Republication Note: The first publication of this proposal ( https://www.tally.xyz/gov/arbitrum/proposal/109425185690543736048728494223916696230797128756558452562790432121529327921478 ) should be ignored in favor of this publication of the proposal. The reasons for the republication being:

1. The former was posted outside the approved calendar window of Thursday 12:00 UTC and we like to avoid ineligibility

2. A correction was made on the ARB sum values

3. The executable has been simplified to a single tx to avoid any potential execution issues

Summary

Event Horizon is a public good. It is a public-access metagovernance block. With the aim of enfranchising the tens of thousands of small voters, this proposal suggests we delegate (not grant) 7,000,000 ARB to a public access-voter block subject to a non-optimistic 1-year renewal. This delegation gets mobilized by Voter Pass functionally giving underrepresented DAO citizens multiplied voting power and therefore more incentive to express their voices.

The Gitcoin DAO has recently passed a proposal supporting Event Horizon, thereby making our Citizen Enfranchisement pool the #6 delegate on Gitcoin.

We also request a grant of 200k ARB to help the team maintain this public good across this 1 year experiment in addition to retroactively awarding the team for the fully-functional product thus far built out of pocket for the Arbitrum community over the past several months. In addition, to ensure community alignment, a separate 125K ARB grant will be paid to the 5 member Oversight Committee in monthly installments. Grant Grand Total: 325K ARB.

Problem

Today, the typical Arbitrum voter participation rate floats in the low single digits. However, there are thousands of individual voters who participate in each vote despite having effectively no meaningful say. They should be rewarded with a voice. Moreover, there are likely tens of thousands more incredibly talented community members who are very capable of adding to the collective cognition of the ecosystem, but simply lack the capital means to have a voice and are left discouraged from voting at all. Voting when you only have, say, $500 worth of ARB doesn’t make sense, it’s a drop in the bucket. Sitting out governance proposals is, unfortunately, the rational decision but collectively makes everyone worse off. The strength of the DAO is directly related to the number of participants having their voices heard by the community. The governance platform and vote multiple that Event Horizon gives to these citizens incentivizes greater participation and surfaces greater cognition from the community.

Mechanism

Arbitrum Citizens interested in governance may mint a free, soul-bound Voter Pass which allows them to take part in mobilizing this voter enfranchisement pool subject to an additional Gitcoin Pass requirement to prevent sybil attacks. As detailed further below, this model:

1. Grants a clear and meaningful voice to statistically low-capital DAO citizen voters regardless of their financial means
2. Incentivizes participation with additional governance authority, not inflationary rewards
3. Incentivizes participants interested in governance itself, not financial gain

DAOs today rely exclusively on individuals and company entities to serve as network delegates. However, this isn’t the only option. While individual delegates certainly add incredible value to the Arbitrum Ecosystem, so would a governance allotment dedicated to the greater body of smaller citizen participants.

In this regard, Event Horizon slots into the Arbitrum ecosystem in a similar fashion to a standard delegate. However, rather than the block voting based on the decision of one individual, it votes with the collective cognition of hundreds of individual voter pass holders.

This serves two functions:

1. It provides a clear and designated voice for smaller, citizen voters.
2. It drives participation through a game-theoretic process called Implicit Delegation.

One of the greatest barriers to participation is a lack of voice due to lack of capital. Implicit delegation and public access governance changes this. Implicit Delegation is a model by which the full public governance block mobilizes in favor of the consensus of those who do vote, thereby implicitly delegating the authority of those who don’t vote to those who do.

When participation is low… each voter receives a larger slice of the public access pie. This means the fewer people there are voting, the more incentive there is for someone new to come and participate.

When participation is high… there are more voters splitting the same pie, however, citizen participation is high, which is a win for the ecosystem.

Implicit Delegation represents an effort to offer a new paradigm around means of influence. A shift from today’s entirely capital-centric to a more citizen-friendly, participation-centric model.

Where Direct Governance allocates influence along the lines of capital, and Explicit Delegation allocates influence along the lines of popularity (which often reflects capital), Implicit Delegation allocates influence to those who care most: people showing up to vote. Because the carrot is governance voice itself, implicit delegation attracts governance-interested citizens, not capital-interested citizens; more on that below.

Because the entirety of the block is always mobilized, those who are most vested are rewarded for their participation by having a larger share of the voting pie. In this regard, Event Horizon’s model leans into a systemic lack of participation to create a solution.

Rationale

Delegation rationale

7,000,000 ARB would place the Event Horizon community as around the 15th largest delegate. Based upon significant dialogue with existing Arbitrum delegates and stakeholders, we think this places a fair amount of power into the 3rd pillar of governance, namely citizens (the other two being organizational and individual delegations) without being large enough to flip any typical proposal.

