There's been a lively discussion on the forums regarding Arbitrum's first governance proposal, AIP-1. The level of engagement has been remarkable and a testament to the strength and dedication of the DAO community. There have been some requests for comments from the Foundation about AIP-1 and requests for further clarification, and that's the intention of this post -- to engage with the questions being raised and also to provide some additional context that may be helpful in understanding and taking a stance on AIP-1.
One acknowledgement before diving in is that in hindsight it's clear that the Foundation definitely could have done a better job on communication -- both by providing more clarity directly in AIP-1 and also by being quicker to respond. We are in the process of staffing up the Foundation and will strive to improve our communication going forward, and we hope that this post provides the necessary clarifications for AIP-1.
When it comes to setting up a DAO, there's a chicken and an egg problem. Let's put aside the question of funding the Foundation for just a second (we'll get there shortly), and focus on the handoff of the core technology and upgradability of the Arbitrum chains. In order to do that, certain parameters need to be decided including transferring the code as-is to the DAO, creating the security council, setting the time delays for code upgrades, establishing the initial textdraft of the Constitution, establishing the AIP proposal mechanism, the initial set of validators and DAC on Nova. Some have suggested that even the initial values of these parameters should have been chosen by the DAO, but that's not technically possible. When the system was given over to the community, these numbers had to be set with some value -- i.e. the DAO governance smart contract had to specify the thresholds that allowed for a proposal to be passed and had to specify a security council that would be live during the initial handoff. There simply was no community that could have voted on these numbers, and the very act of creating the community required these parameters to be specified.
The Foundation was created in order to kick off and facilitate the DAO decision making process in the first instance – if the Foundation didn’t exist, simple operational questions such as “who hosts the various governance forums where these discussions occur” as well as broader questions such as “who kicks off governance” would go unanswered and revert back to the chicken and the egg issue.
And with regards to setting up the Foundation, there were similarly lots of decisions that needed to be made ahead of time in order to get it off the ground. These include basic questions like where the Foundation is domiciled, who its initial directors and employees are, as well as questions about its mandate, mission, bylaws, and funding. Now of course, there's room for discretion about what these values should have been, particularly with how much initial funding the foundation should receive, but two things that we'd like to make abundantly clear in this post are (1) these values were set with the sole goal of making sure that Arbitrum is positioned to succeed and compete with its peers and (2) the decisions made are well within market range when compared to Arbitrum's peer projects and foundations.
Nothing here is intended to minimize that there was very clearly a shortfalling in communication. One of the mistakes in the drafting of AIP-1 was a failure to note at the outset that this proposal was intended to act as a ratification of the initial setup of both the Arbitrum DAO and the Foundation that has been created to serve the DAO; this was spelled out at the end of AIP-1 in the section “Steps to Implement”, but it should have been made clear earlier on. Moreover, the post was written in the future tense (a reflection of the fact that it was in the future when we were drafting the post and did not catch this) and understandably this likely led to some of the confusion on the point that this was a ratification. As discussed above, there is a chicken and the egg that needs to be solved when decentralizing a network, and the point of AIP-1 was to inform the community of all of the decisions that were made in advance. The communication of those decisions was clearly not articulated correctly. We hope that this post will properly delve into the initial thought processes that went into making these decisions.
The ratification of AIP-1 was also intended to allow for the Foundation to assume some obligations relating to infrastructure and service providers that have been supporting the network in the past, establish its relationship with service providers, contractors and hire personnel on a moving forward basis and ensure that the ecosystem has what it needs in order to continue to thrive in an extremely competitive environment.
The establishment of an initial distribution of tokens to the Foundation is a normal course of practice in setting up ecosystems like Arbitrum, and this was always the intent when AIP-1 was submitted for ratification concurrently with the announcement of the Arbitrum DAO. While our focus is not competing ecosystems, it is useful to compare to understand how this figure was originally chosen and whether allocating 7.5% of the token supply to the Arbitrum Foundation is reasonable. The three closest peers with live or announced tokens are Optimism, Starkware, and Polygon, and indeed 7.5% is lower than all of these:
While not as directly comparable because they are Layer-1 blockchains, the Avalanche Foundation originally received 9.26% of the token supply and the Solana Foundation received 12.5% of its token supply, respectively.
Looking at the above data points, Arbitrum is unique in that it is the only one among its peers in which the vast majority of the community tokens are currently controlled by the DAO on-chain. And also uniquely, The Arbitrum Foundation is the only one that even asked for the community's ratification of these decisions.
Now, even though it's an established practice, one may fairly wonder why The Arbitrum Foundation (or any of its peer foundations) needs a significant token budget and why this cannot all happen via on-chain voting. And this is again a place where we should have provided more clarity. It's not only because of "voter fatigue", which was intended to describe a more effective way to process smaller grant requests, but often it's more fundamental and necessary for Arbitrum's ability to efficiently and effectively fulfill its mission.
At times, it may be in the best interest of the DAO to partner with a company or organization that either won’t or doesn't have the ability to publicly negotiate deals on-chain due to confidentiality and other operational requirements. Without a strong foundation that has the ability, mandate, and resources to engage with these entities in real life, the Arbitrum ecosystem would be ineffective and at a serious disadvantage as compared with its peers. Please take note of Polygon's partnership with Nike and Starbucks and Optimism's partnership with Coinbase's Base chain. In all of these cases, there was no public process at all and the first time that the public became aware of these relationships was after they were agreed upon.
While it would be incredible if all traditional companies agreed to do everything on-chain, this is not realistically going to happen. Not having a well-funded Arbitrum Foundation that has limited discretionary power to engage and enter deals with large institutions on behalf of the DAO could be severely damaging to Arbitrum as Arbitrum would be the only ecosystem that could not compete for these deals.
Indeed we are aware of similar conversations going on with fintech, social media, and gaming companies right now, and we at the Foundation, are ramping up to engage with and educate these players on Arbitrum, and the initial distribution at inception was intended to provide the Foundation with the resources it needed. It's clear that it's within the DAO's best interest to have a voice in these arenas, and the DAOs ability to choose the Foundation's directors give it direct control to replace, remove, or augment its representatives. The current (and any future) directors of the Foundation are (and must be) signed fiduciaries of the Foundation and committed to acting in the DAO's best interest in accordance with the Foundation's mission.
The Foundation’s purpose is to fulfill its mission to foster the development and growth of the Arbitrum ecosystem – this is its mission as stated in its governing documents and the Foundation cannot act in ways that are counter to these documents. As a Foundation Company, it does not have shareholders or partners that it is accountable to, and instead, significant governance authority over the Foundation has been given to the holders of the $ARB token. In other words, the Foundation exists to effectively facilitate and serve as a steward for the DAO and the Arbitrum ecosystem.
The specific governance authority that the Foundation’s governing documents provide to the DAO include:
The DAO can also cause the Foundation to take any other action subject to compliance with Cayman Islands law (and in fact, according to the Foundation’s governing documents, in the event that the decisions of the Foundation conflict with those of the DAO, the DAO will prevail unless prohibited under Cayman Islands law, see Bylaws § 7(c)).
Simply put, the Foundation works for the DAO.
We believe that a lot of the negative sentiment around AIP-1 was driven by confusion around the notion of AIP-1 being a ratification and not a request. For those that didn't realize that this was a ratification, they may have been surprised to see that the Foundation's tokens have already been separated and begun to be utilized.
In hindsight, we should have made it clearer that this was indeed a ratification of a decision that had been made, which explains why there has been movement in the treasury that had been set aside for the Foundation. The Foundation treated this as a ratification of its initial setup, not an initial grant request from the DAO Treasury, and indeed has begun to use these tokens in the interest of the DAO, including conversion of some funds into stablecoins for operational purposes.
