Arbitrum

[Non-constitutional]

Executive Summary As voted on in the ADPC proposal, one of the key tasks of the ADPC was to conceptualize and structure a subsidy fund for the Arbitrum DAO. This proposal intends to set up this subsidy fund, seeking up to $10 million worth of ARB to be administered and selected by the Arbitrum DAO Procurement Committee (hereinafter referred to as the ‘ADPC’) to facilitate the selection of projects that will benefit from the whitelisted security audit service providers selected via the ADPC’s procurement framework. The ultimate decision will be made by the ADPC based on the Means Test and the Application Process Terms 13.

Proposal Request We propose the creation of a procurement subsidy fund allocating up to $10 million worth of ARB to provide financial assistance to both new and existing projects within the Arbitrum ecosystem.

These subsidies will be exclusive to a pre-approved whitelisted set of security audit service providers, selected by the ADPC, who will publicly display their fees. This approach eliminates the need for the ADPC to assess the reasonableness of funds requests.

The aim of the subsidy fund is to incentivise participation and growth among smaller projects helping them to overcome barriers to entry, such as challenges to acquire funding to pay for the cost of robust security audits.

The figure of up to $10 million worth of ARB has been determined via a benchmarking exercise conducted with various security audit service providers. This form 4 was shared with these service providers and based on the responses of 10 service providers (including the likes of Spearbit, Halborn, Nethermind, Three Sigma, Guardian, Zellic, etc.) on their scope of services and fees associated, we have estimated that each project will require a 2-month security audit at an average cost of $200K. This will enable the ADPC to potentially fund up to 50 projects; however, it should be noted that the average of $200K is an estimate and fees are usually specific to each project, each project requires a scoping exercise, and audit costs will vary based on the size of the codebase, complexity, etc.

We ask delegates delegates to choose between following options for the initial size of the fund and length of the program:

• Do not fund the program
• 1 cohort of 8 weeks (2 months) for a total fund size of $2.5 million
• 2 cohorts of 8 weeks each (4 months) for a total fund size of $5 million
• 4 cohorts of 8 weeks each (8 months) for a total fund size of $10 million
• Abstain

Please review the forum post (linked below) for a full proposal description and discussion.