The Arbitrum DAO has allocated several hundred million dollars across various initiatives, including incentive programs, grants, investment vehicles, and service providers. While these allocations have driven growth and innovation, there has been minimal oversight or review of how these funds are ultimately used, and no system currently exists to incentivize the identification and reporting of fund misappropriation. Although three instances of misuse have been uncovered, it is likely that additional cases remain undetected.
In response, Entropy Advisors proposes the establishment of a grant misuse bounty program dubbed “The Watchdog” to incentivize the identification and reporting of misused DAO-allocated funds. The program would utilize an incentive mechanism to reward community contributors and investigators who submit verifiable reports of misappropriation.
By offering financial rewards for valid reports of misappropriation, there will be a stronger motivation for community members to contribute skills or information that aid in identifying misconduct in the DAO. Today, the identification of wrongdoing can result in retaliation, unnecessary friction within the DAO, and other negative externalities for the investigators.
Moreover, with no incentive to bring forth allegations, it is unlikely that most community members would do so. The Watchdog program creates a decentralized force of accountability, augmenting the DAO’s capacity to detect abuse that would likely otherwise go unnoticed while protecting the submitter from repercussions.
Arbitrum DAO’s successful identification of misappropriated funds, whether by a service provider, protocol, grant recipient, or anyone else that receives funds from Arbitrum DAO has three main benefits:
Just the existence of a transparent and well-publicized bounty program will likely deter some malicious actors from misusing DAO funds in the first place. Knowing that the community has the tools and incentives to identify misallocation increases the risk of exposure for those who might consider abusing the DAO’s trust. Recipients of DAO funds will need to think twice before acting maliciously or in a way that doesn’t align with the DAO’s strategic objectives, rules, and the broader interests of Arbitrum.
By allowing anyone to submit evidence-based reports of misuse anonymously, the program empowers the entire Arbitrum and crypto ecosystem to take an active role in maintaining the financial health and integrity of the Arbitrum DAO. We hope this fosters a culture of vigilance, good intentions, and accountability while bringing white-hat actors into the ecosystem.
The Watchdog program will extend to ALL DAO-funded initiatives including end recipients of other programs such as the Questbook Domain program, Stylus Sprint, Arbitrum Foundation grants, and the incentives programs. The process for rewarding those who successfully identify fund misuse will start with a temporary solution utilizing a small committee of reviewers with a long-term plan for the program to eventually fall under OpCo.
Entropy proposes the following definition of misuse of funds:
Any action or inaction by a recipient of DAO-allocated funds that directly violates the stated terms, objectives, agreement, or overall spirit of the allocation under which those funds were provided.
Misuse definitions and examples below are included solely as a point of reference for the DAO and all decisions surrounding severity will be at the full discretion of the committee:
The workflow for Watchdog reports will be as follows:
1. Report Submission
2. Review Process
3. DAO Forum & Snapshot Voting
4. Reward Mechanism
We believe that this mechanism is optimal for the time being, but once OpCo is stood up, it is our recommendation that the program be moved into its domain. If done so, the reviewing mechanism will likely be restructured.
The program will run until the 400K ARB is exhausted from valid misuse reports. If the budget falls below 100k ARB before the program is moved to OpCo, Entropy Advisors will notify the DAO and potentially put forward a proposal to extend the budget.
Before moving the program under the domain of OpCo or 6 months post program launch, whichever occurs first, Entropy Advisors will provide a retrospective report to help evaluate the successfulness of the Watchdog. The report will summarize the received misuse cases along with data such as total amount of misuse, severity breakdowns, and amount of ARB recovered.
After the Watchdog program passed on Snapshot, Entropy began contacting potential providers in order to solicit bids for a dedicated portal. As shared in Entropy’s February monthly update, following discussions with @JoJo and the Arbitrum Foundation, it was determined that introducing a separate portal introduced unnecessary fragmentation and Entropy believed there was an opportunity to combine the creation of the Watchdog site with a larger Arbitrum branded grants portal, an idea expressed originally in our voting rationale for Season 3 of the D.A.O program. Through the end of February and most of March, Entropy explored this idea with several different providers and development teams.
During these discussions, it became clear that such a portal would be a several month endeavor, so to not delay the Watchdog program any further, Entropy explored a few open source whistleblower software solutions and concluded that GlobaLeaks is the best option for a temporary grant misuse portal.
For those not familiar with GlobaLeaks, it is an open-source whistleblowing platform used by governments, NGOs, and investigative journalists. A dedicated submission portal can be deployed by the Arbitrum Foundation on a VPS to enable secure & anonymous submissions. For the Watchdog program, it is a free option that supports the submission and review of grant misuse reports, offers end-to-end encryption, includes a reviewer dashboards, and has optional Tor access for sleuths looking to maximize their privacy.
For the time being, we believe a GlobaLeaks portal is a sufficient temporary option for the Watchdog and can be simply linked on the Foundation’s grant page. If the program is successful and the larger Arbitrum grants portal comes to fruition, the Watchdog program can easily be transferred over.
400,000 ARB will be sent to a new Arbitrum Foundation controlled address. These funds will be used to reward valid Watchdog reports and pay SeedGov.
May 8th - 22nd: Onchain Vote End of May: Program is launched
The Arbitrum DAO has allocated several hundred million dollars across various initiatives, including incentive programs, grants, investment vehicles, and service providers. While these allocations have driven growth and innovation, there has been minimal oversight or review of how these funds are ultimately used, and no system currently exists to incentivize the identification and reporting of fund misappropriation. Although three instances of misuse have been uncovered, it is likely that additional cases remain undetected.
In response, Entropy Advisors proposes the establishment of a grant misuse bounty program dubbed “The Watchdog” to incentivize the identification and reporting of misused DAO-allocated funds. The program would utilize an incentive mechanism to reward community contributors and investigators who submit verifiable reports of misappropriation.
By offering financial rewards for valid reports of misappropriation, there will be a stronger motivation for community members to contribute skills or information that aid in identifying misconduct in the DAO. Today, the identification of wrongdoing can result in retaliation, unnecessary friction within the DAO, and other negative externalities for the investigators.
Moreover, with no incentive to bring forth allegations, it is unlikely that most community members would do so. The Watchdog program creates a decentralized force of accountability, augmenting the DAO’s capacity to detect abuse that would likely otherwise go unnoticed while protecting the submitter from repercussions.
Arbitrum DAO’s successful identification of misappropriated funds, whether by a service provider, protocol, grant recipient, or anyone else that receives funds from Arbitrum DAO has three main benefits:
Just the existence of a transparent and well-publicized bounty program will likely deter some malicious actors from misusing DAO funds in the first place. Knowing that the community has the tools and incentives to identify misallocation increases the risk of exposure for those who might consider abusing the DAO’s trust. Recipients of DAO funds will need to think twice before acting maliciously or in a way that doesn’t align with the DAO’s strategic objectives, rules, and the broader interests of Arbitrum.
By allowing anyone to submit evidence-based reports of misuse anonymously, the program empowers the entire Arbitrum and crypto ecosystem to take an active role in maintaining the financial health and integrity of the Arbitrum DAO. We hope this fosters a culture of vigilance, good intentions, and accountability while bringing white-hat actors into the ecosystem.
The Watchdog program will extend to ALL DAO-funded initiatives including end recipients of other programs such as the Questbook Domain program, Stylus Sprint, Arbitrum Foundation grants, and the incentives programs. The process for rewarding those who successfully identify fund misuse will start with a temporary solution utilizing a small committee of reviewers with a long-term plan for the program to eventually fall under OpCo.
Entropy proposes the following definition of misuse of funds:
Any action or inaction by a recipient of DAO-allocated funds that directly violates the stated terms, objectives, agreement, or overall spirit of the allocation under which those funds were provided.
Misuse definitions and examples below are included solely as a point of reference for the DAO and all decisions surrounding severity will be at the full discretion of the committee:
The workflow for Watchdog reports will be as follows:
1. Report Submission
2. Review Process
3. DAO Forum & Snapshot Voting
4. Reward Mechanism
We believe that this mechanism is optimal for the time being, but once OpCo is stood up, it is our recommendation that the program be moved into its domain. If done so, the reviewing mechanism will likely be restructured.
The program will run until the 400K ARB is exhausted from valid misuse reports. If the budget falls below 100k ARB before the program is moved to OpCo, Entropy Advisors will notify the DAO and potentially put forward a proposal to extend the budget.
Before moving the program under the domain of OpCo or 6 months post program launch, whichever occurs first, Entropy Advisors will provide a retrospective report to help evaluate the successfulness of the Watchdog. The report will summarize the received misuse cases along with data such as total amount of misuse, severity breakdowns, and amount of ARB recovered.
After the Watchdog program passed on Snapshot, Entropy began contacting potential providers in order to solicit bids for a dedicated portal. As shared in Entropy’s February monthly update, following discussions with @JoJo and the Arbitrum Foundation, it was determined that introducing a separate portal introduced unnecessary fragmentation and Entropy believed there was an opportunity to combine the creation of the Watchdog site with a larger Arbitrum branded grants portal, an idea expressed originally in our voting rationale for Season 3 of the D.A.O program. Through the end of February and most of March, Entropy explored this idea with several different providers and development teams.
During these discussions, it became clear that such a portal would be a several month endeavor, so to not delay the Watchdog program any further, Entropy explored a few open source whistleblower software solutions and concluded that GlobaLeaks is the best option for a temporary grant misuse portal.
For those not familiar with GlobaLeaks, it is an open-source whistleblowing platform used by governments, NGOs, and investigative journalists. A dedicated submission portal can be deployed by the Arbitrum Foundation on a VPS to enable secure & anonymous submissions. For the Watchdog program, it is a free option that supports the submission and review of grant misuse reports, offers end-to-end encryption, includes a reviewer dashboards, and has optional Tor access for sleuths looking to maximize their privacy.
For the time being, we believe a GlobaLeaks portal is a sufficient temporary option for the Watchdog and can be simply linked on the Foundation’s grant page. If the program is successful and the larger Arbitrum grants portal comes to fruition, the Watchdog program can easily be transferred over.
400,000 ARB will be sent to a new Arbitrum Foundation controlled address. These funds will be used to reward valid Watchdog reports and pay SeedGov.
May 8th - 22nd: Onchain Vote End of May: Program is launched
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/56
Democratising lobbyism, on-chain. Check out lobbyfi.xyz
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/56
Democratising lobbyism, on-chain. Check out lobbyfi.xyz
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/117
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/78?u=ocandocrypto
The Event Horizon Community voted FOR on this Proposal (ehARB-100): EventHorizon.vote/vote/arbitrum/ehARB-100
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/112?u=mcfly
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/111?u=hawheik
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/110?u=griff
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/107?u=euphoria
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/58
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/100?u=0x_ultra
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/96?u=tekr0x.eth
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/61?u=0xalex
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/37?u=castlecapital
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/94?u=danielm
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/91?u=dragonawr
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/90?u=blockful
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/14?u=ezr3al
despite personally pushing for this program to exist in the DAO, and even trying to help it come to fruition since October, the latest last minute changes to the program changed the nature of it significantly, namely: GlobaLeaks as a platform will not act as a neutral third-party and therefor it doesn’t ensure the anonymity of the whistleblowers; and more problematic, the inclusion of the Arbitrum Foundation and SeedGov into the reviewer set creates an explicit conflict of interest where the entities responsible to adjudicate grants will be the same that will review the reports of wrongly adjudicated grants and therefor undermining the neutrality and then the effectiveness of this program. https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/87?u=paulofonseca
Democratising lobbyism, on-chain. Check out lobbyfi.xyz
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/73
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/72?u=tane
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/56
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/71?u=mcfly
The Event Horizon Community Voted to Support this Proposal ehARB-76: EventHorizon.vote/vote/arbitrum/ehARB-76
The Event Horizon Community Voted to Support this Proposal ehARB-76: EventHorizon.vote/vote/arbitrum/ehARB-76
https://forum.arbitrum.foundation/t/gfx-labs-delegate-communication-thread/13794
https://forum.arbitrum.foundation/t/seedgov-delegate-communication-thread/28243
Supportive of this program, but a mechanism should exist for those that don't KYC to allow their reward to be directed to a charity or similar entity that would still KYC with the Arbitrum Foundation and/or OpCo as appropriate
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/67?u=euphoria
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/68?u=maxlomu
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/65?u=0xtalvo.eth_mty
https://forum.arbitrum.foundation/t/griff-green-delegate-communication-thread/25040/60?u=griff
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/62?u=amira
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/61?u=0xalex
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/60?u=gabriel
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/59?u=0x_ultra
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/58
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/37?u=castlecapital
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/57?u=tekr0x.eth
https://forum.arbitrum.foundation/t/agnes-delegation-communication-thread/28220/2?u=agneslfg
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/55?u=0xdonpepe
https://forum.arbitrum.foundation/t/juanrah-delegate-communication-thread/27395/19?u=juanrah
As I reported in the forum, I for. But I didn't see the legal costs involving multiple countries? Was this fee added to make the experiment more complete?
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/20?u=tempetechie
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/52?u=pedrob
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/51?u=ocandocrypto
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/50?u=kuiclub
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/49?u=duokongcrypto
am voting for this proposal because it creates a safe way for the community to speak up and protects DAO money from being wasted. This program will make the DAO stronger and more trusted.
This is a well thought out program and has been in the works for months.
uppWort of this proposal to bring more transparency to the grants process and prevent bad use of funds.
I've been begging Entropy since October to publish this proposal once and for all. There has been misuse of funds in this DAO, and this proposal should incentivize people to look for those and report them. For example, I just recently [found a $10k USD worth](https://forum.arbitrum.foundation/t/questbook-dda-program-report/27859/14?u=paulofonseca) of misused funds that were reverted to the DAO after my report. We should all do more of that. https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/46?u=paulofonseca
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/45?u=ezr3al
https://forum.arbitrum.foundation/t/larva-delegate-communication-thread/24476/113?u=larva
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/117
https://forum.arbitrum.foundation/t/defi-renaissance-incentive-program-drip/29049/78?u=ocandocrypto
The Event Horizon Community voted FOR on this Proposal (ehARB-100): EventHorizon.vote/vote/arbitrum/ehARB-100
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/112?u=mcfly
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/111?u=hawheik
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/110?u=griff
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/107?u=euphoria
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/58
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/100?u=0x_ultra
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/96?u=tekr0x.eth
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/61?u=0xalex
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/37?u=castlecapital
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/94?u=danielm
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/91?u=dragonawr
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/90?u=blockful
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/14?u=ezr3al
despite personally pushing for this program to exist in the DAO, and even trying to help it come to fruition since October, the latest last minute changes to the program changed the nature of it significantly, namely: GlobaLeaks as a platform will not act as a neutral third-party and therefor it doesn’t ensure the anonymity of the whistleblowers; and more problematic, the inclusion of the Arbitrum Foundation and SeedGov into the reviewer set creates an explicit conflict of interest where the entities responsible to adjudicate grants will be the same that will review the reports of wrongly adjudicated grants and therefor undermining the neutrality and then the effectiveness of this program. https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/87?u=paulofonseca
Democratising lobbyism, on-chain. Check out lobbyfi.xyz
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/73
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/72?u=tane
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/56
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/71?u=mcfly
The Event Horizon Community Voted to Support this Proposal ehARB-76: EventHorizon.vote/vote/arbitrum/ehARB-76
The Event Horizon Community Voted to Support this Proposal ehARB-76: EventHorizon.vote/vote/arbitrum/ehARB-76
https://forum.arbitrum.foundation/t/gfx-labs-delegate-communication-thread/13794
https://forum.arbitrum.foundation/t/seedgov-delegate-communication-thread/28243
Supportive of this program, but a mechanism should exist for those that don't KYC to allow their reward to be directed to a charity or similar entity that would still KYC with the Arbitrum Foundation and/or OpCo as appropriate
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/67?u=euphoria
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/68?u=maxlomu
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/65?u=0xtalvo.eth_mty
https://forum.arbitrum.foundation/t/griff-green-delegate-communication-thread/25040/60?u=griff
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/62?u=amira
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/61?u=0xalex
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/60?u=gabriel
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/59?u=0x_ultra
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/58
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/37?u=castlecapital
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/57?u=tekr0x.eth
https://forum.arbitrum.foundation/t/agnes-delegation-communication-thread/28220/2?u=agneslfg
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/55?u=0xdonpepe
https://forum.arbitrum.foundation/t/juanrah-delegate-communication-thread/27395/19?u=juanrah
As I reported in the forum, I for. But I didn't see the legal costs involving multiple countries? Was this fee added to make the experiment more complete?
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/20?u=tempetechie
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/52?u=pedrob
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/51?u=ocandocrypto
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/50?u=kuiclub
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/49?u=duokongcrypto
am voting for this proposal because it creates a safe way for the community to speak up and protects DAO money from being wasted. This program will make the DAO stronger and more trusted.
This is a well thought out program and has been in the works for months.
uppWort of this proposal to bring more transparency to the grants process and prevent bad use of funds.
I've been begging Entropy since October to publish this proposal once and for all. There has been misuse of funds in this DAO, and this proposal should incentivize people to look for those and report them. For example, I just recently [found a $10k USD worth](https://forum.arbitrum.foundation/t/questbook-dda-program-report/27859/14?u=paulofonseca) of misused funds that were reverted to the DAO after my report. We should all do more of that. https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/46?u=paulofonseca
https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/45?u=ezr3al
https://forum.arbitrum.foundation/t/larva-delegate-communication-thread/24476/113?u=larva
What’s the latest here?
What’s the latest here?
Im voting FOR on this
This is a solid step towards more accountability in the DAO. Feels like a no-brainer to have something like this in place — it empowers the community to keep things in check without adding too much overhead. Sure, there might be edge cases or noise, but the upside is worth it. Glad to support this.
Level K voted FOR this proposal on Tally. We have reviewed all points of view and recognize that there may be some issues that arise from this proposal. However, we believe that in the absence of any other safeguards, this proposal is a step in the right direction. We hope that any issues with this program can be iterated on in future proposals.
Im voting FOR on this
This is a solid step towards more accountability in the DAO. Feels like a no-brainer to have something like this in place — it empowers the community to keep things in check without adding too much overhead. Sure, there might be edge cases or noise, but the upside is worth it. Glad to support this.
Level K voted FOR this proposal on Tally. We have reviewed all points of view and recognize that there may be some issues that arise from this proposal. However, we believe that in the absence of any other safeguards, this proposal is a step in the right direction. We hope that any issues with this program can be iterated on in future proposals.
Thank you @Entropy for this amazing proposal. I have been following this proposal very keenly to see how it will transform. should i have any voting power, i would have voted million times for it.
Thank you @Entropy for this amazing proposal. I have been following this proposal very keenly to see how it will transform. should i have any voting power, i would have voted million times for it.
If an anonymous researcher does not want to dox themselves/ get rewarded for forensic accounting/ fraud research, would they be punished for publishing their findings on the forum?
If an anonymous researcher does not want to dox themselves/ get rewarded for forensic accounting/ fraud research, would they be punished for publishing their findings on the forum?
I think this proposal has the potential to effectively improve the transparency and governance of the DAO, particularly in terms of the use and distribution of funds. However, the success of the proposal hinges on setting reasonable reward standards and reporting mechanisms, as well as ensuring a fair and transparent investigation and decision-making process. If these issues can be effectively addressed, the proposal could bring about positive changes.
I think this proposal has the potential to effectively improve the transparency and governance of the DAO, particularly in terms of the use and distribution of funds. However, the success of the proposal hinges on setting reasonable reward standards and reporting mechanisms, as well as ensuring a fair and transparent investigation and decision-making process. If these issues can be effectively addressed, the proposal could bring about positive changes.
great idea to bring accountability to grantees.
+1 on the second paragraph. We must have a detailed document that states what the meaning of misuse is in this context.
great idea to bring accountability to grantees.
+1 on the second paragraph. We must have a detailed document that states what the meaning of misuse is in this context.
Onchain voting for this proposal is ending within 24 hours:
[Vote on Tally: The Watchdog: Arbitrum DAO’s Grant Misuse Bounty Program](https://www.tally.xyz/gov/eip155:42161:0x789fC99093B09aD01C34DC7251D0C89ce743e5a4/proposal/2585929699385410815)
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Onchain voting for this proposal is ending within 24 hours:
[Vote on Tally: The Watchdog: Arbitrum DAO’s Grant Misuse Bounty Program](https://www.tally.xyz/gov/eip155:42161:0x789fC99093B09aD01C34DC7251D0C89ce743e5a4/proposal/2585929699385410815)
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===============
[The Watchdog: Arbitrum DAO’s Grant Misuse Bounty Program](https://www.tally.xyz/gov/eip155:42161:0x789fC99093B09aD01C34DC7251D0C89ce743e5a4/proposal/2585929699385410815)
### Final Votes
| **Category** | **Result** | **Details** |
|----------------------|------------------|-----------------------------|
| **Quorum reached** | ✅ | 205.83M of 132.07M |
| **Majority Support** | ✅ | |
| **For** | | 184.71M (89.7%) |
| **Against** | | 115.99k (0.1%) |
| **Abstain** | | 21.13M (10.3%) |
* * *
I am a bot. Questions? Contact [email protected]
Voting has ended!
===============
[The Watchdog: Arbitrum DAO’s Grant Misuse Bounty Program](https://www.tally.xyz/gov/eip155:42161:0x789fC99093B09aD01C34DC7251D0C89ce743e5a4/proposal/2585929699385410815)
### Final Votes
| **Category** | **Result** | **Details** |
|----------------------|------------------|-----------------------------|
| **Quorum reached** | ✅ | 205.83M of 132.07M |
| **Majority Support** | ✅ | |
| **For** | | 184.71M (89.7%) |
| **Against** | | 115.99k (0.1%) |
| **Abstain** | | 21.13M (10.3%) |
* * *
I am a bot. Questions? Contact [email protected]
Voting has started for this proposal! Vote on Tally: The Watchdog: Arbitrum DAO’s Grant Misuse Bounty Program
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This seems similar to the Safeguard initiative, which was discussed last year in this forum and is currently in development. Perhaps we should have a chat and see if we can align efforts?
Voting has started for this proposal! Vote on Tally: The Watchdog: Arbitrum DAO’s Grant Misuse Bounty Program
I am a bot. Questions? Contact [email protected]
This seems similar to the Safeguard initiative, which was discussed last year in this forum and is currently in development. Perhaps we should have a chat and see if we can align efforts?
Of course! Here's a quick video walkthrough of the platform: https://screenrec.com/share/VLHEx86cb4 and https://screenrec.com/share/zmq47IaUnZ. We're still moving things around, still looking for a way to simplify things, and most of the content is currently simulated. As you'll see in the video, we have a grantee list page where AI helps track issues to support human oversight.
Of course! Here's a quick video walkthrough of the platform: https://screenrec.com/share/VLHEx86cb4 and https://screenrec.com/share/zmq47IaUnZ. We're still moving things around, still looking for a way to simplify things, and most of the content is currently simulated. As you'll see in the video, we have a grantee list page where AI helps track issues to support human oversight.
Hi Entropy team,
I appreciate the work that has been put into updating this proposal. Given the importance and potential impact of it, I’d like to suggest allowing a few more days for the community to provide feedback before moving the proposal to a snapshot.
Hi Entropy team,
I appreciate the work that has been put into updating this proposal. Given the importance and potential impact of it, I’d like to suggest allowing a few more days for the community to provide feedback before moving the proposal to a snapshot.
This would give all stakeholders more time to evaluate the recent updates and ensure that the proposal reflects the collective interests of the DAO. I believe such a step would strengthen the decision-making process and uphold the transparency and inclusivity we all value.
Thank you for considering this request.
Hi Entropy team,
I appreciate the work that has been put into updating this proposal. Given the importance and potential impact of it, I’d like to suggest allowing a few more days for the community to provide feedback before moving the proposal to a snapshot.
Hi Entropy team,
I appreciate the work that has been put into updating this proposal. Given the importance and potential impact of it, I’d like to suggest allowing a few more days for the community to provide feedback before moving the proposal to a snapshot.
This would give all stakeholders more time to evaluate the recent updates and ensure that the proposal reflects the collective interests of the DAO. I believe such a step would strengthen the decision-making process and uphold the transparency and inclusivity we all value.
Thank you for considering this request.
I noticed that the Watchdog proposal seems to address some similar concerns regarding fund misuse and accountability within the DAO. and I wanted to ask if there are any potential conflicts between my proposal here . I believe it's important to ensure we're all aligned and that both initiatives can complement each other if they share similar goals.
hey @SEEDGov thanks for asking. I will look into whether it is possible re Snapshot and get back to you.
