The following language was added to the proposal: "The DAO will have the ability to kill the DRIP program via a snapshot vote with 3% quorum and more votes for than against. In the scenario that the DAO ends the DRIP program via vote, the Arbitrum Foundation will do their best to send all unallocated funds back to the DAO in a timely manner, however, if there is an ongoing season, it's possible that the season may be seen through before the program is ended."
This proposal will proceed to Tally Thursday 6/5
This proposal will be going to Snapshot this Thursday, 5/15.
Entropy proposes a new type of incentives framework focused on targeting specific assets and activities across Arbitrum rather than specific protocols. Incentives per specific assets/activities will run in 3-month seasons through the DRIP so that the program can be adapted and different assets and activities can be selected as learnings are taken into account. Each season must have a singular, specified goal. For example, Make Arbitrum One the best place to borrow USDT against wstETH or Ensure Arbitrum One Has the deepest liquidity for trading USDT/ETH.
A season selection committee made up of the Arbitrum Foundation, Entropy Advisors, and Offchain Labs will be tasked with creating eligible, viable seasons with ideation input from partner companies and key stakeholders. The committee will maintain the right to modify, extend, or discontinue a season during its lifecycle. The “3-month” timeline is somewhat arbitrary, and is open to change dependent on perceived program success and market conditions.
The DRIP seeks funding of 80M ARB for the first 4 seasons, with a maximum of 20M allocated per season and a portion set aside for operational costs related to vendors utilized by the season selection committee. The season selection committee will procure partners for distribution and evaluation at their discretion, and potentially other partners as it sees fit. For example, the distribution partner will check the chain for wallet eligibility and distribute rewards to the wallets that have met the mandated goals of a season and create a frontend through which all eligible protocols will be shown. The evaluation partner will host open data around the program and recommend optimization improvements to the committee throughout a season’s lifecycle; after a season is complete, the evaluation partner will provide a more holistic analysis to the DAO. The same partners will likely be utilized throughout all 4 seasons. 80M ARB is the maximum amount that can be allocated throughout the 4 initial seasons, but there is no requirement to use all funds. All remaining ARB not used as part of the program will be held for further seasons or returned to the DAO if further seasons are not approved by the end of the 1-year mandate.
As the Incentives Detox concluded on December 17th, 2024, and with many parties exploring the next phase of incentives, Entropy has decided to take a first-principles approach to redesign the DAO’s incentives framework. After analysis of Chaos’ and Blockworks’ incentives reviews, and in collaboration with Gauntlet and other stakeholders, we have identified that taking the approach of incentivizing specific activities that the DAO would like to increase Arbitrum’s market share in will deliver better results than more generalized programs that are harder to evaluate and adapt. This is especially true for activities where Arbitrum has not yet achieved an established, stable market share or where the underlying vertical will be experiencing a systemic shock.
The DRIP is purposefully simple, targeted, and measurable, and focuses solely on the goal of bringing popular activity taking place on other ecosystems to Arbitrum One in a sustainable manner. In past programs, by lumping together oracles, perps, lending, dex trading, dex liquidity, bridges, and more, evaluation and iteration became an impossible task. One reason for this is the fact that protocols across different verticals and long-tail vs. core assets inherently cannot be judged on an apples-to-apples basis. The DRIP focuses on a controlled experimentation approach.
Looking across the space at activities that real DeFi users are executing in practice where Arbitrum’s market share shows growth potential either through innovation/potential partnerships on the application layer or through changes to the underlying market, a few ideas come to mind. For example, borrowing against yield-generating ETH a.k.a. “Looping,” creating the deepest liquidity on specific high-attention assets (per IOSG), bringing a vibrant wrapped BTC ecosystem to the network, increasing Arbitrum’s RWA utility and dominance, or focusing on attracting liquidity to restaking and LRTs. These are just a few examples of activities through which Arbitrum One has substantial room to grow, but the list goes on. We believe that for an incentives program to succeed, even within these targeted activities, target assets need to be selected in order for the program to proceed smoothly. By limiting programs to category-leading assets, or the category’s highest-growth assets, Arbitrum can take an opinionated stance and bet on what areas of growth it envisions as crypto’s most valuable use-cases into the future. Notably, the DRIP focuses on quality activities and assets that the DAO views as high-growth and -retention, rather than attempting to create a program that treats everything equally. The program focuses solely on using incentives as a tool in more holistic strategies around promising verticals where Arbitrum's penetration has room to grow sustainably in its competitive environment.
Another benefit of the DRIP is its value in business development and growth. Potential Arbitrum partners will see a program that could benefit them if they put a primary focus on Arbitrum. This will allow Arbitrum’s partnership teams, including Entropy Advisors and Offchain Labs, to use the DRIP as an incentive that makes Arbitrum more attractive to protocols exploring alternative/genesis chain deployments. This will create a frictionless path that effectively attracts new Arbitrum entrants while still supporting incumbents.
Upon ARDC analysis of our past incentives programs, a few findings are particularly notable:
Experiment and Iterate: Each of the studied protocols did this successfully in their own way. This was the clearest takeaway from the program and incentive programs should be thought of similarly to paid marketing campaigns in web2. The optimal design is constantly evolving and not always obvious purely to reasoning. There is no substitute for controlled experimentation.
Keep the Incentive Criteria Clear and Simple: Users need to know what to do to react optimally to incentives. If the criteria are too complex, education becomes an issue, and attention will go to easier-to-earn incentives. All three protocols made the incentivized activity and payoff extremely clear and easy to understand.
Use Incentives to Amplify New Features and Announcements: This was done by all three protocols studied and significantly impacts bootstrapping new markets, bringing visibility to new features and generally leaning into growth areas.
To summarize, all of the analyzed protocols saw their top-line metrics increase during the STIP, but in the months following the program’s end, figures trended back toward September 2023 values. There was some variability in how much capital/volume each protocol had managed to capture per ARB spent at the end of the STIP, but in the long term, these multiples tended to converge to a tight range. There are a few exceptions to this—protocols that are on the younger side and generally offer differentiated products. These protocols have successfully reached notably higher “steady states” compared to the beginning of the program, with incentives likely amplifying market penetration deriving from intrinsic drivers and on a few occasions, leading to more robust collaboration between the outperformers and other Arbitrum protocols, creating additional synergies.
TVL is an attractive vanity metric to optimize, the utilization of that capital is what ultimately determines the efficacy and success of lending protocols.
established protocols have disproportionate influence
The proposed distribution model shifts ARB token incentives from protocols to liquidity providers directly.
Taking these learnings into account, we believe that the DRIP’s ultra-targeted nature (controlled environment experiment), focused on high-value verticals where Arbitrum has high potential to increase its market penetration, is an ideal path forward as we continue to iterate and evolve over time. DRIP will also take advantage of the learnings to prioritize programs that focus on both supply and the efficacy of that supply through demand. Finally, marketing is a missing aspect from every past program, which the DRIP will address by having the foundation included on the committee and requiring eligible protocols to co-market.
Entropy encourages the whole community to participate in proposing new activities and assets for incentives and is happy to be the primary point of contact for community ideation. There will absolutely be opportunities for community input throughout the DRIP process. Entropy will be actively calling on the community to help ideate (and already have been) on the most impactful season goals and service providers with a particular interest in opinions from those with DeFi and procurement experience. That said, the committee will have full discretion over all aspects of season planning and execution with help from the onboarded distribution & evaluation vendors.
-The seasons must have a defined, singular goal. Specificity is required. As an example, “Increase trading activity”, is not a specific goal, but “create the deepest aggregate liquidity for the USDT/ETH pair across DEXs on Arbitrum One” would qualify as a specific goal.
-Seasons are intended to be ~3 months, though they can be cut short by the committee or extended at their discretion, with the goal of always tapering rewards instead of arbitrarily cutting incentives at once.
-Overlapping seasons running in tandem that may make evaluation more difficult should be avoided.
-Need to be chain-wide and protocol agnostic (minus security-related whitelisting or a TVL/protocol-maturity requirement). Depending on the vertical and ROI after a program starts, the committee can expand or restrict how broad the program is.
-Actionable and executable, including all details required.
-Target asset/activity should maintain room for Arbitrum to grow its market share with a goal of eventually hitting “critical mass,” where incentives are no longer needed.
-Eligible protocols must include marketing in their frontend and on their socials, coordinating co-marketing with Entropy Advisors and the Arbitrum Foundation.
Each incentive “season” is governed by a set of rules specifying which onchain actions or participants qualify for ARB rewards. An independent distribution partner is responsible for:
Illustrative Example
If a season incentivizes borrowing USDT against wstETH, applying to all lending markets with >$X million TVL, the evaluation partner would examine eligible lending protocols on Arbitrum, identify the addresses meeting the criteria (e.g., required collateral ratio, borrowing amounts, etc.), and distribute ARB rewards to those addresses.
Examples of potential partners include RoyCo, Boost, Galxe, Brevis, Merkl, and others. All costs associated with this partner will be taken from the 80M ARB budget, but the season selection committee prioritizes keeping low OpEx, as the point of the program is user rewards. Although, we will note that our opinion is that previous incentive programs run by the DAO could have been notably more effective had more resources been allocated to the programs’ operations.
Selection Process:
The season selection committee will have full discretion on how the procurement is run; public or private application and evaluation, open or invitation only, who is selected, etc. The process will be fully facilitated by the season selection committee, and the decision of the partner will be fully at their discretion.
Each incentive program requires ongoing monitoring and analysis to assess its impact and guide continuous improvements. An independent evaluation partner is responsible for:
Entropy will take this role into our domain as well, but we believe having an additional outside party will be beneficial.
Illustrative Example If a program incentivizes liquidity provision on DEXs with over $10 million TVL, the evaluation partner would track how many and what types of wallets participated, the total ARB distributed, changes in TVL and capital efficiency, overall volume growth, cost of capital for similar opportunities in other ecosystems, returns to users that are performing the incentivized action, retention after the program’s end, etc. The partner would then share these insights and recommend any adjustments (e.g., refining eligibility criteria, adjusting reward distribution thresholds) to the season selection committee. Holistic recommendations will be given publicly at the end of the program cycle.
The same selection process will take place for the evaluation partner as distribution. The same provider can apply for both evaluation and distribution.
Goal: Make Arbitrum One the best place to borrow USDT, USDC, and ETH against wstETH.
Select Collateral: wstETH
Select Borrowable assets: ETH, USDC, and USDT
Required LTV: 15%
Target yield boost for wstETH: 2% APR (increase over wstETH base yield)
Maximum collateral incentivized: $1B
Protocol Partner RFP: The program will be platform/protocol agnostic and target lending across Arbitrum One. With that said, protocols will be screened for security purposes before being included in the program. The thought process behind this decision surrounds not incentivizing (or appearing to endorse) Arbitrum’s users to deposit assets into protocols that have a higher likelihood of being hacked. The security provider selected in the ARDC will be in charge of whitelisting lending protocols or alternatively the committee enlists a firm that can do this. The lending platform partners must support wstETH as collateral and borrowing of USDC, USDT, or ETH against that collateral in order to be eligible. This creates a fair environment that should not negatively encumber any specific lending market.
In practice, this means that any borrower of USDC, USDT, and/or ETH on a whitelisted Arbitrum One-based lending platform will be eligible to receive 2% APR paid on the total value of their wstETH deposited into the lending protocol. Wallets will only be eligible if they have reached and sustained an LTV of 15%. Rewards will be paid out weekly by a distribution partner.
With a 3-month program, targeting a 2% yield, $5M will cover 3 months of runway on $1B in collateral participating in the program.
⅔ votes are required for a season to be approved. The first 4 seasons that meet the rule requirements and are deemed valid by the committee will be enacted. We realize that accountability in committees has been a problem in the past and we would like to make clear that Entropy should be held as the part responsible for the successes and failures of the program.
All funds will be sent to an Arbitrum Foundation controlled wallet with DAO-clawback capabilities. The DAO will have the ability to kill the DRIP program via a snapshot vote with 3% quorum and more votes for than against. In the scenario that the DAO ends the DRIP program via vote, the Arbitrum Foundation will do their best to send all unallocated funds back to the DAO in a timely manner, however, if there is an ongoing season, it's possible that the season may be seen through before the program is ended.
The committee also has the power to:
Forum: April 16
Snapshot: May 15
Tally: May X (TBD)
Date For First Program Live: Targeting July, but would like to remain nimble given that potential partnerships may impact go-live dates.
DRIP End Date (funds returned if not used or another proposal is not passed): July 1, 2026. An ongoing season may go past this date, but new seasons will not begin after this date
The following language was added to the proposal: "The DAO will have the ability to kill the DRIP program via a snapshot vote with 3% quorum and more votes for than against. In the scenario that the DAO ends the DRIP program via vote, the Arbitrum Foundation will do their best to send all unallocated funds back to the DAO in a timely manner, however, if there is an ongoing season, it's possible that the season may be seen through before the program is ended."
This proposal will proceed to Tally Thursday 6/5
This proposal will be going to Snapshot this Thursday, 5/15.
Entropy proposes a new type of incentives framework focused on targeting specific assets and activities across Arbitrum rather than specific protocols. Incentives per specific assets/activities will run in 3-month seasons through the DRIP so that the program can be adapted and different assets and activities can be selected as learnings are taken into account. Each season must have a singular, specified goal. For example, Make Arbitrum One the best place to borrow USDT against wstETH or Ensure Arbitrum One Has the deepest liquidity for trading USDT/ETH.
A season selection committee made up of the Arbitrum Foundation, Entropy Advisors, and Offchain Labs will be tasked with creating eligible, viable seasons with ideation input from partner companies and key stakeholders. The committee will maintain the right to modify, extend, or discontinue a season during its lifecycle. The “3-month” timeline is somewhat arbitrary, and is open to change dependent on perceived program success and market conditions.
The DRIP seeks funding of 80M ARB for the first 4 seasons, with a maximum of 20M allocated per season and a portion set aside for operational costs related to vendors utilized by the season selection committee. The season selection committee will procure partners for distribution and evaluation at their discretion, and potentially other partners as it sees fit. For example, the distribution partner will check the chain for wallet eligibility and distribute rewards to the wallets that have met the mandated goals of a season and create a frontend through which all eligible protocols will be shown. The evaluation partner will host open data around the program and recommend optimization improvements to the committee throughout a season’s lifecycle; after a season is complete, the evaluation partner will provide a more holistic analysis to the DAO. The same partners will likely be utilized throughout all 4 seasons. 80M ARB is the maximum amount that can be allocated throughout the 4 initial seasons, but there is no requirement to use all funds. All remaining ARB not used as part of the program will be held for further seasons or returned to the DAO if further seasons are not approved by the end of the 1-year mandate.
As the Incentives Detox concluded on December 17th, 2024, and with many parties exploring the next phase of incentives, Entropy has decided to take a first-principles approach to redesign the DAO’s incentives framework. After analysis of Chaos’ and Blockworks’ incentives reviews, and in collaboration with Gauntlet and other stakeholders, we have identified that taking the approach of incentivizing specific activities that the DAO would like to increase Arbitrum’s market share in will deliver better results than more generalized programs that are harder to evaluate and adapt. This is especially true for activities where Arbitrum has not yet achieved an established, stable market share or where the underlying vertical will be experiencing a systemic shock.
The DRIP is purposefully simple, targeted, and measurable, and focuses solely on the goal of bringing popular activity taking place on other ecosystems to Arbitrum One in a sustainable manner. In past programs, by lumping together oracles, perps, lending, dex trading, dex liquidity, bridges, and more, evaluation and iteration became an impossible task. One reason for this is the fact that protocols across different verticals and long-tail vs. core assets inherently cannot be judged on an apples-to-apples basis. The DRIP focuses on a controlled experimentation approach.
Looking across the space at activities that real DeFi users are executing in practice where Arbitrum’s market share shows growth potential either through innovation/potential partnerships on the application layer or through changes to the underlying market, a few ideas come to mind. For example, borrowing against yield-generating ETH a.k.a. “Looping,” creating the deepest liquidity on specific high-attention assets (per IOSG), bringing a vibrant wrapped BTC ecosystem to the network, increasing Arbitrum’s RWA utility and dominance, or focusing on attracting liquidity to restaking and LRTs. These are just a few examples of activities through which Arbitrum One has substantial room to grow, but the list goes on. We believe that for an incentives program to succeed, even within these targeted activities, target assets need to be selected in order for the program to proceed smoothly. By limiting programs to category-leading assets, or the category’s highest-growth assets, Arbitrum can take an opinionated stance and bet on what areas of growth it envisions as crypto’s most valuable use-cases into the future. Notably, the DRIP focuses on quality activities and assets that the DAO views as high-growth and -retention, rather than attempting to create a program that treats everything equally. The program focuses solely on using incentives as a tool in more holistic strategies around promising verticals where Arbitrum's penetration has room to grow sustainably in its competitive environment.
Another benefit of the DRIP is its value in business development and growth. Potential Arbitrum partners will see a program that could benefit them if they put a primary focus on Arbitrum. This will allow Arbitrum’s partnership teams, including Entropy Advisors and Offchain Labs, to use the DRIP as an incentive that makes Arbitrum more attractive to protocols exploring alternative/genesis chain deployments. This will create a frictionless path that effectively attracts new Arbitrum entrants while still supporting incumbents.
Upon ARDC analysis of our past incentives programs, a few findings are particularly notable:
Experiment and Iterate: Each of the studied protocols did this successfully in their own way. This was the clearest takeaway from the program and incentive programs should be thought of similarly to paid marketing campaigns in web2. The optimal design is constantly evolving and not always obvious purely to reasoning. There is no substitute for controlled experimentation.
Keep the Incentive Criteria Clear and Simple: Users need to know what to do to react optimally to incentives. If the criteria are too complex, education becomes an issue, and attention will go to easier-to-earn incentives. All three protocols made the incentivized activity and payoff extremely clear and easy to understand.
Use Incentives to Amplify New Features and Announcements: This was done by all three protocols studied and significantly impacts bootstrapping new markets, bringing visibility to new features and generally leaning into growth areas.
To summarize, all of the analyzed protocols saw their top-line metrics increase during the STIP, but in the months following the program’s end, figures trended back toward September 2023 values. There was some variability in how much capital/volume each protocol had managed to capture per ARB spent at the end of the STIP, but in the long term, these multiples tended to converge to a tight range. There are a few exceptions to this—protocols that are on the younger side and generally offer differentiated products. These protocols have successfully reached notably higher “steady states” compared to the beginning of the program, with incentives likely amplifying market penetration deriving from intrinsic drivers and on a few occasions, leading to more robust collaboration between the outperformers and other Arbitrum protocols, creating additional synergies.
TVL is an attractive vanity metric to optimize, the utilization of that capital is what ultimately determines the efficacy and success of lending protocols.
established protocols have disproportionate influence
The proposed distribution model shifts ARB token incentives from protocols to liquidity providers directly.
Taking these learnings into account, we believe that the DRIP’s ultra-targeted nature (controlled environment experiment), focused on high-value verticals where Arbitrum has high potential to increase its market penetration, is an ideal path forward as we continue to iterate and evolve over time. DRIP will also take advantage of the learnings to prioritize programs that focus on both supply and the efficacy of that supply through demand. Finally, marketing is a missing aspect from every past program, which the DRIP will address by having the foundation included on the committee and requiring eligible protocols to co-market.
Entropy encourages the whole community to participate in proposing new activities and assets for incentives and is happy to be the primary point of contact for community ideation. There will absolutely be opportunities for community input throughout the DRIP process. Entropy will be actively calling on the community to help ideate (and already have been) on the most impactful season goals and service providers with a particular interest in opinions from those with DeFi and procurement experience. That said, the committee will have full discretion over all aspects of season planning and execution with help from the onboarded distribution & evaluation vendors.
-The seasons must have a defined, singular goal. Specificity is required. As an example, “Increase trading activity”, is not a specific goal, but “create the deepest aggregate liquidity for the USDT/ETH pair across DEXs on Arbitrum One” would qualify as a specific goal.
-Seasons are intended to be ~3 months, though they can be cut short by the committee or extended at their discretion, with the goal of always tapering rewards instead of arbitrarily cutting incentives at once.
-Overlapping seasons running in tandem that may make evaluation more difficult should be avoided.
-Need to be chain-wide and protocol agnostic (minus security-related whitelisting or a TVL/protocol-maturity requirement). Depending on the vertical and ROI after a program starts, the committee can expand or restrict how broad the program is.
-Actionable and executable, including all details required.
-Target asset/activity should maintain room for Arbitrum to grow its market share with a goal of eventually hitting “critical mass,” where incentives are no longer needed.
-Eligible protocols must include marketing in their frontend and on their socials, coordinating co-marketing with Entropy Advisors and the Arbitrum Foundation.
Each incentive “season” is governed by a set of rules specifying which onchain actions or participants qualify for ARB rewards. An independent distribution partner is responsible for:
Illustrative Example
If a season incentivizes borrowing USDT against wstETH, applying to all lending markets with >$X million TVL, the evaluation partner would examine eligible lending protocols on Arbitrum, identify the addresses meeting the criteria (e.g., required collateral ratio, borrowing amounts, etc.), and distribute ARB rewards to those addresses.
Examples of potential partners include RoyCo, Boost, Galxe, Brevis, Merkl, and others. All costs associated with this partner will be taken from the 80M ARB budget, but the season selection committee prioritizes keeping low OpEx, as the point of the program is user rewards. Although, we will note that our opinion is that previous incentive programs run by the DAO could have been notably more effective had more resources been allocated to the programs’ operations.
Selection Process:
The season selection committee will have full discretion on how the procurement is run; public or private application and evaluation, open or invitation only, who is selected, etc. The process will be fully facilitated by the season selection committee, and the decision of the partner will be fully at their discretion.
Each incentive program requires ongoing monitoring and analysis to assess its impact and guide continuous improvements. An independent evaluation partner is responsible for:
Entropy will take this role into our domain as well, but we believe having an additional outside party will be beneficial.
Illustrative Example If a program incentivizes liquidity provision on DEXs with over $10 million TVL, the evaluation partner would track how many and what types of wallets participated, the total ARB distributed, changes in TVL and capital efficiency, overall volume growth, cost of capital for similar opportunities in other ecosystems, returns to users that are performing the incentivized action, retention after the program’s end, etc. The partner would then share these insights and recommend any adjustments (e.g., refining eligibility criteria, adjusting reward distribution thresholds) to the season selection committee. Holistic recommendations will be given publicly at the end of the program cycle.
The same selection process will take place for the evaluation partner as distribution. The same provider can apply for both evaluation and distribution.
Goal: Make Arbitrum One the best place to borrow USDT, USDC, and ETH against wstETH.
Select Collateral: wstETH
Select Borrowable assets: ETH, USDC, and USDT
Required LTV: 15%
Target yield boost for wstETH: 2% APR (increase over wstETH base yield)
Maximum collateral incentivized: $1B
Protocol Partner RFP: The program will be platform/protocol agnostic and target lending across Arbitrum One. With that said, protocols will be screened for security purposes before being included in the program. The thought process behind this decision surrounds not incentivizing (or appearing to endorse) Arbitrum’s users to deposit assets into protocols that have a higher likelihood of being hacked. The security provider selected in the ARDC will be in charge of whitelisting lending protocols or alternatively the committee enlists a firm that can do this. The lending platform partners must support wstETH as collateral and borrowing of USDC, USDT, or ETH against that collateral in order to be eligible. This creates a fair environment that should not negatively encumber any specific lending market.
In practice, this means that any borrower of USDC, USDT, and/or ETH on a whitelisted Arbitrum One-based lending platform will be eligible to receive 2% APR paid on the total value of their wstETH deposited into the lending protocol. Wallets will only be eligible if they have reached and sustained an LTV of 15%. Rewards will be paid out weekly by a distribution partner.
With a 3-month program, targeting a 2% yield, $5M will cover 3 months of runway on $1B in collateral participating in the program.
⅔ votes are required for a season to be approved. The first 4 seasons that meet the rule requirements and are deemed valid by the committee will be enacted. We realize that accountability in committees has been a problem in the past and we would like to make clear that Entropy should be held as the part responsible for the successes and failures of the program.
All funds will be sent to an Arbitrum Foundation controlled wallet with DAO-clawback capabilities. The DAO will have the ability to kill the DRIP program via a snapshot vote with 3% quorum and more votes for than against. In the scenario that the DAO ends the DRIP program via vote, the Arbitrum Foundation will do their best to send all unallocated funds back to the DAO in a timely manner, however, if there is an ongoing season, it's possible that the season may be seen through before the program is ended.
The committee also has the power to:
Forum: April 16
Snapshot: May 15
Tally: May X (TBD)
Date For First Program Live: Targeting July, but would like to remain nimble given that potential partnerships may impact go-live dates.
DRIP End Date (funds returned if not used or another proposal is not passed): July 1, 2026. An ongoing season may go past this date, but new seasons will not begin after this date
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/117
Democratising lobbyism, on-chain. Check out lobbyfi.xyz
I'm voting against. When I voted on Snapshot, I supported this new approach because it seemed like an interesting experiment that addressed issues from previous programs. However, I also requested a more detailed breakdown of expenses. Since then, there has been no significant update on this point. Given the size of the budget involved, I believe it is essential to have a clear and transparent cost breakdown before approving such a proposal. Without this clarity, I am not comfortable giving my approval. To be clear, I still believe the overall approach has potential and could be beneficial, but it needs to be better structured and more transparent before I can support it.
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/117
Democratising lobbyism, on-chain. Check out lobbyfi.xyz
I'm voting against. When I voted on Snapshot, I supported this new approach because it seemed like an interesting experiment that addressed issues from previous programs. However, I also requested a more detailed breakdown of expenses. Since then, there has been no significant update on this point. Given the size of the budget involved, I believe it is essential to have a clear and transparent cost breakdown before approving such a proposal. Without this clarity, I am not comfortable giving my approval. To be clear, I still believe the overall approach has potential and could be beneficial, but it needs to be better structured and more transparent before I can support it.
The Event Horizon Community voted FOR on this Proposal (ehARB-106): EventHorizon.vote/vote/arbitrum/ehARB-106
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/114?u=griff
FranklinDAO is abstaining because we feel we do not have sufficient historic knowledge and background on the parties that stand to gain from this proposal.
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/43?u=castlecapital
https://forum.arbitrum.foundation/t/tekr0x-eth-delegate-communication-thread/24804/19
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/110?u=bob-rossi
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/109?u=winverse
The lack of transparency of some of the actors in the committee is concerning for accountability but overall this is more a yes than a no
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/108?u=hawheik
An incentives program for DEFI is HIGHLY needed in the current market and the kill-switch minimizes risk for the DAO
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/107?u=danielm
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/56
None of the critical issues that were raised were address between moving from Snapshot to Tally. https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/106?u=klausbrave
https://forum.arbitrum.foundation/t/gfx-labs-delegate-communication-thread/13794/88
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/104?u=euphoria
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/105?u=zeptimus
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/92?u=ezr3al
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/102?u=zenithiaa
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/101?u=mcfly
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/74?u=0xalex
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/86
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/84
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/43?u=castlecapital
https://forum.arbitrum.foundation/t/gfx-labs-delegate-communication-thread/13794
Democratising lobbyism, on-chain. Check out lobbyfi.xyz
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/81?u=0x_ultra
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/78?u=ocandocrypto
The Event Horizon Community voted on this proposal (ehARB-102): EventHorizon.vote/vote/arbitrum/ehARB-102
The Event Horizon Community voted FOR on this proposal (ehARB-102): EventHorizon.vote/vote/arbitrum/ehARB-102
https://x.com/alex__eth/status/1925148398493065586
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/76?u=mcfly
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/73?u=hawheik
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/71?u=griff
I feel that it is irresponsible to approve an incentive program of this size where @Entropy has such a major role on, without first having clarity around the future collaboration parameters between Entropy and Arbitrum DAO. https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/69?u=paulofonseca
I find the governance structure to be too opaque to know if success has happened with all the committee organisations having a track record of limited transparency to the DAO. So although I appreciate their efforts and track record of high trust with the DAO, I don't think we should further encourage the DAO to close down
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/66?u=euphoria
https://forum.arbitrum.foundation/t/tekr0x-eth-delegate-communication-thread/24804/18?u=tekr0x.eth
Inadequate detail on how this strategy leads to retention of users, inadequate ability for auditing of the program, zero detail on the administration costs. https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/64?u=klausbrave
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/62
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/56
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/55?u=danielm
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/54?u=ezr3al
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/52?u=bruce
The Event Horizon Community voted FOR on this Proposal (ehARB-106): EventHorizon.vote/vote/arbitrum/ehARB-106
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/114?u=griff
FranklinDAO is abstaining because we feel we do not have sufficient historic knowledge and background on the parties that stand to gain from this proposal.
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/43?u=castlecapital
https://forum.arbitrum.foundation/t/tekr0x-eth-delegate-communication-thread/24804/19
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/110?u=bob-rossi
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/109?u=winverse
The lack of transparency of some of the actors in the committee is concerning for accountability but overall this is more a yes than a no
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/108?u=hawheik
An incentives program for DEFI is HIGHLY needed in the current market and the kill-switch minimizes risk for the DAO
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/107?u=danielm
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/56
None of the critical issues that were raised were address between moving from Snapshot to Tally. https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/106?u=klausbrave
https://forum.arbitrum.foundation/t/gfx-labs-delegate-communication-thread/13794/88
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/104?u=euphoria
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/105?u=zeptimus
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/92?u=ezr3al
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/102?u=zenithiaa
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/101?u=mcfly
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/74?u=0xalex
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/86
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/84
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/43?u=castlecapital
https://forum.arbitrum.foundation/t/gfx-labs-delegate-communication-thread/13794
Democratising lobbyism, on-chain. Check out lobbyfi.xyz
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/81?u=0x_ultra
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/78?u=ocandocrypto
The Event Horizon Community voted on this proposal (ehARB-102): EventHorizon.vote/vote/arbitrum/ehARB-102
The Event Horizon Community voted FOR on this proposal (ehARB-102): EventHorizon.vote/vote/arbitrum/ehARB-102
https://x.com/alex__eth/status/1925148398493065586
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/76?u=mcfly
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/73?u=hawheik
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/71?u=griff
I feel that it is irresponsible to approve an incentive program of this size where @Entropy has such a major role on, without first having clarity around the future collaboration parameters between Entropy and Arbitrum DAO. https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/69?u=paulofonseca
I find the governance structure to be too opaque to know if success has happened with all the committee organisations having a track record of limited transparency to the DAO. So although I appreciate their efforts and track record of high trust with the DAO, I don't think we should further encourage the DAO to close down
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/66?u=euphoria
https://forum.arbitrum.foundation/t/tekr0x-eth-delegate-communication-thread/24804/18?u=tekr0x.eth
Inadequate detail on how this strategy leads to retention of users, inadequate ability for auditing of the program, zero detail on the administration costs. https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/64?u=klausbrave
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/62
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/56
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/55?u=danielm
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/54?u=ezr3al
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/52?u=bruce
Voting has ended!
===============
[DeFi Renaissance Incentive Program (DRIP)](https://www.tally.xyz/gov/eip155:42161:0x789fC99093B09aD01C34DC7251D0C89ce743e5a4/proposal/2606309579402773764)
### Final Votes
| **Category** | **Result** | **Details** |
|----------------------|------------------|-----------------------------|
| **Quorum reached** | ✅ | 217.64M of 128.77M |
| **Majority Support** | ✅ | |
| **For** | | 190.24M (84.2%) |
| **Against** | | 8.18M (3.6%) |
| **Abstain** | | 27.40M (12.1%) |
* * *
I am a bot. Questions? Contact [email protected]
Voting has ended!
===============
[DeFi Renaissance Incentive Program (DRIP)](https://www.tally.xyz/gov/eip155:42161:0x789fC99093B09aD01C34DC7251D0C89ce743e5a4/proposal/2606309579402773764)
### Final Votes
| **Category** | **Result** | **Details** |
|----------------------|------------------|-----------------------------|
| **Quorum reached** | ✅ | 217.64M of 128.77M |
| **Majority Support** | ✅ | |
| **For** | | 190.24M (84.2%) |
| **Against** | | 8.18M (3.6%) |
| **Abstain** | | 27.40M (12.1%) |
* * *
I am a bot. Questions? Contact [email protected]
Level K voted FOR this proposal on snapshot.
We welcome the collaboration of the AF, OCL, and Entropy. We think this partnership is positive for Arbitrum, and we look forward to reports from the committee. We believe this team is well-positioned to help Arbitrum further strengthen its position.
Level K voted FOR this proposal on snapshot.
We welcome the collaboration of the AF, OCL, and Entropy. We think this partnership is positive for Arbitrum, and we look forward to reports from the committee. We believe this team is well-positioned to help Arbitrum further strengthen its position.
As mentioned by KlausBrave, this is a shift from previous proposals, but not unexpected after the A Vision for the Future of Arbitrum announcement from the AF. That said, we believe there are particulars about DAO involvement that need to be worked out, as mentioned by L2beat. This is important as it will likely set a precedent for future proposals that utilize AAEs.
As for concerns that the DAO lacks input or oversight in the execution of this proposal, we lean towards the DAO putting trust in AAEs to execute with the goal of giving Arbitrum a competitive edge.
We do recognize that this move could lead to the consolidation of the influence of incumbents within DAO. We hope that the dedicated delegates of the DAO will find a way to balance the competitive edge provided by giving influence to a select few, with the decentralized voice of the DAO being heard.
One point of clarification. Entropy mentions several times that they are the point of contact for all concerns/feedback regarding the proposal. What is the best way to get in contact with Entropy for those who do not have existing lines of communication?
Though not necessary, we do welcome direct communication from OCL and the AF.
The problem with DRIP is that the idea of it cannot really be rejected. This is because its outcome relates to the fundamental truth of how businesses work.
For example, buyers always want to buy low; sellers want to sell high; businesses would always want to grow users and revenue. Since DRIP aims to increase activity/market share, this makes a FOR vote obvious. Because, after all, who can say, "No, I don't want to increase activity"?
The problem with DRIP is that the idea of it cannot really be rejected. This is because its outcome relates to the fundamental truth of how businesses work.
For example, buyers always want to buy low; sellers want to sell high; businesses would always want to grow users and revenue. Since DRIP aims to increase activity/market share, this makes a FOR vote obvious. Because, after all, who can say, "No, I don't want to increase activity"?
This means the reasons for rejection or acceptance of this proposal must stem from its mechanism. You can't vote FOR simply because you want the outcome (make Arbitrum the best at [activity]). The outcome is obviously what should happen, and what every business strives for. There is nothing to really vote on, as it is a fundamental truth.
Hence, the next point of discussion is the mechanism. I can't see why a FOR vote should be made, given:
There are no discussions or thoughts on how strategies are selected and prioritized. This also means there is no careful thinking on how trade-offs and implications from a particular incentivized area are made.
There are no evaluation strategy and design in place. KPIs are not an evaluation strategy, but part of it. The lack of a discussion on evaluation implies that no one knows what success looks like except for a KPI pump. Evaluations are very important to be performed upfront because they act as a test to determine if the manager has thought through what they want to achieve, the performance of the activity, and whether the activity trickles down to the end goal.
Maybe this response is a little too ahead of itself at this stage, but I think Entropy and other larger voters should consider thinking about
I’m broadly in favor of DRIP — it’s a well-structured proposal and I appreciate the effort to set clear goals for each season. That said, I still have mixed feelings about direct incentives. We've seen in past programs that a big chunk of rewards tends to go to whales, and I’m not convinced that brings lasting value or sticky users to the ecosystem.
There’s also the usual risk that some partners see this more as a short-term money grab than a way to grow Arbitrum long-term — which creates a bit of a misalignment.
I’m broadly in favor of DRIP — it’s a well-structured proposal and I appreciate the effort to set clear goals for each season. That said, I still have mixed feelings about direct incentives. We've seen in past programs that a big chunk of rewards tends to go to whales, and I’m not convinced that brings lasting value or sticky users to the ecosystem.
There’s also the usual risk that some partners see this more as a short-term money grab than a way to grow Arbitrum long-term — which creates a bit of a misalignment.
That said, I do think this is worth testing, especially if we’re open to iterating. I’d love to see something like Futarchy markets run alongside DRIP to help figure out the real amount of ARB needed to hit certain goals — like achieving deep USDC/ETH liquidity. It would give everyone a benchmark and make it easier to call out overspending when it happens.
So overall: solid proposal, but let’s stay critical and be open to improving how we allocate incentives as we go.
Level K voted FOR this proposal on snapshot.
We welcome the collaboration of the AF, OCL, and Entropy. We think this partnership is positive for Arbitrum, and we look forward to reports from the committee. We believe this team is well-positioned to help Arbitrum further strengthen its position.
Level K voted FOR this proposal on snapshot.
We welcome the collaboration of the AF, OCL, and Entropy. We think this partnership is positive for Arbitrum, and we look forward to reports from the committee. We believe this team is well-positioned to help Arbitrum further strengthen its position.
As mentioned by KlausBrave, this is a shift from previous proposals, but not unexpected after the A Vision for the Future of Arbitrum announcement from the AF. That said, we believe there are particulars about DAO involvement that need to be worked out, as mentioned by L2beat. This is important as it will likely set a precedent for future proposals that utilize AAEs.
As for concerns that the DAO lacks input or oversight in the execution of this proposal, we lean towards the DAO putting trust in AAEs to execute with the goal of giving Arbitrum a competitive edge.
We do recognize that this move could lead to the consolidation of the influence of incumbents within DAO. We hope that the dedicated delegates of the DAO will find a way to balance the competitive edge provided by giving influence to a select few, with the decentralized voice of the DAO being heard.
One point of clarification. Entropy mentions several times that they are the point of contact for all concerns/feedback regarding the proposal. What is the best way to get in contact with Entropy for those who do not have existing lines of communication?
Though not necessary, we do welcome direct communication from OCL and the AF.
The problem with DRIP is that the idea of it cannot really be rejected. This is because its outcome relates to the fundamental truth of how businesses work.
For example, buyers always want to buy low; sellers want to sell high; businesses would always want to grow users and revenue. Since DRIP aims to increase activity/market share, this makes a FOR vote obvious. Because, after all, who can say, "No, I don't want to increase activity"?
The problem with DRIP is that the idea of it cannot really be rejected. This is because its outcome relates to the fundamental truth of how businesses work.
For example, buyers always want to buy low; sellers want to sell high; businesses would always want to grow users and revenue. Since DRIP aims to increase activity/market share, this makes a FOR vote obvious. Because, after all, who can say, "No, I don't want to increase activity"?
This means the reasons for rejection or acceptance of this proposal must stem from its mechanism. You can't vote FOR simply because you want the outcome (make Arbitrum the best at [activity]). The outcome is obviously what should happen, and what every business strives for. There is nothing to really vote on, as it is a fundamental truth.
Hence, the next point of discussion is the mechanism. I can't see why a FOR vote should be made, given:
There are no discussions or thoughts on how strategies are selected and prioritized. This also means there is no careful thinking on how trade-offs and implications from a particular incentivized area are made.
There are no evaluation strategy and design in place. KPIs are not an evaluation strategy, but part of it. The lack of a discussion on evaluation implies that no one knows what success looks like except for a KPI pump. Evaluations are very important to be performed upfront because they act as a test to determine if the manager has thought through what they want to achieve, the performance of the activity, and whether the activity trickles down to the end goal.
Maybe this response is a little too ahead of itself at this stage, but I think Entropy and other larger voters should consider thinking about
I’m broadly in favor of DRIP — it’s a well-structured proposal and I appreciate the effort to set clear goals for each season. That said, I still have mixed feelings about direct incentives. We've seen in past programs that a big chunk of rewards tends to go to whales, and I’m not convinced that brings lasting value or sticky users to the ecosystem.
There’s also the usual risk that some partners see this more as a short-term money grab than a way to grow Arbitrum long-term — which creates a bit of a misalignment.
I’m broadly in favor of DRIP — it’s a well-structured proposal and I appreciate the effort to set clear goals for each season. That said, I still have mixed feelings about direct incentives. We've seen in past programs that a big chunk of rewards tends to go to whales, and I’m not convinced that brings lasting value or sticky users to the ecosystem.
There’s also the usual risk that some partners see this more as a short-term money grab than a way to grow Arbitrum long-term — which creates a bit of a misalignment.
That said, I do think this is worth testing, especially if we’re open to iterating. I’d love to see something like Futarchy markets run alongside DRIP to help figure out the real amount of ARB needed to hit certain goals — like achieving deep USDC/ETH liquidity. It would give everyone a benchmark and make it easier to call out overspending when it happens.
So overall: solid proposal, but let’s stay critical and be open to improving how we allocate incentives as we go.
We’re very supportive of this program. Aave are likely one of the most experienced organisations in developing and running incentive programs and believe this is the kind of program that is likely to perform well and achieve Arbitrum’s goals.
We believe that the targeting of specific activities and assets is a solid strategy. At times it is difficult for an individual protocol to fully support these sort of activities even if they wish to. For example, if Aave were given an incentive budget to spend and we wanted to incentivise borrow asset A against asset B collateral, it is likely we would come up against supply or borrow cap issues due to low liquidity of one of these assets. Our options here would be to go to LPs or teams of specific assets and encourage them to deploy more liquidity, but we wouldn’t be able to directly incentivise this and so would be limited in how much control we have. However, if this type of strategy is applied at the entire chain level, it would be possible to carry out a phased approach of deepening liquidity, initiating borrow and supply, and then expanding this activity in a holistic way which would be far more effective and result in much better outcomes.
We’re very supportive of this program. Aave are likely one of the most experienced organisations in developing and running incentive programs and believe this is the kind of program that is likely to perform well and achieve Arbitrum’s goals.
We believe that the targeting of specific activities and assets is a solid strategy. At times it is difficult for an individual protocol to fully support these sort of activities even if they wish to. For example, if Aave were given an incentive budget to spend and we wanted to incentivise borrow asset A against asset B collateral, it is likely we would come up against supply or borrow cap issues due to low liquidity of one of these assets. Our options here would be to go to LPs or teams of specific assets and encourage them to deploy more liquidity, but we wouldn’t be able to directly incentivise this and so would be limited in how much control we have. However, if this type of strategy is applied at the entire chain level, it would be possible to carry out a phased approach of deepening liquidity, initiating borrow and supply, and then expanding this activity in a holistic way which would be far more effective and result in much better outcomes.
Looking at the example given here of encouraging borrowing of stablecoins against wstETH, we would recommend that the approach is even more explicit in incentivising this behaviour. Instead of simply incentivising wstETH deposits, which would also incentivise other strategies such as a simple wstETH deposit or a wstETH-WETH loop strategy, we would recommend directly targeting users who do precisely the actions you’re targeting - both depositing wstETH AND borrowing stablecoins. ACI has developed infrastructure for Aave - Merit, and more recently, MASIV - which is capable of handling granular incentivisation such as this. We have found this incentivisation approach to be extremely effective resulting in both direct TVL growth in addition to indirect TVL growth through deepened liquidity which benefits adjacent user strategies. As an example of how effective this can be we have seen up to $7,855 TVL growth per dollar spent in extreme cases, and an average of $2,284 TVL growth per dollar of incentive spend.
In summary, we fully support this initiative, and stand by through our service providers to provide advice and assistance in any future incentive programs.
We’re very supportive of this program. Aave are likely one of the most experienced organisations in developing and running incentive programs and believe this is the kind of program that is likely to perform well and achieve Arbitrum’s goals.
We believe that the targeting of specific activities and assets is a solid strategy. At times it is difficult for an individual protocol to fully support these sort of activities even if they wish to. For example, if Aave were given an incentive budget to spend and we wanted to incentivise borrow asset A against asset B collateral, it is likely we would come up against supply or borrow cap issues due to low liquidity of one of these assets. Our options here would be to go to LPs or teams of specific assets and encourage them to deploy more liquidity, but we wouldn’t be able to directly incentivise this and so would be limited in how much control we have. However, if this type of strategy is applied at the entire chain level, it would be possible to carry out a phased approach of deepening liquidity, initiating borrow and supply, and then expanding this activity in a holistic way which would be far more effective and result in much better outcomes.
We’re very supportive of this program. Aave are likely one of the most experienced organisations in developing and running incentive programs and believe this is the kind of program that is likely to perform well and achieve Arbitrum’s goals.
We believe that the targeting of specific activities and assets is a solid strategy. At times it is difficult for an individual protocol to fully support these sort of activities even if they wish to. For example, if Aave were given an incentive budget to spend and we wanted to incentivise borrow asset A against asset B collateral, it is likely we would come up against supply or borrow cap issues due to low liquidity of one of these assets. Our options here would be to go to LPs or teams of specific assets and encourage them to deploy more liquidity, but we wouldn’t be able to directly incentivise this and so would be limited in how much control we have. However, if this type of strategy is applied at the entire chain level, it would be possible to carry out a phased approach of deepening liquidity, initiating borrow and supply, and then expanding this activity in a holistic way which would be far more effective and result in much better outcomes.
