Arbitrum DAO Approves Additional Funding for STIP Proposals

The Arbitrum DAO, a layer-2 networking system designed to enhance Ethereum blockchain scalability, has recently taken a significant step in expanding its Short-Term Incentive Program (STIP). The DAO, governed by ARB token holders and financed through transaction fees, voted to increase its STIP budget by $23.4 million. This decision was made during a community vote held from November 18 to December 2, 2023.

The proposal aimed to provide additional funding for projects that had previously been approved but not financed due to the initial 50 million ARB token cap set for STIP. The recent vote led to the allocation of an additional 21.1 million ARB tokens, equivalent to approximately $23.4 million, thereby expanding the overall STIP budget to 71.4 million ARB tokens.

This increased funding will now extend to a total of 56 projects, emphasizing the DAO’s commitment to supporting diverse and emerging builders within the Arbitrum ecosystem. The initiative is part of a broader effort to create a conducive environment for new projects and foster innovation and growth on the platform.

Among the projects receiving additional funding are Wormhole (1.8 million ARB), Stargate Finance (2 million ARB), and Gains Network (4.5 million ARB). However, due to the imposition of Know Your Customer (KYC) requirements by STIP, PancakeSwap withdrew its request for 2 million ARB.

The decision to authorize increased funds was not without controversy. Some members of the Arbitrum DAO argued that a complete second round of funding would have been a more equitable approach to include additional protocols in the incentives program. This sentiment reflects the ongoing debate within the community about the best methods to support and integrate new projects into the Arbitrum ecosystem.

Delegates from the MUX protocol raised concerns about the mixing of projects of varying quality due to the additional funding. However, the majority vote in favor of the proposal underscores the community’s preference for immediate action to support a wider range of projects, despite the differing opinions.

The Arbitrum DAO’s decision to expand its STIP budget signifies its commitment to nurturing a diverse and dynamic ecosystem of projects. By funding additional initiatives, the DAO aims to bolster innovation and growth, ensuring the platform remains competitive and attractive to developers and users alike. This move also highlights the active role of ARB token holders in shaping the future of the Arbitrum ecosystem through their participation in governance decisions.

Overall, the approval of the increased funds for STIP proposals represents a critical step in Arbitrum’s journey towards fostering a thriving and inclusive environment for blockchain innovation and development.

Image source: Shutterstock

This article was originally reported on Blockchain News.