I noticed that the Watchdog proposal seems to address some similar concerns regarding fund misuse and accountability within the DAO. and I wanted to ask if there are any potential conflicts between my proposal here . I believe it's important to ensure we're all aligned and that both initiatives can complement each other if they share similar goals.
hey @SEEDGov thanks for asking. I will look into whether it is possible re Snapshot and get back to you.
Great timing @paulofonseca! Our team is happy to share that the customization of the Watchdog portal is now complete and the program is live of this morning. Community members and sleuths can now submit evidence-based reports of grant misuse through the official Watchdog portal: https://watchdog.arbitrum.foundation/
A summary of the Watchdog has been posted to the Report Misuse of Funds subcategory to highlight the program and opportunity for individuals who have instances to report. Additionally, marketing announcements will be posted by the Arbitrum Foundation and Entropy Advisors to socials later today. We'd appreciate any help from delegates in amplifying the program.
Great timing @paulofonseca! Our team is happy to share that the customization of the Watchdog portal is now complete and the program is live of this morning. Community members and sleuths can now submit evidence-based reports of grant misuse through the official Watchdog portal: https://watchdog.arbitrum.foundation/
A summary of the Watchdog has been posted to the Report Misuse of Funds subcategory to highlight the program and opportunity for individuals who have instances to report. Additionally, marketing announcements will be posted by the Arbitrum Foundation and Entropy Advisors to socials later today. We'd appreciate any help from delegates in amplifying the program.
As a reminder, the Watchdog is operating on an ongoing basis until its 400k ARB budget is exhausted or the program is transitioned to the OpCo. At the 6 month mark or when the program transitions to OpCo, whichever occurs first, a retrospective report will be published summarizing the impact.
Great timing @paulofonseca! Our team is happy to share that the customization of the Watchdog portal is now complete and the program is live of this morning. Community members and sleuths can now submit evidence-based reports of grant misuse through the official Watchdog portal: https://watchdog.arbitrum.foundation/
A summary of the Watchdog has been posted to the Report Misuse of Funds subcategory to highlight the program and opportunity for individuals who have instances to report. Additionally, marketing announcements will be posted by the Arbitrum Foundation and Entropy Advisors to socials later today. We'd appreciate any help from delegates in amplifying the program.
Great timing @paulofonseca! Our team is happy to share that the customization of the Watchdog portal is now complete and the program is live of this morning. Community members and sleuths can now submit evidence-based reports of grant misuse through the official Watchdog portal: https://watchdog.arbitrum.foundation/
A summary of the Watchdog has been posted to the Report Misuse of Funds subcategory to highlight the program and opportunity for individuals who have instances to report. Additionally, marketing announcements will be posted by the Arbitrum Foundation and Entropy Advisors to socials later today. We'd appreciate any help from delegates in amplifying the program.
As a reminder, the Watchdog is operating on an ongoing basis until its 400k ARB budget is exhausted or the program is transitioned to the OpCo. At the 6 month mark or when the program transitions to OpCo, whichever occurs first, a retrospective report will be published summarizing the impact.
I have voted in favour of this proposal on it's on-chain stage in Tally, under the rationale for the off-chain proposal:
I voted FOR in Snapshot. Really liked this proposal, having an accountability structure like this will immensely help with execution, it’s an attempt to optimize the capital deployment, something I’m all favour for. This makes a lot of sense. I like the reward and payment rewards composition, it incentivizes both the grant recipient to be honest and the watchdog entity to find inconsistencies. I think giving a chance to this proposal might help the dao find a good balance if it works well.
I have voted in favour of this proposal on it's on-chain stage in Tally, under the rationale for the off-chain proposal:
I voted FOR in Snapshot. Really liked this proposal, having an accountability structure like this will immensely help with execution, it’s an attempt to optimize the capital deployment, something I’m all favour for. This makes a lot of sense. I like the reward and payment rewards composition, it incentivizes both the grant recipient to be honest and the watchdog entity to find inconsistencies. I think giving a chance to this proposal might help the dao find a good balance if it works well.
Also I'd like to highlight this - a good call!
Due to our clear Conflict of Interest with respect to this proposal we have decided to abstain.
I voted YES on The Watchdog proposal—a smart, market-driven solution to strengthen accountability in Arbitrum. (which is necessary imho)
What makes this proposal stand out is its practical approach to governance:
I voted YES on The Watchdog proposal—a smart, market-driven solution to strengthen accountability in Arbitrum. (which is necessary imho)
What makes this proposal stand out is its practical approach to governance:
This proposal aligns incentives with ecosystem health, creating a self-sustaining check on misconduct. As someone who values accountability, I see The Watchdog as a necessary step forward for Arbitrum’s growth.
@Entropy @Arbitrum any progress on this?
As ITU Blockchain, we voted in favor of this proposal.
We believe it represents an important step toward enhancing transparency and accountability in the DAO’s fund allocation processes. There are numerous examples within the Web3 ecosystem where bounty mechanisms for reporting fund misuse have proven to be effective. Implementing a similar approach within Arbitrum’s large-scale incentive programs — particularly LTIP and STIP — would significantly contribute to the ecosystem’s sustainability and ensure more efficient use of resources.
As ITU Blockchain, we voted in favor of this proposal.
We believe it represents an important step toward enhancing transparency and accountability in the DAO’s fund allocation processes. There are numerous examples within the Web3 ecosystem where bounty mechanisms for reporting fund misuse have proven to be effective. Implementing a similar approach within Arbitrum’s large-scale incentive programs — particularly LTIP and STIP — would significantly contribute to the ecosystem’s sustainability and ensure more efficient use of resources.
Additionally, we believe that the Watchdog Program would not only serve as a deterrent against malicious behavior but also increase community engagement by encouraging more active participation in governance processes.
Below is a v1 analysis that brings together the many viewpoints into a concise summary, an evaluation of the strongest arguments for and against the proposal, a set of novel improvement suggestions, and the conclusion of inter-agent dialog ─────────────────────────────
FOR: 183 AGAINST: 7 ABSTAIN: 2 Verdict: Overwhelming Support
no it hasn't... there is still more than 24 hours left to vote on this onchain proposal.
We vote for this proposal, keeping the same opinion as our Snapshot vote. This proposal offers a low-cost safeguard that can return multiples of its 400k ARB budget by preventing or clawing back misused funds. We value the clear incentive alignment, because it mobilises independent investigators without the overhead of a permanent audit team. Privacy protections through GlobaLeaks and a three-member committee with conflict-of-interest rules mitigate retaliation risk while keeping oversight accountable to the DAO. The six-month pilot and mandatory retrospective report give tokenholders concrete data to refine or retire the program, making support a prudent, risk-controlled choice for long-term value creation.
Voting for this proposal.
It helps us bring more accountability and aligns us with TWO of Elenor Ostrom’s principles that are commonly not applied hard enough in DAOs: mutual monitoring and graduated sanctions.
It's rare to see something that we can vote on that will bring more accountability to the DAO in a decentralized way.
Voting FOR
The current format eliminates accountability for some of the most powerful entities in Arbitrum, which is problematic as it compounds with other changes in the same direction. That being said, it's better than nothing and still fulfils the core purpose of analysing grant missuse
Entropy proposed The Watchdog to fill a gap in Arbitrum’s governance: the absence of a system to detect and respond to misuse of DAO-allocated funds. We recognize that a conflict of interest exists given that Entropy is a member of the reviewing committee and are disclosing this to the DAO before voting FOR on Tally.
Last week the Watchdog Program proposal passed on Tally and following its execution, the 400,000 ARB was transferred to an Arbitrum Foundation controlled multisig. Entropy is now coordinating with the AF to get the dedicated GlobaLeaks portal set up. We will provide an update to the DAO once this step has been completed.
I have voted in favour of this proposal on it's on-chain stage in Tally, under the rationale for the off-chain proposal:
I voted FOR in Snapshot. Really liked this proposal, having an accountability structure like this will immensely help with execution, it’s an attempt to optimize the capital deployment, something I’m all favour for. This makes a lot of sense. I like the reward and payment rewards composition, it incentivizes both the grant recipient to be honest and the watchdog entity to find inconsistencies. I think giving a chance to this proposal might help the dao find a good balance if it works well.
I have voted in favour of this proposal on it's on-chain stage in Tally, under the rationale for the off-chain proposal:
I voted FOR in Snapshot. Really liked this proposal, having an accountability structure like this will immensely help with execution, it’s an attempt to optimize the capital deployment, something I’m all favour for. This makes a lot of sense. I like the reward and payment rewards composition, it incentivizes both the grant recipient to be honest and the watchdog entity to find inconsistencies. I think giving a chance to this proposal might help the dao find a good balance if it works well.
Also I'd like to highlight this - a good call!
Due to our clear Conflict of Interest with respect to this proposal we have decided to abstain.
I voted YES on The Watchdog proposal—a smart, market-driven solution to strengthen accountability in Arbitrum. (which is necessary imho)
What makes this proposal stand out is its practical approach to governance:
I voted YES on The Watchdog proposal—a smart, market-driven solution to strengthen accountability in Arbitrum. (which is necessary imho)
What makes this proposal stand out is its practical approach to governance:
This proposal aligns incentives with ecosystem health, creating a self-sustaining check on misconduct. As someone who values accountability, I see The Watchdog as a necessary step forward for Arbitrum’s growth.
@Entropy @Arbitrum any progress on this?
As ITU Blockchain, we voted in favor of this proposal.
We believe it represents an important step toward enhancing transparency and accountability in the DAO’s fund allocation processes. There are numerous examples within the Web3 ecosystem where bounty mechanisms for reporting fund misuse have proven to be effective. Implementing a similar approach within Arbitrum’s large-scale incentive programs — particularly LTIP and STIP — would significantly contribute to the ecosystem’s sustainability and ensure more efficient use of resources.
As ITU Blockchain, we voted in favor of this proposal.
We believe it represents an important step toward enhancing transparency and accountability in the DAO’s fund allocation processes. There are numerous examples within the Web3 ecosystem where bounty mechanisms for reporting fund misuse have proven to be effective. Implementing a similar approach within Arbitrum’s large-scale incentive programs — particularly LTIP and STIP — would significantly contribute to the ecosystem’s sustainability and ensure more efficient use of resources.
Additionally, we believe that the Watchdog Program would not only serve as a deterrent against malicious behavior but also increase community engagement by encouraging more active participation in governance processes.
Below is a v1 analysis that brings together the many viewpoints into a concise summary, an evaluation of the strongest arguments for and against the proposal, a set of novel improvement suggestions, and the conclusion of inter-agent dialog ─────────────────────────────
FOR: 183 AGAINST: 7 ABSTAIN: 2 Verdict: Overwhelming Support
no it hasn't... there is still more than 24 hours left to vote on this onchain proposal.
We vote for this proposal, keeping the same opinion as our Snapshot vote. This proposal offers a low-cost safeguard that can return multiples of its 400k ARB budget by preventing or clawing back misused funds. We value the clear incentive alignment, because it mobilises independent investigators without the overhead of a permanent audit team. Privacy protections through GlobaLeaks and a three-member committee with conflict-of-interest rules mitigate retaliation risk while keeping oversight accountable to the DAO. The six-month pilot and mandatory retrospective report give tokenholders concrete data to refine or retire the program, making support a prudent, risk-controlled choice for long-term value creation.
Voting for this proposal.
It helps us bring more accountability and aligns us with TWO of Elenor Ostrom’s principles that are commonly not applied hard enough in DAOs: mutual monitoring and graduated sanctions.
It's rare to see something that we can vote on that will bring more accountability to the DAO in a decentralized way.
Voting FOR
The current format eliminates accountability for some of the most powerful entities in Arbitrum, which is problematic as it compounds with other changes in the same direction. That being said, it's better than nothing and still fulfils the core purpose of analysing grant missuse
Entropy proposed The Watchdog to fill a gap in Arbitrum’s governance: the absence of a system to detect and respond to misuse of DAO-allocated funds. We recognize that a conflict of interest exists given that Entropy is a member of the reviewing committee and are disclosing this to the DAO before voting FOR on Tally.
Last week the Watchdog Program proposal passed on Tally and following its execution, the 400,000 ARB was transferred to an Arbitrum Foundation controlled multisig. Entropy is now coordinating with the AF to get the dedicated GlobaLeaks portal set up. We will provide an update to the DAO once this step has been completed.
Below is a v1 analysis that brings together the many viewpoints into a concise summary, an evaluation of the strongest arguments for and against the proposal, a set of novel improvement suggestions, and the conclusion of inter-agent dialog ─────────────────────────────
FOR: 183 AGAINST: 7 ABSTAIN: 2 Verdict: Overwhelming Support
• Nearly every voter’s rationale states “true” (support) with only a few “false” votes.
• The core rationale is that a misuse bounty program will enhance accountability by incentivizing community members to identify—and help recover—misused DAO funds, deter bad actors, and ultimately safeguard large-scale allocations.
• Some concerns exist around clarity in the reward tiers, potential conflicts of interest in the review process, and the possibility that a secretive or subjective evaluation might harm transparency and community trust.
• Accountability & Deterrence: The proposal builds on historical DAO shortcomings by establishing a formal, incentive‐driven oversight mechanism. It draws on past cases of misappropriation and lessons learned in previous proposals, showing that a robust bounty system can both recapture funds and deter abuse.
• Low Implementation Cost vs. High Benefits: The program can quickly create a decentralized, low‐cost watchdog mechanism that leverages trusted community reviewers and open-source tools like GlobaLeaks.
• Community Empowerment: With anonymity and predefined reward structures, the program empowers white-hat actors while adding a layer of “checks and balances” that has been missing from previous governance frameworks.
• Subjectivity & Concentration of Power: Opponents worry that a small committee—even with trusted members—might exercise subjective discretion, raising the risk of conflict of interest or bias. Historical DAO disputes warn against centralized control when reviewing fund misuses.
• Clarity in Definitions and Procedures: Without crystal-clear definitions of “misuse” or detailed criteria for categorizing low/medium/high cases (and how to act when recovery is partial or minimal), there is a risk of inconsistent decision-making.
• Potential Chilling Effects: A process that delays public knowledge of misuse incidents might protect individuals but could also obscure damaging patterns from broader community scrutiny, historically a key driver for swift corrective action.
• Introduce a Data-Driven Preliminary Screening: Leverage machine learning algorithms to flag anomalous transactions or patterns. This “first pass” would provide standardized metrics before human review—helping reduce subjectivity and improve consistency. • Establish a Rotating Independent Audit Panel: Beyond the fixed review committee, implement a randomized, externally vetted panel (rotating periodically) to verify contentious decisions. This would further reduce conflict risks and enhance legitimacy without relying on community nominations already widely suggested. • Dynamic Reward Calibration: Incorporate a historical-data–driven model that adjusts the reward tiers and percentages based on past recovery rates and the actual fund amounts involved. This dynamic model would help ensure that rewards are proportionate and can adapt to changing market or political conditions.
While the overwhelming support in the initial rationales confirms the proposal’s appeal, addressing the remaining concerns with novel, data- and tech-enabled measures could not only mitigate the weaknesses but also broaden its appeal. Inter-agent debate suggests that embedding automated evaluations and independent audits is likely to foster greater trust, ultimately moving the proposal toward near-unanimous support.
As in @web3citizenxyz representation. Voting FOR.
Below the rationale:
Voting FOR this proposal, for the reasons highlighted at the snapshot stage: https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/71?u=mcfly
Shared originally in Entropy’s June update, the Globaleaks instance for the Watchdog portal was deployed by the Arbitrum Foundation in early July. Since then Entropy has completed the necessary customization steps, which included updating the intake form, adding elements of the Arbitrum brand to the landing page, and onboarding the other reviewers from the Arbitrum Foundation and SeedGov as recipients for submitted reports.
The final steps remaining before the program is ready to be launched is the enabling of https, pointing the site to a domain name like watchdog.arbitrum.foundation (it may be this or something similar), and linking the portal on the Arbitrum Foundation’s grants page to boost visibility. These types of network changes can only be made through the Globaleaks CLI, as opposed to the admin portal, and the necessary instructions have been communicated to the relevant team at the AF. With the task currently pending based on their availability, Entropy can not on their behalf provide an exact date when this will be completed. Our team has begun preparing marketing materials so that once the network changes are completed, we can promptly launch the program.
I'm in full support of this proposal. I'm voting FOR on Tally.
After consideration, the @SEEDgov delegation decided to vote “ABSTAIN” on this proposal at the Tally Vote.
Rationale
Due to our clear Conflict of Interest with respect to this proposal we have decided to abstain.
We voted for the proposal on Tally https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/37?u=castlecapital
I support this proposal on Tally as well. Here (https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/59)’s my previous rationale. I also support the changes that were made following the off-chain vote. Additionally, after giving the platform a look, I believe it effectively addresses our needs. Voting in favor.
The Watchgod proposal is innovative, I've never seen anything similar mechanism being implemented in web3 and will be voting yes on it because I'm curios how it will deliver. That being said, here are the things that I believe the proposal are lacking are:
1) Transparency and a plan into CTAs, in the sense that:
The Watchgod proposal is innovative, I've never seen anything similar mechanism being implemented in web3 and will be voting yes on it because I'm curios how it will deliver. That being said, here are the things that I believe the proposal are lacking are:
1) Transparency and a plan into CTAs, in the sense that:
If two or more reviewers have an identified COI, the reviewers will identify two external parties who don’t have COIs and have the capabilities to review the report. If the report is made public, the reviewers’ identified COIs will be published at the same time. To reduce the need for an additional election process and budgeted compensation, the Watchdog program will leverage trusted community members who have been elected to other Arbitrum DAO initiatives such as, but not limited to, the Domain
Resonate with @limes thinking and indeed it would be optimal if the DAO, possibly the ARDC would consider options to try to avoid fund misuse before the need to recover them.
PS. As a former reviewer myself I know it's sometimes hard in practice to maintain neutrality on all levels and that anti-fraud work always requires a bit of trust in the parties involved.
I voted FOR on this proposal. This is an structured effort to encourage parties to review the correct use of funds and indentify any wrongdoing. I will be following the findings/reports to verify it effectiveness.
I voted FOR this proposal https://forum.arbitrum.foundation/t/cp0x-delegate-communication-thread/22217/182?u=cp0x
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 Tally voting.
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 Tally voting.
We strongly believe the Watchdog program represents a crucial initiative for safeguarding DAO resources. It leverages community vigilance, enabling a proactive approach to ensuring DAO funds are utilized effectively and responsibly.
Initially, we built an MVP called Truence (GitHub Repo) that incorporates most required functionalities outlined in the initial proposal, with the intention to participate if an RFP process was conducted for selecting the service provider to develop the Watchdog platform.
When Entropy Advisors mentioned that no RFP process would be conducted and they are exploring an alternative solution, we shared our solution directly with them to explore how it could best serve the DAO without charging anything for the platform. Ultimately, Entropy decided to proceed with GlobaLeaks due to its extensive usage, proven reliability, and robust privacy features, criteria which we also value highly. As delegates, we respect this decision and support moving forward with the program. Our MVP was created purely out of enthusiasm and support for this critical initiative, and taken part in the RFP process if it had been conducted.
Additionally, we acknowledge the committee's decision to release Watchdog reports on a case-by-case basis. We encourage timely and transparent disclosures whenever possible, as consistent updates will help the community and delegates to stay updated on the program.
Overall, the Watchdog program marks a significant step forward for the Arbitrum DAO, enhancing security, accountability, and community involvement. We look forward to its successful implementation and long-term impact.
Just voted YES on The Watchdog proposal on tally. This is the kind of market-driven accountability mechanism Arbitrum needs.
What stands out here is how The Watchdog elegantly applies several of Ostrom's principles for managing shared resources:
Just voted YES on The Watchdog proposal on tally. This is the kind of market-driven accountability mechanism Arbitrum needs.
What stands out here is how The Watchdog elegantly applies several of Ostrom's principles for managing shared resources:
What makes this proposal particularly strong is that it aligns market incentives with ecosystem health. As someone who's consistently advocated for skin in the game and performance-based accountability, I see this as the perfect complement to our grants programs.
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 voted 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 voted FOR the proposal.
As previously stated, we understand the motivation behind launching this initiative. However, we remain cautious about its potential effectiveness and the possible involuntary consequences it may introduce. That said, given its nature as a pilot program and the current absence of a DAO-wide mechanism to ensure accountability and proper fund allocation, we believe it’s worth giving the proposal a chance.
Voted For: I think this program is good enough to add transparency and security to the Arbitrum DAO. The idea itself is inspired by many other organizations, and I definitely see how we could benefit from it.
There were some concerns on the call about edge cases, but as the team justified — I think it's better than nothing. Let's see the program in action and then, based on that, we can improve and adjust it. Overall, I like and fully support programs like this.
FOR should conduct a detailed follow-up on previous fund mismanagement plans and implement future fund tracking and oversight. I’m optimistic that this project can achieve great success and create a fair environment for everyone.
I voted in favor on Snapshot and will continue to support this proposal onchain.
Besides the positives I shared earlier, I believe Watchdog could set a strong precedent for transparent grant oversight across DAOs, especially with so many funding and grant activities happening right now to support builders and projects in the web3 ecosystem.
I voted in favor on Snapshot and will continue to support this proposal onchain.
Besides the positives I shared earlier, I believe Watchdog could set a strong precedent for transparent grant oversight across DAOs, especially with so many funding and grant activities happening right now to support builders and projects in the web3 ecosystem.
On a case by case basis, if all attempts at backchanneling fail and the accused party is nonresponsive, the report may be posted to the forum with all the watcher’s personal and identifiable information redacted in the version posted publicly. Additionally, on a case by case basis, the committee may decide to post a summary of a grant misuse report to inform the DAO of certain incidents. Otherwise individual reports will not be posted to the forum directly.
I agree but wanted to add one point (hope it's not too late lol), in high level cases involving large-scale abuse, after internal efforts fail, we could also consider posting the accused party’s info on social media so other DAOs or ecosystem partners can blacklist them.
I don’t think this is overreacting, it’s about protecting our partners and and the space from bad actors.
I have voted "Yes" to this proposal, as I believe it adds a layer of crowdsourced accountability without much of a downside at all.
As has been mentioned by others I have some concerns that there might be spurious, "gold-digging" reports or that this might lead to some public accusations around instances where fund-usage is just on the borderline of misuse or not, creating a situation where there is an incentive for reporters to argue their case publically. Ultimately these are process/implementation details that I think can be sorted out, and don't outweigh the overall good of the proposal either way.
Having already voted FOR on Snapshot, I will also vote FOR on Tally, even despite recent changes that I understand may compromise the effectiveness or intent of the program as a whole as this, like many other, proposals would be affected by the upcoming OpCo era changes.
This is the most straightforward vote for me so far — I’m voting FOR. I believe this program can improve how treasury funds are used, support the DAO’s long-term health, and bring more transparency across initiatives.
One small point I wanted to raise: I noticed the proposal was first discussed back in December. The reason I mention this — and not as a criticism — is because I’m genuinely curious about what caused the delay. I searched the forum but couldn’t find a clear explanation, and understanding this would be helpful to me as I try to follow governance more closely and learn how things evolve over time.
We are voting FOR this proposal. The proposal creates a system that encourages people to bring complaints to the Arbitrum DAO and, if the program is successful (and the misuse is found), the system can feed back - or even bring money back to the DAO. The work carried out by Entropy, Seed and Foundation in reviewing these submissions is crucial. Not only to assign a fair reward value to informants, but to avoid potential cases where there is no misuse of resources.
Below is a v1 analysis that brings together the many viewpoints into a concise summary, an evaluation of the strongest arguments for and against the proposal, a set of novel improvement suggestions, and the conclusion of inter-agent dialog ─────────────────────────────
FOR: 183 AGAINST: 7 ABSTAIN: 2 Verdict: Overwhelming Support
• Nearly every voter’s rationale states “true” (support) with only a few “false” votes.
• The core rationale is that a misuse bounty program will enhance accountability by incentivizing community members to identify—and help recover—misused DAO funds, deter bad actors, and ultimately safeguard large-scale allocations.
• Some concerns exist around clarity in the reward tiers, potential conflicts of interest in the review process, and the possibility that a secretive or subjective evaluation might harm transparency and community trust.
• Accountability & Deterrence: The proposal builds on historical DAO shortcomings by establishing a formal, incentive‐driven oversight mechanism. It draws on past cases of misappropriation and lessons learned in previous proposals, showing that a robust bounty system can both recapture funds and deter abuse.
• Low Implementation Cost vs. High Benefits: The program can quickly create a decentralized, low‐cost watchdog mechanism that leverages trusted community reviewers and open-source tools like GlobaLeaks.
• Community Empowerment: With anonymity and predefined reward structures, the program empowers white-hat actors while adding a layer of “checks and balances” that has been missing from previous governance frameworks.
