Abstract

We propose a program for rewarding active delegates focused solely on their voting record and making public their voting rationale. This is the first of a series of upcoming proposals under the umbrella of a DAO Incentive Program (DIP 2.1).

Motivation and Rationale

A delegate is defined as a party with voting power who votes on proposals. It narrowly focuses on voting and aiding sentiment analysis of why a proposal passed (or failed).

With this in mind, there are three overarching goals that this program is trying to achieve:

• Increased active voting power. The total amount of active voting power is steadily increasing over time.
• Reduce voter apathy. The share of active voting power compared to total delegated voting power is increasing over time.
• Sentiment analysis. Sufficient publicly available information to aid understanding and gain insight on decisions made by the DAO.

This program can be considered successful if delegates are incentivized to continue participating and new delegates step up to participate in the DAO’s voting system. As well, if a proposal does fail, then the proposer should have the ability to gauge sentiment of various voters across the DAO based on the public feedback they leave on the forum.

Specification

This program is designed to be objective and on a per-proposal basis.

Eligibility requirements

Any delegate who has satisfied the following eligibility criteria can receive a payment provided that:

• Actionable requirements:

  • They cast a vote on a proposal,
  • They publicly post rationale for how they voted and why (within 5 days of a proposal ending).

• Prior requirements:

  • They have cast votes in at least 75% of all proposals in a given month,
  • They expressed interest to participate in the program and passed compliance requirements with the OpCo,
  • They have the minimum voting power (specified in budget),
  • Sufficient votes (FOR/ABSTAIN/AGAINST) cast that achieves quorum target*,
  • The proposal follows the process outlined in the Arbitrum Constitution.

Additionally, delegates must adhere to the program’s terms and conditions in order to remain eligible. Any proposals related to this program will not be eligible for rewards, to avoid any possible conflicts of interest.

*AGAINST does not typically count towards quorum, but for the purpose of this program, it will be included in the count towards quorum for the purpose of issuing rewards. The intention is to enable delegates to vote according to their preference such that ‘quorum’ is always hit even if not officially.

Incentive Budget per Quarter

Proposal type	Incentive Budget	Payout Cap	Minimum voting power
On-chain constitutional quorum	15,000 USD	700 USD	200k ARB
On-chain non-constitutional quorum	7,000 USD	500 USD	200k ARB
Off-chain decision making (non-constitutional)	7,000 USD	500 USD	200k ARB
Off-chain election	7,000 USD	500 USD	200k ARB
Off-chain temperature check (non-binding)	5,000 USD	300 USD	200k ARB

Table 1: Incentive Budget from November 1st 2025 to January 31st 2026

Every quarter (3 months), the OpCo will decide an incentive budget that is paid on a per-proposal basis, with the following information:

• Proposal type: Type of decision voted on by the DAO,
• Incentive budget: Budget allocated to a single proposal,
• Payout caps (per proposal): Maximum incentive grant a delegate can receive from this proposal,
• Minimum voting power: A delegate must have at least this amount voting power at the start of a proposal's voting period and must also maintain an average voting power at or above this threshold throughout the relevant month, to be eligible for rewards.

The budget is expected to be shared at the start of every quarter and to remain in effect for that quarter. This will provide delegates with predictability on the reward structure while allowing the payout strategies to change over time. For clarity, the proposal’s end date for voting (whether on-chain or off-chain) will be the date used to decide which payout strategy is used. All payouts will be issued in ARB tokens with a 7-day TWAP.

Table 1 provides the initial incentive budget that will be adopted if the proposal is passed. An illustration of how the payouts may look for the DIP 1.7 September Cohort and if all voting power was eligible for the program, can be found here.

Rewards are calculated relative to:

• A delegate’s share of total eligible voting power,
• The portion of the incentive budget remaining at the time of allocation,
• A payment cap that limits the maximum a single delegate can receive.

This is designed to ensure the entire incentive budget for a proposal is fully allocated and the rewards are distributed fairly among the delegates.

The key finding is that the payout cap in the September Cohort effectively redistributes rewards across the delegate set and prevents concentration among those with the highest voting power. This mechanism ensures all participating delegates receive some reward. However, as the total eligible voting power increases to ~300m, the influence of the payout cap becomes less pronounced.

If we assume, in a given month, there are two temperature check proposals followed by a non-constitutional proposal and constitutional proposal, then the DAO as a collective will spend ~$32k.

