AIP-7: Operating Expenses Request

Since AIP-6 passed in October 2021, the ARCx team requested $1,415,000 USDC from the ARCx DAO for operating expenses. This has lasted approximately 10 months marking an average of $145,000 USDC of run rate to be spent.

Since then the team has used that money to:

• Ship the beta ARCx Credit product which includes the DeFi Credit Score in addition to a lending/borrowing money market that natively integrates the score to offer unparalleled capital efficiency.

• Succeed with initial pilot customers on the Platform side of ARCx where we use our data capabilities to help other DAOs. While current customer conversations are confidential, our work with JuiceboxDAO is public and demonstrates the tip of the iceberg.

• Grow the ARCx team to over 10 full time and restructuring into two official cross-functional teams (defined as Credit and Platform).

In the coming 12 months we intend on making critical improvements in the three following areas:

• App: The ARCx app team will continue to invest in features that enhance the safety and user experience of borrowing in DeFi. These will include features that support the avoidance of liquidations (such as a notification services and a private funding address for emergency collateral top ups), as well as various improvements to the front-end design and user experience of the app generally. As we speak with ARCx Credit customers to learn from their experience using the app, it is expected that new and unforeseen features or improvements may be prioritized in the roadmap to address these demands. These new priorities will be communicated proactively through our regular community calls.

• Risk: The ARCx risk team will focus on expanding the value proposition of ARCx Credit to new borrowers and working to validate the viability of credit score based borrowing in DeFi. To that end, the key near-term priorities will include releasing the Credit Report, a detailed and personalized report explaining the calculation of an individual Score, and the Risk Dashboard, a series of metrics and charts that substantiate system risk across ARCx Credit. In addition to this, the team will also manage the continuous work streams of optimizing risk parameters, introducing new collateral types, and integrating new data sources to expand the coverage of the DeFi Credit Score.

• Infrastructure: The ARCx infrastructure team will focus on improving the speed, security and efficiency of the merkle root oracle. The primary metrics that drive improvements in end user experience for our infrastructure will be recalculation frequency (i.e. how often attributes are recalculated in the ARCx data stack) and the publishing frequency (i.e. how often attributes are updated and made available for verification on-chain). However, improvements in these areas need to be balanced by continual investment in security and reliability. To that end, the key priorities for Infrastructure will include improving ledger storage to optimise scanning costs, and performing just-in-time ledger parsing to optimize computation times. Beyond this, the team will also be responsible for preparations and response to our upcoming audit with Trail of Bits in October 2022.

The Core Team would like to request funding from the ARCx DAO for the next 12 months of operational expenses:

• $1,500,000 for salaries for current and future team members and contractors;
• $100,000 in security, contract deployments and contract testing;
• $50,000 in operating expenses (hosting, infrastructure etc); and
• No ARCx tokens are being requested as we already have enough from the previous AIP.

These funds will be paid after the vote passes on Snapshot and any remainder as of July 2023 will be either:

• Rolled into the next successful proposal for requesting funding; or
• Sent back to the Treasury if the following proposal fails.