• Subjectivity & Concentration of Power: Opponents worry that a small committee—even with trusted members—might exercise subjective discretion, raising the risk of conflict of interest or bias. Historical DAO disputes warn against centralized control when reviewing fund misuses.
• Clarity in Definitions and Procedures: Without crystal-clear definitions of “misuse” or detailed criteria for categorizing low/medium/high cases (and how to act when recovery is partial or minimal), there is a risk of inconsistent decision-making.
• Potential Chilling Effects: A process that delays public knowledge of misuse incidents might protect individuals but could also obscure damaging patterns from broader community scrutiny, historically a key driver for swift corrective action.
• Introduce a Data-Driven Preliminary Screening: Leverage machine learning algorithms to flag anomalous transactions or patterns. This “first pass” would provide standardized metrics before human review—helping reduce subjectivity and improve consistency. • Establish a Rotating Independent Audit Panel: Beyond the fixed review committee, implement a randomized, externally vetted panel (rotating periodically) to verify contentious decisions. This would further reduce conflict risks and enhance legitimacy without relying on community nominations already widely suggested. • Dynamic Reward Calibration: Incorporate a historical-data–driven model that adjusts the reward tiers and percentages based on past recovery rates and the actual fund amounts involved. This dynamic model would help ensure that rewards are proportionate and can adapt to changing market or political conditions.
While the overwhelming support in the initial rationales confirms the proposal’s appeal, addressing the remaining concerns with novel, data- and tech-enabled measures could not only mitigate the weaknesses but also broaden its appeal. Inter-agent debate suggests that embedding automated evaluations and independent audits is likely to foster greater trust, ultimately moving the proposal toward near-unanimous support.
As in @web3citizenxyz representation. Voting FOR.
Below the rationale:
Voting FOR this proposal, for the reasons highlighted at the snapshot stage: https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/71?u=mcfly
Shared originally in Entropy’s June update, the Globaleaks instance for the Watchdog portal was deployed by the Arbitrum Foundation in early July. Since then Entropy has completed the necessary customization steps, which included updating the intake form, adding elements of the Arbitrum brand to the landing page, and onboarding the other reviewers from the Arbitrum Foundation and SeedGov as recipients for submitted reports.
The final steps remaining before the program is ready to be launched is the enabling of https, pointing the site to a domain name like watchdog.arbitrum.foundation (it may be this or something similar), and linking the portal on the Arbitrum Foundation’s grants page to boost visibility. These types of network changes can only be made through the Globaleaks CLI, as opposed to the admin portal, and the necessary instructions have been communicated to the relevant team at the AF. With the task currently pending based on their availability, Entropy can not on their behalf provide an exact date when this will be completed. Our team has begun preparing marketing materials so that once the network changes are completed, we can promptly launch the program.
I'm in full support of this proposal. I'm voting FOR on Tally.
After consideration, the @SEEDgov delegation decided to vote “ABSTAIN” on this proposal at the Tally Vote.
Rationale
Due to our clear Conflict of Interest with respect to this proposal we have decided to abstain.
We voted for the proposal on Tally https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/37?u=castlecapital
I support this proposal on Tally as well. Here (https://forum.arbitrum.foundation/t/the-watchdog-arbitrum-daos-grant-misuse-bounty-program/27978/59)’s my previous rationale. I also support the changes that were made following the off-chain vote. Additionally, after giving the platform a look, I believe it effectively addresses our needs. Voting in favor.
The Watchgod proposal is innovative, I've never seen anything similar mechanism being implemented in web3 and will be voting yes on it because I'm curios how it will deliver. That being said, here are the things that I believe the proposal are lacking are:
1) Transparency and a plan into CTAs, in the sense that:
The Watchgod proposal is innovative, I've never seen anything similar mechanism being implemented in web3 and will be voting yes on it because I'm curios how it will deliver. That being said, here are the things that I believe the proposal are lacking are:
1) Transparency and a plan into CTAs, in the sense that:
If two or more reviewers have an identified COI, the reviewers will identify two external parties who don’t have COIs and have the capabilities to review the report. If the report is made public, the reviewers’ identified COIs will be published at the same time. To reduce the need for an additional election process and budgeted compensation, the Watchdog program will leverage trusted community members who have been elected to other Arbitrum DAO initiatives such as, but not limited to, the Domain
Resonate with @limes thinking and indeed it would be optimal if the DAO, possibly the ARDC would consider options to try to avoid fund misuse before the need to recover them.
PS. As a former reviewer myself I know it's sometimes hard in practice to maintain neutrality on all levels and that anti-fraud work always requires a bit of trust in the parties involved.
I voted FOR on this proposal. This is an structured effort to encourage parties to review the correct use of funds and indentify any wrongdoing. I will be following the findings/reports to verify it effectiveness.
I voted FOR this proposal https://forum.arbitrum.foundation/t/cp0x-delegate-communication-thread/22217/182?u=cp0x
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 Tally voting.
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 Tally voting.
We strongly believe the Watchdog program represents a crucial initiative for safeguarding DAO resources. It leverages community vigilance, enabling a proactive approach to ensuring DAO funds are utilized effectively and responsibly.
Initially, we built an MVP called Truence (GitHub Repo) that incorporates most required functionalities outlined in the initial proposal, with the intention to participate if an RFP process was conducted for selecting the service provider to develop the Watchdog platform.
When Entropy Advisors mentioned that no RFP process would be conducted and they are exploring an alternative solution, we shared our solution directly with them to explore how it could best serve the DAO without charging anything for the platform. Ultimately, Entropy decided to proceed with GlobaLeaks due to its extensive usage, proven reliability, and robust privacy features, criteria which we also value highly. As delegates, we respect this decision and support moving forward with the program. Our MVP was created purely out of enthusiasm and support for this critical initiative, and taken part in the RFP process if it had been conducted.
Additionally, we acknowledge the committee's decision to release Watchdog reports on a case-by-case basis. We encourage timely and transparent disclosures whenever possible, as consistent updates will help the community and delegates to stay updated on the program.
Overall, the Watchdog program marks a significant step forward for the Arbitrum DAO, enhancing security, accountability, and community involvement. We look forward to its successful implementation and long-term impact.
Just voted YES on The Watchdog proposal on tally. This is the kind of market-driven accountability mechanism Arbitrum needs.
What stands out here is how The Watchdog elegantly applies several of Ostrom's principles for managing shared resources:
Just voted YES on The Watchdog proposal on tally. This is the kind of market-driven accountability mechanism Arbitrum needs.
What stands out here is how The Watchdog elegantly applies several of Ostrom's principles for managing shared resources:
What makes this proposal particularly strong is that it aligns market incentives with ecosystem health. As someone who's consistently advocated for skin in the game and performance-based accountability, I see this as the perfect complement to our grants programs.
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 voted 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 voted FOR the proposal.
As previously stated, we understand the motivation behind launching this initiative. However, we remain cautious about its potential effectiveness and the possible involuntary consequences it may introduce. That said, given its nature as a pilot program and the current absence of a DAO-wide mechanism to ensure accountability and proper fund allocation, we believe it’s worth giving the proposal a chance.
Voted For: I think this program is good enough to add transparency and security to the Arbitrum DAO. The idea itself is inspired by many other organizations, and I definitely see how we could benefit from it.
There were some concerns on the call about edge cases, but as the team justified — I think it's better than nothing. Let's see the program in action and then, based on that, we can improve and adjust it. Overall, I like and fully support programs like this.
FOR should conduct a detailed follow-up on previous fund mismanagement plans and implement future fund tracking and oversight. I’m optimistic that this project can achieve great success and create a fair environment for everyone.
I voted in favor on Snapshot and will continue to support this proposal onchain.
Besides the positives I shared earlier, I believe Watchdog could set a strong precedent for transparent grant oversight across DAOs, especially with so many funding and grant activities happening right now to support builders and projects in the web3 ecosystem.
I voted in favor on Snapshot and will continue to support this proposal onchain.
Besides the positives I shared earlier, I believe Watchdog could set a strong precedent for transparent grant oversight across DAOs, especially with so many funding and grant activities happening right now to support builders and projects in the web3 ecosystem.
On a case by case basis, if all attempts at backchanneling fail and the accused party is nonresponsive, the report may be posted to the forum with all the watcher’s personal and identifiable information redacted in the version posted publicly. Additionally, on a case by case basis, the committee may decide to post a summary of a grant misuse report to inform the DAO of certain incidents. Otherwise individual reports will not be posted to the forum directly.
I agree but wanted to add one point (hope it's not too late lol), in high level cases involving large-scale abuse, after internal efforts fail, we could also consider posting the accused party’s info on social media so other DAOs or ecosystem partners can blacklist them.
I don’t think this is overreacting, it’s about protecting our partners and and the space from bad actors.
I have voted "Yes" to this proposal, as I believe it adds a layer of crowdsourced accountability without much of a downside at all.
As has been mentioned by others I have some concerns that there might be spurious, "gold-digging" reports or that this might lead to some public accusations around instances where fund-usage is just on the borderline of misuse or not, creating a situation where there is an incentive for reporters to argue their case publically. Ultimately these are process/implementation details that I think can be sorted out, and don't outweigh the overall good of the proposal either way.
Having already voted FOR on Snapshot, I will also vote FOR on Tally, even despite recent changes that I understand may compromise the effectiveness or intent of the program as a whole as this, like many other, proposals would be affected by the upcoming OpCo era changes.
This is the most straightforward vote for me so far — I’m voting FOR. I believe this program can improve how treasury funds are used, support the DAO’s long-term health, and bring more transparency across initiatives.
One small point I wanted to raise: I noticed the proposal was first discussed back in December. The reason I mention this — and not as a criticism — is because I’m genuinely curious about what caused the delay. I searched the forum but couldn’t find a clear explanation, and understanding this would be helpful to me as I try to follow governance more closely and learn how things evolve over time.
We are voting FOR this proposal. The proposal creates a system that encourages people to bring complaints to the Arbitrum DAO and, if the program is successful (and the misuse is found), the system can feed back - or even bring money back to the DAO. The work carried out by Entropy, Seed and Foundation in reviewing these submissions is crucial. Not only to assign a fair reward value to informants, but to avoid potential cases where there is no misuse of resources.
This is the most straightforward vote for me so far — I’m voting FOR. I believe this program can improve how treasury funds are used, support the DAO’s long-term health, and bring more transparency across initiatives.
One small point I wanted to raise: I noticed the proposal was first discussed back in December. The reason I mention this — and not as a criticism — is because I’m genuinely curious about what caused the delay. I searched the forum but couldn’t find a clear explanation, and understanding this would be helpful to me as I try to follow governance more closely and learn how things evolve over time.
Thanks again to the team for putting this together and helping the DAO grow stronger.
DAOplomats voted FOR this proposal on Tally.
We initially supported this proposal during the temp check and maintained our stance during the onchain vote.
There were some modifications to the proposal going into the onchain vote, however, we are comfortable with these changes.
LobbyFi’s rationale on the price and making the voting power available for sale for this proposal:
A proposal as this one clearly benefits all ARB token holders, hence the auction will be on for this proposal.
The instant buy price will be set at 1% of the requested amount, 400k ARB * 0.01 ≈ 0.67 ETH.
voting Against on the current onchain vote because despite personally pushing for this program to exist in the DAO, and even trying to help it come to fruition since October, the latest last minute changes to the program changed the nature of it significantly, namely: GlobaLeaks as a platform will not act as a neutral third-party and therefor it doesn't ensure the anonymity of the whistleblowers; and more problematic, the inclusion of the Arbitrum Foundation and SeedGov into the reviewer set creates an explicit conflict of interest where the entities responsible to adjudicate grants will be the same that will review the reports of wrongly adjudicated grants and therefor undermining the neutrality and then the effectiveness of this program.
I'm voting FOR this on Tally because it’s a solid move to keep grant funds in check and make sure they’re used right. The Watchdog setup, with its rewards and anonymous tips, feels like a real way to build trust and keep the Arbitrum DAO strong.
Hi, voted FOR. Echoing @JoJo - this is a straightforward solution that works. I'm sure we will have time to iterate on the committee / portal in the future, but it's important to ship this.
Thanks Entropy for your efforts.
We appreciate delegate's patience as Entropy explored multiple avenues for the Watchdog portal and the programs next steps. Our team would also like to thank the teams who expressed interest in providing a solution. After evaluating several options, we have determined that GlobaLeaks offers everything necessary for the program's privacy requirements.
For those not familiar with GlobaLeaks, it is an open-source whistleblowing platform used by governments, NGOs, and investigative journalists. A dedicated submission portal can be deployed by the Arbitrum Foundation on a VPS to enable secure & anonymous submissions. For the Watchdog program, it is a free option that supports the submission and review of grant misuse reports, offers end-to-end encryption, includes reviewer dashboards/functionality, and has optional Tor access for those looking to maximize their privacy.
We appreciate delegate's patience as Entropy explored multiple avenues for the Watchdog portal and the programs next steps. Our team would also like to thank the teams who expressed interest in providing a solution. After evaluating several options, we have determined that GlobaLeaks offers everything necessary for the program's privacy requirements.
For those not familiar with GlobaLeaks, it is an open-source whistleblowing platform used by governments, NGOs, and investigative journalists. A dedicated submission portal can be deployed by the Arbitrum Foundation on a VPS to enable secure & anonymous submissions. For the Watchdog program, it is a free option that supports the submission and review of grant misuse reports, offers end-to-end encryption, includes reviewer dashboards/functionality, and has optional Tor access for those looking to maximize their privacy.
There are a few other notable changes to the proposal. The first being that the ARDC Research member has been replaced with @SEEDGov as the third member on the reviewing committee. Given SeedGov's position as a trusted community member and DIP admin, our team felt they were a bit fit for such a role until the program is moved to OpCo's domain. Secondly, adjustments have been made to the reward structure so that in the event of funds being recovered the base ARB payment is deducted from the total amount. This is to prevent the total reward from exceeding 5% in cases of large misuse and was originally suggested by @pedrob. Lastly, the 400k ARB used to pay out valid Watchdog reports, will now be sent to a Foundation controlled address instead of the MSS.
A summary of all the changes are provided at the top of the proposal. Our team is excited to move this initiative forward to Tally next week with the vote being scheduled to start on May 8th. If passed, we believe it is feasible to have the GlobaLeaks portal created and program launched by the end of May.
Voting in favor. The platform that was chosen, as mentioned in private, is a standard for whistleblowing. We don't really need to reinvent the wheel here and addresses concerns of people who, rightfully so, mentioned how a simple protonmail would have not been enough.
I am also ok with the committee: being a 3 members one, if there is any conflict the other 2 parties will provide the valuation while the interest one will just recuse. It's the most streamline process.
Voting in favor. The platform that was chosen, as mentioned in private, is a standard for whistleblowing. We don't really need to reinvent the wheel here and addresses concerns of people who, rightfully so, mentioned how a simple protonmail would have not been enough.
I am also ok with the committee: being a 3 members one, if there is any conflict the other 2 parties will provide the valuation while the interest one will just recuse. It's the most streamline process.
People really need to understand how, often times, protocols did want in the past communicate information regarding bad behaviour of certain actors, and refrained in doing so because it would have been negative for their reputation. So I really welcome this watchdog program.
I support the Watchdog proposal. Working as a PM and developing the GRC I can tell you how much work it takes to observe the misuse of funds at the initiative level, let alone at the sub-initiative level.
I like the concept of decentralizing the watchdog perspective.
I support the Watchdog proposal. Working as a PM and developing the GRC I can tell you how much work it takes to observe the misuse of funds at the initiative level, let alone at the sub-initiative level.
I like the concept of decentralizing the watchdog perspective.
I am interested in how this watchdog will get incorporated in to something like a PM or managing and developing the additional initiatives.
I'm also unclear how effective this proposal will be post the incentive program.
Going forward I am more interested in how misuse can turn in to measuring ROI of grants.
I voted FOR in Snapshot. Really liked this proposal, having an accountability structure like this will immensely help with execution, it's an attempt to optimize the capital deployment, something I'm all favour for. This makes a lot of sense. I like the reward and payment rewards composition, it incentivizes both the grant recipient to be honest and the watchdog entity to find inconsistencies. I think giving a chance to this proposal might help the dao find a good balance if it works well.
DAOplomats voted FOR this proposal on Snapshot.
The watchdog initiative is great. We believe creating a well-structured bounty program would help curb future grant misuse as it not only helps us track potential fund misappropriation but also encourages projects to be more cautious with grants received.
We would like to document the rationale behind LobbyFi's vote on this proposal.
LobbyFi has voted in favor of this proposal since the auction was won by the user(s) that deposited the most into the "for" pool.
Have a link? I'm not able to find it
The Watchdog passed on Snapshot with a total of 154.6m combined FOR and ABSTAIN votes. Therefore, the proposal obtained the non-constitutional quorum requirement that Entropy outlined.
Addressing the additional concerns that came up during the voting period:
We're voting FOR with concerns about the KYC requirement.
The combination of anonymous reporting and guaranteed rewards creates strong incentives to uncover misuse, while the severity tiers maintain flexibility. The 6-month trial allows us to test and adjust.
We're voting FOR with concerns about the KYC requirement.
The combination of anonymous reporting and guaranteed rewards creates strong incentives to uncover misuse, while the severity tiers maintain flexibility. The 6-month trial allows us to test and adjust.
Critical concern: KYC requirements will deter top blockchain investigators from participating, especially given Arbitrum Foundation's previous KYC data breach. The most effective sleuths value privacy and anonymity. We should explore a non-KYC track similar to Immunefi's model - perhaps with lower reward caps but preserving investigator privacy.
The enforcement framework needs more teeth. While the proposal outlines general approaches (legal, technical, social), it lacks concrete recovery mechanisms. Let's clarify these before implementation.
I’m supportive of the Watchdog proposal and will be voting yes in the onchain vote.
That said, as someone who’s worked in Operations Security and Risk Management, I want to highlight that this program addresses only one side of the risk equation.
I’m supportive of the Watchdog proposal and will be voting yes in the onchain vote.
That said, as someone who’s worked in Operations Security and Risk Management, I want to highlight that this program addresses only one side of the risk equation.
The risk we’re trying to reduce here is misuse of funds. The Watchdog program functions as a detective control: it helps us catch fraud after it has occurred. But what are we doing to prevent fraud in the first place?
That’s where preventative controls come in, and that’s the role I believe SafeNotes (my own product) can play for Arbitrum. Safenotes is used to track and publicly document every transaction carried out by multisig signers, giving the community a clear, human-readable record of what’s happening with DAO funds before something goes wrong.
We’ve currently applied for a Questbook grant to bring SafeNotes to Arbitrum, but my goal is to have a successful intro period and make it available DAO-wide. I see it as a natural complement to the Watchdog program: Watchdog helps catch what slips through, SafeNotes helps watchdogs identify what is what and ensures fewer things slip through in the first place.
I voted for in this proposal.
This is an important initiative to support a good execution on the upcoming programs. I also like the fact it introduces more checks and balances that we need within Arbitrum
After consideration, the @SEEDgov delegation has decided to “FOR” on this proposal at the Snapshot Vote.
In light of our previous feedback, we appreciate all the clarifications provided by @Entropy as well as the amendments made to the proposal.
Regarding the incorporation of this committee into the OpCo in the future, we reiterate that this could be the new composition:
gm, strong proposal that addresses a critical gap in governance.
Why I support it:
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.
Entropy’s proposition of a Watchdog Bounty Program aims to provide stronger oversight in funds utilised across incentive programs, grants, investment vehicles, or service provisioning. This program allows reports from whistleblowers to be made to a Watchdog group if there’s malpractice within the distribution of grants.
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.
Entropy’s proposition of a Watchdog Bounty Program aims to provide stronger oversight in funds utilised across incentive programs, grants, investment vehicles, or service provisioning. This program allows reports from whistleblowers to be made to a Watchdog group if there’s malpractice within the distribution of grants.
We are happy this program has been approved by the community, we wanted to help highlight our decision-making, this program is great for creating accountability within the DAO, with close resemblance to the Dodd-Frank Wall Street Reform and Consumer Protection Act, in which Whistleblowers are able to report on fraudulent activities in the financial services industry. Those Whistleblowers can maintain anonymity and can receive a percentage on the penalties incurred by offending corporations. Similarly, this program allows whistleblowers to report resourceful information on parties who misappropriate funding given by the DAO.
Alongside the misuse definition which clearly defines the impact, we suggest a framework documenting how watchers can provide this information with discretion to protect their identities or recourse on them for disclosures. Unfortunately, the issue of malicious or forged reports, as @JoJo had mentioned is an issue that we have no determination for, but we do believe the committee will act in accordance with proper evaluation and confirm the evidence shared in the report.
Overall we were favourable to this program, it is well-meaning and heads in the right direction, creating a valuable oversight committee for managing Arbitrum DAO grants to prevent bad actors from taking advantage of good initiatives.
This is the most straightforward vote for me so far — I’m voting FOR. I believe this program can improve how treasury funds are used, support the DAO’s long-term health, and bring more transparency across initiatives.
One small point I wanted to raise: I noticed the proposal was first discussed back in December. The reason I mention this — and not as a criticism — is because I’m genuinely curious about what caused the delay. I searched the forum but couldn’t find a clear explanation, and understanding this would be helpful to me as I try to follow governance more closely and learn how things evolve over time.
Thanks again to the team for putting this together and helping the DAO grow stronger.
DAOplomats voted FOR this proposal on Tally.
We initially supported this proposal during the temp check and maintained our stance during the onchain vote.
There were some modifications to the proposal going into the onchain vote, however, we are comfortable with these changes.
LobbyFi’s rationale on the price and making the voting power available for sale for this proposal:
A proposal as this one clearly benefits all ARB token holders, hence the auction will be on for this proposal.
The instant buy price will be set at 1% of the requested amount, 400k ARB * 0.01 ≈ 0.67 ETH.
voting Against on the current onchain vote because despite personally pushing for this program to exist in the DAO, and even trying to help it come to fruition since October, the latest last minute changes to the program changed the nature of it significantly, namely: GlobaLeaks as a platform will not act as a neutral third-party and therefor it doesn't ensure the anonymity of the whistleblowers; and more problematic, the inclusion of the Arbitrum Foundation and SeedGov into the reviewer set creates an explicit conflict of interest where the entities responsible to adjudicate grants will be the same that will review the reports of wrongly adjudicated grants and therefor undermining the neutrality and then the effectiveness of this program.
I'm voting FOR this on Tally because it’s a solid move to keep grant funds in check and make sure they’re used right. The Watchdog setup, with its rewards and anonymous tips, feels like a real way to build trust and keep the Arbitrum DAO strong.
Hi, voted FOR. Echoing @JoJo - this is a straightforward solution that works. I'm sure we will have time to iterate on the committee / portal in the future, but it's important to ship this.
Thanks Entropy for your efforts.
We appreciate delegate's patience as Entropy explored multiple avenues for the Watchdog portal and the programs next steps. Our team would also like to thank the teams who expressed interest in providing a solution. After evaluating several options, we have determined that GlobaLeaks offers everything necessary for the program's privacy requirements.
For those not familiar with GlobaLeaks, it is an open-source whistleblowing platform used by governments, NGOs, and investigative journalists. A dedicated submission portal can be deployed by the Arbitrum Foundation on a VPS to enable secure & anonymous submissions. For the Watchdog program, it is a free option that supports the submission and review of grant misuse reports, offers end-to-end encryption, includes reviewer dashboards/functionality, and has optional Tor access for those looking to maximize their privacy.
We appreciate delegate's patience as Entropy explored multiple avenues for the Watchdog portal and the programs next steps. Our team would also like to thank the teams who expressed interest in providing a solution. After evaluating several options, we have determined that GlobaLeaks offers everything necessary for the program's privacy requirements.
For those not familiar with GlobaLeaks, it is an open-source whistleblowing platform used by governments, NGOs, and investigative journalists. A dedicated submission portal can be deployed by the Arbitrum Foundation on a VPS to enable secure & anonymous submissions. For the Watchdog program, it is a free option that supports the submission and review of grant misuse reports, offers end-to-end encryption, includes reviewer dashboards/functionality, and has optional Tor access for those looking to maximize their privacy.
There are a few other notable changes to the proposal. The first being that the ARDC Research member has been replaced with @SEEDGov as the third member on the reviewing committee. Given SeedGov's position as a trusted community member and DIP admin, our team felt they were a bit fit for such a role until the program is moved to OpCo's domain. Secondly, adjustments have been made to the reward structure so that in the event of funds being recovered the base ARB payment is deducted from the total amount. This is to prevent the total reward from exceeding 5% in cases of large misuse and was originally suggested by @pedrob. Lastly, the 400k ARB used to pay out valid Watchdog reports, will now be sent to a Foundation controlled address instead of the MSS.
