,
Just to clarify the situation. It was suggested that the program's funds are initially transferred from the DAO's treasury to a community run multisig who can hold the funds for the program. Then, every month, when the top 50 delegates are picked by the committee, then the recipients for the rewards can go through the Foundation's compliance process and once that is complete the multi-sig can trigger the payments that go to the recipients. It is the same setup for the STIP ("incentive multisig") and the STIP backfund. The advantage of this approach is that it allows the funds to be unlocked when the program begins, the funds can be accessed by the program managers when needed, and it provides time for the winning delegates to go through the compliance process before receiving their rewards.
Overall, the goal is to help reduce friction when running the long-term program for all parties involved, so the winning delegates can get their reward as soon as reasonably possible. I hope this clears up the situation. From our side, we will do our best to help cement/make this setup more clear, as we suspect more DAO-approved grant programs will want to leverage it.
Your approach is interesting, and I agree that we need to focus on the strategic allocation of resources and skills.
The experience with MakerDAO serves as a good reminder of how incentives can impact behavior and outcomes within an ecosystem. The fact that delegates focused on the weight of their votes rather than taking responsibility for metrics and protocol growth highlights the need for a more careful approach in incentive design.
Your approach is interesting, and I agree that we need to focus on the strategic allocation of resources and skills.
The experience with MakerDAO serves as a good reminder of how incentives can impact behavior and outcomes within an ecosystem. The fact that delegates focused on the weight of their votes rather than taking responsibility for metrics and protocol growth highlights the need for a more careful approach in incentive design.
The idea of allocating specific resources and budgets to strategic needs is intriguing. This could enhance efficiency and focus on key areas for protocol growth and success. By tying delegate compensation to the delivery and execution of these strategic needs, a direct link is established between tangible results and rewards. This has the potential to more effectively align delegate incentives with the community's long-term goals and the protocol itself.
Choosing delegates based on their work history, experience, and commitment to the DAO also seems like a prudent way to ensure that the right individuals are involved in key positions. Additionally, considering their participation in forums and voting provides a balance when evaluating their commitment to both strategic decisions and overall participation.
It's important to note that while the overall structure you've outlined seems solid, its precise implementation might require a more detailed analysis and consideration of potential implications. For instance, defining how the success of "strategic needs" will be measured and how the delivery and execution of delegates will be evaluated is crucial. Furthermore, it could be beneficial to think about mechanisms to prevent the concentration of power in the hands of a few delegates.
Your focus on aligning incentives towards strategic needs and selecting delegates based on their work history, experience, and commitment is a valuable approach to enhance the effectiveness and direction of a DAO. We are taking note of this.
Thank you for your contribution to this conversation; I find it highly significant for advancing the creation of more robust incentive systems aligned with community goals.
DAOs absolutely should be looking to fund and incentivize contributors, but, as the saying goes "show me the incentives and I'll show you the outcome." As was seen with MakerDAO up until the return of Rune in 2022, delegates were compensated based on their voting weight and in turn, the forum was overrun with pontification and debate while none of the delegates were held responsible for protocol metrics, KPIs, or growth.
If Arbitrum is serious about delegate compensation, it should start the design process from the ground up and focus on what specific actions is the community hoping to incentivize from these expenditures. Voting and posting are unlikely to be the most important avenues to drive material impact for each dollar spent on participation.
There are many avenues to pursue here, and it is worth potentially funding a small group to explore, flesh out, and propose more detailed options to the community for feedback and discussion (similar to the Uniswap bridge committee), but there is one I've been thinking about for a while...
Instead of funding contributors to vote and post across the forum, empower small groups of delegates with clear mission alignment and KPIs to work for and deliver on behalf of the DAO. In exchange for real ownership and responsibility, the community should see an increase in output and dedication from these incentivized parties.
Instead of funding actors solely to participate in governance, the community outlines top strategic needs (growth, operations, engineering, security, etc.) and builds an incentive system by which domain experts can provide advice, guidance, and proposals for the betterment of the protocol.
Each strategic need is allocated a budget for "delegates" and, potentially, a budget for "grants". The delegates, like other councils and committees as outlined in the constitution, will be publicly elected based on:
Each delegate is then judged across two parallel considerations:
Though this is a very high-level overview, the DAO could use this structure to compensate "delegates" while ensuring they are spending time and effort furthering Arbitrum based on their expertise and putting in real work alongside governance participation.
Hi all,
Just to clarify the situation. It was suggested that the program's funds are initially transferred from the DAO's treasury to a community run multisig who can hold the funds for the program. Then, every month, when the top 50 delegates are picked by the committee, then the recipients for the rewards can go through the Foundation's compliance process and once that is complete the multi-sig can trigger the payments that go to the recipients. It is the same setup for the STIP ("incentive multisig") and the STIP backfund. The advantage of this approach is that it allows the funds to be unlocked when the program begins, the funds can be accessed by the program managers when needed, and it provides time for the winning delegates to go through the compliance process before receiving their rewards.
Hi all,
Just to clarify the situation. It was suggested that the program's funds are initially transferred from the DAO's treasury to a community run multisig who can hold the funds for the program. Then, every month, when the top 50 delegates are picked by the committee, then the recipients for the rewards can go through the Foundation's compliance process and once that is complete the multi-sig can trigger the payments that go to the recipients. It is the same setup for the STIP ("incentive multisig") and the STIP backfund. The advantage of this approach is that it allows the funds to be unlocked when the program begins, the funds can be accessed by the program managers when needed, and it provides time for the winning delegates to go through the compliance process before receiving their rewards.
Overall, the goal is to help reduce friction when running the long-term program for all parties involved, so the winning delegates can get their reward as soon as reasonably possible. I hope this clears up the situation. From our side, we will do our best to help cement/make this setup more clear, as we suspect more DAO-approved grant programs will want to leverage it.
Your approach is interesting, and I agree that we need to focus on the strategic allocation of resources and skills.
The experience with MakerDAO serves as a good reminder of how incentives can impact behavior and outcomes within an ecosystem. The fact that delegates focused on the weight of their votes rather than taking responsibility for metrics and protocol growth highlights the need for a more careful approach in incentive design.
Your approach is interesting, and I agree that we need to focus on the strategic allocation of resources and skills.
The experience with MakerDAO serves as a good reminder of how incentives can impact behavior and outcomes within an ecosystem. The fact that delegates focused on the weight of their votes rather than taking responsibility for metrics and protocol growth highlights the need for a more careful approach in incentive design.
The idea of allocating specific resources and budgets to strategic needs is intriguing. This could enhance efficiency and focus on key areas for protocol growth and success. By tying delegate compensation to the delivery and execution of these strategic needs, a direct link is established between tangible results and rewards. This has the potential to more effectively align delegate incentives with the community's long-term goals and the protocol itself.
Choosing delegates based on their work history, experience, and commitment to the DAO also seems like a prudent way to ensure that the right individuals are involved in key positions. Additionally, considering their participation in forums and voting provides a balance when evaluating their commitment to both strategic decisions and overall participation.
It's important to note that while the overall structure you've outlined seems solid, its precise implementation might require a more detailed analysis and consideration of potential implications. For instance, defining how the success of "strategic needs" will be measured and how the delivery and execution of delegates will be evaluated is crucial. Furthermore, it could be beneficial to think about mechanisms to prevent the concentration of power in the hands of a few delegates.
Your focus on aligning incentives towards strategic needs and selecting delegates based on their work history, experience, and commitment is a valuable approach to enhance the effectiveness and direction of a DAO. We are taking note of this.
Thank you for your contribution to this conversation; I find it highly significant for advancing the creation of more robust incentive systems aligned with community goals.
The first pilot phase of the incentive program has concluded. Below you will find links to the reports we have committed to and other links that allow delegates to keep track of everything that happened during the program. We hope it will be useful for those who wish to conduct any kind of audit.
The first pilot phase of the incentive program has concluded. Below you will find links to the reports we have committed to and other links that allow delegates to keep track of everything that happened during the program. We hope it will be useful for those who wish to conduct any kind of audit.
SEEDLatam commits to deliver two reports, one after the third month and one after the sixth (and final) month of the program with metrics on its impact, delegates’ performance, and expenditures. They will also collect feedback from both the community and participating delegates.
The reports will be a detailed forum post and also accompanied by a community call explaining the metrics and feedback collected.
Test: We conducted 3 tests in the months before the program launch:
Results: Monthly results of the program:
Program report:
Payment distribution:
For the snapshot vote I didn't suggest using the multisig, because I honestly didn't want to, but the Foundation suggested we use one (they messaged me after the proposal had already been voted on snapshot) and, from the conversation I had with them, I understood it was for KYC purposes - these are required by the Foundation not by us. But now they reached out to me saying that regardless of the multisig they would still have to KYC the recipients of the incentives. So, there was simply a misunderstanding of how their KYC process works. We did add a zodiac module anyway, so the DAO can claw back funds at any time if it feels so ~ so, in theory, the funds are still under the control of the DAO.
Maybe @cliffton.eth can further explain how the foundation's KYC process works and why they need it for this case.
Thank you so much for the overwhelming support of the program! I'm glad that after months of working on this, we managed to develop a framework that most delegates could agree upon ~ comms related to the program will be carried out by @SEEDGov under a new topic in the governance section + we'll also create a separate topic for applications. Given the current timeline, we aim to kick off the program on March 1st so that delegates can apply during February and also proceed with their KYC (more details on this soon). Karma's dashboard will be ready earlier than expected, so I'll be reaching out to delegates to get them to test it around and collect some feedback.
Thanks again and really looking forwards to keep on developing this program with the support of the DAO.
Hello everyone, thank you for the great support this proposal has received. And also for trusting us. We are already working on the next steps, in the next week we will issue a communiqué with the corresponding details so that delegates are informed.
Hello, @ruslanklinkov Very interesting proposals, I will briefly (maybe not) comment:
Hey, @cattin But now I see a Tally description:
Since it would be very complicated to KYC 50 delegates (or more) for this program, and following the Foundation's recommendation, we're going to proceed with a multisig to manage payments
What advantages does KYC? Why did complexity disappear? And how is it possible that everyone voted for multisig, and you change it unilaterally?
Thank you Arbitrum. This has been the best chain for me.
After consideration Treasure DAO’s Arbitrum Council (ARC) would like to vote FOR this proposal.
Our rationale remains consistent with the one we expressed during the Snapshot Vote which can be viewed here. Whilst there are some aspects of delegation not covered by this framework, we feel that overall this proposal still represents a step in the right direction.
Information about this will come a little later
We voted FOR this proposal onchain even though we still stand with our previous Snapshot vote and believe that this program should not use Karma during the pilot phase.
All opinions come from @juanbug and me, the operators of the Uniswap DAO’s ARB delegation
Thank you for your support! I generally agree with the theses. My thoughts on what can be done to increase community interest in this program:
The first pilot phase of the incentive program has concluded. Below you will find links to the reports we have committed to and other links that allow delegates to keep track of everything that happened during the program. We hope it will be useful for those who wish to conduct any kind of audit.
The first pilot phase of the incentive program has concluded. Below you will find links to the reports we have committed to and other links that allow delegates to keep track of everything that happened during the program. We hope it will be useful for those who wish to conduct any kind of audit.
SEEDLatam commits to deliver two reports, one after the third month and one after the sixth (and final) month of the program with metrics on its impact, delegates’ performance, and expenditures. They will also collect feedback from both the community and participating delegates.
The reports will be a detailed forum post and also accompanied by a community call explaining the metrics and feedback collected.
Test: We conducted 3 tests in the months before the program launch:
Results: Monthly results of the program:
Program report:
Payment distribution:
For the snapshot vote I didn't suggest using the multisig, because I honestly didn't want to, but the Foundation suggested we use one (they messaged me after the proposal had already been voted on snapshot) and, from the conversation I had with them, I understood it was for KYC purposes - these are required by the Foundation not by us. But now they reached out to me saying that regardless of the multisig they would still have to KYC the recipients of the incentives. So, there was simply a misunderstanding of how their KYC process works. We did add a zodiac module anyway, so the DAO can claw back funds at any time if it feels so ~ so, in theory, the funds are still under the control of the DAO.
Maybe @cliffton.eth can further explain how the foundation's KYC process works and why they need it for this case.
Thank you so much for the overwhelming support of the program! I'm glad that after months of working on this, we managed to develop a framework that most delegates could agree upon ~ comms related to the program will be carried out by @SEEDGov under a new topic in the governance section + we'll also create a separate topic for applications. Given the current timeline, we aim to kick off the program on March 1st so that delegates can apply during February and also proceed with their KYC (more details on this soon). Karma's dashboard will be ready earlier than expected, so I'll be reaching out to delegates to get them to test it around and collect some feedback.
Thanks again and really looking forwards to keep on developing this program with the support of the DAO.
Hello everyone, thank you for the great support this proposal has received. And also for trusting us. We are already working on the next steps, in the next week we will issue a communiqué with the corresponding details so that delegates are informed.
Hello, @ruslanklinkov Very interesting proposals, I will briefly (maybe not) comment:
Hey, @cattin But now I see a Tally description:
Since it would be very complicated to KYC 50 delegates (or more) for this program, and following the Foundation's recommendation, we're going to proceed with a multisig to manage payments
What advantages does KYC? Why did complexity disappear? And how is it possible that everyone voted for multisig, and you change it unilaterally?
Thank you Arbitrum. This has been the best chain for me.
After consideration Treasure DAO’s Arbitrum Council (ARC) would like to vote FOR this proposal.
Our rationale remains consistent with the one we expressed during the Snapshot Vote which can be viewed here. Whilst there are some aspects of delegation not covered by this framework, we feel that overall this proposal still represents a step in the right direction.
Information about this will come a little later
We voted FOR this proposal onchain even though we still stand with our previous Snapshot vote and believe that this program should not use Karma during the pilot phase.
All opinions come from @juanbug and me, the operators of the Uniswap DAO’s ARB delegation
Thank you for your support! I generally agree with the theses. My thoughts on what can be done to increase community interest in this program:
We voted FOR this proposal onchain even though we still stand with our previous Snapshot vote and believe that this program should not use Karma during the pilot phase.
All opinions come from @juanbug and me, the operators of the Uniswap DAO’s ARB delegation
Vote: For
Type: Onchain
As per our previous Snapshot vote, we still believe that this initiative should not incorporate Karma to start with. Once the program matures and it becomes clear what exactly needs to be optimized after manually operating this initiative, then Karma should ideally be incorporated. Regardless, we voted FOR the onchain proposal because, on the whole, we believe in the positive impact that this program can have on delegate participation. One aspect we’d like to flag one more time is the ability for the DAO to weed out pointless contributions–those done for the sake of contribution.
@cliffton.eth hey bro! can you tell me where to add this information about me? I want to participate in this program. I'd appreciate it if you could help me figure it out.
I commend the team for the well-structured Experimental Incentive System Proposal. The detailed plan and innovative scoring framework demonstrate a thoughtful approach to enhancing delegate engagement.
Positives:
I commend the team for the well-structured Experimental Incentive System Proposal. The detailed plan and innovative scoring framework demonstrate a thoughtful approach to enhancing delegate engagement.
Positives:
Feedback:
I'm excited about the potential of this experimental system and look forward to community collaboration.
Hey, @cattin, thanks for the prompt response.
Under this context and understanding the nature of the proposal, and of course, it was drafted in August under different circumstances and stages of the DAO. This we understand:
Hey, @cattin, thanks for the prompt response.
Under this context and understanding the nature of the proposal, and of course, it was drafted in August under different circumstances and stages of the DAO. This we understand:
Having only started a couple of months in the delegation exercise, under the current conditions, there is no classification. However, if the program were to take place at any point, there would be integration, given the conditions and meeting the requirements.
Btw, feedback here. If the idea is to continue with this premise, it would be good to provide more details as it can become confusing during the reading and comprehension exercise.
Regarding the karma dashboard, for this specific program, there will be a separate dashboard to measure the 50 score. Still, we're going to reach out to them to check what happened with our address, thanks.
All-time participation in Tally is the ratio without the [OLD] proposals in terms of participation. Currently, there are 13 proposals, not 20. This will be resolved in the Karma Dashboard due to the nature of Arbitrum's Governor.
With this in mind, these are metrics that initially work for us within the delegation exercise. It's good.
Is there anything else we should take into account?
Hey, just to address some concerns raised by @SavvyDAO and @ocandocrypto:
As we mentioned before, the idea of this program is to serve as a way to compensate those delegates who have been actively contributing to the DAO and ensure they have a predictable compensation for their future contributions, incentivizing their further participation/reducing apathy, but at the same time acknowledging that this proposal is experimental and after 6 months it probably won't look the same as how it does right now. The current cap used of min 50k VP + 25% historic Tally Vote is 1) to again, ensure we're compensating active delegates and nudging them into being proactive plus critical on how they vote (especially the larger ones since they are the decision-makers in the DAO) and 2) serve as a very simple spam filter, given the experimental nature of this program. The intention of this program is not necessarily to onboard new delegates through incentives; however, this could be done later on with additional modifications.
Hey, just to address some concerns raised by @SavvyDAO and @ocandocrypto:
As we mentioned before, the idea of this program is to serve as a way to compensate those delegates who have been actively contributing to the DAO and ensure they have a predictable compensation for their future contributions, incentivizing their further participation/reducing apathy, but at the same time acknowledging that this proposal is experimental and after 6 months it probably won't look the same as how it does right now. The current cap used of min 50k VP + 25% historic Tally Vote is 1) to again, ensure we're compensating active delegates and nudging them into being proactive plus critical on how they vote (especially the larger ones since they are the decision-makers in the DAO) and 2) serve as a very simple spam filter, given the experimental nature of this program. The intention of this program is not necessarily to onboard new delegates through incentives; however, this could be done later on with additional modifications.
As @cp0x mentioned, these parameters aim at nudging delegates into getting more involved in governance by introducing some degree of competition (by limiting those entitled to compensation to the top 50 by score).
More to @ocandocrypto question, in your case, you wouldn't qualify for two reasons: 1) you would need a voting power above 50k and 2) have historic participation of 25% or more, which in your situation currently is of 7.69% since you've only voted in 1 proposal out of 13 valid proposals, so if you had voted on all three proposals that went live since your delegation was active on tally plus one proposal (hit a 4/14 ratio), then you would've qualified on this end for this system. If at any point during the 6 month period you manage to obtain a voting power of 50k and increase your historic participation to 25% (would simply have to vote in 4 future proposals out of 16 for example), then you could participate in the program.
And to make this clear, the top 50 are defined each month based on the score they get for each month, not based on voting power or any other metric.