Based on the DIP 1.7’s September Cohort data, we estimate the following payments for certain sized delegates:

• Above 8 million votes will earn ~$1.8k,
• Above 4 million votes will earn ~$1.6k,
• Above 1 million votes will earn ~$900.

The estimates are subject to change based on participation by voting power. As more voting power participates, the rewards will be diluted, and it will be up to the OpCo every quarter to evaluate this data to set a new budget.

The following metric will be used to track the cost-effectiveness of the program:

• Dollar spent per vote cast. A cost-efficiency metric that measures the total program expenditure divided by the number of votes incentivized. It represents how much funding is required to generate a single vote through the program.

Dollar spent per vote, alongside rewards on a per-proposal basis, enables the DAO to explicitly define a collective cost for the passage of a proposal. The program will need to find a balance that sufficiently rewards delegates to keep them engaged, and onboard newcomers, while keeping a keen eye on the collective cost to the DAO for the passage of a proposal.

Tracking of Rewards

The OpCo is responsible for keeping track of all rewards for delegate voting. It should be available on a public spreadsheet. For clarity, all records should be kept on a per calendar month basis, and payouts should be issued shortly after month’s end. If a proposal's voting phase starts in one month and ends in the next, it will count towards the month in which it ends. When payouts are computed, the program manager (who could either be OpCo or another party) should accurately keep track of total accrued rewards and total payouts, to ensure only the difference carries over to the next month.

Delegates must earn at least $100 before a payment is issued. The allocation will carry over to the next calendar month, but it will expire after 3 months if the threshold is not reached. This is simply to avoid sending dust transactions alongside the overhead in doing so.

Safe-guard Budget

The OpCo reserves the right to offer bespoke incentive grant budgets for specific proposals. For example, if a proposal requires multiple temperature check proposals at the same time (like in the STIP), then all proposals may fall within a single bespoke incentive budget.

The OpCo may decide not to offer any reward. This should be taken in cases to prevent potential abuse such as an avalanche of unnecessary proposals or proposals that are deemed very minor in nature (including canceled proposals). If so, the rationale should be published prior or during the respective proposal’s voting phase.

Facilitated by the OpCo

The Arbitrum OpCo Foundation (“OpCo”) retains the authority to change any aspect of the program and any major change should be published to the DAO.

Additionally, the OpCo are in charge of hiring (and terminating) a program manager (if they choose to do so) with an appropriate service level agreement. It is expected that the program manager will handle the day-to-day operations, but rely on instructions from the OpCo.

This program will initially be run by the Arbitrum Foundation, but will be handed over with the OpCo as it ramps up its own resources to run DAO-programs. For clarity, anything that states “OpCo” in this proposal will be handled by the Arbitrum Foundation from the onset.

Participation Depends on Delegates being Non-Sybil and Human

The program’s goal is to activate unique and human delegates who will express their opinion through voting and sharing rationales. The program will exclude platforms that enable non-human activity (i.e., AI agents) or enable token holders who sell their votes for short-term profits. Additionally, no Arbitrum Aligned Entity nor the program manager will be allowed to earn any incentive payouts.

Budget

The Delegate Incentive Program multisig is holding approximately 7 million ARB. This program, alongside upcoming proposals under the umbrella of a DAO incentive program, will absorb the entire budget.

The OpCo will use this budget for:

• Payouts related to the program,
• Program manager compensation,
• Other miscellaneous costs that arise.

The program manager’s compensation and scope of work will be announced if and when it is negotiated by the OpCo. This will be periodically reviewed by the OpCo and any changes will be published to the DAO.

We do not expect miscellaneous costs to be substantial. An initial budget of $50k per year will be allocated. If the costs exceed this budget, then the OpCo’s OAT must approve and notify the DAO.

Finally, a transparency report will be prepared and published every 6 months, to track total spend of any program that falls under the umbrella of a DAO Incentive Program.

Timeline

The intention is for the RAD program to run for 1 year. If the OpCo, based on feedback, deems the program is running well, it may authorise the program to continue operating beyond 1 year. If not, any excess funds will be returned to the DAO Treasury.

The off-chain proposal was posted on December 4th, 2025. A non-constitutional quorum is required alongside more FOR than AGAINST votes for the proposal to pass.

If passed, the program will retrospectively take into account any proposals conducted after the 1st November 2025, and issue rewards in a timely manner.