A Newcomer's Guide to Understanding ArbitrumDAO Proposals
Resources to read and link to
https://docs.arbitrum.foundation/gentle-intro-dao-governance
https://docs.arbitrum.foundation/how-tos/create-submit-dao-proposal
https://docs.arbitrum.foundation/dao-comprehension-check
https://docs.arbitrum.foundation/dao-glossary
https://snapshot.box/#/arbitrumfoundation.eth
https://www.tally.xyz/gov/arbitrum/proposals
Introduction
The 6th article in my writing challenge series explores DAO governance, the way that decisions get made. The resources listed above is what I used to prepare for this piece. I’ll give a quick introduction to the DAO, examine the lifecycle and anatomy of proposals, and give a breakdown of what I learned reading 4 proposals that went through different stages in the life cycle.
I chose to focus on ArbitrumDAO for these reasons:
I'm an $ARB token holder.
They have the most L2 dApps I use.
I hope to write for them.
Arbitrum is a protocol that makes Ethereum transactions faster and cheaper. The ecosystem consists of two primary chains, Arbitrum One and Arbitrum Nova. They are committed to decentralization. This is achieved through the distribution of $ARB governance tokens. These tokens distribute decision-making authority throughout the community, empowering token holders to collectively shape the future of the protocols, their respective chains, and any additional chains the ArbitrumDAO might authorize in the future. The DAO has a total of 335K members
Participation in ArbitrumDAO takes multiple forms:
Direct voting: Exercising your influence by using $ARB tokens to vote on governance proposals
Delegation: Entrusting your voting power to knowledgeable delegates who align with your values
Becoming a delegate: Building reputation within the community so others choose you to represent their interests
Proposal creation and discussion: Developing and refining ideas that could transform the protocol's trajectory
In my previous article on DAOs here, I highlighted a persistent challenge: the lack of voting participation, even with delegation options available. This observation sparked my curiosity. Could proposal complexity, readability issues, or other factors be contributing to this problem? As a newcomer to the ecosystem, I felt that understanding how proposals work became an intriguing first step toward meaningful contribution.
Whether your interests lie in technical development, community building, or governance design, comprehending the proposal process serves as your gateway to effective participation in the DAO.
In this article, I'll share insights about ArbitrumDAO proposals. I'll examine their structure and lifecycle. I'll also highlight examples of effective proposals that caught my attention. My hope is that newcomers will find this guide useful. It may help you take your first steps as a DAO contributor. Or perhaps it will simply introduce you to the world of decentralized governance. My goal is to make the proposal process less intimidating. By understanding proposals better, we can all participate more confidently in shaping these protocols.
Proposal lifecycle and anatomy
Life Cycle of a Governance Proposal:
1. Discuss Proposals: https://forum.arbitrum.foundation/c/proposals/
2. Vote on Proposals (OFF-CHAIN): https://snapshot.org/#/arbitrumfoundation.eth
3. Vote on Proposals (ON-CHAIN): https://www.tally.xyz/gov/arbitrum/proposals
Types
There are two types of Arbitrum Improvement Proposals (AIP): Constitutional and non-Constitutional:
Constitutional AIPs are those that modify the text or procedures of the Constitution or AIP-1, install or modify software on any chain, or take any action that requires "chain owner" permission on any chain.
Non-Constitutional AIPs are all other AIPs, such as those that request funds/grants or provide general guidelines or information to the community.
Structure
Abstract - Two or three sentences that summarize the AIP.
Motivation - A statement on why the Arbitrum community should implement the AIP.
Rationale - An explanation of how the AIP aligns with the Arbitrum community's mission and guiding values.
Key Terms - Definitions of any terms within the proposal that are unique to the proposal, new to the Arbitrum community, and/or industry-specific. This section is optional, but recommended.
Specifications - A detailed breakdown of the platforms and technologies that will be used. This is where you can elaborate on the "why" of your design decisions. You can also use this section to describe alternate designs that were considered and related work, e.g. how similar specifications have been successfully (or unsuccessfully) implemented in other chains or languages.
Steps to Implement - The steps to implement the AIP, including associated costs, manpower, and other resources for each step where applicable. AIPs that involve transactions with third parties (such as grants) will need to ensure that applicable legal documentation and procedures are also included.
Timeline - Relevant timing details, including but not limited to start date, milestones, and completion dates.
Overall Cost - The total cost to implement the AIP. The overall cost section should include a breakdown of the total cost of the AIP, including any associated costs for each step where applicable. Consider both fixed costs and recurring costs.
Proposals Peak
Arbitrum Audit Program (Discussion -> Snapshot -> Tally (Successful))
Key Insights:
Stronger Preference for DAO Governance
Forum round (red dot) showed mixed governance preferences
Snapshot round (green dot) shifted significantly toward DAO control
Top response (51% similarity): “I don’t agree with internalizing into the Arbitrum Foundation”
Consistent Support for Audit Program Concept
Both positions remain high on the value curve
Second top response (51% similarity): “The DAO currently lacks an active audit program, and launching this initiative at the earliest could be highly beneficial”
Strong recognition that “audit support is one of the most frequently requested forms of assistance”
Historical Context Recognition
Increased acknowledgment of ADPC’s past contributions
References to “ADPC has been exceptionally strong at ecosystem growth”
Concern about whether new program can “replicate or improve upon these ecosystem-building efforts”
Arbitrum Onboarding V2: A Governance Bootcamp (Discussion -> Snapshot -> (Tally didn’t pass))
Votes FOR:
Builds the talent pipeline with fellow matching
Good opportunity to train current and new members
Education worthwhile investment
Votes AGAINST:
Budget too high
DAO should not need to pay this
Not convinced this is the best way to go for the DAO
ABSTAIN votes:
Dissatisfaction with the overall structure of the program
Previous involvement in program
Onboarding should take a research-driven approach
ARB Incentives: User Acquisition for dApps & Protocols (Discussion (-> Failed to reach snapshot))
Votes FOR:
New approach to incentives
Metric-based approach to marketing
Support in exposure and amplification valued
Votes AGAINST:
Better to allocate this money for the second drop from the Arbitrum
Use Arbitrum existing grant programs first
Conflict of interest
ABSTAIN votes:
Proposal evolved from an earlier incentive program
Budget too large for an undetermined result
More concrete criteria desired
Grant Request: CyberCash - Driving Crypto Adoption on Arbitrum (Withdrawn)
The proposer decided to withdraw their grant request after observing that most criticism targeted the proposal's structure and process rather than the core concept of CyberCash itself.
Key Points:
They interpreted the lack of fundamental criticism as encouragement to proceed with the project
Instead of waiting for grant frameworks, they're moving forward independently
They're increasing alignment with Arbitrum by:
Launching with a CASH/ARB liquidity pairing instead of CASH/ETH
Purchasing 5,000 ARB to seed the liquidity pool
Permanently locking 100% of that liquidity with no vesting period
They explained how this pairing benefits ARB holders:
Buy pressure on CASH will create equal buy pressure on ARB
Similar to how the TRUMP memecoin launch boosted SOL price
Creates long-term alignment between Arbitrum and CyberCash users
They maintain ambitious goals:
Becoming an "international, multi-trillion dollar currency"
Following Bitcoin's original ambition
Despite withdrawing the funding request, they still view Arbitrum as the ideal blockchain for their project and plan to launch on February 28th