The Savvy DeFi DAO's Arbitrum Council has decisively voted in favor of the Experimental Delegates Incentive System proposal, and we would like to provide insight into our collective perspective on this decision.
After conducting a thorough analysis of the proposal, we have gained a comprehensive understanding of its objectives. With a primary focus on active delegates in recent months, we appreciate the proposal's inclusivity, allowing new members to join the framework by fulfilling specified objectives.
The program will operate on a monthly basis, providing opportunities for any delegate to achieve the proposal's requirements. This approach fosters a welcoming environment for participation in the DAO.
We are confident that the development of this program will not only attract new active members but also encourage increased participation from existing delegates within the DAO.
The Savvy DeFi DAO's Arbitrum Council has decisively voted in favor of the Experimental Delegates Incentive System proposal, and we would like to provide insight into our collective perspective on this decision.
After conducting a thorough analysis of the proposal, we have gained a comprehensive understanding of its objectives. With a primary focus on active delegates in recent months, we appreciate the proposal's inclusivity, allowing new members to join the framework by fulfilling specified objectives.
The program will operate on a monthly basis, providing opportunities for any delegate to achieve the proposal's requirements. This approach fosters a welcoming environment for participation in the DAO.
We are confident that the development of this program will not only attract new active members but also encourage increased participation from existing delegates within the DAO.
Special thanks to Cattin for his assistance in understanding this proposal.
From, Savvy DeFi DAO's Arbitrum Council
We analyze this proposal with the objective of understanding what we need to set up or prepare in order to determine if we qualify for this proposal. In doing so, and with the goal of continuing to grow in our journey of being delegates in the DAO, we seek to answer the question:
Do we qualify within the top 50 within the incentive measure framework? If not, what do we need to ensure that we qualify?
And in trying to answer this question, we find that we are still a bit confused by the following...
Savvy is a synthetic credit protocol that enables you to access non-liquidating, auto-repaying lines of credit.
Savvy has five main focuses where it aims to cultivate an environment where self-regulation thrives through both on-chain and off-chain avenues: Empower the Community, Sustainable Incentivisation, Collaboration Over Competition, Innovation and Technical Excellence, and Holistic Ecosystem Growth.
About myself @ocandocrypto, I'm currently building web3citizen.xyz as core contributor. Web3 citizen is a community-driven open-source project aimed at simplifying the Web3 Ecosystem where we started by building The State of DAOs 2023 report and weekly governance highlights. Also, I built one of the largest blockchain school in Latin America at Platzi (developer bootcamps section) and now I'm excited on my decentralized journey starting to be part of the Arbitrum DAO and aiming to contribute more through Savvy Arbitrum DAO Committee.
Great job on the development of this proposal, @cattin . At Savvy, we agree that a good incentive system could bring increased participation in the DAO and greater commitment from delegates, as well as more opportunities for new contributors.
You can also read this post where we're really aligned:
https://tally.mirror.xyz/P5WzF4C407UXDtroRFDCgM-60CP8424pYqbdZkKCASE
A couple of days ago, we raised some questions that are still relevant, as follows:
Furthermore, we have been analyzing whether Savvy, as new delegates, would have the opportunity to participate in this incentive program measurement framework that has been built, and we have some questions to better understand:
The majority of proposals in Tally occurred from June 2023 to November 2023. Keeping this in mind, only one proposal is currently active.
If the goal of this proposal is to increase delegate participation, is it possible to achieve more than 20% of all-time Tally participation in the coming months when new proposals are on-chain? (talking more about the proposal timeline if we talk about bring more active delegates, etc)
How was this variable selected? The 20% range.
We'd like to see if we have some chance and do the math. But we're not on Karma.
Is there a specific reason we cannot be there? Are there any conditions we need to fulfill?
Although Savvy does not yet meet the requirement of having at least 50k ARB, we have had active participation in the DAO for the past 3 months, as well as active participation in Snapshot and upcoming participation in the AIP: ArbOS Version 11.
What other variables should we consider to evaluate participation within this measurement range?
Is there something we may be missing?
Note: On another note, if any new delegate within the DAO, like us, would like to understand their position or possibility within this framework, maybe this document that I have been working on to better understand this process could be helpful:
https://docs.google.com/document/d/1A-l59nImdMfdaCtbGr_YkipX_nBW3k9c3BQLC2oUX9E/edit?usp=sharing
We have been doing some maths for this.
We would love to understand in order to continue our improvement process as delegates of the DAO.
Thanks.
thank u sir 🫡 already voted, waiting for the results.
Good day, @SavvyDAO. In my opinion, this is just an advantage:
Good day, @SavvyDAO. In my opinion, this is just an advantage:
As stated in the proposal above - 50 delegates is the initial number, which can be changed at the end of the first stage
We introduce an Experimental Incentive System aimed at the ArbitrumDAO delegates with a duration of six months. The goal is to assess the incentives' impact on the delegates' active participation and involvement in the DAO's governance. This proposal is subject to changes.
We introduce an Experimental Incentive System aimed at the ArbitrumDAO delegates with a duration of six months. The goal is to assess the incentives' impact on the delegates' active participation and involvement in the DAO's governance. This proposal is subject to changes.
This proposal is the final result of the proposal published and voted in favor of option 2 in snapshot. It contains some minor changes.
We've allocated an initial trial period of 6 months. This timeframe should allow us to gather initial metrics to gauge the system's functionality and its anticipated impact.
We have set the number of eligible delegates to 50. This figure isn't based on specific reasoning, but we believe it's a good starting point, these ranking is based on the score they achieve each month.
Total costs: 1,580,000 ARB
Based on the feedback received, we've opted for a single tier instead of a multi-tiered program, allowing a wider array of participants, the requirements would be as follows:
Note:
- So following this model, the top fifty delegates - defined by their final score - within the range, would be compensated
- The 5000 ARB per month is the max amount a delegate could earn, but this amount could be lower depending on their score.
- Certain votes won't be counted towards the Tally Participation Rate, as detailed in the following links:
Delegates matching the requirements must confirm their participation in the Incentive System in the forum (a dedicated channel will be established for this). They must post using the template provided below, within a 14-day application window.
Incentive Program Confirmation Template:
Note:
- Failing to send a confirmation message will exclude you from the incentive system, regardless of eligibility.
- Applicants should ensure accuracy in numbers and links, facilitating quicker verification.
Eligible delegates for the incentive program will be announced on the forum.
To determine which delegates will be paid monthly, we will use a point system and a framework. Please note that this framework will be developed by Karma. Delegates can track their activities using this template.
Framework - Experimental Incentive
We explain in detail the framework and points system:
Delegates (DD): Delegates with right to access to incentives
Ranking (TOP): Delegate's position in this Dune table https://dune.com/pandajackson42/arbitrum-delegates-and-voting-power
Funds ARB (FARB): The amount of ARB allocated per month to the delegates' payment
Activity Weight (%): Represents the weight assigned to each key activity to be measured in delegates.
Total Participation (TP): Sum of the results of activities performed by the delegate. A TP% of 100 indicates full participation.
Payment ARB (PARB): Final amount of ARB that the delegate will receive based on his TP% and his position in the table.
The activities that have been considered in shaping the framework and scope are measurable activities that we believe can positively impact governance.
We have distributed the weight according to the type of activity, as we believe this is the fairest way to do it at the moment.
Surely both the activities and the weightings are far from being the final parameters, ideally after these 6 months we should have a clear idea of how to modify certain parameters or which ones to add/remove.
Note: We have not included the governance call in the list of activities because we feel that it may be difficult for delegates in different time zones to attend because of the specific timing of the call. Plus some delegates might not want to dox their voices.
The 50 delegates who conclude the month with a TP score of +60% will be the ones to receive incentives based on the result provided by the PARB parameter.
Should more than 50 delegates have a TP score of +60%, only the top 50 scores will be selected.
If fewer than 50 delegates have a TP score of +60%, only those meeting the criteria will be compensated
Note: In the exceptional circumstance where scores are identical or more than 50 delegates exceed +90%, the entire month's budget may be distributed amongst all delegates with such scores. This decision is at the discretion of the program administrator.
Should a delegate propose or actively participate in an enhancement proposal for Arbitrum DAO and execute it, like the Arbitrum’s Short-Term Incentive Program (Arbitrum Improvement Proposal), they will be granted an additional +30% to their TP score for making a valuable contribution to the DAO. This could also be a governance process enhancement proposal or a template for grant selection.
We understand that this is one of the weakest points of the proposal and we believe it is very objective. To assess this point we will try to answer these questions
When evaluating the bonus points we will try to answer these questions and the administrator will have to upload a post to the forum with the answer and a justification of why he/she grants the bonus point. We also look forward to hearing the community's opinion on the matter.
When we refer to a month, we consider from the first day of the month 00:00 UTC to the last day 23:59hs UTC of each month. Within these days and hours, delegates have the opportunity to perform all actions to meet the parameters. The month's activities conclude on the last day of the month, so delegates must be punctual.
On the last day of each month, the incentive system administrator is responsible for collecting and carefully reviewing the data provided by Karma. During this initial stage, several inconsistencies are likely to be identified and corrected. Subsequently, the administrator should announce on the forum the names of the delegates selected to receive incentives, as well as the amounts allocated to each. This procedure must be completed within 10 days.
After the publication of these results, the delegates will have a period of 2 days to present any dispute, in case they disagree with the amounts or the selection made.
Delegates have a 2-day window to dispute if they disagree with the results presented by the Incentive System Administrator.
To raise a dispute, they must do so via a forum post with the following template:
The system administrator must promptly address the issue, resolving it within a maximum of 2 days.
Should a delegate or any community member attempt to deceive or game the incentive system, they will be banned. This decision is at the discretion of the program administrator.
We must remember that this system is experimental, and we hope for community members' cooperation for its success.
If all goes according to plan, the delegate payments are expected to be executed from the programs multisig, with full details of the payments posted on the forum, between the 13th and 14th. This will be repeated for the duration of the program. Payments are made in ARB tokens.
Like every new and experimental system, there may be delays, so please be patient.
Given the short duration of the program and the lack of a DAO Facilitator, SEED Latam is willing to assume the administration of this program. This means that our delegation won't participate in it and that the adminstration won't be carried out by myself, but by the organization SEED Latam.
However, we're also open to a group of delegates or potentially a third party administering this program, in which case we would obviously provide any assistance necessary.
For the adminstration of said program the budget would be 20,000 ARB. This payment will also be divided into 6 months and will be sent in the proposal to Tally along with the payments to the delegates. In this way the DAO will have control over the administrator.
Karma will develop features to enhance administrator efficiency and provide transparency to the Arbitrum community. The features that will be built include:
arbitrum.karmahq.xyz/delegate-compensation.This automation eliminates the need for delegates to manually report their monthly activities.
Karma payments will also be executed from the DAO and tracked by the program administrator.
Since it would be very complicated to KYC 50 delegates (or more) for this program, and following the Foundation's recomendation, we're going to proceed with a multisig to manage payments.
We propose to use a configuration similar to that of Plurality Labs. Having a 3/5 multisig where apart from myself, there would be a mix of DAO delegates + contributros, each recieving a 1,000 ARB payment per month for the duration of the program.
We propose that the signatories be:
Seed Latam is committed to monitoring the proper functioning of Karma and collecting feedback from the community on the dashboard's performance. We also commit to collaborating with Karma so that the dashboard meets the needs of the incentive system.
We will also assume the responsibilities of the incentive system administrator, as mentioned in the previous points.
SEED Latam does not have any commercial relationship with Karma nor does it receive any payment from them for incorporating them into this proposal.
The only link between SEED Latam and Karma is that both want the success of the Arbitrum ecosystem.
Duration of the incentive system
Total Number of Delegates to Receive Incentives
Selection process
Eligible delegates must confirm their participation in the incentive system by posting a message on the forum.
Scoring
Minimum score to receive incentives
Bonus Point
Parameter Snapshot
Dispute
Payments
Incentive system administrator
Note Costs may vary, since we probably won't give the max amount to every delegate every month, so the cost mentioned would be the max this program would cost assuming we compensate 50 delegates per month for 6 months with the maximum allocation.
SEEDLatam commits to deliver two reports, one after the third month and one after the sixth (and final) month of the program with metrics on its impact, delegates' performance, and expenditures. They will also collect feedback from both the community and participating delegates.
The reports will be a detailed forum post and also accompanied by a community call explaining the metrics and feedback collected.
ArbitrumDAO has the power to:
Please note that this initial incentive system is experimental and is not intended to be the final version. With this initiative, we aim to evaluate the performance of the DAO and determine its impact. We also anticipate collaboration from both the DAO and facilitators to ensure its success.
At the end of the six months, SEED Latam commits to delivering a report containing the gathered data and feedback from the governance.
Onchain Vote to fund the Multisig.
Hey everyone, I'll catch up with most questions by tomorrow, but just a quick update I got from the foundation - all delegates qualifying for rewards from this pilot program need to go through a KYC compliance process from the Foundation. The only advantage of having the multisig is that it simply would alleviate some governance burden from the delegates, but I'm down to switch back to simply having the DAO manage the payments directly through onchain votes down the road if the DAO seems to see it as a better alternative, as it was mentioned in the original proposal. Sorry for any confusion this might've caused.
The proposal has a limit of 50 delegates, who receive incentives. Now there are more then 190 delegates with 50k ARB. If you greatly reduce the entry threshold:
And I think we need to vote about this on Tally!
I dont agree with it. I think 50K is too much. The min amount of tokens should be 10k
Regarding bonus points, I believe that it should be more of a decay mechanism over x time and it should stack higher. There are delegates who add significantly more valuable input and those folks should be rewarded without a hard reset.
I think this is a very valid question, and I was also thinking about this, maybe for future proposals, it would be better for delegates to wait until voting ends to disclose their vote on the forum to make shutter voting more efficient ~ but it's always gonna be at the discretion of the delegate.
Not yet, this proposal hasn't been approved on Tally, only snapshot.
You must wait for the proposal to be approved. It is currently being voted on in Tally :
The Savvy delegation has some serious concerns about this proposal.
Initial concerns:
Thank you so much, everyone, for the overwhelming support received on this proposal - since option 2 was the most voted, once this proposal goes to onchain voting, we would have to proceed with the first payment for Karma (10k ARB) so that they can start developing the dashboard for this program.
Before this, though, I want to state that I agree with the points raised by @krst - the idea of this program is to serve as a way to compensate those delegates who have been actively contributing to the DAO and ensure they have a predictable compensation for their future contributions, incentivizing their further participation/reducing apathy. But as pointed out, the greatest challenge we face is that we also have to encourage critical participation ~ the idea shouldn’t be to simply encourage large delegates to vote, but also to have a critical vote. So, as a first step in this direction, we added more weight to the delegate statement to ensure that delegates justify the way they vote (compared to what we had in our previous draft) - but this can definitely be improved, and we are open to suggestions. We could look into forum activity, which can be coupled with discourse metrics, but my only concern is that these are easy to game, and a lot would be left at the administrator's discretion - that doesn’t mean it can’t be done tho. We could also add points for those who attend + engage in calls, but some delegates might not be able to participate due to time zones or simply not wanting to dox themselves. These are just some initial thoughts, though, and I am down to discuss this more in the monthly call.
Great work. It's going to be quite interesting to see the results after 6 months. Very high chance of boosting engagement. The design is overall fair and inclusive. However, I was a bit concerned about the risk of the system becoming overly reliant on quantitative metrics, which may not fully capture the qualitative aspects of delegate contributions. A blend of quantitative and more decentralized qualitative metrics might provide a more holistic evaluation of delegate contributions in the next iteration. But finding the good framework to evaluate the quality of contributions is not gonna be easy. So I believe the proposed approach is a great start. Gonna vote for it.
I'd like to also thank @Cattin and Seed LATAM for drafting this interesting experimentation.
We voted FOR this proposal onchain even though we still stand with our previous Snapshot vote and believe that this program should not use Karma during the pilot phase.
All opinions come from @juanbug and me, the operators of the Uniswap DAO’s ARB delegation
Vote: For
Type: Onchain
As per our previous Snapshot vote, we still believe that this initiative should not incorporate Karma to start with. Once the program matures and it becomes clear what exactly needs to be optimized after manually operating this initiative, then Karma should ideally be incorporated. Regardless, we voted FOR the onchain proposal because, on the whole, we believe in the positive impact that this program can have on delegate participation. One aspect we’d like to flag one more time is the ability for the DAO to weed out pointless contributions–those done for the sake of contribution.
@cliffton.eth hey bro! can you tell me where to add this information about me? I want to participate in this program. I'd appreciate it if you could help me figure it out.
I commend the team for the well-structured Experimental Incentive System Proposal. The detailed plan and innovative scoring framework demonstrate a thoughtful approach to enhancing delegate engagement.
Positives:
I commend the team for the well-structured Experimental Incentive System Proposal. The detailed plan and innovative scoring framework demonstrate a thoughtful approach to enhancing delegate engagement.
Positives:
Feedback:
I'm excited about the potential of this experimental system and look forward to community collaboration.
Hey, @cattin, thanks for the prompt response.
Under this context and understanding the nature of the proposal, and of course, it was drafted in August under different circumstances and stages of the DAO. This we understand:
Hey, @cattin, thanks for the prompt response.
Under this context and understanding the nature of the proposal, and of course, it was drafted in August under different circumstances and stages of the DAO. This we understand:
Having only started a couple of months in the delegation exercise, under the current conditions, there is no classification. However, if the program were to take place at any point, there would be integration, given the conditions and meeting the requirements.
Btw, feedback here. If the idea is to continue with this premise, it would be good to provide more details as it can become confusing during the reading and comprehension exercise.
Regarding the karma dashboard, for this specific program, there will be a separate dashboard to measure the 50 score. Still, we're going to reach out to them to check what happened with our address, thanks.
All-time participation in Tally is the ratio without the [OLD] proposals in terms of participation. Currently, there are 13 proposals, not 20. This will be resolved in the Karma Dashboard due to the nature of Arbitrum's Governor.
With this in mind, these are metrics that initially work for us within the delegation exercise. It's good.
Is there anything else we should take into account?
Hey, just to address some concerns raised by @SavvyDAO and @ocandocrypto:
As we mentioned before, the idea of this program is to serve as a way to compensate those delegates who have been actively contributing to the DAO and ensure they have a predictable compensation for their future contributions, incentivizing their further participation/reducing apathy, but at the same time acknowledging that this proposal is experimental and after 6 months it probably won't look the same as how it does right now. The current cap used of min 50k VP + 25% historic Tally Vote is 1) to again, ensure we're compensating active delegates and nudging them into being proactive plus critical on how they vote (especially the larger ones since they are the decision-makers in the DAO) and 2) serve as a very simple spam filter, given the experimental nature of this program. The intention of this program is not necessarily to onboard new delegates through incentives; however, this could be done later on with additional modifications.