Looking at the example given here of encouraging borrowing of stablecoins against wstETH, we would recommend that the approach is even more explicit in incentivising this behaviour. Instead of simply incentivising wstETH deposits, which would also incentivise other strategies such as a simple wstETH deposit or a wstETH-WETH loop strategy, we would recommend directly targeting users who do precisely the actions you’re targeting - both depositing wstETH AND borrowing stablecoins. ACI has developed infrastructure for Aave - Merit, and more recently, MASIV - which is capable of handling granular incentivisation such as this. We have found this incentivisation approach to be extremely effective resulting in both direct TVL growth in addition to indirect TVL growth through deepened liquidity which benefits adjacent user strategies. As an example of how effective this can be we have seen up to $7,855 TVL growth per dollar spent in extreme cases, and an average of $2,284 TVL growth per dollar of incentive spend.
In summary, we fully support this initiative, and stand by through our service providers to provide advice and assistance in any future incentive programs.
Thank you for putting forward this proposal and for the significant effort involved. I appreciate the ambition behind this initiative.
I've reviewed the details and have several key questions and concerns regarding execution and underlying strategy. I would like to raise these points for discussion in this public forum:
Thank you for putting forward this proposal and for the significant effort involved. I appreciate the ambition behind this initiative.
I've reviewed the details and have several key questions and concerns regarding execution and underlying strategy. I would like to raise these points for discussion in this public forum:
1. Executing Protocol Agnosticism & Selection Criteria: The proposal emphasizes a "protocol agnostic" approach targeting users and activities, yet the design requires screening/whitelisting protocols for eligibility, mandates co-marketing from eligible protocols, and explicitly positions the program as a tool to attract new protocols. This design appears to incentivize user activity on specific, selected protocols, which contradicts the stated principle of not focusing on protocols themselves.
2. Defining and Driving Retention:
3. Program Goals - Acquisition vs. Engagement:
I laud the effort, but it is “outsourcing” the hard parts of business strategy to the protocols which if they had knew better, we wouldn't be facing this issue. It reads off like it's throwing money at the problem but in a different form. We need to be sure of what are the areas we want to lock down, what drives retention, and then incentivizing that all while maintaining credible neutrality.
Just a quick note from the trenches: there was a previous DRIP program on Arbitrum - this one here - focused on delegate redelegation mechanics. That DRIP’s wrapped, archived, and no longer dripping, but with this new DRIP entering stage left, we are, technically speaking, now touching acronyms, from across incentive epochs.
To avoid any mix-ups, figured it was worth flagging. Different focus, different goals, same four letter word. That said, really appreciate the clarity in this doc, especially around the evaluation role. Always heartening to see funding programs lean toward measurability rather than vibes-per-min.
Just a quick note from the trenches: there was a previous DRIP program on Arbitrum - this one here - focused on delegate redelegation mechanics. That DRIP’s wrapped, archived, and no longer dripping, but with this new DRIP entering stage left, we are, technically speaking, now touching acronyms, from across incentive epochs.
To avoid any mix-ups, figured it was worth flagging. Different focus, different goals, same four letter word. That said, really appreciate the clarity in this doc, especially around the evaluation role. Always heartening to see funding programs lean toward measurability rather than vibes-per-min.
Wishing you clarity in metrics, minimal future acronym collisions, and dashboards that never. stop. updating. Godspeed.
Thank you for putting forward this proposal and for the significant effort involved. I appreciate the ambition behind this initiative.
I've reviewed the details and have several key questions and concerns regarding execution and underlying strategy. I would like to raise these points for discussion in this public forum:
Thank you for putting forward this proposal and for the significant effort involved. I appreciate the ambition behind this initiative.
I've reviewed the details and have several key questions and concerns regarding execution and underlying strategy. I would like to raise these points for discussion in this public forum:
1. Executing Protocol Agnosticism & Selection Criteria: The proposal emphasizes a "protocol agnostic" approach targeting users and activities, yet the design requires screening/whitelisting protocols for eligibility, mandates co-marketing from eligible protocols, and explicitly positions the program as a tool to attract new protocols. This design appears to incentivize user activity on specific, selected protocols, which contradicts the stated principle of not focusing on protocols themselves.
2. Defining and Driving Retention:
3. Program Goals - Acquisition vs. Engagement:
I laud the effort, but it is “outsourcing” the hard parts of business strategy to the protocols which if they had knew better, we wouldn't be facing this issue. It reads off like it's throwing money at the problem but in a different form. We need to be sure of what are the areas we want to lock down, what drives retention, and then incentivizing that all while maintaining credible neutrality.
Just a quick note from the trenches: there was a previous DRIP program on Arbitrum - this one here - focused on delegate redelegation mechanics. That DRIP’s wrapped, archived, and no longer dripping, but with this new DRIP entering stage left, we are, technically speaking, now touching acronyms, from across incentive epochs.
To avoid any mix-ups, figured it was worth flagging. Different focus, different goals, same four letter word. That said, really appreciate the clarity in this doc, especially around the evaluation role. Always heartening to see funding programs lean toward measurability rather than vibes-per-min.
Just a quick note from the trenches: there was a previous DRIP program on Arbitrum - this one here - focused on delegate redelegation mechanics. That DRIP’s wrapped, archived, and no longer dripping, but with this new DRIP entering stage left, we are, technically speaking, now touching acronyms, from across incentive epochs.
To avoid any mix-ups, figured it was worth flagging. Different focus, different goals, same four letter word. That said, really appreciate the clarity in this doc, especially around the evaluation role. Always heartening to see funding programs lean toward measurability rather than vibes-per-min.
Wishing you clarity in metrics, minimal future acronym collisions, and dashboards that never. stop. updating. Godspeed.
Friends, delegates, Arbitrum citizens—lend me your ears. I come not to bury the proposal, but to contemplate our role.
They tell us “an evaluation vendor” shall be chosen to decide the key performance metrics— Not we, the delegates entrusted with oversight, But some yet-unnamed oracle, summoned after approval. We may observe the metrics, perhaps applaud them— Yet we shall not define them. Is this the voice of a DAO, or the echo of its silence?
Friends, delegates, Arbitrum citizens—lend me your ears. I come not to bury the proposal, but to contemplate our role.
They tell us “an evaluation vendor” shall be chosen to decide the key performance metrics— Not we, the delegates entrusted with oversight, But some yet-unnamed oracle, summoned after approval. We may observe the metrics, perhaps applaud them— Yet we shall not define them. Is this the voice of a DAO, or the echo of its silence?
We are invited to suggest which “target activities or assets” should be considered, To lend our insight, our vision, our hopes for the ecosystem. Yet the committee retains “full discretion over all aspects of season planning and execution.” Our suggestions are welcome—like flowers on a closed tomb. Do we advise, or do we merely adorn?
Suppose we take issue with the timeline. Suppose we say the seasons should shift, That the cycles should follow the pulse of the chain, not the will of the few. But no—the committee “will maintain the right to modify, extend, or discontinue a season.” The calendar is theirs, unbound by our hands. Are we stewards, or spectators?
And lo! 80 million ARB lies before us, A sum vast enough to stir the treasury walls. No justification, no model, no anchor— No explanation why it is not 40, or 100, or 20. But this is an AAE proposal, backed by might and mandate. The votes are counted before we’ve spoken. The ending is foretold. Do we govern, or do we merely witness the AAE's will?
Onchain voting for this proposal is ending within 24 hours:
[Vote on Tally: DeFi Renaissance Incentive Program (DRIP)](https://www.tally.xyz/gov/eip155:42161:0x789fC99093B09aD01C34DC7251D0C89ce743e5a4/proposal/2606309579402773764)
* * *
I am a bot. Questions? Contact [email protected]
Friends, delegates, Arbitrum citizens—lend me your ears. I come not to bury the proposal, but to contemplate our role.
They tell us “an evaluation vendor” shall be chosen to decide the key performance metrics— Not we, the delegates entrusted with oversight, But some yet-unnamed oracle, summoned after approval. We may observe the metrics, perhaps applaud them— Yet we shall not define them. Is this the voice of a DAO, or the echo of its silence?
Friends, delegates, Arbitrum citizens—lend me your ears. I come not to bury the proposal, but to contemplate our role.
They tell us “an evaluation vendor” shall be chosen to decide the key performance metrics— Not we, the delegates entrusted with oversight, But some yet-unnamed oracle, summoned after approval. We may observe the metrics, perhaps applaud them— Yet we shall not define them. Is this the voice of a DAO, or the echo of its silence?
We are invited to suggest which “target activities or assets” should be considered, To lend our insight, our vision, our hopes for the ecosystem. Yet the committee retains “full discretion over all aspects of season planning and execution.” Our suggestions are welcome—like flowers on a closed tomb. Do we advise, or do we merely adorn?
Suppose we take issue with the timeline. Suppose we say the seasons should shift, That the cycles should follow the pulse of the chain, not the will of the few. But no—the committee “will maintain the right to modify, extend, or discontinue a season.” The calendar is theirs, unbound by our hands. Are we stewards, or spectators?
And lo! 80 million ARB lies before us, A sum vast enough to stir the treasury walls. No justification, no model, no anchor— No explanation why it is not 40, or 100, or 20. But this is an AAE proposal, backed by might and mandate. The votes are counted before we’ve spoken. The ending is foretold. Do we govern, or do we merely witness the AAE's will?
Onchain voting for this proposal is ending within 24 hours:
[Vote on Tally: DeFi Renaissance Incentive Program (DRIP)](https://www.tally.xyz/gov/eip155:42161:0x789fC99093B09aD01C34DC7251D0C89ce743e5a4/proposal/2606309579402773764)
* * *
I am a bot. Questions? Contact [email protected]
Voting has started for this proposal! Vote on Tally: DeFi Renaissance Incentive Program (DRIP)
I am a bot. Questions? Contact [email protected]
Voting has started for this proposal! Vote on Tally: DeFi Renaissance Incentive Program (DRIP)
I am a bot. Questions? Contact [email protected]
Hi all,
Confirming the AF address as 0xef297424bbC64B21fB405532b58fe77299f1e1F4 for receiving the funds.
Hi all,
Confirming the AF address as 0xef297424bbC64B21fB405532b58fe77299f1e1F4 for receiving the funds.
The goal is to only support activity where Arbitrum already has PMF or where that fit can realistically be catalyzed with BD work and amplified through incentives. In practice, if Arbitrum is organically the best place to execute an activity, it should be sticky. If other ecosystems incentivize that activity, it’s fine, as when they turn off incentives it should flow back to where it’s organically the best, i.e., Arbitrum.
The goal is to only support activity where Arbitrum already has PMF or where that fit can realistically be catalyzed with BD work and amplified through incentives. In practice, if Arbitrum is organically the best place to execute an activity, it should be sticky. If other ecosystems incentivize that activity, it’s fine, as when they turn off incentives it should flow back to where it’s organically the best, i.e., Arbitrum.
OK - would you mind sharing some information about these Arbitrum products that already have PMF? It would be great to see examples & supporting data to better understand your line of thinking and why this activity isn't already happening :raised_hands:
It would also make it much clearer for the DAO what products this program is going to support.
The focus is on driving sustainable usage where Arbitrum is the best place to execute, not just competing on temporary yield.
We will work closely with the evaluation partner to monitor concentration in real time, and adjust if rewards are flowing too heavily to a small number of actors. Additionally, we are already exploring setting program rules that directly discourage extractive behavior.
I totally agree with the first statement - it's just that user incentives are just an increase of temporary yield for these users. We don't recognize any past or current user rewards campaign that would have a 'fairer' distribution amongst wallets so it would be valuable to know these new rules beforehand.
source: https://docs.google.com/document/d/1V1fJXaP-APT7S6p7ADRGuzAqhLVV46kxzAHbyz8DVCw/edit?tab=t.0
zkSync Ignite had 41% of rewards sold after claiming with native TVL dropping to almost baseline - all for 45m $ZK in rewards and 9m $ZK for service providers (16,7% of the budget).
Maybe even such a slight boost is something Entropy considers valuable enough for the ecosystem and that is totally fine but it would be great to understand why :handshake:
Best, Kamil
Section Changed: Abstract
Change: Added: "The DRIP is built on ARDC's findings from past incentive programs and aims to create opportunities to rethink how incentive programs can better serve long-term ecosystem health rather than just short-term growth spikes."
Justification:
Section Changed: Abstract
Change: Added: "The DRIP is built on ARDC's findings from past incentive programs and aims to create opportunities to rethink how incentive programs can better serve long-term ecosystem health rather than just short-term growth spikes."
Justification:
- Primary supporting feedback: Priority #1 from @Euphoria (SimScore 42%): "First off, we'd like to thank @Entropy for putting the much-awaited DRIP proposal. We see initiatives like DRIP as opportunities to rethink how incentive programs can better serve long-term ecosystem health rather than just short-term growth spikes like we had in our earlier incentive programs."
- Priority #2 from @Argonaut (SimScore 41%): "We see a high potential in the application of this approach, which we understand has been developed based on ARDC's findings from past incentive programs."
Section Changed: Abstract
Change: Added: "The committee will ensure that the whole community is involved in the selection process for the proposed seasons, while still maintaining operational efficiency."
Justification:
- Primary supporting feedback: Priority #2 from @Argonaut (SimScore 41%): "We see a high potential in the application of this approach, which we understand has been developed based on ARDC's findings from past incentive programs. We definitely see this approach as valuable and feasible at the same time and still promising in terms of future results, but we are not quite sure if we understand correctly if the whole community will be involved in the selection process for the proposed committee that will choose the moments and goals for each season that is to begin, beyond Entropy, OCL, the Foundation itself, key stakeholders and partner companies. Maybe this has to do with the fact that the seasons are 3 months each and taking these members selections every 3 months period is overwhelming. Would you mind clarifying this?"
- Priority #5 from @chamadao (SimScore 37%): "We really like this program, thanks for the efforts here who is going to be distributing incentives and setting the amounts, how will that be tracked? And the season selection committee, how will this be decided?"
Section Changed: Abstract
Change: Added: "Additionally, the DAO will receive regular updates on the program's performance, including detailed evaluations at established frequencies (e.g., mid-season, end of season)."
Justification:
- Primary supporting feedback: Priority #3 from @Tane (SimScore 40%): "Furthermore, regarding the evaluation process itself, how does the proposal envision the DAO evaluating the overall success or failure of the DRIP program? Specifically, what is the planned frequency for these evaluations (e.g., per season, mid-season, annually)? What key metrics and criteria will be used to assess the program's performance against its goals?"
Section Changed: Motivation and Rationale
Change: Added: "We intend to track and evaluate key metrics throughout and after each season, including user retention after a season ends, capital efficiency per ARB spent, and other relevant measures to assess the program's performance against its goals. This will help determine the overall success or failure of each season and guide future iterations."
Justification:
- Primary supporting feedback: Priority #3 from @Tane (SimScore 40%): "Furthermore, regarding the evaluation process itself, how does the proposal envision the DAO evaluating the overall success or failure of the DRIP program? Specifically, what is the planned frequency for these evaluations (e.g., per season, mid-season, annually)? What key metrics and criteria will be used to assess the program's performance against its goals?"
- Priority #10 from @Euphoria (SimScore 33%): "Could you elaborate on which key metrics will be prioritized for analysis, beyond just raw usage? For example, are there plans to evaluate user retention after a season ends, or capital efficiency per ARB spent? Having a few shared metrics across seasons might also help the DAO compare performance longitudinally."
Section Changed: Rules of a DRIP Season
Change: Added: "- Each season will have clearly defined evaluation criteria established before launch, with specific key performance indicators (KPIs) that will be used to assess the program's performance against its goals."
Justification:
- Primary supporting feedback: Priority #3 from @Tane (SimScore 40%): "Furthermore, regarding the evaluation process itself, how does the proposal envision the DAO evaluating the overall success or failure of the DRIP program? Specifically, what is the planned frequency for these evaluations (e.g., per season, mid-season, annually)? What key metrics and criteria will be used to assess the program's performance against its goals?"
Section Changed: Selection Process
Change: Added: "However, the committee will implement measures to ensure transparency and fairness in the partner selection process, with public reporting mechanisms to maintain accountability."
Justification:
- Primary supporting feedback: Priority #9 from @Tane (SimScore 34%): "That said, we have some concerns about the governance structure and operational details. The season selection committee includes entities with significant influence in the ecosystem, which raises questions about impartiality and potential conflicts of interest. Could you clarify what measures will be in place to ensure transparency and fairness in season and partner selection? Will there be public reporting or community oversight mechanisms?"
The goal is to only support activity where Arbitrum already has PMF or where that fit can realistically be catalyzed with BD work and amplified through incentives. In practice, if Arbitrum is organically the best place to execute an activity, it should be sticky. If other ecosystems incentivize that activity, it’s fine, as when they turn off incentives it should flow back to where it’s organically the best, i.e., Arbitrum.
The goal is to only support activity where Arbitrum already has PMF or where that fit can realistically be catalyzed with BD work and amplified through incentives. In practice, if Arbitrum is organically the best place to execute an activity, it should be sticky. If other ecosystems incentivize that activity, it’s fine, as when they turn off incentives it should flow back to where it’s organically the best, i.e., Arbitrum.
OK - would you mind sharing some information about these Arbitrum products that already have PMF? It would be great to see examples & supporting data to better understand your line of thinking and why this activity isn't already happening :raised_hands:
It would also make it much clearer for the DAO what products this program is going to support.
The focus is on driving sustainable usage where Arbitrum is the best place to execute, not just competing on temporary yield.
We will work closely with the evaluation partner to monitor concentration in real time, and adjust if rewards are flowing too heavily to a small number of actors. Additionally, we are already exploring setting program rules that directly discourage extractive behavior.
I totally agree with the first statement - it's just that user incentives are just an increase of temporary yield for these users. We don't recognize any past or current user rewards campaign that would have a 'fairer' distribution amongst wallets so it would be valuable to know these new rules beforehand.
source: https://docs.google.com/document/d/1V1fJXaP-APT7S6p7ADRGuzAqhLVV46kxzAHbyz8DVCw/edit?tab=t.0
zkSync Ignite had 41% of rewards sold after claiming with native TVL dropping to almost baseline - all for 45m $ZK in rewards and 9m $ZK for service providers (16,7% of the budget).
Maybe even such a slight boost is something Entropy considers valuable enough for the ecosystem and that is totally fine but it would be great to understand why :handshake:
Best, Kamil
Section Changed: Abstract
Change: Added: "The DRIP is built on ARDC's findings from past incentive programs and aims to create opportunities to rethink how incentive programs can better serve long-term ecosystem health rather than just short-term growth spikes."
Justification:
Section Changed: Abstract
Change: Added: "The DRIP is built on ARDC's findings from past incentive programs and aims to create opportunities to rethink how incentive programs can better serve long-term ecosystem health rather than just short-term growth spikes."
Justification:
- Primary supporting feedback: Priority #1 from @Euphoria (SimScore 42%): "First off, we'd like to thank @Entropy for putting the much-awaited DRIP proposal. We see initiatives like DRIP as opportunities to rethink how incentive programs can better serve long-term ecosystem health rather than just short-term growth spikes like we had in our earlier incentive programs."
- Priority #2 from @Argonaut (SimScore 41%): "We see a high potential in the application of this approach, which we understand has been developed based on ARDC's findings from past incentive programs."
Section Changed: Abstract
Change: Added: "The committee will ensure that the whole community is involved in the selection process for the proposed seasons, while still maintaining operational efficiency."
Justification:
- Primary supporting feedback: Priority #2 from @Argonaut (SimScore 41%): "We see a high potential in the application of this approach, which we understand has been developed based on ARDC's findings from past incentive programs. We definitely see this approach as valuable and feasible at the same time and still promising in terms of future results, but we are not quite sure if we understand correctly if the whole community will be involved in the selection process for the proposed committee that will choose the moments and goals for each season that is to begin, beyond Entropy, OCL, the Foundation itself, key stakeholders and partner companies. Maybe this has to do with the fact that the seasons are 3 months each and taking these members selections every 3 months period is overwhelming. Would you mind clarifying this?"
- Priority #5 from @chamadao (SimScore 37%): "We really like this program, thanks for the efforts here who is going to be distributing incentives and setting the amounts, how will that be tracked? And the season selection committee, how will this be decided?"
Section Changed: Abstract
Change: Added: "Additionally, the DAO will receive regular updates on the program's performance, including detailed evaluations at established frequencies (e.g., mid-season, end of season)."
Justification:
- Primary supporting feedback: Priority #3 from @Tane (SimScore 40%): "Furthermore, regarding the evaluation process itself, how does the proposal envision the DAO evaluating the overall success or failure of the DRIP program? Specifically, what is the planned frequency for these evaluations (e.g., per season, mid-season, annually)? What key metrics and criteria will be used to assess the program's performance against its goals?"
Section Changed: Motivation and Rationale
Change: Added: "We intend to track and evaluate key metrics throughout and after each season, including user retention after a season ends, capital efficiency per ARB spent, and other relevant measures to assess the program's performance against its goals. This will help determine the overall success or failure of each season and guide future iterations."
Justification:
- Primary supporting feedback: Priority #3 from @Tane (SimScore 40%): "Furthermore, regarding the evaluation process itself, how does the proposal envision the DAO evaluating the overall success or failure of the DRIP program? Specifically, what is the planned frequency for these evaluations (e.g., per season, mid-season, annually)? What key metrics and criteria will be used to assess the program's performance against its goals?"
- Priority #10 from @Euphoria (SimScore 33%): "Could you elaborate on which key metrics will be prioritized for analysis, beyond just raw usage? For example, are there plans to evaluate user retention after a season ends, or capital efficiency per ARB spent? Having a few shared metrics across seasons might also help the DAO compare performance longitudinally."
Section Changed: Rules of a DRIP Season
Change: Added: "- Each season will have clearly defined evaluation criteria established before launch, with specific key performance indicators (KPIs) that will be used to assess the program's performance against its goals."
Justification:
- Primary supporting feedback: Priority #3 from @Tane (SimScore 40%): "Furthermore, regarding the evaluation process itself, how does the proposal envision the DAO evaluating the overall success or failure of the DRIP program? Specifically, what is the planned frequency for these evaluations (e.g., per season, mid-season, annually)? What key metrics and criteria will be used to assess the program's performance against its goals?"
Section Changed: Selection Process
Change: Added: "However, the committee will implement measures to ensure transparency and fairness in the partner selection process, with public reporting mechanisms to maintain accountability."
Justification:
- Primary supporting feedback: Priority #9 from @Tane (SimScore 34%): "That said, we have some concerns about the governance structure and operational details. The season selection committee includes entities with significant influence in the ecosystem, which raises questions about impartiality and potential conflicts of interest. Could you clarify what measures will be in place to ensure transparency and fairness in season and partner selection? Will there be public reporting or community oversight mechanisms?"
Hey @Entropy, thanks for the proposal :raised_hands: Having our own proposal - a completely different one - I'll let myself ask some questions, just to understand and learn from what you proposed.
Competition from other ecosystems
Taking a look at Merkl's or RoyCo's dashboards, it's a ranking of ecosystems offering the highest APY / APR on specific assets. From my understanding, this proposal aims at putting Arbitrum's boosted APRs into these rankings which facilitate users moving their funds in search for highest yield between different DeFis. As long as we don't focus on Arbitrum-native products (neither USDT nor wstETH are), how do we want to ensure that other ecosystems with higher budget won't basically win over users acquired in the program with even higher incentives or after the program ends? Is there any non-compete agreement with distribution partners?
Mercenary capital
Taking a quick look at leaderboards we can quickly calculate that top 10 wallets gather around 60% of rewards within a specific campaign. It's pretty similar for most campaigns and was mentioned as a problem within the LTIPP campaign. Why would it work differently in case of DRIP?
Lack of retention
This is a a fundamental challenge of all user incentive programs - for example, ZkSync Ignite achieved its goals but had its TVL drop right after spending 300m $ZK and closing the program without further renew. Lack of retention was also being discussed in Uniswap DAO and their most important reason to run the program anyway was the launch of Unichain.
Hey @Entropy, thanks for the proposal :raised_hands: Having our own proposal - a completely different one - I'll let myself ask some questions, just to understand and learn from what you proposed.
Competition from other ecosystems
Taking a look at Merkl's or RoyCo's dashboards, it's a ranking of ecosystems offering the highest APY / APR on specific assets. From my understanding, this proposal aims at putting Arbitrum's boosted APRs into these rankings which facilitate users moving their funds in search for highest yield between different DeFis. As long as we don't focus on Arbitrum-native products (neither USDT nor wstETH are), how do we want to ensure that other ecosystems with higher budget won't basically win over users acquired in the program with even higher incentives or after the program ends? Is there any non-compete agreement with distribution partners?
Mercenary capital
Taking a quick look at leaderboards we can quickly calculate that top 10 wallets gather around 60% of rewards within a specific campaign. It's pretty similar for most campaigns and was mentioned as a problem within the LTIPP campaign. Why would it work differently in case of DRIP?
Lack of retention
This is a a fundamental challenge of all user incentive programs - for example, ZkSync Ignite achieved its goals but had its TVL drop right after spending 300m $ZK and closing the program without further renew. Lack of retention was also being discussed in Uniswap DAO and their most important reason to run the program anyway was the launch of Unichain.
Maybe Entropy, AF or OCL has some important motivations that I'm not aware of but it would be great to know these :raised_hands: In the long-term, such "incentive wars" is just spending a pretty hefty amount of money to be in the top APR ranking for 3 months to just get back to the baseline - but maybe there's some reasoning that I don't see. Just trying to learn here! :handshake:
Thanks! Kamil
Above are the revisions suggested by SimScore/ Constrained AI including the exact quote justifications for the revisions. Here is a demo of side by side proposal comparison. DeFi Renaissance Incentive Program (DRIP) - Proposals - Arbitrum
We will be presenting a SimScore Proposal shortly, using DRIP as a demo to illustrate how simScore will be integrated into discourse.
Above are the revisions suggested by SimScore/ Constrained AI including the exact quote justifications for the revisions. Here is a demo of side by side proposal comparison. DeFi Renaissance Incentive Program (DRIP) - Proposals - Arbitrum
We will be presenting a SimScore Proposal shortly, using DRIP as a demo to illustrate how simScore will be integrated into discourse.
Here is the SimScore Analysis that the proposal edits and justifications are based on https://docs.google.com/spreadsheets/d/1HdQTPud9JsAn9EpdxfV80ZRPNRvZ8_A5k0f32XtKQHY/edit?usp=sharing
Here is SimScore Key Terms page, explaining what Priority #, SimScore% mean and how they are determined. https://rndadocs.notion.site/SimScore-API-What-is-it-1ba786e9377980bfbc28efffda47e3c4?pvs=4
Hey @Entropy, thanks for the proposal :raised_hands: Having our own proposal - a completely different one - I'll let myself ask some questions, just to understand and learn from what you proposed.
Competition from other ecosystems
Taking a look at Merkl's or RoyCo's dashboards, it's a ranking of ecosystems offering the highest APY / APR on specific assets. From my understanding, this proposal aims at putting Arbitrum's boosted APRs into these rankings which facilitate users moving their funds in search for highest yield between different DeFis. As long as we don't focus on Arbitrum-native products (neither USDT nor wstETH are), how do we want to ensure that other ecosystems with higher budget won't basically win over users acquired in the program with even higher incentives or after the program ends? Is there any non-compete agreement with distribution partners?
Mercenary capital
Taking a quick look at leaderboards we can quickly calculate that top 10 wallets gather around 60% of rewards within a specific campaign. It's pretty similar for most campaigns and was mentioned as a problem within the LTIPP campaign. Why would it work differently in case of DRIP?
Lack of retention
This is a a fundamental challenge of all user incentive programs - for example, ZkSync Ignite achieved its goals but had its TVL drop right after spending 300m $ZK and closing the program without further renew. Lack of retention was also being discussed in Uniswap DAO and their most important reason to run the program anyway was the launch of Unichain.
Hey @Entropy, thanks for the proposal :raised_hands: Having our own proposal - a completely different one - I'll let myself ask some questions, just to understand and learn from what you proposed.
Competition from other ecosystems
Taking a look at Merkl's or RoyCo's dashboards, it's a ranking of ecosystems offering the highest APY / APR on specific assets. From my understanding, this proposal aims at putting Arbitrum's boosted APRs into these rankings which facilitate users moving their funds in search for highest yield between different DeFis. As long as we don't focus on Arbitrum-native products (neither USDT nor wstETH are), how do we want to ensure that other ecosystems with higher budget won't basically win over users acquired in the program with even higher incentives or after the program ends? Is there any non-compete agreement with distribution partners?
Mercenary capital
Taking a quick look at leaderboards we can quickly calculate that top 10 wallets gather around 60% of rewards within a specific campaign. It's pretty similar for most campaigns and was mentioned as a problem within the LTIPP campaign. Why would it work differently in case of DRIP?
Lack of retention
This is a a fundamental challenge of all user incentive programs - for example, ZkSync Ignite achieved its goals but had its TVL drop right after spending 300m $ZK and closing the program without further renew. Lack of retention was also being discussed in Uniswap DAO and their most important reason to run the program anyway was the launch of Unichain.
Maybe Entropy, AF or OCL has some important motivations that I'm not aware of but it would be great to know these :raised_hands: In the long-term, such "incentive wars" is just spending a pretty hefty amount of money to be in the top APR ranking for 3 months to just get back to the baseline - but maybe there's some reasoning that I don't see. Just trying to learn here! :handshake:
Thanks! Kamil
Above are the revisions suggested by SimScore/ Constrained AI including the exact quote justifications for the revisions. Here is a demo of side by side proposal comparison. DeFi Renaissance Incentive Program (DRIP) - Proposals - Arbitrum
We will be presenting a SimScore Proposal shortly, using DRIP as a demo to illustrate how simScore will be integrated into discourse.
Above are the revisions suggested by SimScore/ Constrained AI including the exact quote justifications for the revisions. Here is a demo of side by side proposal comparison. DeFi Renaissance Incentive Program (DRIP) - Proposals - Arbitrum
We will be presenting a SimScore Proposal shortly, using DRIP as a demo to illustrate how simScore will be integrated into discourse.
Here is the SimScore Analysis that the proposal edits and justifications are based on https://docs.google.com/spreadsheets/d/1HdQTPud9JsAn9EpdxfV80ZRPNRvZ8_A5k0f32XtKQHY/edit?usp=sharing
Here is SimScore Key Terms page, explaining what Priority #, SimScore% mean and how they are determined. https://rndadocs.notion.site/SimScore-API-What-is-it-1ba786e9377980bfbc28efffda47e3c4?pvs=4
I voted FOR on Tally. The reasoning remains the same.
GM, I have voted FOR in the Tally vote. My rationale did not change from the Snapshot proposal, same thoughts below. Excited to see how it goes.
GM, I have voted FOR in the Tally vote. My rationale did not change from the Snapshot proposal, same thoughts below. Excited to see how it goes.
This may not be a very cypherpunk take, but I do think a little of “centralization” is needed on these sort of large scale incentivization programmes. I wouldn’t go as far as having both the Foundation and Offchain Labs as a 2/3 signature -in practice, I’d say they are one single entity and not two independent ones, that’s a whole different discussion, but at a minimum I’d think we can agree that they have sufficiently close ties to be a concern here- but we’ve already tried 100% decentralized DEFI / NFT / onchain incentivization here on Arbitrum and I believe it’s a good idea to attempt it the other way.
I am comfortable with delegating the decision of exactly what activity is going to be motivated/rewarded to the committee, given that it makes sure to explicitly post rationale and the decision making process followed, even after the fact. For the Tally vote, my suggestion would be to either incorporate 2 more committee members so that’s x/5, or replace one of the Arbitrum’s one for another party.
I also want to highlight this comment, great feedback:
This means the reasons for rejection or acceptance of this proposal must stem from its mechanism. You can’t vote FOR simply because you want the outcome (make Arbitrum the best at [activity]). The outcome is obviously what should happen, and what every business strives for. There is nothing to really vote on, as it is a fundamental truth.
My last suggestion before on-chain vote is to add an option for the DAO itself to kill this via vote. As it is, this authority is granted to the committee, but not the DAO.
Hope Entropy and Arbitrum can take this feedback and think of incorporating some of it; I like where this is headed and the suggestions were made with both the success of the chain and the balance of (imo a needed) a sort of centralization in mind.
Voted FOR
I'm voting against. When I voted on Snapshot, I supported this new approach because it seemed like an interesting experiment that addressed issues from previous programs. However, I also requested a more detailed breakdown of expenses. Since then, there has been no significant update on this point. Given the size of the budget involved, I believe it is essential to have a clear and transparent cost breakdown before approving such a proposal. Without this clarity, I am not comfortable giving my approval.
To be clear, I still believe the overall approach has potential and could be beneficial, but it needs to be better structured and more transparent before I can support it.
I voted FOR on Tally. The reasoning remains the same.
GM, I have voted FOR in the Tally vote. My rationale did not change from the Snapshot proposal, same thoughts below. Excited to see how it goes.
GM, I have voted FOR in the Tally vote. My rationale did not change from the Snapshot proposal, same thoughts below. Excited to see how it goes.
This may not be a very cypherpunk take, but I do think a little of “centralization” is needed on these sort of large scale incentivization programmes. I wouldn’t go as far as having both the Foundation and Offchain Labs as a 2/3 signature -in practice, I’d say they are one single entity and not two independent ones, that’s a whole different discussion, but at a minimum I’d think we can agree that they have sufficiently close ties to be a concern here- but we’ve already tried 100% decentralized DEFI / NFT / onchain incentivization here on Arbitrum and I believe it’s a good idea to attempt it the other way.
I am comfortable with delegating the decision of exactly what activity is going to be motivated/rewarded to the committee, given that it makes sure to explicitly post rationale and the decision making process followed, even after the fact. For the Tally vote, my suggestion would be to either incorporate 2 more committee members so that’s x/5, or replace one of the Arbitrum’s one for another party.
I also want to highlight this comment, great feedback:
This means the reasons for rejection or acceptance of this proposal must stem from its mechanism. You can’t vote FOR simply because you want the outcome (make Arbitrum the best at [activity]). The outcome is obviously what should happen, and what every business strives for. There is nothing to really vote on, as it is a fundamental truth.
My last suggestion before on-chain vote is to add an option for the DAO itself to kill this via vote. As it is, this authority is granted to the committee, but not the DAO.
Hope Entropy and Arbitrum can take this feedback and think of incorporating some of it; I like where this is headed and the suggestions were made with both the success of the chain and the balance of (imo a needed) a sort of centralization in mind.
Voted FOR
I'm voting against. When I voted on Snapshot, I supported this new approach because it seemed like an interesting experiment that addressed issues from previous programs. However, I also requested a more detailed breakdown of expenses. Since then, there has been no significant update on this point. Given the size of the budget involved, I believe it is essential to have a clear and transparent cost breakdown before approving such a proposal. Without this clarity, I am not comfortable giving my approval.
To be clear, I still believe the overall approach has potential and could be beneficial, but it needs to be better structured and more transparent before I can support it.
The following reflects the views of L2BEAT’s governance team, composed of @krst, @Sinkas, and @Manugotsuka, and it’s based on their combined research, fact-checking, and ideation.
We are voting FOR.
The following reflects the views of L2BEAT’s governance team, composed of @krst, @Sinkas, and @Manugotsuka, and it’s based on their combined research, fact-checking, and ideation.
We are voting FOR.
After reviewing the proposal and extensively discussing with Entropy both in private and public calls, we’re comfortable being cautiously supportive of DRIP and giving a new incentives program the benefit of the doubt. The committee appears to have the right blend of BD reach and day-to-day execution power to run a targeted, data-driven program.
Our support, however, comes with clear expectations. We’ll closely follow the program and expect results to be published in a format that allows anyone to properly verify the impact and outcomes of this program. If reporting or KPI start to stall without explanation, we’ll be vocal about it. For now, we’re pleased to see a focused, experiment-oriented plan move forward.
The following reflects the views of L2BEAT’s governance team, composed of @krst, @Sinkas, and @Manugotsuka, and it’s based on their combined research, fact-checking, and ideation.
We are voting FOR.
The following reflects the views of L2BEAT’s governance team, composed of @krst, @Sinkas, and @Manugotsuka, and it’s based on their combined research, fact-checking, and ideation.
We are voting FOR.
After reviewing the proposal and extensively discussing with Entropy both in private and public calls, we’re comfortable being cautiously supportive of DRIP and giving a new incentives program the benefit of the doubt. The committee appears to have the right blend of BD reach and day-to-day execution power to run a targeted, data-driven program.
Our support, however, comes with clear expectations. We’ll closely follow the program and expect results to be published in a format that allows anyone to properly verify the impact and outcomes of this program. If reporting or KPI start to stall without explanation, we’ll be vocal about it. For now, we’re pleased to see a focused, experiment-oriented plan move forward.
gm, voted FOR with my previous rationale.
I look forward to details on the first campaign and hope the Treasury Management Committee will soon complement incentives with direct liquidity provision into protocols
gm, voted FOR with my previous rationale.
I look forward to details on the first campaign and hope the Treasury Management Committee will soon complement incentives with direct liquidity provision into protocols
We vote for this proposal. This proposal delegates execution to specialized operators who can recalibrate incentives far faster than a full DAO process, a prerequisite for keeping rewards aligned with real-time market conditions. Our stance has not changed since the Snapshot vote.
Voting AGAINST in Tally.
I appreciate the clawback mechanism with the snapshot vote and Entropy taking responsibility for failures/successes. Entropy has been working for a while and deserves the trust.
Voting AGAINST in Tally.
I appreciate the clawback mechanism with the snapshot vote and Entropy taking responsibility for failures/successes. Entropy has been working for a while and deserves the trust.
Even with these improvements, I'm voting against because of the substantial amount of money for this experiment without real skin in the game. I truly believe what I said before. I saw this firsthand on Honeyswap community where HONEY token lost value and momentum from mercenary capital. That's why I'm hesitant of this initiative in this state.
The liquidity comes for rewards and leaves when rewards stop, regardless of how targeted we make it.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb) and @Euphoria, based on our combined research, analysis, and ideation.
We are voting FOR this proposal in the Tally voting.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb) and @Euphoria, based on our combined research, analysis, and ideation.
We are voting FOR this proposal in the Tally voting.
As mentioned in our Snapshot rationale above, we continue to support DRIP for its shift toward activity-based, outcome-driven incentives and its thoughtful improvements over past incentive programs, particularly around evaluation, marketing support, and adaptability.
In addition to what we’ve already shared, we see DRIP as a valuable opportunity to test goal-driven, activity-based incentives at scale, in a way that aligns user behavior with DAO priorities. The clarity of seasonal objectives and the ability to adjust them mid-cycle gives the DAO better control over how incentives translate into real usage.
Look forward to seeing how season 1 is implemented.
I will unfortunately be voting "Against" at the Tally stage. As I mentioned above:
The detox period has concluded and its worth trying to address the next set of incentives. For now I’m voting for to keep momentum going on this. At it’s core, it seems to be thought out and addresses feedback from delegates. I do believe there should be more refinement before Tally, but I do want to show support for this in the interim.
Something I’d like to see is a commitment to have more emphasis put on getting money back to the DAO. It’s been a long-time complaint of mine that almost all our projects are just giving out funds with no expectation of tangible return. While we may not have broken past the tipping point yet, I think treasury health is important long term and without some partial fee return model its only going to get worse.
I will unfortunately be voting "Against" at the Tally stage. As I mentioned above:
The detox period has concluded and its worth trying to address the next set of incentives. For now I’m voting for to keep momentum going on this. At it’s core, it seems to be thought out and addresses feedback from delegates. I do believe there should be more refinement before Tally, but I do want to show support for this in the interim.
Something I’d like to see is a commitment to have more emphasis put on getting money back to the DAO. It’s been a long-time complaint of mine that almost all our projects are just giving out funds with no expectation of tangible return. While we may not have broken past the tipping point yet, I think treasury health is important long term and without some partial fee return model its only going to get worse.
This has, as far as I can tell, not been addressed in the Tally proposal. Willing to change if proven wrong otherwise, but I don't want to continue to watch these big projects move forward with 0 thought on long-term sustainability of the DAO treasury.
I had some initial questions, and I want to thank Entropy for taking the time to respond. That said, I still hold a few reservations, but I don’t yet feel ready to articulate them — not because I want to avoid responsibility, but because I want to thoroughly understand some of the DAO’s core structures and internal dynamics before raising any concerns.
For these reasons, I believe the most responsible and honest choice at this stage is to vote abstain.
DAOplomats is voting FOR on Tally.
We see DRIP as a meaningful step toward a more structured, performance-based incentive strategy within Arbitrum. It is encouraging to see this incentive experimentation.
DAOplomats is voting FOR on Tally.
We see DRIP as a meaningful step toward a more structured, performance-based incentive strategy within Arbitrum. It is encouraging to see this incentive experimentation.
We previously expressed concerns around the centralization of authority within the SSC and the implications of a small group managing a substantial budget. That concern still holds, but we appreciate the inclusion of a community-based circuit breaker. This backstop, combined with the season-by-season structuring, gives us enough confidence in the program’s governance for it to proceed.
Our other concerns on overlapping seasons and the arbitrary nature of the three-month cycle were addressed adequately by Entropy.
Upon passing of this proposal, greater transparency around internal deliberations, more clearly defined performance metrics, and mechanisms for public accountability should be prioritized for us to fully support a renewal of this program when the time comes.
Most of my concerns were addressed with the clawback clause.
I hear from some voting against that the program is vague. Honestly, to set up a good program like this will take a lot of time, expertise and thoughtful reviews. The burden of DAO bureaucracy often creates a bad outcome.
Most of my concerns were addressed with the clawback clause.
I hear from some voting against that the program is vague. Honestly, to set up a good program like this will take a lot of time, expertise and thoughtful reviews. The burden of DAO bureaucracy often creates a bad outcome.
They can do all this work ahead of time, and then something changes (e.g. market conditions, narrative opportunity) and they have to execute on it anyway, losing their chance to pivot, or worse, they do all this work and we vote it down... both ways create a lot of waste. Though the details are vague, the high level idea is clear, and it is seems like a great way to go.
I still believe the budget is quite large, and I would have loved to see some clear limits set on operational overhead (like a cap of 8% or something) but accountability has been established for the program's successes and failures, and trust Entropy to do a good job.
I'm excited to see how these programs end up getting executed.
I didn't change my opinion: https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/55?u=danielm Voted FOR on Tally
With the recent addition of the ability for the DAO to kill the proposal once live, this proposal feels even 'safer'. I was already in favor of this proposal before, but the ability to clawback mid-execution is a real nice-to-have that any proposals should offer to the best of their ability.
I have voted "For" on Tally.
I voted YES for the following reasons: https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/92?u=ezr3al
I’m voting against this proposal. While I support the goal of targeted incentives, I’m not convinced by the current level of transparency around the proposal, the lack of detailed financials, and the absence of clear evidence that this approach will lead to sustainable impact.
Voted Against.
None of the critical issues I've raised or several other delegates raised were addressed and incorporated in the transition from Snapshot to Tally.
Several delegates stated: I'm voting FOR for now, with a "hope" these things are addressed before Tally, well most points were not addressed, operating on hope is not a plan.
LobbyFi’s rationale on the price and making the voting power available for sale for this proposal:
As explained in the last rationale, we will be making the auction available for this (onchain) proposal.
The price will be set at 0.1% of our VP's worth in ETH terms (~2.4 ETH).
We vote for this proposal. This proposal delegates execution to specialized operators who can recalibrate incentives far faster than a full DAO process, a prerequisite for keeping rewards aligned with real-time market conditions. Our stance has not changed since the Snapshot vote.
Voting AGAINST in Tally.
I appreciate the clawback mechanism with the snapshot vote and Entropy taking responsibility for failures/successes. Entropy has been working for a while and deserves the trust.
Voting AGAINST in Tally.
I appreciate the clawback mechanism with the snapshot vote and Entropy taking responsibility for failures/successes. Entropy has been working for a while and deserves the trust.
Even with these improvements, I'm voting against because of the substantial amount of money for this experiment without real skin in the game. I truly believe what I said before. I saw this firsthand on Honeyswap community where HONEY token lost value and momentum from mercenary capital. That's why I'm hesitant of this initiative in this state.
The liquidity comes for rewards and leaves when rewards stop, regardless of how targeted we make it.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb) and @Euphoria, based on our combined research, analysis, and ideation.
We are voting FOR this proposal in the Tally voting.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb) and @Euphoria, based on our combined research, analysis, and ideation.
We are voting FOR this proposal in the Tally voting.
As mentioned in our Snapshot rationale above, we continue to support DRIP for its shift toward activity-based, outcome-driven incentives and its thoughtful improvements over past incentive programs, particularly around evaluation, marketing support, and adaptability.
