Summary
As we near the end of allocating the initial grant budget (link to proposal), where through the Arbitrum Grants Program run via the Delegated Domain Allocation model by Questbook, $912k has already been allocated to over 60 proposals. Based on the overwhelming response and number of quality proposals the grant program has received, we propose to start a new program for the Arbitrum Grants via DDA through Questbook with a budget of $4,000,000 spread across 4 domains over the next two quarters. We have received great feedback and support from the community, builders, and domain allocators for requesting additional budget and continue funding projects through the delegated domain allocation model.
Proposal
Based on the impact and insights derived from Arbitrum DDA program, we propose renewing the Program with a budget of $4M for two quarters. The domain allocators will utilize this budget to fund proposals that align with Arbitrum’s roadmap. After researching, gathering feedback from domain allocators, active community members, and builders, we propose supporting the same domains as the previous program:
| Domain |
Domain Allocator |
Proposed Budget |
| New Protocol Ideas |
Jojo |
$920,000 |
| Gaming |
Adam |
$920,000 |
| Dev Tooling |
Juandi |
$920,000 |
| Education, Growth, Community and Events |
Cattin (Seed Latam) |
$920,000 |
RFPs, acceptance criteria and specifications for each domain
- New Protocol Ideas - Link
- Gaming - Link
- Dev Tooling - Link
- Education, Growth, Community and Events - Link
- We propose increasing the allocated grants budget for all domains equally to a higher budget based on the number of proposals received in the previous round.
- Additionally, in the first round we set a soft cap of $25,000, and we propose increasing the cap to $50,000, with a few more steps for approving a grant that is larger than $25,000, requiring the involvement of two DAs to approve a proposal rather than just the specific domain allocator.
- Considering the previous softcap being half of what is currently proposed, and that for an average of $220,000 for each domain the program was able to run for around 3.5 months before being maxed out, we project that providing 4X the amount of the previous iteration to each domain should allow the program to constantly allocate, at the same rate or even higher, for the full 6 months projected duration
- The increased cap will allow the Questbook Program to keep covering the bootstrap belt of grant between $1,000 to $25,000 while, at the same time, be able to serve larger protocols that inherently might have larger needs.
Specifications and Implementation
Similar to the model implemented in the initial program, the renewed grants program will be run using Delegated Domain Capital Allocation Model 1. Each domain allocator will run their respective domain on-chain for full transparency using Questbook. The data and performance across key metrics will be visible to the community.
While the program has produced, accordingly to preliminary conversation with protocols and delegates, good results, we want to address and integrate the feedbacks so far proposed and partially covered in the previous section, such as:
- have better accountability for the increased soft cap
- define a more robust and structured set of rules for applicants, in regards to providing a timeline for their project(s)
- define a cost for the management and verification of milestones after the program is completed
- define a plan to manage the volatility of funds being distributed by the DAO in ARB token.
The DA will evaluate all the proposals through the rubrics provided for each domain, with the following framework:
- in case of request below or equal to $25,000, the evaluation process will be the same of the previous iteration, with rubrics being evaluated and scored by the specific DA
- in case of request above $25,000, and below the new soft cap of $50,000, the evaluation will involve a second DA, chosen by the first one based on the proximity of the specific expertise and knowledge to that proposal, that will have to publish a second evaluation of the rubrics alongside the score. Assuming N rubrics, scored from 1 to 5, the grant will be approved only if both the DA will give each a scoring equal or above to N*3.
The disbursement of the grant will take place on-chain from a multi-sig wallet controlled by the program manager & the domain allocator. The domain allocator will approve or reject the application based on evaluation rubric. A Grants SAFE, with 3/5 multi-sig, between the program manager and 4 domain allocators will be setup. We will then have 4 SAFEs for each of the domains with a 2/2 between the program manager and the specific domain allocator. The funds for the grants program will flow from the treasury into the Grants SAFE. This SAFE will hold the funds related to operational costs, committee compensation, and the grants budget. Funds that will be disbursed to the proposers will reside in the domain-level SAFEs.
After the end of two quarters, the grants committee and the Arbitrum community shall evaluate the performance of each domain using publicly available data and decide to eventually, renew the program and, if so, change any specification of the domains, the domain allocators or the program manager.
To ensure predictability of the funding of the program and a proper runaway, upon receiving the amount from the DAO, the DAs alongside the PM will convert it in stables. If the protocols request it, specific grants or milestones might be paid in $ARB by converting the needed amount at the moment of payout.
Arbitrum DDA program closed accepting new proposals from mid February. If the program will be renewed in the terms above, the DDA program will take care, alongside the evaluation of new proposal, to keep evaluating the milestones of the previous program, thus allowing for the continuity of the previous iteration in an accountable way for grantees.
Compensation
We propose the following payment structure for the PM and DAs, with a base salary of $100/h and an increased projected workload of DA by 33% compared to the previous program, in consideration of the fact that DA not only have on average worked more than what initially was expected in the previous program, but also that they will need to spend time to cross evaluate all proposals above $25,000. On the other hand, the compensation of the PM is instead unchanged.
We are also adding overhead for an extra 6 months, equivalent to 20% of full-time salaries, for the Domain Allocators and the PM to keep evaluating the milestones of the grantees after the natural end of the program. This will ensure the proper continuation of the program and the followup with grantees, despite the program potentially not being renewed if so decided by the DAO. In case the program would be renewed with the same structure and people, or in case the milestone verification would come to an end before the due time, any leftover would be given back to the Arbitrum DAO.
| Role |
Monthly Cost |
Total |
| Program Manager and Questbook |
$10000 |
$60,000* |
| Domain Allocator |
$8000 |
$192,000 |
| Overhead for extra 6 months |
$8400 |
$50,400 |
| Operations Cost, Misc. |
|
$10,000 |
|
Totals: |
$312,400 |
*Note: Questbook will provide the grants committee its grants orchestration tool at a cost of $5000 per month, included in the numbers above with the PM’s payment.
As per the above, the current costs to run program would be 7.8% of the overall budget of the grant program.
- We suggest that the grants committee continue with Synapse for KYC services and Docusign for all contractual agreements, as we have been using these services throughout the Arbitrum DDA program 1.
- However, for any specific asks from the grants team in order to run the process more smoothly, Questbook will charge for any additional feature requests based on the development overhead through a retrospective grant proposal from Arbitrum at the end of two quarters.
Read the whole proposal on the forum for Domain Allocator roles, responsibilities, KPIs, and Expectations
