Transparency report: Initial foundation setup
++ Introduction +
++ The establishment of The Arbitrum Foundation, a Cayman + Islands foundation company, was a critical first step + in the establishment of the DAO. The Arbitrum + Foundation serves the ArbitrumDAO community and is + governed by it, aiming to foster the growth and + development of the Arbitrum ecosystem while remaining + accountable to the community. +
++ This document acknowledges the actions that were + required in advance of the DAO setup in order to + legally comply with registration and operational + requirements. The Arbitrum Foundation believes it is + important for the community to understand all actions + taken in the lead-up to DAO formation (especially for + one as large as this), and therefore seeks to describe + documents and activities conducted by the Foundation + on the DAO's behalf. +
++ This document sets forth a transparent summary of what + has occurred thus far; the structure of a + decentralised autonomous organisation (the + "ArbitrumDAO"), that is governed by holders + of $ARB, responsible for fostering, developing, + authorising and governing the ArbitrumDAO-governed + chains (as defined in the + ArbitrumDAO Constitution) and its governance powers over The Arbitrum + Foundation. +
++ The ArbitrumDAO has the ability to submit Arbitrum + Improvement Proposals + ("AIPs"), vote on them and + approve through on-chain execution or actions of The + Arbitrum Foundation. The guiding values of The + Arbitrum Foundation and ArbitrumDAO are described in + Section 5 of the + ArbitrumDAO Constitution. +
++ Through the submission of AIPs in line with the + constitution, the ArbitrumDAO is able to collectively + decide and effectuate changes ranging from core + protocol technology to non-technical decisions that + otherwise impact the community and $ARB tokenholders. + Throughout this transparency report below, it's + noted where decisions made during Foundation setup can + be modified by an AIP, and the process for doing so. +
++ 1. Foundation Governance: Directors +
++ As a Cayman Islands foundation, The Arbitrum + Foundation is required to have at least 1 director + responsible for the management and operation of The + Arbitrum Foundation, in particular approving and + entering into contractual arrangements on behalf of + The Arbitrum Foundation (i.e., the parties actually + approving and signing agreements). These directors + were required to be appointed as part of the initial + set-up of the Foundation. +
++ The initial directors of The Arbitrum Foundation are + the following individuals: +
+-
+
- + Campbell Law is the founder of + Silverside Ltd, and co-founder of Provenance Ltd. He + has over 30 years' experience in the financial + services industry in the Cayman Islands. He has + considerable experience working within the offshore + world including 11 years as a VP at Goldman Sachs + and now focuses on corporate governance for Cayman + Islands entities. + +
- + Edward Noyons is a director of + Marfire and co-founder of Autonomous and is focused + on providing directorship and DAO services to web3 + funds, DAOs / foundations and OpCo’s. He most + recently served as an audit director at a Big-4 + Audit, Tax and Advisory firm where he worked for 11 + years, 8 of which were in the Cayman Islands. + +
- + Ani Banerjee worked at Citigroup, + Cheyne Capital and BlackRock, as an investor, for + the first fourteen years of his career. Since 2017 + Ani has been a private investor in various companies + and advises them closely on strategy and corporate + governance. + +
+ As laid out in the Foundation's governing + documents, the ArbitrumDAO has significant authority + over the directors as it may remove or elect The + Arbitrum Foundation's directors, or expand or + reduce the number of directors + at any time pursuant to a + Non-Constitutional AIP. +
++ 2. Initial Set-up Costs of The Arbitrum Foundation and + ArbitrumDAO and Initial Operating Funds +
++ The Arbitrum Foundation incurred pre-launch costs to + set up the Arbitrum DAO and governance. The work + included careful consideration and guidance of legal + structures and technical expertise and development. + This was done in the spirit of providing a safe, legal + and technical framework to allow the DAO to + self-govern on a trusted platform, and to allow for + the safe transfer of the Arbitrum One and Arbitrum + Nova networks to the DAO from both a technical and + legal perspective. +
++ With the launch of the ArbitrumDAO, the responsibility + for operation of the Arbitrum network was transferred + to the ArbitrumDAO. As part of its responsibilities to + the DAO, the Foundation has assumed the costs of + paying for operations, blockchain operation, + infrastructure, service contracts, and ongoing + improvements to the Arbitrum ecosystem. In addition, + the net on-chain fee revenue (the net difference + between fees collected by on-chain operations and L1 + fees paid by the Sequencer) from the Arbitrum One and + Arbitrum Nova chains is now being sent to the + ArbitrumDAO treasury. As such, the ArbitrumDAO will + need to ensure The Arbitrum Foundation is adequately + funded going forward to continue operating core + infrastructure for the Arbitrum network including the + Sequencer and public RPC interface. +