The most significant miscommunication is likely the unclear classification of the initial distribution to the Foundation in the original pie chart in the governance documentation. The documentation described the allotment to the DAO treasury address and to the Foundation in one bucket as “DAO treasury.” It would have been more clear had that been bifurcated into two, distributing the bulk of the funds to the on-chain DAO-controlled treasury and a portion to the Foundation, in service of the DAO.
In hindsight, there was clearly a lot that could have been better communicated. We do want to stress, however, that AIP-1 was posted on the forums simultaneously with the governance announcement on March 16 (one week before the airdrop went live), and in the "Steps to Implement" section it did make clear that this was indeed a ratification of funding that had already occurred. Again, we could have done a lot better with regards to making sure that this was clear to all, but lest anyone think there was any change of intent, we do want to point out that this was announced at the outset. And we will strive to communicate better going forward.
===
P.S. There have been some questions for clarity as to the role of Lemma LTD, the poster of AIP-1, and their relationship with the Foundation. Setting up a foundation, managing the governance process and setting up and managing the DAO tooling takes a lot of work, and indeed this is one of the reasons that it was so critical to get the Foundation up, running, and funded prior to launch. To assist in these roles as it staffs up, the Foundation is working with a few different service providers in order to bootstrap itself and be in a position to properly serve the DAO. One among those is Lemma Ltd which provides several services to the Foundation including monitoring and participating in governance forums.
There's been a lively discussion on the forums regarding Arbitrum's first governance proposal, AIP-1. The level of engagement has been remarkable and a testament to the strength and dedication of the DAO community. There have been some requests for comments from the Foundation about AIP-1 and requests for further clarification, and that's the intention of this post -- to engage with the questions being raised and also to provide some additional context that may be helpful in understanding and taking a stance on AIP-1.
One acknowledgement before diving in is that in hindsight it's clear that the Foundation definitely could have done a better job on communication -- both by providing more clarity directly in AIP-1 and also by being quicker to respond. We are in the process of staffing up the Foundation and will strive to improve our communication going forward, and we hope that this post provides the necessary clarifications for AIP-1.
When it comes to setting up a DAO, there's a chicken and an egg problem. Let's put aside the question of funding the Foundation for just a second (we'll get there shortly), and focus on the handoff of the core technology and upgradability of the Arbitrum chains. In order to do that, certain parameters need to be decided including transferring the code as-is to the DAO, creating the security council, setting the time delays for code upgrades, establishing the initial textdraft of the Constitution, establishing the AIP proposal mechanism, the initial set of validators and DAC on Nova. Some have suggested that even the initial values of these parameters should have been chosen by the DAO, but that's not technically possible. When the system was given over to the community, these numbers had to be set with some value -- i.e. the DAO governance smart contract had to specify the thresholds that allowed for a proposal to be passed and had to specify a security council that would be live during the initial handoff. There simply was no community that could have voted on these numbers, and the very act of creating the community required these parameters to be specified.
The Foundation was created in order to kick off and facilitate the DAO decision making process in the first instance – if the Foundation didn’t exist, simple operational questions such as “who hosts the various governance forums where these discussions occur” as well as broader questions such as “who kicks off governance” would go unanswered and revert back to the chicken and the egg issue.
And with regards to setting up the Foundation, there were similarly lots of decisions that needed to be made ahead of time in order to get it off the ground. These include basic questions like where the Foundation is domiciled, who its initial directors and employees are, as well as questions about its mandate, mission, bylaws, and funding. Now of course, there's room for discretion about what these values should have been, particularly with how much initial funding the foundation should receive, but two things that we'd like to make abundantly clear in this post are (1) these values were set with the sole goal of making sure that Arbitrum is positioned to succeed and compete with its peers and (2) the decisions made are well within market range when compared to Arbitrum's peer projects and foundations.
Nothing here is intended to minimize that there was very clearly a shortfalling in communication. One of the mistakes in the drafting of AIP-1 was a failure to note at the outset that this proposal was intended to act as a ratification of the initial setup of both the Arbitrum DAO and the Foundation that has been created to serve the DAO; this was spelled out at the end of AIP-1 in the section “Steps to Implement”, but it should have been made clear earlier on. Moreover, the post was written in the future tense (a reflection of the fact that it was in the future when we were drafting the post and did not catch this) and understandably this likely led to some of the confusion on the point that this was a ratification. As discussed above, there is a chicken and the egg that needs to be solved when decentralizing a network, and the point of AIP-1 was to inform the community of all of the decisions that were made in advance. The communication of those decisions was clearly not articulated correctly. We hope that this post will properly delve into the initial thought processes that went into making these decisions.
The ratification of AIP-1 was also intended to allow for the Foundation to assume some obligations relating to infrastructure and service providers that have been supporting the network in the past, establish its relationship with service providers, contractors and hire personnel on a moving forward basis and ensure that the ecosystem has what it needs in order to continue to thrive in an extremely competitive environment.
The establishment of an initial distribution of tokens to the Foundation is a normal course of practice in setting up ecosystems like Arbitrum, and this was always the intent when AIP-1 was submitted for ratification concurrently with the announcement of the Arbitrum DAO. While our focus is not competing ecosystems, it is useful to compare to understand how this figure was originally chosen and whether allocating 7.5% of the token supply to the Arbitrum Foundation is reasonable. The three closest peers with live or announced tokens are Optimism, Starkware, and Polygon, and indeed 7.5% is lower than all of these:
While not as directly comparable because they are Layer-1 blockchains, the Avalanche Foundation originally received 9.26% of the token supply and the Solana Foundation received 12.5% of its token supply, respectively.
Looking at the above data points, Arbitrum is unique in that it is the only one among its peers in which the vast majority of the community tokens are currently controlled by the DAO on-chain. And also uniquely, The Arbitrum Foundation is the only one that even asked for the community's ratification of these decisions.
Now, even though it's an established practice, one may fairly wonder why The Arbitrum Foundation (or any of its peer foundations) needs a significant token budget and why this cannot all happen via on-chain voting. And this is again a place where we should have provided more clarity. It's not only because of "voter fatigue", which was intended to describe a more effective way to process smaller grant requests, but often it's more fundamental and necessary for Arbitrum's ability to efficiently and effectively fulfill its mission.
At times, it may be in the best interest of the DAO to partner with a company or organization that either won’t or doesn't have the ability to publicly negotiate deals on-chain due to confidentiality and other operational requirements. Without a strong foundation that has the ability, mandate, and resources to engage with these entities in real life, the Arbitrum ecosystem would be ineffective and at a serious disadvantage as compared with its peers. Please take note of Polygon's partnership with Nike and Starbucks and Optimism's partnership with Coinbase's Base chain. In all of these cases, there was no public process at all and the first time that the public became aware of these relationships was after they were agreed upon.
While it would be incredible if all traditional companies agreed to do everything on-chain, this is not realistically going to happen. Not having a well-funded Arbitrum Foundation that has limited discretionary power to engage and enter deals with large institutions on behalf of the DAO could be severely damaging to Arbitrum as Arbitrum would be the only ecosystem that could not compete for these deals.
Indeed we are aware of similar conversations going on with fintech, social media, and gaming companies right now, and we at the Foundation, are ramping up to engage with and educate these players on Arbitrum, and the initial distribution at inception was intended to provide the Foundation with the resources it needed. It's clear that it's within the DAO's best interest to have a voice in these arenas, and the DAOs ability to choose the Foundation's directors give it direct control to replace, remove, or augment its representatives. The current (and any future) directors of the Foundation are (and must be) signed fiduciaries of the Foundation and committed to acting in the DAO's best interest in accordance with the Foundation's mission.