Hey, just to address some concerns raised by @SavvyDAO and @ocandocrypto:
As we mentioned before, the idea of this program is to serve as a way to compensate those delegates who have been actively contributing to the DAO and ensure they have a predictable compensation for their future contributions, incentivizing their further participation/reducing apathy, but at the same time acknowledging that this proposal is experimental and after 6 months it probably won't look the same as how it does right now. The current cap used of min 50k VP + 25% historic Tally Vote is 1) to again, ensure we're compensating active delegates and nudging them into being proactive plus critical on how they vote (especially the larger ones since they are the decision-makers in the DAO) and 2) serve as a very simple spam filter, given the experimental nature of this program. The intention of this program is not necessarily to onboard new delegates through incentives; however, this could be done later on with additional modifications.
As @cp0x mentioned, these parameters aim at nudging delegates into getting more involved in governance by introducing some degree of competition (by limiting those entitled to compensation to the top 50 by score).
More to @ocandocrypto question, in your case, you wouldn't qualify for two reasons: 1) you would need a voting power above 50k and 2) have historic participation of 25% or more, which in your situation currently is of 7.69% since you've only voted in 1 proposal out of 13 valid proposals, so if you had voted on all three proposals that went live since your delegation was active on tally plus one proposal (hit a 4/14 ratio), then you would've qualified on this end for this system. If at any point during the 6 month period you manage to obtain a voting power of 50k and increase your historic participation to 25% (would simply have to vote in 4 future proposals out of 16 for example), then you could participate in the program.
And to make this clear, the top 50 are defined each month based on the score they get for each month, not based on voting power or any other metric.
The Savvy DeFi DAO's Arbitrum Council has decisively voted in favor of the Experimental Delegates Incentive System proposal, and we would like to provide insight into our collective perspective on this decision.
After conducting a thorough analysis of the proposal, we have gained a comprehensive understanding of its objectives. With a primary focus on active delegates in recent months, we appreciate the proposal's inclusivity, allowing new members to join the framework by fulfilling specified objectives.
The program will operate on a monthly basis, providing opportunities for any delegate to achieve the proposal's requirements. This approach fosters a welcoming environment for participation in the DAO.
We are confident that the development of this program will not only attract new active members but also encourage increased participation from existing delegates within the DAO.
The Savvy DeFi DAO's Arbitrum Council has decisively voted in favor of the Experimental Delegates Incentive System proposal, and we would like to provide insight into our collective perspective on this decision.
After conducting a thorough analysis of the proposal, we have gained a comprehensive understanding of its objectives. With a primary focus on active delegates in recent months, we appreciate the proposal's inclusivity, allowing new members to join the framework by fulfilling specified objectives.
The program will operate on a monthly basis, providing opportunities for any delegate to achieve the proposal's requirements. This approach fosters a welcoming environment for participation in the DAO.
We are confident that the development of this program will not only attract new active members but also encourage increased participation from existing delegates within the DAO.
Special thanks to Cattin for his assistance in understanding this proposal.
From, Savvy DeFi DAO's Arbitrum Council
We analyze this proposal with the objective of understanding what we need to set up or prepare in order to determine if we qualify for this proposal. In doing so, and with the goal of continuing to grow in our journey of being delegates in the DAO, we seek to answer the question:
Do we qualify within the top 50 within the incentive measure framework? If not, what do we need to ensure that we qualify?
And in trying to answer this question, we find that we are still a bit confused by the following...
Savvy is a synthetic credit protocol that enables you to access non-liquidating, auto-repaying lines of credit.
Savvy has five main focuses where it aims to cultivate an environment where self-regulation thrives through both on-chain and off-chain avenues: Empower the Community, Sustainable Incentivisation, Collaboration Over Competition, Innovation and Technical Excellence, and Holistic Ecosystem Growth.
About myself @ocandocrypto, I'm currently building web3citizen.xyz as core contributor. Web3 citizen is a community-driven open-source project aimed at simplifying the Web3 Ecosystem where we started by building The State of DAOs 2023 report and weekly governance highlights. Also, I built one of the largest blockchain school in Latin America at Platzi (developer bootcamps section) and now I'm excited on my decentralized journey starting to be part of the Arbitrum DAO and aiming to contribute more through Savvy Arbitrum DAO Committee.
Great job on the development of this proposal, @cattin . At Savvy, we agree that a good incentive system could bring increased participation in the DAO and greater commitment from delegates, as well as more opportunities for new contributors.
You can also read this post where we're really aligned:
https://tally.mirror.xyz/P5WzF4C407UXDtroRFDCgM-60CP8424pYqbdZkKCASE
A couple of days ago, we raised some questions that are still relevant, as follows:
Furthermore, we have been analyzing whether Savvy, as new delegates, would have the opportunity to participate in this incentive program measurement framework that has been built, and we have some questions to better understand:
The majority of proposals in Tally occurred from June 2023 to November 2023. Keeping this in mind, only one proposal is currently active.
If the goal of this proposal is to increase delegate participation, is it possible to achieve more than 20% of all-time Tally participation in the coming months when new proposals are on-chain? (talking more about the proposal timeline if we talk about bring more active delegates, etc)
How was this variable selected? The 20% range.
We'd like to see if we have some chance and do the math. But we're not on Karma.
Is there a specific reason we cannot be there? Are there any conditions we need to fulfill?
Although Savvy does not yet meet the requirement of having at least 50k ARB, we have had active participation in the DAO for the past 3 months, as well as active participation in Snapshot and upcoming participation in the AIP: ArbOS Version 11.
What other variables should we consider to evaluate participation within this measurement range?
Is there something we may be missing?
Note: On another note, if any new delegate within the DAO, like us, would like to understand their position or possibility within this framework, maybe this document that I have been working on to better understand this process could be helpful:
https://docs.google.com/document/d/1A-l59nImdMfdaCtbGr_YkipX_nBW3k9c3BQLC2oUX9E/edit?usp=sharing
We have been doing some maths for this.
We would love to understand in order to continue our improvement process as delegates of the DAO.
Thanks.
thank u sir 🫡 already voted, waiting for the results.
Good day, @SavvyDAO. In my opinion, this is just an advantage:
Good day, @SavvyDAO. In my opinion, this is just an advantage:
As stated in the proposal above - 50 delegates is the initial number, which can be changed at the end of the first stage
We introduce an Experimental Incentive System aimed at the ArbitrumDAO delegates with a duration of six months. The goal is to assess the incentives' impact on the delegates' active participation and involvement in the DAO's governance. This proposal is subject to changes.
We introduce an Experimental Incentive System aimed at the ArbitrumDAO delegates with a duration of six months. The goal is to assess the incentives' impact on the delegates' active participation and involvement in the DAO's governance. This proposal is subject to changes.
This proposal is the final result of the proposal published and voted in favor of option 2 in snapshot. It contains some minor changes.
We've allocated an initial trial period of 6 months. This timeframe should allow us to gather initial metrics to gauge the system's functionality and its anticipated impact.
We have set the number of eligible delegates to 50. This figure isn't based on specific reasoning, but we believe it's a good starting point, these ranking is based on the score they achieve each month.
Total costs: 1,580,000 ARB
Based on the feedback received, we've opted for a single tier instead of a multi-tiered program, allowing a wider array of participants, the requirements would be as follows:
Note:
- So following this model, the top fifty delegates - defined by their final score - within the range, would be compensated
- The 5000 ARB per month is the max amount a delegate could earn, but this amount could be lower depending on their score.
- Certain votes won't be counted towards the Tally Participation Rate, as detailed in the following links:
Delegates matching the requirements must confirm their participation in the Incentive System in the forum (a dedicated channel will be established for this). They must post using the template provided below, within a 14-day application window.
Incentive Program Confirmation Template:
Note:
- Failing to send a confirmation message will exclude you from the incentive system, regardless of eligibility.
- Applicants should ensure accuracy in numbers and links, facilitating quicker verification.
Eligible delegates for the incentive program will be announced on the forum.
To determine which delegates will be paid monthly, we will use a point system and a framework. Please note that this framework will be developed by Karma. Delegates can track their activities using this template.
Framework - Experimental Incentive
We explain in detail the framework and points system:
Delegates (DD): Delegates with right to access to incentives
Ranking (TOP): Delegate's position in this Dune table https://dune.com/pandajackson42/arbitrum-delegates-and-voting-power
Funds ARB (FARB): The amount of ARB allocated per month to the delegates' payment
Activity Weight (%): Represents the weight assigned to each key activity to be measured in delegates.
Total Participation (TP): Sum of the results of activities performed by the delegate. A TP% of 100 indicates full participation.
Payment ARB (PARB): Final amount of ARB that the delegate will receive based on his TP% and his position in the table.
The activities that have been considered in shaping the framework and scope are measurable activities that we believe can positively impact governance.
We have distributed the weight according to the type of activity, as we believe this is the fairest way to do it at the moment.
Surely both the activities and the weightings are far from being the final parameters, ideally after these 6 months we should have a clear idea of how to modify certain parameters or which ones to add/remove.
Note: We have not included the governance call in the list of activities because we feel that it may be difficult for delegates in different time zones to attend because of the specific timing of the call. Plus some delegates might not want to dox their voices.
The 50 delegates who conclude the month with a TP score of +60% will be the ones to receive incentives based on the result provided by the PARB parameter.
Should more than 50 delegates have a TP score of +60%, only the top 50 scores will be selected.
If fewer than 50 delegates have a TP score of +60%, only those meeting the criteria will be compensated
Note: In the exceptional circumstance where scores are identical or more than 50 delegates exceed +90%, the entire month's budget may be distributed amongst all delegates with such scores. This decision is at the discretion of the program administrator.
Should a delegate propose or actively participate in an enhancement proposal for Arbitrum DAO and execute it, like the Arbitrum’s Short-Term Incentive Program (Arbitrum Improvement Proposal), they will be granted an additional +30% to their TP score for making a valuable contribution to the DAO. This could also be a governance process enhancement proposal or a template for grant selection.
We understand that this is one of the weakest points of the proposal and we believe it is very objective. To assess this point we will try to answer these questions
When evaluating the bonus points we will try to answer these questions and the administrator will have to upload a post to the forum with the answer and a justification of why he/she grants the bonus point. We also look forward to hearing the community's opinion on the matter.
When we refer to a month, we consider from the first day of the month 00:00 UTC to the last day 23:59hs UTC of each month. Within these days and hours, delegates have the opportunity to perform all actions to meet the parameters. The month's activities conclude on the last day of the month, so delegates must be punctual.
On the last day of each month, the incentive system administrator is responsible for collecting and carefully reviewing the data provided by Karma. During this initial stage, several inconsistencies are likely to be identified and corrected. Subsequently, the administrator should announce on the forum the names of the delegates selected to receive incentives, as well as the amounts allocated to each. This procedure must be completed within 10 days.
After the publication of these results, the delegates will have a period of 2 days to present any dispute, in case they disagree with the amounts or the selection made.
Delegates have a 2-day window to dispute if they disagree with the results presented by the Incentive System Administrator.
To raise a dispute, they must do so via a forum post with the following template:
The system administrator must promptly address the issue, resolving it within a maximum of 2 days.
Should a delegate or any community member attempt to deceive or game the incentive system, they will be banned. This decision is at the discretion of the program administrator.
We must remember that this system is experimental, and we hope for community members' cooperation for its success.
If all goes according to plan, the delegate payments are expected to be executed from the programs multisig, with full details of the payments posted on the forum, between the 13th and 14th. This will be repeated for the duration of the program. Payments are made in ARB tokens.
Like every new and experimental system, there may be delays, so please be patient.
Given the short duration of the program and the lack of a DAO Facilitator, SEED Latam is willing to assume the administration of this program. This means that our delegation won't participate in it and that the adminstration won't be carried out by myself, but by the organization SEED Latam.
However, we're also open to a group of delegates or potentially a third party administering this program, in which case we would obviously provide any assistance necessary.
For the adminstration of said program the budget would be 20,000 ARB. This payment will also be divided into 6 months and will be sent in the proposal to Tally along with the payments to the delegates. In this way the DAO will have control over the administrator.
Karma will develop features to enhance administrator efficiency and provide transparency to the Arbitrum community. The features that will be built include:
arbitrum.karmahq.xyz/delegate-compensation.This automation eliminates the need for delegates to manually report their monthly activities.
Karma payments will also be executed from the DAO and tracked by the program administrator.
Since it would be very complicated to KYC 50 delegates (or more) for this program, and following the Foundation's recomendation, we're going to proceed with a multisig to manage payments.
We propose to use a configuration similar to that of Plurality Labs. Having a 3/5 multisig where apart from myself, there would be a mix of DAO delegates + contributros, each recieving a 1,000 ARB payment per month for the duration of the program.
We propose that the signatories be:
Seed Latam is committed to monitoring the proper functioning of Karma and collecting feedback from the community on the dashboard's performance. We also commit to collaborating with Karma so that the dashboard meets the needs of the incentive system.
We will also assume the responsibilities of the incentive system administrator, as mentioned in the previous points.
SEED Latam does not have any commercial relationship with Karma nor does it receive any payment from them for incorporating them into this proposal.
The only link between SEED Latam and Karma is that both want the success of the Arbitrum ecosystem.
Duration of the incentive system
Total Number of Delegates to Receive Incentives
Selection process
Eligible delegates must confirm their participation in the incentive system by posting a message on the forum.
Scoring
Minimum score to receive incentives
Bonus Point
Parameter Snapshot
Dispute
Payments
Incentive system administrator
Note Costs may vary, since we probably won't give the max amount to every delegate every month, so the cost mentioned would be the max this program would cost assuming we compensate 50 delegates per month for 6 months with the maximum allocation.
SEEDLatam commits to deliver two reports, one after the third month and one after the sixth (and final) month of the program with metrics on its impact, delegates' performance, and expenditures. They will also collect feedback from both the community and participating delegates.
The reports will be a detailed forum post and also accompanied by a community call explaining the metrics and feedback collected.
ArbitrumDAO has the power to:
Please note that this initial incentive system is experimental and is not intended to be the final version. With this initiative, we aim to evaluate the performance of the DAO and determine its impact. We also anticipate collaboration from both the DAO and facilitators to ensure its success.
At the end of the six months, SEED Latam commits to delivering a report containing the gathered data and feedback from the governance.
Onchain Vote to fund the Multisig.
Hey everyone, I'll catch up with most questions by tomorrow, but just a quick update I got from the foundation - all delegates qualifying for rewards from this pilot program need to go through a KYC compliance process from the Foundation. The only advantage of having the multisig is that it simply would alleviate some governance burden from the delegates, but I'm down to switch back to simply having the DAO manage the payments directly through onchain votes down the road if the DAO seems to see it as a better alternative, as it was mentioned in the original proposal. Sorry for any confusion this might've caused.
The proposal has a limit of 50 delegates, who receive incentives. Now there are more then 190 delegates with 50k ARB. If you greatly reduce the entry threshold:
And I think we need to vote about this on Tally!
I dont agree with it. I think 50K is too much. The min amount of tokens should be 10k
Regarding bonus points, I believe that it should be more of a decay mechanism over x time and it should stack higher. There are delegates who add significantly more valuable input and those folks should be rewarded without a hard reset.
I think this is a very valid question, and I was also thinking about this, maybe for future proposals, it would be better for delegates to wait until voting ends to disclose their vote on the forum to make shutter voting more efficient ~ but it's always gonna be at the discretion of the delegate.
Not yet, this proposal hasn't been approved on Tally, only snapshot.
You must wait for the proposal to be approved. It is currently being voted on in Tally :
The Savvy delegation has some serious concerns about this proposal.
Initial concerns:
Thank you so much, everyone, for the overwhelming support received on this proposal - since option 2 was the most voted, once this proposal goes to onchain voting, we would have to proceed with the first payment for Karma (10k ARB) so that they can start developing the dashboard for this program.
Before this, though, I want to state that I agree with the points raised by @krst - the idea of this program is to serve as a way to compensate those delegates who have been actively contributing to the DAO and ensure they have a predictable compensation for their future contributions, incentivizing their further participation/reducing apathy. But as pointed out, the greatest challenge we face is that we also have to encourage critical participation ~ the idea shouldn’t be to simply encourage large delegates to vote, but also to have a critical vote. So, as a first step in this direction, we added more weight to the delegate statement to ensure that delegates justify the way they vote (compared to what we had in our previous draft) - but this can definitely be improved, and we are open to suggestions. We could look into forum activity, which can be coupled with discourse metrics, but my only concern is that these are easy to game, and a lot would be left at the administrator's discretion - that doesn’t mean it can’t be done tho. We could also add points for those who attend + engage in calls, but some delegates might not be able to participate due to time zones or simply not wanting to dox themselves. These are just some initial thoughts, though, and I am down to discuss this more in the monthly call.
Great work. It's going to be quite interesting to see the results after 6 months. Very high chance of boosting engagement. The design is overall fair and inclusive. However, I was a bit concerned about the risk of the system becoming overly reliant on quantitative metrics, which may not fully capture the qualitative aspects of delegate contributions. A blend of quantitative and more decentralized qualitative metrics might provide a more holistic evaluation of delegate contributions in the next iteration. But finding the good framework to evaluate the quality of contributions is not gonna be easy. So I believe the proposed approach is a great start. Gonna vote for it.
I'd like to also thank @Cattin and Seed LATAM for drafting this interesting experimentation.
The Savvy delegation has some serious concerns about this proposal.
Initial concerns:
Next step: We will further review the proposal and recommend improvements early next week. We just ask for the opportunity to do this before it goes to Tally.
Why now? Honestly, we've been so overwhelmed by the amount of work in the DAO that Savvy missed this proposal and only seeing it now because we hired a governance analyst to help deal with the 10-15 proposals/work groups currently in the DAO.
@cattin I also reached out to you on Telegram - appreciate all of your work!
Thank you so much, everyone, for the overwhelming support received on this proposal - since option 2 was the most voted, once this proposal goes to onchain voting, we would have to proceed with the first payment for Karma (10k ARB) so that they can start developing the dashboard for this program.
Before this, though, I want to state that I agree with the points raised by @krst - the idea of this program is to serve as a way to compensate those delegates who have been actively contributing to the DAO and ensure they have a predictable compensation for their future contributions, incentivizing their further participation/reducing apathy. But as pointed out, the greatest challenge we face is that we also have to encourage critical participation ~ the idea shouldn’t be to simply encourage large delegates to vote, but also to have a critical vote. So, as a first step in this direction, we added more weight to the delegate statement to ensure that delegates justify the way they vote (compared to what we had in our previous draft) - but this can definitely be improved, and we are open to suggestions. We could look into forum activity, which can be coupled with discourse metrics, but my only concern is that these are easy to game, and a lot would be left at the administrator's discretion - that doesn’t mean it can’t be done tho. We could also add points for those who attend + engage in calls, but some delegates might not be able to participate due to time zones or simply not wanting to dox themselves. These are just some initial thoughts, though, and I am down to discuss this more in the monthly call.