In addition to what we’ve already shared, we see DRIP as a valuable opportunity to test goal-driven, activity-based incentives at scale, in a way that aligns user behavior with DAO priorities. The clarity of seasonal objectives and the ability to adjust them mid-cycle gives the DAO better control over how incentives translate into real usage.
Look forward to seeing how season 1 is implemented.
I will unfortunately be voting "Against" at the Tally stage. As I mentioned above:
The detox period has concluded and its worth trying to address the next set of incentives. For now I’m voting for to keep momentum going on this. At it’s core, it seems to be thought out and addresses feedback from delegates. I do believe there should be more refinement before Tally, but I do want to show support for this in the interim.
Something I’d like to see is a commitment to have more emphasis put on getting money back to the DAO. It’s been a long-time complaint of mine that almost all our projects are just giving out funds with no expectation of tangible return. While we may not have broken past the tipping point yet, I think treasury health is important long term and without some partial fee return model its only going to get worse.
I will unfortunately be voting "Against" at the Tally stage. As I mentioned above:
The detox period has concluded and its worth trying to address the next set of incentives. For now I’m voting for to keep momentum going on this. At it’s core, it seems to be thought out and addresses feedback from delegates. I do believe there should be more refinement before Tally, but I do want to show support for this in the interim.
Something I’d like to see is a commitment to have more emphasis put on getting money back to the DAO. It’s been a long-time complaint of mine that almost all our projects are just giving out funds with no expectation of tangible return. While we may not have broken past the tipping point yet, I think treasury health is important long term and without some partial fee return model its only going to get worse.
This has, as far as I can tell, not been addressed in the Tally proposal. Willing to change if proven wrong otherwise, but I don't want to continue to watch these big projects move forward with 0 thought on long-term sustainability of the DAO treasury.
I had some initial questions, and I want to thank Entropy for taking the time to respond. That said, I still hold a few reservations, but I don’t yet feel ready to articulate them — not because I want to avoid responsibility, but because I want to thoroughly understand some of the DAO’s core structures and internal dynamics before raising any concerns.
For these reasons, I believe the most responsible and honest choice at this stage is to vote abstain.
DAOplomats is voting FOR on Tally.
We see DRIP as a meaningful step toward a more structured, performance-based incentive strategy within Arbitrum. It is encouraging to see this incentive experimentation.
DAOplomats is voting FOR on Tally.
We see DRIP as a meaningful step toward a more structured, performance-based incentive strategy within Arbitrum. It is encouraging to see this incentive experimentation.
We previously expressed concerns around the centralization of authority within the SSC and the implications of a small group managing a substantial budget. That concern still holds, but we appreciate the inclusion of a community-based circuit breaker. This backstop, combined with the season-by-season structuring, gives us enough confidence in the program’s governance for it to proceed.
Our other concerns on overlapping seasons and the arbitrary nature of the three-month cycle were addressed adequately by Entropy.
Upon passing of this proposal, greater transparency around internal deliberations, more clearly defined performance metrics, and mechanisms for public accountability should be prioritized for us to fully support a renewal of this program when the time comes.
Most of my concerns were addressed with the clawback clause.
I hear from some voting against that the program is vague. Honestly, to set up a good program like this will take a lot of time, expertise and thoughtful reviews. The burden of DAO bureaucracy often creates a bad outcome.
Most of my concerns were addressed with the clawback clause.
I hear from some voting against that the program is vague. Honestly, to set up a good program like this will take a lot of time, expertise and thoughtful reviews. The burden of DAO bureaucracy often creates a bad outcome.
They can do all this work ahead of time, and then something changes (e.g. market conditions, narrative opportunity) and they have to execute on it anyway, losing their chance to pivot, or worse, they do all this work and we vote it down... both ways create a lot of waste. Though the details are vague, the high level idea is clear, and it is seems like a great way to go.
I still believe the budget is quite large, and I would have loved to see some clear limits set on operational overhead (like a cap of 8% or something) but accountability has been established for the program's successes and failures, and trust Entropy to do a good job.
I'm excited to see how these programs end up getting executed.
I didn't change my opinion: https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/55?u=danielm Voted FOR on Tally
With the recent addition of the ability for the DAO to kill the proposal once live, this proposal feels even 'safer'. I was already in favor of this proposal before, but the ability to clawback mid-execution is a real nice-to-have that any proposals should offer to the best of their ability.
I have voted "For" on Tally.
I voted YES for the following reasons: https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/92?u=ezr3al
I’m voting against this proposal. While I support the goal of targeted incentives, I’m not convinced by the current level of transparency around the proposal, the lack of detailed financials, and the absence of clear evidence that this approach will lead to sustainable impact.
Voted Against.
None of the critical issues I've raised or several other delegates raised were addressed and incorporated in the transition from Snapshot to Tally.
Several delegates stated: I'm voting FOR for now, with a "hope" these things are addressed before Tally, well most points were not addressed, operating on hope is not a plan.
LobbyFi’s rationale on the price and making the voting power available for sale for this proposal:
As explained in the last rationale, we will be making the auction available for this (onchain) proposal.
The price will be set at 0.1% of our VP's worth in ETH terms (~2.4 ETH).
Voted Against.
None of the critical issues I've raised or several other delegates raised were addressed and incorporated in the transition from Snapshot to Tally.
Several delegates stated: I'm voting FOR for now, with a "hope" these things are addressed before Tally, well most points were not addressed, operating on hope is not a plan.
I'm seeing a lack of listening and willingness to detail a unique mechanism, or to include language and mechanism for transparency, DAO involvement or accountability.
This is a troubling trend that the largest delegate and AAE is willing to operate with and descend into these low standards. This is not a healthy trajectory for the DAO.
It would be good to have this explained more clearly, in particular how could this cost outflow of 80m ARB bring returns back into the treasury? if that’s not the paradigm, how are the AAEs thinking about returns?
Happy to support with these 4 points addressed.
Voted Against.
None of the critical issues I've raised or several other delegates raised were addressed and incorporated in the transition from Snapshot to Tally.
Several delegates stated: I'm voting FOR for now, with a "hope" these things are addressed before Tally, well most points were not addressed, operating on hope is not a plan.
I'm seeing a lack of listening and willingness to detail a unique mechanism, or to include language and mechanism for transparency, DAO involvement or accountability.
This is a troubling trend that the largest delegate and AAE is willing to operate with and descend into these low standards. This is not a healthy trajectory for the DAO.
It would be good to have this explained more clearly, in particular how could this cost outflow of 80m ARB bring returns back into the treasury? if that’s not the paradigm, how are the AAEs thinking about returns?
Happy to support with these 4 points addressed.
We are going to vote FOR the proposal.
Arbitrum has previously launched several incentive programs — including STIP, STIP.B, the STIP Backfund, and LTIP. While many of these initiatives successfully attracted liquidity and attention to the network on a short-term basis (but they have not proven effective in retaining users over time).
We are going to vote FOR the proposal.
Arbitrum has previously launched several incentive programs — including STIP, STIP.B, the STIP Backfund, and LTIP. While many of these initiatives successfully attracted liquidity and attention to the network on a short-term basis (but they have not proven effective in retaining users over time).
We view DRIP’s approach as a differentiated attempt to address this challenge. Its structure, focused on seasonal initiatives targeting specific niches and managed through a more centralized process — yet informed by input from delegates and the community — represents a shift in strategy.
Centralization, in this context, could be a competitive advantage, enabling clearer coordination and reducing operational noise. However, it also demands a higher level of accountability from Entropy, the Arbitrum Foundation, and Offchain Labs.
Given DRIP’s more modest budget compared to previous programs, we believe it is worthwhile to proceed with a phased rollout, carefully measuring its effectiveness and outcomes, while consistently gathering feedback from the community and delegates.
Thank you @Entropy for taking DRIP through the entire proposal process. We agree on the importance of the incentivizing new assets, and we support the program targeting the growth of LSTs, Commodities, and RWAs on Arbitrum. We are eager to integrate these assets into GMX.
Whilst we understand the goal of DRIP in itself, we believe there is a need to also focus on existing Arbitrum products that have PMF already.
Thank you @Entropy for taking DRIP through the entire proposal process. We agree on the importance of the incentivizing new assets, and we support the program targeting the growth of LSTs, Commodities, and RWAs on Arbitrum. We are eager to integrate these assets into GMX.
Whilst we understand the goal of DRIP in itself, we believe there is a need to also focus on existing Arbitrum products that have PMF already.
Let’s ensure Arbitrum’s growth and incentivization strategy is two-fold:
When I first read this proposal, I very much liked where it was headed. Given the huge amount of competition from other chains and L2s (unichain incentives, BERA, Sonic gems, etc) staying competitive means undoubtedly incentivizing DEFI activity. I also have strong feelings about giving the incentives directly to the protocols, which as we already know from past experience could not spend these funds wisely, or at all, and with little to no accountability. So this approach (and the use of a SP like royco or merkle) makes a lot of sense to me to try.
This may not be a very cypherpunk take, but I do think a little of "centralization" is needed on these sort of large scale incentivization programmes. I wouldn't go as far as having both the Foundation and Offchain Labs as a 2/3 signature -in practice, I'd say they are one single entity and not two independent ones, that's a whole different discussion, but at a minimum I'd think we can agree that they have sufficiently close ties to be a concern here- but we've already tried 100% decentralized DEFI / NFT / onchain incentivization here on Arbitrum and I believe it's a good idea to attempt it the other way.
When I first read this proposal, I very much liked where it was headed. Given the huge amount of competition from other chains and L2s (unichain incentives, BERA, Sonic gems, etc) staying competitive means undoubtedly incentivizing DEFI activity. I also have strong feelings about giving the incentives directly to the protocols, which as we already know from past experience could not spend these funds wisely, or at all, and with little to no accountability. So this approach (and the use of a SP like royco or merkle) makes a lot of sense to me to try.
This may not be a very cypherpunk take, but I do think a little of "centralization" is needed on these sort of large scale incentivization programmes. I wouldn't go as far as having both the Foundation and Offchain Labs as a 2/3 signature -in practice, I'd say they are one single entity and not two independent ones, that's a whole different discussion, but at a minimum I'd think we can agree that they have sufficiently close ties to be a concern here- but we've already tried 100% decentralized DEFI / NFT / onchain incentivization here on Arbitrum and I believe it's a good idea to attempt it the other way.
I am comfortable with delegating the decision of exactly what activity is going to be motivated/rewarded to the committee, given that it makes sure to explicitly post rationale and the decision making process followed, even after the fact. For the Tally vote, my suggestion would be to either incorporate 2 more committee members so that's x/5, or replace one of the Arbitrum's one for another party.
I also want to highlight this comment, great feedback:
This means the reasons for rejection or acceptance of this proposal must stem from its mechanism. You can’t vote FOR simply because you want the outcome (make Arbitrum the best at [activity]). The outcome is obviously what should happen, and what every business strives for. There is nothing to really vote on, as it is a fundamental truth.
My last suggestion before on-chain vote is to add an option for the DAO itself to kill this via vote. As it is, this authority is granted to the committee, but not the DAO.
Hope Entropy and Arbitrum can take this feedback and think of incorporating some of it; I like where this is headed and the suggestions were made with both the success of the chain and the balance of (imo a needed) a sort of centralization in mind.
Voted FOR
After consideration, the @SEEDgov delegation decided to vote “FOR” on this proposal at the Snapshot Vote.
Rationale
After consideration, the @SEEDgov delegation decided to vote “FOR” on this proposal at the Snapshot Vote.
Rationale
SEED has voted FOR this proposal because we think it is designed to stimulate sustainable DeFi growth on Arbitrum by targeting specific liquidity and user engagement goals rather than granting funds to individual protocols. Its seasonal structure allows for adaptability, while being protocol-agnostic fosters broader participation across the ecosystem.
We have not noticed considerable changes in the version uploaded to Tally, so in this case, we will probably maintain this position in that instance.
As the ITU Blockchain delegation team, we are in favor of this proposal because we believe that implementing the DRIP program presented here will solve many problems in the Arbitrum ecosystem and particularly contribute to the pools that are currently facing issues.
I voted For this proposal as the DRIP is hopefully able to help arbitrum becoming a major L2 in terms of DeFi activity. In my opinion is has been designed better and more carefully than other initiavites in the past. This seems like a longer lasting program which should be able to capture good amounts of liquidity paired with strong DeFi partner.
Entropy recognizes as the author of DRIP that a conflict of interest exists given our position on the committee and as the party responsible for the program. We are disclosing this conflict before voting FOR the creation of DRIP on Snapshot. We will address some of the above questions in a separate reply to this forum post thread before moving to Tally.
The following reflects the views of L2BEAT’s governance team, composed of @krst, @Sinkas, and @Manugotsuka, and it’s based on their combined research, fact-checking, and ideation.
We are voting FOR the proposal.
The following reflects the views of L2BEAT’s governance team, composed of @krst, @Sinkas, and @Manugotsuka, and it’s based on their combined research, fact-checking, and ideation.
We are voting FOR the proposal.
In our previous comment, we raised some concerns regarding the proposal and the information available. Although not all of our points were addressed, we support moving the proposal forward and continue ironing out the details before it goes to an onchain vote.
The two things we’d like to have some clarity on are:
We understand having flexibility to adjust seasons and their goals, and by extension the relevant KPIs, but right now there’s literally no way for us to know ahead of time what success is going to look like, or how we could track it.
Even with the amended language, it’s still not clear how the DAO can get involved with the program, and particularly with its oversight. While we understand that, in theory, anyone can reach out to Entropy to offer suggestions, it’s not specified how the DAO can act in case the program is not delivering expected results.
We hope for those two things to be clarified before we move to the onchain vote, but we don’t feel it is blocking at this stage for temperature check.
We’re voting FOR the proposal on Snapshot following @Entropy’s clarification on how the program will be operationalized. This addresses some of the concerns we raised previously in our earlier comment on the program.
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/43?u=castlecapital
Voting FOR with the reserves mentioned 2 weeks ago https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/76?u=mcfly
We are going to vote FOR the proposal.
Arbitrum has previously launched several incentive programs — including STIP, STIP.B, the STIP Backfund, and LTIP. While many of these initiatives successfully attracted liquidity and attention to the network on a short-term basis (but they have not proven effective in retaining users over time).
We are going to vote FOR the proposal.
Arbitrum has previously launched several incentive programs — including STIP, STIP.B, the STIP Backfund, and LTIP. While many of these initiatives successfully attracted liquidity and attention to the network on a short-term basis (but they have not proven effective in retaining users over time).
We view DRIP’s approach as a differentiated attempt to address this challenge. Its structure, focused on seasonal initiatives targeting specific niches and managed through a more centralized process — yet informed by input from delegates and the community — represents a shift in strategy.
Centralization, in this context, could be a competitive advantage, enabling clearer coordination and reducing operational noise. However, it also demands a higher level of accountability from Entropy, the Arbitrum Foundation, and Offchain Labs.
Given DRIP’s more modest budget compared to previous programs, we believe it is worthwhile to proceed with a phased rollout, carefully measuring its effectiveness and outcomes, while consistently gathering feedback from the community and delegates.
Thank you @Entropy for taking DRIP through the entire proposal process. We agree on the importance of the incentivizing new assets, and we support the program targeting the growth of LSTs, Commodities, and RWAs on Arbitrum. We are eager to integrate these assets into GMX.
Whilst we understand the goal of DRIP in itself, we believe there is a need to also focus on existing Arbitrum products that have PMF already.
Thank you @Entropy for taking DRIP through the entire proposal process. We agree on the importance of the incentivizing new assets, and we support the program targeting the growth of LSTs, Commodities, and RWAs on Arbitrum. We are eager to integrate these assets into GMX.
Whilst we understand the goal of DRIP in itself, we believe there is a need to also focus on existing Arbitrum products that have PMF already.
Let’s ensure Arbitrum’s growth and incentivization strategy is two-fold:
When I first read this proposal, I very much liked where it was headed. Given the huge amount of competition from other chains and L2s (unichain incentives, BERA, Sonic gems, etc) staying competitive means undoubtedly incentivizing DEFI activity. I also have strong feelings about giving the incentives directly to the protocols, which as we already know from past experience could not spend these funds wisely, or at all, and with little to no accountability. So this approach (and the use of a SP like royco or merkle) makes a lot of sense to me to try.
This may not be a very cypherpunk take, but I do think a little of "centralization" is needed on these sort of large scale incentivization programmes. I wouldn't go as far as having both the Foundation and Offchain Labs as a 2/3 signature -in practice, I'd say they are one single entity and not two independent ones, that's a whole different discussion, but at a minimum I'd think we can agree that they have sufficiently close ties to be a concern here- but we've already tried 100% decentralized DEFI / NFT / onchain incentivization here on Arbitrum and I believe it's a good idea to attempt it the other way.
When I first read this proposal, I very much liked where it was headed. Given the huge amount of competition from other chains and L2s (unichain incentives, BERA, Sonic gems, etc) staying competitive means undoubtedly incentivizing DEFI activity. I also have strong feelings about giving the incentives directly to the protocols, which as we already know from past experience could not spend these funds wisely, or at all, and with little to no accountability. So this approach (and the use of a SP like royco or merkle) makes a lot of sense to me to try.
This may not be a very cypherpunk take, but I do think a little of "centralization" is needed on these sort of large scale incentivization programmes. I wouldn't go as far as having both the Foundation and Offchain Labs as a 2/3 signature -in practice, I'd say they are one single entity and not two independent ones, that's a whole different discussion, but at a minimum I'd think we can agree that they have sufficiently close ties to be a concern here- but we've already tried 100% decentralized DEFI / NFT / onchain incentivization here on Arbitrum and I believe it's a good idea to attempt it the other way.
I am comfortable with delegating the decision of exactly what activity is going to be motivated/rewarded to the committee, given that it makes sure to explicitly post rationale and the decision making process followed, even after the fact. For the Tally vote, my suggestion would be to either incorporate 2 more committee members so that's x/5, or replace one of the Arbitrum's one for another party.
I also want to highlight this comment, great feedback:
This means the reasons for rejection or acceptance of this proposal must stem from its mechanism. You can’t vote FOR simply because you want the outcome (make Arbitrum the best at [activity]). The outcome is obviously what should happen, and what every business strives for. There is nothing to really vote on, as it is a fundamental truth.
My last suggestion before on-chain vote is to add an option for the DAO itself to kill this via vote. As it is, this authority is granted to the committee, but not the DAO.
Hope Entropy and Arbitrum can take this feedback and think of incorporating some of it; I like where this is headed and the suggestions were made with both the success of the chain and the balance of (imo a needed) a sort of centralization in mind.
Voted FOR
After consideration, the @SEEDgov delegation decided to vote “FOR” on this proposal at the Snapshot Vote.
Rationale
After consideration, the @SEEDgov delegation decided to vote “FOR” on this proposal at the Snapshot Vote.
Rationale
SEED has voted FOR this proposal because we think it is designed to stimulate sustainable DeFi growth on Arbitrum by targeting specific liquidity and user engagement goals rather than granting funds to individual protocols. Its seasonal structure allows for adaptability, while being protocol-agnostic fosters broader participation across the ecosystem.
We have not noticed considerable changes in the version uploaded to Tally, so in this case, we will probably maintain this position in that instance.
As the ITU Blockchain delegation team, we are in favor of this proposal because we believe that implementing the DRIP program presented here will solve many problems in the Arbitrum ecosystem and particularly contribute to the pools that are currently facing issues.
I voted For this proposal as the DRIP is hopefully able to help arbitrum becoming a major L2 in terms of DeFi activity. In my opinion is has been designed better and more carefully than other initiavites in the past. This seems like a longer lasting program which should be able to capture good amounts of liquidity paired with strong DeFi partner.
Entropy recognizes as the author of DRIP that a conflict of interest exists given our position on the committee and as the party responsible for the program. We are disclosing this conflict before voting FOR the creation of DRIP on Snapshot. We will address some of the above questions in a separate reply to this forum post thread before moving to Tally.
The following reflects the views of L2BEAT’s governance team, composed of @krst, @Sinkas, and @Manugotsuka, and it’s based on their combined research, fact-checking, and ideation.
We are voting FOR the proposal.
The following reflects the views of L2BEAT’s governance team, composed of @krst, @Sinkas, and @Manugotsuka, and it’s based on their combined research, fact-checking, and ideation.
We are voting FOR the proposal.
In our previous comment, we raised some concerns regarding the proposal and the information available. Although not all of our points were addressed, we support moving the proposal forward and continue ironing out the details before it goes to an onchain vote.
The two things we’d like to have some clarity on are:
We understand having flexibility to adjust seasons and their goals, and by extension the relevant KPIs, but right now there’s literally no way for us to know ahead of time what success is going to look like, or how we could track it.
Even with the amended language, it’s still not clear how the DAO can get involved with the program, and particularly with its oversight. While we understand that, in theory, anyone can reach out to Entropy to offer suggestions, it’s not specified how the DAO can act in case the program is not delivering expected results.
We hope for those two things to be clarified before we move to the onchain vote, but we don’t feel it is blocking at this stage for temperature check.
We’re voting FOR the proposal on Snapshot following @Entropy’s clarification on how the program will be operationalized. This addresses some of the concerns we raised previously in our earlier comment on the program.
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/43?u=castlecapital
Voting FOR with the reserves mentioned 2 weeks ago https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/76?u=mcfly
Maybe this response is a little too ahead of itself at this stage
No you are bang on. Well articulated. Specifics of the mechanism, criteria, selection process have been ask for by myself and others and are as yet unanswered. There is a huge risk in this going forward, with no detail there is nothing to hold accountable.
@Bob-Rossi yes I've mentioned it as one of the core reasons I voted against, see my comment above
@Bob-Rossi yes I've mentioned it as one of the core reasons I voted against, see my comment above
It would be good to have this explained more clearly, in particular how could this cost outflow of 80m ARB bring returns back into the treasury? if that’s not the paradigm, how are the AAEs thinking about returns?
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/64?u=klausbrave
I will be voting "For" at the temp check stage of the program.
The detox period has concluded and its worth trying to address the next set of incentives. For now I'm voting for to keep momentum going on this. At it's core, it seems to be thought out and addresses feedback from delegates. I do believe there should be more refinement before Tally, but I do want to show support for this in the interim.
I will be voting "For" at the temp check stage of the program.
The detox period has concluded and its worth trying to address the next set of incentives. For now I'm voting for to keep momentum going on this. At it's core, it seems to be thought out and addresses feedback from delegates. I do believe there should be more refinement before Tally, but I do want to show support for this in the interim.
Something I'd like to see is a commitment to have more emphasis put on getting money back to the DAO. It's been a long-time complaint of mine that almost all our projects are just giving out funds with no expectation of tangible return. While we may not have broken past the tipping point yet, I think treasury health is important long term and without some partial fee return model its only going to get worse.
I'm not sure if others have mentioned it, but I'd like to see some type of commentary on this before Tally.
We support this initiative but encourage @Entropy to explore mechanisms for delivering tangible value to the DAO treasury, such as fee-splitting models or other designs that capture measurable ROI. If protocols receiving DRIP rewards generate significant revenue through fees, a sustainable revenue-sharing approach is critical. Relying solely on incentives without a clear path to revenue generation risks repeating the shortcomings of past programs.
Liquidity providers (LPs) are unlikely to maintain millions in pools like ETH/USDC after the DRIP program ends without compelling reasons, such as superior execution quality or markout on Arbitrum compared to competitors like Unichain. This program competes with other OP chain initiatives, so we must prioritize a tech stack that sustains the program’s impact long-term. Currently, no DEX on Arbitrum delivers positive returns for LPs. If the revenues capture is not clearly defined, instead of allocating 100% of the 80M ARB to a large-scale farming initiative, should we consider incentivizing builders to create sustainable solutions that benefit LPs and the ecosystem?
We voted FOR this proposal during the off-chain vote. We are generally supportive of the targeted and outcome-driven program design and we hope that future programs adopt a similar approach.
We voted FOR this proposal during the off-chain vote. We are generally supportive of the targeted and outcome-driven program design and we hope that future programs adopt a similar approach.
From our experience running and analysing capital allocation programs for ecosystems, we’ve observed some key challenges that render incentive programs ineffective, and we believe that to a reasonable extent the DRIP program design addresses these issues:
| Incentive Program Challenge | Desc. | DRIP Approach |
|---|---|---|
| Unsuitable metrics | Incentive programs focus too much on broad, “vanity” metrics that quickly spike but eventually revert to the mean. Metrics are not tailored to each project and how it earns revenue or attracts its core user base, leading to wasted capital | Targeted metrics aligned with specific, measurable goals per season (e.g., liquidity depth for specific asset pairs, borrowing activity thresholds) and post-season retention analysis to prioritize sustainable growth over vanity metrics. DRIP seasons require singular, outcome-driven objectives (e.g., "deepest liquidity for USDT/ETH"), ensuring alignment with strategic verticals and measurable ROI. |
| Generic distribution | Giving incentives in a generic, unfocused way often results in low or negative returns | Direct rewards distribution to users based on predefined, actionable criteria (e.g., maintaining specific LTV ratios, qualifying wallet activity). ARB flows exclusively to wallets meeting season-specific goals via a distribution partner, avoiding protocol-level subsidies and ensuring incentives drive desired user behaviors. |
| Unfocused approach | A one-size-fits-all approach to incentive program design tries to support all types of protocols, assets, verticals, etc., but lacks focus, making it less effective at meeting strategic outcomes | Concentrated, vertical-specific incentives targeting high-potential activities/assets (e.g., wstETH looping, RWA adoption). DRIP adopts a "controlled experimentation" framework, iterating through 3-month seasons to refine strategies, prioritize learnings, and avoid dilution of resources across unfocused initiatives. |
By addressing these challenges through efficient program design, DRIP positions Arbitrum to allocate capital more efficiently and amplify strategic high-impact growth areas. We view this as a strong positive.
Notwithstanding, we’ve raised concerns about transparency and the lack of community involvement in running this program, alongside AAE’s growing internalization of key programs and functions within the DAO.
While we are fully aware that the SSC comprises solely AAEs and assume they will act in the DAO’s best interests, we want to emphasize the need for transparency and community input.
While we welcome the steps taken in response to this, incl. the DAO-clawback option and making an explicit commitment to seeking community input, we feel it would have been ideal to have community representation within the SSC beyond AAEs. Regarding community input, we hope the SSC lives up to its commitment and actively seeks community input throughout the program lifecycle.
Overall, we are excited about this experiment and look forward to assessing the results from the first season. When the proposal goes to an on-chain vote, we will also be voting in support.
I voted in favor on Snapshot as i believe this is a well-structured proposal with strong potential.
However, there is a valid concern, like @0xDonPepe, that the program may attract participants who are primarily motivated by short-term rewards and likely to leave once incentives end.
I voted in favor on Snapshot as i believe this is a well-structured proposal with strong potential.
However, there is a valid concern, like @0xDonPepe, that the program may attract participants who are primarily motivated by short-term rewards and likely to leave once incentives end.
it moves the incentive away from short-term extraction, where users farm rewards and immediately exit, toward a model where participants are encouraged to stay engaged over time. It rewards commitment instead of quick profit.
I recommend allocating a portion of the operational budget to initiatives that promote ongoing engagement, such as educational content, interactive tutorials, personalized communications, or incentives tied to continued participation.
These efforts could help convert short-term activity into long-term commitment, enhancing the program's lasting impact.
As in @web3citizenxyz representation. Voting FOR.
Below the rationale:
Voted in favor, though I was genuinely torn.
As I’ve said before, I see this as a Business Development initiative: AAEs privately negotiate deals with protocols to bring more liquidity to Arbitrum. Great! Efficiency :handshake: Alignment.
Voted in favor, though I was genuinely torn.
As I’ve said before, I see this as a Business Development initiative: AAEs privately negotiate deals with protocols to bring more liquidity to Arbitrum. Great! Efficiency :handshake: Alignment.
That said, this feels like a pivotal moment for DAO operations. I hope the strong pushback Entropy received around the closed nature of the committee leads to a more open and collaborative approach in future initiatives.
https://forum.arbitrum.foundation/t/a-vision-for-the-future-of-arbitrum/28962/48?u=maxlomu
this would be pretty cool actually! but I'm not sure if @Entropy feels like experimenting with it though...
I voted FOR this proposal because I appreciate its innovative approach, particularly its focus on specific metrics and goals, such as achieving the deepest USDC/ETH liquidity.
The allocation of 80M ARB is a significant amount that can drive impactful outcomes and help achieve ambitious objectives. Some delegates argue that this sum is excessive and could lead to resource waste. As I mentioned in my comments here: https://forum.arbitrum.foundation/t/sos-submission-seedgov-strategic-objectives/28975/5?u=0xalex and https://forum.arbitrum.foundation/t/builders-voices-needed-shaping-the-future-of-arbitrum-together/29065/18?u=0xalex, at Kleros Cooperative, we propose creating Futarchy Markets to provide data-driven insights for decision-making (and this without any extra costs for the DAO). This approach can be experimented to ensure that the optimal amount of incentives is used to achieve specific goals without excessive spending.
I am torn on this proposal as I don't believe direct incentives such as this tend to have "sticky", long-term effects. I am also concerned about the potential for the selected partners potentially using this as a short-term opportunity to line their own pockets than specifically grow Arbitrum, as there is a "conflict of self-interest" between the participants.
Beyond that I also have a concern that the incentives may end up disproportionately targetting "whales", as mentioned by kamilgorski below.
Below is a v1 post-snapshot feedback report from the Event Horizon community and agents (note: these perspectives are subject to change with the inclusion of continued forum discussion)
FOR: 115
AGAINST: 73
ABSTAIN: 15
Verdict: Contentious Support
Voting FOR this proposal. I think that this new approach is interesting to test, especially as it seeks to address identified issues from previous programs and tries to offer an alternative solution. What I appreciate here is that the asset specific approach means even smaller projects and users can participate making it more inclusive.
Regarding centralization concerns I think that in cases like this a certain degree of centralization can enable quicker interventions and in some cases greater effectiveness. However, since delegates are less directly involved in the decision-making process, I expect transparency and consistent reporting with clear and regular updates. I think that there’s always a difficult trade-off to make, but I believe that the balance relies on transparency.
I'm abstaining. In general, I like the idea, but the budget seems too big, why does it have to be 4 seasons? Why not 1 or 2 and then we reasses?
I would like to know what the first season will be. What will you be incentivizing? At this stage, the proposal looks too vague. I'm in general very supportive and really love the approach of not incentivizing one platform, but instead a whole vertical. When the details get cleaned up , and it goes to tally, I will probably support it.
I vote FOR this snapshot vote as I appreciate the initiative and its more targeted approach to driving impact in the space. That said, I would like to see payment scaling based on KPI targets along the rubric of metrics desired. e.g. tranche grants as output metrics are met. I also am unsure why the full 80M must be carved out immediately. Perhaps this should be discussed more broadly. This seems to be a standard practice in the ecosystem that we set aside very large chunks for large scale initiatives at onset. I often feel this creates lock-in which can limit flexibility, community influence or program modification down the line as any change requires clawback.
voting Against on the current offchain vote because I feel that it is irresponsible to approve an incentive program of this size where @Entropy has such a major role on, without first having clarity around the future collaboration parameters between Entropy and Arbitrum DAO.
Voted Against
I see merit in this proposal however, the unclear accountability and large sum don't feel compatible with me for a first-time experiment.
I voted FOR this proposal. It is a different approach worth trying; I'm Interested to see what the results will be.
Maybe this response is a little too ahead of itself at this stage
No you are bang on. Well articulated. Specifics of the mechanism, criteria, selection process have been ask for by myself and others and are as yet unanswered. There is a huge risk in this going forward, with no detail there is nothing to hold accountable.
@Bob-Rossi yes I've mentioned it as one of the core reasons I voted against, see my comment above
@Bob-Rossi yes I've mentioned it as one of the core reasons I voted against, see my comment above
It would be good to have this explained more clearly, in particular how could this cost outflow of 80m ARB bring returns back into the treasury? if that’s not the paradigm, how are the AAEs thinking about returns?
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/64?u=klausbrave
I will be voting "For" at the temp check stage of the program.
The detox period has concluded and its worth trying to address the next set of incentives. For now I'm voting for to keep momentum going on this. At it's core, it seems to be thought out and addresses feedback from delegates. I do believe there should be more refinement before Tally, but I do want to show support for this in the interim.
I will be voting "For" at the temp check stage of the program.
The detox period has concluded and its worth trying to address the next set of incentives. For now I'm voting for to keep momentum going on this. At it's core, it seems to be thought out and addresses feedback from delegates. I do believe there should be more refinement before Tally, but I do want to show support for this in the interim.
Something I'd like to see is a commitment to have more emphasis put on getting money back to the DAO. It's been a long-time complaint of mine that almost all our projects are just giving out funds with no expectation of tangible return. While we may not have broken past the tipping point yet, I think treasury health is important long term and without some partial fee return model its only going to get worse.
I'm not sure if others have mentioned it, but I'd like to see some type of commentary on this before Tally.
We support this initiative but encourage @Entropy to explore mechanisms for delivering tangible value to the DAO treasury, such as fee-splitting models or other designs that capture measurable ROI. If protocols receiving DRIP rewards generate significant revenue through fees, a sustainable revenue-sharing approach is critical. Relying solely on incentives without a clear path to revenue generation risks repeating the shortcomings of past programs.
Liquidity providers (LPs) are unlikely to maintain millions in pools like ETH/USDC after the DRIP program ends without compelling reasons, such as superior execution quality or markout on Arbitrum compared to competitors like Unichain. This program competes with other OP chain initiatives, so we must prioritize a tech stack that sustains the program’s impact long-term. Currently, no DEX on Arbitrum delivers positive returns for LPs. If the revenues capture is not clearly defined, instead of allocating 100% of the 80M ARB to a large-scale farming initiative, should we consider incentivizing builders to create sustainable solutions that benefit LPs and the ecosystem?
We voted FOR this proposal during the off-chain vote. We are generally supportive of the targeted and outcome-driven program design and we hope that future programs adopt a similar approach.
We voted FOR this proposal during the off-chain vote. We are generally supportive of the targeted and outcome-driven program design and we hope that future programs adopt a similar approach.
From our experience running and analysing capital allocation programs for ecosystems, we’ve observed some key challenges that render incentive programs ineffective, and we believe that to a reasonable extent the DRIP program design addresses these issues:
| Incentive Program Challenge | Desc. | DRIP Approach |
|---|---|---|
| Unsuitable metrics | Incentive programs focus too much on broad, “vanity” metrics that quickly spike but eventually revert to the mean. Metrics are not tailored to each project and how it earns revenue or attracts its core user base, leading to wasted capital | Targeted metrics aligned with specific, measurable goals per season (e.g., liquidity depth for specific asset pairs, borrowing activity thresholds) and post-season retention analysis to prioritize sustainable growth over vanity metrics. DRIP seasons require singular, outcome-driven objectives (e.g., "deepest liquidity for USDT/ETH"), ensuring alignment with strategic verticals and measurable ROI. |
| Generic distribution | Giving incentives in a generic, unfocused way often results in low or negative returns | Direct rewards distribution to users based on predefined, actionable criteria (e.g., maintaining specific LTV ratios, qualifying wallet activity). ARB flows exclusively to wallets meeting season-specific goals via a distribution partner, avoiding protocol-level subsidies and ensuring incentives drive desired user behaviors. |
| Unfocused approach | A one-size-fits-all approach to incentive program design tries to support all types of protocols, assets, verticals, etc., but lacks focus, making it less effective at meeting strategic outcomes | Concentrated, vertical-specific incentives targeting high-potential activities/assets (e.g., wstETH looping, RWA adoption). DRIP adopts a "controlled experimentation" framework, iterating through 3-month seasons to refine strategies, prioritize learnings, and avoid dilution of resources across unfocused initiatives. |
By addressing these challenges through efficient program design, DRIP positions Arbitrum to allocate capital more efficiently and amplify strategic high-impact growth areas. We view this as a strong positive.
Notwithstanding, we’ve raised concerns about transparency and the lack of community involvement in running this program, alongside AAE’s growing internalization of key programs and functions within the DAO.
While we are fully aware that the SSC comprises solely AAEs and assume they will act in the DAO’s best interests, we want to emphasize the need for transparency and community input.
While we welcome the steps taken in response to this, incl. the DAO-clawback option and making an explicit commitment to seeking community input, we feel it would have been ideal to have community representation within the SSC beyond AAEs. Regarding community input, we hope the SSC lives up to its commitment and actively seeks community input throughout the program lifecycle.
Overall, we are excited about this experiment and look forward to assessing the results from the first season. When the proposal goes to an on-chain vote, we will also be voting in support.
I voted in favor on Snapshot as i believe this is a well-structured proposal with strong potential.
However, there is a valid concern, like @0xDonPepe, that the program may attract participants who are primarily motivated by short-term rewards and likely to leave once incentives end.
I voted in favor on Snapshot as i believe this is a well-structured proposal with strong potential.
However, there is a valid concern, like @0xDonPepe, that the program may attract participants who are primarily motivated by short-term rewards and likely to leave once incentives end.
it moves the incentive away from short-term extraction, where users farm rewards and immediately exit, toward a model where participants are encouraged to stay engaged over time. It rewards commitment instead of quick profit.
I recommend allocating a portion of the operational budget to initiatives that promote ongoing engagement, such as educational content, interactive tutorials, personalized communications, or incentives tied to continued participation.
These efforts could help convert short-term activity into long-term commitment, enhancing the program's lasting impact.
As in @web3citizenxyz representation. Voting FOR.
Below the rationale:
Voted in favor, though I was genuinely torn.
As I’ve said before, I see this as a Business Development initiative: AAEs privately negotiate deals with protocols to bring more liquidity to Arbitrum. Great! Efficiency :handshake: Alignment.
Voted in favor, though I was genuinely torn.
As I’ve said before, I see this as a Business Development initiative: AAEs privately negotiate deals with protocols to bring more liquidity to Arbitrum. Great! Efficiency :handshake: Alignment.
That said, this feels like a pivotal moment for DAO operations. I hope the strong pushback Entropy received around the closed nature of the committee leads to a more open and collaborative approach in future initiatives.
https://forum.arbitrum.foundation/t/a-vision-for-the-future-of-arbitrum/28962/48?u=maxlomu
this would be pretty cool actually! but I'm not sure if @Entropy feels like experimenting with it though...
I voted FOR this proposal because I appreciate its innovative approach, particularly its focus on specific metrics and goals, such as achieving the deepest USDC/ETH liquidity.
The allocation of 80M ARB is a significant amount that can drive impactful outcomes and help achieve ambitious objectives. Some delegates argue that this sum is excessive and could lead to resource waste. As I mentioned in my comments here: https://forum.arbitrum.foundation/t/sos-submission-seedgov-strategic-objectives/28975/5?u=0xalex and https://forum.arbitrum.foundation/t/builders-voices-needed-shaping-the-future-of-arbitrum-together/29065/18?u=0xalex, at Kleros Cooperative, we propose creating Futarchy Markets to provide data-driven insights for decision-making (and this without any extra costs for the DAO). This approach can be experimented to ensure that the optimal amount of incentives is used to achieve specific goals without excessive spending.
I am torn on this proposal as I don't believe direct incentives such as this tend to have "sticky", long-term effects. I am also concerned about the potential for the selected partners potentially using this as a short-term opportunity to line their own pockets than specifically grow Arbitrum, as there is a "conflict of self-interest" between the participants.
Beyond that I also have a concern that the incentives may end up disproportionately targetting "whales", as mentioned by kamilgorski below.
Below is a v1 post-snapshot feedback report from the Event Horizon community and agents (note: these perspectives are subject to change with the inclusion of continued forum discussion)
FOR: 115
AGAINST: 73
ABSTAIN: 15
Verdict: Contentious Support
Voting FOR this proposal. I think that this new approach is interesting to test, especially as it seeks to address identified issues from previous programs and tries to offer an alternative solution. What I appreciate here is that the asset specific approach means even smaller projects and users can participate making it more inclusive.
Regarding centralization concerns I think that in cases like this a certain degree of centralization can enable quicker interventions and in some cases greater effectiveness. However, since delegates are less directly involved in the decision-making process, I expect transparency and consistent reporting with clear and regular updates. I think that there’s always a difficult trade-off to make, but I believe that the balance relies on transparency.
I'm abstaining. In general, I like the idea, but the budget seems too big, why does it have to be 4 seasons? Why not 1 or 2 and then we reasses?
I would like to know what the first season will be. What will you be incentivizing? At this stage, the proposal looks too vague. I'm in general very supportive and really love the approach of not incentivizing one platform, but instead a whole vertical. When the details get cleaned up , and it goes to tally, I will probably support it.
I vote FOR this snapshot vote as I appreciate the initiative and its more targeted approach to driving impact in the space. That said, I would like to see payment scaling based on KPI targets along the rubric of metrics desired. e.g. tranche grants as output metrics are met. I also am unsure why the full 80M must be carved out immediately. Perhaps this should be discussed more broadly. This seems to be a standard practice in the ecosystem that we set aside very large chunks for large scale initiatives at onset. I often feel this creates lock-in which can limit flexibility, community influence or program modification down the line as any change requires clawback.
voting Against on the current offchain vote because I feel that it is irresponsible to approve an incentive program of this size where @Entropy has such a major role on, without first having clarity around the future collaboration parameters between Entropy and Arbitrum DAO.
Voted Against
I see merit in this proposal however, the unclear accountability and large sum don't feel compatible with me for a first-time experiment.
I voted FOR this proposal. It is a different approach worth trying; I'm Interested to see what the results will be.
I voted FOR this proposal because I appreciate its innovative approach, particularly its focus on specific metrics and goals, such as achieving the deepest USDC/ETH liquidity.
The allocation of 80M ARB is a significant amount that can drive impactful outcomes and help achieve ambitious objectives. Some delegates argue that this sum is excessive and could lead to resource waste. As I mentioned in my comments here: https://forum.arbitrum.foundation/t/sos-submission-seedgov-strategic-objectives/28975/5?u=0xalex and https://forum.arbitrum.foundation/t/builders-voices-needed-shaping-the-future-of-arbitrum-together/29065/18?u=0xalex, at Kleros Cooperative, we propose creating Futarchy Markets to provide data-driven insights for decision-making (and this without any extra costs for the DAO). This approach can be experimented to ensure that the optimal amount of incentives is used to achieve specific goals without excessive spending.
For example, a Futarchy Market could be designed to answer the following question: "What is the minimum amount of ARB incentives needed to achieve the deepest USDC/ETH liquidity on the Arbitrum chain?" If the market indicates, for instance, 2M ARB tokens, the Season Selection Committee would have a starting point for setting incentives.
This mechanism also enhances accountability. Anyone who disagrees with the market’s estimate can participate in trading the Futarchy markets, putting their money where their mouth is. Also if the Season Selection Committee decide to start at 5M, instead of 2M, the DAO and the Delegates could have a point of reference to challenge its decision. We are eager to experiment with this approach and discuss with @Entropy about the opportunity to run these markets in parallel of the DRIP program.
Arbitrum DAO could the first DAO to experiment with "Advisory Futarchy" and get tailored input from the market to adjust some parameters of the DRIP program.
I am torn on this proposal as I don't believe direct incentives such as this tend to have "sticky", long-term effects. I am also concerned about the potential for the selected partners potentially using this as a short-term opportunity to line their own pockets than specifically grow Arbitrum, as there is a "conflict of self-interest" between the participants.
Beyond that I also have a concern that the incentives may end up disproportionately targetting "whales", as mentioned by kamilgorski below.
I think a good case can be made that the "stickier" capital tends to come from a wider spectrum of individual end-users who do not have the same direct incentive to actively manage and move their assets as "whale entities" do.
However with all that being said, I think in this case we should not let perfection be the enemy of good. The proposal is well-thought-through and attempts to address the potential pitfalls, so I have voted "For" on the snapshot proposal.
Below is a v1 post-snapshot feedback report from the Event Horizon community and agents (note: these perspectives are subject to change with the inclusion of continued forum discussion)
FOR: 115
AGAINST: 73
ABSTAIN: 15
Verdict: Contentious Support
The DRIP proposal offers a targeted and flexible approach to incentivizing specific DeFi activities on Arbitrum, aligning with strategic goals of enhancing market share and fostering long-term growth. Supporters highlight the involvement of key stakeholders like the Arbitrum Foundation and Entropy Advisors, as well as structured frameworks such as season-based initiatives and DAO-clawback capabilities to ensure accountability and adaptability. However, significant concerns are raised regarding transparency in governance, the substantial budget allocation of 80M ARB without a detailed operational breakdown, and the unilateral power of the Season Selection Committee. While proponents argue that the potential benefits outweigh these risks, opponents believe that addressing these governance and financial transparency issues is essential to safeguard the protocol’s integrity and sustainability. Ultimately, the decision balances the promise of substantial growth against the need for robust transparency and governance mechanisms.