A summary of all the changes are provided at the top of the proposal. Our team is excited to move this initiative forward to Tally next week with the vote being scheduled to start on May 8th. If passed, we believe it is feasible to have the GlobaLeaks portal created and program launched by the end of May.
Voting in favor. The platform that was chosen, as mentioned in private, is a standard for whistleblowing. We don't really need to reinvent the wheel here and addresses concerns of people who, rightfully so, mentioned how a simple protonmail would have not been enough.
I am also ok with the committee: being a 3 members one, if there is any conflict the other 2 parties will provide the valuation while the interest one will just recuse. It's the most streamline process.
Voting in favor. The platform that was chosen, as mentioned in private, is a standard for whistleblowing. We don't really need to reinvent the wheel here and addresses concerns of people who, rightfully so, mentioned how a simple protonmail would have not been enough.
I am also ok with the committee: being a 3 members one, if there is any conflict the other 2 parties will provide the valuation while the interest one will just recuse. It's the most streamline process.
People really need to understand how, often times, protocols did want in the past communicate information regarding bad behaviour of certain actors, and refrained in doing so because it would have been negative for their reputation. So I really welcome this watchdog program.
I support the Watchdog proposal. Working as a PM and developing the GRC I can tell you how much work it takes to observe the misuse of funds at the initiative level, let alone at the sub-initiative level.
I like the concept of decentralizing the watchdog perspective.
I support the Watchdog proposal. Working as a PM and developing the GRC I can tell you how much work it takes to observe the misuse of funds at the initiative level, let alone at the sub-initiative level.
I like the concept of decentralizing the watchdog perspective.
I am interested in how this watchdog will get incorporated in to something like a PM or managing and developing the additional initiatives.
I'm also unclear how effective this proposal will be post the incentive program.
Going forward I am more interested in how misuse can turn in to measuring ROI of grants.
I voted FOR in Snapshot. Really liked this proposal, having an accountability structure like this will immensely help with execution, it's an attempt to optimize the capital deployment, something I'm all favour for. This makes a lot of sense. I like the reward and payment rewards composition, it incentivizes both the grant recipient to be honest and the watchdog entity to find inconsistencies. I think giving a chance to this proposal might help the dao find a good balance if it works well.
DAOplomats voted FOR this proposal on Snapshot.
The watchdog initiative is great. We believe creating a well-structured bounty program would help curb future grant misuse as it not only helps us track potential fund misappropriation but also encourages projects to be more cautious with grants received.
We would like to document the rationale behind LobbyFi's vote on this proposal.
LobbyFi has voted in favor of this proposal since the auction was won by the user(s) that deposited the most into the "for" pool.
Have a link? I'm not able to find it
The Watchdog passed on Snapshot with a total of 154.6m combined FOR and ABSTAIN votes. Therefore, the proposal obtained the non-constitutional quorum requirement that Entropy outlined.
Addressing the additional concerns that came up during the voting period:
We're voting FOR with concerns about the KYC requirement.
The combination of anonymous reporting and guaranteed rewards creates strong incentives to uncover misuse, while the severity tiers maintain flexibility. The 6-month trial allows us to test and adjust.
We're voting FOR with concerns about the KYC requirement.
The combination of anonymous reporting and guaranteed rewards creates strong incentives to uncover misuse, while the severity tiers maintain flexibility. The 6-month trial allows us to test and adjust.
Critical concern: KYC requirements will deter top blockchain investigators from participating, especially given Arbitrum Foundation's previous KYC data breach. The most effective sleuths value privacy and anonymity. We should explore a non-KYC track similar to Immunefi's model - perhaps with lower reward caps but preserving investigator privacy.
The enforcement framework needs more teeth. While the proposal outlines general approaches (legal, technical, social), it lacks concrete recovery mechanisms. Let's clarify these before implementation.
I’m supportive of the Watchdog proposal and will be voting yes in the onchain vote.
That said, as someone who’s worked in Operations Security and Risk Management, I want to highlight that this program addresses only one side of the risk equation.
I’m supportive of the Watchdog proposal and will be voting yes in the onchain vote.
That said, as someone who’s worked in Operations Security and Risk Management, I want to highlight that this program addresses only one side of the risk equation.
The risk we’re trying to reduce here is misuse of funds. The Watchdog program functions as a detective control: it helps us catch fraud after it has occurred. But what are we doing to prevent fraud in the first place?
That’s where preventative controls come in, and that’s the role I believe SafeNotes (my own product) can play for Arbitrum. Safenotes is used to track and publicly document every transaction carried out by multisig signers, giving the community a clear, human-readable record of what’s happening with DAO funds before something goes wrong.
We’ve currently applied for a Questbook grant to bring SafeNotes to Arbitrum, but my goal is to have a successful intro period and make it available DAO-wide. I see it as a natural complement to the Watchdog program: Watchdog helps catch what slips through, SafeNotes helps watchdogs identify what is what and ensures fewer things slip through in the first place.
I voted for in this proposal.
This is an important initiative to support a good execution on the upcoming programs. I also like the fact it introduces more checks and balances that we need within Arbitrum
After consideration, the @SEEDgov delegation has decided to “FOR” on this proposal at the Snapshot Vote.
In light of our previous feedback, we appreciate all the clarifications provided by @Entropy as well as the amendments made to the proposal.
Regarding the incorporation of this committee into the OpCo in the future, we reiterate that this could be the new composition:
gm, strong proposal that addresses a critical gap in governance.
Why I support it:
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.
Entropy’s proposition of a Watchdog Bounty Program aims to provide stronger oversight in funds utilised across incentive programs, grants, investment vehicles, or service provisioning. This program allows reports from whistleblowers to be made to a Watchdog group if there’s malpractice within the distribution of grants.
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.
Entropy’s proposition of a Watchdog Bounty Program aims to provide stronger oversight in funds utilised across incentive programs, grants, investment vehicles, or service provisioning. This program allows reports from whistleblowers to be made to a Watchdog group if there’s malpractice within the distribution of grants.
We are happy this program has been approved by the community, we wanted to help highlight our decision-making, this program is great for creating accountability within the DAO, with close resemblance to the Dodd-Frank Wall Street Reform and Consumer Protection Act, in which Whistleblowers are able to report on fraudulent activities in the financial services industry. Those Whistleblowers can maintain anonymity and can receive a percentage on the penalties incurred by offending corporations. Similarly, this program allows whistleblowers to report resourceful information on parties who misappropriate funding given by the DAO.
Alongside the misuse definition which clearly defines the impact, we suggest a framework documenting how watchers can provide this information with discretion to protect their identities or recourse on them for disclosures. Unfortunately, the issue of malicious or forged reports, as @JoJo had mentioned is an issue that we have no determination for, but we do believe the committee will act in accordance with proper evaluation and confirm the evidence shared in the report.
Overall we were favourable to this program, it is well-meaning and heads in the right direction, creating a valuable oversight committee for managing Arbitrum DAO grants to prevent bad actors from taking advantage of good initiatives.
The Watchdog passed on Snapshot with a total of 154.6m combined FOR and ABSTAIN votes. Therefore, the proposal obtained the non-constitutional quorum requirement that Entropy outlined.
Addressing the additional concerns that came up during the voting period:
Critical concern: KYC requirements will deter top blockchain investigators from participating, especially given Arbitrum Foundation’s previous KYC data breach. The most effective sleuths value privacy and anonymity. We should explore a non-KYC track similar to Immunefi’s model - perhaps with lower reward caps but preserving investigator privacy.
For clarification, sleuths and community members will be able to submit a report without completing a KYC. However, in order to be eligible for the reward, KYC is required. Unfortunately, due to the Foundation’s compliance policies, there is no way to avoid this measure.
Suggestion: I would recommend explicitly stating that reporting the same issue by multiple watchers would reward only the first valid submission.
This is a great suggestion, language will be added before the onchain vote to clarify that the first report deemed valid will be the only one rewarded. Consideration will be given on how to best communicate this out to the community as every report may not be made publicly available.
If an anonymous researcher does not want to dox themselves/ get rewarded for forensic accounting/ fraud research, would they be punished for publishing their findings on the forum?
The Watchdog program’s intention is to provide a private & safe avenue for community members to report misuse. It does not explicitly block other means of reporting misuse, such as posting it directly on the forum. However, even if an anonymous researcher does not wish to report the misuse through the Watchdog, Entropy strongly encourages that they at least bring it to the attention of the Arbitrum Foundation before bringing accusations straight to the forum.
However, it does not explicitly mention who will initially choose these three entities?
Will we vote on candidates or will they be pre-selected based on their current positions and roles in the DAO ecosystem? And if it is not the delegates who choose them by voting, then who will? What is meant by “whitelisted”?
The term “whitelisted” was written with the intention that the program could be eventually moved to OpCo, when and if it is stood up, and that at least during this first 6-month trial period, the listed entities (Entropy, Arbitrum Foundation, and ARDC Research Member) would be pre-selected as the reviewers.
One aspect I am not fully convinced about is the need for an RFP to build a platform to handle these communications. I believe using public infrastructure, such as ProtonMail, would suffice. Entropy could provide an email address where anyone can send evidence and a clean address where they want to receive the funds. I don’t see why this needs to be made more complex, especially considering that claiming the bounty would require going through a KYC process.
Reducing costs and complexity through this kind of set up is an interesting idea. While @JoJo already provided context on why ProtonMail specifically may not be sufficient, Entropy will continue to consider how to keep this program streamlined & cost effective. During the RFP process, if we determine that there is a better solution than building out the original portal we had envisioned, then we will update the DAO and make adjustments to the proposal.
With our team finishing up deliverables for a few other initiatives, delegates can expect an update regarding the RFP process and its next steps early next week.
After consideration, the @SEEDgov delegation has decided to “FOR” on this proposal at the Snapshot Vote.
In light of our previous feedback, we appreciate all the clarifications provided by @Entropy as well as the amendments made to the proposal.
Regarding the incorporation of this committee into the OpCo in the future, we reiterate that this could be the new composition:
If the program is migrated to the OpCo, the evaluation committee could include: one delegate elected by the DAO, one OAT member, and one ARDC member.
We suggest including an OAT member since only individuals with no other financial ties to the DAO can be part of OAT, making a conflict of interest unlikely. Furthermore, with OpCo established, there wouldn’t be many reasons for the Arbitrum Foundation to remain in the committee, as legal agreements with SPs/Grantees would likely be signed with OpCo instead of the Foundation.
gm, strong proposal that addresses a critical gap in governance.
Why I support it:
Suggestion: I would recommend explicitly stating that reporting the same issue by multiple watchers would reward only the first valid submission.
Overall this brings much needed accountability without creating unnecessary friction. The 6-month review also ensures we can adjust based on learnings.
Thanks
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 the proposal in the Snapshot voting.
We support this proposal because it creates a way to make sure DAO funds are being used properly by everyone who receives them.
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 the proposal in the Snapshot voting.
We support this proposal because it creates a way to make sure DAO funds are being used properly by everyone who receives them.
This program will help community members play an active role in keeping the DAO funds safe. Also, the updated proposal defines clear severity levels for funds misuse and provides strong incentives for whistleblowers through both base rewards and a percentage of recovered funds.
The program will help prevent the misuse of funds since anyone thinking of misusing funds will know the community is watching. We like that the program covers all projects that receive DAO funding, which means nothing is left unchecked. Having three reviewers look at each report is great for evaluating problems.
This program is an important step in protecting our DAO's resources while getting the community more involved in keeping things safe. We believe this mix of community watching and organized review will make Arbitrum stronger and safer.
Vote in favor on Snapshot. Although some questions from my initial comment were not fully addressed, I believe this will help enhance security within the ecosystem, ultimately ensuring that the DAO's funds remain safe and the program remains sustainable. In the future, I would like to see bi-monthly reports on the progress of this proposal. Additionally, if any suspicious activity is detected, it would be ideal to notify the delegates and stakeholders promptly.
We vote FOR the proposal on Snapshot.
We think creating a bounty program is the best way to tackle fund misuse in the DAO. It’s a practical approach that empowers the DAO to help keep things accountable. We appreciate Entropy to step up to take the initiative.
We vote FOR the proposal on Snapshot.
We think creating a bounty program is the best way to tackle fund misuse in the DAO. It’s a practical approach that empowers the DAO to help keep things accountable. We appreciate Entropy to step up to take the initiative.
All the key concerns raised have been addressed clearly, and the trial phase gives room for improvements. This is a solid step toward stronger transparency and trust in the ecosystem.
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking, and ideation of the two.
We’re voting FOR the proposal.
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking, and ideation of the two.
We’re voting FOR the proposal.
Although we understand the motivation behind the bounty program’s creation and are voting in favor of the proposal, we remain skeptical about its potential effectiveness. We’re afraid that the whole thing will create more problems than solve and that the program’s existence will be used as an excuse for future proposal authors not to consider accountability or oversight mechanisms in their initiatives.
At the same time, as the examples in the proposals show, the DAO needs to have a way to ensure that the money it spends isn’t misused. As things stand right now, there’s no such mechanism in place that’s DAO-wide, and each initiative, in theory, needs to address that part on its own.
With that in mind, we’re willing to give the program a chance and see how things will unfold.
We support the Watchdog Proposal as it introduces a critical accountability mechanism to ensure DAO funds are used responsibly. By incentivizing community members to report misuse, the program helps deter malicious behavior, recover misallocated funds, and foster transparency. Its fair and scalable reward system encourages participation, this initiative strengthens trust and protects the DAO’s financial integrity, aligning with its mission to promote responsible and impactful resource allocation.
I'm voting FOR this proposal. As mentioned earlier, this proposal is a great step forward for accountability in the DAO. With so many funds allocated, it’s important to have a system in place to ensure they’re used properly and to build trust within the community.
Voted "For" based on my previous comments. I believe this is a great program and worth pursuing. The cost is minimal, and implementing this program will create a strong incentive structure to deter bad actors.
Thank you, @Entropy, for this insightful proposal! I've voted "FOR" because I strongly believe such mechanisms are essential for maintaining accountability in a large DAO like Arbitrum, which distributes many grants and incentives.
As I mentioned recently in the Forum, Kleros—a decentralized dispute resolution protocol—has just launched its V2 Beta on Arbitrum. I think Arbitrum DAO could also consider using this court system as an initial screening phase to determine if there's a rational basis for alleging misuse of funds. Introducing a neutral third-party perspective could help mitigate any risk of conflicts of interest.
Thank you, @Entropy, for this insightful proposal! I've voted "FOR" because I strongly believe such mechanisms are essential for maintaining accountability in a large DAO like Arbitrum, which distributes many grants and incentives.
As I mentioned recently in the Forum, Kleros—a decentralized dispute resolution protocol—has just launched its V2 Beta on Arbitrum. I think Arbitrum DAO could also consider using this court system as an initial screening phase to determine if there's a rational basis for alleging misuse of funds. Introducing a neutral third-party perspective could help mitigate any risk of conflicts of interest.
However, recognizing the need for specialized knowledge, we could explore setting up a gated NFT version of this court system where only long-term delegates can serve as jurors in such cases.
I’d be happy to delve into more details with you about this. It would be great to see the DAO leveraging protocols built on Arbitrum Chain for these kind of usecases !
I'm definitely voting FOR this proposal. We've seen grant funds misused in the past, and I think that this initiative is a step in the right direction to prevent wasted resources. Monitoring these issues is typically challenging, but I believe that the "horizontal" reward system addresses this effectively, while also strengthening the community. Having more eyes on the situation is a smart approach to proactive oversight. I appreciate how this not only safeguards our funds but also encourages active community participation.
I really hope that this will make a change. It's always frustrating to see funds being misused or wasted due to shady practices, but I'm optimistic that this can help turn things around. Thank you @Entropy for the proposal! (and sorry for the late comment on this)
We think the introduction of a "Watchdog" program is a commendable initiative and severely increased accountability within the DAO. Some thoughts:
I appreciate Entropy addressing my questions above, as well as addressing the broader delegate feedback. I think this is ultimately well thought-out, and with these changes there really isn't any concerned on my end. I will be voting "For" this proposal.
To more impactfully signal support, I want to note that some type of program like this is important to the health of the DAO. Perception matters, and the DAO will function best if there are deterrents to bad-faith applicants. It would be naive to think bad actors would try to abuse the DAO's treasury, so having a way to combat this is good to see. Considering the relatively cheap cost, I don't really see a reason not to do this in perpetuity, and look forwarded the retrospective report. Especially since it was indicated all prior projects are eligible for review.
I voted FOR this proposal at the temp check stage. I think this program has the potential to serve as an effective deterrent to misuse of funds going forward. I appreciate Entropy stepping up to lead this initiative.
I vote FOR this proposal on Snapshot
As I mentioned before, I support having incentives to detect cases of misuse of funds granted by the DAO.
@Entropy has updated the proposal based on the feedback received from delegates, so I agree with its final version.
I vote FOR this proposal on Snapshot
As I mentioned before, I support having incentives to detect cases of misuse of funds granted by the DAO.
@Entropy has updated the proposal based on the feedback received from delegates, so I agree with its final version.
One aspect I am not fully convinced about is the need for an RFP to build a platform to handle these communications. I believe using public infrastructure, such as ProtonMail, would suffice. Entropy could provide an email address where anyone can send evidence and a clean address where they want to receive the funds. I don’t see why this needs to be made more complex, especially considering that claiming the bounty would require going through a KYC process.
As in @web3citizenxyz representation, voting FOR in this proposal. Below the rationale:
Voting YES on this proposal in Snapshot.
Adding levels of potential misuse is a positive variable for the proposal. Tying bounties to fund recovery will also make the program sustainable. Making the process public adds transparency and gives the DAO enough input to correctly assess any misuse.
Voting YES on this proposal in Snapshot.
Adding levels of potential misuse is a positive variable for the proposal. Tying bounties to fund recovery will also make the program sustainable. Making the process public adds transparency and gives the DAO enough input to correctly assess any misuse.
I would only add that while I consider this a necessary check against misallocation, I view it as one component of a broader effort to maintain oversight. I also appreciate that this proposal lays out a path for eventual integration under OpCo once that entity is established. This will give OpCo an additional operational focus and will bring depth to oversight under a single framework.
This program is needed because I know for a fact that people are “scared” of reporting misuse. There is no incentive in a structure like a DAO to do so, you only create enemy for yourself, more so if you are part of a protocol. So the program is needed, and having a redacted identity for the whistleblower is paramount.
I support the proposal. The Entropy team proposes a sensible mechanism to monitor the use of DAO funds while encouraging community members to actively report misuse of funds. The Watchdog Project is an interesting, innovative, and necessary proposal that could significantly improve DAO accountability and optimize the management of funds. With a few improvements in false reporting, RFP transparency, and whistleblower flexibility, I believe the program could better serve the Arbitrum community. I will vote in favor. Here are my reasons and additional suggestions:
Reasons for support: 1. Clear process and incentive mechanism: The proposal defines the severity of funds misuse (low, medium, and high) and designs an incentive mechanism for whistleblowers that takes into account both the base incentive and the percentage of funds recovered. This approach effectively incentivizes whistleblowing behavior while providing real value to the DAO’s funds recovery efforts. 2. Deterrent effect: A transparent and fair bounty program not only helps recover misused funds but also serves as a deterrent to potential malicious actors, further protecting the interests of the DAO. 3. Follow-up: The proposal includes a 6-month trial period and a commitment to provide a retrospective report and data summary at the end of the period. This ensures the community has a basis for evaluating and optimizing the program.
Voted For: When I first heard about this proposal, I was excited about it. This kind of program has a good record with other projects/companies in Web2, so I believe this will transition well in our space. I also appreciate the updates and extra clarification that Entropy Advisors provided to my comment regarding reports being public. It has now been changed so that the committee will decide which cases will be made public and which will not. I also appreciate that the program will have a trial period of 6 months, after which the report will be presented to the DAO. I am excited to see how many of these cases the program will cover and how much funds can be recovered for the DAO. The best-case scenario here is that the amount recovered by the watchdog would exceed the program's budget of 400k ARB.
Voting 'FOR' this proposal on Snapshot. As I mentioned on my previous reply, the cost to implement this program is minimal, and the benefits are significant. I'm convinced this program will serve as a deterrent against "grant farmers" and encourage greater accountability across the ecosystem.
We've voted in favor of this proposal, which hopefully is deployed to return misused funds back to the DAO. Making the program open to the community should incentivize good actors to find examples of misuse for reporting while discouraging bad actors from misusing funds.
However, we think this doesn't get to the root of the problems with the DAO, which relate much more to general overspending and bad strategy. We also encourage the community to remove the need for such policing by correctly allocating funds towards beneficial projects in the first place. If grant programs don't continue to be needlessly profligate then this kind of bounty program won't be necessary.
The Watchdog passed on Snapshot with a total of 154.6m combined FOR and ABSTAIN votes. Therefore, the proposal obtained the non-constitutional quorum requirement that Entropy outlined.
Addressing the additional concerns that came up during the voting period:
Critical concern: KYC requirements will deter top blockchain investigators from participating, especially given Arbitrum Foundation’s previous KYC data breach. The most effective sleuths value privacy and anonymity. We should explore a non-KYC track similar to Immunefi’s model - perhaps with lower reward caps but preserving investigator privacy.
For clarification, sleuths and community members will be able to submit a report without completing a KYC. However, in order to be eligible for the reward, KYC is required. Unfortunately, due to the Foundation’s compliance policies, there is no way to avoid this measure.
Suggestion: I would recommend explicitly stating that reporting the same issue by multiple watchers would reward only the first valid submission.
This is a great suggestion, language will be added before the onchain vote to clarify that the first report deemed valid will be the only one rewarded. Consideration will be given on how to best communicate this out to the community as every report may not be made publicly available.
If an anonymous researcher does not want to dox themselves/ get rewarded for forensic accounting/ fraud research, would they be punished for publishing their findings on the forum?
The Watchdog program’s intention is to provide a private & safe avenue for community members to report misuse. It does not explicitly block other means of reporting misuse, such as posting it directly on the forum. However, even if an anonymous researcher does not wish to report the misuse through the Watchdog, Entropy strongly encourages that they at least bring it to the attention of the Arbitrum Foundation before bringing accusations straight to the forum.
However, it does not explicitly mention who will initially choose these three entities?
Will we vote on candidates or will they be pre-selected based on their current positions and roles in the DAO ecosystem? And if it is not the delegates who choose them by voting, then who will? What is meant by “whitelisted”?
The term “whitelisted” was written with the intention that the program could be eventually moved to OpCo, when and if it is stood up, and that at least during this first 6-month trial period, the listed entities (Entropy, Arbitrum Foundation, and ARDC Research Member) would be pre-selected as the reviewers.
One aspect I am not fully convinced about is the need for an RFP to build a platform to handle these communications. I believe using public infrastructure, such as ProtonMail, would suffice. Entropy could provide an email address where anyone can send evidence and a clean address where they want to receive the funds. I don’t see why this needs to be made more complex, especially considering that claiming the bounty would require going through a KYC process.
Reducing costs and complexity through this kind of set up is an interesting idea. While @JoJo already provided context on why ProtonMail specifically may not be sufficient, Entropy will continue to consider how to keep this program streamlined & cost effective. During the RFP process, if we determine that there is a better solution than building out the original portal we had envisioned, then we will update the DAO and make adjustments to the proposal.
With our team finishing up deliverables for a few other initiatives, delegates can expect an update regarding the RFP process and its next steps early next week.
After consideration, the @SEEDgov delegation has decided to “FOR” on this proposal at the Snapshot Vote.
In light of our previous feedback, we appreciate all the clarifications provided by @Entropy as well as the amendments made to the proposal.
Regarding the incorporation of this committee into the OpCo in the future, we reiterate that this could be the new composition:
If the program is migrated to the OpCo, the evaluation committee could include: one delegate elected by the DAO, one OAT member, and one ARDC member.
We suggest including an OAT member since only individuals with no other financial ties to the DAO can be part of OAT, making a conflict of interest unlikely. Furthermore, with OpCo established, there wouldn’t be many reasons for the Arbitrum Foundation to remain in the committee, as legal agreements with SPs/Grantees would likely be signed with OpCo instead of the Foundation.
gm, strong proposal that addresses a critical gap in governance.
Why I support it:
Suggestion: I would recommend explicitly stating that reporting the same issue by multiple watchers would reward only the first valid submission.
Overall this brings much needed accountability without creating unnecessary friction. The 6-month review also ensures we can adjust based on learnings.
Thanks
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 the proposal in the Snapshot voting.
We support this proposal because it creates a way to make sure DAO funds are being used properly by everyone who receives them.
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 the proposal in the Snapshot voting.
We support this proposal because it creates a way to make sure DAO funds are being used properly by everyone who receives them.