++ In total, 7.5% of the token supply was distributed to + the Foundation when the token supply was generated. + 0.5% of $ARB tokens were needed to complete initiation + of the DAO. Of the 0.5%, 0.4% of $ARB tokens were + provided as a loan as previously disclosed. The other + 0.1% was sold to meet the obligations of initial + governance setup and initial and near-term operating + funds. This has been distributed to the Foundation in + order to satisfy these upfront and near-term costs on + behalf of the DAO. +
++ These tokens were intended to fund the following + expenses: +
+-
+
- + DAO administration setup and registration fees + +
- Legal costs +
- Chain service provider fees +
- Director fees +
- Fund near-term operating costs +
- Contracts with third parties +
+ Aside from the distribution to the Administrative + Budget Wallet, 35.27% of the token supply was + distributed to the on-chain DAO treasury, 11.62% to + individual wallets, and 1.13% have been allocated to + DAOs in the Arbitrum ecosystem. +
++ 3. On-Chain DAO Governance +
++ The Governance Structure was established in line with + the + The Constitution of the Arbitrum DAO. +
++ Governance powers breakdown +
+1. $ARB Tokenholders
+-
+
- + $ARB tokenholders, who make up the ArbitrumDAO, play + the most critical role in the proper functioning of + decentralised governance in the pursuit of a + trustless, transparent and verifiable Arbitrum + ecosystem. As Arbitrum is intended to be a public + good, it is only right that governance over it + should be directed by those for whom such public + good is intended. + +
- + $ARB token holders have the ability to directly + propose, vote on and effectuate on-chain AIPs with + respect to the ArbitrumDAO-governed chains. + +
2. Security Council
++ The Security Council is a committee of 12 members of a + multi-sig wallet which has the ability to perform both + Emergency and delayed Non-Emergency Actions, further + detailed in Section 3 of the + ArbitrumDAO Constitution. +
++ The Security Council was required to be operational at + the time the DAO launched, as they would be required + to mobilise in cases where a critical vulnerability + has been identified that could significantly + compromise the integrity or availability of a chain + governed by the ArbitrumDAO, or to ensure that any + actions of the DAO abide by the rules of the + Constitution. +
++ The initial Security Council members, split by cohort, + are as follows: +
+i. September Cohort
+-
+
-
+ Mo Dong
+ is the Co-Founder of Celer Network. Mo received a
+ PhD from the University of Illinois Urbana-Champaign
+ in computer science.
+
-
+
-
+
0x526C0DA9970E7331d171f86AeD28FAFB5D8A49EF+
+
+ -
+
-
+ Harry Kalodner
+ is Co-Founder and CTO at Offchain Labs. Harry
+ started working on building Arbitrum while studying
+ at Princeton University.
+
-
+
-
+
0xf8e1492255d9428c2Fc20A98A1DeB1215C8ffEfd+
+
+ -
+
-
+ Diane Dai
+ is the Co-Founder of DODO, a leading decentralised
+ trading platform. Diane has extensive marketing
+ experience in Defi space since 2017 and was named to
+ Forbes Asia 30 under 30 in 2022.
+
-
+
-
+
0x0E5011001cF9c89b0259BC3B050785067495eBf5+
+
+ -
+
-
+ Caleb Lau
+ has been a software engineer at Etherscan since
+ 2019. He works closely with L2 scaling teams to
+ bring users the Etherscan experience on the explorer
+ front.
+
-
+
-
+
0x8688515028955734350067695939423222009623+
+
+ -
+
-
+ Ed Felten
+ is Co-Founder and Chief Scientist at Offchain Labs.
+ Prior to this, Ed served as the Robert E. Kahn
+ Professor of Computer Science and Public Affairs at
+ Princeton University. Ed also served as the Deputy
+ U.S. Chief Technology Officer from 2015-17.
+
-
+
-
+
0x6e77068823f9D0fE98F80764c21Ec294e4d96AdB+
+
+ -
+
-
+ Bryan Pellegrino
+ is Co-Founder and CEO at LayerZero Labs, an
+ omnichain interoperability protocol. Bryan is a
+ multi-time founder/serial entrepreneur who has been
+ active in crypto for more than 10 years.
+
-
+
-
+
0x8e6247239CBeB3Eaf9d9a691D01A67e2A9Fea3C5+
+
+ -
+
ii. March Cohort
+-
+
-
+ Patrick McNab
+ Is a Co-founder of Mycelium which has been
+ developing and deploying decentralised financial
+ infrastructure since 2018. Mycelium (previously
+ Tracer DAO) were one of the first protocols deployed
+ on Arbitrum in 2021 and support the Arbitrum
+ ecosystem through running validators and Chainlink
+ nodes.
+
-
+
-
+
0x566a07C3c932aE6AF74d77c29e5c30D8B1853710+
+
+ -
+
-
+ Justin Drake
+ has been a researcher at the Ethereum Foundation
+ since 2017. He focuses on Ethereum consensus layer
+ upgrades.
+
-
+
-
+
0x5280406912EB8Ec677Df66C326BE48f938DC2e44+
+
+ -
+
-
+ Bartek Kiepuszewski
+ has been a blockchain architect at MakerDAO since
+ 2017. He also co-founded
+ l2beat.com
+ and TokenFlow Insights. Bartek holds a PhD in
+ computer science from Queensland University of
+ Technology.