Arguments in Favor:
Arguments Against:
Expert A (Proponent; initial conviction ~85/100):
“DRIP’s targeted, seasonal approach is a clear evolution from prior all‐inclusive incentive programs. By focusing on measurable goals, we align rewards with specific market behaviors that drive sustainable growth. Historical analysis of our previous incentives proves that a clear, narrow focus leads to better capital efficiency and adoption.”
Expert B (Skeptic; initial conviction ~75/100):
“While the idea of seasonal targeting is attractive, I’m concerned about the heavy discretion given to the SSC. Past proposals have shown that without explicit, auditable checks, such centralization can lead to decisions that do not fully reflect community interests. Moreover, the risk of transient reward farming is real if we fail to integrate dynamic recalibration or vesting measures.”
Expert A:
“The proposal does include periodic public data releases and external evaluation. With an additional independent oversight body (new or an extension or an existing committee) and recalibration, the design would automatically adjust incentives if KPIs deviate, thereby protecting long-term value.”
Both sides agree that DRIP’s core concept holds merit. Expert A’s support for targeted incentives is tempered by Expert B’s legitimate concerns over governance and sustainability. Ultimately, integrating independent oversight, real‑time adjustment mechanisms, and rigorous pre-season validation may provide a middle ground, preserving DRIP’s innovative potential while addressing accountability and transparency issues.
Post-Debate Conviction Assessment:
• Proponents: Conviction adjusts from 85 to ~80/100 (slight moderation in light of valid counterpoints).
• Skeptics: Conviction adjusts from 75 to ~70/100 (acknowledging that enhanced oversight and recalibration measures could alleviate concerns)
Estimated Sway:
• Approximately 30% might be swayed by the rigorous, new accountability proposals.
• Approximately 20% might now find the proposal more acceptable given the additional independent reviews and built-in mechanistic checks.
The DRIP proposal represents a promising shift in the DAO’s incentive strategy by emphasizing targeted, measurable, and seasonal interventions that could drive long-term, sustainable growth. However, significant concerns over governance opacity and potential short-termism persist and drove a contentious, though net supportive, outcome. By adopting independent oversight, pre-launch simulations, and a standardized metrics framework, the proposal’s weaknesses can be mitigated while preserving its innovative intent. A balanced approach can ultimately strengthen community confidence and drive the ecosystem toward sustainable success."
Voting FOR this proposal. I think that this new approach is interesting to test, especially as it seeks to address identified issues from previous programs and tries to offer an alternative solution. What I appreciate here is that the asset specific approach means even smaller projects and users can participate making it more inclusive.
Regarding centralization concerns I think that in cases like this a certain degree of centralization can enable quicker interventions and in some cases greater effectiveness. However, since delegates are less directly involved in the decision-making process, I expect transparency and consistent reporting with clear and regular updates. I think that there’s always a difficult trade-off to make, but I believe that the balance relies on transparency.
That said, one thing I would appreciate seeing is a more detailed explanation or forecast of the cost breakdown, so we have a clearer idea of operational expenses. I am curious to see how this approach will evolve and look forward to following its progress.
Voted Against.
Incentive mechanic inadequately detailed. The claimed novel mechanic to incentivize and retain new users is not detailed, as a delegate we are left with trust us, we'll work it out along the way and we'll rely heavily on the distribution partner. The detail on Distribution partners criteria and responsibility is missing, this leaves a huge absence in a reliable plan and frankly not adequate work for an 80m ARB request After the amount of pushback, rigour and inquiry that went into the Incentives Detox this is disappointing to not see a more detail strategy and rational for why this time it will be different.
Lack of DAO involvement. Lack of formal balanced DAO representation and accountability mechanisms. Soft language is used from a accountability metric perspective, creating a trust assumption that is unverifiable and unfalsifiable "Entropy encourages the whole community to participate in proposing new activities and assets for incentives and is happy to be the primary point of contact for community ideation. There will absolutely be opportunities for community input throughout the DRIP process." Given this is a big concern mentioned by many delegates more specific language is needed.
Missing operational costs. "A portion set aside". "The DRIP seeks funding of 80M ARB for the first 4 seasons, with a maximum of 20M allocated per season and a portion set aside for operational costs related to vendors utilized by the season selection committee." For a proposal of this size and from the top AAEs this requires a higher standard, the operational costs need to detailed, at the least an estimate provided.
Disjointed proposal. This proposal sits on an island out on its own and doesn't represent a joined up strategy that fulfills the MVP, nor the SOS or moves Arbitrum towards a digital sovereign nation. My questions regarding this were left unanswered, Entropy pointed to a reply they made to Daniel which was unrelated and didn't answer the question. The lack of coherently positioning this incentive program's role in fulfilling the high level objectives of Arbitrum and the DAO leaves delegates with the question what's the point and will this make any lasting difference.
Voted Against.
Incentive mechanic inadequately detailed. The claimed novel mechanic to incentivize and retain new users is not detailed, as a delegate we are left with trust us, we'll work it out along the way and we'll rely heavily on the distribution partner. The detail on Distribution partners criteria and responsibility is missing, this leaves a huge absence in a reliable plan and frankly not adequate work for an 80m ARB request After the amount of pushback, rigour and inquiry that went into the Incentives Detox this is disappointing to not see a more detail strategy and rational for why this time it will be different.
Lack of DAO involvement. Lack of formal balanced DAO representation and accountability mechanisms. Soft language is used from a accountability metric perspective, creating a trust assumption that is unverifiable and unfalsifiable "Entropy encourages the whole community to participate in proposing new activities and assets for incentives and is happy to be the primary point of contact for community ideation. There will absolutely be opportunities for community input throughout the DRIP process." Given this is a big concern mentioned by many delegates more specific language is needed.
Missing operational costs. "A portion set aside". "The DRIP seeks funding of 80M ARB for the first 4 seasons, with a maximum of 20M allocated per season and a portion set aside for operational costs related to vendors utilized by the season selection committee." For a proposal of this size and from the top AAEs this requires a higher standard, the operational costs need to detailed, at the least an estimate provided.
Disjointed proposal. This proposal sits on an island out on its own and doesn't represent a joined up strategy that fulfills the MVP, nor the SOS or moves Arbitrum towards a digital sovereign nation. My questions regarding this were left unanswered, Entropy pointed to a reply they made to Daniel which was unrelated and didn't answer the question. The lack of coherently positioning this incentive program's role in fulfilling the high level objectives of Arbitrum and the DAO leaves delegates with the question what's the point and will this make any lasting difference.
It would be good to have this explained more clearly, in particular how could this cost outflow of 80m ARB bring returns back into the treasury? if that’s not the paradigm, how are the AAEs thinking about returns?
Happy to support with these 4 points addressed.
We vote for this proposal. Delegating execution to expert operators is essential because incentive programs need fast adjustments that the full DAO cannot coordinate efficiently. We would still prefer an explicit upper limit on vendor fees, but the clawback authority and transparent reporting create a practical hedge against potential overspend on those fees.
Voting NO on Snapshot. Appreciate the work Entropy put into this — the structure is thoughtful and the intent is clear.
That said, the proposal lacks strong accountability. Those ammount of ARB with no skin in the game from recipients, no clear clawbacks if TVL drops post-incentives, and centralized control over allocations feels risky.
Voting NO on Snapshot. Appreciate the work Entropy put into this — the structure is thoughtful and the intent is clear.
That said, the proposal lacks strong accountability. Those ammount of ARB with no skin in the game from recipients, no clear clawbacks if TVL drops post-incentives, and centralized control over allocations feels risky.
This creates artificial demand that likely won’t last. Can’t support in its current form, and remain open to a revised version with better safeguards.
I voted FOR this proposal: https://forum.arbitrum.foundation/t/cp0x-delegate-communication-thread/22217/183?u=cp0x
Also thanks to Entropy for the thoughtful responses to every interested delegate
Thank you for the responses to my comment as well as to others in the discussion. I truly appreciate the commitment to building a complete and well-rounded initiative. These kinds of conversations can help all members become more effective and valuable contributors to the DAO.
Based on your answer, I’ll not only be able to better understand this specific program, but also the logic behind how such initiatives are structured. More importantly, as the conversation deepens, it becomes easier to decode the reasoning of fellow DAO members — and the better we understand one another, the stronger and more aligned our community can become. I plan to continue studying the topic and will gladly return to the discussion if any follow-up questions arise.
Thank you for the responses to my comment as well as to others in the discussion. I truly appreciate the commitment to building a complete and well-rounded initiative. These kinds of conversations can help all members become more effective and valuable contributors to the DAO.
Based on your answer, I’ll not only be able to better understand this specific program, but also the logic behind how such initiatives are structured. More importantly, as the conversation deepens, it becomes easier to decode the reasoning of fellow DAO members — and the better we understand one another, the stronger and more aligned our community can become. I plan to continue studying the topic and will gladly return to the discussion if any follow-up questions arise.
Thanks again for the answer and the contribution!
Thank you for the proposal.
Posting to support the vote in the temp check.
Thank you for the proposal.
Posting to support the vote in the temp check.
First, there is a general appetite from builders to renew an incentive program, albeit with differences from the past we have had. Regardless of the general opinion that DAO members can have about these programs, incentives do make a difference at the ecosystem level and protocol level: with more and more competition from alternative L1s, and new L2s, and an always more fragmented mindshare, it does make sense to utilize economic incentives to strengthen the metric of Arbitrum. I also welcome an approach that is KPI-centered, with measures and goals established beforehand, something we honestly didn't do in the past.
I have a few remarks that I want to list below.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
We are voting FOR this proposal in the Snapshot voting.
We believe DRIP presents a meaningful improvement in how the DAO designs and delivers ecosystem incentives.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
We are voting FOR this proposal in the Snapshot voting.
We believe DRIP presents a meaningful improvement in how the DAO designs and delivers ecosystem incentives.
We appreciate Entropy’s responses, particularly the clarification that each season will include a public evaluation framework and that protocols will be provided with co-marketing templates and strategic support. This directly addresses past weaknesses in DAO-funded incentive programs, where marketing was often overlooked and reporting was inconsistent.
What sets DRIP apart, in our view, is its shift away from protocol-specific grants and toward activity-based, asset-pair focused goals. For example, targeting something like “deepest wstETH/USDT liquidity” in a season gives the program a measurable north star. It creates aligned incentives across protocols and users and allows the DAO to track whether value is actually being created.
The seasonal structure and ability to adapt mid-cycle are additional strengths. This introduces flexibility while keeping the program grounded in DAO accountability.
We recognize that execution quality will be key. But the architecture and intent behind DRIP reflect maturity in how the Arbitrum ecosystem approaches incentive design. This proposal experiments with the right things like focused goals, clear outcomes, vendor accountability, and continuous measurement.
We support DRIP as a valuable step forward and look forward to engaging closely throughout its rollout.
I’m voting yes for DRIP cause I think it good idea to bring more DeFi users and activity to Arbitrum. It focus on real use cases and rewards users, not just protocols. Also they said Entropy take full responsibilty, so it show they serious.
We’re genuinely excited about DRIP because it feels like the first incentive program that really “gets” what Arbitrum needs: clear goals, fast feedback loops. We’re voting yes because it puts real users front and center with measurable objectives, like boosting USDT/ETH liquidity, instead of broad protocol handouts. We appreciate that Entropy is fully on the hook: all ARB sits in a foundation-controlled, clawback-enabled multisig and is released only when pre-agreed milestones are met. We value the transparency built into the design, where every ARB spent, whether on incentives or operations, is published live, and community ideas feed directly into each season’s roadmap. We support vesting and tranche-based payouts to encourage sustained engagement long after the incentive window closes. With expert partners handling distribution and evaluation and public dashboards tracking progress in real time, we believe DRIP offers a truly data-driven path to lasting DeFi growth on Arbitrum.
Voting Yes. DeFi is simply the best usecase for blockchains right now and Arbitrum shouldn't fade this opportunity. Especially with chains like Base that capture big value in this area.
LobbyFi’s rationale on the price and making the voting power available for sale for this proposal:
While we’ve seen many discussions about this proposal, we believe it could still benefit the entire Arbitrum community if executed correctly. Given the expertise of the team involved, we are confident that this will be the case. The auction be made available.
LobbyFi’s rationale on the price and making the voting power available for sale for this proposal:
While we’ve seen many discussions about this proposal, we believe it could still benefit the entire Arbitrum community if executed correctly. Given the expertise of the team involved, we are confident that this will be the case. The auction be made available.
Since the requested sum for the program is significantly higher than our voting power, we will price the instant buy at 1% of our voting power’s worth in ETH terms. This is calculated as 18,422,193 ARB * 1%, which equals approximately 29.25 ETH.
Can you explain how community participation should start?
If the program starts before July 1st, there should be a period for considering proposals, and there is almost no time for that. Am I right in thinking that the first season will start without community proposals?
It would be best to swap out either Offchain Labs or the Foundation on the committee. One is beholden to the other via a service provider relationship, and given the 2/3 threshold to vote, this could in practice just be instructing the Foundation to run this program.
This is inconsistent with Entropy being the party held accountable, since they could, in theory, object to every policy made and allocation planned.
Solid framework! Love how it focuses on specific goals while keeping flexibility, and holding Entropy accountable gives confidence. The data-driven approach with multi-sig oversight makes sense - this could really move the needle for Arbitrum's growth.
We would like to highlight changes made to the proposal today:
Additional context around community input has been added
Entropy encourages the whole community to participate in proposing new activities and assets for incentives and is happy to be the primary point of contact for community ideation. There will absolutely be opportunities for community input throughout the DRIP process. Entropy will be actively calling on the community to help ideate (and already have been) on the most impactful season goals and service providers with a particular interest in opinions from those with DeFi and procurement experience.
We support the DeFi Renaissance Incentive Program. Targeting concrete goals such as creating the deepest USDT/ETH liquidity should make it easier to measure and evaluate outcomes compared with broad, protocol-level incentives. In addition, maintaining an extensive whitelist of eligible protocols and rewarding users for defined on-chain actions—like lending or borrowing under clear criteria—avoids giving any single platform an unfair advantage and encourages ecosystem-wide growth. We also expect higher post-incentive retention, because users will have multiple venues to choose from rather than being forced onto a single protocol only to leave once rewards stop. Our main concern is that the Season Selection Committee can unilaterally adjust parameters or terminate a season; while this flexibility enables rapid iteration, it also limits delegate influence.
gm, thanks for submitting this proposal and apologies for the delay in my comment.
I broadly understand and agree with the general approach. Please correct me if I'm wrong:
gm, thanks for submitting this proposal and apologies for the delay in my comment.
I broadly understand and agree with the general approach. Please correct me if I'm wrong:
I'm comfortable with the increased centralization of this type of program as it should make it an order of magnitude more effective.
Nevertheless, as proposed by others:
I expect this to be included in the proposal - not the full analysis (protocols, etc.) but at least clear objectives and KPIs
Thanks
This proposal will be delayed to Snapshot by 1 week. Changes to the proposal will include: The addition that funds will be sent to a foundation wallet with DAO-Clawback capabilities, further clarification about our desire to have community input around all aspects of seasons and vendors, and adding Entropy as a clear responsible party to be held to the successes and failures of the program. Additionally, we will be scheduling a call to discuss DRIP this week. Finally, a small addition adding more flexibility around the DRIP’s starting date for execution has been added.
I voted FOR this proposal because I appreciate its innovative approach, particularly its focus on specific metrics and goals, such as achieving the deepest USDC/ETH liquidity.
The allocation of 80M ARB is a significant amount that can drive impactful outcomes and help achieve ambitious objectives. Some delegates argue that this sum is excessive and could lead to resource waste. As I mentioned in my comments here: https://forum.arbitrum.foundation/t/sos-submission-seedgov-strategic-objectives/28975/5?u=0xalex and https://forum.arbitrum.foundation/t/builders-voices-needed-shaping-the-future-of-arbitrum-together/29065/18?u=0xalex, at Kleros Cooperative, we propose creating Futarchy Markets to provide data-driven insights for decision-making (and this without any extra costs for the DAO). This approach can be experimented to ensure that the optimal amount of incentives is used to achieve specific goals without excessive spending.
For example, a Futarchy Market could be designed to answer the following question: "What is the minimum amount of ARB incentives needed to achieve the deepest USDC/ETH liquidity on the Arbitrum chain?" If the market indicates, for instance, 2M ARB tokens, the Season Selection Committee would have a starting point for setting incentives.
This mechanism also enhances accountability. Anyone who disagrees with the market’s estimate can participate in trading the Futarchy markets, putting their money where their mouth is. Also if the Season Selection Committee decide to start at 5M, instead of 2M, the DAO and the Delegates could have a point of reference to challenge its decision. We are eager to experiment with this approach and discuss with @Entropy about the opportunity to run these markets in parallel of the DRIP program.
Arbitrum DAO could the first DAO to experiment with "Advisory Futarchy" and get tailored input from the market to adjust some parameters of the DRIP program.
I am torn on this proposal as I don't believe direct incentives such as this tend to have "sticky", long-term effects. I am also concerned about the potential for the selected partners potentially using this as a short-term opportunity to line their own pockets than specifically grow Arbitrum, as there is a "conflict of self-interest" between the participants.
Beyond that I also have a concern that the incentives may end up disproportionately targetting "whales", as mentioned by kamilgorski below.
I think a good case can be made that the "stickier" capital tends to come from a wider spectrum of individual end-users who do not have the same direct incentive to actively manage and move their assets as "whale entities" do.
However with all that being said, I think in this case we should not let perfection be the enemy of good. The proposal is well-thought-through and attempts to address the potential pitfalls, so I have voted "For" on the snapshot proposal.
Below is a v1 post-snapshot feedback report from the Event Horizon community and agents (note: these perspectives are subject to change with the inclusion of continued forum discussion)
FOR: 115
AGAINST: 73
ABSTAIN: 15
Verdict: Contentious Support
The DRIP proposal offers a targeted and flexible approach to incentivizing specific DeFi activities on Arbitrum, aligning with strategic goals of enhancing market share and fostering long-term growth. Supporters highlight the involvement of key stakeholders like the Arbitrum Foundation and Entropy Advisors, as well as structured frameworks such as season-based initiatives and DAO-clawback capabilities to ensure accountability and adaptability. However, significant concerns are raised regarding transparency in governance, the substantial budget allocation of 80M ARB without a detailed operational breakdown, and the unilateral power of the Season Selection Committee. While proponents argue that the potential benefits outweigh these risks, opponents believe that addressing these governance and financial transparency issues is essential to safeguard the protocol’s integrity and sustainability. Ultimately, the decision balances the promise of substantial growth against the need for robust transparency and governance mechanisms.
Arguments in Favor:
Arguments Against:
Expert A (Proponent; initial conviction ~85/100):
“DRIP’s targeted, seasonal approach is a clear evolution from prior all‐inclusive incentive programs. By focusing on measurable goals, we align rewards with specific market behaviors that drive sustainable growth. Historical analysis of our previous incentives proves that a clear, narrow focus leads to better capital efficiency and adoption.”
Expert B (Skeptic; initial conviction ~75/100):
“While the idea of seasonal targeting is attractive, I’m concerned about the heavy discretion given to the SSC. Past proposals have shown that without explicit, auditable checks, such centralization can lead to decisions that do not fully reflect community interests. Moreover, the risk of transient reward farming is real if we fail to integrate dynamic recalibration or vesting measures.”
Expert A:
“The proposal does include periodic public data releases and external evaluation. With an additional independent oversight body (new or an extension or an existing committee) and recalibration, the design would automatically adjust incentives if KPIs deviate, thereby protecting long-term value.”
Both sides agree that DRIP’s core concept holds merit. Expert A’s support for targeted incentives is tempered by Expert B’s legitimate concerns over governance and sustainability. Ultimately, integrating independent oversight, real‑time adjustment mechanisms, and rigorous pre-season validation may provide a middle ground, preserving DRIP’s innovative potential while addressing accountability and transparency issues.
Post-Debate Conviction Assessment:
• Proponents: Conviction adjusts from 85 to ~80/100 (slight moderation in light of valid counterpoints).
• Skeptics: Conviction adjusts from 75 to ~70/100 (acknowledging that enhanced oversight and recalibration measures could alleviate concerns)
Estimated Sway:
• Approximately 30% might be swayed by the rigorous, new accountability proposals.
• Approximately 20% might now find the proposal more acceptable given the additional independent reviews and built-in mechanistic checks.
The DRIP proposal represents a promising shift in the DAO’s incentive strategy by emphasizing targeted, measurable, and seasonal interventions that could drive long-term, sustainable growth. However, significant concerns over governance opacity and potential short-termism persist and drove a contentious, though net supportive, outcome. By adopting independent oversight, pre-launch simulations, and a standardized metrics framework, the proposal’s weaknesses can be mitigated while preserving its innovative intent. A balanced approach can ultimately strengthen community confidence and drive the ecosystem toward sustainable success."
Voting FOR this proposal. I think that this new approach is interesting to test, especially as it seeks to address identified issues from previous programs and tries to offer an alternative solution. What I appreciate here is that the asset specific approach means even smaller projects and users can participate making it more inclusive.
Regarding centralization concerns I think that in cases like this a certain degree of centralization can enable quicker interventions and in some cases greater effectiveness. However, since delegates are less directly involved in the decision-making process, I expect transparency and consistent reporting with clear and regular updates. I think that there’s always a difficult trade-off to make, but I believe that the balance relies on transparency.
That said, one thing I would appreciate seeing is a more detailed explanation or forecast of the cost breakdown, so we have a clearer idea of operational expenses. I am curious to see how this approach will evolve and look forward to following its progress.
Voted Against.
Incentive mechanic inadequately detailed. The claimed novel mechanic to incentivize and retain new users is not detailed, as a delegate we are left with trust us, we'll work it out along the way and we'll rely heavily on the distribution partner. The detail on Distribution partners criteria and responsibility is missing, this leaves a huge absence in a reliable plan and frankly not adequate work for an 80m ARB request After the amount of pushback, rigour and inquiry that went into the Incentives Detox this is disappointing to not see a more detail strategy and rational for why this time it will be different.
Lack of DAO involvement. Lack of formal balanced DAO representation and accountability mechanisms. Soft language is used from a accountability metric perspective, creating a trust assumption that is unverifiable and unfalsifiable "Entropy encourages the whole community to participate in proposing new activities and assets for incentives and is happy to be the primary point of contact for community ideation. There will absolutely be opportunities for community input throughout the DRIP process." Given this is a big concern mentioned by many delegates more specific language is needed.
Missing operational costs. "A portion set aside". "The DRIP seeks funding of 80M ARB for the first 4 seasons, with a maximum of 20M allocated per season and a portion set aside for operational costs related to vendors utilized by the season selection committee." For a proposal of this size and from the top AAEs this requires a higher standard, the operational costs need to detailed, at the least an estimate provided.
Disjointed proposal. This proposal sits on an island out on its own and doesn't represent a joined up strategy that fulfills the MVP, nor the SOS or moves Arbitrum towards a digital sovereign nation. My questions regarding this were left unanswered, Entropy pointed to a reply they made to Daniel which was unrelated and didn't answer the question. The lack of coherently positioning this incentive program's role in fulfilling the high level objectives of Arbitrum and the DAO leaves delegates with the question what's the point and will this make any lasting difference.
Voted Against.
Incentive mechanic inadequately detailed. The claimed novel mechanic to incentivize and retain new users is not detailed, as a delegate we are left with trust us, we'll work it out along the way and we'll rely heavily on the distribution partner. The detail on Distribution partners criteria and responsibility is missing, this leaves a huge absence in a reliable plan and frankly not adequate work for an 80m ARB request After the amount of pushback, rigour and inquiry that went into the Incentives Detox this is disappointing to not see a more detail strategy and rational for why this time it will be different.
Lack of DAO involvement. Lack of formal balanced DAO representation and accountability mechanisms. Soft language is used from a accountability metric perspective, creating a trust assumption that is unverifiable and unfalsifiable "Entropy encourages the whole community to participate in proposing new activities and assets for incentives and is happy to be the primary point of contact for community ideation. There will absolutely be opportunities for community input throughout the DRIP process." Given this is a big concern mentioned by many delegates more specific language is needed.
Missing operational costs. "A portion set aside". "The DRIP seeks funding of 80M ARB for the first 4 seasons, with a maximum of 20M allocated per season and a portion set aside for operational costs related to vendors utilized by the season selection committee." For a proposal of this size and from the top AAEs this requires a higher standard, the operational costs need to detailed, at the least an estimate provided.
Disjointed proposal. This proposal sits on an island out on its own and doesn't represent a joined up strategy that fulfills the MVP, nor the SOS or moves Arbitrum towards a digital sovereign nation. My questions regarding this were left unanswered, Entropy pointed to a reply they made to Daniel which was unrelated and didn't answer the question. The lack of coherently positioning this incentive program's role in fulfilling the high level objectives of Arbitrum and the DAO leaves delegates with the question what's the point and will this make any lasting difference.
It would be good to have this explained more clearly, in particular how could this cost outflow of 80m ARB bring returns back into the treasury? if that’s not the paradigm, how are the AAEs thinking about returns?
Happy to support with these 4 points addressed.
We vote for this proposal. Delegating execution to expert operators is essential because incentive programs need fast adjustments that the full DAO cannot coordinate efficiently. We would still prefer an explicit upper limit on vendor fees, but the clawback authority and transparent reporting create a practical hedge against potential overspend on those fees.
Voting NO on Snapshot. Appreciate the work Entropy put into this — the structure is thoughtful and the intent is clear.
That said, the proposal lacks strong accountability. Those ammount of ARB with no skin in the game from recipients, no clear clawbacks if TVL drops post-incentives, and centralized control over allocations feels risky.
Voting NO on Snapshot. Appreciate the work Entropy put into this — the structure is thoughtful and the intent is clear.
That said, the proposal lacks strong accountability. Those ammount of ARB with no skin in the game from recipients, no clear clawbacks if TVL drops post-incentives, and centralized control over allocations feels risky.
This creates artificial demand that likely won’t last. Can’t support in its current form, and remain open to a revised version with better safeguards.
I voted FOR this proposal: https://forum.arbitrum.foundation/t/cp0x-delegate-communication-thread/22217/183?u=cp0x
Also thanks to Entropy for the thoughtful responses to every interested delegate
Thank you for the responses to my comment as well as to others in the discussion. I truly appreciate the commitment to building a complete and well-rounded initiative. These kinds of conversations can help all members become more effective and valuable contributors to the DAO.
Based on your answer, I’ll not only be able to better understand this specific program, but also the logic behind how such initiatives are structured. More importantly, as the conversation deepens, it becomes easier to decode the reasoning of fellow DAO members — and the better we understand one another, the stronger and more aligned our community can become. I plan to continue studying the topic and will gladly return to the discussion if any follow-up questions arise.
Thank you for the responses to my comment as well as to others in the discussion. I truly appreciate the commitment to building a complete and well-rounded initiative. These kinds of conversations can help all members become more effective and valuable contributors to the DAO.
Based on your answer, I’ll not only be able to better understand this specific program, but also the logic behind how such initiatives are structured. More importantly, as the conversation deepens, it becomes easier to decode the reasoning of fellow DAO members — and the better we understand one another, the stronger and more aligned our community can become. I plan to continue studying the topic and will gladly return to the discussion if any follow-up questions arise.
Thanks again for the answer and the contribution!
Thank you for the proposal.
Posting to support the vote in the temp check.
Thank you for the proposal.
Posting to support the vote in the temp check.
First, there is a general appetite from builders to renew an incentive program, albeit with differences from the past we have had. Regardless of the general opinion that DAO members can have about these programs, incentives do make a difference at the ecosystem level and protocol level: with more and more competition from alternative L1s, and new L2s, and an always more fragmented mindshare, it does make sense to utilize economic incentives to strengthen the metric of Arbitrum. I also welcome an approach that is KPI-centered, with measures and goals established beforehand, something we honestly didn't do in the past.
I have a few remarks that I want to list below.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
We are voting FOR this proposal in the Snapshot voting.
We believe DRIP presents a meaningful improvement in how the DAO designs and delivers ecosystem incentives.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
We are voting FOR this proposal in the Snapshot voting.
We believe DRIP presents a meaningful improvement in how the DAO designs and delivers ecosystem incentives.
We appreciate Entropy’s responses, particularly the clarification that each season will include a public evaluation framework and that protocols will be provided with co-marketing templates and strategic support. This directly addresses past weaknesses in DAO-funded incentive programs, where marketing was often overlooked and reporting was inconsistent.
What sets DRIP apart, in our view, is its shift away from protocol-specific grants and toward activity-based, asset-pair focused goals. For example, targeting something like “deepest wstETH/USDT liquidity” in a season gives the program a measurable north star. It creates aligned incentives across protocols and users and allows the DAO to track whether value is actually being created.
The seasonal structure and ability to adapt mid-cycle are additional strengths. This introduces flexibility while keeping the program grounded in DAO accountability.
We recognize that execution quality will be key. But the architecture and intent behind DRIP reflect maturity in how the Arbitrum ecosystem approaches incentive design. This proposal experiments with the right things like focused goals, clear outcomes, vendor accountability, and continuous measurement.
We support DRIP as a valuable step forward and look forward to engaging closely throughout its rollout.
I’m voting yes for DRIP cause I think it good idea to bring more DeFi users and activity to Arbitrum. It focus on real use cases and rewards users, not just protocols. Also they said Entropy take full responsibilty, so it show they serious.
We’re genuinely excited about DRIP because it feels like the first incentive program that really “gets” what Arbitrum needs: clear goals, fast feedback loops. We’re voting yes because it puts real users front and center with measurable objectives, like boosting USDT/ETH liquidity, instead of broad protocol handouts. We appreciate that Entropy is fully on the hook: all ARB sits in a foundation-controlled, clawback-enabled multisig and is released only when pre-agreed milestones are met. We value the transparency built into the design, where every ARB spent, whether on incentives or operations, is published live, and community ideas feed directly into each season’s roadmap. We support vesting and tranche-based payouts to encourage sustained engagement long after the incentive window closes. With expert partners handling distribution and evaluation and public dashboards tracking progress in real time, we believe DRIP offers a truly data-driven path to lasting DeFi growth on Arbitrum.
Voting Yes. DeFi is simply the best usecase for blockchains right now and Arbitrum shouldn't fade this opportunity. Especially with chains like Base that capture big value in this area.
LobbyFi’s rationale on the price and making the voting power available for sale for this proposal:
While we’ve seen many discussions about this proposal, we believe it could still benefit the entire Arbitrum community if executed correctly. Given the expertise of the team involved, we are confident that this will be the case. The auction be made available.
LobbyFi’s rationale on the price and making the voting power available for sale for this proposal:
While we’ve seen many discussions about this proposal, we believe it could still benefit the entire Arbitrum community if executed correctly. Given the expertise of the team involved, we are confident that this will be the case. The auction be made available.
Since the requested sum for the program is significantly higher than our voting power, we will price the instant buy at 1% of our voting power’s worth in ETH terms. This is calculated as 18,422,193 ARB * 1%, which equals approximately 29.25 ETH.
Can you explain how community participation should start?
If the program starts before July 1st, there should be a period for considering proposals, and there is almost no time for that. Am I right in thinking that the first season will start without community proposals?
It would be best to swap out either Offchain Labs or the Foundation on the committee. One is beholden to the other via a service provider relationship, and given the 2/3 threshold to vote, this could in practice just be instructing the Foundation to run this program.
This is inconsistent with Entropy being the party held accountable, since they could, in theory, object to every policy made and allocation planned.
Solid framework! Love how it focuses on specific goals while keeping flexibility, and holding Entropy accountable gives confidence. The data-driven approach with multi-sig oversight makes sense - this could really move the needle for Arbitrum's growth.
We would like to highlight changes made to the proposal today:
Additional context around community input has been added
Entropy encourages the whole community to participate in proposing new activities and assets for incentives and is happy to be the primary point of contact for community ideation. There will absolutely be opportunities for community input throughout the DRIP process. Entropy will be actively calling on the community to help ideate (and already have been) on the most impactful season goals and service providers with a particular interest in opinions from those with DeFi and procurement experience.
We support the DeFi Renaissance Incentive Program. Targeting concrete goals such as creating the deepest USDT/ETH liquidity should make it easier to measure and evaluate outcomes compared with broad, protocol-level incentives. In addition, maintaining an extensive whitelist of eligible protocols and rewarding users for defined on-chain actions—like lending or borrowing under clear criteria—avoids giving any single platform an unfair advantage and encourages ecosystem-wide growth. We also expect higher post-incentive retention, because users will have multiple venues to choose from rather than being forced onto a single protocol only to leave once rewards stop. Our main concern is that the Season Selection Committee can unilaterally adjust parameters or terminate a season; while this flexibility enables rapid iteration, it also limits delegate influence.
gm, thanks for submitting this proposal and apologies for the delay in my comment.
I broadly understand and agree with the general approach. Please correct me if I'm wrong:
gm, thanks for submitting this proposal and apologies for the delay in my comment.
I broadly understand and agree with the general approach. Please correct me if I'm wrong:
I'm comfortable with the increased centralization of this type of program as it should make it an order of magnitude more effective.
Nevertheless, as proposed by others:
I expect this to be included in the proposal - not the full analysis (protocols, etc.) but at least clear objectives and KPIs
Thanks
This proposal will be delayed to Snapshot by 1 week. Changes to the proposal will include: The addition that funds will be sent to a foundation wallet with DAO-Clawback capabilities, further clarification about our desire to have community input around all aspects of seasons and vendors, and adding Entropy as a clear responsible party to be held to the successes and failures of the program. Additionally, we will be scheduling a call to discuss DRIP this week. Finally, a small addition adding more flexibility around the DRIP’s starting date for execution has been added.
It would be best to swap out either Offchain Labs or the Foundation on the committee. One is beholden to the other via a service provider relationship, and given the 2/3 threshold to vote, this could in practice just be instructing the Foundation to run this program.
This is inconsistent with Entropy being the party held accountable, since they could, in theory, object to every policy made and allocation planned.
If the threshold is to be 2/3, it's important from a governance perspective that none of the parties be directly related entities. Governance would not generally favor a committee where one party is a service provider for the other, and this should be no exception. Given that Foundation is also custodying the funds and would be required to act on a clawback, it is probably Foundation rather than Offchain Labs that should be replaced with another member.
Alternatively, the committee could be expanded to be 3/5, but the easier solution is just to have three independent committee members.
This is especially important since the primary check on the DRIP committee is resorting to a full clawback. Governance has obvious no ability to alter the makeup of the committee as written, leaving funds revocation as the only action available (assuming the wallet empowers the governance contract itself to claw back funds rather than a "soft" assurance without technical or legal enforcement mechanisms.)
We would like to highlight changes made to the proposal today:
Additional context around community input has been added
Entropy encourages the whole community to participate in proposing new activities and assets for incentives and is happy to be the primary point of contact for community ideation. There will absolutely be opportunities for community input throughout the DRIP process. Entropy will be actively calling on the community to help ideate (and already have been) on the most impactful season goals and service providers with a particular interest in opinions from those with DeFi and procurement experience.
We added clear language that funds will be sent to an AF wallet with DAO-Clawback capabilities. We also added verbiage to make clear Entropy is the accountable party for this program.
All funds will be sent to an Arbitrum Foundation controlled wallet with DAO-clawback capabilities.
More flexibility has been added to the timeline.
DRIP End Date (funds returned if not used or another proposal is not passed): July 1, 2026. An ongoing season may go past this date, but new seasons will not begin after this date
This proposal will be delayed to Snapshot by 1 week. Changes to the proposal will include: The addition that funds will be sent to a foundation wallet with DAO-Clawback capabilities, further clarification about our desire to have community input around all aspects of seasons and vendors, and adding Entropy as a clear responsible party to be held to the successes and failures of the program. Additionally, we will be scheduling a call to discuss DRIP this week. Finally, a small addition adding more flexibility around the DRIP’s starting date for execution has been added.
Appreciate the suggestion naming is definitely important. The “DeFi Renaissance” framing is meant to reflect both new and existing use cases in Arbitrum’s most important vertical, and we’ve gotten some positive feedback around the DRIP acronym as a balance of familiarity and freshness. That said, we’re always open to refining how the program is presented if it helps broaden its reach and appeal.
can at least some wording to this effect be included in the proposal?
Totally fair, we’ll update the following language to make the commitment to community input more explicit:
Entropy encourages the whole community to participate in proposing new activities and assets for incentives and is happy to be the primary point of contact for community ideation. That said, the committee will have full discretion over all aspects of season planning and execution with help from the onboarded distribution & evaluation vendors.
It would allow you to test with smaller amounts first, measure the results, and then make data-driven decisions
We 100% agree on the value of data-driven iteration. Our goal is to work closely with the evaluation partner on exactly these kinds of decisions. While in some cases front-loading rewards can be effective, we think disbursement strategies should be tailored to the specifics of each season. That said, we're fully aligned on the broader principle, programs should aim to spend as little as necessary and should be cut off early if results aren’t materializing and there’s no clear path to improvement.
It would also be valuable to see some CAC vs. LTV analysis included in the evaluation partner’s public dashboards
Good flag will be included in scope for public dashs.
higher incentives or after the program ends? Is there any non-compete agreement with distribution partners?
The goal is to only support activity where Arbitrum already has PMF or where that fit can realistically be catalyzed with BD work and amplified through incentives. In practice, if Arbitrum is organically the best place to execute an activity, it should be sticky. If other ecosystems incentivize that activity, it's fine, as when they turn off incentives it should flow back to where it's organically the best, i.e., Arbitrum. The focus is on driving sustainable usage where Arbitrum is the best place to execute, not just competing on temporary yield.
We’re not relying on non-compete agreements, but we will require a custom frontend that exclusively highlights Arbitrum-based programs.
It’s pretty similar for most campaigns and was mentioned as a problem within the LTIPP campaign. Why would it work differently in case of DRIP?
We will work closely with the evaluation partner to monitor concentration in real time, and adjust if rewards are flowing too heavily to a small number of actors. Additionally, we are already exploring setting program rules that directly discourage extractive behavior. The program is purposefully designed to give us more flexibility to intervene if capital concentration or farming in general is undermining a broader goal. It’s also extremely important to note that DRIP aims to be highly focused, while historical programs have been operating through non-targeted frameworks without operators focused on optimizing allocations in real time. Naturally, this has led to unsustainable activity as, on average, users are onboarded to protocols that don’t offer a differentiated product. As incentives are turned off, there is no incentive for capital to stay around.
Why was this specific committee selected? What motivations and criteria will guide wallet eligibility decisions?
The committee was selected based on context, bandwidth, expertise, alignment, and proven ability to execute across governance, strategy, business development, and implementation. Wallet eligibility will be guided by the specific goals of each season, with input from both the evaluation and distribution partners, and a focus on minimizing extraction while maximizing alignment with the targeted activity.
Clarity around how success is defined and how programs will adapt is essential.
Each season will have a clear upfront overarching goal and specific objectives defined before launch. The evaluation partner will create a clear reward methodology, monitor progress in real time and recommend adjustments as needed to improve outcomes or cut losses early based on observed effectiveness. The exact mechanics will differ to optimize for a specific goal. Goals and execution will be decided by the committee with input from the community and onboarded partners.
The 80M ARB cap was set based on estimated capital requirements to bootstrap new verticals/products and to give flexibility for up to four ambitious seasons, each with a maximum of 20M ARB. It's informed by prior program scales like STIP and LTIP (much smaller), while leaving room for iteration and early shutdown if a season underperforms.
I think the DRIP could definitely benefit from having 2 or 3 (if you want to retain the ⅔ of votes for season) extra committee members
we propose adding at least two independent DAO observers to the SSC
The initial structure prioritizes high-context coordination, but if DRIP proves effective, expanding the committee is something the DAO could consider later. For the current size adding additional complexity and overhead may hurt the effectiveness of the program. We want to avoid reverting back to old “DAO habits” of having bloated committees just for the sake of having committees.
could it be wise to set an initial budget allocation for season 1 out of the 80M ARB requested?
Yes, each season will have its own budget with a maximum of 20M.
Hopefully the question around opex was answered in our previous comment above that responded to donpepe and others.
who is responsible for managing the program itself and ensuring its success.
Who is the directly responsible individual for executing the program?
Entropy will serve as the primary operator of the program. We are humbled to take on this responsibility and happy to be clearly defined as the operator that can be held accountable for the program’s successes and failures. If the program doesn't manage to attract sticky capital but losses are cut quickly, that should still be considered a success versus past programs. While workload will be shared across committee members and vendors, it is our job to coordinate partner execution, publish updates, and be accountable for ensuring delivery against stated goals. Delegates can reach out directly to Entropy for clarification, feedback, or concerns. This role will ideally be moved to OpCo in line with the vision recently posted by the Arbitrum Foundation once the entity is operational.
If, for whatever reason, Entropy’s collaboration with the DAO is not renewed, what is the expectation in terms of Entropy’s involvement (and compensation) in this program?
Great flag. Our current agreement overlaps with the start of DRIP which will largely be frontloaded, but we appreciate the nudge to get into discussions with delegates about future work. We’re committed to continuity and won’t leave the program unsupported midstream no matter what. We have full confidence that even if we are not renewed by the DAO, the AF and OCL will have full ability to continue the program, either on their own or potentially through a bridge agreement between Entropy and the AF itself. Even with those predetermined options (which we will confirm with AF before we begin), ideally we can lock in our renewal/further engagement with the DAO earlier so this is not a concern for the DRIP or any other future programs that extend beyond immediate action.
who will work on the programs themselves? How is the process going to look like and what are the expected milestones?
The program design and implementation will be in the hands of the season selection committee, but they will, at their discretion, call on vendors, delegates, builders, and investors to help with programs. We are scoping the evaluation partner’s deliverables in a way where real-time progress can be followed by the community. The main goal of the DRIP is to meaningfully bootstrap verticals/products that have a large underlying market size but where Arbitrum’s market penetration is minimal.
It’s also not clear what is expected of the DAO and delegates regarding this program
We hope the DAO, including delegates, investors, and builders, will contribute to ideation around sectors and program design. While community input is welcome and valuable, it’s not a requirement for the program’s execution or success. Based on historical incentive programs across different ecosystems, it’s clear that minimizing delegate involvement in active operations leads to the highest efficiency. Having said that, Entropy will lead outreach to parties the committee believes can add the most value, and we encourage anyone interested to reach out proactively as well.
we’re not so sure if it needs to proceed directly to a Tally vote, at least not before clarifying the details
We are happy to continue integrating feedback and making edits to the proposal ahead of the onchain vote. We view the Snapshot as a signaling moment, but will ensure delegates are equipped to evaluate DRIP on execution, not just intent, before funds are allocated. That said, we would like to keep the program flexible to adapt with ongoing changes in the ecosystem, competitive environment, industry, and lessons learned while the program is live. Based on experience we have with respect to engaging with both providers and possible partner protocols, it’s not going to be possible to move this initiative forward unless capital has been committed.
We’d love to hear the Arbitrum Foundation and Offchain Labs support this proposal and speak to the strategies they aim to pursue
We’ll let them share their views directly if they choose, but this proposal will not be moving forward without their support. Fully agreed that the success of DRIP relies fully on deep understanding of defi mechanics, cross-protocol dynamics, and how to leverage partnerships and parameters to give Arbitrum a long-term edge.
Agreed. Each season will be built around a clear thesis for both bootstrapping and sustaining usage, including tapering incentives and sequencing seasons to build on prior momentum.
bureaucratic friction in additional programs placed under similar structures of direct Foundation management.
Entropy will serve as the accountable party for DRIP and will take responsibility for overall execution, even when issues stem from other committee members or service providers. We expect challenges to come up, but they’ll be communicated transparently and addressed head-on. Any known operational constraints will be disclosed ahead of fund transfers, and we’ll aim to minimize friction through upfront coordination and we will further check this before moving forward to Snapshot.
It would be good to have this explained more clearly, in particular how could this cost outflow of 80m ARB bring returns back into the treasury?
Please see our response to Daniel Ospina above which we hope addresses this.
What’s the risk of protocols self-juicing or making backdoor TVL deals to get more incentives
it may be helpful to distribute funds through Hedgey contracts again, as last time they proved to be useful for incentives management and oversight last time.
In DRIP, incentives are distributed directly to end users based on predefined onchain actions for a season. Protocols don’t receive any ARB. This structure removes the incentive to self-juice, and any suspicious patterns will be monitored by the evaluation partner in real time, so there is further disincentive to do so. That said hedgey contracts may still have a place in the program and we appreciate the suggestion.
So there needs to be some justification into what yield is needed to get mass movement of these groups
This is exactly where the evaluation partner provides the most value. While we expect them to contribute across season design and analytics, their core responsibility is modeling incentive thresholds and optimizing for efficient capital movement, a function the committee intentionally will delegate due to limited current in-house expertise. This “reward methodology” will indeed be important.