Regarding the issues pointed out by @Treasure, we agree that there should be complementary frameworks that go beyond the scope of this proposal in order to compensate less active or smaller delegates for their contributions. We also have to emphasize that we did abandon the three-tier system, which was presented in the draft for a more flexible structure, by simply setting a minimum voting power of 50k ARB (to make it less economically viable to game) and also requiring minimum historical participation, in order to compensate those delegates that have been actively contributing to the DAO and incentivize their future contributions. However, we understand capping the monthly compensated delegates to 50 might be arbitrary, but we decided to cap it like this to make it more competitive and also alleviate the workload of the administrator to ensure that they can do their job properly ~ although we could change this a month or so into the program if we find it feasible. And regarding the amount used for monthly payments, we’re also fine with increasing it to maybe 6000 ARB per month, but again, we’re open to any other suggestion.
We believe it’s important to put some emphasis on some points of the proposal:
I have some questions about formulas:
Firstly, we would like to thank @cattin and the Seed LATAM team for reviewing previous proposals and creating this one. We are also grateful to @Patrick_J for sharing his experiences at MakerDAO and contributing to the further development of this proposal.
We are quite excited to see the delegator incentive mechanism, which has been tried in other protocols and solved in different ways, being tested in ArbitrumDAO. We would like to announce that we will actively participate in this experiment and fulfill our responsibilities as delegators. Additionally, the fact that the program can be stopped by a vote from the DAO and that funds will be distributed monthly is an important point in gaining the community's trust.
Firstly, we would like to thank @cattin and the Seed LATAM team for reviewing previous proposals and creating this one. We are also grateful to @Patrick_J for sharing his experiences at MakerDAO and contributing to the further development of this proposal.
We are quite excited to see the delegator incentive mechanism, which has been tried in other protocols and solved in different ways, being tested in ArbitrumDAO. We would like to announce that we will actively participate in this experiment and fulfill our responsibilities as delegators. Additionally, the fact that the program can be stopped by a vote from the DAO and that funds will be distributed monthly is an important point in gaining the community's trust.
We voted for the management of the voting to be primarily handled by the Seed LATAM team and secondarily for the use of Karma, as we believe Karma does not yet have sufficient features for this experiment. We are open to helping out in any way we can during the process.
The below response reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking and ideation of the two.
We are voting FOR this proposal in the temperature check, choosing Option 1 as our preferred solution for the time being. Our rationale and some suggestions regarding potential amendments that could be made before the onchain vote are outlined below.
The below response reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking and ideation of the two.
We are voting FOR this proposal in the temperature check, choosing Option 1 as our preferred solution for the time being. Our rationale and some suggestions regarding potential amendments that could be made before the onchain vote are outlined below.
First of all, we would like to echo the gratitude to @cattin and the whole SEEDLatam group for bringing this proposal forward and pushing the discussion on delegate incentives. We've been discussing and supporting this initiative for some time and have expressed the need for such a program on several occasions. Below we'd like to outline our thinking behind delegate incentives and our expectations for any program that implements it.
To begin with, we think that delegate incentives should come hand-in-hand with delegate responsibilities as receiving monetary compensation both gives birth to expectations but also serves as an enabler for the delegates to carry out their responsibilities.
The role of delegates as we understand it, especially delegates with significant voting power, is of an executive in the DAO, as it’s up to delegates to cast votes and effectively make decisions regarding protocol mechanics and upgrades as well as treasury management/spending. Moreover, and given the current quorum requirements and average participation in the votes, no decision in the DAO can be made without the engagement of top (by voting power) delegates.
Therefore, it is extremely important for these delegates to be informed about the merits of the initiatives taking place and proposals being made, to actively participate in the discussions, to closely follow the development of different proposals and various initiatives and to also to help shape their details. In a broader sense, top delegates need to help navigate the strategic direction in which the DAO is headed.
After all, how can a delegate drive to a conclusion and make a decision on a proposal if they don’t know the context in which this proposal has been brought up, how the specific proposal has been developed in the relevant working group, what other possible options have been considered, and what are the expected consequences of passing a given proposal? Not to mention that many proposals require direct oversight from delegates to ensure proper execution or to take action if the proposer fails to meet their obligations.
If a delegate only spends a dozen minutes reading a proposal (which the proposers have spent tens of hours preparing and discussing) right before they vote and then cast their vote according to their gut feeling based on the limited context they were able to acquire, then it becomes readily apparent that such a governance system isn’t sustainable in the long term.
However, we know very well that this level of engagement requires a time commitment that is usually beyond the capacity of many delegates, especially the largest ones (by voting power) who are typically involved in multiple projects and have many other commitments. It’s understandable and we cannot expect them to make personal sacrifices for the good of the DAO.
That's the reason why we believe that this incentive/compensation program can serve as an enabler for those delegates to better fulfill their role - either by freeing up a considerable amount of their time to devote to delegate work, or by hiring someone to assist them as their DAO representative (similar to how @Sinkas and I serve as the representatives of L2BEAT and not of ourselves individually). And with the resources from an incentive program at their disposal, the DAO can now expect these delegates to participate meaningfully in governance’s day-to-day, and the DAO can begin to define delegate expectations.
Having said that, we’re not sure if the current scoring framework presented in the proposal fully supports the goals that we outline above, as it puts most of the weight on the voting itself rather then on proactive contributions in the DAO activities before the vote even happens.
If others agree with the aforementioned goals and rationale behind the incentive framework, then we would like to see this scoring framework adjusted to better reflect those goals - either prior to the on-chain vote or later during the proposal execution phase.
Overall, we think it's a good first step and an experiment that will allow us to better understand the impact of such a program and allow us to set expectations for the delegates who participate in this program in the future.
Finally, we would like to point out that this program is intended for delegates as executives/decision makers in the DAO. This program should definitely not preclude other incentive programs for non-delegates (or delegates who do not meet the requirements for this incentives system) who would bring valuable work to the DAO.
Excited to experiment with this. I voted for Option 1: Yes - WIthout Karma as I believe this could be a viable way to incentivize better governance processes, while it's still too early to build tooling before actually understanding what needs to be measured (the parameters might change a lot as we test this out in the next 6 months).
Question as this was my first Shutter-protected proposal: are delegates expected/encouraged to disclose their voted answer before the voting ends, or that defeats the purpose of the hidden vote?
I experience the same problem. I don’t know what’s the cause
We would like to thank the Seed LATAM team for their dedicated work on this proposal. Their commitment to enhancing our DAO's governance is commendable. We are leaning toward supporting Option 1, appreciating its community-driven approach and the nuanced evaluation of delegate contributions it offers. While the automation aspect of Karma in Option 2 is intriguing, we believe it's too early for full implementation. Given the likely evolution of metrics after the first season, a more adaptable, manual trial is preferable. We suggest using Karma as a benchmarking/data visualization tool in these initial phases, ensuring an additional layer of oversight and accuracy in our processes.
Hey! Thank you so much for pointing this out, since this proposal underwent multiple modifications, we made some typos with the formulas and it should actually look more like this, to reflect the formulas we used in the excel:
It's important to keep in mind that delegates are not necessarily token holders and token holders are not necessarily delegates.
Pre-selection is based on a few criteria, just to avoid farming and spamming. Delegates have to express their willingness to participate and the 50 who receive rewards have to compete for income as long as they meet the minimum participation.
I support this program & applaud SeedLatam for taking lead on a framework for delegate compensation.
Framework --> Service provider is the right template for ArbitrumDAO to enter new contractual agreements and i am glad to see a well thought out delegate compensation framework
I support this program & applaud SeedLatam for taking lead on a framework for delegate compensation.
Framework --> Service provider is the right template for ArbitrumDAO to enter new contractual agreements and i am glad to see a well thought out delegate compensation framework
I have voted against inclusion of karma in this season, mostly because the metrics will likely change after season 1. So much better to keep this as a (cheaper) trial run and if the metrics hold up, we make it automated from next season onwards
Fully in favor of the Experimental Incentive System proposal. The clear structure, detailed framework, and commitment to fairness make it a promising initiative. Excited to see the positive impact on delegate engagement.
Fully in favor of the Experimental Incentive System proposal. The clear structure, detailed framework, and commitment to fairness make it a promising initiative. Excited to see the positive impact on delegate engagement.
Hello everyone,
We would like to thank @maxlom0, @Patrick_J, and @Bob-Rossi for their valuable comments and feedback. Special thanks to @Patrick_J for his thorough response; we at Soveign Finance AVC, created by SEEDLatam within MakerDAO, are big fans of his contribution and dedication to MakerDAO.
We would like to share some thoughts:
Hi @maxlomu,
We really appreciate your feedback and we’re working on finding a way to implement it in our proposal, but in the meantime here are some thoughts:
Hi @maxlomu,
We really appreciate your feedback and we’re working on finding a way to implement it in our proposal, but in the meantime here are some thoughts:
I would like to emphasize that our framework does not seek to favor any particular type of delegate. It is intended to encourage active participation in the DAO, regardless of who the participants are (builders, protocols, individual delegates, etc.). It is important to recognize that this framework is experimental and far from perfect. However, starting with a baseline is essential, evaluating the results over a given period, and then making adjustments for improvement. We are aware of the difficulty in achieving a fair balance, but we are confident that, over time, we will be able to establish the right incentives.
Regarding your comment on the high entry participation rate and its possible impact on reducing the number of participating delegates, we agree with what you mentioned. We propose to modify the following parameters:
In addition, we are considering the possibility of increasing the number of selected delegates from 10 to 15 per level. However, this would also imply requesting a larger budget, on which we do not yet have a final decision. We would like to receive feedback from other delegates in this regard.
Regarding compensation for proactivity and initiative, we completely agree with you. It is a challenge to distinguish actions that benefit the DAO and avoid incentivizing initiatives that only favor a small group or the delegates themselves. For this reason, we have included in the proposal a bonus point system (+25% in participation points - TP), aimed at rewarding those delegates who contribute with initiatives beneficial to the DAO. Initially, these bonus points will be awarded by the program administrator. We are interested in evaluating this dynamic and, in the future, proposing a more structured process.
Should a delegate propose or actively participate in an enhancement proposal for Arbitrum DAO and execute it, like the Arbitrum’s Short-Term Incentive Program (Arbitrum Improvement Proposal ), they will be granted an additional +25% to their TP score for making a valuable contribution to the DAO. This could also be a governance process enhancement proposal or a template for grant selection.
Such scenarios are highly subjective and will be left to the judgment of the incentive system administrator. For this reason, we have not included it as a parameter within the table since it can be challenging to assess what genuinely adds value to ArbitrumDAO. Thus, we have decided to handle them this way.
However, I do want to emphasize that we’re open to other ideas on having a less arbitrary framework for these specific scenarios to better incentivize proactivity.
We first want to thank Seed LATAM and @cattin for their continuous effort and dedication on this proposal. As the DAO continues to engage in discussion as to the best mechanisms to support governance participation and proposal analysis, Seed LATAM has been a leader in enhancing our governance process. Given this, Michigan Blockchain are voting FOR Option 1 in the snapshot temperature check.
Seed LATAM has delivered a comprehensive incentive system that involves detailed scoring criteria and encourages community involvement. We believe that the current proposed system will sufficiently evaluate delegate participation with transparency. We must acknowledge that this is our first attempt at such a system. A transparent and iterative process is therefore crucial to produce a community-driven program that benefits the DAO governance and protocol as a whole.
+1 in acknowledging the work that SEEDLatam has put into this with multiple forum detailed form posts & addressing feedback with each iteration.
In totality, I would strongly vote in approval of a proposal of this type. I think that being an active and effective delegate for a DAO of this size / importance to the space can be time consuming... and to reward those who take on the task in the capacity noted above isn't unreasonable. Long-term the more delegates we can get active in the forum the healthier & more decentralized the DAO can become. Incentivizing delegates to be active in the DAO should help both retain and hopefully entice new delegates to join as the time goes on.
gm everyone, I'd like to extend my thanks to @cattin and the SEEDLatam team for their diligent work on this proposal.
I agree that creating a framework to incentivize delegates is essential for our DAO. It not only attracts top talent but also ensures their dedicated commitment.
gm everyone, I'd like to extend my thanks to @cattin and the SEEDLatam team for their diligent work on this proposal.
I agree that creating a framework to incentivize delegates is essential for our DAO. It not only attracts top talent but also ensures their dedicated commitment.
A critical aspect that should be a cornerstone in every DAO is diversity. In light of this, I want to offer an alternative viewpoint on the proposed framework.
The current framework predominantly rewards those who can engage in numerous discussions, vote, and participate actively in the forum, a method I refer to as "horizontal quantity". This approach particularly benefits delegates who can dedicate all their time to the DAO, often those deeply involved in political activities and backed by organizations that can divide tasks among multiple members.
However, the current framework falls short in acknowledging the role of "builders" – individuals and organizations possessing specialized, high-caliber expertise, or what can be termed as "vertical quality " knowledge and skills. These builders play a pivotal role in enhancing the Arbitrum ecosystem, notably through protocol development, attracting new users, and generating revenue for the Arbitrum DAO. Nor does it favor individual delegates who, realistically, have less time to review, discuss, and vote.
While I anticipate the evolution of party systems within DAOs over time, I would like to see a framework that encourages diversity without necessarily leading to complete politicization. This isn't a critique of political organizations; rather, it's an aspiration to cultivate a DAO characterized by a rich multitude of perspectives. The key lies in crafting the right incentives.
Incentivizing individuals with deep vertical expertise, rewarding quality contributions over sheer quantity, and encouraging impactful actions are pivotal. Here's how I envision implementing this:
Base Compensation for All Delegates: Implement a baseline compensation for every active delegate. This would be way below the 4000 ARB initially suggested, yet still proportional to their Tally score and other relevant criteria - and without the need for a 70%+ pre-requirement.
Rewarding Proactivity and Initiative: Place significant emphasis on proactive involvement. Develop a system for endorsing and co-sponsoring proposals. Delegates who sponsor proposals that gain approval should receive additional rewards. This incentivizes not just participation, but meaningful, result-oriented contributions.
Thanks and looking forward to some feedback on this.
This is a great step forward. I'd support with the small change to being payment in ARB. Denominating in $ is a pain and misaligned for this type of payment.
We were also looking into giving Karma a grant to build this. It's nice seeing it linked to payment here.
I like the general idea and agree with @krst about not letting perfect be the enemy of good. If this is difficult to pass due to complexity, we could help run an MVP version to show the DAO its value.
Plurality Labs could offer up to 150k ARB for season 1 (through Jan 31). We can provide technical support and automation of contribution tracking. Additionally, we are already looking to offer the build grant for Karma.
The incentives are meant to attract a certain behaviour from the delegates receiving them, but we shouldn’t have similar expectations from all delegates. We’d much rather incentivise large delegates to vote, actively participate in the discussions around proposals and share their rationale which is founded on solid due diligence, while incentivising smaller delegates (and also non-delegate community members) to actively participate in discussions and contribute to the DAO by tackling specific problems (e.g how @tnorm did with workshops to come up with the short-term incentives proposal).
The Savvy delegation has some serious concerns about this proposal.
Initial concerns:
Next step: We will further review the proposal and recommend improvements early next week. We just ask for the opportunity to do this before it goes to Tally.
Why now? Honestly, we've been so overwhelmed by the amount of work in the DAO that Savvy missed this proposal and only seeing it now because we hired a governance analyst to help deal with the 10-15 proposals/work groups currently in the DAO.
@cattin I also reached out to you on Telegram - appreciate all of your work!
Thank you so much, everyone, for the overwhelming support received on this proposal - since option 2 was the most voted, once this proposal goes to onchain voting, we would have to proceed with the first payment for Karma (10k ARB) so that they can start developing the dashboard for this program.
Before this, though, I want to state that I agree with the points raised by @krst - the idea of this program is to serve as a way to compensate those delegates who have been actively contributing to the DAO and ensure they have a predictable compensation for their future contributions, incentivizing their further participation/reducing apathy. But as pointed out, the greatest challenge we face is that we also have to encourage critical participation ~ the idea shouldn’t be to simply encourage large delegates to vote, but also to have a critical vote. So, as a first step in this direction, we added more weight to the delegate statement to ensure that delegates justify the way they vote (compared to what we had in our previous draft) - but this can definitely be improved, and we are open to suggestions. We could look into forum activity, which can be coupled with discourse metrics, but my only concern is that these are easy to game, and a lot would be left at the administrator's discretion - that doesn’t mean it can’t be done tho. We could also add points for those who attend + engage in calls, but some delegates might not be able to participate due to time zones or simply not wanting to dox themselves. These are just some initial thoughts, though, and I am down to discuss this more in the monthly call.
Regarding the issues pointed out by @Treasure, we agree that there should be complementary frameworks that go beyond the scope of this proposal in order to compensate less active or smaller delegates for their contributions. We also have to emphasize that we did abandon the three-tier system, which was presented in the draft for a more flexible structure, by simply setting a minimum voting power of 50k ARB (to make it less economically viable to game) and also requiring minimum historical participation, in order to compensate those delegates that have been actively contributing to the DAO and incentivize their future contributions. However, we understand capping the monthly compensated delegates to 50 might be arbitrary, but we decided to cap it like this to make it more competitive and also alleviate the workload of the administrator to ensure that they can do their job properly ~ although we could change this a month or so into the program if we find it feasible. And regarding the amount used for monthly payments, we’re also fine with increasing it to maybe 6000 ARB per month, but again, we’re open to any other suggestion.
We believe it’s important to put some emphasis on some points of the proposal:
I have some questions about formulas:
Firstly, we would like to thank @cattin and the Seed LATAM team for reviewing previous proposals and creating this one. We are also grateful to @Patrick_J for sharing his experiences at MakerDAO and contributing to the further development of this proposal.
We are quite excited to see the delegator incentive mechanism, which has been tried in other protocols and solved in different ways, being tested in ArbitrumDAO. We would like to announce that we will actively participate in this experiment and fulfill our responsibilities as delegators. Additionally, the fact that the program can be stopped by a vote from the DAO and that funds will be distributed monthly is an important point in gaining the community's trust.
Firstly, we would like to thank @cattin and the Seed LATAM team for reviewing previous proposals and creating this one. We are also grateful to @Patrick_J for sharing his experiences at MakerDAO and contributing to the further development of this proposal.
