What is STIP?

The Arbitrum Short-Term Incentive Program is a one-time, community-created initiative to distribute up to 50 million ARB from the DAO treasury to active protocols on Arbitrum. The goals are to accelerate ecosystem growth, experiment with grant distribution models, generate data to inform future programs, and uncover new strategies to drive activity on the network. It spans two voting rounds and provides incentives to eligible programs designed to fund incentives through January 31, 2024.

It is expected that all funds distributed by this program will be used by the end of January 31, 2024. Participating grantees will be expected to self report data, dashboards, and summarize grant performance on an ongoing basis. Successful applicants will receive funding distributions biweekly via Hedgey streams.

Grantees must comply with spending guidelines, data reporting, and community standards or risk having their stream halted by the multisig.

How to Apply For Funding?

The Arbitrum Short-Term Incentive Program will accept applications over 2 consecutive proposal Application Rounds. To apply, projects can follow the following steps:

1. Review the Official Short Term Incentives Program proposal here.
2. Draft a proposal for your project using the Application Template.
3. Publish your proposal in the Incentive Framework category for feedback from delegates with your title formatted as: [Project Name] [DRAFT] [STIP - Round 1].
4. Following the application, delegates will have one week to review applications. During this week, applicants may digest critiques and adjust their proposals accordingly.
5. Once feedback has been incorporated, projects will need to change their title from [DRAFT] to [FINAL] by the deadline: October 4, 2023 11:59 PM EST. At that time, all proposals with the following formatted titles will be migrated to Snapshot to vote. The correct format for a proposal ready to move to vote looks like this: [Project Name] [FINAL] [STIP - Round 1].
6. Voting will occur on Arbitrum Snapshot .Once voting commences, the Arbitrum Foundation will reach out with steps to KYC.
7. Once successful votes have been confirmed, the STIP-ARB Multisig will begin the distribution of funds.

What is the Application Timeline?

This program is designed to fund incentive programs running from October 2023 through the end of January 31, 2024. While there is no hard deadline on the end of incentive programs, funds are expected to be distributed as they are received, and programs should aim to end before the end of the incentivization period on Jan. 31, 2024. The program will comprise two application rounds. With the first application round commencing September 20, 2023.

What are the Application Requirements?

Once programs are live, protocols are responsible for upholding their end of the grant program agreement by distributing the funds as described in their approved strategy and providing dashboards for their programs based on the descriptions below.

• Grantees are required to keep distributions in ARB without converting to other assets.
• Grantees must not farm their own incentive programs.
• Grantees must outline a spending plan, provide a pro forma, and state the grant’s objective.
• Grantees must commit to providing data on distributions, all ARB spending transactions, and key metrics like daily TVL, transactions, volumes, unique addresses, and transaction fees. This data should cover 30 days before, during, and after the Incentivization period, and be presented preferably in a Dune Spell/dashboard. Grantees must agree to share all contract addresses being used to distribute incentive rewards.
• Grantees must disclose the contracts being incentivized and denote any external contracts being incentivized as part of the program.
• Grantees can only incentivize contracts on the Arbitrum Network.
• Grants are not to be used in DAO governance (Ie, self-delegating funds or holding funds in a wallet delegated).
• Grantees are expected to not encourage or partake in disruptive behaviors that may delay the funding process such as intentionally directing individuals to or directly spamming the forum to obfuscate true community sentiment’
• Grantees must agree to complete KYC verification with the Arbitrum Foundation in order to receive funds.
• Grantees must apply using the approved program application template 39.

Exceptions may be made only at delegate discretion for non-applicable points (For example, if TVL is irrelevant for a protocol’s dashboard, etc.). Any exceptions must be explicitly demonstrable to the DAO in the protocol’s application.-

What Are the Additional Program Deliverables

In addition to upholding accordance with the aforementioned requirements, protocols are required to uphold their commitment to dashboards and reporting. The expectation of participating grantees is two-fold:

1. To create a dashboard by December 15, 2023 showing daily TVL, transactions, volume, addresses, and network fees covering 30 days before/during/after incentivization. Grantees are encouraged to expand upon these basic requirements, and the commitment to data availability and transparency shown in this program should play a key role in the application process of future programs. We recommend that prospective applicants create the infrastructure/data in place so dashboards are available throughout the incentive program.
2. Provide bi-weekly status updates on the program posted onto the Arbitrum Forum on the application thread. These updates should report on distributions made in the preceding two week period as well as articulate any relevant refinement or adjustment to the program’s strategy.

Outcomes of STIP

Over the past five months since the Arbitrum DAO introduced the Short Term Incentives Program, significant progress has been made, with over 71.4M ARB granted to 56 projects. New proposals and programs have emerged, including the LTIPP and ARDC, alongside key infrastructure grants in areas like open data 5, KPIs 4, and analytics. This consolidates feedback from a series of interviews conducted by @tnorm and aims to synthesize lessons from the DAO’s status post-STIP. It reflects on the progress, lessons, and collective views of the Arbitrum community. These insights offer many actionable learnings for future endeavors. The following summary combines opinions and responses of these Arbitrum DAO community members and are not reflective of @tnorm’s personal opinion nor advice or recommendations for the Arbitrum community. A special thanks to all contributors who shared their perspectives on STIP, incentives, and the future of the DAO.

Learnings

Take-aways from Short-Term incentive Program incentive with insights for future endeavours.

Open Block Labs

Data Monitoring and Detailed report of the STIP Round 1with details of the grantees, round overview and claims.

Voting Dashboard by Inspex

Detailed Dashboard on all the voting data for STIP proposals and results.