DRIP is designed to be flexible so we can adapt to evolving narratives and opportunities. Appreciate these suggestions, they’re exactly the kind of directional input that can shape future seasons if the timing and infrastructure make sense. RWAs (specifically gold) is something already at top of mind for example.
the DAO should focus more on issuing some of these assets itself
100% beyond agree that DAO-issued or DAO-partnered assets are a long-term strategic priority. While DRIP won’t cover this directly, we’re watching initiatives like Mantle and ecosystem stables (hyperliquid) closely and see strong potential for Arbitrum DAO to explore similar structures over time, especially in cases where asset issuance aligns with revenue or lock-in.
Additionally, while we understand the need to maintain some flexibility, the current proposal does not sufficiently define how seasons will be scoped, how goals will be selected, or how success will be measured.
Happy to provide more detail here. Season selection ultimately comes down to two key criteria:
Is Arbitrum already the best place to execute this activity, or can it become the best place with catalytic incentives?
Do the AAEs believe this activity is high-growth and strategically valuable long-term?
We can add language to the proposal to make these guiding principles more explicit.
As for measurement, it will be tailored to each season. You wouldn’t evaluate a trading competition the same way you’d evaluate a program for LST liquidity or RWA onboarding, KPIs and OKRs will be specific to the objective of each vertical.
Thanks for the clarification!
Commentary
We appreciate the effort to bring forward a refined incentive framework with DRIP, especially the pivot toward targeting specific assets and activities. This is a welcome change from our past programs and aligns more closely with sustainable ecosystem design. That said, we’d like to see stronger justification behind certain mechanisms. Recent proposals have done well to explain the rationale for their incentive designs—empirically or rationally. This proposal needs some of that grounding, and we’d prefer to see more rigorous data to support key assumptions. Nonetheless, we believe this is a step in the right direction and support it.
Criticisms & Questions
Commentary
We appreciate the effort to bring forward a refined incentive framework with DRIP, especially the pivot toward targeting specific assets and activities. This is a welcome change from our past programs and aligns more closely with sustainable ecosystem design. That said, we’d like to see stronger justification behind certain mechanisms. Recent proposals have done well to explain the rationale for their incentive designs—empirically or rationally. This proposal needs some of that grounding, and we’d prefer to see more rigorous data to support key assumptions. Nonetheless, we believe this is a step in the right direction and support it.
Criticisms & Questions
Self-Juicing and Backdoor Dealing
What's the risk of protocols self-juicing or making backdoor TVL deals to get more incentives here? This needs to measured/monitored somehow. Otherwise, we're at risk of another STIP like situation.
Distribution mechanism For the distribution partner, it may be helpful to distribute funds through Hedgey contracts again, as last time they proved to be useful for incentives management and oversight last time. This would also provide contributors a place to monitor the program individually in case they would like to make a tip to the DAO Watchdog program.
DeFi Impact: There should be greater scrutiny on impact on DeFi this proposal can have, in both directions. From Gauntlet's past uniswap research, LPs and borrowers are elastic to a degree, and thus shift their capital in response to changing APRs. So there needs to be some justification into what yield is needed to get mass movement of these groups. I.e., will this incentive generate enough demand to beat other benchmarks like the US3M or sUSDS rates (which have outperformed Aave rates in the past)? There should be consideration of the explicit goal per season weighted against opportunities elsewhere both onchain and offchain. Furthermore, how would borrower demand respond to the decrease in borrow APR if this is to affect lending protocols.
Asset Expansion: it's obvious to promote majors like ETH, USDC, and USDT. But what about long tail assets and less established stablecoins (i.e., sUSDe, SUSDS/USDS, etc). What about interoperable assets (OFTs, NTTs, etc, maybe this can be a direction for solver-loan program ran in tandem with a season at some point) or real-world assets (Paxos Gold, whatever else). Moreover, protocols should be given a reasonable heads up for asset promotion, as many (especially lending) will need to go through a governance process followed by risk management curation; this wouldn't apply to USDC/USDT/ETH but can apply to interop variants, RWAs, etc.
DAO-Issued Assets & Managed Products: Long term (and of course this is likely outside of the scope of this proposal) the DAO should focus more on issuing some of these assets itself. This is not to say the DAO should fork Ethena and have arbUSDe, but rather the DAO should consider partnering with an institution to issue major assets like BTC, etc. Example: Mantle is taking an onchain asset issuance approach with their Mantle Index Fund (BTC, mETH, SOL, USD) and the DAO gains a management fee from this structure (Source).
Hi Entropy, Arbitrum Foundation and OCL,
Procedural feedback
This proposal is the first since the Vision for the Future of Arbitrum post, it is initiated by 3 Arbitrum Aligned Entities (AAEs) and it's style and content suggests a way of moving de facto within this new paradigm.
Hi Entropy, Arbitrum Foundation and OCL,
Procedural feedback
This proposal is the first since the Vision for the Future of Arbitrum post, it is initiated by 3 Arbitrum Aligned Entities (AAEs) and it's style and content suggests a way of moving de facto within this new paradigm.
Given these facts its critical this proposal embodies and exemplifies the standards required for the ecosystem to build trust and establish norms for this new way of operating.
I agree with the points raised by @pedrob on auditability, @Chris_Areta on the need for mechanisms of community input - a superpower of a DAO is activating collective intelligence, great ideas can come from anywhere and the current structure would miss out by not tapping this valuable resource, agree with @krst and L2Beat on accountability, continuity, process and metrics.
Now is the time to put in place the organisational infrastructure required to make the AAE paradigm viable and trustable, this moment is a critical inflection point where its necessary to develop new norms, lets strive to listen to all stakeholders and bring intentional care in change-management for how working relationships will need to adapt and function between individuals and entities in different roles from AAEs, Service Providers, talented individual contributors, and Delegates in the DAO.
Imo the ground work and organisational infrastructure needs to be developed and in place and referenced within the proposal, before a proposal of this magnitude can be considered for voting. I am not against this kind of program, I see the potential, however we should really hold ourselves to a high standard when experimenting with something new of this nature and magnitude.
Proposal Intent and implementation feedback
Considering the MVP (Mission Vision and Purpose)
in combination with the vision for a Sovereign Digital Nation / Sovereign Wealth Fund
This vision of creating additional economic zones of opportunity is important precisely because Arbitrum is also neither just a blockchain or a stack. It is so much more. It is a collection of stakeholders who are bound together and empowered by their common interests as participants in the ArbitrumDAO. Collectively, our business opportunity is significantly more ambitious than just generating revenue on transaction and Arbitrum Expansion Program (“AEP”) fees. We should support builders and create business lines that compound demand for Arbitrum technology and capture value from the resources that we contribute and commit. Arbitrum is a collective of builders, users and investors that can form the largest digital sovereign nation
Right now I am not seeing how this incentive program's novel mechanism targeting verticals over protocols, and strategic timing intervention within the development of candidate organisations further solves for sustainability/stickiness of keeping activity with Arbitrum, nor how this approach achieves the MVP or moves us towards creating economic zones of opportunity.
It would be good to have this explained more clearly, in particular how could this cost outflow of 80m ARB bring returns back into the treasury? if that's not the paradigm, how are the AAEs thinking about returns? Some projections of how this growth-cycle loop is envisaged would be helpful for Delegates and contributors to get behind this model.
Now more than ever in Arbitrum the parts need to support the whole, with the DAO now having gone through the process to define an MVP, with OCL offering the Sovereign Wealth Fund paradigm, the AF suggesting a new org structure around AAEs, and the DAO still being in the middle of SOS setting, this proposal may be too early before the SOS process has completed to ensure maximum coherency and congruency. Lets get our ducks in a row and ensure with rigor all new proposals (parts) are shaped to add up with systemic integrity inside of the (whole) organisational structures and strategy we are defining.
Thank you to @Entropy for putting this proposal together. It represents a thoughtful and well-intentioned step forward for the DAO. Broadly, we support the direction outlined, with a few points of emphasis:
Thank you to @Entropy for putting this proposal together. It represents a thoughtful and well-intentioned step forward for the DAO. Broadly, we support the direction outlined, with a few points of emphasis:
Some areas that we believe would support even greater confidence in the proposal are:
Previous programs have shown that short-term incentives often struggle to create lasting usage. The evaluation partner and Season Selection Committee must understand DeFi flywheel effects to design programs that thoughtfully taper incentives as organic usage develops. We'd love to hear the Arbitrum Foundation and Offchain Labs support this proposal and speak to the strategies they aim to pursue.
Who is the directly responsible individual for executing the program? A program of this size managing multiple service providers likely needs a head to ensure alignment across all parties and committee members.
While a hard stop after three months is likely the cleanest political path, the DAO should consider a situation where it forfeits hard-won adoption without strategies for gradually "weaning" off incentives. The Season Selection Committee must have robust theses for each vertical/product a season pursues.
Recent events, such as the Foundation’s unilateral and discretionary pause of STEP 2/TMC allocations, have highlighted uncertainties around DAO objectives being efficiently executed once ARB is transferred. It's unclear what policies led to this decision. This is not an attempt to place blame but rather an admission that there may be unforeseen bureaucratic friction in additional programs placed under similar structures of direct Foundation management.
If there are foreseen policies restrictive to this program, we'd ask that they be communicated pre-emptively. Depending on the nature of the program, the DAO could explore alternative structures, such as establishing non-custodial stewardship with a service provider (regardless of who's selected), similar to a recently executed liquidity program with Uniswap DAO, where transferred funds were placed directly in a governance owned Aera/Merkl integrated vault.
Ultimately, the DAO is in a frustrating position awaiting the launch of OpCo and the recently proposed Arbitrum Foundation vision. @krst points out many of the same questions we have, although these are not necessarily reasons to avoid the proposal.
The following reflects the views of L2BEAT’s governance team, composed of @krst, @Sinkas, and @Manugotsuka, and it’s based on their combined research, fact-checking, and ideation.
We are generally not convinced about the concept of incentives and their efficacy in attracting and retaining capital and users in the long term. That said, we are not experts in that domain, and as such, we are inclined to rely on those who have a stronger background in incentives. Beyond feedback on the high-level concept of incentives, we can offer our perspective on aspects that can be improved or better clarified in this particular proposal.
The following reflects the views of L2BEAT’s governance team, composed of @krst, @Sinkas, and @Manugotsuka, and it’s based on their combined research, fact-checking, and ideation.
We are generally not convinced about the concept of incentives and their efficacy in attracting and retaining capital and users in the long term. That said, we are not experts in that domain, and as such, we are inclined to rely on those who have a stronger background in incentives. Beyond feedback on the high-level concept of incentives, we can offer our perspective on aspects that can be improved or better clarified in this particular proposal.
A crucial aspect that we should all be clear about is who is responsible for managing the program itself and ensuring its success. While Entropy, Arbitrum Foundation, and Offchain Labs will form the selection committee, the proposal does not clarify who is going to manage and coordinate work of all the parties involved in the program’s execution.
We would like to know who will monitor the success of the program, make adjustments as needed, and also be responsible for pausing or canceling the program if it is not delivering the expected results. We believe that this responsibility should not be diffused within a tripartite committee, but that there should be a clear point of contact with whom delegates can communicate to get more information, file complaints, or request changes.
It might be a good idea to have the OpCo be in charge of the program, with Entropy, AF, and OCL serving as the selection committee. With this setup, OpCo will be explicitly responsible for ensuring the program’s success, ensuring proper coordination between the committee and partners. However, it creates a dependency on OpCo, which isn’t operational yet, and it’s unclear whether it will be ready to take on this responsibility when it is finally operational.
While we are supportive of Entropy being both in the committee and serving (at least partially) as the Evaluation Partner, there is a question of continuity. Here’s what we mean by that:
We appreciate the thinking behind DRIP and share the goal of making Arbitrum’s incentive programs more targeted and measurable. However, we see little in the way of processes and quantifiable outcomes or KPIs that we can use to better understand exactly what we’re voting for. Currently, the proposal appears to be simply approving 80M ARB for incentives and trusting that it will be put to good use. It is not clear to us who is going to be responsible for designing the seasons and their goals - are these supposed to be coming from the partners, the committee, or from the public RFP? Who is responsible for sourcing proposals for seasons and working on them to ensure they are designed with Arbitrum’s interests in mind? We understand that the SSC will be responsible for selecting programs and allocating capital to them, but who will work on the programs themselves? How is the process going to look like and what are the expected milestones? Without that information, the DAO cannot track the program’s progress and help it achieve success.
It’s also not clear what is expected of the DAO and delegates regarding this program - how is the DAO going to be informed about the program’s progress, and should delegates be providing feedback? To whom, at what stage? In the comments, it was mentioned that the funds will be held in a structure that will allow for potential clawback, but when and how should the delegates even be considering that? And when should they not be using this nuclear option, what other options should be used for providing feedback? We believe having those details clarified in the beginning will help set proper expectations and avoid confusion and conflicts later on.
While holding a temp-check to gauge the DAO's sentiment towards approving an incentive program in general, and the DRIP in particular, is a good move, we’re not so sure if it needs to proceed directly to a Tally vote, at least not before clarifying the details. All the parties involved in the design of the details of the program are not requesting for any budget to cover the expenses, so they can start the work as soon as they receive the confirmation from the DAO that the DAO is supportive of the overall direction and the size of the program.
As L2BEAT, while we’re not against the proposed program, we cannot, at this time, justify voting in its favor without first getting clarifications on the points above.
Thank you to the team for this proposal and all the work that went into it. I’ve gone through the proposal and a part of the discussion and wanted to offer some respectful thoughts for consideration before the vote.
Committee composition & process Why was this specific committee selected? What motivations and criteria will guide wallet eligibility decisions? Since I don't want to just criticize but offer an alternative, I propose the following in order to improve transparency and broader representation. I’d suggest including delegates collectively as a member of the committee. Their vote could count as two votes, with a 4/5 majority required for approvals. Delegate votes could be gathered via a 3-day Snapshot vote, with the majority position — regardless of turnout — being cast as their collective vote.
Thank you to the team for this proposal and all the work that went into it. I’ve gone through the proposal and a part of the discussion and wanted to offer some respectful thoughts for consideration before the vote.
Committee composition & process Why was this specific committee selected? What motivations and criteria will guide wallet eligibility decisions? Since I don't want to just criticize but offer an alternative, I propose the following in order to improve transparency and broader representation. I’d suggest including delegates collectively as a member of the committee. Their vote could count as two votes, with a 4/5 majority required for approvals. Delegate votes could be gathered via a 3-day Snapshot vote, with the majority position — regardless of turnout — being cast as their collective vote.
As an additional or alternative mechanism, introducing soft DAO signaling via Snapshot before a new season begins could help surface community alignment and increase confidence in the committee’s decision-making, even if such votes are non-binding.
While I understand and appreciate the importance of governance minimization, I believe it should not come at the expense of effectiveness — let alone the long-term sustainability of the DAO
On goals vs. execution The goals outlined (e.g. becoming the top venue for lending a stablecoin) are ambitious and valuable. That said, I believe we need greater focus on how these goals will be executed. The strategy, mechanics, and iterative structure behind achieving these outcomes will be critical, especially in such a high-budget program. Clarity around how success is defined and how programs will adapt is essential.
Budget clarity I’m still trying to fully understand the rationale behind the 80M ARB budget. I’d appreciate more detail on how this number was determined, what portion is expected to go to operations vs. incentives, and how the capital efficiency of the program will be measured.
I’ll continue reviewing the proposal more deeply before the vote, with the goal of offering feedback that’s as thoughtful and useful as possible. Thank you again to everyone pushing forward this important discussion for Arbitrum’s future.
Thanks for the response, @Entropy.
We welcome the ambition behind DRIP and recognize its potential to streamline incentives through a more agile, season-based approach. This proposal is a strong starting point, but to fully realize its promise, we believe it must evolve structurally to better reflect the DAO’s values of transparency, reusability, and collective intelligence.
Thanks for the response, @Entropy.
We welcome the ambition behind DRIP and recognize its potential to streamline incentives through a more agile, season-based approach. This proposal is a strong starting point, but to fully realize its promise, we believe it must evolve structurally to better reflect the DAO’s values of transparency, reusability, and collective intelligence.
Currently, the Season Selection Committee (SSC) — composed of Entropy, Offchain Labs, and the Arbitrum Foundation — holds significant authority over the design and execution of each season. In this, we agree with @Chris_Areta:
While we are fully aware that the SSC comprises solely AAEs and assume they will act in the DAO’s best interests, we want to emphasize the need for transparency and community input.
However, as currently structured, the model lacks formal DAO oversight.
While we understand the appeal of operational efficiency, speed cannot come at the cost of legitimacy. To strengthen DRIP’s alignment with the DAO, we propose adding at least two independent DAO observers to the SSC. These observers would not hold decision-making power but would ensure greater transparency, provide early-stage feedback, and facilitate broader trust in the process. This would build on what has already been proposed:
The DRIP is open to the community for help with ideation, contributions, and SPs; it’s just the final decisions that lie solely with the AAEs. Without the DRIP’s structure, we’d decrease the potential for ideation and takeaways from the community. Entropy will serve as a point of contact to ensure that this input is taken into consideration.
Additionally, while we understand the need to maintain some flexibility, the current proposal does not sufficiently define how seasons will be scoped, how goals will be selected, or how success will be measured. For a program requesting funds from the DAO, we believe it is critical to provide at least a high-level framework outlining:
Providing even a preliminary framework would enable the community to better evaluate and support DRIP’s direction, while still allowing the SSC operational flexibility to adapt. There is also currently an ARDC Recommendation for Incentives in the works, and it should be referenced if approved as a boilerplate design specification for bootstrapped, targeted programs.
Overall, DRIP is directionally strong, and with these structural adjustments, it can potentially become a repeatable, DAO-aligned model for catalyzing growth across Arbitrum.
Ok, as someone that first got into Arbitrum because of DeFi, I’m down to back proposals that are specifically designed to strengthen that position. With that in mind, I’m happy to add some feedback that seems to be shared by some other folks on the forum:
Season Selection Committee
Ok, as someone that first got into Arbitrum because of DeFi, I’m down to back proposals that are specifically designed to strengthen that position. With that in mind, I’m happy to add some feedback that seems to be shared by some other folks on the forum:
Season Selection Committee
As pointed out by @SEEDGov, and especially because this a program intended for at least a year, I think the DRIP could definitely benefit from having 2 or 3 (if you want to retain the ⅔ of votes for season) extra committee members as it could ensure a wider scope when it comes participation from smaller projects and transparency and audit concerns voiced by others.
Financials
I won’t go too deep into the numbers presented here, but since this is an experimental program, could it be wise to set an initial budget allocation for season 1 out of the 80M ARB requested? As correctly pointed out by @Entropy in the proposal, marketing has usually been the weakest link in past programs, and having some type of increasing curve that allows more partners to be added onto seasons 2, 3 and 4 can boost the financial incentives for anyone missing out on season 1.
I agree with @kamilgorski in making sure these seasons bring a competitive edge to them that can help Arbitrum stand out from competitors and also stick to the program for its full length.
On a similar note, @0xDonPepe’s suggestion of setting a hard cap on certain operating costs can help plan out the money side of things and provide a clearer picture of the DRIP as whole, regardless of the 80M ARB requested being a max limit and not carte blanche.
That said, I believe this proposal is headed in the right direction, and provided all transparency and public dashboard data info is handled properly, I look forward to taking part in the DRIP!
Thank you, your responde addresses multiple of my objections. Especially the understanding that this is not about incentives as protocol growth for ROI but incentives as a strategic tool. The original post didn't make this super clear, so I'd suggest redrafting it before a vote.
Now, for incentives as strategic tool, I'd be great to understand who's defining said strategy beyond this program, because it will likely need a concerted effort across units. The SOS proposal currently is halfway through and it's unclear to me how it will relate to this and whether the output can indeed provide strategic guidance here. Failing that, will it be the AES developing said macro strategy that then this program can help execute on?
Thank you, your responde addresses multiple of my objections. Especially the understanding that this is not about incentives as protocol growth for ROI but incentives as a strategic tool. The original post didn't make this super clear, so I'd suggest redrafting it before a vote.
Now, for incentives as strategic tool, I'd be great to understand who's defining said strategy beyond this program, because it will likely need a concerted effort across units. The SOS proposal currently is halfway through and it's unclear to me how it will relate to this and whether the output can indeed provide strategic guidance here. Failing that, will it be the AES developing said macro strategy that then this program can help execute on?
Now, seeing it as a strategic tool, there's a risk of deepening an organisation design mistake of organising by functions instead of by market verticals. This is avoided if the scope of this is really DeFI (or DeFi+say Arb token price), which is mentioned but could be a bit more clear by saying what will be excluded (e.g. gaming, or incentives for defi protocols growth, or whatever).
I'm still unsure about the 80mn ARB number. The justification seems to be that before we wasted a lot of money, and not one about "this is the minimum needed to validate this before we scale". Even if here we're talking about validating multiple things (capability for various strategic initiatives) it's still a new mechanism with operational/system design risks.
If this is about DeFI liquidty and we just want to have a large budget to do targeted initiatives, that makes sense to me. But then that's the bit that could be more explicitly on a redfrat.
The name really needs changing. Why more acronyms? also DRIPs is already a tool for funding OS software dependencies, built by Radix
I appreciate the shift toward targeted incentives rather than generalized programs, addressing key lessons from previous initiatives. The season-based format is also great as it allows for continuous evaluation and iteration.
Perhaps splitting each season into "sub" seasons with a gradual release approach (like 2M for the first month, 6M for the second, and 12M for the third) tied to performance could be more effective. It would allow you to test with smaller amounts first, measure the results, and then make data-driven decisions about whether to scale up spending, tweak the approach, or pivot to a different goal. This would be especially useful because insights from incentivizing one activity (like wstETH lending) may not map cleanly to another (like RWA liquidity).
Yes, there will absolutely be opportunities for community input throughout the DRIP process. We’ll be actively calling on the community to help ideate (and already have been) on the most impactful season goals and service providers. That said, input will be weighted based on relevant expertise. For example, builders with product-market fit in a targeted vertical or contributors with procurement experience will naturally carry more influence when evaluating potential program design or partners.
The core idea behind DRIP is to use incentives not to subsidize usage by simply increasing returns higher than the prevalent cost of capital, but to tip the scale in favor of Arbitrum where organic product-market fit is emerging and can be catalyzed via incentives.
Really appreciate the thought and effort behind this proposal — overall, I support the initiative and think it’s a valuable direction for encouraging more activity and growth across the Arbitrum DeFi ecosystem.
That said, I wanted to highlight a couple of points for further consideration:
Really appreciate the thought and effort behind this proposal — overall, I support the initiative and think it’s a valuable direction for encouraging more activity and growth across the Arbitrum DeFi ecosystem.
That said, I wanted to highlight a couple of points for further consideration:
The following reflects the views of GMX’s Governance Committee, and is based on the combined research, evaluation, consensus, and ideation of various committee members.
Thanks Entropy for the proposal. While we see the learnings of the previous incentive programs been implemented and incentives having more targeted approach. Also, most of the points are already covered here in the comment section.
The following reflects the views of GMX’s Governance Committee, and is based on the combined research, evaluation, consensus, and ideation of various committee members.
Thanks Entropy for the proposal. While we see the learnings of the previous incentive programs been implemented and incentives having more targeted approach. Also, most of the points are already covered here in the comment section.
Thanks for putting this up, Entropy.
This is a strong proposal with clear upside. It’s great to see Arbitrum moving toward a more structured incentives framework — especially with projects like Morpho also thinking along the lines of adopting similarly strategic approaches in their own grants programs.
That said, we want to highlight a few concerns:
Thanks for putting this up, Entropy.
This is a strong proposal with clear upside. It’s great to see Arbitrum moving toward a more structured incentives framework — especially with projects like Morpho also thinking along the lines of adopting similarly strategic approaches in their own grants programs.
That said, we want to highlight a few concerns:
Several delegates have already raised concerns about the level of authority granted to the SSC.
Then, regarding the funding situation, after discussing this with Entropy and the Foundation, we agreed that the best way forward would be to sunset the MSS and turn over payroll operations to the foundation, where the AF would run this DAO function at their discretion.
The proposal itself acknowledges that the three-month timeline is somewhat arbitrary. While the committee has the right to adjust this, the fixed initial duration could lead to seasons ending prematurely or extending unnecessarily based on factors not immediately apparent. This could impact user participation and the overall effectiveness of the incentives if the timeframe doesn't align with the targeted activity's natural lifecycle or market conditions.
While the proposal states that "overlapping seasons running in tandem that may make evaluation more difficult should be avoided", the possibility of this occurring, or the challenges in ensuring clear separation and evaluation, remains a potential concern. If seasons unintentionally influence each other, it could obscure the true impact of each individual incentive program.
All remaining ARB not used as part of the program will be held for further seasons or returned to the DAO if further seasons are not approved by the end of the 1-year mandate.
Also, if the SSC decides to go above a three-month per season timeline, since this current timeline is arbitrary, the program could go beyond a 1-year mandate. How would that be handled? Would more funds be requested to complete the four seasons? Or would the program be cut abruptly at the end of the 12 months?
Finally, just highlighting this comment from pedro;
What mechanisms are in place to ensure user retention, long-term commitment from potential partners, or other indicators of sustainability?
It would be beneficial to understand how the SSC plans to extend the impact of the program beyond each season — especially in terms of partner retention and user behavior post-incentive.
Overall, we support the direction of the proposal, but believe these are critical details worth addressing to ensure the program is robust, measured, and future-proofed.
Thanks for putting up this new initiative to support the DeFi ecosystem.
We appreciate the systematic approach to isolate single DeFi actions in order to better analyze the impact of incentives. Additionally, being protocol agnostic makes a credibly neutral chain, which we think is also positive. Nonetheless, we echo some concerns other delegates have raised regarding the assumption that single-action incentives will have a different outcome than previous incentives and how the program will report to the DAO, given the delegated execution into the Season Selection Committee.
Thanks for putting up this new initiative to support the DeFi ecosystem.
We appreciate the systematic approach to isolate single DeFi actions in order to better analyze the impact of incentives. Additionally, being protocol agnostic makes a credibly neutral chain, which we think is also positive. Nonetheless, we echo some concerns other delegates have raised regarding the assumption that single-action incentives will have a different outcome than previous incentives and how the program will report to the DAO, given the delegated execution into the Season Selection Committee.
TVL is an attractive vanity metric to optimize, the utilization of that capital is what ultimately determines the efficacy and success of lending protocols.
We agree TVL is often misused as a vanity metric for protocol performance. In addition, Arbitrum benefits from network activity and not value accrual. For this reason, we think other metrics can better serve as protocol cutoff to be eligible for incentives, specially those that directly benefit Arbitrum, e.g., daily/weekly active users, transactions or fees paid to the network.
We strongly support dedicating more resources toward restoring Arbitrum’s leading position in the DeFi ecosystem.
We really like the direction DRIP is heading. It clearly takes lessons from STIP and LTIP by focusing on specific goals, aiming for more sustainable growth, and improving how incentives are managed. From our perspective, this has the potential to be a more effective and scalable way to grow the Arbitrum ecosystem. That said, there are still a few areas we would love to see strengthened. One big question is around DAO involvement, since the current setup gives the committee full control over planning and execution. More clarity on how seasonal goals are chosen, how partners are selected, and how success is measured would go a long way. The 80 million ARB budget is quite large, so it would help to break down how much goes toward direct incentives versus operational costs like marketing and distribution partners.
We would also like to see a clear rubric or selection criteria for eligible projects, similar to what Optimism uses, to help guide applicants and make decisions more transparent.
It would be best to swap out either Offchain Labs or the Foundation on the committee. One is beholden to the other via a service provider relationship, and given the 2/3 threshold to vote, this could in practice just be instructing the Foundation to run this program.
This is inconsistent with Entropy being the party held accountable, since they could, in theory, object to every policy made and allocation planned.
If the threshold is to be 2/3, it's important from a governance perspective that none of the parties be directly related entities. Governance would not generally favor a committee where one party is a service provider for the other, and this should be no exception. Given that Foundation is also custodying the funds and would be required to act on a clawback, it is probably Foundation rather than Offchain Labs that should be replaced with another member.
Alternatively, the committee could be expanded to be 3/5, but the easier solution is just to have three independent committee members.
This is especially important since the primary check on the DRIP committee is resorting to a full clawback. Governance has obvious no ability to alter the makeup of the committee as written, leaving funds revocation as the only action available (assuming the wallet empowers the governance contract itself to claw back funds rather than a "soft" assurance without technical or legal enforcement mechanisms.)
We would like to highlight changes made to the proposal today:
Additional context around community input has been added
Entropy encourages the whole community to participate in proposing new activities and assets for incentives and is happy to be the primary point of contact for community ideation. There will absolutely be opportunities for community input throughout the DRIP process. Entropy will be actively calling on the community to help ideate (and already have been) on the most impactful season goals and service providers with a particular interest in opinions from those with DeFi and procurement experience.
We added clear language that funds will be sent to an AF wallet with DAO-Clawback capabilities. We also added verbiage to make clear Entropy is the accountable party for this program.
All funds will be sent to an Arbitrum Foundation controlled wallet with DAO-clawback capabilities.
More flexibility has been added to the timeline.
DRIP End Date (funds returned if not used or another proposal is not passed): July 1, 2026. An ongoing season may go past this date, but new seasons will not begin after this date
This proposal will be delayed to Snapshot by 1 week. Changes to the proposal will include: The addition that funds will be sent to a foundation wallet with DAO-Clawback capabilities, further clarification about our desire to have community input around all aspects of seasons and vendors, and adding Entropy as a clear responsible party to be held to the successes and failures of the program. Additionally, we will be scheduling a call to discuss DRIP this week. Finally, a small addition adding more flexibility around the DRIP’s starting date for execution has been added.
Appreciate the suggestion naming is definitely important. The “DeFi Renaissance” framing is meant to reflect both new and existing use cases in Arbitrum’s most important vertical, and we’ve gotten some positive feedback around the DRIP acronym as a balance of familiarity and freshness. That said, we’re always open to refining how the program is presented if it helps broaden its reach and appeal.
can at least some wording to this effect be included in the proposal?
Totally fair, we’ll update the following language to make the commitment to community input more explicit:
Entropy encourages the whole community to participate in proposing new activities and assets for incentives and is happy to be the primary point of contact for community ideation. That said, the committee will have full discretion over all aspects of season planning and execution with help from the onboarded distribution & evaluation vendors.
It would allow you to test with smaller amounts first, measure the results, and then make data-driven decisions
We 100% agree on the value of data-driven iteration. Our goal is to work closely with the evaluation partner on exactly these kinds of decisions. While in some cases front-loading rewards can be effective, we think disbursement strategies should be tailored to the specifics of each season. That said, we're fully aligned on the broader principle, programs should aim to spend as little as necessary and should be cut off early if results aren’t materializing and there’s no clear path to improvement.
It would also be valuable to see some CAC vs. LTV analysis included in the evaluation partner’s public dashboards
Good flag will be included in scope for public dashs.
higher incentives or after the program ends? Is there any non-compete agreement with distribution partners?
The goal is to only support activity where Arbitrum already has PMF or where that fit can realistically be catalyzed with BD work and amplified through incentives. In practice, if Arbitrum is organically the best place to execute an activity, it should be sticky. If other ecosystems incentivize that activity, it's fine, as when they turn off incentives it should flow back to where it's organically the best, i.e., Arbitrum. The focus is on driving sustainable usage where Arbitrum is the best place to execute, not just competing on temporary yield.
We’re not relying on non-compete agreements, but we will require a custom frontend that exclusively highlights Arbitrum-based programs.
It’s pretty similar for most campaigns and was mentioned as a problem within the LTIPP campaign. Why would it work differently in case of DRIP?
We will work closely with the evaluation partner to monitor concentration in real time, and adjust if rewards are flowing too heavily to a small number of actors. Additionally, we are already exploring setting program rules that directly discourage extractive behavior. The program is purposefully designed to give us more flexibility to intervene if capital concentration or farming in general is undermining a broader goal. It’s also extremely important to note that DRIP aims to be highly focused, while historical programs have been operating through non-targeted frameworks without operators focused on optimizing allocations in real time. Naturally, this has led to unsustainable activity as, on average, users are onboarded to protocols that don’t offer a differentiated product. As incentives are turned off, there is no incentive for capital to stay around.
Why was this specific committee selected? What motivations and criteria will guide wallet eligibility decisions?
The committee was selected based on context, bandwidth, expertise, alignment, and proven ability to execute across governance, strategy, business development, and implementation. Wallet eligibility will be guided by the specific goals of each season, with input from both the evaluation and distribution partners, and a focus on minimizing extraction while maximizing alignment with the targeted activity.
Clarity around how success is defined and how programs will adapt is essential.
Each season will have a clear upfront overarching goal and specific objectives defined before launch. The evaluation partner will create a clear reward methodology, monitor progress in real time and recommend adjustments as needed to improve outcomes or cut losses early based on observed effectiveness. The exact mechanics will differ to optimize for a specific goal. Goals and execution will be decided by the committee with input from the community and onboarded partners.
The 80M ARB cap was set based on estimated capital requirements to bootstrap new verticals/products and to give flexibility for up to four ambitious seasons, each with a maximum of 20M ARB. It's informed by prior program scales like STIP and LTIP (much smaller), while leaving room for iteration and early shutdown if a season underperforms.
I think the DRIP could definitely benefit from having 2 or 3 (if you want to retain the ⅔ of votes for season) extra committee members
we propose adding at least two independent DAO observers to the SSC
The initial structure prioritizes high-context coordination, but if DRIP proves effective, expanding the committee is something the DAO could consider later. For the current size adding additional complexity and overhead may hurt the effectiveness of the program. We want to avoid reverting back to old “DAO habits” of having bloated committees just for the sake of having committees.
could it be wise to set an initial budget allocation for season 1 out of the 80M ARB requested?
Yes, each season will have its own budget with a maximum of 20M.
Hopefully the question around opex was answered in our previous comment above that responded to donpepe and others.
who is responsible for managing the program itself and ensuring its success.
Who is the directly responsible individual for executing the program?
Entropy will serve as the primary operator of the program. We are humbled to take on this responsibility and happy to be clearly defined as the operator that can be held accountable for the program’s successes and failures. If the program doesn't manage to attract sticky capital but losses are cut quickly, that should still be considered a success versus past programs. While workload will be shared across committee members and vendors, it is our job to coordinate partner execution, publish updates, and be accountable for ensuring delivery against stated goals. Delegates can reach out directly to Entropy for clarification, feedback, or concerns. This role will ideally be moved to OpCo in line with the vision recently posted by the Arbitrum Foundation once the entity is operational.
If, for whatever reason, Entropy’s collaboration with the DAO is not renewed, what is the expectation in terms of Entropy’s involvement (and compensation) in this program?
Great flag. Our current agreement overlaps with the start of DRIP which will largely be frontloaded, but we appreciate the nudge to get into discussions with delegates about future work. We’re committed to continuity and won’t leave the program unsupported midstream no matter what. We have full confidence that even if we are not renewed by the DAO, the AF and OCL will have full ability to continue the program, either on their own or potentially through a bridge agreement between Entropy and the AF itself. Even with those predetermined options (which we will confirm with AF before we begin), ideally we can lock in our renewal/further engagement with the DAO earlier so this is not a concern for the DRIP or any other future programs that extend beyond immediate action.
who will work on the programs themselves? How is the process going to look like and what are the expected milestones?
The program design and implementation will be in the hands of the season selection committee, but they will, at their discretion, call on vendors, delegates, builders, and investors to help with programs. We are scoping the evaluation partner’s deliverables in a way where real-time progress can be followed by the community. The main goal of the DRIP is to meaningfully bootstrap verticals/products that have a large underlying market size but where Arbitrum’s market penetration is minimal.
It’s also not clear what is expected of the DAO and delegates regarding this program
We hope the DAO, including delegates, investors, and builders, will contribute to ideation around sectors and program design. While community input is welcome and valuable, it’s not a requirement for the program’s execution or success. Based on historical incentive programs across different ecosystems, it’s clear that minimizing delegate involvement in active operations leads to the highest efficiency. Having said that, Entropy will lead outreach to parties the committee believes can add the most value, and we encourage anyone interested to reach out proactively as well.
we’re not so sure if it needs to proceed directly to a Tally vote, at least not before clarifying the details
We are happy to continue integrating feedback and making edits to the proposal ahead of the onchain vote. We view the Snapshot as a signaling moment, but will ensure delegates are equipped to evaluate DRIP on execution, not just intent, before funds are allocated. That said, we would like to keep the program flexible to adapt with ongoing changes in the ecosystem, competitive environment, industry, and lessons learned while the program is live. Based on experience we have with respect to engaging with both providers and possible partner protocols, it’s not going to be possible to move this initiative forward unless capital has been committed.
We’d love to hear the Arbitrum Foundation and Offchain Labs support this proposal and speak to the strategies they aim to pursue
We’ll let them share their views directly if they choose, but this proposal will not be moving forward without their support. Fully agreed that the success of DRIP relies fully on deep understanding of defi mechanics, cross-protocol dynamics, and how to leverage partnerships and parameters to give Arbitrum a long-term edge.
Agreed. Each season will be built around a clear thesis for both bootstrapping and sustaining usage, including tapering incentives and sequencing seasons to build on prior momentum.
bureaucratic friction in additional programs placed under similar structures of direct Foundation management.
Entropy will serve as the accountable party for DRIP and will take responsibility for overall execution, even when issues stem from other committee members or service providers. We expect challenges to come up, but they’ll be communicated transparently and addressed head-on. Any known operational constraints will be disclosed ahead of fund transfers, and we’ll aim to minimize friction through upfront coordination and we will further check this before moving forward to Snapshot.
It would be good to have this explained more clearly, in particular how could this cost outflow of 80m ARB bring returns back into the treasury?
Please see our response to Daniel Ospina above which we hope addresses this.
What’s the risk of protocols self-juicing or making backdoor TVL deals to get more incentives
it may be helpful to distribute funds through Hedgey contracts again, as last time they proved to be useful for incentives management and oversight last time.
In DRIP, incentives are distributed directly to end users based on predefined onchain actions for a season. Protocols don’t receive any ARB. This structure removes the incentive to self-juice, and any suspicious patterns will be monitored by the evaluation partner in real time, so there is further disincentive to do so. That said hedgey contracts may still have a place in the program and we appreciate the suggestion.
So there needs to be some justification into what yield is needed to get mass movement of these groups
This is exactly where the evaluation partner provides the most value. While we expect them to contribute across season design and analytics, their core responsibility is modeling incentive thresholds and optimizing for efficient capital movement, a function the committee intentionally will delegate due to limited current in-house expertise. This “reward methodology” will indeed be important.
DRIP is designed to be flexible so we can adapt to evolving narratives and opportunities. Appreciate these suggestions, they’re exactly the kind of directional input that can shape future seasons if the timing and infrastructure make sense. RWAs (specifically gold) is something already at top of mind for example.
the DAO should focus more on issuing some of these assets itself
100% beyond agree that DAO-issued or DAO-partnered assets are a long-term strategic priority. While DRIP won’t cover this directly, we’re watching initiatives like Mantle and ecosystem stables (hyperliquid) closely and see strong potential for Arbitrum DAO to explore similar structures over time, especially in cases where asset issuance aligns with revenue or lock-in.
Additionally, while we understand the need to maintain some flexibility, the current proposal does not sufficiently define how seasons will be scoped, how goals will be selected, or how success will be measured.
Happy to provide more detail here. Season selection ultimately comes down to two key criteria:
Is Arbitrum already the best place to execute this activity, or can it become the best place with catalytic incentives?
Do the AAEs believe this activity is high-growth and strategically valuable long-term?
We can add language to the proposal to make these guiding principles more explicit.
As for measurement, it will be tailored to each season. You wouldn’t evaluate a trading competition the same way you’d evaluate a program for LST liquidity or RWA onboarding, KPIs and OKRs will be specific to the objective of each vertical.
Thanks for the clarification!
Commentary
We appreciate the effort to bring forward a refined incentive framework with DRIP, especially the pivot toward targeting specific assets and activities. This is a welcome change from our past programs and aligns more closely with sustainable ecosystem design. That said, we’d like to see stronger justification behind certain mechanisms. Recent proposals have done well to explain the rationale for their incentive designs—empirically or rationally. This proposal needs some of that grounding, and we’d prefer to see more rigorous data to support key assumptions. Nonetheless, we believe this is a step in the right direction and support it.
Criticisms & Questions
Commentary
We appreciate the effort to bring forward a refined incentive framework with DRIP, especially the pivot toward targeting specific assets and activities. This is a welcome change from our past programs and aligns more closely with sustainable ecosystem design. That said, we’d like to see stronger justification behind certain mechanisms. Recent proposals have done well to explain the rationale for their incentive designs—empirically or rationally. This proposal needs some of that grounding, and we’d prefer to see more rigorous data to support key assumptions. Nonetheless, we believe this is a step in the right direction and support it.
Criticisms & Questions
Self-Juicing and Backdoor Dealing
What's the risk of protocols self-juicing or making backdoor TVL deals to get more incentives here? This needs to measured/monitored somehow. Otherwise, we're at risk of another STIP like situation.
Distribution mechanism For the distribution partner, it may be helpful to distribute funds through Hedgey contracts again, as last time they proved to be useful for incentives management and oversight last time. This would also provide contributors a place to monitor the program individually in case they would like to make a tip to the DAO Watchdog program.
DeFi Impact: There should be greater scrutiny on impact on DeFi this proposal can have, in both directions. From Gauntlet's past uniswap research, LPs and borrowers are elastic to a degree, and thus shift their capital in response to changing APRs. So there needs to be some justification into what yield is needed to get mass movement of these groups. I.e., will this incentive generate enough demand to beat other benchmarks like the US3M or sUSDS rates (which have outperformed Aave rates in the past)? There should be consideration of the explicit goal per season weighted against opportunities elsewhere both onchain and offchain. Furthermore, how would borrower demand respond to the decrease in borrow APR if this is to affect lending protocols.
Asset Expansion: it's obvious to promote majors like ETH, USDC, and USDT. But what about long tail assets and less established stablecoins (i.e., sUSDe, SUSDS/USDS, etc). What about interoperable assets (OFTs, NTTs, etc, maybe this can be a direction for solver-loan program ran in tandem with a season at some point) or real-world assets (Paxos Gold, whatever else). Moreover, protocols should be given a reasonable heads up for asset promotion, as many (especially lending) will need to go through a governance process followed by risk management curation; this wouldn't apply to USDC/USDT/ETH but can apply to interop variants, RWAs, etc.
DAO-Issued Assets & Managed Products: Long term (and of course this is likely outside of the scope of this proposal) the DAO should focus more on issuing some of these assets itself. This is not to say the DAO should fork Ethena and have arbUSDe, but rather the DAO should consider partnering with an institution to issue major assets like BTC, etc. Example: Mantle is taking an onchain asset issuance approach with their Mantle Index Fund (BTC, mETH, SOL, USD) and the DAO gains a management fee from this structure (Source).
Hi Entropy, Arbitrum Foundation and OCL,
Procedural feedback
This proposal is the first since the Vision for the Future of Arbitrum post, it is initiated by 3 Arbitrum Aligned Entities (AAEs) and it's style and content suggests a way of moving de facto within this new paradigm.
Hi Entropy, Arbitrum Foundation and OCL,
Procedural feedback
This proposal is the first since the Vision for the Future of Arbitrum post, it is initiated by 3 Arbitrum Aligned Entities (AAEs) and it's style and content suggests a way of moving de facto within this new paradigm.
Given these facts its critical this proposal embodies and exemplifies the standards required for the ecosystem to build trust and establish norms for this new way of operating.
I agree with the points raised by @pedrob on auditability, @Chris_Areta on the need for mechanisms of community input - a superpower of a DAO is activating collective intelligence, great ideas can come from anywhere and the current structure would miss out by not tapping this valuable resource, agree with @krst and L2Beat on accountability, continuity, process and metrics.
Now is the time to put in place the organisational infrastructure required to make the AAE paradigm viable and trustable, this moment is a critical inflection point where its necessary to develop new norms, lets strive to listen to all stakeholders and bring intentional care in change-management for how working relationships will need to adapt and function between individuals and entities in different roles from AAEs, Service Providers, talented individual contributors, and Delegates in the DAO.
Imo the ground work and organisational infrastructure needs to be developed and in place and referenced within the proposal, before a proposal of this magnitude can be considered for voting. I am not against this kind of program, I see the potential, however we should really hold ourselves to a high standard when experimenting with something new of this nature and magnitude.