This program will help community members play an active role in keeping the DAO funds safe. Also, the updated proposal defines clear severity levels for funds misuse and provides strong incentives for whistleblowers through both base rewards and a percentage of recovered funds.
The program will help prevent the misuse of funds since anyone thinking of misusing funds will know the community is watching. We like that the program covers all projects that receive DAO funding, which means nothing is left unchecked. Having three reviewers look at each report is great for evaluating problems.
This program is an important step in protecting our DAO's resources while getting the community more involved in keeping things safe. We believe this mix of community watching and organized review will make Arbitrum stronger and safer.
Vote in favor on Snapshot. Although some questions from my initial comment were not fully addressed, I believe this will help enhance security within the ecosystem, ultimately ensuring that the DAO's funds remain safe and the program remains sustainable. In the future, I would like to see bi-monthly reports on the progress of this proposal. Additionally, if any suspicious activity is detected, it would be ideal to notify the delegates and stakeholders promptly.
We vote FOR the proposal on Snapshot.
We think creating a bounty program is the best way to tackle fund misuse in the DAO. It’s a practical approach that empowers the DAO to help keep things accountable. We appreciate Entropy to step up to take the initiative.
We vote FOR the proposal on Snapshot.
We think creating a bounty program is the best way to tackle fund misuse in the DAO. It’s a practical approach that empowers the DAO to help keep things accountable. We appreciate Entropy to step up to take the initiative.
All the key concerns raised have been addressed clearly, and the trial phase gives room for improvements. This is a solid step toward stronger transparency and trust in the ecosystem.
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking, and ideation of the two.
We’re voting FOR the proposal.
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking, and ideation of the two.
We’re voting FOR the proposal.
Although we understand the motivation behind the bounty program’s creation and are voting in favor of the proposal, we remain skeptical about its potential effectiveness. We’re afraid that the whole thing will create more problems than solve and that the program’s existence will be used as an excuse for future proposal authors not to consider accountability or oversight mechanisms in their initiatives.
At the same time, as the examples in the proposals show, the DAO needs to have a way to ensure that the money it spends isn’t misused. As things stand right now, there’s no such mechanism in place that’s DAO-wide, and each initiative, in theory, needs to address that part on its own.
With that in mind, we’re willing to give the program a chance and see how things will unfold.
We support the Watchdog Proposal as it introduces a critical accountability mechanism to ensure DAO funds are used responsibly. By incentivizing community members to report misuse, the program helps deter malicious behavior, recover misallocated funds, and foster transparency. Its fair and scalable reward system encourages participation, this initiative strengthens trust and protects the DAO’s financial integrity, aligning with its mission to promote responsible and impactful resource allocation.
I'm voting FOR this proposal. As mentioned earlier, this proposal is a great step forward for accountability in the DAO. With so many funds allocated, it’s important to have a system in place to ensure they’re used properly and to build trust within the community.
Voted "For" based on my previous comments. I believe this is a great program and worth pursuing. The cost is minimal, and implementing this program will create a strong incentive structure to deter bad actors.
Thank you, @Entropy, for this insightful proposal! I've voted "FOR" because I strongly believe such mechanisms are essential for maintaining accountability in a large DAO like Arbitrum, which distributes many grants and incentives.
As I mentioned recently in the Forum, Kleros—a decentralized dispute resolution protocol—has just launched its V2 Beta on Arbitrum. I think Arbitrum DAO could also consider using this court system as an initial screening phase to determine if there's a rational basis for alleging misuse of funds. Introducing a neutral third-party perspective could help mitigate any risk of conflicts of interest.
Thank you, @Entropy, for this insightful proposal! I've voted "FOR" because I strongly believe such mechanisms are essential for maintaining accountability in a large DAO like Arbitrum, which distributes many grants and incentives.
As I mentioned recently in the Forum, Kleros—a decentralized dispute resolution protocol—has just launched its V2 Beta on Arbitrum. I think Arbitrum DAO could also consider using this court system as an initial screening phase to determine if there's a rational basis for alleging misuse of funds. Introducing a neutral third-party perspective could help mitigate any risk of conflicts of interest.
However, recognizing the need for specialized knowledge, we could explore setting up a gated NFT version of this court system where only long-term delegates can serve as jurors in such cases.
I’d be happy to delve into more details with you about this. It would be great to see the DAO leveraging protocols built on Arbitrum Chain for these kind of usecases !
I'm definitely voting FOR this proposal. We've seen grant funds misused in the past, and I think that this initiative is a step in the right direction to prevent wasted resources. Monitoring these issues is typically challenging, but I believe that the "horizontal" reward system addresses this effectively, while also strengthening the community. Having more eyes on the situation is a smart approach to proactive oversight. I appreciate how this not only safeguards our funds but also encourages active community participation.
I really hope that this will make a change. It's always frustrating to see funds being misused or wasted due to shady practices, but I'm optimistic that this can help turn things around. Thank you @Entropy for the proposal! (and sorry for the late comment on this)
We think the introduction of a "Watchdog" program is a commendable initiative and severely increased accountability within the DAO. Some thoughts:
I appreciate Entropy addressing my questions above, as well as addressing the broader delegate feedback. I think this is ultimately well thought-out, and with these changes there really isn't any concerned on my end. I will be voting "For" this proposal.
To more impactfully signal support, I want to note that some type of program like this is important to the health of the DAO. Perception matters, and the DAO will function best if there are deterrents to bad-faith applicants. It would be naive to think bad actors would try to abuse the DAO's treasury, so having a way to combat this is good to see. Considering the relatively cheap cost, I don't really see a reason not to do this in perpetuity, and look forwarded the retrospective report. Especially since it was indicated all prior projects are eligible for review.
I voted FOR this proposal at the temp check stage. I think this program has the potential to serve as an effective deterrent to misuse of funds going forward. I appreciate Entropy stepping up to lead this initiative.
I vote FOR this proposal on Snapshot
As I mentioned before, I support having incentives to detect cases of misuse of funds granted by the DAO.
@Entropy has updated the proposal based on the feedback received from delegates, so I agree with its final version.
I vote FOR this proposal on Snapshot
As I mentioned before, I support having incentives to detect cases of misuse of funds granted by the DAO.
@Entropy has updated the proposal based on the feedback received from delegates, so I agree with its final version.
One aspect I am not fully convinced about is the need for an RFP to build a platform to handle these communications. I believe using public infrastructure, such as ProtonMail, would suffice. Entropy could provide an email address where anyone can send evidence and a clean address where they want to receive the funds. I don’t see why this needs to be made more complex, especially considering that claiming the bounty would require going through a KYC process.
As in @web3citizenxyz representation, voting FOR in this proposal. Below the rationale:
Voting YES on this proposal in Snapshot.
Adding levels of potential misuse is a positive variable for the proposal. Tying bounties to fund recovery will also make the program sustainable. Making the process public adds transparency and gives the DAO enough input to correctly assess any misuse.
Voting YES on this proposal in Snapshot.
Adding levels of potential misuse is a positive variable for the proposal. Tying bounties to fund recovery will also make the program sustainable. Making the process public adds transparency and gives the DAO enough input to correctly assess any misuse.
I would only add that while I consider this a necessary check against misallocation, I view it as one component of a broader effort to maintain oversight. I also appreciate that this proposal lays out a path for eventual integration under OpCo once that entity is established. This will give OpCo an additional operational focus and will bring depth to oversight under a single framework.
This program is needed because I know for a fact that people are “scared” of reporting misuse. There is no incentive in a structure like a DAO to do so, you only create enemy for yourself, more so if you are part of a protocol. So the program is needed, and having a redacted identity for the whistleblower is paramount.
I support the proposal. The Entropy team proposes a sensible mechanism to monitor the use of DAO funds while encouraging community members to actively report misuse of funds. The Watchdog Project is an interesting, innovative, and necessary proposal that could significantly improve DAO accountability and optimize the management of funds. With a few improvements in false reporting, RFP transparency, and whistleblower flexibility, I believe the program could better serve the Arbitrum community. I will vote in favor. Here are my reasons and additional suggestions:
Reasons for support: 1. Clear process and incentive mechanism: The proposal defines the severity of funds misuse (low, medium, and high) and designs an incentive mechanism for whistleblowers that takes into account both the base incentive and the percentage of funds recovered. This approach effectively incentivizes whistleblowing behavior while providing real value to the DAO’s funds recovery efforts. 2. Deterrent effect: A transparent and fair bounty program not only helps recover misused funds but also serves as a deterrent to potential malicious actors, further protecting the interests of the DAO. 3. Follow-up: The proposal includes a 6-month trial period and a commitment to provide a retrospective report and data summary at the end of the period. This ensures the community has a basis for evaluating and optimizing the program.
Voted For: When I first heard about this proposal, I was excited about it. This kind of program has a good record with other projects/companies in Web2, so I believe this will transition well in our space. I also appreciate the updates and extra clarification that Entropy Advisors provided to my comment regarding reports being public. It has now been changed so that the committee will decide which cases will be made public and which will not. I also appreciate that the program will have a trial period of 6 months, after which the report will be presented to the DAO. I am excited to see how many of these cases the program will cover and how much funds can be recovered for the DAO. The best-case scenario here is that the amount recovered by the watchdog would exceed the program's budget of 400k ARB.
Voting 'FOR' this proposal on Snapshot. As I mentioned on my previous reply, the cost to implement this program is minimal, and the benefits are significant. I'm convinced this program will serve as a deterrent against "grant farmers" and encourage greater accountability across the ecosystem.
We've voted in favor of this proposal, which hopefully is deployed to return misused funds back to the DAO. Making the program open to the community should incentivize good actors to find examples of misuse for reporting while discouraging bad actors from misusing funds.
However, we think this doesn't get to the root of the problems with the DAO, which relate much more to general overspending and bad strategy. We also encourage the community to remove the need for such policing by correctly allocating funds towards beneficial projects in the first place. If grant programs don't continue to be needlessly profligate then this kind of bounty program won't be necessary.
I appreciate Entropy addressing my questions above, as well as addressing the broader delegate feedback. I think this is ultimately well thought-out, and with these changes there really isn't any concerned on my end. I will be voting "For" this proposal.
To more impactfully signal support, I want to note that some type of program like this is important to the health of the DAO. Perception matters, and the DAO will function best if there are deterrents to bad-faith applicants. It would be naive to think bad actors would try to abuse the DAO's treasury, so having a way to combat this is good to see. Considering the relatively cheap cost, I don't really see a reason not to do this in perpetuity, and look forwarded the retrospective report. Especially since it was indicated all prior projects are eligible for review.
Edit for space: I still support the project and will be voting for on "Tally"
This program is needed because I know for a fact that people are “scared” of reporting misuse. There is no incentive in a structure like a DAO to do so, you only create enemy for yourself, more so if you are part of a protocol. So the program is needed, and having a redacted identity for the whistleblower is paramount.
Main concern is that we go into a witch hunt as others said; this can either happened because the general sentiment of the DAO is quite adversarial (which is not right now and I don’t see necessarily happening but could indeed happen) or because the program is abused by externals. While former is a somehow greater responsibility on the shoulders of everybody in here, the latter could maybe be partially mitigated.
In addition to rewarding whistleblowers, there should also be a set of punitive measures to limit malicious or false reports.
I don’t think we can realistically have “punitive” measures. Even if the whistleblower KYC with the foundation, what measure can we apply? Ban from DIP? Doesn’t seems to get any effect if the person was not going to participate anyway. Ban from grant program? Only works if the person has affiliation with a protocol, and this affiliation is stated before hand in the KYC, but this info cannot be likely verified without breaching the identity of the user somehow, which is a key part of the program.
It could also be hard to identify a fake report from a report that is just wrong in the interpretation: we will have situations with smart contract interactions not easy to review, and they could be misunderstood by a reported in good faith. At the same time, a report in which we have fake/forged evidences can be instead evaluated as malicious. So this last case is probably the only one that could lead to an exclusion, of the individual, to
But what is mentioned above is something extremely serious, punitive and heavy, and again should be only done in case of a clearly blatant fake report aimed at damaging an innocent third party; likely would need a DAO vote.
All of these are things for which is difficult to draw a line in the sand, if that was possible we would just outsource the judiciary system in the world to computers instead than to people; I trust the committee, entropy and the foundation to have the best interest of the DAO in mind to do the right thing paired with their experience. On this note, plugging in people that understand incentive mechanisms can be a +ve to facilitate the work, and that’s why ARDC members are a good choice since most of them up to some degree had a role, or judged, or created report, on previous grant programs that we had in the DAO.
In general I also second the better classification of low/medium/high. I think it could be structured with a few key metrics, specifically: amount of capital impacted, and how the funds are misused. Misusing funds can be a lot of things: having capital that should have been allocated to development, and is instead used in marketing, is a misuse, but likely less severe than wash trading from the protocol to get the funds for example. A simple matrix of the amount of money, plus subcases on the type of misuse consequences, could help, knowing that in the end not all cases can be put on paper and it will be more of an indication than anything, and will have to be upgraded over time.
As a final note, I think is fine to have the program fall into the opco at a later date; BTW in the OpCo i see the program running in the same fashion, with the OpCo potentially replacing Entropy or Foundation in the committee. I don’t think we can exclude ARDC: again, to evaluate certain interactions in smart contracts to draw a judgment, we will need technical expertise that might just not be in the OpCo itself.
Thanks @Entropy for the proposal
EDIT Have a question. Knowing that the KYC part could potentially scare some whistleblower, is there a way, from a compliance standpoint, to have this program created without KYC? Not a lawyer here, maybe the Foundation can answer, but in the end we give for granted that “everybody that interacts with money flowing from the dao has to kyc” and maybe there is a ground for not doing it here?
For example, there could be a ground for a whistleblower being non KYCed if they don’t want a reward. This case should take in account in the program.
This proposal is very good, and received many responses in the previous feedback, I vote: yes at snapshot The reasons are as follows: 1. DAO's fund allocation needs an effective monitoring mechanism, and the current lack of reporting incentives and mechanisms to protect whistleblowers makes it difficult to detect abuses. This project can motivate the community to participate in monitoring and improve the transparency and security of DAO's fund usage. 2. The reward mechanism is clear and will balance abuse and anti-abuse.
I support the proposal. The Entropy team proposes a sensible mechanism to monitor the use of DAO funds while encouraging community members to actively report misuse of funds. The Watchdog Project is an interesting, innovative, and necessary proposal that could significantly improve DAO accountability and optimize the management of funds. With a few improvements in false reporting, RFP transparency, and whistleblower flexibility, I believe the program could better serve the Arbitrum community. I will vote in favor. Here are my reasons and additional suggestions:
Reasons for support: 1. Clear process and incentive mechanism: The proposal defines the severity of funds misuse (low, medium, and high) and designs an incentive mechanism for whistleblowers that takes into account both the base incentive and the percentage of funds recovered. This approach effectively incentivizes whistleblowing behavior while providing real value to the DAO’s funds recovery efforts. 2. Deterrent effect: A transparent and fair bounty program not only helps recover misused funds but also serves as a deterrent to potential malicious actors, further protecting the interests of the DAO. 3. Follow-up: The proposal includes a 6-month trial period and a commitment to provide a retrospective report and data summary at the end of the period. This ensures the community has a basis for evaluating and optimizing the program.
My additional recommendations: 1. Transparency of the RFP process: The proposal mentions that Entropy will be responsible for vendor selection, but delegates will only see the results. I recommend strengthening community engagement, such as regular updates on the RFP evaluation process or introducing transparent scoring criteria, to increase trust. 2. Flexibility in KYC requirements: The current scheme requires whistleblowers to complete KYC in order to receive a reward, but this may deter some whistleblowers, especially in sensitive cases. Would it be possible to provide an option for whistleblowers to “report anonymously but forfeit the reward,” thereby encouraging more submissions? 3. Dynamic adjustments in the allocation of funds: While the budget of 400,000 ARB may seem sufficient, the actual impact will depend on subsequent implementation. I suggest providing a brief report on the use of funds and the effectiveness of the plan halfway through the pilot phase to give the community an early understanding of progress. Personally, I would prefer a team linear release to motivate everyone.
The Watchdog is now up for a temperature check on Snapshot.
@EmmanuelO Our team appreciates the request, but with the recent updates being only minor language clarifications, we feel that it is not necessary to delay this vote an additional week. The Watchdog has been on the forum now for 26 days vs the normal 7 day requirement. If the updates had introduced major changes to the program’s design/structure, then Entropy would agree that more time for delegates to review would be warranted.
Voting in favor of the proposal.
We need the ability to tell to "someone" if something is wrong, without fear of repercussion in a space that is not only quite small but lacks proper accountability like other industries, at least for now. I love that was introduced the clause for which people can submit a report without having to kyc if they don't want the reward: this is key for several actors, such as protocols, that are best positioned to understand what is going on and if there is anybody acting in a shady way. Pretty sure there were plenty of protocols during stip, ltipp, stip bridge, that saw stuff that was "non compliance" and were just hesitant of coming forward due to fear of repercussion, reputational damage and what not due to the lack of this program.
Voting in favor of the proposal.
We need the ability to tell to "someone" if something is wrong, without fear of repercussion in a space that is not only quite small but lacks proper accountability like other industries, at least for now. I love that was introduced the clause for which people can submit a report without having to kyc if they don't want the reward: this is key for several actors, such as protocols, that are best positioned to understand what is going on and if there is anybody acting in a shady way. Pretty sure there were plenty of protocols during stip, ltipp, stip bridge, that saw stuff that was "non compliance" and were just hesitant of coming forward due to fear of repercussion, reputational damage and what not due to the lack of this program.
I am also in favor to build an ad-hoc infra for this (@pedrob mentions protonmail, but would not suffice imho because it will make the commission work just too complex; it also does not allow for proper anonimity on the side of whistleblower if they are not careful enough on their email). But would like to see this infra lately fall into the hands of opco, not in the management sense, but in the ownership sense, as well as all the other website we will build for our dao.
Thanks Entropy
Oh I really love this idea and believe that "The Watchdog" will create a solid mechanism to monitor and protect the DAO funds.
Plus, it will boost Arbitrum's credibility, showing the DAO's commitment to safeguarding resources and promoting transparency :)
Oh I really love this idea and believe that "The Watchdog" will create a solid mechanism to monitor and protect the DAO funds.
Plus, it will boost Arbitrum's credibility, showing the DAO's commitment to safeguarding resources and promoting transparency :)
Just a small suggestion, I think the DAO should implement a clear reporting process so the community can join easily and reduce the risks of incorrect or incomplete reports.
The Watchdog proposal has now been updated based on the feedback shared. Below is a short summary of the changes:
The Watchdog proposal has now been updated based on the feedback shared. Below is a short summary of the changes:
Additionally, we’ll respond to a few additional questions that were not directly addressed in the updates.
To reiterate again, the identity of the person/entity that submits a Watchdog report will remain private throughout the review process and into perpetuity.
Lastly, I have a question: I believe it is implied (meaning the answer is “yes”), but is the program is to be retroactively applied to all previous programs?
Yes, the Watchdog program will be applied retroactively to all previously funded programs.
So, does this mean Entropy will select a provider from the bids submitted, and then a Snapshot vote requiring 3% quorum of the circulating supply will follow?
Following the selection of the provider, the proposal will be updated and moved to Tally. As now detailed in the proposal, Entropy will share rationale for the selection prior to the vote so that delegates can ask questions prior to the onchain vote.
Could this role be merged with the reporting role proposed by @AlexLumley ? Even though the DAO rejected the design and budget, I believe there is interest in having such a role, and it could fulfill both functions. I think that would make the most sense. Or why did you consider them as two distinct roles?
Entropy is unsure of where Alex’s proposal stands following the Holiday Break, but we view these initiatives as separate. Actively monitoring every single grant recipient is too much work for any individual. This system empowers the entire Arbitrum community and decentralizes the overseeing process compared to just a singular role. From our understanding, Alex’s proposal focuses less on catching/preventing misuse, but instead streamlining reporting functions in the DAO to improve the dissemination of information to delegates.
With no material changes being made to the proposal, we plan to move forward with a Snapshot vote tomorrow, January 16th.
Good proposal. Will the RFP be a public process or conducted behind cloaed doors by Entropy? From the proposal this wasn't very clear.
I would likely setup a mechanism to review the bounty amounts before exhibition of funds. Maybe the watchers can evaluate this quarterly and get ratification via quorum-meeting snapshot vote?
Good proposal. Will the RFP be a public process or conducted behind cloaed doors by Entropy? From the proposal this wasn't very clear.
I would likely setup a mechanism to review the bounty amounts before exhibition of funds. Maybe the watchers can evaluate this quarterly and get ratification via quorum-meeting snapshot vote?
I also understand that ARDC would only get funds for an audit/investigation and otherwise no? This would be my preference anyway as it seems unnecessary to have them be paid for this unless an audit they're needed for is triggered.
Thank you, @Entropy, for this amazing proposal!
Addressing the real problem of misuse of funds in Arbitrum DAO by creating a reward system for reporting it is a great idea.
The proposal specifies that the initial group of three DAO-associated reviewers will consist of representatives from the Arbitrum Foundation, Entropy Advisors, and the elected Research Member of the ARDC
Thank you, @Entropy, for this amazing proposal!
Addressing the real problem of misuse of funds in Arbitrum DAO by creating a reward system for reporting it is a great idea.
The proposal specifies that the initial group of three DAO-associated reviewers will consist of representatives from the Arbitrum Foundation, Entropy Advisors, and the elected Research Member of the ARDC
A whitelisted group of three DAO-associated reviewers will have the ability to review the submitted reports. We propose the group of initial reviewers to comprise the Arbitrum Foundation, Entropy Advisors, and the elected Research Member of the ARDC.
However, it does not explicitly mention who will initially choose these three entities?
Will we vote on candidates or will they be pre-selected based on their current positions and roles in the DAO ecosystem? And if it is not the delegates who choose them by voting, then who will? What is meant by "whitelisted"?
I also wonder if 400,000 ARB will be enough for long-term effectiveness, or if there are plans for extending the budget if successful?
Thanks in advance for answers.
voting For the current offchain proposal because I've been begging Entropy since October to publish this proposal once and for all. There has been misuse of funds in this DAO, and this proposal should incentivize people to look for those and report them. For example, I just recently found a $10k USD worth of misused funds that were reverted to the DAO after my report. We should all do more of that.
Im voting YES. This proposal is very much needed after what we have seen for example with Furucombo funds happened.
Detailed explanation can be seen here. Explanation in detail
Im voting FOR this great proposal on snapshot; offering financial rewards for valid reports of misappropriation, motivates us to keep a watchful eye on the fair and honest growth of Arbitrum. Carrying out this project is very inexpensive compared to how significant it can be to increase security and encourage greater accountability. Proposals like this are a yes for me. Great Job!
This proposal is a great step forward for accountability in the DAO. With so many funds allocated, it’s important to have a system in place to ensure they’re used properly and to build trust within the community.
One thing that could make this even better is a clear report template. It would help people provide all the necessary details, like fund amounts, evidence, and the impact of the misuse, making the review process much smoother.
This proposal is a great step forward for accountability in the DAO. With so many funds allocated, it’s important to have a system in place to ensure they’re used properly and to build trust within the community.
One thing that could make this even better is a clear report template. It would help people provide all the necessary details, like fund amounts, evidence, and the impact of the misuse, making the review process much smoother.
Another key point is anonymity. People need to feel safe when reporting issues, and keeping their identities private is crucial for that. Without this, many might hesitate to come forward.
It’s also important to recognize that not all misuse is the same. Defining levels of severity—like minor errors versus intentional fraud—would make the program fairer and more effective, with appropriate actions for each case.
This initiative feels like a big win for transparency and accountability. It’s a thoughtful approach to maintaining trust and integrity in the DAO, and I’m excited to see it come to life!
Thank you to all the delegates who have provided feedback! There have been several great suggestions and areas identified as needing clarification. Both a response to questions and an updated version of the proposal will be posted this week. The Snapshot vote will be delayed by 1 week to January 16th.
Great proposal @Entropy ! I think it's a big step towards greater transparency and accountability with funds.
In my opinion, it is crucial that the selection of reviewers is completely transparent to avoid any favoritism. It would be great to consider creating something like a rotating committee of reviewers to avoid internal conflicts of interest, and also establish clear sanctions for those reviewers who do not act objectively and ethically.
Great proposal @Entropy ! I think it's a big step towards greater transparency and accountability with funds.
In my opinion, it is crucial that the selection of reviewers is completely transparent to avoid any favoritism. It would be great to consider creating something like a rotating committee of reviewers to avoid internal conflicts of interest, and also establish clear sanctions for those reviewers who do not act objectively and ethically.
