RFP-25: Equitable Utilization of Strategic ARB Reserve for Incentives Across Mainnet and Arbitrum

Abstract

Acknowledging that RFP-24 did not reach consensus within the Radiant DAO, this revised proposal aims to address the feedback received from the community.

For clarity, this proposal is unrelated to Radiant’s recent qualification for the Arbitrum Foundation's Short Term Incentives Program, and focuses on utilizing the remaining portion of the initial ARB grant received in March 2023.

RFP-25 serves as an extension of RFP-18 and aims to further stabilize and grow the Radiant protocol’s liquidity pools. RFP-18 codified the Radiant DAO’s plan for the initial allocation of 3,348,026 ARB tokens granted to Radiant by the Arbitrum Foundation. As per the ratified terms:

• 40% was successfully allocated to Starfleet Season 1, an airdrop period for new dLP lockers.

• 30% was earmarked for distribution to all Arbitrum lockers as token incentives via the MFD over a 52-week period. This distribution was implemented into the protocol and is currently ongoing.

• 30% of the original ARB allocation (amounting to 1,004,408 tokens) was earmarked for strategic future use. The application of this strategic reserve is what is currently under discussion.

This proposal aims to leverage the Radiant DAO’s remaining strategic ARB reserve to balance rewards between attracting new dLP lockers and rewarding existing contributors, thereby fostering both short-term and long-term protocol vitality.

Feedback Summary and Response

The DAO community expressed various concerns about RFP-24, primarily focusing on equitable distribution and allocation.

Specific feedback highlighted that the proposal was skewed in favor of new dLP lockers and did not adequately reward existing contributors. There was also concern about using Arbitrum-related incentives disproportionately for Mainnet.

In response, RFP-25 aims to strike a balance by introducing a 50/50 split: half of the Strategic ARB Reserve will incentivize new Mainnet locks, and the other half will be streamed as platform fees to all Arbitrum dLP lockers over the next 52 weeks. Given the current high gas costs on Mainnet, the first portion of the split also serves as an implicit gas reimbursement incentive for users locking assets on Mainnet.

Motivation

The successful implementation of Starfleet Season 1 saw substantial growth in new dLP lockers, especially for 6-month and 1-year locks.

Following the ratification of RFP-19, Radiant is in the final stages of deploying the protocol to Mainnet. With this in mind, the DAO has the opportunity to further incentivize long-term commitments by utilizing the final 30% of the initial ARB allocation standing by in the strategic reserve.

The DAO should consider the value of rewarding existing users of Radiant while concurrently attracting whitespace users, bootstrapping the expansion by incentivizing dLP liquidity and TVL.

RFP-25 proposes to utilize the 1,004,408 ARB tokens earmarked for the strategic reserve as follows:

• 50% (502,204 tokens) - Long-term Incentives: To be distributed as platform fees to all Arbitrum dLP lockers over the next 52 weeks, following the usual multiplier rates based on locking length.

• 50% - Starfleet Season 2: Extend the Starfleet initiative to new lockers who commit to long-term dLP locks on Mainnet, thereby harmonizing with the previously passed RFP-18. In accordance with our branding and prior initiative, this will be referred to as Starfleet Season 2. This action is proposed to fortify our Mainnet presence and capture more long-term value for the Radiant ecosystem.

Key Terms

• ARB: The governance token of the Arbitrum Foundation.
• dLP: Dynamic Liquidity Providers within Radiant’s ecosystem.
• Snapshot window: A specific time period determined by block height for measuring on-chain activities. Please note, this term is not to be confused with “snapshot.org,” the on-chain governance system.
• Starfleet: Term used to identify a group of users that the DAO aims to incentivize due to their commitment and vested interest in Radiant’s long-term performance. Not directly tied to the Discord “Starfleet” role in economic terms.
• Starfleet Season 2: An extension of the original Starfleet initiative. The proposed designated timeframe following Radiant’s launch, designed to incentivize long-term dLP locks on Ethereum Mainnet.