Proposal Intent and implementation feedback
Considering the MVP (Mission Vision and Purpose)
in combination with the vision for a Sovereign Digital Nation / Sovereign Wealth Fund
This vision of creating additional economic zones of opportunity is important precisely because Arbitrum is also neither just a blockchain or a stack. It is so much more. It is a collection of stakeholders who are bound together and empowered by their common interests as participants in the ArbitrumDAO. Collectively, our business opportunity is significantly more ambitious than just generating revenue on transaction and Arbitrum Expansion Program (“AEP”) fees. We should support builders and create business lines that compound demand for Arbitrum technology and capture value from the resources that we contribute and commit. Arbitrum is a collective of builders, users and investors that can form the largest digital sovereign nation
Right now I am not seeing how this incentive program's novel mechanism targeting verticals over protocols, and strategic timing intervention within the development of candidate organisations further solves for sustainability/stickiness of keeping activity with Arbitrum, nor how this approach achieves the MVP or moves us towards creating economic zones of opportunity.
It would be good to have this explained more clearly, in particular how could this cost outflow of 80m ARB bring returns back into the treasury? if that's not the paradigm, how are the AAEs thinking about returns? Some projections of how this growth-cycle loop is envisaged would be helpful for Delegates and contributors to get behind this model.
Now more than ever in Arbitrum the parts need to support the whole, with the DAO now having gone through the process to define an MVP, with OCL offering the Sovereign Wealth Fund paradigm, the AF suggesting a new org structure around AAEs, and the DAO still being in the middle of SOS setting, this proposal may be too early before the SOS process has completed to ensure maximum coherency and congruency. Lets get our ducks in a row and ensure with rigor all new proposals (parts) are shaped to add up with systemic integrity inside of the (whole) organisational structures and strategy we are defining.
Thank you to @Entropy for putting this proposal together. It represents a thoughtful and well-intentioned step forward for the DAO. Broadly, we support the direction outlined, with a few points of emphasis:
Thank you to @Entropy for putting this proposal together. It represents a thoughtful and well-intentioned step forward for the DAO. Broadly, we support the direction outlined, with a few points of emphasis:
Some areas that we believe would support even greater confidence in the proposal are:
Previous programs have shown that short-term incentives often struggle to create lasting usage. The evaluation partner and Season Selection Committee must understand DeFi flywheel effects to design programs that thoughtfully taper incentives as organic usage develops. We'd love to hear the Arbitrum Foundation and Offchain Labs support this proposal and speak to the strategies they aim to pursue.
Who is the directly responsible individual for executing the program? A program of this size managing multiple service providers likely needs a head to ensure alignment across all parties and committee members.
While a hard stop after three months is likely the cleanest political path, the DAO should consider a situation where it forfeits hard-won adoption without strategies for gradually "weaning" off incentives. The Season Selection Committee must have robust theses for each vertical/product a season pursues.
Recent events, such as the Foundation’s unilateral and discretionary pause of STEP 2/TMC allocations, have highlighted uncertainties around DAO objectives being efficiently executed once ARB is transferred. It's unclear what policies led to this decision. This is not an attempt to place blame but rather an admission that there may be unforeseen bureaucratic friction in additional programs placed under similar structures of direct Foundation management.
If there are foreseen policies restrictive to this program, we'd ask that they be communicated pre-emptively. Depending on the nature of the program, the DAO could explore alternative structures, such as establishing non-custodial stewardship with a service provider (regardless of who's selected), similar to a recently executed liquidity program with Uniswap DAO, where transferred funds were placed directly in a governance owned Aera/Merkl integrated vault.
Ultimately, the DAO is in a frustrating position awaiting the launch of OpCo and the recently proposed Arbitrum Foundation vision. @krst points out many of the same questions we have, although these are not necessarily reasons to avoid the proposal.
The following reflects the views of L2BEAT’s governance team, composed of @krst, @Sinkas, and @Manugotsuka, and it’s based on their combined research, fact-checking, and ideation.
We are generally not convinced about the concept of incentives and their efficacy in attracting and retaining capital and users in the long term. That said, we are not experts in that domain, and as such, we are inclined to rely on those who have a stronger background in incentives. Beyond feedback on the high-level concept of incentives, we can offer our perspective on aspects that can be improved or better clarified in this particular proposal.
The following reflects the views of L2BEAT’s governance team, composed of @krst, @Sinkas, and @Manugotsuka, and it’s based on their combined research, fact-checking, and ideation.
We are generally not convinced about the concept of incentives and their efficacy in attracting and retaining capital and users in the long term. That said, we are not experts in that domain, and as such, we are inclined to rely on those who have a stronger background in incentives. Beyond feedback on the high-level concept of incentives, we can offer our perspective on aspects that can be improved or better clarified in this particular proposal.
A crucial aspect that we should all be clear about is who is responsible for managing the program itself and ensuring its success. While Entropy, Arbitrum Foundation, and Offchain Labs will form the selection committee, the proposal does not clarify who is going to manage and coordinate work of all the parties involved in the program’s execution.
We would like to know who will monitor the success of the program, make adjustments as needed, and also be responsible for pausing or canceling the program if it is not delivering the expected results. We believe that this responsibility should not be diffused within a tripartite committee, but that there should be a clear point of contact with whom delegates can communicate to get more information, file complaints, or request changes.
It might be a good idea to have the OpCo be in charge of the program, with Entropy, AF, and OCL serving as the selection committee. With this setup, OpCo will be explicitly responsible for ensuring the program’s success, ensuring proper coordination between the committee and partners. However, it creates a dependency on OpCo, which isn’t operational yet, and it’s unclear whether it will be ready to take on this responsibility when it is finally operational.
While we are supportive of Entropy being both in the committee and serving (at least partially) as the Evaluation Partner, there is a question of continuity. Here’s what we mean by that:
We appreciate the thinking behind DRIP and share the goal of making Arbitrum’s incentive programs more targeted and measurable. However, we see little in the way of processes and quantifiable outcomes or KPIs that we can use to better understand exactly what we’re voting for. Currently, the proposal appears to be simply approving 80M ARB for incentives and trusting that it will be put to good use. It is not clear to us who is going to be responsible for designing the seasons and their goals - are these supposed to be coming from the partners, the committee, or from the public RFP? Who is responsible for sourcing proposals for seasons and working on them to ensure they are designed with Arbitrum’s interests in mind? We understand that the SSC will be responsible for selecting programs and allocating capital to them, but who will work on the programs themselves? How is the process going to look like and what are the expected milestones? Without that information, the DAO cannot track the program’s progress and help it achieve success.
It’s also not clear what is expected of the DAO and delegates regarding this program - how is the DAO going to be informed about the program’s progress, and should delegates be providing feedback? To whom, at what stage? In the comments, it was mentioned that the funds will be held in a structure that will allow for potential clawback, but when and how should the delegates even be considering that? And when should they not be using this nuclear option, what other options should be used for providing feedback? We believe having those details clarified in the beginning will help set proper expectations and avoid confusion and conflicts later on.
While holding a temp-check to gauge the DAO's sentiment towards approving an incentive program in general, and the DRIP in particular, is a good move, we’re not so sure if it needs to proceed directly to a Tally vote, at least not before clarifying the details. All the parties involved in the design of the details of the program are not requesting for any budget to cover the expenses, so they can start the work as soon as they receive the confirmation from the DAO that the DAO is supportive of the overall direction and the size of the program.
As L2BEAT, while we’re not against the proposed program, we cannot, at this time, justify voting in its favor without first getting clarifications on the points above.
Thank you to the team for this proposal and all the work that went into it. I’ve gone through the proposal and a part of the discussion and wanted to offer some respectful thoughts for consideration before the vote.
Committee composition & process Why was this specific committee selected? What motivations and criteria will guide wallet eligibility decisions? Since I don't want to just criticize but offer an alternative, I propose the following in order to improve transparency and broader representation. I’d suggest including delegates collectively as a member of the committee. Their vote could count as two votes, with a 4/5 majority required for approvals. Delegate votes could be gathered via a 3-day Snapshot vote, with the majority position — regardless of turnout — being cast as their collective vote.
Thank you to the team for this proposal and all the work that went into it. I’ve gone through the proposal and a part of the discussion and wanted to offer some respectful thoughts for consideration before the vote.
Committee composition & process Why was this specific committee selected? What motivations and criteria will guide wallet eligibility decisions? Since I don't want to just criticize but offer an alternative, I propose the following in order to improve transparency and broader representation. I’d suggest including delegates collectively as a member of the committee. Their vote could count as two votes, with a 4/5 majority required for approvals. Delegate votes could be gathered via a 3-day Snapshot vote, with the majority position — regardless of turnout — being cast as their collective vote.
As an additional or alternative mechanism, introducing soft DAO signaling via Snapshot before a new season begins could help surface community alignment and increase confidence in the committee’s decision-making, even if such votes are non-binding.
While I understand and appreciate the importance of governance minimization, I believe it should not come at the expense of effectiveness — let alone the long-term sustainability of the DAO
On goals vs. execution The goals outlined (e.g. becoming the top venue for lending a stablecoin) are ambitious and valuable. That said, I believe we need greater focus on how these goals will be executed. The strategy, mechanics, and iterative structure behind achieving these outcomes will be critical, especially in such a high-budget program. Clarity around how success is defined and how programs will adapt is essential.
Budget clarity I’m still trying to fully understand the rationale behind the 80M ARB budget. I’d appreciate more detail on how this number was determined, what portion is expected to go to operations vs. incentives, and how the capital efficiency of the program will be measured.
I’ll continue reviewing the proposal more deeply before the vote, with the goal of offering feedback that’s as thoughtful and useful as possible. Thank you again to everyone pushing forward this important discussion for Arbitrum’s future.
Thanks for the response, @Entropy.
We welcome the ambition behind DRIP and recognize its potential to streamline incentives through a more agile, season-based approach. This proposal is a strong starting point, but to fully realize its promise, we believe it must evolve structurally to better reflect the DAO’s values of transparency, reusability, and collective intelligence.
Thanks for the response, @Entropy.
We welcome the ambition behind DRIP and recognize its potential to streamline incentives through a more agile, season-based approach. This proposal is a strong starting point, but to fully realize its promise, we believe it must evolve structurally to better reflect the DAO’s values of transparency, reusability, and collective intelligence.
Currently, the Season Selection Committee (SSC) — composed of Entropy, Offchain Labs, and the Arbitrum Foundation — holds significant authority over the design and execution of each season. In this, we agree with @Chris_Areta:
While we are fully aware that the SSC comprises solely AAEs and assume they will act in the DAO’s best interests, we want to emphasize the need for transparency and community input.
However, as currently structured, the model lacks formal DAO oversight.
While we understand the appeal of operational efficiency, speed cannot come at the cost of legitimacy. To strengthen DRIP’s alignment with the DAO, we propose adding at least two independent DAO observers to the SSC. These observers would not hold decision-making power but would ensure greater transparency, provide early-stage feedback, and facilitate broader trust in the process. This would build on what has already been proposed:
The DRIP is open to the community for help with ideation, contributions, and SPs; it’s just the final decisions that lie solely with the AAEs. Without the DRIP’s structure, we’d decrease the potential for ideation and takeaways from the community. Entropy will serve as a point of contact to ensure that this input is taken into consideration.
Additionally, while we understand the need to maintain some flexibility, the current proposal does not sufficiently define how seasons will be scoped, how goals will be selected, or how success will be measured. For a program requesting funds from the DAO, we believe it is critical to provide at least a high-level framework outlining:
Providing even a preliminary framework would enable the community to better evaluate and support DRIP’s direction, while still allowing the SSC operational flexibility to adapt. There is also currently an ARDC Recommendation for Incentives in the works, and it should be referenced if approved as a boilerplate design specification for bootstrapped, targeted programs.
Overall, DRIP is directionally strong, and with these structural adjustments, it can potentially become a repeatable, DAO-aligned model for catalyzing growth across Arbitrum.
Ok, as someone that first got into Arbitrum because of DeFi, I’m down to back proposals that are specifically designed to strengthen that position. With that in mind, I’m happy to add some feedback that seems to be shared by some other folks on the forum:
Season Selection Committee
Ok, as someone that first got into Arbitrum because of DeFi, I’m down to back proposals that are specifically designed to strengthen that position. With that in mind, I’m happy to add some feedback that seems to be shared by some other folks on the forum:
Season Selection Committee
As pointed out by @SEEDGov, and especially because this a program intended for at least a year, I think the DRIP could definitely benefit from having 2 or 3 (if you want to retain the ⅔ of votes for season) extra committee members as it could ensure a wider scope when it comes participation from smaller projects and transparency and audit concerns voiced by others.
Financials
I won’t go too deep into the numbers presented here, but since this is an experimental program, could it be wise to set an initial budget allocation for season 1 out of the 80M ARB requested? As correctly pointed out by @Entropy in the proposal, marketing has usually been the weakest link in past programs, and having some type of increasing curve that allows more partners to be added onto seasons 2, 3 and 4 can boost the financial incentives for anyone missing out on season 1.
I agree with @kamilgorski in making sure these seasons bring a competitive edge to them that can help Arbitrum stand out from competitors and also stick to the program for its full length.
On a similar note, @0xDonPepe’s suggestion of setting a hard cap on certain operating costs can help plan out the money side of things and provide a clearer picture of the DRIP as whole, regardless of the 80M ARB requested being a max limit and not carte blanche.
That said, I believe this proposal is headed in the right direction, and provided all transparency and public dashboard data info is handled properly, I look forward to taking part in the DRIP!
Thank you, your responde addresses multiple of my objections. Especially the understanding that this is not about incentives as protocol growth for ROI but incentives as a strategic tool. The original post didn't make this super clear, so I'd suggest redrafting it before a vote.
Now, for incentives as strategic tool, I'd be great to understand who's defining said strategy beyond this program, because it will likely need a concerted effort across units. The SOS proposal currently is halfway through and it's unclear to me how it will relate to this and whether the output can indeed provide strategic guidance here. Failing that, will it be the AES developing said macro strategy that then this program can help execute on?
Thank you, your responde addresses multiple of my objections. Especially the understanding that this is not about incentives as protocol growth for ROI but incentives as a strategic tool. The original post didn't make this super clear, so I'd suggest redrafting it before a vote.
Now, for incentives as strategic tool, I'd be great to understand who's defining said strategy beyond this program, because it will likely need a concerted effort across units. The SOS proposal currently is halfway through and it's unclear to me how it will relate to this and whether the output can indeed provide strategic guidance here. Failing that, will it be the AES developing said macro strategy that then this program can help execute on?
Now, seeing it as a strategic tool, there's a risk of deepening an organisation design mistake of organising by functions instead of by market verticals. This is avoided if the scope of this is really DeFI (or DeFi+say Arb token price), which is mentioned but could be a bit more clear by saying what will be excluded (e.g. gaming, or incentives for defi protocols growth, or whatever).
I'm still unsure about the 80mn ARB number. The justification seems to be that before we wasted a lot of money, and not one about "this is the minimum needed to validate this before we scale". Even if here we're talking about validating multiple things (capability for various strategic initiatives) it's still a new mechanism with operational/system design risks.
If this is about DeFI liquidty and we just want to have a large budget to do targeted initiatives, that makes sense to me. But then that's the bit that could be more explicitly on a redfrat.
The name really needs changing. Why more acronyms? also DRIPs is already a tool for funding OS software dependencies, built by Radix
I appreciate the shift toward targeted incentives rather than generalized programs, addressing key lessons from previous initiatives. The season-based format is also great as it allows for continuous evaluation and iteration.
Perhaps splitting each season into "sub" seasons with a gradual release approach (like 2M for the first month, 6M for the second, and 12M for the third) tied to performance could be more effective. It would allow you to test with smaller amounts first, measure the results, and then make data-driven decisions about whether to scale up spending, tweak the approach, or pivot to a different goal. This would be especially useful because insights from incentivizing one activity (like wstETH lending) may not map cleanly to another (like RWA liquidity).
Yes, there will absolutely be opportunities for community input throughout the DRIP process. We’ll be actively calling on the community to help ideate (and already have been) on the most impactful season goals and service providers. That said, input will be weighted based on relevant expertise. For example, builders with product-market fit in a targeted vertical or contributors with procurement experience will naturally carry more influence when evaluating potential program design or partners.
The core idea behind DRIP is to use incentives not to subsidize usage by simply increasing returns higher than the prevalent cost of capital, but to tip the scale in favor of Arbitrum where organic product-market fit is emerging and can be catalyzed via incentives.
Really appreciate the thought and effort behind this proposal — overall, I support the initiative and think it’s a valuable direction for encouraging more activity and growth across the Arbitrum DeFi ecosystem.
That said, I wanted to highlight a couple of points for further consideration:
Really appreciate the thought and effort behind this proposal — overall, I support the initiative and think it’s a valuable direction for encouraging more activity and growth across the Arbitrum DeFi ecosystem.
That said, I wanted to highlight a couple of points for further consideration:
The following reflects the views of GMX’s Governance Committee, and is based on the combined research, evaluation, consensus, and ideation of various committee members.
Thanks Entropy for the proposal. While we see the learnings of the previous incentive programs been implemented and incentives having more targeted approach. Also, most of the points are already covered here in the comment section.
The following reflects the views of GMX’s Governance Committee, and is based on the combined research, evaluation, consensus, and ideation of various committee members.
Thanks Entropy for the proposal. While we see the learnings of the previous incentive programs been implemented and incentives having more targeted approach. Also, most of the points are already covered here in the comment section.
Thanks for putting this up, Entropy.
This is a strong proposal with clear upside. It’s great to see Arbitrum moving toward a more structured incentives framework — especially with projects like Morpho also thinking along the lines of adopting similarly strategic approaches in their own grants programs.
That said, we want to highlight a few concerns:
Thanks for putting this up, Entropy.
This is a strong proposal with clear upside. It’s great to see Arbitrum moving toward a more structured incentives framework — especially with projects like Morpho also thinking along the lines of adopting similarly strategic approaches in their own grants programs.
That said, we want to highlight a few concerns:
Several delegates have already raised concerns about the level of authority granted to the SSC.
Then, regarding the funding situation, after discussing this with Entropy and the Foundation, we agreed that the best way forward would be to sunset the MSS and turn over payroll operations to the foundation, where the AF would run this DAO function at their discretion.
The proposal itself acknowledges that the three-month timeline is somewhat arbitrary. While the committee has the right to adjust this, the fixed initial duration could lead to seasons ending prematurely or extending unnecessarily based on factors not immediately apparent. This could impact user participation and the overall effectiveness of the incentives if the timeframe doesn't align with the targeted activity's natural lifecycle or market conditions.
While the proposal states that "overlapping seasons running in tandem that may make evaluation more difficult should be avoided", the possibility of this occurring, or the challenges in ensuring clear separation and evaluation, remains a potential concern. If seasons unintentionally influence each other, it could obscure the true impact of each individual incentive program.
All remaining ARB not used as part of the program will be held for further seasons or returned to the DAO if further seasons are not approved by the end of the 1-year mandate.
Also, if the SSC decides to go above a three-month per season timeline, since this current timeline is arbitrary, the program could go beyond a 1-year mandate. How would that be handled? Would more funds be requested to complete the four seasons? Or would the program be cut abruptly at the end of the 12 months?
Finally, just highlighting this comment from pedro;
What mechanisms are in place to ensure user retention, long-term commitment from potential partners, or other indicators of sustainability?
It would be beneficial to understand how the SSC plans to extend the impact of the program beyond each season — especially in terms of partner retention and user behavior post-incentive.
Overall, we support the direction of the proposal, but believe these are critical details worth addressing to ensure the program is robust, measured, and future-proofed.
Thanks for putting up this new initiative to support the DeFi ecosystem.
We appreciate the systematic approach to isolate single DeFi actions in order to better analyze the impact of incentives. Additionally, being protocol agnostic makes a credibly neutral chain, which we think is also positive. Nonetheless, we echo some concerns other delegates have raised regarding the assumption that single-action incentives will have a different outcome than previous incentives and how the program will report to the DAO, given the delegated execution into the Season Selection Committee.
Thanks for putting up this new initiative to support the DeFi ecosystem.
We appreciate the systematic approach to isolate single DeFi actions in order to better analyze the impact of incentives. Additionally, being protocol agnostic makes a credibly neutral chain, which we think is also positive. Nonetheless, we echo some concerns other delegates have raised regarding the assumption that single-action incentives will have a different outcome than previous incentives and how the program will report to the DAO, given the delegated execution into the Season Selection Committee.
TVL is an attractive vanity metric to optimize, the utilization of that capital is what ultimately determines the efficacy and success of lending protocols.
We agree TVL is often misused as a vanity metric for protocol performance. In addition, Arbitrum benefits from network activity and not value accrual. For this reason, we think other metrics can better serve as protocol cutoff to be eligible for incentives, specially those that directly benefit Arbitrum, e.g., daily/weekly active users, transactions or fees paid to the network.
We strongly support dedicating more resources toward restoring Arbitrum’s leading position in the DeFi ecosystem.
We really like the direction DRIP is heading. It clearly takes lessons from STIP and LTIP by focusing on specific goals, aiming for more sustainable growth, and improving how incentives are managed. From our perspective, this has the potential to be a more effective and scalable way to grow the Arbitrum ecosystem. That said, there are still a few areas we would love to see strengthened. One big question is around DAO involvement, since the current setup gives the committee full control over planning and execution. More clarity on how seasonal goals are chosen, how partners are selected, and how success is measured would go a long way. The 80 million ARB budget is quite large, so it would help to break down how much goes toward direct incentives versus operational costs like marketing and distribution partners.
We would also like to see a clear rubric or selection criteria for eligible projects, similar to what Optimism uses, to help guide applicants and make decisions more transparent.
I appreciate the shift toward targeted incentives rather than generalized programs, addressing key lessons from previous initiatives. The season-based format is also great as it allows for continuous evaluation and iteration.
Perhaps splitting each season into "sub" seasons with a gradual release approach (like 2M for the first month, 6M for the second, and 12M for the third) tied to performance could be more effective. It would allow you to test with smaller amounts first, measure the results, and then make data-driven decisions about whether to scale up spending, tweak the approach, or pivot to a different goal. This would be especially useful because insights from incentivizing one activity (like wstETH lending) may not map cleanly to another (like RWA liquidity).
It would also be valuable to see some CAC vs. LTV analysis included in the evaluation partner's public dashboards. Understanding how much we're paying per user action versus the long-term value they bring will help ensure the program is generating positive economic value for Arbitrum over time.
Yes, there will absolutely be opportunities for community input throughout the DRIP process. We’ll be actively calling on the community to help ideate (and already have been) on the most impactful season goals and service providers. That said, input will be weighted based on relevant expertise. For example, builders with product-market fit in a targeted vertical or contributors with procurement experience will naturally carry more influence when evaluating potential program design or partners.
Thanks for the response on this @Entropy - can at least some wording to this effect be included in the proposal? Seeing that the issue of community feedback/input is a recurring theme of feedback on this proposal, it would be great to make it explicitly clear in the proposal community input will be sought and taken into account. This is a simple but nontrivial addition to make.
The core idea behind DRIP is to use incentives not to subsidize usage by simply increasing returns higher than the prevalent cost of capital, but to tip the scale in favor of Arbitrum where organic product-market fit is emerging and can be catalyzed via incentives.
This might be a silly suggestion, but I think the name of the program could be adjusted.
“Drip: the DeFi Incentives Program” sounds like it’s targeted at users who are already familiar with Arbitrum distributing liquidity mining incentives, which is something that’s been common in DeFi for years.
But this program has a much more focused and BD-oriented approach. A different name could potentially catch the attention of projects that aren’t currently on Arbitrum and might otherwise overlook the program, thinking it’s only about incentives for protocols that are already here.
“Strategic Ecosystem Partnerships” or something like this.
We strongly support dedicating more resources toward restoring Arbitrum’s leading position in the DeFi ecosystem.
We greatly appreciate and fully support this research-backed methodology. It’s refreshing to see a program being shaped by deep analysis and subject-matter expertise — a key element that was notably missing from previous incentive efforts. A more structured, targeted design will help deliver more effective, measurable results.
Another benefit of the DRIP is its value in business development and growth. Potential Arbitrum partners will see a program that could benefit them if they put a primary focus on Arbitrum.
While incentives are clearly effective for onboarding new liquidity and users, we believe complementary activities should accompany this to ensure long-term retention and ecosystem growth. Close collaboration with DeFi protocols will be crucial.
There are two main angles here:
-Seasons are intended to be ~3 months, though they can be cut short by the committee or extended at their discretion, with the goal of always tapering rewards instead of arbitrarily cutting incentives at once.
One question: Will strategies be dynamically adjusted throughout the season based on performance metrics, or will they remain fixed? Our concern here is fund optimisation — a more flexible structure that allows mid-season adjustments could help ensure capital is allocated as efficiently as possible.
-Eligible protocols must include marketing in their frontend and on their socials, coordinating co-marketing with Entropy Advisors and the Arbitrum Foundation.
We strongly agree that this is a key requirement. Co-marketing ensures visibility and awareness beyond the initial incentive push and drives community momentum.
Finally, we recommend that the committee publish a transparent report at the end of each season. This should highlight what worked, what didn’t, and what learnings are carried into the next cycle. This will improve accountability and enable continuous improvement for future seasons.
We really like the direction DRIP is heading. It clearly takes lessons from STIP and LTIP by focusing on specific goals, aiming for more sustainable growth, and improving how incentives are managed. From our perspective, this has the potential to be a more effective and scalable way to grow the Arbitrum ecosystem. That said, there are still a few areas we would love to see strengthened. One big question is around DAO involvement, since the current setup gives the committee full control over planning and execution. More clarity on how seasonal goals are chosen, how partners are selected, and how success is measured would go a long way. The 80 million ARB budget is quite large, so it would help to break down how much goes toward direct incentives versus operational costs like marketing and distribution partners.
We would also like to see a clear rubric or selection criteria for eligible projects, similar to what Optimism uses, to help guide applicants and make decisions more transparent.
Regarding accountability, how will we know if a individual project is underperforming? Relying too heavily on subjective evaluation could lead to inconsistent outcomes and make it harder for the community to assess impact. We think one potential solution worth exploring is tying incentives directly to predefined milestones and performance targets. This model would require projects to clearly articulate their goals, timelines, and expected outputs up front, and only receive funding incrementally as they meet those benchmarks. Not only would this create a more objective framework for measuring progress, but it could also help de-risk funding decisions and ensure that resources are being allocated to initiatives that are actively delivering value. Adopting a milestone-based approach could strengthen accountability, reduce waste, and make it easier to course-correct when things aren't working as expected.
Long-term sustainability is another concern. Past programs showed that once incentives ended, usage often dropped off. We think adding mechanisms like vesting and stronger sybil resistance can help drive more lasting engagement.
On the marketing side, requiring co-marketing makes sense, but smaller teams might need some support or guidance to make the most of it. We also think having a unified UI that displays all participating projects is a great move. It would be even better if the UI includes a simple onboarding experience to help users quickly understand what each project does, how to participate, and how to earn rewards. Making it easier for users to get involved can really boost the visibility and impact of the program. Overall, we are supportive of DRIP and excited to see it roll out, and with more clarity around transparency, costs, accountability, and user experience, we believe it can set a strong precedent for future incentive programs.
[quote="pedrob, post:2, topic:29049"]
What it’s still not clear to me is: why do you believe this model will lead to sustainable growth activity on Arbitrum? What mechanisms are in place to ensure user retention, long-term commitment from potential partners, or other indicators of sustainability?
[/quote]
[quote="pedrob, post:2, topic:29049"]
[quote="pedrob, post:2, topic:29049"]
What it’s still not clear to me is: why do you believe this model will lead to sustainable growth activity on Arbitrum? What mechanisms are in place to ensure user retention, long-term commitment from potential partners, or other indicators of sustainability?
[/quote]
[quote="pedrob, post:2, topic:29049"]
Is there a strategy in place to ensure more sustainable engagement? Could a particular deal lead to prioritizing one vertical over others for that single reason?
[/quote]
[quote="cp0x, post:7, topic:29049"]
why are you sure that in this case there will not be the same result as last time? Why in the same example about wstETH all the borrowing will not go to another chain when the season ends?
[/quote]
[quote="Zeptimus, post:22, topic:29049"]
Artificially incentivizing liquidity through emissions often creates mercenary capital rather than sustainable ecosystems. Market forces should determine which protocols deserve capital - not committee-driven subsidies that distort natural competition.
[/quote]
[quote="Saurabh, post:27, topic:29049"]
One of the major issues with previous programs was the lack of stickiness—liquidity often disappeared once incentives ended. As Pedro pointed out, this proposal still doesn’t outline a clear retention strategy to address this.
[/quote]
The core idea behind DRIP is to use incentives not to subsidize usage by simply increasing returns higher than the prevalent cost of capital, but to tip the scale in favor of Arbitrum where organic product-market fit is emerging and can be catalyzed via incentives. We’re not trying to manufacture demand from scratch for products with market share that has already stabilized and there are no systemic changes to be made, instead, we’re targeting activities that are organically emerging (think new product releases, parameter changes, protocol migrations, etc.) where capital can incentivise users to relocate to Arbitrum, so that when incentives turn off, Arbitrum maintains its position as the best organic place to execute a certain activity in its competitive environment. Some aspects of creating the best natural environment include deployments of apps that create new utility for a specific action, which is where the BD perspective is most important, but incentives would never be gated to one specific protocol. This structure is driven by learnings from past incentive programs, where outperformers (in terms of retention and capital attracted per dollar spent) exhibited common attributes: enabling new or better UX activities with organic PMF for verticals and products where Arbitrum’s market share was previously minimal or growing. In short, we believe that no matter the incentives design, user retention cannot be achieved without the underlying product/activity actually being among the best available on the market, but naturally, we can’t promise exceptional retention metrics with 100% certainty.
[quote="pedrob, post:2, topic:29049"]
Still, I believe it’s worth exploring ways to balance that with contributors’ involvement.
[/quote]
[quote="Argonaut, post:6, topic:29049"]
if the whole community will be involved in the selection process
[/quote]
why not simply request funds for the Foundation to manage directly, without much additional structure?
More clarity on how seasonal goals are chosen, how partners are selected, and how success is measured would go a long way.
The DRIP is open to the community for help in ideation, contribution, and SPs; it’s just the end decisions that lie solely with the AAEs. Without the DRIP’s structure, we’d decrease the potential for ideation and takeaways from the community. Entropy will be acting as a point of contact to make sure this input is taken into consideration. It’s additionally worth mentioning that expenses and performance data will all be made publicly available.
Appreciate the passion and agree that transparency and DAO voice are essential. That said, you’re misguided. The evaluation partner doesn’t decide anything unilaterally, they provide open, public dashboards and feedback to guide the program, not dictate it. The 80M ARB is a capped max, not a blank check. Funds are only deployed when users actually participate, and unused funds are returned. The committee’s discretion ensures programs can adapt quickly based on real data, not bottlenecked by gridlock. Most importantly, DAO members absolutely can shape the direction of DRIP through season suggestions, public evaluation, and proposal feedback. This isn’t a rejection of DAO governance, it’s a rejection of vague, bloated programs without clear responsibility areas that fail to deliver. It’s a rejection of rent-seeking theatrics in the name of decentralization at the expense of Arbitrum’s position in crypto.
While we are fully aware that the SSC comprises solely AAEs and assume they will act in the DAO’s best interests, we want to emphasize the need for transparency and community input.
Why not tap the hive mind? I recommend a one‑off signalling round where delegates rank the SSC’s short‑list. The SSC still owns the final call, but now it has a data layer showing which themes the ecosystem believes can move the needle.
Yes, there will absolutely be opportunities for community input throughout the DRIP process. We’ll be actively calling on the community to help ideate (and already have been) on the most impactful season goals and service providers. That said, input will be weighted based on relevant expertise. For example, builders with product-market fit in a targeted vertical or contributors with procurement experience will naturally carry more influence when evaluating potential program design or partners.
what is the target OpEx as a percentage of the season’s allocated funds?
We’d appreciate a more detailed breakdown of the operational budget. How much is being allocated to distribution partners, UI development, evaluation, and potential protocol support? Could you specify the percentage of the 20M ARB per season that is earmarked for operational expenses versus direct incentives? Furthermore, what are the projected costs associated with each vendor (distribution, evaluation, etc.), and how were these estimates determined?
A hard 8 % ceiling on non‑reward spend (vendors, marketing, bounties) keeps incentives front‑loaded where they belong.
The 80 million ARB budget is quite large, so it would help to break down how much goes toward direct incentives versus operational costs like marketing and distribution partners.
This is something we discussed quite a lot internally and called on Castle Cap for feedback as well. We wanted to have some flexibility in case there were excellent partners not on our radar who could make the program quantifiably better. We want to make sure that we have the opportunity to onboard partners that will add value, but believe that internally at Entropy, AF, and OCL, we have quite a lot of bases covered and really just need help in the areas of optimization and distribution. We don’t want to pigeonhole ourselves into a number that removes the flexibility, and OpEx as a % of total expenses will naturally be dependent on how much capital we’d end up distributing during seasons. Like we say in the proposal:
but the season selection committee prioritizes keeping low OpEx, as the point of the program is user rewards. Although, we will note that our opinion is that previous incentive programs run by the DAO could have been notably more effective had more resources been allocated to the programs’ operations.
Transparency into pricing will be given to the community after decisions are made.
we do need a better explanation of the budget breakdown of such a number of requested funds. Why so much?
The excessive allocation seems disproportionate without proven methodology
We strongly believe that these entities are all aligned in only spending ARB in positive ROI ways and would like to go into this with a sufficient budget to make sure we can have a real impact that can capture a large category like wstETH. As mentioned in the proposal, in the condensed example section, capturing the wstETH market alone will likely cost in the realm of 1 entire season or more (given that this may need to be paired with incentives to bring over looping/lrt vaults, more liquidity in DEXs for LTVs, etc). At current prices, the total value of the program is ~$23M (assuming all ARB is distributed and used on OpEx), compared to the ~$140M of realized expenses for the DAO on STIP, STIP.B, STIP Backfund, and LTIP. The program’s value roughly aligns with the DAO’s annualized YTD income (excluding Timeboost). We believe we can have more retained impact with this budget than the totality of the ~$140M spent thus far.
If and when a season is successful, if the committee believes that there is further room for catalyzation toward the point of “critical mass sustainability”, further budget may be requested from the DAO. We believe that this budget is sufficient to get the data we need and potentially even catalyze one or a few markets, depending on their size.
Vesting changes the game: it moves the incentive away from short-term extraction, where users farm rewards and immediately exit, toward a model where participants are encouraged to stay engaged over time. It rewards commitment instead of quick profit.
Long-term sustainability is another concern. Past programs showed that once incentives ended, usage often dropped off. We think adding mechanisms like vesting and stronger sybil resistance can help drive more lasting engagement.
Vesting may or may not be included in the design of a particular season, depending on the target audience. Having said that, based on past research on Arbitrum’s incentive programs, different incentive distribution structures don’t seem to have had a large difference on long-term retained usage. The DRIP is focused on high-retention activity created by organic drivers, and if vesting tokens may help toward that goal for a specific season, it’s possible to be included.
Analysis is ongoing, and distribution is at a regular cadence, for example, once per week. This will be performed by the distribution partner, and incentives will be directed directly to end users.
As outlined in the proposal, the scope for the distribution partner includes creating a dedicated frontend. We think this should be something that is fully Arbitrum-branded and “owned” by the DAO.
I don’t think it’s a good idea to be able to stop or cancel the season - it will have a bad effect on the reputation of the Arbitrum. There will be a committee that will meticulously develop the new season, and if it is not sure about something, then it’s probably worth thinking about changing the committee to other specialists. What I mean is that it’s better to prepare in advance than to lose our reputation later. And also, it’s probably worth publishing these discussions in some preliminary results on the forum, so that the community can adjust the season to avoid problems in the future.
Will strategies be dynamically adjusted throughout the season based on performance metrics, or will they remain fixed? Our concern here is fund optimisation — a more flexible structure that allows mid-season adjustments could help ensure capital is allocated as efficiently as possible.
Each season will be planned meticulously, with real-time performance data being published. If we are seeing a decreasing impact, incentives will likely be tapered instead of a hard stop. This is to ensure that the program isn’t spending unnecessarily. Adjustments will be heavily prioritized during the season. That said, the kill switch is also an important mechanism to have in some low-likelihood scenarios, like protocol or user abuse.
when we compare what could be achieved with 80mn ARB in investments, why should we focus on Incentives instead? did we give up on the idea of DAO budget? or are we just approving things as they go? If this wasn’t such a large sum, this wouldn’t be an issue but at $80mn, we should have some planning on second order effects like eliminating our deployment capacity to fund other programs, no?
Why such a sum? couldn’t this be tested with 2mn ARB? or 10, or 20?
How will we know if this was successful? Any KPIs?
Without clear, detailed allocations or KPIs, this feels like a repetition of the same mistakes from previous rounds.
Our opinion is that both investments and incentives are needed. When it comes to more mature market sectors where Arbitrum’s presence is lagging, e.g., looping, we don’t think investments are a viable route to penetrate this since the market leaders are already well established. Betting on a new team in such a sector could create larger, tangible returns for the DAO, but we must also focus on supporting the ecosystem, making Arbitrum the best place for DeFi activity.
As a clarification, the DRIP is asking for 80M ARB, not $80M. This accounts for ~2% of the DAO’s unissued ARB, and at the current price, roughly equals the DAO’s annualised YTD income (excluding Timeboost). We fully agree that the DAO requires a holistic budget, but we shouldn’t let perfection be the enemy of progress, and given the above figures, we think the allocation is justified as an ecosystem growth initiative. Further justification for the program’s size can be found in our response to Argonaut and Zeptimus above.
KPIs need to be designed on a season-by-season basis, which the evaluation partner, together with the committee, will be in charge of doing or approving in the case that the season recommendation comes from the community. KPIs that will be monitored across seasons would include: user retention, induced activity per $ spent, and total market share gains.
Could you clarify what measures will be in place to ensure transparency and fairness in season and partner selection? Will there be public reporting or community oversight mechanisms?
Specifically, what is the planned frequency for these evaluations (e.g., per season, mid-season, annually)? What key metrics and criteria will be used to assess the program’s performance against its goals?
We’d like to build on this by asking, will these metrics vary seasonally based on the specific activity targeted, or will there be a core set of DAO-wide metrics to allow for comparison across seasons? Additionally, how will learnings from underperforming seasons be used to shape the design of the next?
With the exception of security-related whitelisting or a TVL/protocol-maturity requirement, all protocols offering a product for the incentivised activity will be eligible for participation. When it comes to partner selection, to our knowledge, none of the committee members has a conflict of interest with providers in these verticals.
Real-time performance data and the program’s costs will be made publicly available, with KPIs being designed on a season-by-season basis. The evaluation partner, together with the committee, will continuously monitor performance. In the case of continued underperformance, the committee isn’t afraid of halting the program completely.
We’d like to know, will the DAO receive public interim updates (e.g., at the 6-week mark) during a season to allow for mid-cycle feedback or adjustments? This would allow us to avoid a post-mortem only cycle and make the program more iterative and responsive.
The DAO will be kept updated on a season’s performance.
Many protocols, especially newer or smaller ones, may not have a strong marketing infrastructure. Will DRIP offer templated assets, messaging guidelines, or any support for ad spend, content creation, or community campaigns? Beyond requiring participation, are there any expectations on performance metrics (CTRs, campaign reach, conversions) that protocols should report back? And as the program spans multiple seasons, will co-marketing quality be considered when evaluating protocols for participation in future rounds?
On the marketing side, requiring co-marketing makes sense, but smaller teams might need some support or guidance to make the most of it.
Ad spend will not be covered, but there will be expectations and standardized structures when it comes to marketing. Marketing performance metrics will also be followed, but as long as guidelines are followed, they will not affect a protocol’s eligibility in future rounds. Since protocols must pass security-related whitelisting or a TVL/protocol-maturity requirement, such that users aren’t incentivized to use protocols that aren’t safe, we expect that the number of protocols with no marketing capabilities accepted into a season will be minimal.
Given that each season targets specific activities or pairs, when or how much before the start of the season will the goal be decided? And how will DRIP ensure that incentivizing one pair doesn’t drain liquidity from other critical trading pairs on Arbitrum? Is there a mechanism to monitor or correct fragmentation effects?
Targeted activities/products will be clearly communicated before a season’s initiation, such that the market and protocols have ample time to digest the information and prepare. We expect that some liquidity will move from other avenues within Arbitrum to the incentivized activity until a new equilibrium forms within the ecosystem. We think this is inevitable to some degree since Arbitrum’s landscape of opportunities will change when incentives are turned on. However, by focusing on activities where Arbitrum’s potential for increased market penetration is large and striving to create the best environment for said activities (parameter changes, new protocols or products, etc.), the thesis is that capital flows to Arbitrum from other ecosystems and stays here. We expect the evaluation partner to be able to monitor the origin of capital that is used for activities that are being incentivized.
Could you share more specifics here? What mechanisms will be in place to ensure sybil resistance or prevent users from farming rewards in a way that doesn’t create real ecosystem value? Also, will wallet eligibility be uniform across all seasons or customizable based on the goal?
This will be designed by the distribution partner and accepted by the committee (we’d additionally note that sharing this information publicly would make farming incentives easier). Wallet eligibility will depend on the parameters set for a specific season.
Could you elaborate on which key metrics will be prioritized for analysis, beyond just raw usage? For example, are there plans to evaluate user retention after a season ends, or capital efficiency per ARB spent? Having a few shared metrics across seasons might also help the DAO compare performance longitudinally.
As stated earlier, KPIs will vary depending on the season. Across seasons, shared metrics will include user retention, induced activity per $ spent, and total market share gains.
This raises a question: in the event a protocol is excluded, is there any mechanism to appeal or revert that decision? We understand the Season Selection Committee has discretion to exclude, but it is still composed of humans, and errors or oversights may occur. Therefore, there should be a transparent mechanism for an excluded or omitted protocol to request inclusion.
One fear with this path is that most excluded protocols will challenge, creating strain on the community, and potentially leading to significant pressure to create one-off programs that harm the ability to evaluate a program in an isolated environment. By trusting the committee that will have a holistic view of each individual component and nuance of a program, we reduce the risk of backlash from protocols. For example, if 3 DEXs are willing to match incentives for a specific program, but 1 is not and gets excluded, we don’t want them to have the ability to pressure the community, who may not have the full picture on why they were excluded. Bringing the drama to the forum may do more harm than good for all involved. Having said that, the committee will be in close contact with all relevant protocols to ensure adequate communication.
We suggest initially focusing on ARB + stablecoins + ETH. Greater depth in ARB/stablecoin or ARB/ETH pairs is a win-win for the ecosystem.
We agree that these are important building blocks for the DeFi ecosystem. However, we are fearful that for most of the assets and asset pairs mentioned above, it’ll be difficult to incentivize activity that is retained after incentives end, since creating a systemic shock would be challenging. We welcome community suggestions on structured seasons that would accomplish retention for LPing the specific assets mentioned above.
That said, although the current committee already partially represents the DAO via these entities, we see potential value in incorporating two additional members selected from the current pool of independent DAO contributors. The AAEs could even appoint these two additional members after the proposal is approved.
Expanded SSC participation, including DAO-vendor observers or advisors.
We see the value in increasing DAO representation in the committee, but are against the idea of doing so just for the sake of having committees. If there are specific community members who fill gaps in the current committee’s competencies, we are happy to consider adding members. It’s also important to remember that AAEs represent the DAO’s best interests, and the combination of the currently proposed committee, together with the evaluation and distribution partners, has the required resources to execute on the mandate.
While I do agree that would be the best solution cost-wise, the current v2 mandate is only 6 months (ending in June), so it probably will not be feasible.
If the v2 mandate has ended before a DRIP season can be initiated, the committee has the authority to enlist a security firm that is capable of doing the whitelisting.
Will the DAO be able to claw back funds/end the program? What is the process to do so?
Language will be added that specifies ARB will be sent to a foundation-controlled multisig with DAO-clawback capabilities. We are happy to stipulate the same for the distribution partner, but given the delay in the onchain proposal, this may not be very beneficial in practice.
At the risk of asking a silly question, is there a reason why this program cannot already be done out of the 250,000,000 ARB that the Foundation was given last autumn? They haven’t divested of any of it, and as of the end of 2024, only 11,200,000 ARB of future commitments had been made, so the 80,000,000 for DRIP would be easy for them to cover.
While the Foundation hadn’t divested a notable amount of the ARB as of the end of 2024, it’s not transparent how much of the 250M has already been committed. The public data is incomplete.
Capital in the Foundation’s budget is for a range of purposes beyond what DRIP targets. DRIP is not meant to replace those efforts, but to complement them. While the AF's growth strategy to date has been largely one-off important grants, DRIP focuses on a more holistic strategy for a given sector. Together, these 2 strategies work together to make sure we have support for those coming into the ecosystem as well as within the ecosystem itself. DRIP is not about just partnerships, it's about capturing an entire vertical and everything involved with doing so.
• Whenever the SSC publishes a parameter change or early‑terminates a season, open a 24‑hour veto window.
We foresee this leading to situations where most decisions are vetoed, meaning that changes would commonly go through a public forum discussion, after which a 7-day Snapshot voting period might even be required to reach a clear consensus.
