Rari Foundation

This proposal is submitted by the Rari Foundation, as instructed by the RARI DAO given their desire to make RARI DAO governance more accessible and effective.

Abstract

The RARI DAO seeks to enhance its governance framework by upgrading the RARI token contract and bringing its governance from Ethereum mainnet to the Arbitrum ecosystem. This proposal outlines the implementation of a custom L2 token on Arbitrum, facilitating efficient governance processes while reducing user costs and improving overall accessibility for RARI DAO. This proposal asks to register the custom L2 token and to propose the Arbitrum DAO to implement a custom gateway on Arbitrum native bridge.

Motivation

The RARI DAO is governed by the $RARI token, which, when locked in veRARI, grants voting access. The current token contract and governance hub are on the Ethereum mainnet, making participation in governance costly due to high gas fees for locking, delegating and on-chain voting. The RARI DAO has repeatedly asked to reduce governance fees, which is now possible thanks to the possibility of migrating governance to RARI chain and upgrading core governance contracts, including the token contract.

The current token contract is on Ethereum mainnet and is not upgradable. The RARI DAO wishes to upgrade its governance, a part of which is a token contract upgrade with snapshots and delegations embedded. We will also need to change the mapping on the Arbitrum native bridge router and implement a custom gateway pending a successful Arbitrum DAO vote.

Rationale

The RARI DAO governance upgrade is designed to make governance more accessible by simplifying the UX, reducing gas fees, enabling new token functions, and allowing for multichain governance. This will allow for higher governance participation and will position the DAO to be able to govern the RARI ecosystem beyond Ethereum Mainnet, which is an imperative given that the Rarible Protocol is a multichain product and that the DAO governs the recently launched RARI chain.

As the RARI token contract is on Ethererum mainnet, and not upgradable, a new custom token contract needs to be deployed. This proposal outlines the plan for a custom L2 token implementation, starting with the Arbitrum ecosystem.

Key Terms

RARI token: RARI DAO governance token (https://etherscan.io/token/0xfca59cd816ab1ead66534d82bc21e7515ce441cf

RARI DAO: body governing the Rarible Protocol and RARI chain

Custom L2 RARI token: upgraded and simplified RARI token to be used in RARI DAO multichain governance moving forward

Arbitrum ecosystem: Arbitrum One and RARI chain L3

Specifications

RARI token in question (https://etherscan.io/token/0xfca59cd816ab1ead66534d82bc21e7515ce441cf) does not have upgradability nor allows the owner to register in the Arbitrum token bridge router.

As such, a new customer L2 contract with snapshotting and delegation functions needs to be deployed. The proposed upgraded token contract was fully audited and can be found here:

token: https://github.com/rarible/protocol-contracts/pull/305

audit: https://github.com/pessimistic-io/audits/blob/b14c14f9b5dfac20524fdf82ab4d779f78b2[…]%20Bridged%20Token%20Security%20Analysis%20by%20Pessimistic.pdf

Token contract was deployed to Arbitrum Sepolia, RARI testnet (which is on top of Arbitrum Sepolia) and all contracts were tested manually as well.

For this contract to be deployed on Arbitrum One and RARI chain mainnet, a custom L2 token pathway needs to be enabled in the Arbitrum native bridge, for which the RARI Foundation will submit a proposal, pending this proposal being voted in.

For context, there will be several more actions to take place for the governance upgrade to be complete on a technical level:

• custom L2 token implementation
• custom pathway in Arbitrum native bridge
• multichain governor contract upgrade
• current RARI token wrapping contract for mainnet tokens to be usable in the multichain governance

As a result, the L2 RARI tokens, and the wrapped mainnet tokens will be possible to use for RARI DAO governance as they are. The veRARI model will be dropped and all locks will release once as the upgrade is complete.

RARI token holders will then be incentivized to bridge to the RARI chain (new governance hub), at minimum, by offering costless bridging. The RARI chain will in the meantime complete DeFi integrations to ensure there is liquidity and trading options for RARI tokens as they enter the ecosystem.

Steps to Implement

1. upon passing of this proposal, the custom L2 token contract will be deployed on Arbitrum One and RARI chain
2. RARI Foundation will then submit a proposal to the Arbitrum DAO to enable the custom gateway on the native bridge and investigate incentive funding possibilities
3. Once the custom pathway is enabled, further proposals will be submitted to the RARI DAO to complete the governance upgrade (e.g. new governor contract, planned incentives)
4. Full governance migration will be announced during fall '24; exact timing will depend on technical readiness

Timeline

A custom L2 token contract is ready to deploy upon this proposal’s passing.

The Arbitrum proposal is ready to be submitted to the Arbitrum DAO’s forum upon this proposal’s passing.

Overall costs

N/A