Specifications

Long-term Incentives

50% of the remaining strategic reserve (502,204 ARB) to be distributed to all Arbitrum dLP lockers over the next 52 weeks. This will be executed via the protocol’s MultiFeeDistributor contract, the same mechanism used to distribute all other token incentives.

Starfleet Season 2

50% of the remaining strategic reserve (502,204 ARB) to be utilized for Starfleet Season 2, an airdrop period designed to incentivize long-term dLP locks on Ethereum Mainnet.

Snapshot Window

• The snapshot is targeted to commence immediately upon Radiant’s launch on Mainnet, with a contingency window of up to 72 hours for unforeseen circumstances. The start time will be publicly announced.

• The snapshot window will conclude within 30 to 60 days from opening.

• In order to prevent manipulation, the exact duration of the snapshot window will remain undisclosed until it ends.

Qualifying Wallets

• All wallets which lock or relock dLP on Mainnet within the snapshot window will be eligible for the airdrop.

• Like Season 1, only 12-month and 6-month dLP locks will qualify for Season 2.

• Only dLP locked directly via the Radiant protocol will be eligible. dLP locked through a third-party yield aggregator will not directly qualify. The distribution of ARB to dLP locked through third parties is left to the discretion of those protocols.

Distribution

• The strategic reserve of ARB tokens in the RDNT DAO Treasury (502,204 tokens) to be allocated to Starfleet Season 2.

• The airdrop distribution ratio will be implemented in the same manner as the DAO-approved airdrop distribution specifications for Starfleet Season 1.

  • As per RFP-21, the allocation ratio for 12-month locks will be three times that of 6-month locks. This option rewards long-term commitment to the protocol.

• Eligibility for the window is specific to Ethereum Mainnet lock events, but the qualifying ARB airdrop can only be claimed on Arbitrum.

Steps to Implement

For ARB distributed linearly over the next year to all Arbitrum dLP lockers:

In addition to the 19,315 ARB tokens already being distributed weekly to the MultiFeeDistributor as per RFP-18, the DAO will commence a new 52-week period in which an additional 9,657.77 ARB tokens are allocated per week. This amount represents 1/52 of the 50% split of the strategic reserve.

The MultiFeeDistributor will then disburse the ARB tokens in the same manner as it currently distributes protocol fees.

For Starfleet Season 2:

1. Snapshot window will commence as per terms outlined above

2. The snapshot window will conclude within 30 to 60 days from opening

3. A list of eligible wallets will be pulled, accounting for:

   • 6-month & 12-month lockers from within the qualifying block range
   • Total amount locked per duration
   • Applied allocation weighting

4. Integration of the Starfleet Season 2 airdrop into Radiant’s frontend

Overall Cost/Impact

Developmental costs and effort are relatively minimal, given that the framework for the Season 1 airdrop, redistribution approach and claim page is already in place.

Anticipated impact includes stabilizing and growing Radiant’s Mainnet liquidity, while enhancing the protocol’s overall ecosystem vitality across all supported chains, through the utilization of the DAO’s strategic ARB reserve.

Timeline

1. Upon ratification, a new 52-week cycle will commence in which an additional 9,657.77 ARB per week will be linearly distributed via the MFD.

2. Starfleet Season 2 will be coordinated to commence with Radiant’s launch on Mainnet, with the snapshot period opening no later than 72 hours after launch.

3. The snapshot window will conclude within 30 to 60 days from opening.

4. Upon closing, the eligible block window will be announced retroactively.

5. The Radiant app will be updated to allow users to check their Season 2 eligibility.

6. The ARB airdrop will subsequently be distributed to all eligible wallets in the same manner as Season 1.

Voting

• In Favor: Supportive of, agreeing to use the Radiant DAO’s strategic ARB reserve as proposed
• Against: Against implementation of RFP-25
• Abstain: Undecided, but contributing to quorum