The Foundation’s purpose is to fulfill its mission to foster the development and growth of the Arbitrum ecosystem – this is its mission as stated in its governing documents and the Foundation cannot act in ways that are counter to these documents. As a Foundation Company, it does not have shareholders or partners that it is accountable to, and instead, significant governance authority over the Foundation has been given to the holders of the $ARB token. In other words, the Foundation exists to effectively facilitate and serve as a steward for the DAO and the Arbitrum ecosystem.
The specific governance authority that the Foundation’s governing documents provide to the DAO include:
The DAO can also cause the Foundation to take any other action subject to compliance with Cayman Islands law (and in fact, according to the Foundation’s governing documents, in the event that the decisions of the Foundation conflict with those of the DAO, the DAO will prevail unless prohibited under Cayman Islands law, see Bylaws § 7(c)).
Simply put, the Foundation works for the DAO.
We believe that a lot of the negative sentiment around AIP-1 was driven by confusion around the notion of AIP-1 being a ratification and not a request. For those that didn't realize that this was a ratification, they may have been surprised to see that the Foundation's tokens have already been separated and begun to be utilized.
In hindsight, we should have made it clearer that this was indeed a ratification of a decision that had been made, which explains why there has been movement in the treasury that had been set aside for the Foundation. The Foundation treated this as a ratification of its initial setup, not an initial grant request from the DAO Treasury, and indeed has begun to use these tokens in the interest of the DAO, including conversion of some funds into stablecoins for operational purposes.
The most significant miscommunication is likely the unclear classification of the initial distribution to the Foundation in the original pie chart in the governance documentation. The documentation described the allotment to the DAO treasury address and to the Foundation in one bucket as “DAO treasury.” It would have been more clear had that been bifurcated into two, distributing the bulk of the funds to the on-chain DAO-controlled treasury and a portion to the Foundation, in service of the DAO.
In hindsight, there was clearly a lot that could have been better communicated. We do want to stress, however, that AIP-1 was posted on the forums simultaneously with the governance announcement on March 16 (one week before the airdrop went live), and in the "Steps to Implement" section it did make clear that this was indeed a ratification of funding that had already occurred. Again, we could have done a lot better with regards to making sure that this was clear to all, but lest anyone think there was any change of intent, we do want to point out that this was announced at the outset. And we will strive to communicate better going forward.
===
P.S. There have been some questions for clarity as to the role of Lemma LTD, the poster of AIP-1, and their relationship with the Foundation. Setting up a foundation, managing the governance process and setting up and managing the DAO tooling takes a lot of work, and indeed this is one of the reasons that it was so critical to get the Foundation up, running, and funded prior to launch. To assist in these roles as it staffs up, the Foundation is working with a few different service providers in order to bootstrap itself and be in a position to properly serve the DAO. One among those is Lemma Ltd which provides several services to the Foundation including monitoring and participating in governance forums.
Yes this is what I’m thinking
:+1: Yes If failure state isn’t considered We'll never forget that and it's consequences
Cannot agree with AIP-1
literally. you are right :rofl:
There needs to be a wide-ranging investigation. And if they are guilty, they must be held accountable to the fullest extent of the law.
Yes this is what I’m thinking
:+1: Yes If failure state isn’t considered We'll never forget that and it's consequences
Cannot agree with AIP-1
literally. you are right :rofl:
There needs to be a wide-ranging investigation. And if they are guilty, they must be held accountable to the fullest extent of the law.
This is literally a bot post.
The Dao can start by asking for less and detailing what it will be using it for. Asking for 750 Mil tokens (almost a billy) is alot with basically no information. I get there is going to be pilferage here and there but a billy...... no thanks
This is literally a bot post.
The Dao can start by asking for less and detailing what it will be using it for. Asking for 750 Mil tokens (almost a billy) is alot with basically no information. I get there is going to be pilferage here and there but a billy...... no thanks
If failure state isn’t considered, this might suggest the vote is only for show. The precedent you set for the DAO will set the tone for the future.
While acknowledging the positive aspects of the project, I have some concerns about the allocation of tokens to the Arbitrum Foundation in AIP-1. I believe that the allocation could have been distributed differently or may not be entirely fair. It's important to voice these concerns and engage in the community discussion to help shape the direction of the project. I look forward to future proposals that address some of these concerns.
So, is this merely a formality, with the result of the proposal being insignificant? You need to clarify the real-world implications if the proposal passes, as well as if it fails. The community requires transparency, and it's honestly absurd to establish such a precedent for the DAO.
AIP-1 did not raise any questions for me. In addition, it is pleasing that the community is involved in management. And community members are ready to put forward questions for public discussion, and not just be a holder of ARB tokens. In fact, now we are laying the foundation - the foundation of our DAO. And it is very important to have an understanding and transparency of the decisions that are being made.
This continues to be my largest concerns with DAOs. Votes are just recommendations rather than reality. Why give us the ability to vote if the decisions will continue to be made by the small group of people who are signing the multi sig.
We are so far from decentralization that we should abandon the term DAO until it is more meaningful. This is an Organization.
If failure state isn’t considered, this might suggest the vote is only for show. The precedent you set for the DAO will set the tone for the future.
While acknowledging the positive aspects of the project, I have some concerns about the allocation of tokens to the Arbitrum Foundation in AIP-1. I believe that the allocation could have been distributed differently or may not be entirely fair. It's important to voice these concerns and engage in the community discussion to help shape the direction of the project. I look forward to future proposals that address some of these concerns.
So, is this merely a formality, with the result of the proposal being insignificant? You need to clarify the real-world implications if the proposal passes, as well as if it fails. The community requires transparency, and it's honestly absurd to establish such a precedent for the DAO.
AIP-1 did not raise any questions for me. In addition, it is pleasing that the community is involved in management. And community members are ready to put forward questions for public discussion, and not just be a holder of ARB tokens. In fact, now we are laying the foundation - the foundation of our DAO. And it is very important to have an understanding and transparency of the decisions that are being made.
This continues to be my largest concerns with DAOs. Votes are just recommendations rather than reality. Why give us the ability to vote if the decisions will continue to be made by the small group of people who are signing the multi sig.
We are so far from decentralization that we should abandon the term DAO until it is more meaningful. This is an Organization.
I do not think the issue here is on whether the Foundation should be have a budget for BD (or potential even whether it should do a loan to a MM).
Anybody sensible would agree with those points: those are required for Arbitrum to succeed.
I do not think the issue here is on whether the Foundation should be have a budget for BD (or potential even whether it should do a loan to a MM).
Anybody sensible would agree with those points: those are required for Arbitrum to succeed.
For example, if the docs had been clear that the Foundation got a 750m airdrop (even better if suggested to vesting), I don't think there would have been much of a debate here. People would have simply debated on what is the best and most efficient way for the Foundation to use those. Nothing else, nothing more.
The problem is simply that
i) The docs did not mention it
ii) The circulating supply & the resulting market cap everybody used and made an investment decision on, was simply false. There was not 1.25bn tokens in circulation, but more. What should be used now? 50m more tokens to reflect 10m sold + 40m used by MM (sounds sensible)? Or 750m more tokens if the use of the word "ratification" implies those can enter circulation as early as today, without any vote?
iii) What was the rush to sell, without any transparency, 10m tokens which likely covers the cost of running such a foundation for quite some time?
iv) By saying that AIP-1 is simply a "ratification", the governance powers of the ARB tokens are damaged, hence the token's value suffer. If the proposal ends up being implemented as-is despite tokenholders voting against it, how does the token have any governance powers?