We are quite excited to see the delegator incentive mechanism, which has been tried in other protocols and solved in different ways, being tested in ArbitrumDAO. We would like to announce that we will actively participate in this experiment and fulfill our responsibilities as delegators. Additionally, the fact that the program can be stopped by a vote from the DAO and that funds will be distributed monthly is an important point in gaining the community's trust.
We voted for the management of the voting to be primarily handled by the Seed LATAM team and secondarily for the use of Karma, as we believe Karma does not yet have sufficient features for this experiment. We are open to helping out in any way we can during the process.
The below response reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking and ideation of the two.
We are voting FOR this proposal in the temperature check, choosing Option 1 as our preferred solution for the time being. Our rationale and some suggestions regarding potential amendments that could be made before the onchain vote are outlined below.
The below response reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking and ideation of the two.
We are voting FOR this proposal in the temperature check, choosing Option 1 as our preferred solution for the time being. Our rationale and some suggestions regarding potential amendments that could be made before the onchain vote are outlined below.
First of all, we would like to echo the gratitude to @cattin and the whole SEEDLatam group for bringing this proposal forward and pushing the discussion on delegate incentives. We've been discussing and supporting this initiative for some time and have expressed the need for such a program on several occasions. Below we'd like to outline our thinking behind delegate incentives and our expectations for any program that implements it.
To begin with, we think that delegate incentives should come hand-in-hand with delegate responsibilities as receiving monetary compensation both gives birth to expectations but also serves as an enabler for the delegates to carry out their responsibilities.
The role of delegates as we understand it, especially delegates with significant voting power, is of an executive in the DAO, as it’s up to delegates to cast votes and effectively make decisions regarding protocol mechanics and upgrades as well as treasury management/spending. Moreover, and given the current quorum requirements and average participation in the votes, no decision in the DAO can be made without the engagement of top (by voting power) delegates.
Therefore, it is extremely important for these delegates to be informed about the merits of the initiatives taking place and proposals being made, to actively participate in the discussions, to closely follow the development of different proposals and various initiatives and to also to help shape their details. In a broader sense, top delegates need to help navigate the strategic direction in which the DAO is headed.
After all, how can a delegate drive to a conclusion and make a decision on a proposal if they don’t know the context in which this proposal has been brought up, how the specific proposal has been developed in the relevant working group, what other possible options have been considered, and what are the expected consequences of passing a given proposal? Not to mention that many proposals require direct oversight from delegates to ensure proper execution or to take action if the proposer fails to meet their obligations.
If a delegate only spends a dozen minutes reading a proposal (which the proposers have spent tens of hours preparing and discussing) right before they vote and then cast their vote according to their gut feeling based on the limited context they were able to acquire, then it becomes readily apparent that such a governance system isn’t sustainable in the long term.
However, we know very well that this level of engagement requires a time commitment that is usually beyond the capacity of many delegates, especially the largest ones (by voting power) who are typically involved in multiple projects and have many other commitments. It’s understandable and we cannot expect them to make personal sacrifices for the good of the DAO.
That's the reason why we believe that this incentive/compensation program can serve as an enabler for those delegates to better fulfill their role - either by freeing up a considerable amount of their time to devote to delegate work, or by hiring someone to assist them as their DAO representative (similar to how @Sinkas and I serve as the representatives of L2BEAT and not of ourselves individually). And with the resources from an incentive program at their disposal, the DAO can now expect these delegates to participate meaningfully in governance’s day-to-day, and the DAO can begin to define delegate expectations.
Having said that, we’re not sure if the current scoring framework presented in the proposal fully supports the goals that we outline above, as it puts most of the weight on the voting itself rather then on proactive contributions in the DAO activities before the vote even happens.
If others agree with the aforementioned goals and rationale behind the incentive framework, then we would like to see this scoring framework adjusted to better reflect those goals - either prior to the on-chain vote or later during the proposal execution phase.
Overall, we think it's a good first step and an experiment that will allow us to better understand the impact of such a program and allow us to set expectations for the delegates who participate in this program in the future.
Finally, we would like to point out that this program is intended for delegates as executives/decision makers in the DAO. This program should definitely not preclude other incentive programs for non-delegates (or delegates who do not meet the requirements for this incentives system) who would bring valuable work to the DAO.
Excited to experiment with this. I voted for Option 1: Yes - WIthout Karma as I believe this could be a viable way to incentivize better governance processes, while it's still too early to build tooling before actually understanding what needs to be measured (the parameters might change a lot as we test this out in the next 6 months).
Question as this was my first Shutter-protected proposal: are delegates expected/encouraged to disclose their voted answer before the voting ends, or that defeats the purpose of the hidden vote?
I experience the same problem. I don’t know what’s the cause
We would like to thank the Seed LATAM team for their dedicated work on this proposal. Their commitment to enhancing our DAO's governance is commendable. We are leaning toward supporting Option 1, appreciating its community-driven approach and the nuanced evaluation of delegate contributions it offers. While the automation aspect of Karma in Option 2 is intriguing, we believe it's too early for full implementation. Given the likely evolution of metrics after the first season, a more adaptable, manual trial is preferable. We suggest using Karma as a benchmarking/data visualization tool in these initial phases, ensuring an additional layer of oversight and accuracy in our processes.
Hey! Thank you so much for pointing this out, since this proposal underwent multiple modifications, we made some typos with the formulas and it should actually look more like this, to reflect the formulas we used in the excel:
It's important to keep in mind that delegates are not necessarily token holders and token holders are not necessarily delegates.
Pre-selection is based on a few criteria, just to avoid farming and spamming. Delegates have to express their willingness to participate and the 50 who receive rewards have to compete for income as long as they meet the minimum participation.
I support this program & applaud SeedLatam for taking lead on a framework for delegate compensation.
Framework --> Service provider is the right template for ArbitrumDAO to enter new contractual agreements and i am glad to see a well thought out delegate compensation framework
I support this program & applaud SeedLatam for taking lead on a framework for delegate compensation.
Framework --> Service provider is the right template for ArbitrumDAO to enter new contractual agreements and i am glad to see a well thought out delegate compensation framework
I have voted against inclusion of karma in this season, mostly because the metrics will likely change after season 1. So much better to keep this as a (cheaper) trial run and if the metrics hold up, we make it automated from next season onwards
Fully in favor of the Experimental Incentive System proposal. The clear structure, detailed framework, and commitment to fairness make it a promising initiative. Excited to see the positive impact on delegate engagement.
Fully in favor of the Experimental Incentive System proposal. The clear structure, detailed framework, and commitment to fairness make it a promising initiative. Excited to see the positive impact on delegate engagement.
Hello everyone,
We would like to thank @maxlom0, @Patrick_J, and @Bob-Rossi for their valuable comments and feedback. Special thanks to @Patrick_J for his thorough response; we at Soveign Finance AVC, created by SEEDLatam within MakerDAO, are big fans of his contribution and dedication to MakerDAO.
We would like to share some thoughts:
Hi @maxlomu,
We really appreciate your feedback and we’re working on finding a way to implement it in our proposal, but in the meantime here are some thoughts:
Hi @maxlomu,
We really appreciate your feedback and we’re working on finding a way to implement it in our proposal, but in the meantime here are some thoughts:
I would like to emphasize that our framework does not seek to favor any particular type of delegate. It is intended to encourage active participation in the DAO, regardless of who the participants are (builders, protocols, individual delegates, etc.). It is important to recognize that this framework is experimental and far from perfect. However, starting with a baseline is essential, evaluating the results over a given period, and then making adjustments for improvement. We are aware of the difficulty in achieving a fair balance, but we are confident that, over time, we will be able to establish the right incentives.
Regarding your comment on the high entry participation rate and its possible impact on reducing the number of participating delegates, we agree with what you mentioned. We propose to modify the following parameters:
In addition, we are considering the possibility of increasing the number of selected delegates from 10 to 15 per level. However, this would also imply requesting a larger budget, on which we do not yet have a final decision. We would like to receive feedback from other delegates in this regard.
Regarding compensation for proactivity and initiative, we completely agree with you. It is a challenge to distinguish actions that benefit the DAO and avoid incentivizing initiatives that only favor a small group or the delegates themselves. For this reason, we have included in the proposal a bonus point system (+25% in participation points - TP), aimed at rewarding those delegates who contribute with initiatives beneficial to the DAO. Initially, these bonus points will be awarded by the program administrator. We are interested in evaluating this dynamic and, in the future, proposing a more structured process.
Should a delegate propose or actively participate in an enhancement proposal for Arbitrum DAO and execute it, like the Arbitrum’s Short-Term Incentive Program (Arbitrum Improvement Proposal ), they will be granted an additional +25% to their TP score for making a valuable contribution to the DAO. This could also be a governance process enhancement proposal or a template for grant selection.
Such scenarios are highly subjective and will be left to the judgment of the incentive system administrator. For this reason, we have not included it as a parameter within the table since it can be challenging to assess what genuinely adds value to ArbitrumDAO. Thus, we have decided to handle them this way.
However, I do want to emphasize that we’re open to other ideas on having a less arbitrary framework for these specific scenarios to better incentivize proactivity.
We first want to thank Seed LATAM and @cattin for their continuous effort and dedication on this proposal. As the DAO continues to engage in discussion as to the best mechanisms to support governance participation and proposal analysis, Seed LATAM has been a leader in enhancing our governance process. Given this, Michigan Blockchain are voting FOR Option 1 in the snapshot temperature check.
Seed LATAM has delivered a comprehensive incentive system that involves detailed scoring criteria and encourages community involvement. We believe that the current proposed system will sufficiently evaluate delegate participation with transparency. We must acknowledge that this is our first attempt at such a system. A transparent and iterative process is therefore crucial to produce a community-driven program that benefits the DAO governance and protocol as a whole.
+1 in acknowledging the work that SEEDLatam has put into this with multiple forum detailed form posts & addressing feedback with each iteration.
In totality, I would strongly vote in approval of a proposal of this type. I think that being an active and effective delegate for a DAO of this size / importance to the space can be time consuming... and to reward those who take on the task in the capacity noted above isn't unreasonable. Long-term the more delegates we can get active in the forum the healthier & more decentralized the DAO can become. Incentivizing delegates to be active in the DAO should help both retain and hopefully entice new delegates to join as the time goes on.
gm everyone, I'd like to extend my thanks to @cattin and the SEEDLatam team for their diligent work on this proposal.
I agree that creating a framework to incentivize delegates is essential for our DAO. It not only attracts top talent but also ensures their dedicated commitment.
gm everyone, I'd like to extend my thanks to @cattin and the SEEDLatam team for their diligent work on this proposal.
I agree that creating a framework to incentivize delegates is essential for our DAO. It not only attracts top talent but also ensures their dedicated commitment.
A critical aspect that should be a cornerstone in every DAO is diversity. In light of this, I want to offer an alternative viewpoint on the proposed framework.
The current framework predominantly rewards those who can engage in numerous discussions, vote, and participate actively in the forum, a method I refer to as "horizontal quantity". This approach particularly benefits delegates who can dedicate all their time to the DAO, often those deeply involved in political activities and backed by organizations that can divide tasks among multiple members.
However, the current framework falls short in acknowledging the role of "builders" – individuals and organizations possessing specialized, high-caliber expertise, or what can be termed as "vertical quality " knowledge and skills. These builders play a pivotal role in enhancing the Arbitrum ecosystem, notably through protocol development, attracting new users, and generating revenue for the Arbitrum DAO. Nor does it favor individual delegates who, realistically, have less time to review, discuss, and vote.
While I anticipate the evolution of party systems within DAOs over time, I would like to see a framework that encourages diversity without necessarily leading to complete politicization. This isn't a critique of political organizations; rather, it's an aspiration to cultivate a DAO characterized by a rich multitude of perspectives. The key lies in crafting the right incentives.
Incentivizing individuals with deep vertical expertise, rewarding quality contributions over sheer quantity, and encouraging impactful actions are pivotal. Here's how I envision implementing this:
Base Compensation for All Delegates: Implement a baseline compensation for every active delegate. This would be way below the 4000 ARB initially suggested, yet still proportional to their Tally score and other relevant criteria - and without the need for a 70%+ pre-requirement.
Rewarding Proactivity and Initiative: Place significant emphasis on proactive involvement. Develop a system for endorsing and co-sponsoring proposals. Delegates who sponsor proposals that gain approval should receive additional rewards. This incentivizes not just participation, but meaningful, result-oriented contributions.
Thanks and looking forward to some feedback on this.
This is a great step forward. I'd support with the small change to being payment in ARB. Denominating in $ is a pain and misaligned for this type of payment.
We were also looking into giving Karma a grant to build this. It's nice seeing it linked to payment here.
I like the general idea and agree with @krst about not letting perfect be the enemy of good. If this is difficult to pass due to complexity, we could help run an MVP version to show the DAO its value.
Plurality Labs could offer up to 150k ARB for season 1 (through Jan 31). We can provide technical support and automation of contribution tracking. Additionally, we are already looking to offer the build grant for Karma.
The incentives are meant to attract a certain behaviour from the delegates receiving them, but we shouldn’t have similar expectations from all delegates. We’d much rather incentivise large delegates to vote, actively participate in the discussions around proposals and share their rationale which is founded on solid due diligence, while incentivising smaller delegates (and also non-delegate community members) to actively participate in discussions and contribute to the DAO by tackling specific problems (e.g how @tnorm did with workshops to come up with the short-term incentives proposal).
Fully in favor of the Experimental Incentive System proposal. The clear structure, detailed framework, and commitment to fairness make it a promising initiative. Excited to see the positive impact on delegate engagement.
Arb has been at the forefront of the industry in developing and discussing DAO. Therefore, I fully support the Experimental Incentive System proposal due to its clear structure, detailed framework, and commitment to fairness. I am excited to witness the positive impact it will have on delegate engagement.
Hello everyone,
We would like to thank @maxlom0, @Patrick_J, and @Bob-Rossi for their valuable comments and feedback. Special thanks to @Patrick_J for his thorough response; we at Soveign Finance AVC, created by SEEDLatam within MakerDAO, are big fans of his contribution and dedication to MakerDAO.
We would like to share some thoughts:
We recognize and share the concerns raised by @Patrick_J. Initially, we implemented a tier system to mitigate incentive manipulation. However, it is clear that this approach requires significant adjustments. In response to this, and also addressing the concerns of @Bob-Rossi and @maxlom0, we propose the following structural changes:
Delegate Requirements:
We use Tally as the main source of data to make it easier for delegates to calculate their participation rate since it already provides it, considering that now, due to the STIP, there are also more than 100 proposals on Snapshot. But we are open to changing this (maybe karma could help aggregate snapshot participation).
We just want to clarify that the maximum TP currently is 125%, but the limit of the amount paid to delegates would just be 5k ARB (corresponding to a TP of 100%). The remaining TP would just help them improve their rank.
Note that delegates are responsible for reporting their activity in an orderly fashion, thus avoiding overburdening the program administrator.
Delegates are responsible for keeping track of their actions. At the end of the month, they have until the 3rd of the following month to submit a forum post with the following requirements:
A copy (Link) of the framework with their activity data for that month.
Additionally, the post must have a summary with all the links including:
Snapshot voting link
Forum post link explaining the reasoning behind the snapshot vote
Tally voting link
Forum post link explaining the tally vote reasoning (if you have changed your vote)
Commenting on Proposals link (only those that went to snapshots)
The summary should also include:
Delegate proposal links
Links to any significant contribution (discussion, questions, suggestions, etc.) made to a proposal.
In response to @maxlom0's proposal on compensation for proactivity and initiatives, we are incorporating a bonus system (+25% in TP points) for delegates who contribute significantly to the DAO. These points will initially be allocated by the program administrator, but we do think we need at least some sort of rubric that the administrator could use to determine how many bonus points a delegate should receive for specific actions.
Our original intention was to encourage delegates to be more proactive, and ideally compensate those who manage to push proposals like the following to snapshot with bonus points:
Note:
In the current context, the Arbitrum Foundation has two Facilitators. However, we are aware that we cannot assign additional responsibilities to them as DAOs. The initial uncertainty about the magnitude of the workload to administer this system has been clarified thanks to the feedback provided by Patrick. Consequently, we consider it pertinent to seek the collaboration of another person, delegate or entity, who, in conjunction with SEEDLatam, will contribute to the effective implementation of the program.
We are willing to allocate a specific budget for this collaboration, but we wish to confirm if this proposal has the governance endorsement. We also want to emphasize that we offered to administer this program from SEED Latam in case we don’t find a facilitator willing to run it ~ and if this happens our delegation would obviously not partake in the program, regardless we do understand the concerns raised plus potential conflicts of interest.
This approach highlights the relevance of roles such as facilitator. Previously, we proposed an RFC to discuss the integration of the Facilitator role in the DAO. At that time, the activity and initiatives were not as significant as they are today, which is why we did not move forward with the proposal. Currently, we have a draft for the election of governance facilitators, which we share below for your review and comments:
We agree that if we can automate procedures, it will be easier for the program administrator. We can ask @mmurthy if Karma has any problems or suggestions with these changes.
We first want to thank Seed LATAM and @cattin for their continuous effort and dedication on this proposal. As the DAO continues to engage in discussion as to the best mechanisms to support governance participation and proposal analysis, Seed LATAM has been a leader in enhancing our governance process. Given this, Michigan Blockchain are voting FOR Option 1 in the snapshot temperature check.
Seed LATAM has delivered a comprehensive incentive system that involves detailed scoring criteria and encourages community involvement. We believe that the current proposed system will sufficiently evaluate delegate participation with transparency. We must acknowledge that this is our first attempt at such a system. A transparent and iterative process is therefore crucial to produce a community-driven program that benefits the DAO governance and protocol as a whole.
This is also why we are choosing to support Option 1 over Option 2, which introduces automation with Karma. Though automation and optimizing the process will be important as the DAO progresses, implementing such a system before we have fully understood what is required of said system would be unnecessary and could hinder our ability to iterate and improve going forward. We agree with @Curia that utilizing Karma or other tools for data visualization and transparency would be beneficial as we run this trial. We are excited by the prospect of this proposal and look forward to working with Seed LATAM and our fellow delegates to see its success.
+1 in acknowledging the work that SEEDLatam has put into this with multiple forum detailed form posts & addressing feedback with each iteration.
In totality, I would strongly vote in approval of a proposal of this type. I think that being an active and effective delegate for a DAO of this size / importance to the space can be time consuming... and to reward those who take on the task in the capacity noted above isn't unreasonable. Long-term the more delegates we can get active in the forum the healthier & more decentralized the DAO can become. Incentivizing delegates to be active in the DAO should help both retain and hopefully entice new delegates to join as the time goes on.
