Arbitrum DAO Considers $24 Million “Backfund” for Projects Overlooked in Grant Selection
The Arbitrum DAO is debating a proposal that would inject 21.4 million ARB tokens ($24 million) into previously approved projects that failed to reach the 50 million ARB total funding cut-off during the first round of grants for its Short-Term Incentive Program (STIP) last month.
If the proposal passes, the initiative will move to a formal Arbitrum Improvement Proposal as well as an on-chain vote before it is ratified. The goal of the initiative is to foster development and encourage the adoption of the projects’ applications on the Ethereum Layer 2 network.
The 21.4 million ARB tokens would fund an additional 26 projects, adding them to the 29 projects that were initially approved last month. Arbitrum is referring to the proposal as a one-time “backfund” and is seeking to increase its total STIP budget to 71.4 million ARB.
The proposal was created by the Arbitrum STIP Inclusion Working Group after it organized a series of community calls and workshops involving multiple stakeholders. In the proposal, the Group outlined the goals of the initiative.
- Support diverse, emerging builders and make Arbitrum a welcoming environment for new projects
- Double the sample size and diversity of stages and categories in the STIP data set
- Uphold constitutional values of Inclusion vs Exclusion
- Avoid potentially irreversible harm of crushing small, high potential builders
Voting began on Tuesday and will be finalized on November 14. Currently, 90.49% of voters have voted “yes”, 8.23% have voted “no”, and a further 1.28% have abstained.
With the original grant budget set at 50 million ARB, the Working Group has recommended an increase to 75 million ARB in line with the proposal’s guidelines. If the program is approved, it will maintain the timeline and process of STIP 1 and approve an additional 21.4 million ARB in funding until January 31, 2024.
Notable projects that would benefit from the passing of the proposal include DeFi bridge Wormhole (requesting 1.8 million ARB/$2 million), cross-chain platform Synapse (2 million ARB/$2.2 million) and decentralized trading platform Gains Network (4.5 million ARB/$5 million).
Arbitrum’s first grant application round finished last month. The 29 approved projects received a collective total of 49.6 million ARB, the equivalent of around $40 million at the time, with trading protocol GMX receiving the largest grant at 12 million ARB ($15 million).
Lido Finance, the leading liquid staking protocol, was notably absent from the list of approved projects, leading to speculation that voters were hesitant to offer incentives to the project due to concerns about its perceived role in centralizing the Ethereum staking ecosystem.