What is done is done and cannot really be undone. However, it is pretty obvious that ARB tokenholders do not agree with AIP-1 as it was put forward.
I am just an retarded anon with an absolutely irrelevant amount of tokens. However, using my 60 IQ, I suspect the best way forward is likely to i) Never say again that votes do not matter ii) Hold the bulk of the 700m tokens remaining in a contract with linear vesting (I doubt $1bn in ARB tokens need to be spent day1). The contract is not immutable and can be amended by subsequent governance vote iii) Increase the number of directors in the Foundation to 5. At least 3 of the individuals acting as Directors should not come from Offchain Labs (nor any VC firm that invested in it) in order to improve decentralisation and give reassurances to token holders that the grants will be used to ensure the success of the ecosystem rather than be a slush fund (as it happened on some alt L1s) iv) Give some transparency and detail around year 1 of budget (or at least what the setup costs & expenses in the coming months are) so people better understand why there was a rush to sell 10m tokens v) Suggest what the application process and general criteria for grants will be (it does not need to be extremely detailed, just a framework should do the trick)
This should be enough for AIP-2 to pass easily and goodwill to be rebuilt
2.6b for team why use treasury to cover operation?
I shared my two cents here as a builder who bootstrapped a network and understands how hard it is. Yes, things were handled poorly, but the solution is not to burn everything down.
They messed up initially, but now the FUDDERS are taking advantage. Just my 2 cents.
"If the team needed funding"
I refuse to believe that the team needed funding, because if they did, there's something truly disturbing at play that we are not being told.
Osho was right. Democracy means government of the people, by the people and for the people, but the people are …
Don’t think the project aligns to your values? Sell and build your own!
What exactly is the purpose of loaning $50 million to wintermute, and who made this decision? I understand that companies that IPO often pay an investment bank to make a market in their shares, but ARB is not a stock - it is a "valueless" governance token. "Valueless" is the operative word, because, in hiring Wintermute as a market maker, you are elevating Wintermute's opinion as to what the valuation of ARB should be, over and above other DAO members and tokenholders. There was simply no reason to hire a market maker at all - especially when Arbitrum is chock-full of trustless DEXes, and many ARB holders were willing to provide liquidity on them, so the decision to do so has rightly been met with skepticism. Instead of consulting the ARB holders on a decision that affects the liquidity/market dynamics of their own token, the team opted to shower favors on a centralized, opaque private market maker.
@stonecoldpat Please clearly explain the thought process behind hiring Wintermute for this service. What are the exact terms of the contract? What terms has Wintermute agreed to, and who at Offchain Labs authorized this contract? What is the benefit to the Arbitrum Foundation which Wintermute was hired to deliver? If the only answer is "more liquidity" - then there is no NET benefit to the DAO because any added liquidity in the token is being paid for by the foundation itself...
What exactly is the purpose of loaning $50 million to wintermute, and who made this decision? I understand that companies that IPO often pay an investment bank to make a market in their shares, but ARB is not a stock - it is a "valueless" governance token. "Valueless" is the operative word, because, in hiring Wintermute as a market maker, you are elevating Wintermute's opinion as to what the valuation of ARB should be, over and above other DAO members and tokenholders. There was simply no reason to hire a market maker at all - especially when Arbitrum is chock-full of trustless DEXes, and many ARB holders were willing to provide liquidity on them, so the decision to do so has rightly been met with skepticism. Instead of consulting the ARB holders on a decision that affects the liquidity/market dynamics of their own token, the team opted to shower favors on a centralized, opaque private market maker.
@stonecoldpat Please clearly explain the thought process behind hiring Wintermute for this service. What are the exact terms of the contract? What terms has Wintermute agreed to, and who at Offchain Labs authorized this contract? What is the benefit to the Arbitrum Foundation which Wintermute was hired to deliver? If the only answer is "more liquidity" - then there is no NET benefit to the DAO because any added liquidity in the token is being paid for by the foundation itself...
I fail to see how having more liquidity in ARB token furthers the goals of the foundation. In the stock market you can rationalize this behavior by saying that, from a corporate governance standpoint, if there is better liquidity in a stock, then more sophisticated institutions with larger bankrolls may be more comfortable to finance the company -- so the added liquidity theoretically increases the value of the firm's equity. But there is no equity in the Arbitrum Foundation, so what exactly is the DAO optimizing for when they hire a 3rd party market maker?
You may argue that with more liquidity, more people will be willing to buy the token, but the goals of the Arbitrum Foundation are not tangibly improved by deeper liquidity - it is only 3rd party investors who benefit from the liquidity. Indeed, swiss foundations are only tax-exempt because the are funding public goods that are non-excludable - but the added liquidity in ARB only benefits buyers and sellers of ARB, not the public at large, and disproportionately benefits the team/investors in a private, for profit company.
Please disclose all terms agreed to with wintermute, and how the decision was reached.
Thanks for the clarity dude. My few cents here
Firstly, you centered polygon which is not right because polygon is never a governance token and they operate like a centralised infra where there’s not much dependency on community to participate.
Thanks for the clarity dude. My few cents here
Firstly, you centered polygon which is not right because polygon is never a governance token and they operate like a centralised infra where there’s not much dependency on community to participate.
Secondly, there can be miss communication but the day you guys internally discussed to launch a DAO didn’t you know the the status of the runway and why you guys all of the sudden need ARB for operations?
Thirdly, it’s better you take the inspiration of MakerDAO where they transparently communicate every action taken by CUs and their work, financial info in the forum and viewable.
We’re all learning, mistakes are common in such revolving space. But governance need to be respected at any cost.
I am not an airdrop participant. I bought your tokens looking at your official information. unfortunately you fooled us. you also fooled the participants of the DAO by launching a fake vote. show us an information from the distribution of tokens, wallets, companies. Community needs to see your actions and otherwise you will not be trusted
That's ridiculous. No laws were broken, nothing was stolen. Everything is accounted for and no they just need to whip up the next, hopefully improved, proposal to get the DAO started. I think a lot of you people are here for malicious reasons and not here for dialogue.
It not the time to be sad @Ceazor . It is a great opportunity to take advantage of situation.
What is the purpose of Delegate applications on this forum under Governance tab, while everyone can be a delegate on Tally?
Biggest sham in crypto, Arbitrum have lost all trust. Theaft and then dumbping on user base. The DAO is a joke and the people working at Arbitrum are scammers. Waiting for the class action lawsuit.
Everyone with their free bag of governance tokens (which have no stated value to begin with) suddenly DAO government experts overnight...
There have been more serious mistakes in DAO spaces than this. They provided an explanation, which should suffice. They have to satisfy their partners. Token holders do not own or entirely rule the DAO; that's a fantasy of Web3 purity. If you think differently, you can always give (not sell) the tokens back and leave the project.
Exactly why Arbitrum should leverage a platform like EthereansOS to build an on-chain flexible governance structure. It would mitigate these communication problems and investors doubts that the token is actually effective in governance decisions
Thank you for the clarification on the issues raised @stonecoldpat.
From my POV it seems like most of the discussion is people talking past each other.
Most of the discussion I see has been focused on 3 points:
Thank you for the clarification on the issues raised @stonecoldpat.
From my POV it seems like most of the discussion is people talking past each other.
Most of the discussion I see has been focused on 3 points:
On the other hand, the proposal was intended to ratify the setup of the DAO and the foundation. Setting up a project of this magnitude requires a certain level of pragmatism which I'm sympathetic to. For the most part, I believe that everything in this proposal seems reasonable when viewed through this lens. Still, it's evident by the resulting discussion that this was not clearly communicated.