The foundation of this proposal is a good one. 6 months is a good timeframe. Moving to ARB as the budget is perfect for ease of administration, as well as gives incentive for delegates to make decisions with the health of the ARB token in mind. The cost & scope - 1 Million ARB is IMO a completely fair, arguably low, cost for a project like this. Considering other approved projects of this scope. I agree with avoiding an overly complex system, especially for a 6 month trail run.
I'll add, forcing delegates to actively apply and holding themselves accountable with reporting threads is a must for me.
Tiers: It looks like the limits were designed to put about 50 potential delegates in each tier. (Or maybe that is just pure coincidence?). Either way, probably my only real reservation / concern with the proposal would be that at 10 delegates a tier it's seems narrow in scope. I'd rather see more delegates covered, balanced by lower ARB incentives. i.e. I'd personally rather see something like 20 delegates a tier with the chance at 4k / 3k / 2k ARB in each tier. At current prices, those are still fairly hefty monthly incentives considering the role.
If anything is taken from this post... I do strongly think the 10 per tier limit being bumped up is something to consider if not addressed in prior discussions. Bumping up delegates paid gives opportunity to entice more delegates to meaningfully participate. I simply bring this up as I'd hate to see a situation where a tier has something like 12 delegates who are all doing a really great job, but only 10 get paid. (and yes, I know a cap of say 20 has the same problem if 21 people apply... but at that amount it's seems less likely to have 21 delegates all doing near perfect delegate work for 6 months straight.) And the two who are doing near equal work are getting nothing, resulting in them just stopping their work out of frustration... Or the flip side, where there are 40 delegates in a tier that apply and the bottom half feel like it's pointless to even try because they have 0 chance of making top 10 anyway.
To offer a solution, maybe the alternative is as simple as adding some flexibility in the count depending on applicants per tier? Or maybe the 95% rule moved down to 90%? I just want to avoid the STIP scenario where we are making assumptions on participation rates with 0 historical data, only to find the actual participation wildly out of whack for reason's not foreseen.
Scoring System: The formula looks to be pretty fair to me, and well thought out. I think the bonus points is a nice idea to resolve the previous issue of 'proposal spamming'. It also allows for a good mix between objective standards with a little bit of subjective leeway for extraordinary performance.
The rule about exceeding 95% score I'd almost rather see as a fixed rule, versus as a discretionary tool. To hit 95% you'd have to be a longstanding delegate (due to the historical Participation Rate being 20% of the weighting) with an essentially perfect month of voting + communicating. If we see 11 or more delegates hit that, they all deserve to be paid.
Karma: I admittedly don't know a ton about them. From what I read in the post, I don't have issue with it as a general idea. However, if this - Delegates of Arbitrum DAO (karmahq.xyz) - is the dashboard I'm not sure if it's super accurate, at least based on reviewing my profile. My voting statistics seem way off...? Although it sounds like that is to be updated as part of the 20k cost (which seems reasonable from what I can tell, if they do what is noted in the OP). It looks like they can also add Snapshot votes as well in their dashboard, which is a good feature if we want to go that route.
In summary, I think this is at a minimum worth putting to Snapshot vote to get larger community feedback. I would vote "For" this if it did go to vote, as on the whole it seems like a mostly well thought-out and discussed proposal. My only real critique would be I'd rather see more delegates rewarded as I noted above in the discussion regarding the tiered incentive system, but if it the community at large is okay with 10 I wouldn't let it stop me since it is ultimately a trail run.
Edit: For transparency, I've left my original wording about Karma above. But a quick update since then - they did reach out super quickly and addressed the issue of counting the Tally votes improperly. My dashboard looks correct now and the experience / talking to their team has led me to believe they would do a good job if we used their platform. And having a chance to use look at it a little more I'd be for it.
I like the general idea and agree with @krst about not letting perfect be the enemy of good. If this is difficult to pass due to complexity, we could help run an MVP version to show the DAO its value.
Plurality Labs could offer up to 150k ARB for season 1 (through Jan 31). We can provide technical support and automation of contribution tracking. Additionally, we are already looking to offer the build grant for Karma.
This would also provide a program manager payment for whoever is guiding the effort from Seed Latam.
My concern is that this proposal locks the group into a set of constraints that might prove difficult for the project. I hope to see it succeed. A short MVP period could justify the larger spend while allowing the team to really find which delegate contributions are the most valuable and how to accurately track them.
Happy to discuss anytime.
The incentives are meant to attract a certain behaviour from the delegates receiving them, but we shouldn’t have similar expectations from all delegates. We’d much rather incentivise large delegates to vote, actively participate in the discussions around proposals and share their rationale which is founded on solid due diligence, while incentivising smaller delegates (and also non-delegate community members) to actively participate in discussions and contribute to the DAO by tackling specific problems (e.g how @tnorm did with workshops to come up with the short-term incentives proposal).
That way, we’re taking a holistic approach, incentivising both responsive (discussing, voting, sharing rationale), and proactive (participating in discussions, creating proposals) actions.
We have considered this, but we also wanted to evaluate with this first iteration how delegates react to these "tasks" to be performed and to see what other activities we should evaluate or consider. Therefore, in this first iteration we wanted to keep the programme simple.
Should a delegate propose or actively participate in an enhancement proposal for Arbitrum DAO and execute it, like the Arbitrum’s Short-Term Incentive Program (Arbitrum Improvement Proposal ), they will be granted an additional +10% to their TP score for making a valuable contribution to the DAO. This could also be a governance process enhancement proposal or a template for grant selection.
Such scenarios are highly subjective and will be left to the judgment of the incentive system administrator. For this reason, we have not included it as a parameter within the table since it can be challenging to assess what genuinely adds value to ArbitrumDAO. Thus, we have decided to handle them this way.
In this case, the evaluation is left to the programme manager and +10 extra points are awarded to delegates who carry out these tasks. We know that this is difficult to evaluate, that is why we put it this way.
We also take into account that many delegates may want to carry out these tasks.
We are thinking in the future (once the incentives for delegates are in place) how to organise specific working groups to go deeper into the different verticals that ArbitrumDAO needs to be successful. But this should be a next step as in the end it is the delegates who vote and we need to have a solid basis for them to vote in the different verticals.
The below response reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking and ideation of the two.
First off, we want to thank Cattin for working on this proposal and for his efforts to push things forward. We offered some feedback in the RFC and we’re happy to see it was taken into consideration when this proposal was drafted.
The below response reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking and ideation of the two.
First off, we want to thank Cattin for working on this proposal and for his efforts to push things forward. We offered some feedback in the RFC and we’re happy to see it was taken into consideration when this proposal was drafted.
Below you can find our feedback on some of the key aspects of the proposal, as well as our rationale behind it.
Duration
Overall, we find 6 months to be a good length in order to have adequate time to gather info and feedback on the system’s effect. However, since the outlined incentive system is experimental, we believe it’d be more appropriate to have an evaluation point halfway through its duration (so, at 3 months since the beginning) in order to assess whether we’re gathering the necessary data and evaluate the program’s effect.
Funding
We find the total amount requested (1,080,000 ARB) reasonable, especially since it’s broken down between 30 delegates for 6 month with the intent of being a meaningful incentive for delegates to actively participate. However, we agree with @jengajojo that the amounts should be denominated in ARB and not in USD.
Delegate Selection Process
First off, as also pointed out be @jengajojo, we believe that delegates should have to opt-in for the incentives with a quick application. In our eyes, that will help a bit with social curation, and we’ll avoid any delegate who’s inactive but still has voting power delegated to him receiving incentives.
We do not understand the purpose of the ARB token-lock requirement in the way it’s structured. If it’s meant to be a deterrent, then the amount would have to be more than ~50% (or less) of a single month’s incentives. However, with an increase to the token lock requirement, and arguably even with the current requirement, the system leans on a plutocratic approach, where the people who do not have the ARB to lock will be excluded, regardless of their contributions to the DAO.
We’d suggest removing the token lock requirement altogether.
Having given the feedback above, and having participated in SEED Latam’s call on 25th of September, we also want to bring up a slightly different approach based on our views of delegate incentives.
There are 2 main aspects to our view:
Being as complicated as it is to figure out, chances are we won’t have a perfect delegate incentive system from the get-go. Instead of spending weeks on end discussing and brainstorming different approaches, we should instead focus on having a basic framework on which we’ll iterate based on the data we gather by actually running it for a few months. With that in mind, a simple approach is best since we can use it as the foundation on which we’ll eventually build a more complete process.
The incentives are meant to attract a certain behaviour from the delegates receiving them, but we shouldn’t have similar expectations from all delegates. We’d much rather incentivise large delegates to vote, actively participate in the discussions around proposals and share their rationale which is founded on solid due diligence, while incentivising smaller delegates (and also non-delegate community members) to actively participate in discussions and contribute to the DAO by tackling specific problems (e.g how @tnorm did with workshops to come up with the short-term incentives proposal).
That way, we’re taking a holistic approach, incentivising both responsive (discussing, voting, sharing rationale), and proactive (participating in discussions, creating proposals) actions.
We’d love to continue the discussion and help formulate an updated proposal based on the feedback provided. As such, we want to invite @Cattin and anyone else who’s interested in our Office Hours on Thursday 28th of September at 3pm UTC / 11am EST.
First off, as also pointed out be @jengajojo, we believe that delegates should have to opt-in for the incentives with a quick application. In our eyes, that will help a bit with social curation, and we’ll avoid any delegate who’s inactive but still has voting power delegated to him receiving incentives.
Hi @krst and @sinkas, this is already included in the proposal. To participate the delegate must express it through a template with this data.
Delegates matching the tiered requirements must confirm their participation in the Incentive System in the forum (a dedicated channel will be established for this). They must post using the template provided below, within a 7-day application window.
Incentive Program Confirmation Template:
Note:
Eligible delegates for the incentive program will be announced on the forum.
This also makes it easier for the administrator to filter the delegates who are going to participate.
Thanks @cattin for the proposal.
I'd like to start by appreciating SEEDLatam for doing the research and proposing to support the work delegates do in DAOs via this proposal.
Here are my suggestions:
Thanks @cattin for the proposal.
I'd like to start by appreciating SEEDLatam for doing the research and proposing to support the work delegates do in DAOs via this proposal.
Here are my suggestions:
I am happy to see the delegate tiers and compensation for each tier.
Aside from voting and communicating rationale, the only other thing T1 delegates are rewarded for is putting proposals up, this can incentives folks to put spam proposals. Hence I do not support compensation based on number of proposals uploaded for T1 delegates.
Delegates who wish to participate in this program should opt-into the same with an application outlining their goals for ArbitrumDAO and KPIs to measure their success or failure of their delegation at the end of the 6 month period.
Aside from staking and total votes delegated, there isn't much difference between T1, T2 and T3 delegates. While I understand the rationle for this tier system, I propose a different 3 tier system:
| Tier | Has at least 100K ARB delegated? | Has verifiable governance experience? | Can post on snapshot/tally? | ARB locked |
|---|---|---|---|---|
| 1 | Y | Y | Y | 3500+ |
| 2 | Y | Y | N | 2500+ |
| 2 | Y | N | Y | 2500+ |
| 3 | Y | N | N | 750+ |
Definition of Verifiable Governance Exp:
For better alignment between delegates and the DAO, I suggest all compensation be denominated in ARB not USD
To further strengthen value alignment, compensation should be done in time-locked ARB, with a 6 month lock. Hedgy infra enables this at no additional cost.
A 100K ARB Gitcoin round for delegates at the of the program. This will help us as a DAO identify our most valuable delegates and help these delegates be compensated fairly for their contribution
Delegates who are able to pass proposals via snapshot and tally are helping the DAO gain consensus and hence this should definitely be rewarded irrespective of delegate tier. I suggest 10000 ARB compensation for delegates whos' proposals pass snapshot and tally voting.
I agree with your proposal for the compensation calculation mechanism generally except the PSS criteria since this incentivises a lot of activity at the detriment of valuable converstion.
@krst I really want to attend Thursday's call but I have a personal conflict. There are probably other interested delegates with conflicts too. Can you please record the call for us? Thanks in advance.
Hey @maxlomu, very interesting perspective!
I agree with the idea that constructive and valuable contributions should be rewarded. However, I'm not entirely sure (speaking from my personal opinion) that the delegate program is the way to implement such compensation.
Hey @maxlomu, very interesting perspective!
I agree with the idea that constructive and valuable contributions should be rewarded. However, I'm not entirely sure (speaking from my personal opinion) that the delegate program is the way to implement such compensation.
Mixing the role of reviewing and voting on proposals with a benefit for supporting and approving them can lead to a situation of collusion, where the interest in obtaining the reward for proposing / the endorsement outweighs the critical and constructive scrutiny. Ultimately, this could lead to a deterioration in the quality of the approved proposals.
That said, it would be interesting to discuss your idea of developing a system for rewarding individual builders that bring value and generate revenue for the Arbitrum DAO.
Following the publication of [RFC-2] Delegate Incentive System for ArbitrumDAO, the Karma team reached out to the SEED Latam team to explore a collaborative effort on the incentive system.
Following the publication of [RFC-2] Delegate Incentive System for ArbitrumDAO, the Karma team reached out to the SEED Latam team to explore a collaborative effort on the incentive system.
While we are confident that Karma enriches the proposal, we have introduced it as an optional feature, recognizing that the community might have a different perspective. If the DAO feels it is not appropriate, this option can be omitted and the proposal can continue with Option 1.
Karma is an integrated set of DAO tools for measuring contributions and improving governance. DAOs and communities use these tools to engage contributors, track their contributions, and take action to increase engagement and accountability.
Karma is a team of four developers with two years of experience in the DAO space. Mahesh Murthy is the founder of Karma. Their flagship product is the Delegate Dashboard, and they have collaborated with numerous DAOs, including Optimism, Gitcoin, Starknet and more. You can view all our dashboards at: https://karmahq.xyz/daos.
Website: https://www.karmahq.xyz/ Twitter: https://twitter.com/karmahq_
SeedLatam proposes an experimental delegate incentive program. Karma's delegation dashboard can track all delegate activities, including on-chain and off-chain voting participation, as well as Forum and Discord activity. This proposal seeks to establish the delegate dashboard for Arbitrum and incorporate additional features to enhance the incentive program.
Proposed additional features (specific to incentive program) include:
SeedLatam proposes an experimental delegate incentive program. Karma's delegation dashboard can track all delegate activities, including on-chain and off-chain voting participation, as well as Forum and Discord activity. This proposal seeks to establish the delegate dashboard for Arbitrum and incorporate additional features to enhance the incentive program.
Proposed additional features (specific to incentive program) include:
Should the proposal be approved, the following will be implemented:
A Delegate Dashboard for Arbitrum will be established, mirroring what we've set up for other DAOs like Optimism, Gitcoin, Starknet and more. The dashboard will feature:
Clear indications on each delegate card regarding whether that delegate has chosen to receive compensation. A new filtering feature will be added to sort delegates based on this criterion.
A fresh page will be added to the dashboard, showcasing all delegates compensated on a monthly basis, complete with amounts and statistics.
Monthly compensation metrics for delegates will be displayed, ensuring transparency for both the delegates and the community. This will simplify the process for delegates by removing the requirement for monthly self-reporting.
Administrative functions will be automated for ease in verifying metrics and initiating payments to qualifying delegates.
Karma will create the delegate dashboard, develop the necessary functionality to strengthen the incentive program and ensure that the data is kept up to date. The price for the product and support will be 20,000 USD for the first 6 months of the program. Will configure the control panel and complete the implementation of the features within one month of proposal approval. As modifications to the incentive program are expected based on new knowledge, you will continually update and maintain the features to adapt to evolving program requirements.
The payment for Karma will be executed in two parts
Although Karma automates much of the process, delegates still need to perform the following tasks:
It is recommended that, until the system is optimized, delegates keep a log of their activities.
Seed Latam is committed to monitor the proper functioning of Karma and to collect feedback from the community on the performance of the dashboard. We also commit to collaborate with Karma so that the dashboard meets the needs of the incentive system.
SEED Latam does not have any commercial relationship with Karma nor does it receive any payment from them for incorporating them into this proposal.
The only link between SEED Latam and Karma is that both want the success of the Arbitrum ecosystem.
Proposal overview
Duration of the incentive system
Total Number of Delegates to Receive Incentives
Selection process
Eligible delegates must confirm their participation in the incentive system by posting a message on the forum.
Scoring
Minimum to receive incentives
Adicional Score
Parameter Snapshots
Dispute
Payments
Multisig Management
Incentive system administrator
Option 1
Option 2
Source of truth: https://www.coingecko.com/en/coins/arbitrum
Option 1:
Option 2:
The incentive program will begin on the 1st of the closest month to ensure an organized schedule.
Please note that this initial incentive system is experimental and is not intended to be the final version. With this initiative, we aim to evaluate the performance of the DAO and determine its positive impact. We also anticipate collaboration from both the governance team and facilitators to ensure its success.
At the end of the six months, SEEDLatam commits to delivering a report containing the gathered data and feedback from the governance.
We would like to thank all the people who gave us their feedback and also those interested in the subject, we believe this is important for ArbitrumDAO: @noturhandle, @0xNSE, @benhoneill, @Saurabh, @Frisson, @jengajojo, @DisruptionJoe and everyone who sent us a message via twitter and telegram, and we also want to thank @krst and @Sinkas for providing the space to discuss this topic on their Arbitrum Office Hours – giving us a lot of useful insights + feedback.
We would also like to thank @pedrob who is a SEEDLatam contributor who collaborated in the creation of the proposal. He belongs to SOFI AVC of MakerDAO and has extensive knowledge about incentives for ecosystem actors.
For one week, the community is encouraged to share their views and suggest modifications to this proposal, allowing us to better tailor it to the needs of ArbitrumDAO. If one week proves insufficient for this process, we will extend the feedback period by an additional week.
Appreciate the update / revisions that take into consideration the feedback.
I think after hearing more thoughts about the tier system, scraping it is worthwhile for scenarios mentioned by @Patrick_J. I also see the eligible delegate pool has increased to 200 or so, and those who get paid out from 30 to 50, which I think is good as well. Among the other changes, I think it is in a good state for voting.
Appreciate the update / revisions that take into consideration the feedback.
I think after hearing more thoughts about the tier system, scraping it is worthwhile for scenarios mentioned by @Patrick_J. I also see the eligible delegate pool has increased to 200 or so, and those who get paid out from 30 to 50, which I think is good as well. Among the other changes, I think it is in a good state for voting.