Another thing i wonder is what measures will be taken to ensure that reports of misuse are not leaked before being verified? I would love to see a detailed plan with possible scenarios; I think this would improve the proposal and increase the community's trust. Additionally, it would be convenient to study the option of allowing observers to choose to submit the report anonymously or publicly.
The proposal is quite good and whistleblowing ensures in every organization a better level of transparency and accountability. Good job!
there could be a ground for a whistleblower being non KYCed if they don’t want a reward. This case should take in account in the program.
Coming a bit late to the discussion, so won't likely add too much value here compared to the discussion.
This program is needed because I know for a fact that people are "scared" of reporting misuse. There is no incentive in a structure like a DAO to do so, you only create enemy for yourself, more so if you are part of a protocol. So the program is needed, and having a redacted identity for the whistleblower is paramount.
After reviewing, I believe the proposal is exceptionally well-conceived. However, I still have some questions:
In the review process, three reviewers need to reach a 2/3 consensus, and while the process seems detailed, could it potentially slow down efficiency? Especially for major fund misuse cases, is there a rapid response mechanism to minimize delays and prevent further losses?
After reviewing, I believe the proposal is exceptionally well-conceived. However, I still have some questions:
In the review process, three reviewers need to reach a 2/3 consensus, and while the process seems detailed, could it potentially slow down efficiency? Especially for major fund misuse cases, is there a rapid response mechanism to minimize delays and prevent further losses?
If a reviewer is found to have a conflict of interest and needs to be replaced by external personnel, how will these external reviewers be selected? How will their professionalism and impartiality be ensured?
Additionally, for particularly high-value fund recovery cases, it might be worth considering increasing the reward cap to 15%. For instance, setting a higher reward ceiling or appropriately raising the bounty percentage for exceptionally large recoveries could enhance the program’s attractiveness and incentivize participation.
Thank you for the proposal, @Entropy. It is a good step toward ensuring that Dao grants are utilized as intended.
The only question we have is regarding the classification for Low, Medium, and High levels of misuse. Is this tied to how the funds were inappropriately used, the amount of funds misused, or a mix of both? We would recommend a mix of the type of inappropriate usage (which is subject to the committee’s review) and the amount of funds that have been misappropriated for use outside of the awarded grant's allowed use.
Thank you for the proposal, @Entropy. It is a good step toward ensuring that Dao grants are utilized as intended.
The only question we have is regarding the classification for Low, Medium, and High levels of misuse. Is this tied to how the funds were inappropriately used, the amount of funds misused, or a mix of both? We would recommend a mix of the type of inappropriate usage (which is subject to the committee’s review) and the amount of funds that have been misappropriated for use outside of the awarded grant's allowed use.
That’s our feedback now and we are in favour of this proposal.
This is an amazing idea. I'm very much in favor. The issue remains, sometimes the price you put on the relationship you have with someone at fault might be higher than the proposed rewards. We should think of a way to allow for anonymous reporting and the ability to still receive rewards. I also agree with the shielded voting idea - I think that would help a lot.
tldr: Amazing idea, but for this idea to really work, we need as much privacy as we can.
Thank you, @Entropy, for sharing such a forward-thinking and impactful proposal. Programs like these are crucial in enhancing transparency and accountability within decentralized ecosystems. Overall, we’re very supportive of this proposal and the positive outcomes it seeks to achieve.
We see this initiative as a novel adaptation of bug bounty programs, shifting the focus from technical vulnerabilities to non-technical issues such as fund misuse. Given bug bounty programs' success and widespread adoption in the technical space, we suggest closely following a similar framework. Bug bounty programs have been battle-tested over time and provide valuable lessons in structuring rewards, categorizing severity, and ensuring due process.
Thank you, @Entropy, for sharing such a forward-thinking and impactful proposal. Programs like these are crucial in enhancing transparency and accountability within decentralized ecosystems. Overall, we’re very supportive of this proposal and the positive outcomes it seeks to achieve.
We see this initiative as a novel adaptation of bug bounty programs, shifting the focus from technical vulnerabilities to non-technical issues such as fund misuse. Given bug bounty programs' success and widespread adoption in the technical space, we suggest closely following a similar framework. Bug bounty programs have been battle-tested over time and provide valuable lessons in structuring rewards, categorizing severity, and ensuring due process.
Here are a few specific suggestions for consideration:
Incorporating the above points can help balance enforcement with fairness, aligning the program’s execution with the collaborative and open values of the DAO.
to clarify this, snapshot is updating the shielded voting feature soon, so that it will be possible to specify, per proposal, if the proposal author wants to have shielded voting or not.
I appreciate Entropy addressing my questions above, as well as addressing the broader delegate feedback. I think this is ultimately well thought-out, and with these changes there really isn't any concerned on my end. I will be voting "For" this proposal.
To more impactfully signal support, I want to note that some type of program like this is important to the health of the DAO. Perception matters, and the DAO will function best if there are deterrents to bad-faith applicants. It would be naive to think bad actors would try to abuse the DAO's treasury, so having a way to combat this is good to see. Considering the relatively cheap cost, I don't really see a reason not to do this in perpetuity, and look forwarded the retrospective report. Especially since it was indicated all prior projects are eligible for review.
Edit for space: I still support the project and will be voting for on "Tally"
This program is needed because I know for a fact that people are “scared” of reporting misuse. There is no incentive in a structure like a DAO to do so, you only create enemy for yourself, more so if you are part of a protocol. So the program is needed, and having a redacted identity for the whistleblower is paramount.
Main concern is that we go into a witch hunt as others said; this can either happened because the general sentiment of the DAO is quite adversarial (which is not right now and I don’t see necessarily happening but could indeed happen) or because the program is abused by externals. While former is a somehow greater responsibility on the shoulders of everybody in here, the latter could maybe be partially mitigated.
In addition to rewarding whistleblowers, there should also be a set of punitive measures to limit malicious or false reports.
I don’t think we can realistically have “punitive” measures. Even if the whistleblower KYC with the foundation, what measure can we apply? Ban from DIP? Doesn’t seems to get any effect if the person was not going to participate anyway. Ban from grant program? Only works if the person has affiliation with a protocol, and this affiliation is stated before hand in the KYC, but this info cannot be likely verified without breaching the identity of the user somehow, which is a key part of the program.
It could also be hard to identify a fake report from a report that is just wrong in the interpretation: we will have situations with smart contract interactions not easy to review, and they could be misunderstood by a reported in good faith. At the same time, a report in which we have fake/forged evidences can be instead evaluated as malicious. So this last case is probably the only one that could lead to an exclusion, of the individual, to
But what is mentioned above is something extremely serious, punitive and heavy, and again should be only done in case of a clearly blatant fake report aimed at damaging an innocent third party; likely would need a DAO vote.
All of these are things for which is difficult to draw a line in the sand, if that was possible we would just outsource the judiciary system in the world to computers instead than to people; I trust the committee, entropy and the foundation to have the best interest of the DAO in mind to do the right thing paired with their experience. On this note, plugging in people that understand incentive mechanisms can be a +ve to facilitate the work, and that’s why ARDC members are a good choice since most of them up to some degree had a role, or judged, or created report, on previous grant programs that we had in the DAO.
In general I also second the better classification of low/medium/high. I think it could be structured with a few key metrics, specifically: amount of capital impacted, and how the funds are misused. Misusing funds can be a lot of things: having capital that should have been allocated to development, and is instead used in marketing, is a misuse, but likely less severe than wash trading from the protocol to get the funds for example. A simple matrix of the amount of money, plus subcases on the type of misuse consequences, could help, knowing that in the end not all cases can be put on paper and it will be more of an indication than anything, and will have to be upgraded over time.
As a final note, I think is fine to have the program fall into the opco at a later date; BTW in the OpCo i see the program running in the same fashion, with the OpCo potentially replacing Entropy or Foundation in the committee. I don’t think we can exclude ARDC: again, to evaluate certain interactions in smart contracts to draw a judgment, we will need technical expertise that might just not be in the OpCo itself.
Thanks @Entropy for the proposal
EDIT Have a question. Knowing that the KYC part could potentially scare some whistleblower, is there a way, from a compliance standpoint, to have this program created without KYC? Not a lawyer here, maybe the Foundation can answer, but in the end we give for granted that “everybody that interacts with money flowing from the dao has to kyc” and maybe there is a ground for not doing it here?
For example, there could be a ground for a whistleblower being non KYCed if they don’t want a reward. This case should take in account in the program.
This proposal is very good, and received many responses in the previous feedback, I vote: yes at snapshot The reasons are as follows: 1. DAO's fund allocation needs an effective monitoring mechanism, and the current lack of reporting incentives and mechanisms to protect whistleblowers makes it difficult to detect abuses. This project can motivate the community to participate in monitoring and improve the transparency and security of DAO's fund usage. 2. The reward mechanism is clear and will balance abuse and anti-abuse.
I support the proposal. The Entropy team proposes a sensible mechanism to monitor the use of DAO funds while encouraging community members to actively report misuse of funds. The Watchdog Project is an interesting, innovative, and necessary proposal that could significantly improve DAO accountability and optimize the management of funds. With a few improvements in false reporting, RFP transparency, and whistleblower flexibility, I believe the program could better serve the Arbitrum community. I will vote in favor. Here are my reasons and additional suggestions:
Reasons for support: 1. Clear process and incentive mechanism: The proposal defines the severity of funds misuse (low, medium, and high) and designs an incentive mechanism for whistleblowers that takes into account both the base incentive and the percentage of funds recovered. This approach effectively incentivizes whistleblowing behavior while providing real value to the DAO’s funds recovery efforts. 2. Deterrent effect: A transparent and fair bounty program not only helps recover misused funds but also serves as a deterrent to potential malicious actors, further protecting the interests of the DAO. 3. Follow-up: The proposal includes a 6-month trial period and a commitment to provide a retrospective report and data summary at the end of the period. This ensures the community has a basis for evaluating and optimizing the program.
My additional recommendations: 1. Transparency of the RFP process: The proposal mentions that Entropy will be responsible for vendor selection, but delegates will only see the results. I recommend strengthening community engagement, such as regular updates on the RFP evaluation process or introducing transparent scoring criteria, to increase trust. 2. Flexibility in KYC requirements: The current scheme requires whistleblowers to complete KYC in order to receive a reward, but this may deter some whistleblowers, especially in sensitive cases. Would it be possible to provide an option for whistleblowers to “report anonymously but forfeit the reward,” thereby encouraging more submissions? 3. Dynamic adjustments in the allocation of funds: While the budget of 400,000 ARB may seem sufficient, the actual impact will depend on subsequent implementation. I suggest providing a brief report on the use of funds and the effectiveness of the plan halfway through the pilot phase to give the community an early understanding of progress. Personally, I would prefer a team linear release to motivate everyone.
The Watchdog is now up for a temperature check on Snapshot.
@EmmanuelO Our team appreciates the request, but with the recent updates being only minor language clarifications, we feel that it is not necessary to delay this vote an additional week. The Watchdog has been on the forum now for 26 days vs the normal 7 day requirement. If the updates had introduced major changes to the program’s design/structure, then Entropy would agree that more time for delegates to review would be warranted.
Voting in favor of the proposal.
We need the ability to tell to "someone" if something is wrong, without fear of repercussion in a space that is not only quite small but lacks proper accountability like other industries, at least for now. I love that was introduced the clause for which people can submit a report without having to kyc if they don't want the reward: this is key for several actors, such as protocols, that are best positioned to understand what is going on and if there is anybody acting in a shady way. Pretty sure there were plenty of protocols during stip, ltipp, stip bridge, that saw stuff that was "non compliance" and were just hesitant of coming forward due to fear of repercussion, reputational damage and what not due to the lack of this program.
Voting in favor of the proposal.
We need the ability to tell to "someone" if something is wrong, without fear of repercussion in a space that is not only quite small but lacks proper accountability like other industries, at least for now. I love that was introduced the clause for which people can submit a report without having to kyc if they don't want the reward: this is key for several actors, such as protocols, that are best positioned to understand what is going on and if there is anybody acting in a shady way. Pretty sure there were plenty of protocols during stip, ltipp, stip bridge, that saw stuff that was "non compliance" and were just hesitant of coming forward due to fear of repercussion, reputational damage and what not due to the lack of this program.
I am also in favor to build an ad-hoc infra for this (@pedrob mentions protonmail, but would not suffice imho because it will make the commission work just too complex; it also does not allow for proper anonimity on the side of whistleblower if they are not careful enough on their email). But would like to see this infra lately fall into the hands of opco, not in the management sense, but in the ownership sense, as well as all the other website we will build for our dao.
Thanks Entropy
Oh I really love this idea and believe that "The Watchdog" will create a solid mechanism to monitor and protect the DAO funds.
Plus, it will boost Arbitrum's credibility, showing the DAO's commitment to safeguarding resources and promoting transparency :)
Oh I really love this idea and believe that "The Watchdog" will create a solid mechanism to monitor and protect the DAO funds.
Plus, it will boost Arbitrum's credibility, showing the DAO's commitment to safeguarding resources and promoting transparency :)
Just a small suggestion, I think the DAO should implement a clear reporting process so the community can join easily and reduce the risks of incorrect or incomplete reports.
The Watchdog proposal has now been updated based on the feedback shared. Below is a short summary of the changes:
The Watchdog proposal has now been updated based on the feedback shared. Below is a short summary of the changes:
Additionally, we’ll respond to a few additional questions that were not directly addressed in the updates.
To reiterate again, the identity of the person/entity that submits a Watchdog report will remain private throughout the review process and into perpetuity.
Lastly, I have a question: I believe it is implied (meaning the answer is “yes”), but is the program is to be retroactively applied to all previous programs?
Yes, the Watchdog program will be applied retroactively to all previously funded programs.
So, does this mean Entropy will select a provider from the bids submitted, and then a Snapshot vote requiring 3% quorum of the circulating supply will follow?
Following the selection of the provider, the proposal will be updated and moved to Tally. As now detailed in the proposal, Entropy will share rationale for the selection prior to the vote so that delegates can ask questions prior to the onchain vote.
Could this role be merged with the reporting role proposed by @AlexLumley ? Even though the DAO rejected the design and budget, I believe there is interest in having such a role, and it could fulfill both functions. I think that would make the most sense. Or why did you consider them as two distinct roles?
Entropy is unsure of where Alex’s proposal stands following the Holiday Break, but we view these initiatives as separate. Actively monitoring every single grant recipient is too much work for any individual. This system empowers the entire Arbitrum community and decentralizes the overseeing process compared to just a singular role. From our understanding, Alex’s proposal focuses less on catching/preventing misuse, but instead streamlining reporting functions in the DAO to improve the dissemination of information to delegates.
With no material changes being made to the proposal, we plan to move forward with a Snapshot vote tomorrow, January 16th.
Good proposal. Will the RFP be a public process or conducted behind cloaed doors by Entropy? From the proposal this wasn't very clear.
I would likely setup a mechanism to review the bounty amounts before exhibition of funds. Maybe the watchers can evaluate this quarterly and get ratification via quorum-meeting snapshot vote?
Good proposal. Will the RFP be a public process or conducted behind cloaed doors by Entropy? From the proposal this wasn't very clear.
I would likely setup a mechanism to review the bounty amounts before exhibition of funds. Maybe the watchers can evaluate this quarterly and get ratification via quorum-meeting snapshot vote?
I also understand that ARDC would only get funds for an audit/investigation and otherwise no? This would be my preference anyway as it seems unnecessary to have them be paid for this unless an audit they're needed for is triggered.
Thank you, @Entropy, for this amazing proposal!
Addressing the real problem of misuse of funds in Arbitrum DAO by creating a reward system for reporting it is a great idea.
The proposal specifies that the initial group of three DAO-associated reviewers will consist of representatives from the Arbitrum Foundation, Entropy Advisors, and the elected Research Member of the ARDC
Thank you, @Entropy, for this amazing proposal!
Addressing the real problem of misuse of funds in Arbitrum DAO by creating a reward system for reporting it is a great idea.
The proposal specifies that the initial group of three DAO-associated reviewers will consist of representatives from the Arbitrum Foundation, Entropy Advisors, and the elected Research Member of the ARDC
A whitelisted group of three DAO-associated reviewers will have the ability to review the submitted reports. We propose the group of initial reviewers to comprise the Arbitrum Foundation, Entropy Advisors, and the elected Research Member of the ARDC.
However, it does not explicitly mention who will initially choose these three entities?
Will we vote on candidates or will they be pre-selected based on their current positions and roles in the DAO ecosystem? And if it is not the delegates who choose them by voting, then who will? What is meant by "whitelisted"?
I also wonder if 400,000 ARB will be enough for long-term effectiveness, or if there are plans for extending the budget if successful?
Thanks in advance for answers.
voting For the current offchain proposal because I've been begging Entropy since October to publish this proposal once and for all. There has been misuse of funds in this DAO, and this proposal should incentivize people to look for those and report them. For example, I just recently found a $10k USD worth of misused funds that were reverted to the DAO after my report. We should all do more of that.
Im voting YES. This proposal is very much needed after what we have seen for example with Furucombo funds happened.
Detailed explanation can be seen here. Explanation in detail
Im voting FOR this great proposal on snapshot; offering financial rewards for valid reports of misappropriation, motivates us to keep a watchful eye on the fair and honest growth of Arbitrum. Carrying out this project is very inexpensive compared to how significant it can be to increase security and encourage greater accountability. Proposals like this are a yes for me. Great Job!
This proposal is a great step forward for accountability in the DAO. With so many funds allocated, it’s important to have a system in place to ensure they’re used properly and to build trust within the community.
One thing that could make this even better is a clear report template. It would help people provide all the necessary details, like fund amounts, evidence, and the impact of the misuse, making the review process much smoother.
This proposal is a great step forward for accountability in the DAO. With so many funds allocated, it’s important to have a system in place to ensure they’re used properly and to build trust within the community.
One thing that could make this even better is a clear report template. It would help people provide all the necessary details, like fund amounts, evidence, and the impact of the misuse, making the review process much smoother.
Another key point is anonymity. People need to feel safe when reporting issues, and keeping their identities private is crucial for that. Without this, many might hesitate to come forward.
It’s also important to recognize that not all misuse is the same. Defining levels of severity—like minor errors versus intentional fraud—would make the program fairer and more effective, with appropriate actions for each case.
This initiative feels like a big win for transparency and accountability. It’s a thoughtful approach to maintaining trust and integrity in the DAO, and I’m excited to see it come to life!
Thank you to all the delegates who have provided feedback! There have been several great suggestions and areas identified as needing clarification. Both a response to questions and an updated version of the proposal will be posted this week. The Snapshot vote will be delayed by 1 week to January 16th.
Great proposal @Entropy ! I think it's a big step towards greater transparency and accountability with funds.
In my opinion, it is crucial that the selection of reviewers is completely transparent to avoid any favoritism. It would be great to consider creating something like a rotating committee of reviewers to avoid internal conflicts of interest, and also establish clear sanctions for those reviewers who do not act objectively and ethically.
Great proposal @Entropy ! I think it's a big step towards greater transparency and accountability with funds.
In my opinion, it is crucial that the selection of reviewers is completely transparent to avoid any favoritism. It would be great to consider creating something like a rotating committee of reviewers to avoid internal conflicts of interest, and also establish clear sanctions for those reviewers who do not act objectively and ethically.
Another thing i wonder is what measures will be taken to ensure that reports of misuse are not leaked before being verified? I would love to see a detailed plan with possible scenarios; I think this would improve the proposal and increase the community's trust. Additionally, it would be convenient to study the option of allowing observers to choose to submit the report anonymously or publicly.
The proposal is quite good and whistleblowing ensures in every organization a better level of transparency and accountability. Good job!
there could be a ground for a whistleblower being non KYCed if they don’t want a reward. This case should take in account in the program.
Coming a bit late to the discussion, so won't likely add too much value here compared to the discussion.
This program is needed because I know for a fact that people are "scared" of reporting misuse. There is no incentive in a structure like a DAO to do so, you only create enemy for yourself, more so if you are part of a protocol. So the program is needed, and having a redacted identity for the whistleblower is paramount.
After reviewing, I believe the proposal is exceptionally well-conceived. However, I still have some questions:
In the review process, three reviewers need to reach a 2/3 consensus, and while the process seems detailed, could it potentially slow down efficiency? Especially for major fund misuse cases, is there a rapid response mechanism to minimize delays and prevent further losses?
After reviewing, I believe the proposal is exceptionally well-conceived. However, I still have some questions:
In the review process, three reviewers need to reach a 2/3 consensus, and while the process seems detailed, could it potentially slow down efficiency? Especially for major fund misuse cases, is there a rapid response mechanism to minimize delays and prevent further losses?
If a reviewer is found to have a conflict of interest and needs to be replaced by external personnel, how will these external reviewers be selected? How will their professionalism and impartiality be ensured?
Additionally, for particularly high-value fund recovery cases, it might be worth considering increasing the reward cap to 15%. For instance, setting a higher reward ceiling or appropriately raising the bounty percentage for exceptionally large recoveries could enhance the program’s attractiveness and incentivize participation.
Thank you for the proposal, @Entropy. It is a good step toward ensuring that Dao grants are utilized as intended.
The only question we have is regarding the classification for Low, Medium, and High levels of misuse. Is this tied to how the funds were inappropriately used, the amount of funds misused, or a mix of both? We would recommend a mix of the type of inappropriate usage (which is subject to the committee’s review) and the amount of funds that have been misappropriated for use outside of the awarded grant's allowed use.
Thank you for the proposal, @Entropy. It is a good step toward ensuring that Dao grants are utilized as intended.
The only question we have is regarding the classification for Low, Medium, and High levels of misuse. Is this tied to how the funds were inappropriately used, the amount of funds misused, or a mix of both? We would recommend a mix of the type of inappropriate usage (which is subject to the committee’s review) and the amount of funds that have been misappropriated for use outside of the awarded grant's allowed use.
That’s our feedback now and we are in favour of this proposal.
This is an amazing idea. I'm very much in favor. The issue remains, sometimes the price you put on the relationship you have with someone at fault might be higher than the proposed rewards. We should think of a way to allow for anonymous reporting and the ability to still receive rewards. I also agree with the shielded voting idea - I think that would help a lot.
tldr: Amazing idea, but for this idea to really work, we need as much privacy as we can.
Thank you, @Entropy, for sharing such a forward-thinking and impactful proposal. Programs like these are crucial in enhancing transparency and accountability within decentralized ecosystems. Overall, we’re very supportive of this proposal and the positive outcomes it seeks to achieve.
We see this initiative as a novel adaptation of bug bounty programs, shifting the focus from technical vulnerabilities to non-technical issues such as fund misuse. Given bug bounty programs' success and widespread adoption in the technical space, we suggest closely following a similar framework. Bug bounty programs have been battle-tested over time and provide valuable lessons in structuring rewards, categorizing severity, and ensuring due process.
Thank you, @Entropy, for sharing such a forward-thinking and impactful proposal. Programs like these are crucial in enhancing transparency and accountability within decentralized ecosystems. Overall, we’re very supportive of this proposal and the positive outcomes it seeks to achieve.
We see this initiative as a novel adaptation of bug bounty programs, shifting the focus from technical vulnerabilities to non-technical issues such as fund misuse. Given bug bounty programs' success and widespread adoption in the technical space, we suggest closely following a similar framework. Bug bounty programs have been battle-tested over time and provide valuable lessons in structuring rewards, categorizing severity, and ensuring due process.
Here are a few specific suggestions for consideration:
Incorporating the above points can help balance enforcement with fairness, aligning the program’s execution with the collaborative and open values of the DAO.
to clarify this, snapshot is updating the shielded voting feature soon, so that it will be possible to specify, per proposal, if the proposal author wants to have shielded voting or not.
The proposal is quite good and whistleblowing ensures in every organization a better level of transparency and accountability. Good job!
there could be a ground for a whistleblower being non KYCed if they don’t want a reward. This case should take in account in the program.
This seems important to me. Most will be driven by $$ motivations, but there will be people who will just want to make sure that something is addressed and reported, without compensation, and we should make the process smooth for them.
Already been asked, but didn't see it addressed... so I'll ask too. Presumably, the 5k/20k/50k is the payout, with the 5% on top of the recovered funds? Only asking because I was confused on the 500k ARB budget if the rewards are paid out in recovered funds. I think this make sense btw, as I'd imagine actually recovering funds will be difficult and we need incentives that go beyond just hopinh you'll get paid possible, eventually, subject to a known scammers ability to return funds from their scam...
I think the tiers need either better explained or have a more objective measurement to them. Low / Medium / High is very vauge, and I think that introduces subjectivity.
Otherwise definitely for something like this.
Coming a bit late to the discussion, so won't likely add too much value here compared to the discussion.
This program is needed because I know for a fact that people are "scared" of reporting misuse. There is no incentive in a structure like a DAO to do so, you only create enemy for yourself, more so if you are part of a protocol. So the program is needed, and having a redacted identity for the whistleblower is paramount.