Points one and three are addressed by the fact that this proposal was but point 2 might is not entirely.
It seems like as it stands the proposal will not pass but at the time it must pass so we can move forward.
There are a few ways that I see how we can move forward.
More transparency and detail around the purpose of the 750M budget. This would quell most of the concerns being brought up in the forum and
Reduce the initial budget to an amount that would cover the initial setup costs and short-term expenses. Start work on a draft for a different proposal with a proper budget and guidelines for the allocation of the remaining budget.
I believe that creating a new proposal with either of these or a mix of both solutions would serve to satisfy most raised concerns.
I'm very interested in hearing everyone's thoughts on these solutions or others that can be used to ratify the initial setup of the DAO.
- John from P2P.org
"The Foundation treated this as a ratification of its initial setup, not an initial grant request from the DAO Treasury, and indeed has begun to use these tokens in the interest of the DAO, including conversion of some funds into stablecoins for operational purposes."
How can something be in the interest of a DAO if the vote hasn't completed and the decision goes against the current majority (by 70%) vote? What does "interest of the DAO" mean, exactly?
I do not think the issue here is on whether the Foundation should be have a budget for BD (or potential even whether it should do a loan to a MM).
Anybody sensible would agree with those points: those are required for Arbitrum to succeed.
I do not think the issue here is on whether the Foundation should be have a budget for BD (or potential even whether it should do a loan to a MM).
Anybody sensible would agree with those points: those are required for Arbitrum to succeed.
For example, if the docs had been clear that the Foundation got a 750m airdrop (even better if suggested to vesting), I don't think there would have been much of a debate here. People would have simply debated on what is the best and most efficient way for the Foundation to use those. Nothing else, nothing more.
The problem is simply that
i) The docs did not mention it
ii) The circulating supply & the resulting market cap everybody used and made an investment decision on, was simply false. There was not 1.25bn tokens in circulation, but more. What should be used now? 50m more tokens to reflect 10m sold + 40m used by MM (sounds sensible)? Or 750m more tokens if the use of the word "ratification" implies those can enter circulation as early as today, without any vote?
iii) What was the rush to sell, without any transparency, 10m tokens which likely covers the cost of running such a foundation for quite some time?
iv) By saying that AIP-1 is simply a "ratification", the governance powers of the ARB tokens are damaged, hence the token's value suffer. If the proposal ends up being implemented as-is despite tokenholders voting against it, how does the token have any governance powers?
What is done is done and cannot really be undone. However, it is pretty obvious that ARB tokenholders do not agree with AIP-1 as it was put forward.
I am just an retarded anon with an absolutely irrelevant amount of tokens. However, using my 60 IQ, I suspect the best way forward is likely to i) Never say again that votes do not matter ii) Hold the bulk of the 700m tokens remaining in a contract with linear vesting (I doubt $1bn in ARB tokens need to be spent day1). The contract is not immutable and can be amended by subsequent governance vote iii) Increase the number of directors in the Foundation to 5. At least 3 of the individuals acting as Directors should not come from Offchain Labs (nor any VC firm that invested in it) in order to improve decentralisation and give reassurances to token holders that the grants will be used to ensure the success of the ecosystem rather than be a slush fund (as it happened on some alt L1s) iv) Give some transparency and detail around year 1 of budget (or at least what the setup costs & expenses in the coming months are) so people better understand why there was a rush to sell 10m tokens v) Suggest what the application process and general criteria for grants will be (it does not need to be extremely detailed, just a framework should do the trick)
This should be enough for AIP-2 to pass easily and goodwill to be rebuilt
2.6b for team why use treasury to cover operation?
I shared my two cents here as a builder who bootstrapped a network and understands how hard it is. Yes, things were handled poorly, but the solution is not to burn everything down.
They messed up initially, but now the FUDDERS are taking advantage. Just my 2 cents.
"If the team needed funding"
I refuse to believe that the team needed funding, because if they did, there's something truly disturbing at play that we are not being told.
Osho was right. Democracy means government of the people, by the people and for the people, but the people are …
Don’t think the project aligns to your values? Sell and build your own!
What exactly is the purpose of loaning $50 million to wintermute, and who made this decision? I understand that companies that IPO often pay an investment bank to make a market in their shares, but ARB is not a stock - it is a "valueless" governance token. "Valueless" is the operative word, because, in hiring Wintermute as a market maker, you are elevating Wintermute's opinion as to what the valuation of ARB should be, over and above other DAO members and tokenholders. There was simply no reason to hire a market maker at all - especially when Arbitrum is chock-full of trustless DEXes, and many ARB holders were willing to provide liquidity on them, so the decision to do so has rightly been met with skepticism. Instead of consulting the ARB holders on a decision that affects the liquidity/market dynamics of their own token, the team opted to shower favors on a centralized, opaque private market maker.
@stonecoldpat Please clearly explain the thought process behind hiring Wintermute for this service. What are the exact terms of the contract? What terms has Wintermute agreed to, and who at Offchain Labs authorized this contract? What is the benefit to the Arbitrum Foundation which Wintermute was hired to deliver? If the only answer is "more liquidity" - then there is no NET benefit to the DAO because any added liquidity in the token is being paid for by the foundation itself...
What exactly is the purpose of loaning $50 million to wintermute, and who made this decision? I understand that companies that IPO often pay an investment bank to make a market in their shares, but ARB is not a stock - it is a "valueless" governance token. "Valueless" is the operative word, because, in hiring Wintermute as a market maker, you are elevating Wintermute's opinion as to what the valuation of ARB should be, over and above other DAO members and tokenholders. There was simply no reason to hire a market maker at all - especially when Arbitrum is chock-full of trustless DEXes, and many ARB holders were willing to provide liquidity on them, so the decision to do so has rightly been met with skepticism. Instead of consulting the ARB holders on a decision that affects the liquidity/market dynamics of their own token, the team opted to shower favors on a centralized, opaque private market maker.
@stonecoldpat Please clearly explain the thought process behind hiring Wintermute for this service. What are the exact terms of the contract? What terms has Wintermute agreed to, and who at Offchain Labs authorized this contract? What is the benefit to the Arbitrum Foundation which Wintermute was hired to deliver? If the only answer is "more liquidity" - then there is no NET benefit to the DAO because any added liquidity in the token is being paid for by the foundation itself...
I fail to see how having more liquidity in ARB token furthers the goals of the foundation. In the stock market you can rationalize this behavior by saying that, from a corporate governance standpoint, if there is better liquidity in a stock, then more sophisticated institutions with larger bankrolls may be more comfortable to finance the company -- so the added liquidity theoretically increases the value of the firm's equity. But there is no equity in the Arbitrum Foundation, so what exactly is the DAO optimizing for when they hire a 3rd party market maker?
You may argue that with more liquidity, more people will be willing to buy the token, but the goals of the Arbitrum Foundation are not tangibly improved by deeper liquidity - it is only 3rd party investors who benefit from the liquidity. Indeed, swiss foundations are only tax-exempt because the are funding public goods that are non-excludable - but the added liquidity in ARB only benefits buyers and sellers of ARB, not the public at large, and disproportionately benefits the team/investors in a private, for profit company.
Please disclose all terms agreed to with wintermute, and how the decision was reached.
Thanks for the clarity dude. My few cents here
Firstly, you centered polygon which is not right because polygon is never a governance token and they operate like a centralised infra where there’s not much dependency on community to participate.
