Motivation
Recently Balancer and Aura contributors have collaborated to submit a grant proposal for additional ARB. Further, the Ballers are working on a Proposal for the Arbitrum Short Term Incentives Program . Additionally, automating manual work in calculating incentive flows is a high priority for the Maxis in Q3, and the current program requires manual work and is schedule to run past the end of the quarter.
As part of our work on grants and automation, a new automated calculation system for how the ARB would be distributed has been built. This BIP proposes to change the current distribution of incentives to align with the program and automation proposed in the grant.
Details about the newly developed Automation
The current program matches Bribes for Arbitrum pools with Bribes. The new program is based on veBAL voting and + some situational boosts.
The new program distributes based on the following rules:
- 10,000 $ARB is emitted towards the USDC/USDC.E/DAI/USDT (core USD liquidity)
- Vote weight for all $ARB gauges is considered
- Boosts are applied to provide more ARB to pools seen to have added benefit to the ecosystem, and caps are in place to prevent too much gaming of the system.
- All remaining $ARB for the given epoch is distributed to gauges based on relative vote weight.
Starting to use this program now will reduce the need for manual work in the Maxis, which is a key priority this quarter. It will also allow us to start generating some performance metrics for this planned distribution method, which will be proposed in an upcoming Arbitrum Grant.
Proposed changes to funding
While the program has capacity for upto 100,000 $ARB per 2 week epoch, the maximum ARB distributed per epoch based on this matching was 73,187 $ARB for the round starting August 24th with 45,560 distributed in the last round starting September 7th.
The new program distributes all available $ARB each epoch… As such, it is suggested to reduce the amount spent per 2 week epoch to 80,000 $ARB. this seen in the model below, this has a large positive impact on ARB incentives, while allowing some $ARB not to be spent by this program. Remaining $ARB can be used by future governance to bridge gaps between grants or to incentive specific pools outside a committed grants program.
Proposed Changes to Timing
It is further proposed that this program ends early, if $ARB from the Short-Term incentives Grant is available and starts being paid out, expect on or around October 7th. Otherwise, the program will continue to run until it’s planned end after 10 2-week Epochs. The next round starting on September 21st will be the 5th epoch.
Example Output from new method
The table below compares results from the last epoch of $ARB incentives vs what would have been emitted under the proposed program:
See: Copy of ARB Allocations for change BIP - Google Sheets
Specification
Starting September 21st the new automated calculation will be used to distribute ARB under BIP-322.
The remaining 480k ARB required to pay out the remaining 6 epochs base on the plan proposed above should be transferred to the ARB injector here.
All future BIP-322 payments scheduled in this commit should be deleted.
Author
Note that this BIP was substantially changed from @solarcurve’s original post by @Tritium with his permission.