I saw the discussion regarding snapshot. I think something to add is that the Scoring System does include Tally Votes, so though it is not part of the historical Participation Rate metric, it still is reflected in 15% of the weighting. So while Tally has more weight overall, voting on Snapshot has not lost impact completely. If there is large pushback to include the Snapshot metrics, my suggestion would be just ignoring the any votes related to the Round 1 STIP. I know that isn't a great solution, but the large vote count massively throws off Snapshot metrics to the point I'm not sure it accurately reflects the spirit of a historical participation rate. i.e., someone who voted only in the STIP will have a far better participant rate then someone who voted in everything but the STIP. And beyond even all that, makes tracking a nightmare. While not perfect, it may be a worthwhile compromise. As those who want Snapshot history included do get it included, while also keeping tracking complexity down.
We should definitely offer incentives to the delegates. Here, we can learn from DAOs like Maker and Aave; they have programs such as recognized delegates to incentivize them. This could definitely be one approach, but we should also remain open to various alternatives or frameworks.
Thanks for the forum post, @cattin, and the Seed Latam community.
Thank you @cattin and SEEDLatam for advancing this important initiative. I am a member of @404DAO and I also write for Tally's Content Guild. Over the last month, I have spoken with Arbitrum delegates and performed research on delegate compensation in order to synthesize Cattin/SeedLatam's Request for Comments, as well as incorporate community input. I trust this article will be a valuable resource as the experimental delegate incentive system unfolds.
Note: The perspective shared in the article is independent of 404 DAO.
Thank you for the proposal @cattin
I am generally in favor of incentivising delegates who have demonstrated positive contribution in the DAO via
Thank you for the proposal @cattin
I am generally in favor of incentivising delegates who have demonstrated positive contribution in the DAO via
Another thing to note here is that often delegates with 'sufficient' voting power are compensated in examples of DAOs listed here, at the same time delegation shuffling does not occur frequently enough such that new or emerging delegates have the opportunity to contribute and earn from the DAO. I suggest a robust evaluation system based on a code of conduct as well as using QF to match delegate voting weights with those who have received delegation from unique wallets. The general principle should be that whales delegate their tokens to a matching pool and retail is encouraged to delegate in order to get a better signal of broad support.
I think delegate compensation is essential. Delegates should not be expected to work for free, and indeed are unlikely to do so in the long term. Furthermore, compensation would allow delegates to justify spending more time on Arbitrum, which is ultimately good for the entire ecosystem.
With that said, I suspect most would agree that delegates should get paid. The tricky part is how to pay them. It's easy to imagine a system where the same set of delegates voting to pay themselves forever leads to governance capture, thus removing the incentive to work that the compensation was designed to create in the first place.
The how-to is definitely the trickiest part, I really like @jengajojo suggestion of doing so through QF, but I also think we have to consider based on which metrics/parameters we would compensate delegates - and given that some metrics might be subjective, it could be difficult to implement this in a fully trustless way. Apart from this, I think that whatever scores are assigned to candidates should be reset after some time, just to prevent candidates that once were very active to keep on receiving incentives after they stop contributing, if that makes sense. This is why we also proposed having governance epochs, which could complement this but is not strictly needed.
So to summarize this, imo we should try to make this as trustless as possible, but also ensure that we can have sybil resistant metrics to base our rewards on.
The below response reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking and ideation of the two.
While we are definitely supporting of the idea that delegate incentives are a huge step forward toward attracting devoted contributors to Arbitrum’s governance, we’re also not oblivious to the fact that introducing delegate incentives comes multiple challenges attached.
Fully in favor of the Experimental Incentive System proposal. The clear structure, detailed framework, and commitment to fairness make it a promising initiative. Excited to see the positive impact on delegate engagement.
Arb has been at the forefront of the industry in developing and discussing DAO. Therefore, I fully support the Experimental Incentive System proposal due to its clear structure, detailed framework, and commitment to fairness. I am excited to witness the positive impact it will have on delegate engagement.
Hello everyone,
We would like to thank @maxlom0, @Patrick_J, and @Bob-Rossi for their valuable comments and feedback. Special thanks to @Patrick_J for his thorough response; we at Soveign Finance AVC, created by SEEDLatam within MakerDAO, are big fans of his contribution and dedication to MakerDAO.
We would like to share some thoughts:
We recognize and share the concerns raised by @Patrick_J. Initially, we implemented a tier system to mitigate incentive manipulation. However, it is clear that this approach requires significant adjustments. In response to this, and also addressing the concerns of @Bob-Rossi and @maxlom0, we propose the following structural changes:
Delegate Requirements:
We use Tally as the main source of data to make it easier for delegates to calculate their participation rate since it already provides it, considering that now, due to the STIP, there are also more than 100 proposals on Snapshot. But we are open to changing this (maybe karma could help aggregate snapshot participation).
We just want to clarify that the maximum TP currently is 125%, but the limit of the amount paid to delegates would just be 5k ARB (corresponding to a TP of 100%). The remaining TP would just help them improve their rank.
Note that delegates are responsible for reporting their activity in an orderly fashion, thus avoiding overburdening the program administrator.
Delegates are responsible for keeping track of their actions. At the end of the month, they have until the 3rd of the following month to submit a forum post with the following requirements:
A copy (Link) of the framework with their activity data for that month.
Additionally, the post must have a summary with all the links including:
Snapshot voting link
Forum post link explaining the reasoning behind the snapshot vote
Tally voting link
Forum post link explaining the tally vote reasoning (if you have changed your vote)
Commenting on Proposals link (only those that went to snapshots)
The summary should also include:
Delegate proposal links
Links to any significant contribution (discussion, questions, suggestions, etc.) made to a proposal.
In response to @maxlom0's proposal on compensation for proactivity and initiatives, we are incorporating a bonus system (+25% in TP points) for delegates who contribute significantly to the DAO. These points will initially be allocated by the program administrator, but we do think we need at least some sort of rubric that the administrator could use to determine how many bonus points a delegate should receive for specific actions.
Our original intention was to encourage delegates to be more proactive, and ideally compensate those who manage to push proposals like the following to snapshot with bonus points:
Note:
In the current context, the Arbitrum Foundation has two Facilitators. However, we are aware that we cannot assign additional responsibilities to them as DAOs. The initial uncertainty about the magnitude of the workload to administer this system has been clarified thanks to the feedback provided by Patrick. Consequently, we consider it pertinent to seek the collaboration of another person, delegate or entity, who, in conjunction with SEEDLatam, will contribute to the effective implementation of the program.
We are willing to allocate a specific budget for this collaboration, but we wish to confirm if this proposal has the governance endorsement. We also want to emphasize that we offered to administer this program from SEED Latam in case we don’t find a facilitator willing to run it ~ and if this happens our delegation would obviously not partake in the program, regardless we do understand the concerns raised plus potential conflicts of interest.
This approach highlights the relevance of roles such as facilitator. Previously, we proposed an RFC to discuss the integration of the Facilitator role in the DAO. At that time, the activity and initiatives were not as significant as they are today, which is why we did not move forward with the proposal. Currently, we have a draft for the election of governance facilitators, which we share below for your review and comments:
We agree that if we can automate procedures, it will be easier for the program administrator. We can ask @mmurthy if Karma has any problems or suggestions with these changes.
We first want to thank Seed LATAM and @cattin for their continuous effort and dedication on this proposal. As the DAO continues to engage in discussion as to the best mechanisms to support governance participation and proposal analysis, Seed LATAM has been a leader in enhancing our governance process. Given this, Michigan Blockchain are voting FOR Option 1 in the snapshot temperature check.
Seed LATAM has delivered a comprehensive incentive system that involves detailed scoring criteria and encourages community involvement. We believe that the current proposed system will sufficiently evaluate delegate participation with transparency. We must acknowledge that this is our first attempt at such a system. A transparent and iterative process is therefore crucial to produce a community-driven program that benefits the DAO governance and protocol as a whole.
This is also why we are choosing to support Option 1 over Option 2, which introduces automation with Karma. Though automation and optimizing the process will be important as the DAO progresses, implementing such a system before we have fully understood what is required of said system would be unnecessary and could hinder our ability to iterate and improve going forward. We agree with @Curia that utilizing Karma or other tools for data visualization and transparency would be beneficial as we run this trial. We are excited by the prospect of this proposal and look forward to working with Seed LATAM and our fellow delegates to see its success.
+1 in acknowledging the work that SEEDLatam has put into this with multiple forum detailed form posts & addressing feedback with each iteration.
In totality, I would strongly vote in approval of a proposal of this type. I think that being an active and effective delegate for a DAO of this size / importance to the space can be time consuming... and to reward those who take on the task in the capacity noted above isn't unreasonable. Long-term the more delegates we can get active in the forum the healthier & more decentralized the DAO can become. Incentivizing delegates to be active in the DAO should help both retain and hopefully entice new delegates to join as the time goes on.
The foundation of this proposal is a good one. 6 months is a good timeframe. Moving to ARB as the budget is perfect for ease of administration, as well as gives incentive for delegates to make decisions with the health of the ARB token in mind. The cost & scope - 1 Million ARB is IMO a completely fair, arguably low, cost for a project like this. Considering other approved projects of this scope. I agree with avoiding an overly complex system, especially for a 6 month trail run.
I'll add, forcing delegates to actively apply and holding themselves accountable with reporting threads is a must for me.
Tiers: It looks like the limits were designed to put about 50 potential delegates in each tier. (Or maybe that is just pure coincidence?). Either way, probably my only real reservation / concern with the proposal would be that at 10 delegates a tier it's seems narrow in scope. I'd rather see more delegates covered, balanced by lower ARB incentives. i.e. I'd personally rather see something like 20 delegates a tier with the chance at 4k / 3k / 2k ARB in each tier. At current prices, those are still fairly hefty monthly incentives considering the role.
If anything is taken from this post... I do strongly think the 10 per tier limit being bumped up is something to consider if not addressed in prior discussions. Bumping up delegates paid gives opportunity to entice more delegates to meaningfully participate. I simply bring this up as I'd hate to see a situation where a tier has something like 12 delegates who are all doing a really great job, but only 10 get paid. (and yes, I know a cap of say 20 has the same problem if 21 people apply... but at that amount it's seems less likely to have 21 delegates all doing near perfect delegate work for 6 months straight.) And the two who are doing near equal work are getting nothing, resulting in them just stopping their work out of frustration... Or the flip side, where there are 40 delegates in a tier that apply and the bottom half feel like it's pointless to even try because they have 0 chance of making top 10 anyway.
To offer a solution, maybe the alternative is as simple as adding some flexibility in the count depending on applicants per tier? Or maybe the 95% rule moved down to 90%? I just want to avoid the STIP scenario where we are making assumptions on participation rates with 0 historical data, only to find the actual participation wildly out of whack for reason's not foreseen.
Scoring System: The formula looks to be pretty fair to me, and well thought out. I think the bonus points is a nice idea to resolve the previous issue of 'proposal spamming'. It also allows for a good mix between objective standards with a little bit of subjective leeway for extraordinary performance.
The rule about exceeding 95% score I'd almost rather see as a fixed rule, versus as a discretionary tool. To hit 95% you'd have to be a longstanding delegate (due to the historical Participation Rate being 20% of the weighting) with an essentially perfect month of voting + communicating. If we see 11 or more delegates hit that, they all deserve to be paid.
Karma: I admittedly don't know a ton about them. From what I read in the post, I don't have issue with it as a general idea. However, if this - Delegates of Arbitrum DAO (karmahq.xyz) - is the dashboard I'm not sure if it's super accurate, at least based on reviewing my profile. My voting statistics seem way off...? Although it sounds like that is to be updated as part of the 20k cost (which seems reasonable from what I can tell, if they do what is noted in the OP). It looks like they can also add Snapshot votes as well in their dashboard, which is a good feature if we want to go that route.
In summary, I think this is at a minimum worth putting to Snapshot vote to get larger community feedback. I would vote "For" this if it did go to vote, as on the whole it seems like a mostly well thought-out and discussed proposal. My only real critique would be I'd rather see more delegates rewarded as I noted above in the discussion regarding the tiered incentive system, but if it the community at large is okay with 10 I wouldn't let it stop me since it is ultimately a trail run.
Edit: For transparency, I've left my original wording about Karma above. But a quick update since then - they did reach out super quickly and addressed the issue of counting the Tally votes improperly. My dashboard looks correct now and the experience / talking to their team has led me to believe they would do a good job if we used their platform. And having a chance to use look at it a little more I'd be for it.
I like the general idea and agree with @krst about not letting perfect be the enemy of good. If this is difficult to pass due to complexity, we could help run an MVP version to show the DAO its value.
Plurality Labs could offer up to 150k ARB for season 1 (through Jan 31). We can provide technical support and automation of contribution tracking. Additionally, we are already looking to offer the build grant for Karma.
This would also provide a program manager payment for whoever is guiding the effort from Seed Latam.
My concern is that this proposal locks the group into a set of constraints that might prove difficult for the project. I hope to see it succeed. A short MVP period could justify the larger spend while allowing the team to really find which delegate contributions are the most valuable and how to accurately track them.
Happy to discuss anytime.
The incentives are meant to attract a certain behaviour from the delegates receiving them, but we shouldn’t have similar expectations from all delegates. We’d much rather incentivise large delegates to vote, actively participate in the discussions around proposals and share their rationale which is founded on solid due diligence, while incentivising smaller delegates (and also non-delegate community members) to actively participate in discussions and contribute to the DAO by tackling specific problems (e.g how @tnorm did with workshops to come up with the short-term incentives proposal).
That way, we’re taking a holistic approach, incentivising both responsive (discussing, voting, sharing rationale), and proactive (participating in discussions, creating proposals) actions.
We have considered this, but we also wanted to evaluate with this first iteration how delegates react to these "tasks" to be performed and to see what other activities we should evaluate or consider. Therefore, in this first iteration we wanted to keep the programme simple.
Should a delegate propose or actively participate in an enhancement proposal for Arbitrum DAO and execute it, like the Arbitrum’s Short-Term Incentive Program (Arbitrum Improvement Proposal ), they will be granted an additional +10% to their TP score for making a valuable contribution to the DAO. This could also be a governance process enhancement proposal or a template for grant selection.
Such scenarios are highly subjective and will be left to the judgment of the incentive system administrator. For this reason, we have not included it as a parameter within the table since it can be challenging to assess what genuinely adds value to ArbitrumDAO. Thus, we have decided to handle them this way.
In this case, the evaluation is left to the programme manager and +10 extra points are awarded to delegates who carry out these tasks. We know that this is difficult to evaluate, that is why we put it this way.
We also take into account that many delegates may want to carry out these tasks.
We are thinking in the future (once the incentives for delegates are in place) how to organise specific working groups to go deeper into the different verticals that ArbitrumDAO needs to be successful. But this should be a next step as in the end it is the delegates who vote and we need to have a solid basis for them to vote in the different verticals.
The below response reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking and ideation of the two.
First off, we want to thank Cattin for working on this proposal and for his efforts to push things forward. We offered some feedback in the RFC and we’re happy to see it was taken into consideration when this proposal was drafted.
The below response reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking and ideation of the two.
First off, we want to thank Cattin for working on this proposal and for his efforts to push things forward. We offered some feedback in the RFC and we’re happy to see it was taken into consideration when this proposal was drafted.
Below you can find our feedback on some of the key aspects of the proposal, as well as our rationale behind it.
Duration
Overall, we find 6 months to be a good length in order to have adequate time to gather info and feedback on the system’s effect. However, since the outlined incentive system is experimental, we believe it’d be more appropriate to have an evaluation point halfway through its duration (so, at 3 months since the beginning) in order to assess whether we’re gathering the necessary data and evaluate the program’s effect.
Funding
We find the total amount requested (1,080,000 ARB) reasonable, especially since it’s broken down between 30 delegates for 6 month with the intent of being a meaningful incentive for delegates to actively participate. However, we agree with @jengajojo that the amounts should be denominated in ARB and not in USD.
Delegate Selection Process
First off, as also pointed out be @jengajojo, we believe that delegates should have to opt-in for the incentives with a quick application. In our eyes, that will help a bit with social curation, and we’ll avoid any delegate who’s inactive but still has voting power delegated to him receiving incentives.
We do not understand the purpose of the ARB token-lock requirement in the way it’s structured. If it’s meant to be a deterrent, then the amount would have to be more than ~50% (or less) of a single month’s incentives. However, with an increase to the token lock requirement, and arguably even with the current requirement, the system leans on a plutocratic approach, where the people who do not have the ARB to lock will be excluded, regardless of their contributions to the DAO.
We’d suggest removing the token lock requirement altogether.
Having given the feedback above, and having participated in SEED Latam’s call on 25th of September, we also want to bring up a slightly different approach based on our views of delegate incentives.
There are 2 main aspects to our view:
Being as complicated as it is to figure out, chances are we won’t have a perfect delegate incentive system from the get-go. Instead of spending weeks on end discussing and brainstorming different approaches, we should instead focus on having a basic framework on which we’ll iterate based on the data we gather by actually running it for a few months. With that in mind, a simple approach is best since we can use it as the foundation on which we’ll eventually build a more complete process.
The incentives are meant to attract a certain behaviour from the delegates receiving them, but we shouldn’t have similar expectations from all delegates. We’d much rather incentivise large delegates to vote, actively participate in the discussions around proposals and share their rationale which is founded on solid due diligence, while incentivising smaller delegates (and also non-delegate community members) to actively participate in discussions and contribute to the DAO by tackling specific problems (e.g how @tnorm did with workshops to come up with the short-term incentives proposal).
That way, we’re taking a holistic approach, incentivising both responsive (discussing, voting, sharing rationale), and proactive (participating in discussions, creating proposals) actions.
We’d love to continue the discussion and help formulate an updated proposal based on the feedback provided. As such, we want to invite @Cattin and anyone else who’s interested in our Office Hours on Thursday 28th of September at 3pm UTC / 11am EST.
First off, as also pointed out be @jengajojo, we believe that delegates should have to opt-in for the incentives with a quick application. In our eyes, that will help a bit with social curation, and we’ll avoid any delegate who’s inactive but still has voting power delegated to him receiving incentives.
Hi @krst and @sinkas, this is already included in the proposal. To participate the delegate must express it through a template with this data.
Delegates matching the tiered requirements must confirm their participation in the Incentive System in the forum (a dedicated channel will be established for this). They must post using the template provided below, within a 7-day application window.
Incentive Program Confirmation Template:
Note:
Eligible delegates for the incentive program will be announced on the forum.
This also makes it easier for the administrator to filter the delegates who are going to participate.
Thanks @cattin for the proposal.
I'd like to start by appreciating SEEDLatam for doing the research and proposing to support the work delegates do in DAOs via this proposal.
Here are my suggestions:
Thanks @cattin for the proposal.