Thanks for the clarity dude. My few cents here
Firstly, you centered polygon which is not right because polygon is never a governance token and they operate like a centralised infra where there’s not much dependency on community to participate.
Secondly, there can be miss communication but the day you guys internally discussed to launch a DAO didn’t you know the the status of the runway and why you guys all of the sudden need ARB for operations?
Thirdly, it’s better you take the inspiration of MakerDAO where they transparently communicate every action taken by CUs and their work, financial info in the forum and viewable.
We’re all learning, mistakes are common in such revolving space. But governance need to be respected at any cost.
I am not an airdrop participant. I bought your tokens looking at your official information. unfortunately you fooled us. you also fooled the participants of the DAO by launching a fake vote. show us an information from the distribution of tokens, wallets, companies. Community needs to see your actions and otherwise you will not be trusted
That's ridiculous. No laws were broken, nothing was stolen. Everything is accounted for and no they just need to whip up the next, hopefully improved, proposal to get the DAO started. I think a lot of you people are here for malicious reasons and not here for dialogue.
It not the time to be sad @Ceazor . It is a great opportunity to take advantage of situation.
What is the purpose of Delegate applications on this forum under Governance tab, while everyone can be a delegate on Tally?
Biggest sham in crypto, Arbitrum have lost all trust. Theaft and then dumbping on user base. The DAO is a joke and the people working at Arbitrum are scammers. Waiting for the class action lawsuit.
Everyone with their free bag of governance tokens (which have no stated value to begin with) suddenly DAO government experts overnight...
There have been more serious mistakes in DAO spaces than this. They provided an explanation, which should suffice. They have to satisfy their partners. Token holders do not own or entirely rule the DAO; that's a fantasy of Web3 purity. If you think differently, you can always give (not sell) the tokens back and leave the project.
Exactly why Arbitrum should leverage a platform like EthereansOS to build an on-chain flexible governance structure. It would mitigate these communication problems and investors doubts that the token is actually effective in governance decisions
Thank you for the clarification on the issues raised @stonecoldpat.
From my POV it seems like most of the discussion is people talking past each other.
Most of the discussion I see has been focused on 3 points:
Thank you for the clarification on the issues raised @stonecoldpat.
From my POV it seems like most of the discussion is people talking past each other.
Most of the discussion I see has been focused on 3 points:
On the other hand, the proposal was intended to ratify the setup of the DAO and the foundation. Setting up a project of this magnitude requires a certain level of pragmatism which I'm sympathetic to. For the most part, I believe that everything in this proposal seems reasonable when viewed through this lens. Still, it's evident by the resulting discussion that this was not clearly communicated.
Points one and three are addressed by the fact that this proposal was but point 2 might is not entirely.
It seems like as it stands the proposal will not pass but at the time it must pass so we can move forward.
There are a few ways that I see how we can move forward.
More transparency and detail around the purpose of the 750M budget. This would quell most of the concerns being brought up in the forum and
Reduce the initial budget to an amount that would cover the initial setup costs and short-term expenses. Start work on a draft for a different proposal with a proper budget and guidelines for the allocation of the remaining budget.
I believe that creating a new proposal with either of these or a mix of both solutions would serve to satisfy most raised concerns.
I'm very interested in hearing everyone's thoughts on these solutions or others that can be used to ratify the initial setup of the DAO.
- John from P2P.org
"The Foundation treated this as a ratification of its initial setup, not an initial grant request from the DAO Treasury, and indeed has begun to use these tokens in the interest of the DAO, including conversion of some funds into stablecoins for operational purposes."
How can something be in the interest of a DAO if the vote hasn't completed and the decision goes against the current majority (by 70%) vote? What does "interest of the DAO" mean, exactly?
Everyone needs to calm down. Any and all criticism of the Arbitrum Foundation is anti-semitic. Goyim should be grateful they get to vote on governance at all, even if their vote doesn't matter.
Hi, you write " that this was announced at the outset".
Could you share the announcement about it?
Thanks
As the saying goes, when in a hole, STOP DIGGING!
What you're saying, and just admitted to is that:
As the saying goes, when in a hole, STOP DIGGING!
What you're saying, and just admitted to is that:
If it were a ratification, why was it a Snapshot vote? Why not just a Medium post? I don't think the issue is of 750m ARB as much as it is over utter disrespect towards all the community you're supposed to be governed by.
I'm not a lawyer so I don't wanna larp legal spaghetti, but a centralized sequencer / prover and now this, the legal exposure can't be good.
If you were to try and stop the bleeding, I'd humble myself and revert all these thing we're supposed to be ratifying. Then come forward with specific proposals for everything and a clear oversight & transparency plan in tow.
You guys squarely kneecapped all the trust the community put in you, and it's gonna be a long road back to equilibrium. Community might forgive it once if you play your cards right here, but its gonna be thin ice for a while. Not a good look.
I think most of the community understands the need to properly fund a foundation and ensure that it has the resources to operate for the long haul. However the way this was communicated and proposed to the community left much to be desired and I think in the wake of everything the proposal should be altered and put up for re-ratification with the following added conditions:
Implement a 5 year linear vesting schedule for the 750m tokens. This would ensure a steady unlock of funds while guaranteeing that the foundation has the resources to operate at the same time.
For the appointed multi-sig operators in charge of the special grants - their terms of service should be limited to 2 years (with the DAO having the ability to remove them ahead of time via governance proposals). In addition - 3 additional signers should be elected by the DAO at the end of the first year to erect a rolling committee of 6 signers responsible for special grants with 3 members up for election every year. This rolling committee would hopefully encourage the community to be more active in governance (specifically the election of replacement members) and also ensure urgency for elected members to shoot for maximum impact during the duration of their term.
The clarity posted is a set in the right direction - however I urge the the Foundation to include additional disclosure information, repeal this AIP, and repost in the correct context (i.e., as a ratification and not under the guise of a proposal).
Disclosure items that would be helpful to include as additional context
The clarity posted is a set in the right direction - however I urge the the Foundation to include additional disclosure information, repeal this AIP, and repost in the correct context (i.e., as a ratification and not under the guise of a proposal).
Disclosure items that would be helpful to include as additional context
Publish a high level criteria for the special grant program (e.g., which types of partners are eligible, max funding amounts, how much of the 750mm tokens will be earmarked). This item is not a ratification of an existing program so there is room for more development in this matter and arguably should be it's own AIP.
For tokens already earmarked for ongoing operating/admin costs, give a breakdown of which service provider has received tokens / is earmarked to recieve tokens, how many tokens, and what those tokens will be used for (e.g., market making, compensation for services, etc.)
Give the community a line item accounting of startup costs paid, who is being reimbursed for which services, and the cost of those services. Call out specifically which individuals/entities being reimbursed are affiliates of Offchain and provide benchmarking for affiliate reimbursements for services that could have been performed by a third party
Provide a 12 or 24 month financial projection of operational and administrative costs
Provide sufficient biographies for all of the individuals acting as directors of the DAO and on the security council. Confirm if Offchain affiliates are being compensated for their service on the security council or if that compensation is being waived since they are already compensated by Offchain.
We understand DAO governance is hard and there will be growing pains. Urge the team to embrace best-in-class transparency and install an experienced governance team equipped with the tools and authority to improve these proposals going forward.
Patrick, i did not realize that's you. You just joined Arbitrum and been thrown to the fire.
I commented on the situation here: https://twitter.com/LefterisJP/status/1642507620513722369
Two main take-away points.
Patrick, i did not realize that's you. You just joined Arbitrum and been thrown to the fire.
I commented on the situation here: https://twitter.com/LefterisJP/status/1642507620513722369
Two main take-away points.