Main concern is that we go into a witch hunt as others said; this can either happened because the general sentiment of the DAO is quite adversarial (which is not right now and I don't see necessarily happening but could indeed happen) or because the program is abused by externals. While former is a somehow greater responsibility on the shoulders of everybody in here, the latter could maybe be partially mitigated.
In addition to rewarding whistleblowers, there should also be a set of punitive measures to limit malicious or false reports.
It could also be hard to identify a fake report from a report that is just wrong in the interpretation: we will have situations with smart contract interactions not easy to review, and they could be misunderstood by a reported in good faith. At the same time, a report in which we have fake/forged evidences can be instead evaluated as malicious. So this last case is probably the only one that could lead to an exclusion, of the individual, to
But what is mentioned above is something extremely serious, punitive and heavy, and again should be only done in case of a clearly blatant fake report aimed at damaging an innocent third party; likely would need a DAO vote.
All of these are things for which is difficult to draw a line in the sand, if that was possible we would just outsource the judiciary system in the world to computers instead than to people; I trust the committee, entropy and the foundation to have the best interest of the DAO in mind to do the right thing paired with their experience. On this note, plugging in people that understand incentive mechanisms can be a +ve to facilitate the work, and that's why ARDC members are a good choice since most of them up to some degree had a role, or judged, or created report, on previous grant programs that we had in the DAO.
In general I also second the better classification of low/medium/high. I think it could be structured with a few key metrics, specifically: amount of capital impacted, and how the funds are misused. Misusing funds can be a lot of things: having capital that should have been allocated to development, and is instead used in marketing, is a misuse, but likely less severe than wash trading from the protocol to get the funds for example. A simple matrix of the amount of money, plus subcases on the type of misuse consequences, could help, knowing that in the end not all cases can be put on paper and it will be more of an indication than anything, and will have to be upgraded over time.
As a final note, I think is fine to have the program fall into the opco at a later date; BTW in the OpCo i see the program running in the same fashion, with the OpCo potentially replacing Entropy or Foundation in the committee. I don't think we can exclude ARDC: again, to evaluate certain interactions in smart contracts to draw a judgment, we will need technical expertise that might just not be in the OpCo itself.
Thanks @Entropy for the proposal
EDIT Have a question. Knowing that the KYC part could potentially scare some whistleblower, is there a way, from a compliance standpoint, to have this program created without KYC? Not a lawyer here, maybe the Foundation can answer, but in the end we give for granted that "everybody that interacts with money flowing from the dao has to kyc" and maybe there is a ground for not doing it here?
to clarify this, snapshot is updating the shielded voting feature soon, so that it will be possible to specify, per proposal, if the proposal author wants to have shielded voting or not.
https://github.com/snapshot-labs/sx-monorepo/pull/954
this helps our use case quite a bit, since after this is live in production, Arbitrum DAO proposal authors on snapshot won’t need to coordinate with the AF to enable and disable the shielded vote setting on the space level.
We are pleased with this proposal and are willing to vote in favor, but we have a few questions we would like to clarify:
Interesting proposal!
As others mentioned, there are some definitions that are too broad, so it would be interesting to have it outlined in the proposal, to act as a guideline to those will act as the watchdogs, for example.
Interesting proposal!
As others mentioned, there are some definitions that are too broad, so it would be interesting to have it outlined in the proposal, to act as a guideline to those will act as the watchdogs, for example.
Arbitrum DAO’s successful identification of misappropriated funds, whether by a service provider, protocol, grant recipient, or anyone else that receives funds from Arbitrum DAO has two large benefits:
The Watchdog program will extend to ALL DAO-funded initiatives including end recipients of other programs such as the Questbook Domain program, Stylus Sprint, Arbitrum Foundation grants, and the incentives programs.
As we are mentioning incentives programs, SPs, Protocols, grants, "anyone that receives funds", it is important to have a definition of what misuse of funds represent on each scenario.
Reviewers are required to abstain from specific review processes if a conflict of interest (COI) is identified. If two or more reviewers have an identified COI, the reviewers will identify two external parties who don’t have COIs and have the capabilities to review the report. If the report is made public, the reviewers’ identified COIs will be published at the same time.
Similarly, a list of desired skills for those external parties for each case (grants, incentive programs, etc) is important, as the skill set needed to review a report from a grantee that did not build what was agreed on is different from the one to check if the incentive distribution was done correctly or not.
Lastly, I have a question: I believe it is implied (meaning the answer is "yes"), but is the program is to be retroactively applied to all previous programs?
Good initiative, thanks for the detailed proposal.
I have a few questions.
20,000 ARB to cover a minimum of 50 hours of the ARDC Research member
Good initiative, thanks for the detailed proposal.
I have a few questions.
20,000 ARB to cover a minimum of 50 hours of the ARDC Research member
As far as I know, ARDC has its own budget. Why don't we use it for this program? The committee will choose who will participate in the audit and pay them compensation from its budget. This will also reduce the time for choosing a committee member for audits.
If recaptured funds are denominated in a volatile asset, the reward awarded to the watcher will be calculated as the 30D TWAP of the underlying on the day the transfer is made.
If the grants are expressed in ARB, will we pay bounties in stables? After all, the base reward is paid in ARB.
Gauntlet supports this initiative and believes an emphasis on reporters' privacy is appropriate. Further, increasing guidelines for Low, Medium, and High would be ideal for the final iteration of the proposal.
Is there an estimate for how many misuses have been reported and how those might have been rated under this framework? It might be helpful to include some examples to guide the DAO on what a High misuse is compared to a Low misuse.
I welcome this proposal because it is a move towards better accountability. However, I believe that the idea of a bounty itself reflects a broader issue which is a lack of a monitoring system for all money granted. If every initiative had clear metrics and continuous oversight, finding misuse of funds would be much more effective before the need for outside bounty hunters. It might be useful to consider a broader mechanism to identify potential misuse early on so that reactive measures as this one become a second line of defense rather than the first.
That being said, and considering the current state of affairs within the DAO, I agree that a bounty system is in order. About the bounty amount, I share the feeling expressed by other delegates that a fixed reward may be disproportional in the case of small value ARB abuse, such as 4K ARB recovered versus a 5K ARB bounty. In these cases, a better scheme would use a progressive scale or dynamic limit, considering the value of misappropriated funds to maintain the expenses proportional.
I welcome this proposal because it is a move towards better accountability. However, I believe that the idea of a bounty itself reflects a broader issue which is a lack of a monitoring system for all money granted. If every initiative had clear metrics and continuous oversight, finding misuse of funds would be much more effective before the need for outside bounty hunters. It might be useful to consider a broader mechanism to identify potential misuse early on so that reactive measures as this one become a second line of defense rather than the first.
That being said, and considering the current state of affairs within the DAO, I agree that a bounty system is in order. About the bounty amount, I share the feeling expressed by other delegates that a fixed reward may be disproportional in the case of small value ARB abuse, such as 4K ARB recovered versus a 5K ARB bounty. In these cases, a better scheme would use a progressive scale or dynamic limit, considering the value of misappropriated funds to maintain the expenses proportional.
The idea of a tiered system may be a base reward for lower levels of misappropriation, scaling upwards with the size or severity of the finding to compensate fairly without overpaying. Another suggestion would be to set an adequate small, fixed payout for any verified report, complemented by a percentage bonus in case of successful fund recovery. These adjustments could keep relative expenses compatible while maintaining healthy incentives for whistleblowing.
I also support the involvement of the Research member and would consider integrating the Risk and Security members from ARDC if deemed necessary and of course, considering the proposal/initiative being analyzed. Their expertise would add weight to the review and help overcome any blind spots in the detection of exploits.
Very good proposal. I have been waiting for something like this for a long time. I think this will help a lot to force anyone who received a grant or funding from the DAO to deliver what they promised on time (!). This is important for us and to further detect bad behavior as the example with Furucombo outlined. I will re-read the proposal and see if there are any important questions I should raise that haven't been raised yet.
Hello, first of all, we love this proposal, and we have a particular interest in the following topics:
It’s not entirely clear how the severity levels (low, medium, high) for reported cases will be determined. If possible, it would be helpful to include a more detailed explanation or a rubric specifying the factors considered, such as economic impact, intentionality, or damage to the ecosystem.
Hello, first of all, we love this proposal, and we have a particular interest in the following topics:
It’s not entirely clear how the severity levels (low, medium, high) for reported cases will be determined. If possible, it would be helpful to include a more detailed explanation or a rubric specifying the factors considered, such as economic impact, intentionality, or damage to the ecosystem.
How will cases involving unfounded or even malicious reports be handled? For example, could temporary suspensions be implemented for individuals who repeatedly submit reports without sufficient evidence? This could help balance the evaluation team’s workload and encourage responsible reporting.
On the other hand, what would happen in the hypothetical (though unlikely) scenario where an active investigation leads to the case being rectified while the report is still open? In such a situation, we might not know if the rectification resulted directly from the report. Would the whistleblower still be compensated? Additionally, would the parties responsible for the initially flagged case receive a "strike" or some other form of record for the detected non-compliance?
Finally, a broader reflection: How will the "Watchdog" program ensure a healthy balance between vigilance and trust within the ecosystem? The proposal is well-structured, but it seems unlikely to lead to collective hysteria or witch hunts. We wonder if there’s a plan to prevent an excess of speculative reports from negatively impacting the collaborative and creative environment of the community.
Hello @Entropy!
It’s great to finally see a proposal like this. We recall that other delegates have mentioned the need for a “watchdog” but we believe this proposal is superior as it “decentralizes” this function instead of assigning all responsibility to a single individual/entity/committee.
Hello @Entropy!
It’s great to finally see a proposal like this. We recall that other delegates have mentioned the need for a “watchdog” but we believe this proposal is superior as it “decentralizes” this function instead of assigning all responsibility to a single individual/entity/committee.
What I would add/change is to deduct the upfront payment for the valid report from the 5%.
In this way, the searcher is always guaranteed a minimum payment for their valid submissions, and the maximum payment is 5% of the recovered amount (not 5% + the initial payment). And from that remaining part of 5%, the 500K could be replenished to keep the program sustainable.
We agree with what @pedrob suggests here. It seems reasonable for the base compensation to act as deductible if funds are recovered.
If the review committee deems a report valid at their discretion, they will deem what level of misuse.
Low: 5K ARB
Medium: 20K ARB
High: 50K ARB
The DAO will vote via Snapshot on whether or not the violation constitutes a DAO ban.
The requirement for 3% of the circulating supply should be added here to ensure the vote is valid.
On an off-topic note, since there are now multiple situations where 3% of the circulating supply is required as quorum, it would be optimal to add a feature in Snapshot to “activate” this requirement when setting up a vote. This would allow Snapshot to indicate when a vote hasn’t passed due to insufficient quorum and ensure that delegates are aware of the quorum requirement. @raam @cliffton.eth, what do you think about this? Is it feasible?
This is crucial. Reports must remain private during the initial phase to prevent a “witch hunt.”
We believe that this mechanism is optimal for the time being, but if/once OpCo is stood up, the program could be moved into its domain. If done so, the reviewer and voting mechanism would likely need to be restructured.
If the program is migrated to the OpCo, the evaluation committee could include: one delegate elected by the DAO, one OAT member, and one ARDC member.
We suggest including an OAT member since only individuals with no other financial ties to the DAO can be part of OAT, making a conflict of interest unlikely. Furthermore, with OpCo established, there wouldn’t be many reasons for the Arbitrum Foundation to remain in the committee, as legal agreements with SPs/Grantees would likely be signed with OpCo instead of the Foundation.
The selected provider and the required budget will be presented to the DAO before the proposal moves to Tally.
So, does this mean Entropy will select a provider from the bids submitted, and then a Snapshot vote requiring 3% quorum of the circulating supply will follow?
If we’ve understood correctly, we believe it would be more optimal for the DAO to vote among the different options rather than ratify a selection made by Entropy.
Lastly, we noticed no mention of how the committee’s activities will be reported. We believe one report per quarter would be sufficient.
I think this is a good proposal. As for the rewards for reporting, perhaps the fixed amounts should be somewhat lower, because the 5% share of recovered funds is a good enough incentive in my opinion.
Also, the fixed amounts for rewards should be denominated in USD (but paid out in ARB), just in case the ARB price goes up significantly.
I think this is a good proposal. As for the rewards for reporting, perhaps the fixed amounts should be somewhat lower, because the 5% share of recovered funds is a good enough incentive in my opinion.
Also, the fixed amounts for rewards should be denominated in USD (but paid out in ARB), just in case the ARB price goes up significantly.
It would also make sense to have a pilot phase for the program (measured in months or until funds run out - whichever is first), and evaluate everything after it (including the platform), so that it can be properly improved upon.
I fully support this proposal. I'd like to know more about the reporting process. Will it be anonymous, and how can we submit reports? Email? A section on the Arbitrum website? I think a system platform that allows users to track their reports and communicate directly with the reviewer would be beneficial. This would help prevent spam and ensure cases are handled efficiently. Additionally, a public blacklist of abusers could help to advise and protect the community.
Thanks for the great proposal. This is absolutely a very necessary oversight mechanism for Arbitrum DAO. However, I have a few concerns. First, I believe it’s necessary to clearly define the scope of “misuse,” and determining whether a violation has occurred should go through a more rigorous review process. Ideally, reviewers should publish a detailed report for the DAO to vote on. Without this, I worry there could be instances of power abuse, which would severely harm the DAO. Second, while stopping the disbursement of future funds in case of a violation is straightforward, recovering previously distributed funds could be more challenging. Considering participants are from various countries, legal avenues might not be effective. Happy to discuss!
The following reflects the views of the Lampros DAO (formerly ‘Lampros Labs DAO’) governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
Thank you, @Entropy, for coming up with another great proposal that the DAO currently needs and for giving us all an early Christmas gift.
The following reflects the views of the Lampros DAO (formerly ‘Lampros Labs DAO’) governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
Thank you, @Entropy, for coming up with another great proposal that the DAO currently needs and for giving us all an early Christmas gift.
As mentioned in the Abstract, with 422m ARB tokens being used across many projects, it's great to see a program that lets community members play an active role in keeping our funds safe. This proposal perfectly matches what DAOs are all about - working together as a community to make things better and safer.
Here are our thoughts on specific aspects of the proposal which needs some clarification:
It would be much more beneficial for the community that wants to participate in the bounties to understand what constitutes misuse of grants. If this is clarified first, it would be even more beneficial. It could be common red flags to watch for, or something else. We believe a definition or list of misuse of funds can be provided.
While the tiered reward system is logical, the proposal doesn't define clear criteria for categorizing severity levels. Could we establish specific parameters such as Dollar value ranges for each tier, Duration of misuse, Impact on DAO reputation or Number of participants/transactions involved?
Also, only if the funds are recovered will 5% of the recovered amount be awarded, correct? Additionally, as mentioned by @SEEDGov, what are the plans if a watcher reports a 4K ARB grant? This needs to be clarified.
If two or more reviewers have an identified COI, the reviewers will identify two external parties who don’t have COIs and have the capabilities to review the report.
Can we have a pre-approved list of backup reviewers, vetted by the DAO, rather than making selections on an ad-hoc basis? Or could the criteria for selecting external reviewers in COI situations be shared earlier?
Overall, we support this proposal. While we've asked for some clarifications, we believe this program will greatly benefit Arbitrum's ecosystem and community. We look forward to seeing this proposal move forward.
this is possible as a setting of the whole snapshot space, but not per proposal. in the same way that shielded votes are possible to activate for the whole snapshot space and not per proposal. one of the things we could be asking snapshot going forward, since we are now Turbo customers, would be to have both of these features at the proposal level, so that the proposal creator could choose them for each proposal without having to ask the AF to turn on and off the space settings just to post 1 proposal.
We need such supervision. Currently, the budget cost is not high, but as funding increases in the future, supervision will become more complex, and costs will rise. The implementation plans and the associated costs should be detailed. If the initial experiment is successful in identifying abusers, a long-term monitoring plan will be required.
I am concerned that if the misuse of funds is confirmed, recovering the funds will be a challenging task, as you will need to account for the legal costs in different countries. It is not just about community opinion or relying on the conscience of the other party. This will require additional expenditures, yet I have not seen a budget for this.
Proposal to establish a “Watchdog” grant misuse bounty program to incentivize the identification and reporting of misuse of DAO-allocated funds. After reviewing the entire proposal, it appears to operate at a low cost while serving a supervisory role, which is highly supportive of the proposal. It is suggested that some members of the review panel be selected through community voting or open nominations to enhance the credibility of the program. Additionally, once the bounty program is launched, it should regularly report its operations and fund usage to the community. In addition to rewarding whistleblowers, there should also be a set of punitive measures to limit malicious or false reports. Currently, the proposal does not set an upper limit on the budget for platform development. It is recommended that a budget range be provided during the procurement process to ensure the selection of the most cost-effective platform. The proposal mentions a 6-month trial period, but if the program proves successful, should it be incorporated into the DAO’s long-term governance framework to establish a sustainable culture of fund oversight?
Thank you for your proposal. My personal opinion is that this bounty program is a very good direction for the DAO’s ability to regulate and account for its funds, and the establishment of a bounty program can effectively deter potential malicious actors and reduce the possibility of misuse of funds at the source. Additionally, the incentives can also attract more community members to participate.
I have some additional questions，and Suggested additions 1. While the proposal mentions that the review panel includes members of the Foundation, Entropy Advisors, and ARDC, are these individuals completely independent? Sorry, I’m new to this and don’t know enough about many of the members. 2. The community may question whether there is a potential conflict of interest with internal review, especially if the DAO money flow is sensitive. 3. The proposal mentions low, medium, and high reward amounts, but how is the severity of abuse defined? For example, some abuses may involve smaller amounts, but the impact on community trust is significant. Which level does this situation fall into? It is proposed to add, in more detail, a description of the evaluation criteria for abusive behavior and the specific logic in the distribution of reward amounts. 4. Although the proposal hopes to cultivate a culture of accountability through the bounty program, it may also lead to less cooperation among some members due to the fear of being reported, or even cause internal friction. I am worried that the community will be divided because of this policy. I think it should be supplemented and emphasized that education and promotion of the bounty program is of positive significance, and that the program’s implementation focuses on transparent communication. 5. The proposal mentions the recovery of funds through legal channels or smart contracts, but what is the cost and success rate of these methods? I personally feel that if abuse occurs, the probability of tracing it back is very low. Do you have any good measures and rules to constrain this? The original intent of this proposal I think is great and reminds me of the 'Guardian' program in SAFE, which I'll be following closely on the next ballot, the
babe wake up, Entropy finally dropped the watchdog/whistleblower/sleuth proposal… =)
I even did my happy dance when I woke up to this! Thank you for this proposal!
A few clarifications:
in here, what reward above?
I love the proposal and think this has to be in place to disincentivize grant hunters or farmers from coming to Arbitrum. I just have a couple of questions and suggestions.
First, what do you mean by the "report remains private during the initial submission"? I just want to be clear: I support this if the reporter remains anonymous throughout the whole process and can be paid without the program disclosing their identity.
I love the proposal and think this has to be in place to disincentivize grant hunters or farmers from coming to Arbitrum. I just have a couple of questions and suggestions.
First, what do you mean by the "report remains private during the initial submission"? I just want to be clear: I support this if the reporter remains anonymous throughout the whole process and can be paid without the program disclosing their identity.
Also, I think the payment structure is unclear. If you meant it's only 5%, I believe that's too low to incentivize reporters, especially considering that funds may or may not be recovered. If the payment is fixed depending on the level of misuse, plus a 5% bonus, I think that would be perfect! Could you please clarify this?
Thanks for the proposal! I will support it as long as the amount determined by the RFP is not excessive.
Thank you very much for the proposal. I believe it makes sense to have a watchdog program.
My first question is: why did you choose this system instead of empowering a person or group of people to take on this role of overseeing the allocation of funds? Could this role be merged with the reporting role proposed by @AlexLumley ? Even though the DAO rejected the design and budget, I believe there is interest in having such a role, and it could fulfill both functions. I think that would make the most sense. Or why did you consider them as two distinct roles?
I love this proposal. I do have one question.
From my understanding, if a misuse happens the reviewers will attempt to recover the funds through private communication channels and only if these private attempts fail, the report will be made public in the DAO forum. Is this correct?
I don't support this process. In case misuse happens we should know about it. Maybe through reports?
The proposal is quite good and whistleblowing ensures in every organization a better level of transparency and accountability. Good job!
there could be a ground for a whistleblower being non KYCed if they don’t want a reward. This case should take in account in the program.
This seems important to me. Most will be driven by $$ motivations, but there will be people who will just want to make sure that something is addressed and reported, without compensation, and we should make the process smooth for them.
Already been asked, but didn't see it addressed... so I'll ask too. Presumably, the 5k/20k/50k is the payout, with the 5% on top of the recovered funds? Only asking because I was confused on the 500k ARB budget if the rewards are paid out in recovered funds. I think this make sense btw, as I'd imagine actually recovering funds will be difficult and we need incentives that go beyond just hopinh you'll get paid possible, eventually, subject to a known scammers ability to return funds from their scam...
I think the tiers need either better explained or have a more objective measurement to them. Low / Medium / High is very vauge, and I think that introduces subjectivity.
Otherwise definitely for something like this.
Coming a bit late to the discussion, so won't likely add too much value here compared to the discussion.
This program is needed because I know for a fact that people are "scared" of reporting misuse. There is no incentive in a structure like a DAO to do so, you only create enemy for yourself, more so if you are part of a protocol. So the program is needed, and having a redacted identity for the whistleblower is paramount.
Main concern is that we go into a witch hunt as others said; this can either happened because the general sentiment of the DAO is quite adversarial (which is not right now and I don't see necessarily happening but could indeed happen) or because the program is abused by externals. While former is a somehow greater responsibility on the shoulders of everybody in here, the latter could maybe be partially mitigated.
In addition to rewarding whistleblowers, there should also be a set of punitive measures to limit malicious or false reports.
It could also be hard to identify a fake report from a report that is just wrong in the interpretation: we will have situations with smart contract interactions not easy to review, and they could be misunderstood by a reported in good faith. At the same time, a report in which we have fake/forged evidences can be instead evaluated as malicious. So this last case is probably the only one that could lead to an exclusion, of the individual, to
But what is mentioned above is something extremely serious, punitive and heavy, and again should be only done in case of a clearly blatant fake report aimed at damaging an innocent third party; likely would need a DAO vote.
All of these are things for which is difficult to draw a line in the sand, if that was possible we would just outsource the judiciary system in the world to computers instead than to people; I trust the committee, entropy and the foundation to have the best interest of the DAO in mind to do the right thing paired with their experience. On this note, plugging in people that understand incentive mechanisms can be a +ve to facilitate the work, and that's why ARDC members are a good choice since most of them up to some degree had a role, or judged, or created report, on previous grant programs that we had in the DAO.
In general I also second the better classification of low/medium/high. I think it could be structured with a few key metrics, specifically: amount of capital impacted, and how the funds are misused. Misusing funds can be a lot of things: having capital that should have been allocated to development, and is instead used in marketing, is a misuse, but likely less severe than wash trading from the protocol to get the funds for example. A simple matrix of the amount of money, plus subcases on the type of misuse consequences, could help, knowing that in the end not all cases can be put on paper and it will be more of an indication than anything, and will have to be upgraded over time.
As a final note, I think is fine to have the program fall into the opco at a later date; BTW in the OpCo i see the program running in the same fashion, with the OpCo potentially replacing Entropy or Foundation in the committee. I don't think we can exclude ARDC: again, to evaluate certain interactions in smart contracts to draw a judgment, we will need technical expertise that might just not be in the OpCo itself.
Thanks @Entropy for the proposal
EDIT Have a question. Knowing that the KYC part could potentially scare some whistleblower, is there a way, from a compliance standpoint, to have this program created without KYC? Not a lawyer here, maybe the Foundation can answer, but in the end we give for granted that "everybody that interacts with money flowing from the dao has to kyc" and maybe there is a ground for not doing it here?
to clarify this, snapshot is updating the shielded voting feature soon, so that it will be possible to specify, per proposal, if the proposal author wants to have shielded voting or not.
https://github.com/snapshot-labs/sx-monorepo/pull/954
this helps our use case quite a bit, since after this is live in production, Arbitrum DAO proposal authors on snapshot won’t need to coordinate with the AF to enable and disable the shielded vote setting on the space level.
We are pleased with this proposal and are willing to vote in favor, but we have a few questions we would like to clarify:
Interesting proposal!
As others mentioned, there are some definitions that are too broad, so it would be interesting to have it outlined in the proposal, to act as a guideline to those will act as the watchdogs, for example.
