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AIP-1: Arbitrum Improvement Proposal Framework

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Arbitrum DAO

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Category: Constitutional - Process

Submitted by: Lemma Ltd

Abstract

This document (“AIP-1”) proposes the structure of a decentralized autonomous organization called the ArbitrumDAO that would be governed by holders of $ARB, the decentralized token that will serve as the primary token for fostering, developing, authorizing and/or governing the ArbitrumDAO-approved chains (as defined in the ArbitrumDAO Constitution). The ArbitrumDAO Constitution, located at https://docs.arbitrum.foundation/dao-constitution is incorporated herein by reference.

Motivation

The Arbitrum Foundation, a Cayman Islands foundation company, which will serve the ArbitrumDAO community and be governed by it, aims to foster the growth and development of the Arbitrum ecosystem.

The ArbitrumDAO will have the ability to submit Arbitrum Improvement Proposals (“AIPs”), vote on them and make them a reality through The Arbitrum Foundation.

The guiding values of The Arbitrum Foundation and ArbitrumDAO are described in Section 5 of the ArbitrumDAO Constitution and are incorporated herein.

Rationale

The Arbitrum Foundation serves the ArbitrumDAO by administering the wishes of the community and otherwise adhering to its guiding values. The Arbitrum Foundation and DAO governance are intended to serve as vehicles enabling impactful, transparent and fair decentralized governance by the broader Arbitrum community.

Through the submission of AIPs, the ArbitrumDAO will be able to collectively decide and effectuate changes ranging from core protocol technology to non-technical decisions that otherwise impact the community and $ARB tokenholders.

Specifications

Governance powers breakdown

1. $ARB Tokenholders

$ARB tokenholders, who make up the ArbitrumDAO, play the most critical role in the proper functioning of decentralized governance in the pursuit of a trustless, transparent and verifiable Arbitrum ecosystem. As Arbitrum is intended to be a public good, it is only right that governance over it should be governed by those for whom such public good is intended for.

$ARB tokenholders have the ability to directly propose, vote on and effectuate on-chain AIPs with respect to the ArbitrumDAO-approved chains.

2. Special Grants

The Arbitrum Foundation shall be permitted to issue grants out of the Administrative Budget Wallet without undergoing a full on-chain AIP process (such grants, “Special Grants”).

The rationale behind the ability of The Arbitrum Foundation to issue Special Grants is to avoid inundating governance with grant applications, while at the same time alleviating voter fatigue.

The Special Grants application process and criteria will be released at a later date by The Arbitrum Foundation.