Arbitrum DAO's new proposal sparks controversy: hiring "engineers more expensive than Harvard lawyers"?

Author: Tim Craig, DL News

Compiled by: Felix, PANews

When Arbitrum DAO representatives debated and voted on a proposal to "create a new coalition to assist in Layer 2 blockchain governance," a key issue became the proposal's request to provide coalition members with salaries exceeding $545 per hour.

There were many critical comments regarding this.

Griff Green, an Arbitrum DAO representative holding 12 million tokens, posted on the Arbitrum governance forum, stating, "This expenditure is very large and exceeds what I consider reasonable." Although Griff Green indicated that he supports the idea of forming a coalition in principle, he still voted against the proposal.

However, supporters of the proposal argued that some costs are justified if they can improve the self-governance of Arbitrum DAO.

An anonymous representative holding 4.3 million tokens, Lito.eth, stated, "This is a very small supply, and the funds need to be spent in some way anyway."

Conflicts Among Representatives

Although the voting closed at 1:07 AM on November 11, the voting results showed 44.96% against (108 million ARB), 31.46% in favor (76 million ARB), and 23.58% abstained (57 million ARB). Before the voting ended, representatives expressed their opinions on the proposal, with both sides evenly matched.

This vote followed an in-depth discussion of the proposal on the Arbitrum governance forum led by representatives * (DAO members elected to represent other token holders) * .

In addition to salary concerns, skeptics also argued that the coalition could undermine the decentralization of the DAO and that the proposal lacks a clear way to hold the coalition accountable.

However, supporters stated that Arbitrum DAO urgently needs such an organization to help strengthen and improve governance and solidify Arbitrum's position as a leading Layer 2 scaling project on Ethereum.

According to DefiLlama data, Arbitrum is the largest Ethereum Layer 2 network, with a total value locked (TVL) of $1.9 billion across its numerous DeFi protocols and over 142,000 daily active users.

TVL of Arbitrum ecosystem DeFi protocols

This debate comes at a time when the DAO is striving to balance the egalitarian spirit of long-term DeFi development with the necessity of commercialization.

"More than what I pay Harvard lawyers"

The proposal requests to allocate over $2 million to three main members of the coalition—crypto research platform Blockworks Research, DAO service provider Gauntlet, and crypto security company Trail of Bits—as well as a coalition advocate, Layer 2 data provider L2BEAT.

In the cost breakdown, Trail of Bits requested funding for an engineer to review proposals for 32 weeks a year, costing $800,000. Assuming a 40-hour work week at an hourly rate of $625, the annual salary would reach $1.3 million.

Other coalition members also have high costs. Blockworks Research requested an analyst's hourly rate of $375, while Gauntlet requested $545 per hour for a quantitative researcher.

A user named Karmageddon on the Arbitrum governance forum asked, "Can the relevant organizations prove that their time is worth $650-1500/hour? The requested amounts seem too expensive, 'more than what I pay Harvard lawyers.'"

In response to these criticisms, Blockworks analyst Sam Martin stated that the benefits the coalition aims to bring to the DAO, such as better governance processes, more informed voting, and improved resource allocation, justify the costs. Sam Martin also mentioned that Blockworks has specifically provided a reasonable price for the work of the aforementioned personnel and other coalition members to eliminate the possibility of overspending.

Concentration of Power

Other representatives warned that the coalition could concentrate power within the DAO.

An anonymous representative holding 1.5 million tokens, DK, stated on the Arbitrum governance forum, "Having the same parties review proposals and provide opinions, publicly reporting these proposals through media networks, voting on proposals, reviewing the safety issues of proposals, and then executing upgrades to the Arbitrum network fundamentally lacks decentralization."

DK is not the only one expressing this concern. Arbitrum DAO representative Griff Green, holding 12 million tokens, said, "The power behind this responsibility is immense and far-reaching."

DK indicated that he had requested modifications to address the centralization issue before the proposal vote. However, Blockworks believes that changes were unnecessary before the snapshot.

"There is no doubt that a coalition is needed"

Despite criticism from influential representatives, many seem to support the proposal.

According to an anonymous representative holding 373,000 tokens, Larva, Arbitrum DAO "undoubtedly needs the Arbitrum Coalition" to enhance the efficiency and effectiveness of its governance processes.

He explained that currently, many representatives lack the time and resources to actively participate in discussions and complete voting before deadlines. Larva stated, "Some representatives find it challenging to fully understand highly specialized proposals, which may lead to potential errors in their voting decisions."

By bringing together Blockworks Research, Gauntlet, and Trail of Bits, these teams hope to thoroughly review new proposals, provide research to assist representatives in decision-making, and review the code behind the implementation of proposals.

While Larva voted in favor of the coalition, he also expressed understanding of the criticisms against it.

Larva said, "The amount of funding they require is too high, and the proposers themselves hold too much voting power, which I also criticize."

Although the $500 per hour salary deters some representatives, it is just a drop in the bucket compared to previous expenditures by Arbitrum DAO.

In October, the DAO voted to approve its short-term incentive program, funding over $42 million to DeFi protocols.