Now what to do from here and on to correct this situation? Hard to say. A lot of damage is done with how this thing was handle.
Perhaps try to return the funds, or as much as possible, and then make a post explaining the bugdet that the foundation needs, what it needs to spend on, how much it needs etc. Essentially a proper DAO expenses proposal with details and accountability. And then re-do AIP-1. This would probably buy enough goodwill back from the community and showing that this is not sham governance.
The first point to mention is that the majority of the Arbitrum community were under the impression that tokens were locked up for one year (with the exception of the airdropped tokens). To claim that you had posted this funding arrangement on forums which most people aren't aware of is a cop-out.
Secondly, it is clear that regardless of the semantics around "ratification" vs. "vote", your community is strongly positioned against this allocation of funds. What are you going to do about this?
The first point to mention is that the majority of the Arbitrum community were under the impression that tokens were locked up for one year (with the exception of the airdropped tokens). To claim that you had posted this funding arrangement on forums which most people aren't aware of is a cop-out.
Secondly, it is clear that regardless of the semantics around "ratification" vs. "vote", your community is strongly positioned against this allocation of funds. What are you going to do about this?
For such a community-driven project, this is short-sighted and frankly is a disgrace.
Classic. Lots of words and not a single number for transparency and clarity, and generally why the fund was able to start spending funds before the vote was over.
This series of events has made the Arbitrum DAO looks very redundant and powerless. There was zero DAO oversight or input on these funds.
This "Foundation" entity already has such a large chunk of ARB, and now the DAO is left feeling like it has no control over them. What's the point of ARB governance if day-to-day activities ignore it entirely?
This series of events has made the Arbitrum DAO looks very redundant and powerless. There was zero DAO oversight or input on these funds.
This "Foundation" entity already has such a large chunk of ARB, and now the DAO is left feeling like it has no control over them. What's the point of ARB governance if day-to-day activities ignore it entirely?
IMO it's more important than ever that AIP-1 be voted down and that a new draft be created, significantly reducing the funds given to the Foundation. Trust between the DAO and the Foundation has been broken and must be rebuilt through open governance channels.
Interesting so for the sake of the DAO how are you going to adapt an audit trail for off chain dealings.
This is worse than what we imagined.
Gathering the facts,
This is worse than what we imagined.
Gathering the facts,
How is this acceptable?
For transparency sake, the foundation is required to give a summary of the amount of coins that have been dumped, wallets, accounts which were used for dumping.
This is just a total breach of trust.
I dont see how anyone can trust Arbitrum team going forward.
This is an incredible amount of words to use to get the point across that the vote wasn't meaningful.
Token holders should have some clarity on the buying and selling of $ARB now that it's a liquid token and this just incites panic as speculators are wondering what % of the foundation's tokens are being sold without users knowing.
This is an incredible amount of words to use to get the point across that the vote wasn't meaningful.
Token holders should have some clarity on the buying and selling of $ARB now that it's a liquid token and this just incites panic as speculators are wondering what % of the foundation's tokens are being sold without users knowing.
A lot more transparency on balances + selling schedules and the form of selling are necessary.
Ok I'm well convinced now but you guys need to make an announcement on your Discord and other Social Channels. Wish Arbitrum Success.
Whether Arbitrum Improvement Proposal 1 is a proposal or a ratification, it could be helpful to clarify what happens should the "against" vote win.
If failure state isn't considered, this might suggest the vote is only for show. The precedent you set for the DAO will set the tone for the future.
Everyone needs to calm down. Any and all criticism of the Arbitrum Foundation is anti-semitic. Goyim should be grateful they get to vote on governance at all, even if their vote doesn't matter.
Hi, you write " that this was announced at the outset".
Could you share the announcement about it?
Thanks
As the saying goes, when in a hole, STOP DIGGING!
What you're saying, and just admitted to is that:
As the saying goes, when in a hole, STOP DIGGING!
What you're saying, and just admitted to is that:
If it were a ratification, why was it a Snapshot vote? Why not just a Medium post? I don't think the issue is of 750m ARB as much as it is over utter disrespect towards all the community you're supposed to be governed by.
I'm not a lawyer so I don't wanna larp legal spaghetti, but a centralized sequencer / prover and now this, the legal exposure can't be good.
If you were to try and stop the bleeding, I'd humble myself and revert all these thing we're supposed to be ratifying. Then come forward with specific proposals for everything and a clear oversight & transparency plan in tow.
You guys squarely kneecapped all the trust the community put in you, and it's gonna be a long road back to equilibrium. Community might forgive it once if you play your cards right here, but its gonna be thin ice for a while. Not a good look.
I think most of the community understands the need to properly fund a foundation and ensure that it has the resources to operate for the long haul. However the way this was communicated and proposed to the community left much to be desired and I think in the wake of everything the proposal should be altered and put up for re-ratification with the following added conditions:
Implement a 5 year linear vesting schedule for the 750m tokens. This would ensure a steady unlock of funds while guaranteeing that the foundation has the resources to operate at the same time.
For the appointed multi-sig operators in charge of the special grants - their terms of service should be limited to 2 years (with the DAO having the ability to remove them ahead of time via governance proposals). In addition - 3 additional signers should be elected by the DAO at the end of the first year to erect a rolling committee of 6 signers responsible for special grants with 3 members up for election every year. This rolling committee would hopefully encourage the community to be more active in governance (specifically the election of replacement members) and also ensure urgency for elected members to shoot for maximum impact during the duration of their term.
The clarity posted is a set in the right direction - however I urge the the Foundation to include additional disclosure information, repeal this AIP, and repost in the correct context (i.e., as a ratification and not under the guise of a proposal).
Disclosure items that would be helpful to include as additional context
The clarity posted is a set in the right direction - however I urge the the Foundation to include additional disclosure information, repeal this AIP, and repost in the correct context (i.e., as a ratification and not under the guise of a proposal).
Disclosure items that would be helpful to include as additional context
Publish a high level criteria for the special grant program (e.g., which types of partners are eligible, max funding amounts, how much of the 750mm tokens will be earmarked). This item is not a ratification of an existing program so there is room for more development in this matter and arguably should be it's own AIP.
For tokens already earmarked for ongoing operating/admin costs, give a breakdown of which service provider has received tokens / is earmarked to recieve tokens, how many tokens, and what those tokens will be used for (e.g., market making, compensation for services, etc.)
Give the community a line item accounting of startup costs paid, who is being reimbursed for which services, and the cost of those services. Call out specifically which individuals/entities being reimbursed are affiliates of Offchain and provide benchmarking for affiliate reimbursements for services that could have been performed by a third party
Provide a 12 or 24 month financial projection of operational and administrative costs
Provide sufficient biographies for all of the individuals acting as directors of the DAO and on the security council. Confirm if Offchain affiliates are being compensated for their service on the security council or if that compensation is being waived since they are already compensated by Offchain.
We understand DAO governance is hard and there will be growing pains. Urge the team to embrace best-in-class transparency and install an experienced governance team equipped with the tools and authority to improve these proposals going forward.
Patrick, i did not realize that's you. You just joined Arbitrum and been thrown to the fire.
I commented on the situation here: https://twitter.com/LefterisJP/status/1642507620513722369
Two main take-away points.
Patrick, i did not realize that's you. You just joined Arbitrum and been thrown to the fire.
I commented on the situation here: https://twitter.com/LefterisJP/status/1642507620513722369
Two main take-away points.
Now what to do from here and on to correct this situation? Hard to say. A lot of damage is done with how this thing was handle.