This proposal reflects two of Arbitrum’s core mission values:

1. Socially Inclusive: By constructing a dedicated block of governance authority with lower capital barriers, our community greatly expands who gets a seat at the table.
2. Neutral and Open: By making the thoughts and ideas of this broader swath of individuals heard, we further broaden the spectrum of possibilities for the evolution of our ecosystem.

Grant rationale

1. While we initially didn’t want to ask for compensation, several delegates pointed out that doing this magnitude of work for the DAO for free sets a bad precedent for future builders. It sends the wrong message of “do not build here, your work is not valued by the Arbitrum community”. So despite our initial hesitation, and multiple refusals to do so, we now think it important to ask for some compensation.
2. As for the specific grant amount, LTIPP committees members were paid 25k ARB each for 7.5 weeks of work, approximately $50,000 on proposal execution day (February 21, 2024). We’re asking for 200k ARB total (roughly $100k at today’s ARB prices) for the work already done + 1 year of work from the four members of the Event Horizon team and all associated build costs and ongoing maintenance expenses. This is not to depreciate the value of LTIPP committee members, but to draw a humble comparison of the value of our engineering and governance labor both already done and yet to come in this next year. In fact, this pricing (adjusting for price action between LTIPP and now) explicitly values the work of LTIPP committee members at nearly 19x that of the Event Horizon team ($6.7k per LTIPP committee member per week vs. $480 per EH team member per week), not counting the previous year of work that went into building the already functioning product.

We will also have to pay for a Snapshot subscription which is $6k / year which will come out of the grant. Further labor expenses can be broken down by categories and priced as follows:

1. Launch pass minting on Arbitrum – 40k ARB
2. Maintain functionality through any changes in Arbitrums governance process – 40k ARB
3. Maintain and further streamline voter onboarding UX – 40k ARB
4. Bi-annual reporting including KPIs such as voters, participation rate, voters above key threshold amounts (say $1k worth of ARB), etc. – 40k ARB
5. Service fee – 40k ARB

Benefits compared to Token Incentivized Governance:

While token rewards for participation hold legitimate merit and are an intuitive remedy for low turnout, it has limitations.

1. Misaligned Incentives: Token-based incentives attract returns-interested parties. However, when it comes to governance, participation is most valuable when it comes from those interested in participating not payout. Implicit delegation directly appeals to these individuals as it rewards those who participate, not with capital, but with greater voting power.

Added Thought Capital: in line with the notion above, there are likely thousands of community members each holding both strong ideas and valuable contributions for the ecosystem, but simply lack enough voice to justify participation. Through Implicit Delegation, any community member of the Arbitrum ecosystem has an opportunity to have their voice heard, bringing thousands more minds and ideas to the surface.

1. Inflationary: While token rewards drive participation at the expense of inflation, Implicit delegation simply leverages its game theory model to increase incentive to vote in the form of a greater voting share. This does not cost the token any inflation, nor the treasury any ARB.
2. Non-scalable: Token-based rewards are finite and require a constant drain of ARB funds to continue driving participation. As the ecosystem scales, and more participants join, greater and greater sums of ARB will be needed to continue fueling growth. Implicit delegation has no cost, and its balanced game theory functions with no burn. As more citizen voters join, more Arb could be delegated to the community block, however, again, this is not a cost as the ARB tokens are still retained by the treasury.

Specification

Past Performance

The above is not just theory. The Event Horizon community is already active on Ethereum providing metagoverning public goods to Uniswap, AAVE, Compound, ShapeShift, and of course, Arbitrum. In fact, in several recent Uniswap votes, the Event Horizon community was the 10th largest voter in the Uniswap Ecosystem. Event Horizon has also recently voted as the 8th largest delegate in recent Aave votes. Gitcoin DAO just voted to make Event Horizon the 6th largest delegate in the DAO via delegation.

While there is still quite a gap between Event Horizon and the larger delegates in the larger DAOs, interestingly enough this position serves as a line of demarcation between individual delegates above, and citizens below. This dynamic does, however, highlight a call to action. Raise the long tail a bit, and bring in more voices. Sure, voting isn’t the full picture of DAO decision making, but it’s a great place to start. Individual, organization AND citizen delegations are all valuable and mutually inclusive, three symbiotic pillars for a strong ecosystem.

Since its inception just a few months ago, the Event Horizon protocol has processed nearly 500 metagovernance proposals and placed over $60,000,000 of governance authority and enfranchisement directly into the hands of the citizen voter, a feat not seen anywhere else in the DAO space. This is $60,000,000 of voice amplification for the low-capital, high-conviction citizen which would never have been possible prior to Event Horizon.

Some more metrics worth highlighting:

Number of Metagovernance Proposals Passed ~500

Our community members have participated in and passed nearly 500 metagovernance proposals, each corresponding to Arbitrum or other DAO proposals.