Interesting proposal!
As others mentioned, there are some definitions that are too broad, so it would be interesting to have it outlined in the proposal, to act as a guideline to those will act as the watchdogs, for example.
Arbitrum DAO’s successful identification of misappropriated funds, whether by a service provider, protocol, grant recipient, or anyone else that receives funds from Arbitrum DAO has two large benefits:
The Watchdog program will extend to ALL DAO-funded initiatives including end recipients of other programs such as the Questbook Domain program, Stylus Sprint, Arbitrum Foundation grants, and the incentives programs.
As we are mentioning incentives programs, SPs, Protocols, grants, "anyone that receives funds", it is important to have a definition of what misuse of funds represent on each scenario.
Reviewers are required to abstain from specific review processes if a conflict of interest (COI) is identified. If two or more reviewers have an identified COI, the reviewers will identify two external parties who don’t have COIs and have the capabilities to review the report. If the report is made public, the reviewers’ identified COIs will be published at the same time.
Similarly, a list of desired skills for those external parties for each case (grants, incentive programs, etc) is important, as the skill set needed to review a report from a grantee that did not build what was agreed on is different from the one to check if the incentive distribution was done correctly or not.
Lastly, I have a question: I believe it is implied (meaning the answer is "yes"), but is the program is to be retroactively applied to all previous programs?
Good initiative, thanks for the detailed proposal.
I have a few questions.
20,000 ARB to cover a minimum of 50 hours of the ARDC Research member
Good initiative, thanks for the detailed proposal.
I have a few questions.
20,000 ARB to cover a minimum of 50 hours of the ARDC Research member
As far as I know, ARDC has its own budget. Why don't we use it for this program? The committee will choose who will participate in the audit and pay them compensation from its budget. This will also reduce the time for choosing a committee member for audits.
If recaptured funds are denominated in a volatile asset, the reward awarded to the watcher will be calculated as the 30D TWAP of the underlying on the day the transfer is made.
If the grants are expressed in ARB, will we pay bounties in stables? After all, the base reward is paid in ARB.
Gauntlet supports this initiative and believes an emphasis on reporters' privacy is appropriate. Further, increasing guidelines for Low, Medium, and High would be ideal for the final iteration of the proposal.
Is there an estimate for how many misuses have been reported and how those might have been rated under this framework? It might be helpful to include some examples to guide the DAO on what a High misuse is compared to a Low misuse.
I welcome this proposal because it is a move towards better accountability. However, I believe that the idea of a bounty itself reflects a broader issue which is a lack of a monitoring system for all money granted. If every initiative had clear metrics and continuous oversight, finding misuse of funds would be much more effective before the need for outside bounty hunters. It might be useful to consider a broader mechanism to identify potential misuse early on so that reactive measures as this one become a second line of defense rather than the first.
That being said, and considering the current state of affairs within the DAO, I agree that a bounty system is in order. About the bounty amount, I share the feeling expressed by other delegates that a fixed reward may be disproportional in the case of small value ARB abuse, such as 4K ARB recovered versus a 5K ARB bounty. In these cases, a better scheme would use a progressive scale or dynamic limit, considering the value of misappropriated funds to maintain the expenses proportional.
I welcome this proposal because it is a move towards better accountability. However, I believe that the idea of a bounty itself reflects a broader issue which is a lack of a monitoring system for all money granted. If every initiative had clear metrics and continuous oversight, finding misuse of funds would be much more effective before the need for outside bounty hunters. It might be useful to consider a broader mechanism to identify potential misuse early on so that reactive measures as this one become a second line of defense rather than the first.
That being said, and considering the current state of affairs within the DAO, I agree that a bounty system is in order. About the bounty amount, I share the feeling expressed by other delegates that a fixed reward may be disproportional in the case of small value ARB abuse, such as 4K ARB recovered versus a 5K ARB bounty. In these cases, a better scheme would use a progressive scale or dynamic limit, considering the value of misappropriated funds to maintain the expenses proportional.
The idea of a tiered system may be a base reward for lower levels of misappropriation, scaling upwards with the size or severity of the finding to compensate fairly without overpaying. Another suggestion would be to set an adequate small, fixed payout for any verified report, complemented by a percentage bonus in case of successful fund recovery. These adjustments could keep relative expenses compatible while maintaining healthy incentives for whistleblowing.
I also support the involvement of the Research member and would consider integrating the Risk and Security members from ARDC if deemed necessary and of course, considering the proposal/initiative being analyzed. Their expertise would add weight to the review and help overcome any blind spots in the detection of exploits.
Very good proposal. I have been waiting for something like this for a long time. I think this will help a lot to force anyone who received a grant or funding from the DAO to deliver what they promised on time (!). This is important for us and to further detect bad behavior as the example with Furucombo outlined. I will re-read the proposal and see if there are any important questions I should raise that haven't been raised yet.
Hello, first of all, we love this proposal, and we have a particular interest in the following topics:
It’s not entirely clear how the severity levels (low, medium, high) for reported cases will be determined. If possible, it would be helpful to include a more detailed explanation or a rubric specifying the factors considered, such as economic impact, intentionality, or damage to the ecosystem.
Hello, first of all, we love this proposal, and we have a particular interest in the following topics:
It’s not entirely clear how the severity levels (low, medium, high) for reported cases will be determined. If possible, it would be helpful to include a more detailed explanation or a rubric specifying the factors considered, such as economic impact, intentionality, or damage to the ecosystem.
How will cases involving unfounded or even malicious reports be handled? For example, could temporary suspensions be implemented for individuals who repeatedly submit reports without sufficient evidence? This could help balance the evaluation team’s workload and encourage responsible reporting.
On the other hand, what would happen in the hypothetical (though unlikely) scenario where an active investigation leads to the case being rectified while the report is still open? In such a situation, we might not know if the rectification resulted directly from the report. Would the whistleblower still be compensated? Additionally, would the parties responsible for the initially flagged case receive a "strike" or some other form of record for the detected non-compliance?
Finally, a broader reflection: How will the "Watchdog" program ensure a healthy balance between vigilance and trust within the ecosystem? The proposal is well-structured, but it seems unlikely to lead to collective hysteria or witch hunts. We wonder if there’s a plan to prevent an excess of speculative reports from negatively impacting the collaborative and creative environment of the community.
Hello @Entropy!
It’s great to finally see a proposal like this. We recall that other delegates have mentioned the need for a “watchdog” but we believe this proposal is superior as it “decentralizes” this function instead of assigning all responsibility to a single individual/entity/committee.
Hello @Entropy!
It’s great to finally see a proposal like this. We recall that other delegates have mentioned the need for a “watchdog” but we believe this proposal is superior as it “decentralizes” this function instead of assigning all responsibility to a single individual/entity/committee.
What I would add/change is to deduct the upfront payment for the valid report from the 5%.
In this way, the searcher is always guaranteed a minimum payment for their valid submissions, and the maximum payment is 5% of the recovered amount (not 5% + the initial payment). And from that remaining part of 5%, the 500K could be replenished to keep the program sustainable.
We agree with what @pedrob suggests here. It seems reasonable for the base compensation to act as deductible if funds are recovered.
If the review committee deems a report valid at their discretion, they will deem what level of misuse.
Low: 5K ARB
Medium: 20K ARB
High: 50K ARB
The DAO will vote via Snapshot on whether or not the violation constitutes a DAO ban.
The requirement for 3% of the circulating supply should be added here to ensure the vote is valid.
On an off-topic note, since there are now multiple situations where 3% of the circulating supply is required as quorum, it would be optimal to add a feature in Snapshot to “activate” this requirement when setting up a vote. This would allow Snapshot to indicate when a vote hasn’t passed due to insufficient quorum and ensure that delegates are aware of the quorum requirement. @raam @cliffton.eth, what do you think about this? Is it feasible?
This is crucial. Reports must remain private during the initial phase to prevent a “witch hunt.”
We believe that this mechanism is optimal for the time being, but if/once OpCo is stood up, the program could be moved into its domain. If done so, the reviewer and voting mechanism would likely need to be restructured.
If the program is migrated to the OpCo, the evaluation committee could include: one delegate elected by the DAO, one OAT member, and one ARDC member.
We suggest including an OAT member since only individuals with no other financial ties to the DAO can be part of OAT, making a conflict of interest unlikely. Furthermore, with OpCo established, there wouldn’t be many reasons for the Arbitrum Foundation to remain in the committee, as legal agreements with SPs/Grantees would likely be signed with OpCo instead of the Foundation.
The selected provider and the required budget will be presented to the DAO before the proposal moves to Tally.
So, does this mean Entropy will select a provider from the bids submitted, and then a Snapshot vote requiring 3% quorum of the circulating supply will follow?
If we’ve understood correctly, we believe it would be more optimal for the DAO to vote among the different options rather than ratify a selection made by Entropy.
Lastly, we noticed no mention of how the committee’s activities will be reported. We believe one report per quarter would be sufficient.
I think this is a good proposal. As for the rewards for reporting, perhaps the fixed amounts should be somewhat lower, because the 5% share of recovered funds is a good enough incentive in my opinion.
Also, the fixed amounts for rewards should be denominated in USD (but paid out in ARB), just in case the ARB price goes up significantly.
I think this is a good proposal. As for the rewards for reporting, perhaps the fixed amounts should be somewhat lower, because the 5% share of recovered funds is a good enough incentive in my opinion.
Also, the fixed amounts for rewards should be denominated in USD (but paid out in ARB), just in case the ARB price goes up significantly.
It would also make sense to have a pilot phase for the program (measured in months or until funds run out - whichever is first), and evaluate everything after it (including the platform), so that it can be properly improved upon.
I fully support this proposal. I'd like to know more about the reporting process. Will it be anonymous, and how can we submit reports? Email? A section on the Arbitrum website? I think a system platform that allows users to track their reports and communicate directly with the reviewer would be beneficial. This would help prevent spam and ensure cases are handled efficiently. Additionally, a public blacklist of abusers could help to advise and protect the community.
Thanks for the great proposal. This is absolutely a very necessary oversight mechanism for Arbitrum DAO. However, I have a few concerns. First, I believe it’s necessary to clearly define the scope of “misuse,” and determining whether a violation has occurred should go through a more rigorous review process. Ideally, reviewers should publish a detailed report for the DAO to vote on. Without this, I worry there could be instances of power abuse, which would severely harm the DAO. Second, while stopping the disbursement of future funds in case of a violation is straightforward, recovering previously distributed funds could be more challenging. Considering participants are from various countries, legal avenues might not be effective. Happy to discuss!
The following reflects the views of the Lampros DAO (formerly ‘Lampros Labs DAO’) governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
Thank you, @Entropy, for coming up with another great proposal that the DAO currently needs and for giving us all an early Christmas gift.
The following reflects the views of the Lampros DAO (formerly ‘Lampros Labs DAO’) governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
Thank you, @Entropy, for coming up with another great proposal that the DAO currently needs and for giving us all an early Christmas gift.
As mentioned in the Abstract, with 422m ARB tokens being used across many projects, it's great to see a program that lets community members play an active role in keeping our funds safe. This proposal perfectly matches what DAOs are all about - working together as a community to make things better and safer.
Here are our thoughts on specific aspects of the proposal which needs some clarification:
It would be much more beneficial for the community that wants to participate in the bounties to understand what constitutes misuse of grants. If this is clarified first, it would be even more beneficial. It could be common red flags to watch for, or something else. We believe a definition or list of misuse of funds can be provided.
While the tiered reward system is logical, the proposal doesn't define clear criteria for categorizing severity levels. Could we establish specific parameters such as Dollar value ranges for each tier, Duration of misuse, Impact on DAO reputation or Number of participants/transactions involved?
Also, only if the funds are recovered will 5% of the recovered amount be awarded, correct? Additionally, as mentioned by @SEEDGov, what are the plans if a watcher reports a 4K ARB grant? This needs to be clarified.
If two or more reviewers have an identified COI, the reviewers will identify two external parties who don’t have COIs and have the capabilities to review the report.
Can we have a pre-approved list of backup reviewers, vetted by the DAO, rather than making selections on an ad-hoc basis? Or could the criteria for selecting external reviewers in COI situations be shared earlier?
Overall, we support this proposal. While we've asked for some clarifications, we believe this program will greatly benefit Arbitrum's ecosystem and community. We look forward to seeing this proposal move forward.
this is possible as a setting of the whole snapshot space, but not per proposal. in the same way that shielded votes are possible to activate for the whole snapshot space and not per proposal. one of the things we could be asking snapshot going forward, since we are now Turbo customers, would be to have both of these features at the proposal level, so that the proposal creator could choose them for each proposal without having to ask the AF to turn on and off the space settings just to post 1 proposal.
We need such supervision. Currently, the budget cost is not high, but as funding increases in the future, supervision will become more complex, and costs will rise. The implementation plans and the associated costs should be detailed. If the initial experiment is successful in identifying abusers, a long-term monitoring plan will be required.
I am concerned that if the misuse of funds is confirmed, recovering the funds will be a challenging task, as you will need to account for the legal costs in different countries. It is not just about community opinion or relying on the conscience of the other party. This will require additional expenditures, yet I have not seen a budget for this.
Proposal to establish a “Watchdog” grant misuse bounty program to incentivize the identification and reporting of misuse of DAO-allocated funds. After reviewing the entire proposal, it appears to operate at a low cost while serving a supervisory role, which is highly supportive of the proposal. It is suggested that some members of the review panel be selected through community voting or open nominations to enhance the credibility of the program. Additionally, once the bounty program is launched, it should regularly report its operations and fund usage to the community. In addition to rewarding whistleblowers, there should also be a set of punitive measures to limit malicious or false reports. Currently, the proposal does not set an upper limit on the budget for platform development. It is recommended that a budget range be provided during the procurement process to ensure the selection of the most cost-effective platform. The proposal mentions a 6-month trial period, but if the program proves successful, should it be incorporated into the DAO’s long-term governance framework to establish a sustainable culture of fund oversight?
Thank you for your proposal. My personal opinion is that this bounty program is a very good direction for the DAO’s ability to regulate and account for its funds, and the establishment of a bounty program can effectively deter potential malicious actors and reduce the possibility of misuse of funds at the source. Additionally, the incentives can also attract more community members to participate.
I have some additional questions，and Suggested additions 1. While the proposal mentions that the review panel includes members of the Foundation, Entropy Advisors, and ARDC, are these individuals completely independent? Sorry, I’m new to this and don’t know enough about many of the members. 2. The community may question whether there is a potential conflict of interest with internal review, especially if the DAO money flow is sensitive. 3. The proposal mentions low, medium, and high reward amounts, but how is the severity of abuse defined? For example, some abuses may involve smaller amounts, but the impact on community trust is significant. Which level does this situation fall into? It is proposed to add, in more detail, a description of the evaluation criteria for abusive behavior and the specific logic in the distribution of reward amounts. 4. Although the proposal hopes to cultivate a culture of accountability through the bounty program, it may also lead to less cooperation among some members due to the fear of being reported, or even cause internal friction. I am worried that the community will be divided because of this policy. I think it should be supplemented and emphasized that education and promotion of the bounty program is of positive significance, and that the program’s implementation focuses on transparent communication. 5. The proposal mentions the recovery of funds through legal channels or smart contracts, but what is the cost and success rate of these methods? I personally feel that if abuse occurs, the probability of tracing it back is very low. Do you have any good measures and rules to constrain this? The original intent of this proposal I think is great and reminds me of the 'Guardian' program in SAFE, which I'll be following closely on the next ballot, the
babe wake up, Entropy finally dropped the watchdog/whistleblower/sleuth proposal… =)
I even did my happy dance when I woke up to this! Thank you for this proposal!
A few clarifications:
in here, what reward above?
I love the proposal and think this has to be in place to disincentivize grant hunters or farmers from coming to Arbitrum. I just have a couple of questions and suggestions.
First, what do you mean by the "report remains private during the initial submission"? I just want to be clear: I support this if the reporter remains anonymous throughout the whole process and can be paid without the program disclosing their identity.
I love the proposal and think this has to be in place to disincentivize grant hunters or farmers from coming to Arbitrum. I just have a couple of questions and suggestions.
First, what do you mean by the "report remains private during the initial submission"? I just want to be clear: I support this if the reporter remains anonymous throughout the whole process and can be paid without the program disclosing their identity.
Also, I think the payment structure is unclear. If you meant it's only 5%, I believe that's too low to incentivize reporters, especially considering that funds may or may not be recovered. If the payment is fixed depending on the level of misuse, plus a 5% bonus, I think that would be perfect! Could you please clarify this?
Thanks for the proposal! I will support it as long as the amount determined by the RFP is not excessive.
Thank you very much for the proposal. I believe it makes sense to have a watchdog program.
My first question is: why did you choose this system instead of empowering a person or group of people to take on this role of overseeing the allocation of funds? Could this role be merged with the reporting role proposed by @AlexLumley ? Even though the DAO rejected the design and budget, I believe there is interest in having such a role, and it could fulfill both functions. I think that would make the most sense. Or why did you consider them as two distinct roles?
I love this proposal. I do have one question.
From my understanding, if a misuse happens the reviewers will attempt to recover the funds through private communication channels and only if these private attempts fail, the report will be made public in the DAO forum. Is this correct?
I don't support this process. In case misuse happens we should know about it. Maybe through reports?
We need such supervision. Currently, the budget cost is not high, but as funding increases in the future, supervision will become more complex, and costs will rise. The implementation plans and the associated costs should be detailed. If the initial experiment is successful in identifying abusers, a long-term monitoring plan will be required.
I am concerned that if the misuse of funds is confirmed, recovering the funds will be a challenging task, as you will need to account for the legal costs in different countries. It is not just about community opinion or relying on the conscience of the other party. This will require additional expenditures, yet I have not seen a budget for this.
Reviewers should be elected by the community. While you may nominate individuals, future voting will still be needed to involve more people in supervising their work. Ensuring fairness and justice will require significant time and costs.
This is a good suggestion, and I support it, but more comprehensive implementation steps are needed.
Thank you very much for the proposal. I believe it makes sense to have a watchdog program.
My first question is: why did you choose this system instead of empowering a person or group of people to take on this role of overseeing the allocation of funds? Could this role be merged with the reporting role proposed by @AlexLumley ? Even though the DAO rejected the design and budget, I believe there is interest in having such a role, and it could fulfill both functions. I think that would make the most sense. Or why did you consider them as two distinct roles?
If this proposal moves forward, it will be essential to have a clear definition of what constitutes “verifiable reports of misappropriation” or “valid reports of misappropriation.” These are two different terms used in the document to refer to reports that qualify for rewards. I think it’s important to unify the criteria and be very clear about the circumstances under which a report is eligible for a bounty.
Additionally, a definition of “fund misuse” also needs to be included. For example, if funds that were not used and were supposed to be returned remain in a multisig, would that qualify as misuse?
Just the existence of a transparent and well-publicized bounty program will likely deter some malicious actors from misusing DAO funds in the first place.
The same principle would apply if the person in charge of the GRC also served as the watchdog.
with a temporary solution utilizing a small committee of reviewers with a long-term plan for the program to eventually fall under OpCo, if and when it is stood up.
Why did you envision this as a small committee? I believe it would be better to centralize the initial review of reports, perhaps within the Foundation or you guys from Entropy. I also don’t see the inclusion of the ARDC research member as necessary in the initial stage, given that a single member should suffice to verify the information.
To minimize program costs, you could instead form a sort of "committee" or team between you and the Foundation. In cases where there is disagreement between the two, only then should ARDC support be sought.
I do agree with other comments that if this person or committee determines that a report is “valid” or “verifiable” (based on pre-established criteria), the DAO should subsequently confirm that assessment. This would ensure transparency in the process and allow the DAO to identify providers who are not meeting expectations or misusing funds.
Low: 5K ARB
Medium: 20K ARB
High: 50K ARB
The payment system is not clear. Does this mean that whoever qualifies for the reward will receive a fixed payment of 5K, 20K, or 50K plus the 5%?
So it would be that in the case of a valid report, 5K, 20K, or 50K is paid from those 500K, depending on the importance of the report. And only if the funds are recovered would the 5% be paid, correct?
What I would add/change is to deduct the upfront payment for the valid report from the 5%.
In this way, the searcher is always guaranteed a minimum payment for their valid submissions, and the maximum payment is 5% of the recovered amount (not 5% + the initial payment). And from that remaining part of 5%, the 500K could be replenished to keep the program sustainable.
Thank you very much for the proposal!
I strongly support the idea of a misuse bounty program. The cost to implement such a program is minimal, and the benefits are significant. Not only would it serve as an effective deterrent against "grant farmers" and other bad actors who might otherwise exploit DAO-allocated funds, but it would also encourage greater accountability across the ecosystem. In fact, I personally know of two cases I’d be ready to bring to the Watchdog’s attention once the program is live.
I suggest creating a well-crafted document or set of guidelines that clearly defines what constitutes “misuse” of funds. This will help us avoid unnecessary witch hunts or false accusations, while ensuring that genuine wrongdoing is appropriately addressed.
We need such supervision. Currently, the budget cost is not high, but as funding increases in the future, supervision will become more complex, and costs will rise. The implementation plans and the associated costs should be detailed. If the initial experiment is successful in identifying abusers, a long-term monitoring plan will be required.
I am concerned that if the misuse of funds is confirmed, recovering the funds will be a challenging task, as you will need to account for the legal costs in different countries. It is not just about community opinion or relying on the conscience of the other party. This will require additional expenditures, yet I have not seen a budget for this.
Reviewers should be elected by the community. While you may nominate individuals, future voting will still be needed to involve more people in supervising their work. Ensuring fairness and justice will require significant time and costs.
This is a good suggestion, and I support it, but more comprehensive implementation steps are needed.
Thank you very much for the proposal. I believe it makes sense to have a watchdog program.
My first question is: why did you choose this system instead of empowering a person or group of people to take on this role of overseeing the allocation of funds? Could this role be merged with the reporting role proposed by @AlexLumley ? Even though the DAO rejected the design and budget, I believe there is interest in having such a role, and it could fulfill both functions. I think that would make the most sense. Or why did you consider them as two distinct roles?
If this proposal moves forward, it will be essential to have a clear definition of what constitutes “verifiable reports of misappropriation” or “valid reports of misappropriation.” These are two different terms used in the document to refer to reports that qualify for rewards. I think it’s important to unify the criteria and be very clear about the circumstances under which a report is eligible for a bounty.
Additionally, a definition of “fund misuse” also needs to be included. For example, if funds that were not used and were supposed to be returned remain in a multisig, would that qualify as misuse?
Just the existence of a transparent and well-publicized bounty program will likely deter some malicious actors from misusing DAO funds in the first place.
The same principle would apply if the person in charge of the GRC also served as the watchdog.
with a temporary solution utilizing a small committee of reviewers with a long-term plan for the program to eventually fall under OpCo, if and when it is stood up.
Why did you envision this as a small committee? I believe it would be better to centralize the initial review of reports, perhaps within the Foundation or you guys from Entropy. I also don’t see the inclusion of the ARDC research member as necessary in the initial stage, given that a single member should suffice to verify the information.
To minimize program costs, you could instead form a sort of "committee" or team between you and the Foundation. In cases where there is disagreement between the two, only then should ARDC support be sought.
I do agree with other comments that if this person or committee determines that a report is “valid” or “verifiable” (based on pre-established criteria), the DAO should subsequently confirm that assessment. This would ensure transparency in the process and allow the DAO to identify providers who are not meeting expectations or misusing funds.
Low: 5K ARB
Medium: 20K ARB
High: 50K ARB
The payment system is not clear. Does this mean that whoever qualifies for the reward will receive a fixed payment of 5K, 20K, or 50K plus the 5%?
So it would be that in the case of a valid report, 5K, 20K, or 50K is paid from those 500K, depending on the importance of the report. And only if the funds are recovered would the 5% be paid, correct?
What I would add/change is to deduct the upfront payment for the valid report from the 5%.
In this way, the searcher is always guaranteed a minimum payment for their valid submissions, and the maximum payment is 5% of the recovered amount (not 5% + the initial payment). And from that remaining part of 5%, the 500K could be replenished to keep the program sustainable.
Thank you very much for the proposal!
I strongly support the idea of a misuse bounty program. The cost to implement such a program is minimal, and the benefits are significant. Not only would it serve as an effective deterrent against "grant farmers" and other bad actors who might otherwise exploit DAO-allocated funds, but it would also encourage greater accountability across the ecosystem. In fact, I personally know of two cases I’d be ready to bring to the Watchdog’s attention once the program is live.
I suggest creating a well-crafted document or set of guidelines that clearly defines what constitutes “misuse” of funds. This will help us avoid unnecessary witch hunts or false accusations, while ensuring that genuine wrongdoing is appropriately addressed.