Perhaps try to return the funds, or as much as possible, and then make a post explaining the bugdet that the foundation needs, what it needs to spend on, how much it needs etc. Essentially a proper DAO expenses proposal with details and accountability. And then re-do AIP-1. This would probably buy enough goodwill back from the community and showing that this is not sham governance.
The first point to mention is that the majority of the Arbitrum community were under the impression that tokens were locked up for one year (with the exception of the airdropped tokens). To claim that you had posted this funding arrangement on forums which most people aren't aware of is a cop-out.
Secondly, it is clear that regardless of the semantics around "ratification" vs. "vote", your community is strongly positioned against this allocation of funds. What are you going to do about this?
The first point to mention is that the majority of the Arbitrum community were under the impression that tokens were locked up for one year (with the exception of the airdropped tokens). To claim that you had posted this funding arrangement on forums which most people aren't aware of is a cop-out.
Secondly, it is clear that regardless of the semantics around "ratification" vs. "vote", your community is strongly positioned against this allocation of funds. What are you going to do about this?
For such a community-driven project, this is short-sighted and frankly is a disgrace.
Classic. Lots of words and not a single number for transparency and clarity, and generally why the fund was able to start spending funds before the vote was over.
This series of events has made the Arbitrum DAO looks very redundant and powerless. There was zero DAO oversight or input on these funds.
This "Foundation" entity already has such a large chunk of ARB, and now the DAO is left feeling like it has no control over them. What's the point of ARB governance if day-to-day activities ignore it entirely?
This series of events has made the Arbitrum DAO looks very redundant and powerless. There was zero DAO oversight or input on these funds.
This "Foundation" entity already has such a large chunk of ARB, and now the DAO is left feeling like it has no control over them. What's the point of ARB governance if day-to-day activities ignore it entirely?
IMO it's more important than ever that AIP-1 be voted down and that a new draft be created, significantly reducing the funds given to the Foundation. Trust between the DAO and the Foundation has been broken and must be rebuilt through open governance channels.
Interesting so for the sake of the DAO how are you going to adapt an audit trail for off chain dealings.
This is worse than what we imagined.
Gathering the facts,
This is worse than what we imagined.
Gathering the facts,
How is this acceptable?
For transparency sake, the foundation is required to give a summary of the amount of coins that have been dumped, wallets, accounts which were used for dumping.
This is just a total breach of trust.
I dont see how anyone can trust Arbitrum team going forward.
This is an incredible amount of words to use to get the point across that the vote wasn't meaningful.
Token holders should have some clarity on the buying and selling of $ARB now that it's a liquid token and this just incites panic as speculators are wondering what % of the foundation's tokens are being sold without users knowing.
This is an incredible amount of words to use to get the point across that the vote wasn't meaningful.
Token holders should have some clarity on the buying and selling of $ARB now that it's a liquid token and this just incites panic as speculators are wondering what % of the foundation's tokens are being sold without users knowing.
A lot more transparency on balances + selling schedules and the form of selling are necessary.
Ok I'm well convinced now but you guys need to make an announcement on your Discord and other Social Channels. Wish Arbitrum Success.
Whether Arbitrum Improvement Proposal 1 is a proposal or a ratification, it could be helpful to clarify what happens should the "against" vote win.
If failure state isn't considered, this might suggest the vote is only for show. The precedent you set for the DAO will set the tone for the future.
If the team needed funding, they should have made that clear. You can’t pretend all it good, then secretly loot the treasury and expect the people to be ok with this.
putting the word ratification on it, after the fact, doesn’t fix it. People don’t want it, and didn’t know it was happening. This is the same as any project launching and selling tokens into the FOMO of the investors.
If the team needed funding, they should have made that clear. You can’t pretend all it good, then secretly loot the treasury and expect the people to be ok with this.
putting the word ratification on it, after the fact, doesn’t fix it. People don’t want it, and didn’t know it was happening. This is the same as any project launching and selling tokens into the FOMO of the investors.
Now that the “ratification” is not “officially valid” you have driven a wedge between the investors and the community, and the team. It’s apparently obvious that you attempted to squeeze your funding into a large encompassing proposal, hoping it would go unnoticed. This is presumptuous but likely the sentiment of most people reading this now.
This proposal from the start was wrong. It was a proposal to nullify the need for governance, which was already nullified.
NOW, I do support the idea that teams do work, and dam well should be paid well for doing so, but you can’t do it secretly in DeFi, you have to put yoru cards on the table so we can all work together to make things right.
Yes there will always be greed of the individual, but we can socially reduce the greed of the groups.
This saddens me.
This clearly shows that there need to be representatives of the community in the board/security council to keep the CEOs in line as an overwatch when decisions are being taken over the DAO.
If the team needed funding, they should have made that clear. You can’t pretend all it good, then secretly loot the treasury and expect the people to be ok with this.
putting the word ratification on it, after the fact, doesn’t fix it. People don’t want it, and didn’t know it was happening. This is the same as any project launching and selling tokens into the FOMO of the investors.
If the team needed funding, they should have made that clear. You can’t pretend all it good, then secretly loot the treasury and expect the people to be ok with this.
putting the word ratification on it, after the fact, doesn’t fix it. People don’t want it, and didn’t know it was happening. This is the same as any project launching and selling tokens into the FOMO of the investors.
Now that the “ratification” is not “officially valid” you have driven a wedge between the investors and the community, and the team. It’s apparently obvious that you attempted to squeeze your funding into a large encompassing proposal, hoping it would go unnoticed. This is presumptuous but likely the sentiment of most people reading this now.
This proposal from the start was wrong. It was a proposal to nullify the need for governance, which was already nullified.
NOW, I do support the idea that teams do work, and dam well should be paid well for doing so, but you can’t do it secretly in DeFi, you have to put yoru cards on the table so we can all work together to make things right.
Yes there will always be greed of the individual, but we can socially reduce the greed of the groups.
This saddens me.
This clearly shows that there need to be representatives of the community in the board/security council to keep the CEOs in line as an overwatch when decisions are being taken over the DAO.
I would appreciate a clearer delineation of more visual ranks of the staff and moderators on the platform. During my first week, it was unclear if there were any staff members present.
Additionally, my only concern with the current structure of the Security Council is the absence of community representation. While the Council comprises individuals with distinguished titles, isn't it essential to have a representative from the community if the project is community-driven? Maybe we need a regular Joe in there to represent us regular Joes.
I would appreciate a clearer delineation of more visual ranks of the staff and moderators on the platform. During my first week, it was unclear if there were any staff members present.
Additionally, my only concern with the current structure of the Security Council is the absence of community representation. While the Council comprises individuals with distinguished titles, isn't it essential to have a representative from the community if the project is community-driven? Maybe we need a regular Joe in there to represent us regular Joes.
I believe this calls for more community representation since you're clearly doing something against the DAO.
I would appreciate a clearer delineation of more visual ranks of the staff and moderators on the platform. During my first week, it was unclear if there were any staff members present.
Additionally, my only concern with the current structure of the Security Council is the absence of community representation. While the Council comprises individuals with distinguished titles, isn't it essential to have a representative from the community if the project is community-driven? Maybe we need a regular Joe in there to represent us regular Joes.
I would appreciate a clearer delineation of more visual ranks of the staff and moderators on the platform. During my first week, it was unclear if there were any staff members present.
Additionally, my only concern with the current structure of the Security Council is the absence of community representation. While the Council comprises individuals with distinguished titles, isn't it essential to have a representative from the community if the project is community-driven? Maybe we need a regular Joe in there to represent us regular Joes.
I believe this calls for more community representation since you're clearly doing something against the DAO.