Average Authority Mobilized per Participating Passholder: >$365,000 (and counting)

For the cost of $3 in gas, each participating passholder has mobilized an average of just over $100,000 in Uniswap and AAVE authority governance authority across all metagovernance proposals passed.

Average Authority Mobilized Multiple: >121,500x (and growing)

The average pass holder minted their voter pass for ~$3 in gas. When compared to the $365,000 in average authority mobilized, each member has mobilized over 40,000x their gas cost of admission in blue-chip governance authority.

Oversight Committee

The Arbitrum Event Horizon Oversight Committee is a consortium of 5 existing, notable delegates and community members who will assist in the facilitation of this public good. Namely, a simple 3/5 majority would allow this committee to veto the decisions of the voter pool in favor of an ‘Abstain’ outcome.

The five signers of the Oversight Committee are:

1. Michael (Open Zeppelin) 0xBE1d294FD9B71Ae2F6831Eb80777fF73fb73c953
2. Frisson (Tally): 0xb5D8fe0De11e6a95F1c2D217C55dc4f010EAc7c1
3. Jordan (Event Horizon): 0x50c28a42AC91F6E6437A036D320c9242432CCE3F
4. Juanbug (PGov): 0xB8Dcad009E533066F12e408075E10E3a30F1f15A
5. DisruptionJoe (Arbitrum Delegate): 0x01Cf9fD2efa5Fdf178bd635c3E2adF25B2052712

The Oversight Committee members will receive a monthly stipend of 2083 ARB per month so as to maintain an ethos of “your labor is paid” in the Arbitrum ecosystem.

Implementation

Per the recommendation of the Arbitrum Foundation, the proposal will forego the Franchiser contract approach in favor of a multi-signature wallet structure. With the passing of this proposal, the DAO will transfer 7.325M ARB to the Oversight Committee multi-signature wallet (0x15C4edF2cF2f36335e42c19E506Ed6cB16a57D8F). The Oversight Committee will then:

1. Send the 325K ARB grant to an Event Horizon SAFE (arb1:0xE67192302E444a8D28F60F6737a8bc7c672b8aC6) prior to delegation. The 200K ARB direct grant will be retained by EH, and the 125K ARB oversight committee payments will be emitted proportionally to all members by EH in monthly bulk txs over the coming 12 months.

2. Delegate the remaining 7M ARB to the Arbitrum Community Governance wallet (EventHorizonArbitrum.eth).

After initial delegation, Event Horizon handles all functionality from there. Event Horizon will facilitate and maintain all elements of the pool from pass minting to metagovernance.

Should the DAO wish to recall the delegation, an on-chain vote will no longer be required. Instead, a snapshot proposal will suffice. The Oversight Committee will be beholden to a community Snapshot vote, and will retain the ability to undelegate and return all ARB to the DAO treasury at any point per the request of the DAO.

Previous Model for Reference: In order to implement this proposal, it is required that we create a DAO-controlled Franchiser contract. The contract owner would be the DAO timelock and it would allow the DAO the power to delegate and undelegate tokens that it sends from the treasury to the Franchiser. We suggest that the Foundation aids in the creation of this contract in order to create an official and safe implementation, though we can likely fork the Trail of Bits audited Uniswap Labs implementation [github] of the same concept. If this proposal passes Snapshot, we request that the Foundation take the time to fork the contract and hire an auditor to check the implementation.

The contract has simple functions:

• Fund: allows the DAO to send tokens to contract and delegate to a single address
• FundMany: allows the DAO to send tokens to contract and delegate any amount to multiple addresses
• Recall: allows DAO to pull back funds from Franchiser effectively undelegating and returning tokens to treasury from a single delegate.
• RecallMany: allows DAO to pull back funds from Franchiser effectively undelegating and returning tokens to treasury from multiple delegates.
• It is worth noting that all tokens sent to the Franchiser will remain a part of the DAO’s balance sheet as it has full-control over the contract. The delegated tokens never leave the DAO’s ownership.

Forking and auditing this franchiser contract would be useful for Arbitrum’s version of retroactive delegation (updated version to be posted shortly). Crucially, we view both this proposal (delegating to EH’s citizen enfranchisement pool) and the above retroactive delegation proposal (boosting active delegates in the 10k-1m ARB range) as two sides of the same coin of the community’s call for creative ways to boost citizen participation and governance decision making processes.

Additional Considerations

Sybil Considerations: it is important to note that the delegated ARB is by a large margin a minority voter amount. Any potential risk of Sybil influence over the public-access block would under almost all conditions not amount to a sum of authority that would be capable of passing a vote absent incredibly significant broader support from other delegates and the broader Arbitrum ecosystem participants. E.g. a rogue vote is virtually impossible.

That being said, Event Horizon will be implementing Gitcoin Passport requirements for Arbitrum metagovernance.