Arbitrum DAO integrates oSnap for 45M ARB incentives program
Tldr; The Arbitrum DAO will use oSnap to distribute up to 45 million $ARB to protocols as part of its Long-Term Incentives Pilot Program. oSnap will help the DAO coordinate one of Web3’s biggest incentive programs in a decentralized manner. This integration shows oSnap’s growing prominence in the DAO ecosystem, adding $65 million to its total value secured.
Key takeaways:
The Arbitrum DAO has passed a proposal to launch the LTIPP, with oSnap set to execute payment streams to successful protocols.
The LTIPP is an incentive program that will award up to 45 million $ARB to projects building in the Arbitrum ecosystem, bringing oSnap’s total value secured to ~$875 million.
The Arbitrum DAO will use oSnap as part of a Web3-native tool stack to ensure that the LTIPP is fully decentralized.
The Arbitrum DAO is integrating oSnap for its Long-Term Incentives Pilot Program (LTIPP).
Launched as a follow-up to Round 1 of the Arbitrum DAO’s Short-Term Incentives Program (STIP), the LTIPP aims to support the Arbitrum ecosystem by attracting new users and liquidity. The LTIPP will award up to 45 million $ARB to protocols building on Arbitrum, with oSnap set to trigger the initial payment streams to approved recipients. At $ARB’s market value at the time of writing, the LTIPP adds over $65 million to oSnap’s total value secured.
The Arbitrum DAO will use oSnap alongside Snapshot, Tally, and Hedgey Finance, three solutions that are also regarded as some of the DAO ecosystem’s most prized tools. This stack will allow the Arbitrum DAO to coordinate the LTIPP in a fully decentralized manner.
This integration highlights the value oSnap brings to the DAO ecosystem. It also hints at how the biggest DAOs will coordinate in the future. We explain more below.
What is the LTIPP?
The Arbitrum DAO governs Arbitrum One and Arbitrum Nova, two Layer 2 solutions built to scale Ethereum. Arbitrum is Ethereum’s top Layer 2 rollup, currently holding over 45% market share.
To strengthen the Arbitrum ecosystem, the Arbitrum DAO has recently experimented with incentive programs, distributing ARB tokens to Arbitrum protocols to help them attract users. Many Web3 projects allocate tokens through such programs to improve their liquidity.
In 2023, the Arbitrum DAO launched the STIP to allocate $ARB to a number of approved protocols. However, there were some flaws to the STIP’s structure.
The Long-Term Incentives Pilot Program (LTIPP) is a proposed follow-up to STIP, bringing several improvements that should benefit the DAO and program applicants at once. Key changes include the introduction of a five-member Council to screen applicants and a board of Application Advisors to assist applicants.
In December 2023, Matt Stein, Alex Lumley and Bobby Bola presented a proposal to launch the LTIPP to the Arbitrum governance forum. The proposal later moved to a Snapshot vote, with the majority of tokenholders voting to fund the program with 45,815,000 $ARB.
The LTIPP is a pilot, but if successful, the framework could inform how the Arbitrum DAO distributes incentives on a long-term basis. This is positive news for oSnap and the other tools that the DAO will use for the LTIPP.
How the LTIPP will work
The LTIPP aims to solve issues that arose in Round 1 of the STIP, which allocated 50 million $ARB to successful applicants.
Delegates previously voted on incentive proposals individually, whereas the Council will now screen applicants. This will reduce the onus on voters and accelerate the process.
Additionally, many projects did not receive sufficient feedback on their STIP applications. The Application Advisors will be tasked with offering guidance to applicants before the submission deadline.
The STIP also imposed strict rules on how protocols could offer $ARB as incentives, which stifled innovation. As the Council and Application Advisors will oversee LTIPP applicants, the rules do not to be as stringent.
The timeline for the LTIPP is as follows:
Application period (two weeks) — protocols apply for the program using an application template.
Feedback period (two weeks) — protocols make any necessary edits based on feedback from the Application Advisors.
Screening period (one week) — the Council shortlists the protocols to advance to a DAO vote to receive $ARB according to grading based on pre-determined criteria.
Voting period (one week) — the shortlisted protocols formally present their applications and the Arbitrum DAO votes on $ARB allocations via Snapshot. $ARB payments will be streamed through Hedgey and executed with oSnap.
Incentives period (12 weeks) — $ARB will be streamed through Hedgey to selected protocols on a biweekly basis over 12 weeks.
The LTIPP will use oSnap alongside some of the DAO ecosystem’s most essential products. With Snapshot, the Arbitrum DAO will vote offchain on the protocols to receive an $ARB grant. With Tally, the DAO will vote onchain to transfer the 45,815,000 $ARB to a multisig. Hedgey will distribute the allocated $ARB to approved recipients, while oSnap will execute the first Hedgey payment for each recipient as soon as the DAO approves them.
Together, these Web3-native tools will let the Arbitrum DAO coordinate the LTIPP in a fully decentralized manner. The LTIPP shows how oSnap can make DAO governance work at scale without compromising on the space’s core tenet — decentralization.
Trustless DAO governance at scale
The Arbitrum DAO is one of Web3’s biggest DAOs, and the LTIPP is one of its biggest incentive programs.
The launch of the LTIPP illustrates oSnap’s growing standing in the DAO ecosystem. Since launching in February 2023, a variety of DAOs large and small have successfully used the solution to operate in a trustless manner.
The Arbitrum DAO’s move to adopt oSnap shows how the solution can help large-scale DAOs improve their decentralization. It also offers a preview of how oSnap could secure billions of dollars in the future. The LTIPP boosts oSnap’s TVS to ~$875 million, and that number is likely to continue growing as more leading DAOs use it for incentive programs and other treasury allocations.
The application period for the LTIPP is open now, with oSnap set to execute the first $ARB payments to selected protocols when the voting period ends in the coming weeks.
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Words by @dreamsofdefi