+
-
+
-
+
0x0275b3D54a5dDbf8205A75984796eFE8b7357Bae+
+
+ -
+
-
+ Rachel Bousfield
+ has been a software engineer at Offchain Labs since
+ 2021. She is currently leading the development of
+ Stylus.
+
-
+
-
+
0x5A1FD562271aAC2Dadb51BAAb7760b949D9D81dF+
+
+ -
+
-
+ Patricio Worthalter
+ has been working full time in the Ethereum space
+ since 2015. In 2018 he founded POAP, a web3 native
+ public good that mints digital collectibles for the
+ preservation of memories.
+
-
+
-
+
0xf6B6F07862A02C85628B3A9688beae07fEA9C863+
+
+ -
+
-
+ Yoav Weiss
+ is a security researcher at the Ethereum Foundation
+ and has been building in the Ethereum space since
+ 2017, working on account abstraction (ERC-4337),
+ OpenGSN, L2 security, etc. Yoav brings over 25 years
+ of experience and has developed security
+ technologies used by industry leading companies.
+
-
+
-
+
0x475816ca2a31D601B4e336f5c2418A67978aBf09+
+
+ -
+
Compensation:
+-
+
- + Security Council members are each paid $5,000 per + month in $ARB tokens for their time, expertise, and + efforts in serving the community. + +
Security Council Elections:
+-
+
- + Section 4 of the + ArbitrumDAO Constitution + describes the Security Council election process. + +
+ For absolute clarity, as laid out in the Constitution, + the DAO may appoint and elect members of the Security + Council and may even expand or reduce the powers of + the Security Council through a constitutional AIP. +
++ 3. Data Availability Committee (Arbitrum Nova chain + only) +
++ Transactions occurring on the Arbitrum Nova chain are + settled on Ethereum mainnet, but, unlike transactions + occurring on the Arbitrum One chain, the underlying + transaction data batches are posted and stored by the + members of the Data Availability Committee on a + Data Availability Server + (and not on Ethereum mainnet). The Committee has + already been providing this service for the Arbitrum + Nova chain for the past 6 months, ensuring its speed + and security. +
++ The initial members of the Data Availability Committee + of the Nova chain are authorised representatives of + the following parties: +
+-
+
- Reddit, Inc. +
- ConsenSys Software Inc. +
- QuickNode, Inc. +
- P2P +
- Google Cloud +
- Offchain Labs, Inc. +
- Opensea Innovation Labs Private Limited +
+ Data Availability Committee members can be appointed + and removed at any time pursuant to a Constitutional + AIP approved by the ArbitrumDAO. In the event that a + Data Availability Committee member is removed (and not + otherwise replaced) pursuant to a Constitutional AIP + approved by the ArbitrumDAO, or in the event that a + Data Availability Committee member resigns without a + replacement, the Security Council may execute an + emergency action (9-of-12 approval required) to + appoint a replacement for such removed or resigned + Data Availability Committee member. +
++ The decision was made for a distribution of 20% of the + L2 base fee on the Arbitrum Nova chain with a split of + 8% to the Data Availability Committee and 12% to the + Arbitrum Nova Validators. These entities are critical + given the security, availability, and performance that + they provide to Arbitrum Nova, with this distribution + enabling these groups to provide continued support. + This allocation can be reduced, expanded, or + eliminated pursuant to a Constitutional AIP approved + by the ArbitrumDAO. +
++ The DAC and Validators are only given a share of the + base fee but not congestion fees, so that no member + will be incentivized to promote on-chain congestion. + 100% of Nova's congestion fees and the remaining + 80% of its base fee is sent to the DAO treasury. +
++ 4. Arbitrum Voting Protocol Procedure +
++ Section 2 of the + ArbitrumDAO Constitution + lays out the AIP process and voting procedures, as + well as the various categories of AIPs and is not + incorporated in this report. +
++ There are several governance avenues available, each + serving its own purpose. +
+-
+
- + Discourse: + https://forum.arbitrum.foundation/ + is a discourse forum for governance related + discussions. Community members must register for an + account before sharing or liking posts. + +
- + Snapshot: + https://snapshot.org/#/arbitrumfoundation.eth + is an off-chain voting interface that allows the + community to signal sentiment on the proposed AIP. + +
- + Tally: + Tally.xyz + serves as the initial on-chain voting platform for + the ArbitrumDAO to submit and vote on AIPs + +
+ Tally serves as a front-end user interface that allows + DAO members to do several things, namely: +
+-
+
- Create AIPs; +
- View delegates and their voting share; +
- Re-delegate votes to a different delegate; +
- View current and past AIPs; +
- + Vote on AIPs on-chain, interacting with the on-chain + governance contracts via the Tally front-end; and + +
- + View the status of AIP execution during all voting + stages + +
+ The process of voting, choice of any of the tools, and + length of voting can be changed by the community + through a Constitutional AIP. +
+