How will the team execute on this dual approach – being agnostic in principle while requiring protocol selection in practice?
Consider assets like wrapped LSTs, each representing a different product from a distinct provider. How will the team decide which provider to incentivize, using what criteria, and based on what rationale? (e.g. why wstETH over cbETH etc.). This goes beyond the protocol but the tokens themselves
If the program incentivizes an ETH/USD pair, will all protocols supporting this pair (e.g., DEXs, perps) qualify, or will selection criteria apply? If criteria apply, greater clarity on what these selection criteria are is essential to understanding how the program remains ‘agnostic’ to the user’s choice of eligible protocol.
We would also like to see a clear rubric or selection criteria for eligible projects, similar to what Optimism uses, to help guide applicants and make decisions more transparent.
Protocol/product (in the context described in the above comment) selection is more concerned with making sure that users aren’t incentivized to utilize something that has possible security vulnerabilities or is so new that their stability hasn’t been proven yet. Each season will define which specific products/liquidity pools and activities will be eligible for incentives, and the decision should mainly be driven by the underlying market size as well as what Arbitrum’s potential is to increase its market share sustainably within these through systemic shocks. Seasons wouldn’t be as general as “utilize the ETH/USD pair, no matter in what context”.
How does the team intend to measure and track ‘retention’ within the context of this program? The program length is fairly short and retention can be determined in an experimental manner. We need to review after S1.
Have we clearly identified the specific behaviors that drive long-term retention on Arbitrum, and confirmed that the proposed incentives directly align with encouraging these behaviors?
Could incentivizing already established, top pools be less effective for increasing overall retention given that they are already huge in size which suggests retention?
Conversely, will incentivizing smaller pools effectively contribute to overall retention?
Mainly through a combination of market share changes for a KPI(s) relevant to the incentivised activity, tracking the source and ending locations of capital used for the incentivized activity, and retention of incentivised activity per $ spent. The evaluation partner will be in charge of spearheading these efforts. Specific behaviors and structures that drive long-term retention have been identified through research done on Arbitrum’s previous incentive programs.
Is the primary objective acquisition of new protocols/users, or deepening engagement with existing ones and activities?
Focusing strongly on attracting new protocols might dilute the effort required to make Arbitrum the “best/deepest” in specific, existing areas as this requires a focused effort. Could pursuing both acquisition and engagement simultaneously dilute the program’s overall impact and effectiveness?
The program’s main goal is to get capital/activity to move over from other ecosystems into Arbitrum through incentives and retaining that capital/activity by creating a home base for it through a systemic shock before incentives begin, resulting in an organic market-leading value proposition. This is to be accomplished by focusing on targeted activities/products where Arbitrum has high potential for increased market penetration.
Regarding accountability, how will we know if a individual project is underperforming? Relying too heavily on subjective evaluation could lead to inconsistent outcomes and make it harder for the community to assess impact.
Incentives should be distributed proportionally across eligible protocols based on the activity that they generate. Using the example given in the proposal: protocol A reaches $100M of wstETH that is used as collateral with at least a 15% LTV, while protocol B reaches $200M. Both protocols’ users gain a 2% incremental APR on their collateral, but protocol B is indirectly getting more incentives since it is generating more of the targeted activity. Consistency in incremental yield within the ecosystem is important, such that the baseline cost of capital within Arbitrum stays stable (although nothing would stop protocols from increasing this yield through additional native incentives). In our opinion, it’ll be more important to look at the average performance of a season, but real-time protocol-specific data should also be made available. Specific parameters will be modified by the committee together with the evaluation partner, which we don’t think the whole community could manage in real time.
Also, if the SSC decides to go above a three-month per season timeline, since this current timeline is arbitrary, the program could go beyond a 1-year mandate. How would that be handled? Would more funds be requested to complete the four seasons? Or would the program be cut abruptly at the end of the 12 months?
The maximum allocation per season is 20M ARB. The 1-year mandate refers to the committee having the ability to initiate seasons within this time period. A season would never be cut abruptly. Additional funds may be requested in the future, depending on the success of seasons (if analysis shows that add-on incentives could further amplify organic market share growth) and the DAO’s financial position.
Perp Dex’s are currently the biggest revenue drivers on Arbitrum. The proposed drip incentive program seems to be skewed toward LSTs, LRTs, and lending protocols. There’s a noticeable gap in how perp protocols are being supported. We recommend Pathways for high-performing protocols to proactively propose verticals and influence program design.
The season described in the proposal is an example, and there are no set rules that incentives have to be used for derivative tokens or the lending vertical. As long as incentives can be used to amplify an activity’s/product’s organic PMF, and the underlying market size not captured by Arbitrum is substantial, this activity/product would be ideal for a DRIP season. Entropy will be acting as a point of contact to make sure input from high-performing protocols is taken into account.
We’re currently working on a separate proposal that prioritizes Arbitrum-native builders over everything else.
How does this fit into the broader incentive strategy currently being discussed?
DRIP incorporates learnings from Arbitrum’s previous incentive programs as well as strategies brought up during the detox period. Mainly, it’s extremely targeted, tries to minimize pressure put on recipient protocols, and targets activities where the potential for retention is high through sustainable market share penetration. As such, our strong opinion is that running other generalized incentive programs on top of the DRIP would be counterproductive, likely even parasitic.
We really like this program, thanks for the efforts here who is going to be distributing incentives and setting the amounts, how will that be tracked? And the season selection committee, how will this be decided?
Will there be a way to see that for $1 spent there is x amount generated for the network? Through timeboost stuff or other sequencing fees?
We really like this program, thanks for the efforts here who is going to be distributing incentives and setting the amounts, how will that be tracked? And the season selection committee, how will this be decided?
Will there be a way to see that for $1 spent there is x amount generated for the network? Through timeboost stuff or other sequencing fees?
We asked these questions on the relevant governance call as well, but would be good to have the answer put out here.
Hi, Regarding funding - I simply compared it to the previous LTIPP. At that time, 45 million ARB were initially allocated, which amounted to $81 million for 3 months
The current request is 80 million ARB, which amount to $24 million per year
Here, a significantly smaller budget is clearly visible, approximately 13 times less in dollars.
(80/24 * 4)=13.3
Thanks for pulling DRIP together. I’m generally in favor, but I see some blind spots that could be improved. Below I outline lightweight tweaks that could keep the timeline intact while adding stronger accountability.
“The Season Selection Committee (SSC) may change parameters or terminate a season at its discretion.”
Thanks for pulling DRIP together. I’m generally in favor, but I see some blind spots that could be improved. Below I outline lightweight tweaks that could keep the timeline intact while adding stronger accountability.
“The Season Selection Committee (SSC) may change parameters or terminate a season at its discretion.”
Speed is great, but absolute discretion invites drama. A simple safeguard: • Whenever the SSC publishes a parameter change or early‑terminates a season, open a 24‑hour veto window. • If four top 100 delegates trigger an emergency veto, the change pauses until the DAO weighs in.
You keep agility; the DAO keeps a scalpel‑sharp check on edge cases.
“The SSC will decide which vertical receives incentives each season.”
Why not tap the hive mind? I recommend a one‑off signalling round where delegates rank the SSC’s short‑list. The SSC still owns the final call, but now it has a data layer showing which themes the ecosystem believes can move the needle. Cheap, fast, and boosts buy‑in.
We all watched STIP liquidity sprint in and out. To avoid a sequel: • Require ≥50 % of user rewards to vest linearly for 60 days after the season. • If users yank liquidity/volume during the vest, they forfeit the locked portion.
Vesting changes the game: it moves the incentive away from short-term extraction, where users farm rewards and immediately exit, toward a model where participants are encouraged to stay engaged over time. It rewards commitment instead of quick profit.
“Program OpEx will be funded from the 80 M ARB allocation.”
OpEx creep is real, especially when everyone’s flush with ARB. A hard 8 % ceiling on non‑reward spend (vendors, marketing, bounties) keeps incentives front‑loaded where they belong. Anything unspent rolls over into the next season, rewarding frugality.
• Transparency without gridlock: the veto window and voting signal are guard‑rails, not speed‑bumps. • Sticky, not mercenary, liquidity: vesting flips the incentive from “farm and bounce” to “farm and stick around.” • Fiscal discipline baked in: an OpEx cap ensures the DAO’s 80 M ARB fights for growth, not overhead.
At the risk of asking a silly question, is there a reason why this program cannot already be done out of the 250,000,000 ARB that the Foundation was given last autumn? They haven't divested of any of it, and as of the end of 2024, only 11,200,000 ARB of future commitments had been made, so the 80,000,000 for DRIP would be easy for them to cover.
The AF also has a vesting budget it can draw from.
If this is an effort led primarily by AF/OCL, it seems like AF/OCL should provide all, or at least a proportionate part, of the budget.
That would also have the benefit of being able to move quickly, rather than waiting for July. Market conditions right now seem well suited to quick deployment of tightly targeted incentives, rather than waiting until July.
This proposal raises significant concerns from a market-driven perspective. While I appreciate the goal of increasing DeFi activity, I'm skeptical about the approach and execution framework.
First, the tokenomics don't make sense. Artificially incentivizing liquidity through emissions often creates mercenary capital rather than sustainable ecosystems. Market forces should determine which protocols deserve capital - not committee-driven subsidies that distort natural competition.
This proposal raises significant concerns from a market-driven perspective. While I appreciate the goal of increasing DeFi activity, I'm skeptical about the approach and execution framework.
First, the tokenomics don't make sense. Artificially incentivizing liquidity through emissions often creates mercenary capital rather than sustainable ecosystems. Market forces should determine which protocols deserve capital - not committee-driven subsidies that distort natural competition.
Several key issues stand out:
I've seen similar incentive programs across ecosystems, and they typically lead to temporary TVL pumps followed by immediate exits once incentives dry up. This doesn't build sustainable value for ARB holders.
If we're serious about DeFi growth, we should consider alternatives:
I understand the desire to compete with other L2s, but copying ineffective token emission strategies won't differentiate Arbitrum.
This is fresh thinking.
A few suggestions I’d like to add:
The DRIP seeks funding of 80M ARB for the first 4 seasons, with a maximum of 20M allocated per season and a portion set aside for operational costs related to vendors utilized by the season selection committee.
This is fresh thinking.
A few suggestions I’d like to add:
The DRIP seeks funding of 80M ARB for the first 4 seasons, with a maximum of 20M allocated per season and a portion set aside for operational costs related to vendors utilized by the season selection committee.
Although the current price of ARB is 0.3, this is quite a large budget for the DAO, especially considering there is no allocation directly aimed at incentivizing users. Users may not see a direct correlation between participating in the program and the benefits derived from the ARB token.
But there's a possible solution to prevent yield selling: How about using part of the budget to incentivize ARB token itself, thus increasing both demand for the token and encouraging long term commitment to the ecosystem?
While incentivizing ARB as the asset might be seen as ponzi tokenomics from early DeFi days, this could at least boost demand for ARB.
On top, 80M ARB would not just be sold on the market, but could also be further utilized to farm rewards.
As mentioned, 80M ARB could put pressure on the DAO, I suggest considering collab with other protocols so that users can receive additional rewards or DAO can share budget from these partners.
Uniswap is already using this approach to provide a more attractive incentive structure for users and encourage cross protocol collaboration, check their vote here: BoB Uniswap v3 Incentives Package
Hi @Entropy! Thank you very much for this long-awaited proposal.
Entropy proposes a new type of incentives framework focused on targeting specific assets and activities across Arbitrum rather than specific protocols. Incentives per specific assets/activities will run in 3-month seasons through the DRIP so that the program can be adapted and different assets and activities can be selected as learnings are taken into account. Each season must have a singular, specified goal. For example, Make Arbitrum One the best place to borrow USDT against wstETH or Ensure Arbitrum One Has the deepest liquidity for trading USDT/ETH.
Hi @Entropy! Thank you very much for this long-awaited proposal.
Entropy proposes a new type of incentives framework focused on targeting specific assets and activities across Arbitrum rather than specific protocols. Incentives per specific assets/activities will run in 3-month seasons through the DRIP so that the program can be adapted and different assets and activities can be selected as learnings are taken into account. Each season must have a singular, specified goal. For example, Make Arbitrum One the best place to borrow USDT against wstETH or Ensure Arbitrum One Has the deepest liquidity for trading USDT/ETH.
We believe this approach is on point. From our perspective, incentive programs should be protocol-agnostic, as long as user safety is properly accounted for.
In that regard, we noticed there is a “minimum threshold of security and maturity” required for a protocol to be eligible:
-Need to be chain-wide and protocol agnostic (minus security-related whitelisting or a TVL/protocol-maturity requirement). Depending on the vertical and ROI after a program starts, the committee can expand or restrict how broad the program is.
This raises a question: in the event a protocol is excluded, is there any mechanism to appeal or revert that decision? We understand the Season Selection Committee has discretion to exclude, but it is still composed of humans, and errors or oversights may occur. Therefore, there should be a transparent mechanism for an excluded or omitted protocol to request inclusion.
Goal: Make Arbitrum One the best place to borrow USDT, USDC, and ETH against wstETH.
Select Collateral: wstETH
Select Borrowable assets: ETH, USDC, and USDT
Required LTV: 15%
Target yield boost for wstETH: 2% APR (increase over wstETH base yield)
Maximum collateral incentivized: $1B
Protocol Partner RFP: The program will be platform/protocol agnostic and target lending across Arbitrum One. With that said, protocols will be screened for security purposes before being included in the program. The thought process behind this decision surrounds not incentivizing (or appearing to endorse) Arbitrum’s users to deposit assets into protocols that have a higher likelihood of being hacked. The security provider selected in the ARDC will be in charge of whitelisting lending protocols or alternatively the committee enlists a firm that can do this. The lending platform partners must support wstETH as collateral and borrowing of USDC, USDT, or ETH against that collateral in order to be eligible. This creates a fair environment that should not negatively encumber any specific lending market.
In practice, this means that any borrower of USDC, USDT, and/or ETH on a whitelisted Arbitrum One-based lending platform will be eligible to receive 2% APR paid on the total value of their wstETH deposited into the lending protocol. Wallets will only be eligible if they have reached and sustained an LTV of 15%. Rewards will be paid out weekly by a distribution partner.
With a 3-month program, targeting a 2% yield, $5M will cover 3 months of runway on $1B in collateral participating in the program.
We understand this is just an example, but something that concerns us is that the ARB token is not mentioned at all throughout the proposal. While we’re not suggesting to preset specific goals, part of strengthening the native token involves ensuring deep liquidity.
We suggest initially focusing on ARB + stablecoins + ETH. Greater depth in ARB/stablecoin or ARB/ETH pairs is a win-win for the ecosystem. This is especially relevant when assessing ARB’s risk profile as lending collateral.
⅔ votes are required for a season to be approved. The first 4 seasons that meet the rule requirements and are deemed valid by the committee will be enacted.
The committee also has the power to:
As we’ve mentioned in the thread A Vision for the Future of Arbitrum, it not only makes a lot of sense to have Arbitrum Aligned Entities involved in key proposals like this, but it’s also virtually impossible for any other proposer to gain enough consensus to pass a competing incentives proposal. We’ve already seen this play out with ARB Incentives: User Acquisition for dApps & Protocols, where the DAO made it clear that the incentives strategy must come from entities such as OCL, AF, or Entropy.
That said, although the current committee already partially represents the DAO via these entities, we see potential value in incorporating two additional members selected from the current pool of independent DAO contributors. The AAEs could even appoint these two additional members after the proposal is approved.
This aligns with what we outlined in our SOS Submission: If the DAO already has talented contributors, and the main challenge is better coordination, then the best alternative is to ensure that talent is integrated into the execution of proposals.
We emphasize this because, since this is a DAO-funded initiative, delegates will naturally expect some diversity in who holds decision-making power. We believe the structure we’re proposing could help ease those concerns. Otherwise, we risk swinging from a model where initiatives were 100% executed by external contributors to one where execution is entirely in the hands of the AAEs (excluding the two vendors they plan to hire), which could lead to future issues—as @pedrob pointed out:
One of the unique (albeit sometimes chaotic and inefficient) strengths of the DAO has been the involvement of contributors in operations. That structure helped surface and highlight individuals (we all know who)—now active contributors and respected delegates. If programs had been this closed off from the beginning, the DAO might not have built the pool of engaged contributors it has today. I understand the goal of efficiency, and I think it makes sense in many ways. Still, I believe it’s worth exploring ways to balance that with contributors’ involvement.
A good example—one that we believe has been working well—is the Stylus Sprint Committee: there’s a strong mix of contributors (OZ, Jojo, and SEED) and AAEs (Entropy, OCL, and AF) working together, each bringing unique skills to the table for effective proposal execution and having Entropy’s management of task allocation based on each member’s strengths. A similar approach could work here—for example, assigning DAO communications to one of the additional members, thereby reducing the operational load on the AAEs so they can focus on more strategic matters like designing the next seasons.
A group of AAEs administering monitoring and managing this does make more sens than delegates managing every minute detail
But the current description does leave a lot of questions: Are delegates just approving this with no input?
A group of AAEs administering monitoring and managing this does make more sens than delegates managing every minute detail
But the current description does leave a lot of questions: Are delegates just approving this with no input?
We certainly dont need or want to manage every detail , but general seasonal guidelines, goals, at the very minimum, shoudl have delegate input. This could be split between calls (for detailed discussion) and votes for higher level selection of goals or guidelines.
The general idea of AAEs administering an incentive program is great, but the Current version of this proposal is a bit too vague and doesnt clearly have any synergy between the DAO and AAEs.
Many of us do have experience - we’re LPs and farmers, traders ourselves, and we know other delegates have experience running or analyzing incentive programs, which could provide a lot of value.
As a strong element of positive sentiment/confidence, I broadly support this initiative and the parties presenting/providing research for it (Entropy, Gauntlet, Blockworks, Chaos, Foundation, OCL, etc...). I also support the general approach of
The season selection committee will have full discretion on how the procurement is run; public or private application and evaluation, open or invitation only, who is selected, etc. The process will be fully facilitated by the season selection committee, and the decision of the partner will be fully at their discretion.
As a strong element of positive sentiment/confidence, I broadly support this initiative and the parties presenting/providing research for it (Entropy, Gauntlet, Blockworks, Chaos, Foundation, OCL, etc...). I also support the general approach of
The season selection committee will have full discretion on how the procurement is run; public or private application and evaluation, open or invitation only, who is selected, etc. The process will be fully facilitated by the season selection committee, and the decision of the partner will be fully at their discretion.
I echo many of the delegates, such as @pedrob here in saying that assurances along the lines of transparency would be valuable. I know below there is mention of public data provision, but this seems more in line with an explanation of outcomes. I'd want to see a report on admissions decisions. I'm reluctant to say fully private admissions is ideal, but if it ends up that way, at minimum a thorough post-admittance report would help.
@cp0x I am curious why you say this is a small amount though? I don't say this to disagree with you, I am genuinely curious on identifying proper sizing and I am open to being convinced of higher or lower amounts.
Finally, marketing is a key addition which I strongly support. It's also a component which should be added to proposals more broadly. That said, I would be interested in seeing the program track the actual conversion rates of the marketing strategies used. In this regard, it also serves as experimentation and data on marketing / marketing approaches more broadly which can then be generalized to future, even entirely unrelated, proposals. This has yet to be mentioned, but this form of metrics capturing should be added to the proposal requirements.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
First off, we’d like to thank @Entropy for putting the much-awaited DRIP proposal. We see initiatives like DRIP as opportunities to rethink how incentive programs can better serve long-term ecosystem health rather than just short-term growth spikes like we had in our earlier incentive programs.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
First off, we’d like to thank @Entropy for putting the much-awaited DRIP proposal. We see initiatives like DRIP as opportunities to rethink how incentive programs can better serve long-term ecosystem health rather than just short-term growth spikes like we had in our earlier incentive programs.
There are several strong design decisions in this proposal that stand out to us from the previous incentive programs.
a new type of incentives framework focused on targeting specific assets and activities across Arbitrum rather than specific protocols.
This shift in focus is important. Past programs sometimes led to concentrated allocations based on relationships rather than real impact. Targeting asset pairs and economic behaviors, like deepening a specific market or making Arbitrum the best place to borrow against wstETH, is more aligned with systemic growth.
marketing is a missing aspect from every past program, which the DRIP will address by having the foundation included on the committee and requiring eligible protocols to co-market.
We couldn't agree more. Incentive programs without awareness campaigns often leave adoption potential on the table. Tying eligibility to co-marketing commitments is a smart move that aligns everyone toward reach and usage, not just TVL games.
Some delegates have already raised good points on which we have to add on to -
What key metrics and criteria will be used to assess the program’s performance against its goals?
We’d like to build on this by asking, will these metrics vary seasonally based on the specific activity targeted, or will there be a core set of DAO-wide metrics to allow for comparison across seasons? Additionally, how will learnings from underperforming seasons be used to shape the design of the next?
Given the critical role of distribution and evaluation partners in program success, more detail on how these partners will be chosen and held accountable would strengthen confidence.
We’d like to know, will the DAO receive public interim updates (e.g., at the 6-week mark) during a season to allow for mid-cycle feedback or adjustments? This would allow us to avoid a post-mortem only cycle and make the program more iterative and responsive.
marketing is a missing aspect from every past program, which the DRIP will address by having the foundation included on the committee and requiring eligible protocols to co-market.
Many protocols, especially newer or smaller ones, may not have a strong marketing infrastructure. Will DRIP offer templated assets, messaging guidelines, or any support for ad spend, content creation, or community campaigns? Beyond requiring participation, are there any expectations on performance metrics (CTRs, campaign reach, conversions) that protocols should report back? And as the program spans multiple seasons, will co-marketing quality be considered when evaluating protocols for participation in future rounds?
Given that each season targets specific activities or pairs, when or how much before the start of the season will the goal be decided? And how will DRIP ensure that incentivizing one pair doesn't drain liquidity from other critical trading pairs on Arbitrum? Is there a mechanism to monitor or correct fragmentation effects?
the distribution partner will check the chain for wallet eligibility and distribute rewards to the wallets that have met the mandated goals of a season and create a frontend through which all eligible protocols will be shown.
Could you share more specifics here? What mechanisms will be in place to ensure sybil resistance or prevent users from farming rewards in a way that doesn’t create real ecosystem value? Also, will wallet eligibility be uniform across all seasons or customizable based on the goal?
The evaluation partner will host open data around the program and recommend optimization improvements to the committee throughout a season’s lifecycle; after a season is complete, the evaluation partner will provide a more holistic analysis to the DAO.
Could you elaborate on which key metrics will be prioritized for analysis, beyond just raw usage? For example, are there plans to evaluate user retention after a season ends, or capital efficiency per ARB spent? Having a few shared metrics across seasons might also help the DAO compare performance longitudinally.
We’d appreciate a more detailed breakdown of the operational budget. How much is being allocated to distribution partners, UI development, evaluation, and potential protocol support? Could you specify the percentage of the 20M ARB per season that is earmarked for operational expenses versus direct incentives? Furthermore, what are the projected costs associated with each vendor (distribution, evaluation, etc.), and how were these estimates determined?
All in all, this proposal demonstrates strong evolution in how we approach ecosystem incentives. We see DRIP as a serious attempt to move from broad TVL farming to strategic and measurable activity growth.
Thank you @Entropy, for presenting this comprehensive and well-structured proposal. We appreciate the effort to rethink Arbitrum’s incentives with a focus on targeted, measurable outcomes and controlled experimentation. The idea of running focused 3-month seasons with singular goals addresses many challenges observed in prior programs, especially the difficulty in evaluating broad, multi-vertical incentives.
That said, we have some concerns about the governance structure and operational details. The season selection committee includes entities with significant influence in the ecosystem, which raises questions about impartiality and potential conflicts of interest. Could you clarify what measures will be in place to ensure transparency and fairness in season and partner selection? Will there be public reporting or community oversight mechanisms?
Hello!
Thanks for the proposal!
I have a few questions:
The security provider selected in the ARDC will be in charge of whitelisting lending protocols or alternatively the committee enlists a firm that can do this.
Thank you for the long-awaited proposal.
We see a high potential in the application of this approach, which we understand has been developed based on ARDC's findings from past incentive programs. We definitely see this approach as valuable and feasible at the same time and still promising in terms of future results, but we are not quite sure if we understand correctly if the whole community will be involved in the selection process for the proposed committee that will choose the moments and goals for each season that is to begin, beyond Entropy, OCL, the Foundation itself, key stakeholders and partner companies. Maybe this has to do with the fact that the seasons are 3 months each and taking these members selections every 3 months period is overwhelming. Would you mind clarifying this?
We also have concerns about how much funding is being asked for, even though we see who the team is behind this proposal, who are all trusted parties, yet this is still, as indicated in the proposal, an initial program, so there have been no previous versions on which to build this beyond the lessons learned from ARDC's experience with past programs. It is quite an ambitious start for something that has not been tested by the real-world experience of taking this into reality. Should this be a concern for us as a community if we greenlight this proposal? Considering the team behind it, we do not need guarantees that unused funds will be returned or reinvested in future seasons, but we do need a better explanation of the budget breakdown of such a number of requested funds. Why so much?
Hi all,
I won’t be participating in the AAE discussions or commenting on the composition of the season committee, and will instead focus solely on the substance of the proposal.
Hi all,
I won’t be participating in the AAE discussions or commenting on the composition of the season committee, and will instead focus solely on the substance of the proposal.
Overall, I believe the core idea of targeting specific objectives rather than protocols is a powerful shift. By setting clear goals—like making Arbitrum the most cost-efficient place to borrow—we’re not just attracting short-term volume, but creating conditions that can bring back long-term, power DeFi users and encourage them to stay.
Incentivizing concrete use cases where Arbitrum has the potential to gain sustainable market share—such as borrowing against yield-bearing assets—is a step in the right direction. It aligns incentives with measurable outcomes and sets the stage for meaningful growth beyond temporary TVL spikes.
I think this is great and it’s very important that there will be a publicly accessible data dashboard so everyone can monitor the program’s performance transparently.
what is the target OpEx as a percentage of the season’s allocated funds?
The season selection committee will have full discretion on how the procurement is run; public or private application and evaluation, open or invitation only, who is selected, etc. The process will be fully facilitated by the season selection committee, and the decision of the partner will be fully at their discretion.
First of all, thank you for the long-awaited DeFi program!
At first glance, it seems quite close to simply funding the Foundation or OCL to manage BD/incentives funds at its discretion (which the DAO has done recently). I’m happy to see more involvement from the AAEs, but is the plan for them to run all the DAO funded programs?
First of all, thank you for the long-awaited DeFi program!
At first glance, it seems quite close to simply funding the Foundation or OCL to manage BD/incentives funds at its discretion (which the DAO has done recently). I’m happy to see more involvement from the AAEs, but is the plan for them to run all the DAO funded programs?
One of the unique (albeit sometimes chaotic and inefficient) strengths of the DAO has been the involvement of contributors in operations. That structure helped surface and highlight individuals (we all know who)—now active contributors and respected delegates. If programs had been this closed off from the beginning, the DAO might not have built the pool of engaged contributors it has today. I understand the goal of efficiency, and I think it makes sense in many ways. Still, I believe it’s worth exploring ways to balance that with contributors' involvement.
Regarding the program itself: I do like the model of targeting specific assets. It seems like a valuable experiment worth trying.
The DRIP is purposefully simple, targeted, and measurable, and focuses solely on the goal of bringing popular activity taking place on other ecosystems to Arbitrum One in a sustainable manner.
What it’s still not clear to me is: why do you believe this model will lead to sustainable growth activity on Arbitrum? What mechanisms are in place to ensure user retention, long-term commitment from potential partners, or other indicators of sustainability?
The part of the proposal I’m still not fully convinced about: as presented, the program doesn’t offer an auditable structure. The committee decides how, when, and with whom to negotiate, and even the few defined rules can be changed at will. I understand the intention is to keep the program flexible so it can iterate based on successes and failures. But that makes me wonder: why not simply request funds for the Foundation to manage directly, without much additional structure?
This will allow Arbitrum’s partnership teams, including Entropy Advisors and Offchain Labs, to use the DRIP as an incentive that makes Arbitrum more attractive to protocols exploring alternative/genesis chain deployments.
These look like BD funds that could be used to secure deals or attract deployments, possibly by prioritizing certain verticals. I remember that in the LTIPP, we saw protocols like Synthetix deploy quickly due to incentives, only to leave shortly after. Is there a strategy in place to ensure more sustainable engagement? Could a particular deal lead to prioritizing one vertical over others for that single reason?
Finally, marketing is a missing aspect from every past program, which the DRIP will address by having the foundation included on the committee and requiring eligible protocols to co-market.
This is great. It’s important to ensure coordination with the Foundation’s social media channels. During LTIPP, getting that support to help amplify awareness of the program was quite a challenge.
Thanks for the proposal.
This feels like an ideal pair with https://forum.arbitrum.foundation/t/mate-proposal-non-consitutional/27770 to manage the number of acronyms in the DAO.
Jokes aside, I resonate with the intention of enabling a mechanism for a hyper targetted incentives, but the usual critiques to incentive programs still feel unaddressed
I appreciate the shift toward targeted incentives rather than generalized programs, addressing key lessons from previous initiatives. The season-based format is also great as it allows for continuous evaluation and iteration.
Perhaps splitting each season into "sub" seasons with a gradual release approach (like 2M for the first month, 6M for the second, and 12M for the third) tied to performance could be more effective. It would allow you to test with smaller amounts first, measure the results, and then make data-driven decisions about whether to scale up spending, tweak the approach, or pivot to a different goal. This would be especially useful because insights from incentivizing one activity (like wstETH lending) may not map cleanly to another (like RWA liquidity).
It would also be valuable to see some CAC vs. LTV analysis included in the evaluation partner's public dashboards. Understanding how much we're paying per user action versus the long-term value they bring will help ensure the program is generating positive economic value for Arbitrum over time.
Yes, there will absolutely be opportunities for community input throughout the DRIP process. We’ll be actively calling on the community to help ideate (and already have been) on the most impactful season goals and service providers. That said, input will be weighted based on relevant expertise. For example, builders with product-market fit in a targeted vertical or contributors with procurement experience will naturally carry more influence when evaluating potential program design or partners.
Thanks for the response on this @Entropy - can at least some wording to this effect be included in the proposal? Seeing that the issue of community feedback/input is a recurring theme of feedback on this proposal, it would be great to make it explicitly clear in the proposal community input will be sought and taken into account. This is a simple but nontrivial addition to make.
The core idea behind DRIP is to use incentives not to subsidize usage by simply increasing returns higher than the prevalent cost of capital, but to tip the scale in favor of Arbitrum where organic product-market fit is emerging and can be catalyzed via incentives.
This might be a silly suggestion, but I think the name of the program could be adjusted.
“Drip: the DeFi Incentives Program” sounds like it’s targeted at users who are already familiar with Arbitrum distributing liquidity mining incentives, which is something that’s been common in DeFi for years.
But this program has a much more focused and BD-oriented approach. A different name could potentially catch the attention of projects that aren’t currently on Arbitrum and might otherwise overlook the program, thinking it’s only about incentives for protocols that are already here.
“Strategic Ecosystem Partnerships” or something like this.
We strongly support dedicating more resources toward restoring Arbitrum’s leading position in the DeFi ecosystem.
We greatly appreciate and fully support this research-backed methodology. It’s refreshing to see a program being shaped by deep analysis and subject-matter expertise — a key element that was notably missing from previous incentive efforts. A more structured, targeted design will help deliver more effective, measurable results.
Another benefit of the DRIP is its value in business development and growth. Potential Arbitrum partners will see a program that could benefit them if they put a primary focus on Arbitrum.
While incentives are clearly effective for onboarding new liquidity and users, we believe complementary activities should accompany this to ensure long-term retention and ecosystem growth. Close collaboration with DeFi protocols will be crucial.
There are two main angles here:
-Seasons are intended to be ~3 months, though they can be cut short by the committee or extended at their discretion, with the goal of always tapering rewards instead of arbitrarily cutting incentives at once.
One question: Will strategies be dynamically adjusted throughout the season based on performance metrics, or will they remain fixed? Our concern here is fund optimisation — a more flexible structure that allows mid-season adjustments could help ensure capital is allocated as efficiently as possible.
-Eligible protocols must include marketing in their frontend and on their socials, coordinating co-marketing with Entropy Advisors and the Arbitrum Foundation.
We strongly agree that this is a key requirement. Co-marketing ensures visibility and awareness beyond the initial incentive push and drives community momentum.
Finally, we recommend that the committee publish a transparent report at the end of each season. This should highlight what worked, what didn’t, and what learnings are carried into the next cycle. This will improve accountability and enable continuous improvement for future seasons.
We really like the direction DRIP is heading. It clearly takes lessons from STIP and LTIP by focusing on specific goals, aiming for more sustainable growth, and improving how incentives are managed. From our perspective, this has the potential to be a more effective and scalable way to grow the Arbitrum ecosystem. That said, there are still a few areas we would love to see strengthened. One big question is around DAO involvement, since the current setup gives the committee full control over planning and execution. More clarity on how seasonal goals are chosen, how partners are selected, and how success is measured would go a long way. The 80 million ARB budget is quite large, so it would help to break down how much goes toward direct incentives versus operational costs like marketing and distribution partners.
We would also like to see a clear rubric or selection criteria for eligible projects, similar to what Optimism uses, to help guide applicants and make decisions more transparent.
Regarding accountability, how will we know if a individual project is underperforming? Relying too heavily on subjective evaluation could lead to inconsistent outcomes and make it harder for the community to assess impact. We think one potential solution worth exploring is tying incentives directly to predefined milestones and performance targets. This model would require projects to clearly articulate their goals, timelines, and expected outputs up front, and only receive funding incrementally as they meet those benchmarks. Not only would this create a more objective framework for measuring progress, but it could also help de-risk funding decisions and ensure that resources are being allocated to initiatives that are actively delivering value. Adopting a milestone-based approach could strengthen accountability, reduce waste, and make it easier to course-correct when things aren't working as expected.
Long-term sustainability is another concern. Past programs showed that once incentives ended, usage often dropped off. We think adding mechanisms like vesting and stronger sybil resistance can help drive more lasting engagement.
On the marketing side, requiring co-marketing makes sense, but smaller teams might need some support or guidance to make the most of it. We also think having a unified UI that displays all participating projects is a great move. It would be even better if the UI includes a simple onboarding experience to help users quickly understand what each project does, how to participate, and how to earn rewards. Making it easier for users to get involved can really boost the visibility and impact of the program. Overall, we are supportive of DRIP and excited to see it roll out, and with more clarity around transparency, costs, accountability, and user experience, we believe it can set a strong precedent for future incentive programs.
[quote="pedrob, post:2, topic:29049"]
What it’s still not clear to me is: why do you believe this model will lead to sustainable growth activity on Arbitrum? What mechanisms are in place to ensure user retention, long-term commitment from potential partners, or other indicators of sustainability?
[/quote]
[quote="pedrob, post:2, topic:29049"]
[quote="pedrob, post:2, topic:29049"]
What it’s still not clear to me is: why do you believe this model will lead to sustainable growth activity on Arbitrum? What mechanisms are in place to ensure user retention, long-term commitment from potential partners, or other indicators of sustainability?
[/quote]
[quote="pedrob, post:2, topic:29049"]
Is there a strategy in place to ensure more sustainable engagement? Could a particular deal lead to prioritizing one vertical over others for that single reason?
[/quote]
[quote="cp0x, post:7, topic:29049"]
why are you sure that in this case there will not be the same result as last time? Why in the same example about wstETH all the borrowing will not go to another chain when the season ends?
[/quote]
[quote="Zeptimus, post:22, topic:29049"]
Artificially incentivizing liquidity through emissions often creates mercenary capital rather than sustainable ecosystems. Market forces should determine which protocols deserve capital - not committee-driven subsidies that distort natural competition.
[/quote]
[quote="Saurabh, post:27, topic:29049"]
One of the major issues with previous programs was the lack of stickiness—liquidity often disappeared once incentives ended. As Pedro pointed out, this proposal still doesn’t outline a clear retention strategy to address this.
[/quote]
The core idea behind DRIP is to use incentives not to subsidize usage by simply increasing returns higher than the prevalent cost of capital, but to tip the scale in favor of Arbitrum where organic product-market fit is emerging and can be catalyzed via incentives. We’re not trying to manufacture demand from scratch for products with market share that has already stabilized and there are no systemic changes to be made, instead, we’re targeting activities that are organically emerging (think new product releases, parameter changes, protocol migrations, etc.) where capital can incentivise users to relocate to Arbitrum, so that when incentives turn off, Arbitrum maintains its position as the best organic place to execute a certain activity in its competitive environment. Some aspects of creating the best natural environment include deployments of apps that create new utility for a specific action, which is where the BD perspective is most important, but incentives would never be gated to one specific protocol. This structure is driven by learnings from past incentive programs, where outperformers (in terms of retention and capital attracted per dollar spent) exhibited common attributes: enabling new or better UX activities with organic PMF for verticals and products where Arbitrum’s market share was previously minimal or growing. In short, we believe that no matter the incentives design, user retention cannot be achieved without the underlying product/activity actually being among the best available on the market, but naturally, we can’t promise exceptional retention metrics with 100% certainty.
[quote="pedrob, post:2, topic:29049"]
Still, I believe it’s worth exploring ways to balance that with contributors’ involvement.
[/quote]
[quote="Argonaut, post:6, topic:29049"]
if the whole community will be involved in the selection process
[/quote]
why not simply request funds for the Foundation to manage directly, without much additional structure?
More clarity on how seasonal goals are chosen, how partners are selected, and how success is measured would go a long way.
The DRIP is open to the community for help in ideation, contribution, and SPs; it’s just the end decisions that lie solely with the AAEs. Without the DRIP’s structure, we’d decrease the potential for ideation and takeaways from the community. Entropy will be acting as a point of contact to make sure this input is taken into consideration. It’s additionally worth mentioning that expenses and performance data will all be made publicly available.
Appreciate the passion and agree that transparency and DAO voice are essential. That said, you’re misguided. The evaluation partner doesn’t decide anything unilaterally, they provide open, public dashboards and feedback to guide the program, not dictate it. The 80M ARB is a capped max, not a blank check. Funds are only deployed when users actually participate, and unused funds are returned. The committee’s discretion ensures programs can adapt quickly based on real data, not bottlenecked by gridlock. Most importantly, DAO members absolutely can shape the direction of DRIP through season suggestions, public evaluation, and proposal feedback. This isn’t a rejection of DAO governance, it’s a rejection of vague, bloated programs without clear responsibility areas that fail to deliver. It’s a rejection of rent-seeking theatrics in the name of decentralization at the expense of Arbitrum’s position in crypto.
While we are fully aware that the SSC comprises solely AAEs and assume they will act in the DAO’s best interests, we want to emphasize the need for transparency and community input.
Why not tap the hive mind? I recommend a one‑off signalling round where delegates rank the SSC’s short‑list. The SSC still owns the final call, but now it has a data layer showing which themes the ecosystem believes can move the needle.
Yes, there will absolutely be opportunities for community input throughout the DRIP process. We’ll be actively calling on the community to help ideate (and already have been) on the most impactful season goals and service providers. That said, input will be weighted based on relevant expertise. For example, builders with product-market fit in a targeted vertical or contributors with procurement experience will naturally carry more influence when evaluating potential program design or partners.
what is the target OpEx as a percentage of the season’s allocated funds?
We’d appreciate a more detailed breakdown of the operational budget. How much is being allocated to distribution partners, UI development, evaluation, and potential protocol support? Could you specify the percentage of the 20M ARB per season that is earmarked for operational expenses versus direct incentives? Furthermore, what are the projected costs associated with each vendor (distribution, evaluation, etc.), and how were these estimates determined?
A hard 8 % ceiling on non‑reward spend (vendors, marketing, bounties) keeps incentives front‑loaded where they belong.
The 80 million ARB budget is quite large, so it would help to break down how much goes toward direct incentives versus operational costs like marketing and distribution partners.
This is something we discussed quite a lot internally and called on Castle Cap for feedback as well. We wanted to have some flexibility in case there were excellent partners not on our radar who could make the program quantifiably better. We want to make sure that we have the opportunity to onboard partners that will add value, but believe that internally at Entropy, AF, and OCL, we have quite a lot of bases covered and really just need help in the areas of optimization and distribution. We don’t want to pigeonhole ourselves into a number that removes the flexibility, and OpEx as a % of total expenses will naturally be dependent on how much capital we’d end up distributing during seasons. Like we say in the proposal:
but the season selection committee prioritizes keeping low OpEx, as the point of the program is user rewards. Although, we will note that our opinion is that previous incentive programs run by the DAO could have been notably more effective had more resources been allocated to the programs’ operations.
Transparency into pricing will be given to the community after decisions are made.
we do need a better explanation of the budget breakdown of such a number of requested funds. Why so much?
The excessive allocation seems disproportionate without proven methodology
We strongly believe that these entities are all aligned in only spending ARB in positive ROI ways and would like to go into this with a sufficient budget to make sure we can have a real impact that can capture a large category like wstETH. As mentioned in the proposal, in the condensed example section, capturing the wstETH market alone will likely cost in the realm of 1 entire season or more (given that this may need to be paired with incentives to bring over looping/lrt vaults, more liquidity in DEXs for LTVs, etc). At current prices, the total value of the program is ~$23M (assuming all ARB is distributed and used on OpEx), compared to the ~$140M of realized expenses for the DAO on STIP, STIP.B, STIP Backfund, and LTIP. The program’s value roughly aligns with the DAO’s annualized YTD income (excluding Timeboost). We believe we can have more retained impact with this budget than the totality of the ~$140M spent thus far.
If and when a season is successful, if the committee believes that there is further room for catalyzation toward the point of “critical mass sustainability”, further budget may be requested from the DAO. We believe that this budget is sufficient to get the data we need and potentially even catalyze one or a few markets, depending on their size.
Vesting changes the game: it moves the incentive away from short-term extraction, where users farm rewards and immediately exit, toward a model where participants are encouraged to stay engaged over time. It rewards commitment instead of quick profit.
Long-term sustainability is another concern. Past programs showed that once incentives ended, usage often dropped off. We think adding mechanisms like vesting and stronger sybil resistance can help drive more lasting engagement.
Vesting may or may not be included in the design of a particular season, depending on the target audience. Having said that, based on past research on Arbitrum’s incentive programs, different incentive distribution structures don’t seem to have had a large difference on long-term retained usage. The DRIP is focused on high-retention activity created by organic drivers, and if vesting tokens may help toward that goal for a specific season, it’s possible to be included.
Analysis is ongoing, and distribution is at a regular cadence, for example, once per week. This will be performed by the distribution partner, and incentives will be directed directly to end users.
As outlined in the proposal, the scope for the distribution partner includes creating a dedicated frontend. We think this should be something that is fully Arbitrum-branded and “owned” by the DAO.
I don’t think it’s a good idea to be able to stop or cancel the season - it will have a bad effect on the reputation of the Arbitrum. There will be a committee that will meticulously develop the new season, and if it is not sure about something, then it’s probably worth thinking about changing the committee to other specialists. What I mean is that it’s better to prepare in advance than to lose our reputation later. And also, it’s probably worth publishing these discussions in some preliminary results on the forum, so that the community can adjust the season to avoid problems in the future.
Will strategies be dynamically adjusted throughout the season based on performance metrics, or will they remain fixed? Our concern here is fund optimisation — a more flexible structure that allows mid-season adjustments could help ensure capital is allocated as efficiently as possible.
Each season will be planned meticulously, with real-time performance data being published. If we are seeing a decreasing impact, incentives will likely be tapered instead of a hard stop. This is to ensure that the program isn’t spending unnecessarily. Adjustments will be heavily prioritized during the season. That said, the kill switch is also an important mechanism to have in some low-likelihood scenarios, like protocol or user abuse.
when we compare what could be achieved with 80mn ARB in investments, why should we focus on Incentives instead? did we give up on the idea of DAO budget? or are we just approving things as they go? If this wasn’t such a large sum, this wouldn’t be an issue but at $80mn, we should have some planning on second order effects like eliminating our deployment capacity to fund other programs, no?
Why such a sum? couldn’t this be tested with 2mn ARB? or 10, or 20?
How will we know if this was successful? Any KPIs?
Without clear, detailed allocations or KPIs, this feels like a repetition of the same mistakes from previous rounds.
Our opinion is that both investments and incentives are needed. When it comes to more mature market sectors where Arbitrum’s presence is lagging, e.g., looping, we don’t think investments are a viable route to penetrate this since the market leaders are already well established. Betting on a new team in such a sector could create larger, tangible returns for the DAO, but we must also focus on supporting the ecosystem, making Arbitrum the best place for DeFi activity.
