Arbitrum DAO’s Decision to Support Emerging Projects
The Arbitrum DAO has taken a significant step by approving a $23.54 million one-time “backfund” to bolster 26 projects that previously missed out on its grant funding round. This initiative, which garnered two-thirds of the voting support, is aimed at nurturing and promoting the use of these projects’ applications on the Ethereum Layer 2 network.
Grant Allocation and Impact on the Ecosystem
In a decisive vote, the DAO agreed to allocate 21.1 million ARB tokens (valued at $23.5 million) to projects initially approved for the Short-Term Incentive Program (STIP) grant but failed to receive funds due to budget constraints. The allocation of these additional funds, increasing the STIP’s total budget to 71.1 million ARB tokens, is set to commence after a three-day waiting period. Notably, Gains Network, Stargate Finance, Synapse, and Wormhole are among the top recipients of this backfund.
Diverse Opinions within the Community
The decision to provide additional funding was not unanimous, as evidenced by the one-third of voters, including projects like Camelot and MUX, who opposed it. The dissenting voices called for a more selective approach, advocating for a second round of proposals rather than a blanket backfunding event.
The Rationale Behind the Backfund
A working group was formed to gather sentiment, key data points, and outline the proposal’s structure. The group engaged with stakeholders, including delegates and affected projects, to refine the proposal. The decision to proceed with the backfund was driven by the need to quickly provide resources to approved projects, avoiding delays in a highly competitive environment and maintaining focus on new proposals and long-term ecosystem development.
Motivation and Long-Term Goals
The backfund aims to serve as a catalyst for future grant structures, addressing weaknesses in the original STIP structure. By nearly doubling the sample size and including a diverse array of protocols, the initiative is expected to provide valuable data for designing future incentive programs and growing the Arbitrum ecosystem.
Aligning with Arbitrum’s Core Values
The backfund aligns with Arbitrum’s community values of diversity, neutrality, and nurturing a thriving ecosystem. The initiative addresses the inadvertent exclusion of smaller protocols in the original grant allocation, ensuring a more inclusive and representative sample for the STIP study. This step is crucial for understanding how incentives impact new builders in the Arbitrum ecosystem, potentially leading to significant growth and innovation.
