Arbitrum is a protocol that makes Ethereum transactions faster and cheaper. Developers use Arbitrum to build user-friendly decentralized apps (dApps) that can take advantage of the scalability benefits of the Arbitrum Rollup and AnyTrust protocols

Arbitrum's flagship chain, Arbitrum One, was launched in 2021. This was quickly followed by the launch of Arbitrum Nova, a separate AnyTrust chain built for ultra low-cost transactions. In August 2022, Arbitrum One was upgraded to the Arbitrum Nitro stack, bringing a 7-10x upgrade to its scaling capabilities.

The distribution of $ARB governance tokens decentralizes governance of Arbitrum One and Arbitrum Nova and their underlying protocols. $ARB tokens can be used to vote on Arbitrum DAO governance proposals, allowing $ARB holders to collectively shape the future of Arbitrum protocols and chains. Token holders can also delegate their voting power to delegates.

The Constitution of the Arbitrum DAO

Source: https://docs.arbitrum.foundation/dao-constitution

This Constitution of the ArbitrumDAO takes effect on the date upon which AIP-1 is posted, located at https://forum.arbitrum.foundation/t/aip-1-arbitrum-improvement-proposal-framework/30.

Some of the rules and procedures of this Constitution will be enforced directly by smart contracts on a blockchain, and some will not. All rules are equally binding. Actions taken under this Constitution may be on-chain or off-chain actions. On-chain actions are those that are actuated directly by the governance smart contracts of the DAO as transactions on a blockchain. Off-chain actions are those that are actuated by other means.

This Constitution also includes some "recommended guidelines" which are non-binding but strongly recommended as good governance practice.

This Constitution describes the procedures by which it may be amended. For more information regarding the governance framework of the ArbitrumDAO and Arbitrum Foundation, please see AIP-1.

Initial token allocation

Initial supply cap: 10 billion

Arbitrum emissions and what to watch

Source: Arbitrum emissions and what to watch-lilydu811

Step 1: Analyze The proposal AIP-1: Arbitrum Improvement Proposal Framework https://forum.arbitrum.foundation/t/aip-1-arbitrum-improvement-proposal-framework/30 and watch out for the formation of the DAO

The proposal will make decisions on:

• DAO Treasury: 3,527,046,079 $ARB tokens have been transferred to the DAO Treasury. The ArbitrumDAO will have direct on-chain governance powers over the DAO Treasury
• The Arbitrum Foundation Administrative Budget Wallet: For the sake of operational and administrative efficiency, a separate account controlled by The Arbitrum Foundation will be created (“Administrative Budget Wallet”). 750 million $ARB tokens will be transferred to the Administrative Budget Wallet for purposes of making Special Grants, reimbursing applicable service providers for the Total Setup Costs and covering ongoing administrative and operational costs of The Arbitrum Foundation.

Step 2: Similar to optimism incentives, the Arbitrum DAO treasury, especially the 750M ARB token, will probably be used to fund grants/ incentives for projects. since the DAO will have governance powers over the DAO Treasury, I expect to see proposals requesting incentives will be submitted publicly on the governance forum and will be voted on by the DAO.

Check the proposals here and the governance process here (written by the Messari team)

Step 3: Expect to see Grant proposal template similar to this: https://gov.optimism.io/t/season-2-grant-proposal-template/3233. when the template is published, that is a signal saying incentives are about to run

Step 4: Go through proposals and look for which one will receive incentives from Arbitrum and how much, and when the incentives would start to consider ape in. I would look for the following information of projects receiving incentives:

• What are they? what do they do? who behind the team?
• How much incentives they are asking for?
• Their grant recipient address (to keep track on when the incentives have been sent)

A good thread/ check list here: https://twitter.com/Defi_Maestro/status/1636364217992478720

What conclusion I should have after all:

• What kind of projects arbitrum would airdrop? and why do they spend incentives on them? similar to a startup, spending money on anything in the early phase of development implies the development direction of the ecosystem in the year or the next several years.
• Why has Arbitrum bootstrapped its ecosystem in the opposite way compared to Optimism and would that help them maintain the competitive edge over its competitors as well as zk-rollup technology coming up?

Comparison between Optimism and Arbitrum airdrops/ incentives

• Optimism: the airdrop took place when TVL was little and the ecosystem was not big, robust or as active as Arbitrum atm. The token issuance was to bootstrap liquidity and onboard users.
• Arbitrum: TVL is good, the number of transactions is good, and they successfully onboarded people on-chain even before issuing the token. My pondering question still: why has Arbitrum done the opposite and would that help them maintain the competitive edge over its competitors as well as zk-rollup technology?
• Since TVL on Arbitrum is quite big, the incentives should be bigger to bootstrap even more, I do expect the incentives from Arbitrum would be bigger than Optimism.

Inspired by Lily's note, I created this dashboard to monitor the arbitrum ecosystem and find investment opportunities.

Click: Arbitrum emissions and what to watch-lilydu811

Council Wallet Monitor