As a clarification, the DRIP is asking for 80M ARB, not $80M. This accounts for ~2% of the DAO’s unissued ARB, and at the current price, roughly equals the DAO’s annualised YTD income (excluding Timeboost). We fully agree that the DAO requires a holistic budget, but we shouldn’t let perfection be the enemy of progress, and given the above figures, we think the allocation is justified as an ecosystem growth initiative. Further justification for the program’s size can be found in our response to Argonaut and Zeptimus above.
KPIs need to be designed on a season-by-season basis, which the evaluation partner, together with the committee, will be in charge of doing or approving in the case that the season recommendation comes from the community. KPIs that will be monitored across seasons would include: user retention, induced activity per $ spent, and total market share gains.
Could you clarify what measures will be in place to ensure transparency and fairness in season and partner selection? Will there be public reporting or community oversight mechanisms?
Specifically, what is the planned frequency for these evaluations (e.g., per season, mid-season, annually)? What key metrics and criteria will be used to assess the program’s performance against its goals?
We’d like to build on this by asking, will these metrics vary seasonally based on the specific activity targeted, or will there be a core set of DAO-wide metrics to allow for comparison across seasons? Additionally, how will learnings from underperforming seasons be used to shape the design of the next?
With the exception of security-related whitelisting or a TVL/protocol-maturity requirement, all protocols offering a product for the incentivised activity will be eligible for participation. When it comes to partner selection, to our knowledge, none of the committee members has a conflict of interest with providers in these verticals.
Real-time performance data and the program’s costs will be made publicly available, with KPIs being designed on a season-by-season basis. The evaluation partner, together with the committee, will continuously monitor performance. In the case of continued underperformance, the committee isn’t afraid of halting the program completely.
We’d like to know, will the DAO receive public interim updates (e.g., at the 6-week mark) during a season to allow for mid-cycle feedback or adjustments? This would allow us to avoid a post-mortem only cycle and make the program more iterative and responsive.
The DAO will be kept updated on a season’s performance.
Many protocols, especially newer or smaller ones, may not have a strong marketing infrastructure. Will DRIP offer templated assets, messaging guidelines, or any support for ad spend, content creation, or community campaigns? Beyond requiring participation, are there any expectations on performance metrics (CTRs, campaign reach, conversions) that protocols should report back? And as the program spans multiple seasons, will co-marketing quality be considered when evaluating protocols for participation in future rounds?
On the marketing side, requiring co-marketing makes sense, but smaller teams might need some support or guidance to make the most of it.
Ad spend will not be covered, but there will be expectations and standardized structures when it comes to marketing. Marketing performance metrics will also be followed, but as long as guidelines are followed, they will not affect a protocol’s eligibility in future rounds. Since protocols must pass security-related whitelisting or a TVL/protocol-maturity requirement, such that users aren’t incentivized to use protocols that aren’t safe, we expect that the number of protocols with no marketing capabilities accepted into a season will be minimal.
Given that each season targets specific activities or pairs, when or how much before the start of the season will the goal be decided? And how will DRIP ensure that incentivizing one pair doesn’t drain liquidity from other critical trading pairs on Arbitrum? Is there a mechanism to monitor or correct fragmentation effects?
Targeted activities/products will be clearly communicated before a season’s initiation, such that the market and protocols have ample time to digest the information and prepare. We expect that some liquidity will move from other avenues within Arbitrum to the incentivized activity until a new equilibrium forms within the ecosystem. We think this is inevitable to some degree since Arbitrum’s landscape of opportunities will change when incentives are turned on. However, by focusing on activities where Arbitrum’s potential for increased market penetration is large and striving to create the best environment for said activities (parameter changes, new protocols or products, etc.), the thesis is that capital flows to Arbitrum from other ecosystems and stays here. We expect the evaluation partner to be able to monitor the origin of capital that is used for activities that are being incentivized.
Could you share more specifics here? What mechanisms will be in place to ensure sybil resistance or prevent users from farming rewards in a way that doesn’t create real ecosystem value? Also, will wallet eligibility be uniform across all seasons or customizable based on the goal?
This will be designed by the distribution partner and accepted by the committee (we’d additionally note that sharing this information publicly would make farming incentives easier). Wallet eligibility will depend on the parameters set for a specific season.
Could you elaborate on which key metrics will be prioritized for analysis, beyond just raw usage? For example, are there plans to evaluate user retention after a season ends, or capital efficiency per ARB spent? Having a few shared metrics across seasons might also help the DAO compare performance longitudinally.
As stated earlier, KPIs will vary depending on the season. Across seasons, shared metrics will include user retention, induced activity per $ spent, and total market share gains.
This raises a question: in the event a protocol is excluded, is there any mechanism to appeal or revert that decision? We understand the Season Selection Committee has discretion to exclude, but it is still composed of humans, and errors or oversights may occur. Therefore, there should be a transparent mechanism for an excluded or omitted protocol to request inclusion.
One fear with this path is that most excluded protocols will challenge, creating strain on the community, and potentially leading to significant pressure to create one-off programs that harm the ability to evaluate a program in an isolated environment. By trusting the committee that will have a holistic view of each individual component and nuance of a program, we reduce the risk of backlash from protocols. For example, if 3 DEXs are willing to match incentives for a specific program, but 1 is not and gets excluded, we don’t want them to have the ability to pressure the community, who may not have the full picture on why they were excluded. Bringing the drama to the forum may do more harm than good for all involved. Having said that, the committee will be in close contact with all relevant protocols to ensure adequate communication.
We suggest initially focusing on ARB + stablecoins + ETH. Greater depth in ARB/stablecoin or ARB/ETH pairs is a win-win for the ecosystem.
We agree that these are important building blocks for the DeFi ecosystem. However, we are fearful that for most of the assets and asset pairs mentioned above, it’ll be difficult to incentivize activity that is retained after incentives end, since creating a systemic shock would be challenging. We welcome community suggestions on structured seasons that would accomplish retention for LPing the specific assets mentioned above.
That said, although the current committee already partially represents the DAO via these entities, we see potential value in incorporating two additional members selected from the current pool of independent DAO contributors. The AAEs could even appoint these two additional members after the proposal is approved.
Expanded SSC participation, including DAO-vendor observers or advisors.
We see the value in increasing DAO representation in the committee, but are against the idea of doing so just for the sake of having committees. If there are specific community members who fill gaps in the current committee’s competencies, we are happy to consider adding members. It’s also important to remember that AAEs represent the DAO’s best interests, and the combination of the currently proposed committee, together with the evaluation and distribution partners, has the required resources to execute on the mandate.
While I do agree that would be the best solution cost-wise, the current v2 mandate is only 6 months (ending in June), so it probably will not be feasible.
If the v2 mandate has ended before a DRIP season can be initiated, the committee has the authority to enlist a security firm that is capable of doing the whitelisting.
Will the DAO be able to claw back funds/end the program? What is the process to do so?
Language will be added that specifies ARB will be sent to a foundation-controlled multisig with DAO-clawback capabilities. We are happy to stipulate the same for the distribution partner, but given the delay in the onchain proposal, this may not be very beneficial in practice.
At the risk of asking a silly question, is there a reason why this program cannot already be done out of the 250,000,000 ARB that the Foundation was given last autumn? They haven’t divested of any of it, and as of the end of 2024, only 11,200,000 ARB of future commitments had been made, so the 80,000,000 for DRIP would be easy for them to cover.
While the Foundation hadn’t divested a notable amount of the ARB as of the end of 2024, it’s not transparent how much of the 250M has already been committed. The public data is incomplete.
Capital in the Foundation’s budget is for a range of purposes beyond what DRIP targets. DRIP is not meant to replace those efforts, but to complement them. While the AF's growth strategy to date has been largely one-off important grants, DRIP focuses on a more holistic strategy for a given sector. Together, these 2 strategies work together to make sure we have support for those coming into the ecosystem as well as within the ecosystem itself. DRIP is not about just partnerships, it's about capturing an entire vertical and everything involved with doing so.
• Whenever the SSC publishes a parameter change or early‑terminates a season, open a 24‑hour veto window.
We foresee this leading to situations where most decisions are vetoed, meaning that changes would commonly go through a public forum discussion, after which a 7-day Snapshot voting period might even be required to reach a clear consensus.
How will the team execute on this dual approach – being agnostic in principle while requiring protocol selection in practice?
Consider assets like wrapped LSTs, each representing a different product from a distinct provider. How will the team decide which provider to incentivize, using what criteria, and based on what rationale? (e.g. why wstETH over cbETH etc.). This goes beyond the protocol but the tokens themselves
If the program incentivizes an ETH/USD pair, will all protocols supporting this pair (e.g., DEXs, perps) qualify, or will selection criteria apply? If criteria apply, greater clarity on what these selection criteria are is essential to understanding how the program remains ‘agnostic’ to the user’s choice of eligible protocol.
We would also like to see a clear rubric or selection criteria for eligible projects, similar to what Optimism uses, to help guide applicants and make decisions more transparent.
Protocol/product (in the context described in the above comment) selection is more concerned with making sure that users aren’t incentivized to utilize something that has possible security vulnerabilities or is so new that their stability hasn’t been proven yet. Each season will define which specific products/liquidity pools and activities will be eligible for incentives, and the decision should mainly be driven by the underlying market size as well as what Arbitrum’s potential is to increase its market share sustainably within these through systemic shocks. Seasons wouldn’t be as general as “utilize the ETH/USD pair, no matter in what context”.
How does the team intend to measure and track ‘retention’ within the context of this program? The program length is fairly short and retention can be determined in an experimental manner. We need to review after S1.
Have we clearly identified the specific behaviors that drive long-term retention on Arbitrum, and confirmed that the proposed incentives directly align with encouraging these behaviors?
Could incentivizing already established, top pools be less effective for increasing overall retention given that they are already huge in size which suggests retention?
Conversely, will incentivizing smaller pools effectively contribute to overall retention?
Mainly through a combination of market share changes for a KPI(s) relevant to the incentivised activity, tracking the source and ending locations of capital used for the incentivized activity, and retention of incentivised activity per $ spent. The evaluation partner will be in charge of spearheading these efforts. Specific behaviors and structures that drive long-term retention have been identified through research done on Arbitrum’s previous incentive programs.
Is the primary objective acquisition of new protocols/users, or deepening engagement with existing ones and activities?
Focusing strongly on attracting new protocols might dilute the effort required to make Arbitrum the “best/deepest” in specific, existing areas as this requires a focused effort. Could pursuing both acquisition and engagement simultaneously dilute the program’s overall impact and effectiveness?
The program’s main goal is to get capital/activity to move over from other ecosystems into Arbitrum through incentives and retaining that capital/activity by creating a home base for it through a systemic shock before incentives begin, resulting in an organic market-leading value proposition. This is to be accomplished by focusing on targeted activities/products where Arbitrum has high potential for increased market penetration.
Regarding accountability, how will we know if a individual project is underperforming? Relying too heavily on subjective evaluation could lead to inconsistent outcomes and make it harder for the community to assess impact.
Incentives should be distributed proportionally across eligible protocols based on the activity that they generate. Using the example given in the proposal: protocol A reaches $100M of wstETH that is used as collateral with at least a 15% LTV, while protocol B reaches $200M. Both protocols’ users gain a 2% incremental APR on their collateral, but protocol B is indirectly getting more incentives since it is generating more of the targeted activity. Consistency in incremental yield within the ecosystem is important, such that the baseline cost of capital within Arbitrum stays stable (although nothing would stop protocols from increasing this yield through additional native incentives). In our opinion, it’ll be more important to look at the average performance of a season, but real-time protocol-specific data should also be made available. Specific parameters will be modified by the committee together with the evaluation partner, which we don’t think the whole community could manage in real time.
Also, if the SSC decides to go above a three-month per season timeline, since this current timeline is arbitrary, the program could go beyond a 1-year mandate. How would that be handled? Would more funds be requested to complete the four seasons? Or would the program be cut abruptly at the end of the 12 months?
The maximum allocation per season is 20M ARB. The 1-year mandate refers to the committee having the ability to initiate seasons within this time period. A season would never be cut abruptly. Additional funds may be requested in the future, depending on the success of seasons (if analysis shows that add-on incentives could further amplify organic market share growth) and the DAO’s financial position.
Perp Dex’s are currently the biggest revenue drivers on Arbitrum. The proposed drip incentive program seems to be skewed toward LSTs, LRTs, and lending protocols. There’s a noticeable gap in how perp protocols are being supported. We recommend Pathways for high-performing protocols to proactively propose verticals and influence program design.
The season described in the proposal is an example, and there are no set rules that incentives have to be used for derivative tokens or the lending vertical. As long as incentives can be used to amplify an activity’s/product’s organic PMF, and the underlying market size not captured by Arbitrum is substantial, this activity/product would be ideal for a DRIP season. Entropy will be acting as a point of contact to make sure input from high-performing protocols is taken into account.
We’re currently working on a separate proposal that prioritizes Arbitrum-native builders over everything else.
How does this fit into the broader incentive strategy currently being discussed?
DRIP incorporates learnings from Arbitrum’s previous incentive programs as well as strategies brought up during the detox period. Mainly, it’s extremely targeted, tries to minimize pressure put on recipient protocols, and targets activities where the potential for retention is high through sustainable market share penetration. As such, our strong opinion is that running other generalized incentive programs on top of the DRIP would be counterproductive, likely even parasitic.
We really like this program, thanks for the efforts here who is going to be distributing incentives and setting the amounts, how will that be tracked? And the season selection committee, how will this be decided?
Will there be a way to see that for $1 spent there is x amount generated for the network? Through timeboost stuff or other sequencing fees?
We really like this program, thanks for the efforts here who is going to be distributing incentives and setting the amounts, how will that be tracked? And the season selection committee, how will this be decided?
Will there be a way to see that for $1 spent there is x amount generated for the network? Through timeboost stuff or other sequencing fees?
We asked these questions on the relevant governance call as well, but would be good to have the answer put out here.
Hi, Regarding funding - I simply compared it to the previous LTIPP. At that time, 45 million ARB were initially allocated, which amounted to $81 million for 3 months
The current request is 80 million ARB, which amount to $24 million per year
Here, a significantly smaller budget is clearly visible, approximately 13 times less in dollars.
(80/24 * 4)=13.3
Thanks for pulling DRIP together. I’m generally in favor, but I see some blind spots that could be improved. Below I outline lightweight tweaks that could keep the timeline intact while adding stronger accountability.
“The Season Selection Committee (SSC) may change parameters or terminate a season at its discretion.”
Thanks for pulling DRIP together. I’m generally in favor, but I see some blind spots that could be improved. Below I outline lightweight tweaks that could keep the timeline intact while adding stronger accountability.
“The Season Selection Committee (SSC) may change parameters or terminate a season at its discretion.”
Speed is great, but absolute discretion invites drama. A simple safeguard: • Whenever the SSC publishes a parameter change or early‑terminates a season, open a 24‑hour veto window. • If four top 100 delegates trigger an emergency veto, the change pauses until the DAO weighs in.
You keep agility; the DAO keeps a scalpel‑sharp check on edge cases.
“The SSC will decide which vertical receives incentives each season.”
Why not tap the hive mind? I recommend a one‑off signalling round where delegates rank the SSC’s short‑list. The SSC still owns the final call, but now it has a data layer showing which themes the ecosystem believes can move the needle. Cheap, fast, and boosts buy‑in.
We all watched STIP liquidity sprint in and out. To avoid a sequel: • Require ≥50 % of user rewards to vest linearly for 60 days after the season. • If users yank liquidity/volume during the vest, they forfeit the locked portion.
Vesting changes the game: it moves the incentive away from short-term extraction, where users farm rewards and immediately exit, toward a model where participants are encouraged to stay engaged over time. It rewards commitment instead of quick profit.
“Program OpEx will be funded from the 80 M ARB allocation.”
OpEx creep is real, especially when everyone’s flush with ARB. A hard 8 % ceiling on non‑reward spend (vendors, marketing, bounties) keeps incentives front‑loaded where they belong. Anything unspent rolls over into the next season, rewarding frugality.
• Transparency without gridlock: the veto window and voting signal are guard‑rails, not speed‑bumps. • Sticky, not mercenary, liquidity: vesting flips the incentive from “farm and bounce” to “farm and stick around.” • Fiscal discipline baked in: an OpEx cap ensures the DAO’s 80 M ARB fights for growth, not overhead.
At the risk of asking a silly question, is there a reason why this program cannot already be done out of the 250,000,000 ARB that the Foundation was given last autumn? They haven't divested of any of it, and as of the end of 2024, only 11,200,000 ARB of future commitments had been made, so the 80,000,000 for DRIP would be easy for them to cover.
The AF also has a vesting budget it can draw from.
If this is an effort led primarily by AF/OCL, it seems like AF/OCL should provide all, or at least a proportionate part, of the budget.
That would also have the benefit of being able to move quickly, rather than waiting for July. Market conditions right now seem well suited to quick deployment of tightly targeted incentives, rather than waiting until July.
This proposal raises significant concerns from a market-driven perspective. While I appreciate the goal of increasing DeFi activity, I'm skeptical about the approach and execution framework.
First, the tokenomics don't make sense. Artificially incentivizing liquidity through emissions often creates mercenary capital rather than sustainable ecosystems. Market forces should determine which protocols deserve capital - not committee-driven subsidies that distort natural competition.
This proposal raises significant concerns from a market-driven perspective. While I appreciate the goal of increasing DeFi activity, I'm skeptical about the approach and execution framework.
First, the tokenomics don't make sense. Artificially incentivizing liquidity through emissions often creates mercenary capital rather than sustainable ecosystems. Market forces should determine which protocols deserve capital - not committee-driven subsidies that distort natural competition.
Several key issues stand out:
I've seen similar incentive programs across ecosystems, and they typically lead to temporary TVL pumps followed by immediate exits once incentives dry up. This doesn't build sustainable value for ARB holders.
If we're serious about DeFi growth, we should consider alternatives:
I understand the desire to compete with other L2s, but copying ineffective token emission strategies won't differentiate Arbitrum.
This is fresh thinking.
A few suggestions I’d like to add:
The DRIP seeks funding of 80M ARB for the first 4 seasons, with a maximum of 20M allocated per season and a portion set aside for operational costs related to vendors utilized by the season selection committee.
This is fresh thinking.
A few suggestions I’d like to add:
The DRIP seeks funding of 80M ARB for the first 4 seasons, with a maximum of 20M allocated per season and a portion set aside for operational costs related to vendors utilized by the season selection committee.
Although the current price of ARB is 0.3, this is quite a large budget for the DAO, especially considering there is no allocation directly aimed at incentivizing users. Users may not see a direct correlation between participating in the program and the benefits derived from the ARB token.
But there's a possible solution to prevent yield selling: How about using part of the budget to incentivize ARB token itself, thus increasing both demand for the token and encouraging long term commitment to the ecosystem?
While incentivizing ARB as the asset might be seen as ponzi tokenomics from early DeFi days, this could at least boost demand for ARB.
On top, 80M ARB would not just be sold on the market, but could also be further utilized to farm rewards.
As mentioned, 80M ARB could put pressure on the DAO, I suggest considering collab with other protocols so that users can receive additional rewards or DAO can share budget from these partners.
Uniswap is already using this approach to provide a more attractive incentive structure for users and encourage cross protocol collaboration, check their vote here: BoB Uniswap v3 Incentives Package
Hi @Entropy! Thank you very much for this long-awaited proposal.
Entropy proposes a new type of incentives framework focused on targeting specific assets and activities across Arbitrum rather than specific protocols. Incentives per specific assets/activities will run in 3-month seasons through the DRIP so that the program can be adapted and different assets and activities can be selected as learnings are taken into account. Each season must have a singular, specified goal. For example, Make Arbitrum One the best place to borrow USDT against wstETH or Ensure Arbitrum One Has the deepest liquidity for trading USDT/ETH.
Hi @Entropy! Thank you very much for this long-awaited proposal.
Entropy proposes a new type of incentives framework focused on targeting specific assets and activities across Arbitrum rather than specific protocols. Incentives per specific assets/activities will run in 3-month seasons through the DRIP so that the program can be adapted and different assets and activities can be selected as learnings are taken into account. Each season must have a singular, specified goal. For example, Make Arbitrum One the best place to borrow USDT against wstETH or Ensure Arbitrum One Has the deepest liquidity for trading USDT/ETH.
We believe this approach is on point. From our perspective, incentive programs should be protocol-agnostic, as long as user safety is properly accounted for.
In that regard, we noticed there is a “minimum threshold of security and maturity” required for a protocol to be eligible:
-Need to be chain-wide and protocol agnostic (minus security-related whitelisting or a TVL/protocol-maturity requirement). Depending on the vertical and ROI after a program starts, the committee can expand or restrict how broad the program is.
This raises a question: in the event a protocol is excluded, is there any mechanism to appeal or revert that decision? We understand the Season Selection Committee has discretion to exclude, but it is still composed of humans, and errors or oversights may occur. Therefore, there should be a transparent mechanism for an excluded or omitted protocol to request inclusion.
Goal: Make Arbitrum One the best place to borrow USDT, USDC, and ETH against wstETH.
Select Collateral: wstETH
Select Borrowable assets: ETH, USDC, and USDT
Required LTV: 15%
Target yield boost for wstETH: 2% APR (increase over wstETH base yield)
Maximum collateral incentivized: $1B
Protocol Partner RFP: The program will be platform/protocol agnostic and target lending across Arbitrum One. With that said, protocols will be screened for security purposes before being included in the program. The thought process behind this decision surrounds not incentivizing (or appearing to endorse) Arbitrum’s users to deposit assets into protocols that have a higher likelihood of being hacked. The security provider selected in the ARDC will be in charge of whitelisting lending protocols or alternatively the committee enlists a firm that can do this. The lending platform partners must support wstETH as collateral and borrowing of USDC, USDT, or ETH against that collateral in order to be eligible. This creates a fair environment that should not negatively encumber any specific lending market.
In practice, this means that any borrower of USDC, USDT, and/or ETH on a whitelisted Arbitrum One-based lending platform will be eligible to receive 2% APR paid on the total value of their wstETH deposited into the lending protocol. Wallets will only be eligible if they have reached and sustained an LTV of 15%. Rewards will be paid out weekly by a distribution partner.
With a 3-month program, targeting a 2% yield, $5M will cover 3 months of runway on $1B in collateral participating in the program.
We understand this is just an example, but something that concerns us is that the ARB token is not mentioned at all throughout the proposal. While we’re not suggesting to preset specific goals, part of strengthening the native token involves ensuring deep liquidity.
We suggest initially focusing on ARB + stablecoins + ETH. Greater depth in ARB/stablecoin or ARB/ETH pairs is a win-win for the ecosystem. This is especially relevant when assessing ARB’s risk profile as lending collateral.
⅔ votes are required for a season to be approved. The first 4 seasons that meet the rule requirements and are deemed valid by the committee will be enacted.
The committee also has the power to:
As we’ve mentioned in the thread A Vision for the Future of Arbitrum, it not only makes a lot of sense to have Arbitrum Aligned Entities involved in key proposals like this, but it’s also virtually impossible for any other proposer to gain enough consensus to pass a competing incentives proposal. We’ve already seen this play out with ARB Incentives: User Acquisition for dApps & Protocols, where the DAO made it clear that the incentives strategy must come from entities such as OCL, AF, or Entropy.
That said, although the current committee already partially represents the DAO via these entities, we see potential value in incorporating two additional members selected from the current pool of independent DAO contributors. The AAEs could even appoint these two additional members after the proposal is approved.
This aligns with what we outlined in our SOS Submission: If the DAO already has talented contributors, and the main challenge is better coordination, then the best alternative is to ensure that talent is integrated into the execution of proposals.
We emphasize this because, since this is a DAO-funded initiative, delegates will naturally expect some diversity in who holds decision-making power. We believe the structure we’re proposing could help ease those concerns. Otherwise, we risk swinging from a model where initiatives were 100% executed by external contributors to one where execution is entirely in the hands of the AAEs (excluding the two vendors they plan to hire), which could lead to future issues—as @pedrob pointed out:
One of the unique (albeit sometimes chaotic and inefficient) strengths of the DAO has been the involvement of contributors in operations. That structure helped surface and highlight individuals (we all know who)—now active contributors and respected delegates. If programs had been this closed off from the beginning, the DAO might not have built the pool of engaged contributors it has today. I understand the goal of efficiency, and I think it makes sense in many ways. Still, I believe it’s worth exploring ways to balance that with contributors’ involvement.
A good example—one that we believe has been working well—is the Stylus Sprint Committee: there’s a strong mix of contributors (OZ, Jojo, and SEED) and AAEs (Entropy, OCL, and AF) working together, each bringing unique skills to the table for effective proposal execution and having Entropy’s management of task allocation based on each member’s strengths. A similar approach could work here—for example, assigning DAO communications to one of the additional members, thereby reducing the operational load on the AAEs so they can focus on more strategic matters like designing the next seasons.
A group of AAEs administering monitoring and managing this does make more sens than delegates managing every minute detail
But the current description does leave a lot of questions: Are delegates just approving this with no input?
A group of AAEs administering monitoring and managing this does make more sens than delegates managing every minute detail
But the current description does leave a lot of questions: Are delegates just approving this with no input?
We certainly dont need or want to manage every detail , but general seasonal guidelines, goals, at the very minimum, shoudl have delegate input. This could be split between calls (for detailed discussion) and votes for higher level selection of goals or guidelines.
The general idea of AAEs administering an incentive program is great, but the Current version of this proposal is a bit too vague and doesnt clearly have any synergy between the DAO and AAEs.
Many of us do have experience - we’re LPs and farmers, traders ourselves, and we know other delegates have experience running or analyzing incentive programs, which could provide a lot of value.
As a strong element of positive sentiment/confidence, I broadly support this initiative and the parties presenting/providing research for it (Entropy, Gauntlet, Blockworks, Chaos, Foundation, OCL, etc...). I also support the general approach of
The season selection committee will have full discretion on how the procurement is run; public or private application and evaluation, open or invitation only, who is selected, etc. The process will be fully facilitated by the season selection committee, and the decision of the partner will be fully at their discretion.
As a strong element of positive sentiment/confidence, I broadly support this initiative and the parties presenting/providing research for it (Entropy, Gauntlet, Blockworks, Chaos, Foundation, OCL, etc...). I also support the general approach of
The season selection committee will have full discretion on how the procurement is run; public or private application and evaluation, open or invitation only, who is selected, etc. The process will be fully facilitated by the season selection committee, and the decision of the partner will be fully at their discretion.
I echo many of the delegates, such as @pedrob here in saying that assurances along the lines of transparency would be valuable. I know below there is mention of public data provision, but this seems more in line with an explanation of outcomes. I'd want to see a report on admissions decisions. I'm reluctant to say fully private admissions is ideal, but if it ends up that way, at minimum a thorough post-admittance report would help.
@cp0x I am curious why you say this is a small amount though? I don't say this to disagree with you, I am genuinely curious on identifying proper sizing and I am open to being convinced of higher or lower amounts.
Finally, marketing is a key addition which I strongly support. It's also a component which should be added to proposals more broadly. That said, I would be interested in seeing the program track the actual conversion rates of the marketing strategies used. In this regard, it also serves as experimentation and data on marketing / marketing approaches more broadly which can then be generalized to future, even entirely unrelated, proposals. This has yet to be mentioned, but this form of metrics capturing should be added to the proposal requirements.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
First off, we’d like to thank @Entropy for putting the much-awaited DRIP proposal. We see initiatives like DRIP as opportunities to rethink how incentive programs can better serve long-term ecosystem health rather than just short-term growth spikes like we had in our earlier incentive programs.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
First off, we’d like to thank @Entropy for putting the much-awaited DRIP proposal. We see initiatives like DRIP as opportunities to rethink how incentive programs can better serve long-term ecosystem health rather than just short-term growth spikes like we had in our earlier incentive programs.
There are several strong design decisions in this proposal that stand out to us from the previous incentive programs.
a new type of incentives framework focused on targeting specific assets and activities across Arbitrum rather than specific protocols.
This shift in focus is important. Past programs sometimes led to concentrated allocations based on relationships rather than real impact. Targeting asset pairs and economic behaviors, like deepening a specific market or making Arbitrum the best place to borrow against wstETH, is more aligned with systemic growth.
marketing is a missing aspect from every past program, which the DRIP will address by having the foundation included on the committee and requiring eligible protocols to co-market.
We couldn't agree more. Incentive programs without awareness campaigns often leave adoption potential on the table. Tying eligibility to co-marketing commitments is a smart move that aligns everyone toward reach and usage, not just TVL games.
Some delegates have already raised good points on which we have to add on to -
What key metrics and criteria will be used to assess the program’s performance against its goals?
We’d like to build on this by asking, will these metrics vary seasonally based on the specific activity targeted, or will there be a core set of DAO-wide metrics to allow for comparison across seasons? Additionally, how will learnings from underperforming seasons be used to shape the design of the next?
Given the critical role of distribution and evaluation partners in program success, more detail on how these partners will be chosen and held accountable would strengthen confidence.
We’d like to know, will the DAO receive public interim updates (e.g., at the 6-week mark) during a season to allow for mid-cycle feedback or adjustments? This would allow us to avoid a post-mortem only cycle and make the program more iterative and responsive.
marketing is a missing aspect from every past program, which the DRIP will address by having the foundation included on the committee and requiring eligible protocols to co-market.
Many protocols, especially newer or smaller ones, may not have a strong marketing infrastructure. Will DRIP offer templated assets, messaging guidelines, or any support for ad spend, content creation, or community campaigns? Beyond requiring participation, are there any expectations on performance metrics (CTRs, campaign reach, conversions) that protocols should report back? And as the program spans multiple seasons, will co-marketing quality be considered when evaluating protocols for participation in future rounds?
Given that each season targets specific activities or pairs, when or how much before the start of the season will the goal be decided? And how will DRIP ensure that incentivizing one pair doesn't drain liquidity from other critical trading pairs on Arbitrum? Is there a mechanism to monitor or correct fragmentation effects?
the distribution partner will check the chain for wallet eligibility and distribute rewards to the wallets that have met the mandated goals of a season and create a frontend through which all eligible protocols will be shown.
Could you share more specifics here? What mechanisms will be in place to ensure sybil resistance or prevent users from farming rewards in a way that doesn’t create real ecosystem value? Also, will wallet eligibility be uniform across all seasons or customizable based on the goal?
The evaluation partner will host open data around the program and recommend optimization improvements to the committee throughout a season’s lifecycle; after a season is complete, the evaluation partner will provide a more holistic analysis to the DAO.
Could you elaborate on which key metrics will be prioritized for analysis, beyond just raw usage? For example, are there plans to evaluate user retention after a season ends, or capital efficiency per ARB spent? Having a few shared metrics across seasons might also help the DAO compare performance longitudinally.
We’d appreciate a more detailed breakdown of the operational budget. How much is being allocated to distribution partners, UI development, evaluation, and potential protocol support? Could you specify the percentage of the 20M ARB per season that is earmarked for operational expenses versus direct incentives? Furthermore, what are the projected costs associated with each vendor (distribution, evaluation, etc.), and how were these estimates determined?
All in all, this proposal demonstrates strong evolution in how we approach ecosystem incentives. We see DRIP as a serious attempt to move from broad TVL farming to strategic and measurable activity growth.
Thank you @Entropy, for presenting this comprehensive and well-structured proposal. We appreciate the effort to rethink Arbitrum’s incentives with a focus on targeted, measurable outcomes and controlled experimentation. The idea of running focused 3-month seasons with singular goals addresses many challenges observed in prior programs, especially the difficulty in evaluating broad, multi-vertical incentives.
That said, we have some concerns about the governance structure and operational details. The season selection committee includes entities with significant influence in the ecosystem, which raises questions about impartiality and potential conflicts of interest. Could you clarify what measures will be in place to ensure transparency and fairness in season and partner selection? Will there be public reporting or community oversight mechanisms?
Hello!
Thanks for the proposal!
I have a few questions:
The security provider selected in the ARDC will be in charge of whitelisting lending protocols or alternatively the committee enlists a firm that can do this.
Thank you for the long-awaited proposal.
We see a high potential in the application of this approach, which we understand has been developed based on ARDC's findings from past incentive programs. We definitely see this approach as valuable and feasible at the same time and still promising in terms of future results, but we are not quite sure if we understand correctly if the whole community will be involved in the selection process for the proposed committee that will choose the moments and goals for each season that is to begin, beyond Entropy, OCL, the Foundation itself, key stakeholders and partner companies. Maybe this has to do with the fact that the seasons are 3 months each and taking these members selections every 3 months period is overwhelming. Would you mind clarifying this?
We also have concerns about how much funding is being asked for, even though we see who the team is behind this proposal, who are all trusted parties, yet this is still, as indicated in the proposal, an initial program, so there have been no previous versions on which to build this beyond the lessons learned from ARDC's experience with past programs. It is quite an ambitious start for something that has not been tested by the real-world experience of taking this into reality. Should this be a concern for us as a community if we greenlight this proposal? Considering the team behind it, we do not need guarantees that unused funds will be returned or reinvested in future seasons, but we do need a better explanation of the budget breakdown of such a number of requested funds. Why so much?
Hi all,
I won’t be participating in the AAE discussions or commenting on the composition of the season committee, and will instead focus solely on the substance of the proposal.
Hi all,
I won’t be participating in the AAE discussions or commenting on the composition of the season committee, and will instead focus solely on the substance of the proposal.
Overall, I believe the core idea of targeting specific objectives rather than protocols is a powerful shift. By setting clear goals—like making Arbitrum the most cost-efficient place to borrow—we’re not just attracting short-term volume, but creating conditions that can bring back long-term, power DeFi users and encourage them to stay.
Incentivizing concrete use cases where Arbitrum has the potential to gain sustainable market share—such as borrowing against yield-bearing assets—is a step in the right direction. It aligns incentives with measurable outcomes and sets the stage for meaningful growth beyond temporary TVL spikes.
I think this is great and it’s very important that there will be a publicly accessible data dashboard so everyone can monitor the program’s performance transparently.
what is the target OpEx as a percentage of the season’s allocated funds?
The season selection committee will have full discretion on how the procurement is run; public or private application and evaluation, open or invitation only, who is selected, etc. The process will be fully facilitated by the season selection committee, and the decision of the partner will be fully at their discretion.
First of all, thank you for the long-awaited DeFi program!
At first glance, it seems quite close to simply funding the Foundation or OCL to manage BD/incentives funds at its discretion (which the DAO has done recently). I’m happy to see more involvement from the AAEs, but is the plan for them to run all the DAO funded programs?
First of all, thank you for the long-awaited DeFi program!
At first glance, it seems quite close to simply funding the Foundation or OCL to manage BD/incentives funds at its discretion (which the DAO has done recently). I’m happy to see more involvement from the AAEs, but is the plan for them to run all the DAO funded programs?
One of the unique (albeit sometimes chaotic and inefficient) strengths of the DAO has been the involvement of contributors in operations. That structure helped surface and highlight individuals (we all know who)—now active contributors and respected delegates. If programs had been this closed off from the beginning, the DAO might not have built the pool of engaged contributors it has today. I understand the goal of efficiency, and I think it makes sense in many ways. Still, I believe it’s worth exploring ways to balance that with contributors' involvement.
Regarding the program itself: I do like the model of targeting specific assets. It seems like a valuable experiment worth trying.
The DRIP is purposefully simple, targeted, and measurable, and focuses solely on the goal of bringing popular activity taking place on other ecosystems to Arbitrum One in a sustainable manner.
What it’s still not clear to me is: why do you believe this model will lead to sustainable growth activity on Arbitrum? What mechanisms are in place to ensure user retention, long-term commitment from potential partners, or other indicators of sustainability?
The part of the proposal I’m still not fully convinced about: as presented, the program doesn’t offer an auditable structure. The committee decides how, when, and with whom to negotiate, and even the few defined rules can be changed at will. I understand the intention is to keep the program flexible so it can iterate based on successes and failures. But that makes me wonder: why not simply request funds for the Foundation to manage directly, without much additional structure?
This will allow Arbitrum’s partnership teams, including Entropy Advisors and Offchain Labs, to use the DRIP as an incentive that makes Arbitrum more attractive to protocols exploring alternative/genesis chain deployments.
These look like BD funds that could be used to secure deals or attract deployments, possibly by prioritizing certain verticals. I remember that in the LTIPP, we saw protocols like Synthetix deploy quickly due to incentives, only to leave shortly after. Is there a strategy in place to ensure more sustainable engagement? Could a particular deal lead to prioritizing one vertical over others for that single reason?
Finally, marketing is a missing aspect from every past program, which the DRIP will address by having the foundation included on the committee and requiring eligible protocols to co-market.
This is great. It’s important to ensure coordination with the Foundation’s social media channels. During LTIPP, getting that support to help amplify awareness of the program was quite a challenge.
Thanks for the proposal.
This feels like an ideal pair with https://forum.arbitrum.foundation/t/mate-proposal-non-consitutional/27770 to manage the number of acronyms in the DAO.
Jokes aside, I resonate with the intention of enabling a mechanism for a hyper targetted incentives, but the usual critiques to incentive programs still feel unaddressed
Thank you @Entropy, for presenting this comprehensive and well-structured proposal. We appreciate the effort to rethink Arbitrum’s incentives with a focus on targeted, measurable outcomes and controlled experimentation. The idea of running focused 3-month seasons with singular goals addresses many challenges observed in prior programs, especially the difficulty in evaluating broad, multi-vertical incentives.
That said, we have some concerns about the governance structure and operational details. The season selection committee includes entities with significant influence in the ecosystem, which raises questions about impartiality and potential conflicts of interest. Could you clarify what measures will be in place to ensure transparency and fairness in season and partner selection? Will there be public reporting or community oversight mechanisms?
Regarding partner procurement, the proposal leaves much discretion to the committee without specifying criteria or processes. Given the critical role of distribution and evaluation partners in program success, more detail on how these partners will be chosen and held accountable would strengthen confidence.
Furthermore, regarding the evaluation process itself, how does the proposal envision the DAO evaluating the overall success or failure of the DRIP program? Specifically, what is the planned frequency for these evaluations (e.g., per season, mid-season, annually)? What key metrics and criteria will be used to assess the program's performance against its goals?
Relatedly, to ensure transparency and allow the community to monitor progress, is there a plan to provide a public dashboard? Such a dashboard would ideally display key performance indicators, incentive distribution data, and the results of the evaluation partner's analysis in a timely manner. We believe these elements are fundamental for demonstrating accountability.
Finally, the proposal emphasizes marketing and partnership engagement, which is encouraging. However, marketing execution is notoriously challenging. How will the committee ensure protocols fulfill co-marketing obligations effectively?
Hello!
Thanks for the proposal!
I have a few questions:
The security provider selected in the ARDC will be in charge of whitelisting lending protocols or alternatively the committee enlists a firm that can do this.
While I do agree that would be the best solution cost-wise, the current v2 mandate is only 6 months (ending in June), so it probably will not be feasible.
The season selection committee will have full discretion on how the procurement is run; public or private application and evaluation, open or invitation only, who is selected, etc. The process will be fully facilitated by the season selection committee, and the decision of the partner will be fully at their discretion.
Having that in mind, I want to echo some previous comments regarding the procurement process for service providers for this initiative. As the DAO is funding the initiative, it is in the best interest to have a transparent process for selecting all partners (Distribution, evaluation, and probably security/whitelisting). We should expect a full disclosure of costs and reasoning for each selection.
We need to be more specific in here, as the DAO can't be a mere spectator in the process, and some sense of accountability must be created for the Season Selection Committee.
Kill the Program: If the program fails to perform, at the discretion of the committee, it reserves the right to terminate it.
It is missing KPIs in this section. What does "fails to perform" mean?
The evaluation partner will host open data around the program and recommend optimization improvements to the committee throughout a season’s lifecycle; after a season is complete, the evaluation partner will provide a more holistic analysis to the DAO.
Will the DAO be able to claw back funds/end the program? What is the process to do so?
Overall, this is a great initiative, but my understanding is that the proposal would benefit from the refinements several delegates are presenting to make it more robust, with proper checks and balances.
The season selection committee will have full discretion on how the procurement is run; public or private application and evaluation, open or invitation only, who is selected, etc. The process will be fully facilitated by the season selection committee, and the decision of the partner will be fully at their discretion.
The Season Selection Committee (SSC) holds unilateral power to approve, modify, or terminate seasons, including selection of Evaluation Partners. Will there be room for community input in shaping the decisions of the SSC? Will there be transparency in SSC's decisions and voting?
While we are fully aware that the SSC comprises solely AAEs and assume they will act in the DAO’s best interests, we want to emphasize the need for transparency and community input.
Thanks for the proposal.
This feels like an ideal pair with https://forum.arbitrum.foundation/t/mate-proposal-non-consitutional/27770 to manage the number of acronyms in the DAO.
Jokes aside, I resonate with the intention of enabling a mechanism for a hyper targetted incentives, but the usual critiques to incentive programs still feel unaddressed
why do you believe this model will lead to sustainable growth activity on Arbitrum?
also echoed by
Perhaps most importantly,
Thank you @Entropy, for presenting this comprehensive and well-structured proposal. We appreciate the effort to rethink Arbitrum’s incentives with a focus on targeted, measurable outcomes and controlled experimentation. The idea of running focused 3-month seasons with singular goals addresses many challenges observed in prior programs, especially the difficulty in evaluating broad, multi-vertical incentives.
That said, we have some concerns about the governance structure and operational details. The season selection committee includes entities with significant influence in the ecosystem, which raises questions about impartiality and potential conflicts of interest. Could you clarify what measures will be in place to ensure transparency and fairness in season and partner selection? Will there be public reporting or community oversight mechanisms?
Regarding partner procurement, the proposal leaves much discretion to the committee without specifying criteria or processes. Given the critical role of distribution and evaluation partners in program success, more detail on how these partners will be chosen and held accountable would strengthen confidence.
Furthermore, regarding the evaluation process itself, how does the proposal envision the DAO evaluating the overall success or failure of the DRIP program? Specifically, what is the planned frequency for these evaluations (e.g., per season, mid-season, annually)? What key metrics and criteria will be used to assess the program's performance against its goals?
Relatedly, to ensure transparency and allow the community to monitor progress, is there a plan to provide a public dashboard? Such a dashboard would ideally display key performance indicators, incentive distribution data, and the results of the evaluation partner's analysis in a timely manner. We believe these elements are fundamental for demonstrating accountability.
Finally, the proposal emphasizes marketing and partnership engagement, which is encouraging. However, marketing execution is notoriously challenging. How will the committee ensure protocols fulfill co-marketing obligations effectively?
Hello!
Thanks for the proposal!
I have a few questions:
The security provider selected in the ARDC will be in charge of whitelisting lending protocols or alternatively the committee enlists a firm that can do this.
While I do agree that would be the best solution cost-wise, the current v2 mandate is only 6 months (ending in June), so it probably will not be feasible.
The season selection committee will have full discretion on how the procurement is run; public or private application and evaluation, open or invitation only, who is selected, etc. The process will be fully facilitated by the season selection committee, and the decision of the partner will be fully at their discretion.
Having that in mind, I want to echo some previous comments regarding the procurement process for service providers for this initiative. As the DAO is funding the initiative, it is in the best interest to have a transparent process for selecting all partners (Distribution, evaluation, and probably security/whitelisting). We should expect a full disclosure of costs and reasoning for each selection.
We need to be more specific in here, as the DAO can't be a mere spectator in the process, and some sense of accountability must be created for the Season Selection Committee.
Kill the Program: If the program fails to perform, at the discretion of the committee, it reserves the right to terminate it.
It is missing KPIs in this section. What does "fails to perform" mean?
The evaluation partner will host open data around the program and recommend optimization improvements to the committee throughout a season’s lifecycle; after a season is complete, the evaluation partner will provide a more holistic analysis to the DAO.
Will the DAO be able to claw back funds/end the program? What is the process to do so?
Overall, this is a great initiative, but my understanding is that the proposal would benefit from the refinements several delegates are presenting to make it more robust, with proper checks and balances.
The season selection committee will have full discretion on how the procurement is run; public or private application and evaluation, open or invitation only, who is selected, etc. The process will be fully facilitated by the season selection committee, and the decision of the partner will be fully at their discretion.
The Season Selection Committee (SSC) holds unilateral power to approve, modify, or terminate seasons, including selection of Evaluation Partners. Will there be room for community input in shaping the decisions of the SSC? Will there be transparency in SSC's decisions and voting?
While we are fully aware that the SSC comprises solely AAEs and assume they will act in the DAO’s best interests, we want to emphasize the need for transparency and community input.
Thanks for the proposal.
This feels like an ideal pair with https://forum.arbitrum.foundation/t/mate-proposal-non-consitutional/27770 to manage the number of acronyms in the DAO.
Jokes aside, I resonate with the intention of enabling a mechanism for a hyper targetted incentives, but the usual critiques to incentive programs still feel unaddressed
why do you believe this model will lead to sustainable growth activity on Arbitrum?
also echoed by
Perhaps most importantly,