I'd like to start by appreciating SEEDLatam for doing the research and proposing to support the work delegates do in DAOs via this proposal.
Here are my suggestions:
I am happy to see the delegate tiers and compensation for each tier.
Aside from voting and communicating rationale, the only other thing T1 delegates are rewarded for is putting proposals up, this can incentives folks to put spam proposals. Hence I do not support compensation based on number of proposals uploaded for T1 delegates.
Delegates who wish to participate in this program should opt-into the same with an application outlining their goals for ArbitrumDAO and KPIs to measure their success or failure of their delegation at the end of the 6 month period.
Aside from staking and total votes delegated, there isn't much difference between T1, T2 and T3 delegates. While I understand the rationle for this tier system, I propose a different 3 tier system:
| Tier | Has at least 100K ARB delegated? | Has verifiable governance experience? | Can post on snapshot/tally? | ARB locked |
|---|---|---|---|---|
| 1 | Y | Y | Y | 3500+ |
| 2 | Y | Y | N | 2500+ |
| 2 | Y | N | Y | 2500+ |
| 3 | Y | N | N | 750+ |
Definition of Verifiable Governance Exp:
For better alignment between delegates and the DAO, I suggest all compensation be denominated in ARB not USD
To further strengthen value alignment, compensation should be done in time-locked ARB, with a 6 month lock. Hedgy infra enables this at no additional cost.
A 100K ARB Gitcoin round for delegates at the of the program. This will help us as a DAO identify our most valuable delegates and help these delegates be compensated fairly for their contribution
Delegates who are able to pass proposals via snapshot and tally are helping the DAO gain consensus and hence this should definitely be rewarded irrespective of delegate tier. I suggest 10000 ARB compensation for delegates whos' proposals pass snapshot and tally voting.
I agree with your proposal for the compensation calculation mechanism generally except the PSS criteria since this incentivises a lot of activity at the detriment of valuable converstion.
@krst I really want to attend Thursday's call but I have a personal conflict. There are probably other interested delegates with conflicts too. Can you please record the call for us? Thanks in advance.
Hey @maxlomu, very interesting perspective!
I agree with the idea that constructive and valuable contributions should be rewarded. However, I'm not entirely sure (speaking from my personal opinion) that the delegate program is the way to implement such compensation.
Hey @maxlomu, very interesting perspective!
I agree with the idea that constructive and valuable contributions should be rewarded. However, I'm not entirely sure (speaking from my personal opinion) that the delegate program is the way to implement such compensation.
Mixing the role of reviewing and voting on proposals with a benefit for supporting and approving them can lead to a situation of collusion, where the interest in obtaining the reward for proposing / the endorsement outweighs the critical and constructive scrutiny. Ultimately, this could lead to a deterioration in the quality of the approved proposals.
That said, it would be interesting to discuss your idea of developing a system for rewarding individual builders that bring value and generate revenue for the Arbitrum DAO.
Following the publication of [RFC-2] Delegate Incentive System for ArbitrumDAO, the Karma team reached out to the SEED Latam team to explore a collaborative effort on the incentive system.
Following the publication of [RFC-2] Delegate Incentive System for ArbitrumDAO, the Karma team reached out to the SEED Latam team to explore a collaborative effort on the incentive system.
While we are confident that Karma enriches the proposal, we have introduced it as an optional feature, recognizing that the community might have a different perspective. If the DAO feels it is not appropriate, this option can be omitted and the proposal can continue with Option 1.
Karma is an integrated set of DAO tools for measuring contributions and improving governance. DAOs and communities use these tools to engage contributors, track their contributions, and take action to increase engagement and accountability.
Karma is a team of four developers with two years of experience in the DAO space. Mahesh Murthy is the founder of Karma. Their flagship product is the Delegate Dashboard, and they have collaborated with numerous DAOs, including Optimism, Gitcoin, Starknet and more. You can view all our dashboards at: https://karmahq.xyz/daos.
Website: https://www.karmahq.xyz/ Twitter: https://twitter.com/karmahq_
SeedLatam proposes an experimental delegate incentive program. Karma's delegation dashboard can track all delegate activities, including on-chain and off-chain voting participation, as well as Forum and Discord activity. This proposal seeks to establish the delegate dashboard for Arbitrum and incorporate additional features to enhance the incentive program.
Proposed additional features (specific to incentive program) include:
SeedLatam proposes an experimental delegate incentive program. Karma's delegation dashboard can track all delegate activities, including on-chain and off-chain voting participation, as well as Forum and Discord activity. This proposal seeks to establish the delegate dashboard for Arbitrum and incorporate additional features to enhance the incentive program.
Proposed additional features (specific to incentive program) include:
Should the proposal be approved, the following will be implemented:
A Delegate Dashboard for Arbitrum will be established, mirroring what we've set up for other DAOs like Optimism, Gitcoin, Starknet and more. The dashboard will feature:
Clear indications on each delegate card regarding whether that delegate has chosen to receive compensation. A new filtering feature will be added to sort delegates based on this criterion.
A fresh page will be added to the dashboard, showcasing all delegates compensated on a monthly basis, complete with amounts and statistics.
Monthly compensation metrics for delegates will be displayed, ensuring transparency for both the delegates and the community. This will simplify the process for delegates by removing the requirement for monthly self-reporting.
Administrative functions will be automated for ease in verifying metrics and initiating payments to qualifying delegates.
Karma will create the delegate dashboard, develop the necessary functionality to strengthen the incentive program and ensure that the data is kept up to date. The price for the product and support will be 20,000 USD for the first 6 months of the program. Will configure the control panel and complete the implementation of the features within one month of proposal approval. As modifications to the incentive program are expected based on new knowledge, you will continually update and maintain the features to adapt to evolving program requirements.
The payment for Karma will be executed in two parts
Although Karma automates much of the process, delegates still need to perform the following tasks:
It is recommended that, until the system is optimized, delegates keep a log of their activities.
Seed Latam is committed to monitor the proper functioning of Karma and to collect feedback from the community on the performance of the dashboard. We also commit to collaborate with Karma so that the dashboard meets the needs of the incentive system.
SEED Latam does not have any commercial relationship with Karma nor does it receive any payment from them for incorporating them into this proposal.
The only link between SEED Latam and Karma is that both want the success of the Arbitrum ecosystem.
Proposal overview
Duration of the incentive system
Total Number of Delegates to Receive Incentives
Selection process
Eligible delegates must confirm their participation in the incentive system by posting a message on the forum.
Scoring
Minimum to receive incentives
Adicional Score
Parameter Snapshots
Dispute
Payments
Multisig Management
Incentive system administrator
Option 1
Option 2
Source of truth: https://www.coingecko.com/en/coins/arbitrum
Option 1:
Option 2:
The incentive program will begin on the 1st of the closest month to ensure an organized schedule.
Please note that this initial incentive system is experimental and is not intended to be the final version. With this initiative, we aim to evaluate the performance of the DAO and determine its positive impact. We also anticipate collaboration from both the governance team and facilitators to ensure its success.
At the end of the six months, SEEDLatam commits to delivering a report containing the gathered data and feedback from the governance.
We would like to thank all the people who gave us their feedback and also those interested in the subject, we believe this is important for ArbitrumDAO: @noturhandle, @0xNSE, @benhoneill, @Saurabh, @Frisson, @jengajojo, @DisruptionJoe and everyone who sent us a message via twitter and telegram, and we also want to thank @krst and @Sinkas for providing the space to discuss this topic on their Arbitrum Office Hours – giving us a lot of useful insights + feedback.
We would also like to thank @pedrob who is a SEEDLatam contributor who collaborated in the creation of the proposal. He belongs to SOFI AVC of MakerDAO and has extensive knowledge about incentives for ecosystem actors.
For one week, the community is encouraged to share their views and suggest modifications to this proposal, allowing us to better tailor it to the needs of ArbitrumDAO. If one week proves insufficient for this process, we will extend the feedback period by an additional week.
Appreciate the update / revisions that take into consideration the feedback.
I think after hearing more thoughts about the tier system, scraping it is worthwhile for scenarios mentioned by @Patrick_J. I also see the eligible delegate pool has increased to 200 or so, and those who get paid out from 30 to 50, which I think is good as well. Among the other changes, I think it is in a good state for voting.
Appreciate the update / revisions that take into consideration the feedback.
I think after hearing more thoughts about the tier system, scraping it is worthwhile for scenarios mentioned by @Patrick_J. I also see the eligible delegate pool has increased to 200 or so, and those who get paid out from 30 to 50, which I think is good as well. Among the other changes, I think it is in a good state for voting.
I saw the discussion regarding snapshot. I think something to add is that the Scoring System does include Tally Votes, so though it is not part of the historical Participation Rate metric, it still is reflected in 15% of the weighting. So while Tally has more weight overall, voting on Snapshot has not lost impact completely. If there is large pushback to include the Snapshot metrics, my suggestion would be just ignoring the any votes related to the Round 1 STIP. I know that isn't a great solution, but the large vote count massively throws off Snapshot metrics to the point I'm not sure it accurately reflects the spirit of a historical participation rate. i.e., someone who voted only in the STIP will have a far better participant rate then someone who voted in everything but the STIP. And beyond even all that, makes tracking a nightmare. While not perfect, it may be a worthwhile compromise. As those who want Snapshot history included do get it included, while also keeping tracking complexity down.
We should definitely offer incentives to the delegates. Here, we can learn from DAOs like Maker and Aave; they have programs such as recognized delegates to incentivize them. This could definitely be one approach, but we should also remain open to various alternatives or frameworks.
Thanks for the forum post, @cattin, and the Seed Latam community.
Thank you @cattin and SEEDLatam for advancing this important initiative. I am a member of @404DAO and I also write for Tally's Content Guild. Over the last month, I have spoken with Arbitrum delegates and performed research on delegate compensation in order to synthesize Cattin/SeedLatam's Request for Comments, as well as incorporate community input. I trust this article will be a valuable resource as the experimental delegate incentive system unfolds.
Note: The perspective shared in the article is independent of 404 DAO.
Thank you for the proposal @cattin
I am generally in favor of incentivising delegates who have demonstrated positive contribution in the DAO via
Thank you for the proposal @cattin
I am generally in favor of incentivising delegates who have demonstrated positive contribution in the DAO via
Another thing to note here is that often delegates with 'sufficient' voting power are compensated in examples of DAOs listed here, at the same time delegation shuffling does not occur frequently enough such that new or emerging delegates have the opportunity to contribute and earn from the DAO. I suggest a robust evaluation system based on a code of conduct as well as using QF to match delegate voting weights with those who have received delegation from unique wallets. The general principle should be that whales delegate their tokens to a matching pool and retail is encouraged to delegate in order to get a better signal of broad support.
I think delegate compensation is essential. Delegates should not be expected to work for free, and indeed are unlikely to do so in the long term. Furthermore, compensation would allow delegates to justify spending more time on Arbitrum, which is ultimately good for the entire ecosystem.
With that said, I suspect most would agree that delegates should get paid. The tricky part is how to pay them. It's easy to imagine a system where the same set of delegates voting to pay themselves forever leads to governance capture, thus removing the incentive to work that the compensation was designed to create in the first place.
The how-to is definitely the trickiest part, I really like @jengajojo suggestion of doing so through QF, but I also think we have to consider based on which metrics/parameters we would compensate delegates - and given that some metrics might be subjective, it could be difficult to implement this in a fully trustless way. Apart from this, I think that whatever scores are assigned to candidates should be reset after some time, just to prevent candidates that once were very active to keep on receiving incentives after they stop contributing, if that makes sense. This is why we also proposed having governance epochs, which could complement this but is not strictly needed.
So to summarize this, imo we should try to make this as trustless as possible, but also ensure that we can have sybil resistant metrics to base our rewards on.
The below response reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking and ideation of the two.
While we are definitely supporting of the idea that delegate incentives are a huge step forward toward attracting devoted contributors to Arbitrum’s governance, we’re also not oblivious to the fact that introducing delegate incentives comes multiple challenges attached.
I think delegate compensation is essential. Delegates should not be expected to work for free, and indeed are unlikely to do so in the long term. Furthermore, compensation would allow delegates to justify spending more time on Arbitrum, which is ultimately good for the entire ecosystem.
With that said, I suspect most would agree that delegates should get paid. The tricky part is how to pay them. It's easy to imagine a system where the same set of delegates voting to pay themselves forever leads to governance capture, thus removing the incentive to work that the compensation was designed to create in the first place.
Excited to contribute to this discussion. Thanks for posting @cattin!
The below response reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking and ideation of the two.
While we are definitely supporting of the idea that delegate incentives are a huge step forward toward attracting devoted contributors to Arbitrum’s governance, we’re also not oblivious to the fact that introducing delegate incentives comes multiple challenges attached.
There are several considerations to be made while attempting to set up a system that is fair and inclusive, incentivises just the right actions to create impact, is sybil-resistant, and easy to keep track of.
Some things to consider
Delegate Expectations
We think that an important aspect of the delegate incentives discussion is delegates’ responsibilities. Right now, with delegates simply volunteering their work, we can’t really have expectations when it comes to their participation in the forums, calls and in voting. However, if and when incentives are introduced, delegates will be compensated for their work, and therefore the community will rightfully expect them to participate responsibly to a reasonable extent.
Some expectations from delegates who receive compensation include, but are not limited to:
We also need to keep in mind that there might be delegates who do not wish to burden themselves with the aforementioned responsibilities. For those cases, we need to provide the ability for them to opt-out of the incentives, regardless of how “big” of a delegate they are.
Deciding on Arbitrum’s Approach
There’s a lot to learn from other protocols which have tried to tackle the same issue and we can use that knowledge to avoid making the same mistakes they made. We think it’s important to first highlight the problems with current approaches and all the things to consider when structuring an incentive system, and then collaboratively work on a novel system that incorporates only the best aspects of other approaches and new ideas.
We think that the idea of compensating delegates for strategic needs suggested by @benhoneill is interesting and should be discussed more in-depth. We also want to bring Hop’s approach to the attention of interested parties as we believe it’s a good solution to remove the need for an individual, group or entity to take up the overhead of calculating the incentives to be paid out to each delegate.
Hop’s Approach to Delegate Incentives
Hop Protocol uses a formula to calculate each delegate’s incentives. Each month, delegates must self-report their vote participation and communication participation percentages using some specific formula. For more information, you can view the amended HIP 4 proposal here.
Hop’s approach is coming short on some things, like the fact that voting and proposals aren’t created out of thin air, and it takes work and time to make them happen in the first place. It also doesn’t take into account discussions happening outside the forums, e.g in community calls, on Discord, or privately. Lastly, it doesn’t, and can’t really, take into account the qualitative aspect of the participation.
However, what’s interesting is that there’s no single individual, group, or entity that has to take up the overhead of tracking and calculating, which would come at a cost to the DAO. It’s an optimistic process which can be cross-checked if someone is believed to be cheating. Each delegate only has their own calculations to do, which does create some overhead, but it’s small enough to be bearable (and it’s also something they’re doing in the context of their work as delegates - given they want to get compensated).
Moving Forward
We’d like to invite the community to discuss the challenges of designing an incentive system and which approach could better work for Arbitrum during L2BEAT’s weekly office hours every Thursday , at 3pm UTC/11pm EST.
You can grab the respective link for each week’s call by adding L2BEAT’s Governance calendar to your calendar.
I think delegate compensation is essential. Delegates should not be expected to work for free, and indeed are unlikely to do so in the long term. Furthermore, compensation would allow delegates to justify spending more time on Arbitrum, which is ultimately good for the entire ecosystem.
With that said, I suspect most would agree that delegates should get paid. The tricky part is how to pay them. It's easy to imagine a system where the same set of delegates voting to pay themselves forever leads to governance capture, thus removing the incentive to work that the compensation was designed to create in the first place.
Excited to contribute to this discussion. Thanks for posting @cattin!
The below response reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking and ideation of the two.
While we are definitely supporting of the idea that delegate incentives are a huge step forward toward attracting devoted contributors to Arbitrum’s governance, we’re also not oblivious to the fact that introducing delegate incentives comes multiple challenges attached.
There are several considerations to be made while attempting to set up a system that is fair and inclusive, incentivises just the right actions to create impact, is sybil-resistant, and easy to keep track of.
Some things to consider
Delegate Expectations
We think that an important aspect of the delegate incentives discussion is delegates’ responsibilities. Right now, with delegates simply volunteering their work, we can’t really have expectations when it comes to their participation in the forums, calls and in voting. However, if and when incentives are introduced, delegates will be compensated for their work, and therefore the community will rightfully expect them to participate responsibly to a reasonable extent.
Some expectations from delegates who receive compensation include, but are not limited to:
We also need to keep in mind that there might be delegates who do not wish to burden themselves with the aforementioned responsibilities. For those cases, we need to provide the ability for them to opt-out of the incentives, regardless of how “big” of a delegate they are.
Deciding on Arbitrum’s Approach
There’s a lot to learn from other protocols which have tried to tackle the same issue and we can use that knowledge to avoid making the same mistakes they made. We think it’s important to first highlight the problems with current approaches and all the things to consider when structuring an incentive system, and then collaboratively work on a novel system that incorporates only the best aspects of other approaches and new ideas.
We think that the idea of compensating delegates for strategic needs suggested by @benhoneill is interesting and should be discussed more in-depth. We also want to bring Hop’s approach to the attention of interested parties as we believe it’s a good solution to remove the need for an individual, group or entity to take up the overhead of calculating the incentives to be paid out to each delegate.
Hop’s Approach to Delegate Incentives
Hop Protocol uses a formula to calculate each delegate’s incentives. Each month, delegates must self-report their vote participation and communication participation percentages using some specific formula. For more information, you can view the amended HIP 4 proposal here.
Hop’s approach is coming short on some things, like the fact that voting and proposals aren’t created out of thin air, and it takes work and time to make them happen in the first place. It also doesn’t take into account discussions happening outside the forums, e.g in community calls, on Discord, or privately. Lastly, it doesn’t, and can’t really, take into account the qualitative aspect of the participation.
However, what’s interesting is that there’s no single individual, group, or entity that has to take up the overhead of tracking and calculating, which would come at a cost to the DAO. It’s an optimistic process which can be cross-checked if someone is believed to be cheating. Each delegate only has their own calculations to do, which does create some overhead, but it’s small enough to be bearable (and it’s also something they’re doing in the context of their work as delegates - given they want to get compensated).
Moving Forward
We’d like to invite the community to discuss the challenges of designing an incentive system and which approach could better work for Arbitrum during L2BEAT’s weekly office hours every Thursday , at 3pm UTC/11pm EST.
You can grab the respective link for each week’s call by adding L2BEAT’s Governance calendar to your calendar.