Arbitrum DAO gives Lido the cold shoulder

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Hello everyone, Osato here.

I’m taking over from Tim for this week’s The Decentralised.

Arbitrum DAO has finished voting on which protocols will receive a share of its $40 million short-term incentive programme grants. Over 100 protocols applied, but only 29 made the cut.

The biggest winners were Arbitrum-native stalwarts like GMX and Camelot. GMX secured a whopping 12 million ARB grant — the biggest single pay-out — while Camelot got just over 3 million ARB.

Surprisingly, liquid staking giant Lido did not make the cut.

The support for GMX and Camelot and lack thereof for Lido highlights the preference for protocols that have already positively impacted the Arbitrum ecosystem.

GMX, Arbitrum’s biggest native protocol, sailed through the grants process with over 186 million votes. But DAO members called Lido’s four million ARB request to help incentivise its liquid staking token stETH on the Ethereum layer 2 “excessive.”

The grants and the process by which Arbitrum distributed them was not without its critics.

Some have likened the vote to a popularity contest, with friendly protocols and delegates voting for each other instead of for which protocols could make the best use of the incentives.

Arbitrum delegate Max Lomuscio also said the grants should have been used to fund builders during this bear market phase rather than distribute them to protocols that will most likely use them to fund short-term liquidity mining incentives.

While Arbitrum’s grants vote largely went off without a hitch, fellow Ethereum layer 2 Optimism is having yet another grants-related controversy.

DL News managing editor Ekin Genç reported on a spat within Optimism DAO related to an alleged doxxing — the practice of revealing information that can be used to identify an anonymous person.

Gitcoin contributor Carlos Melgar was accused of doxxing an anonymous Optimism community member.

The purported victim says Melgar released non-public information about them after they had been nominated to vote to help allocate grants, in this case up to $35 million in OP token incentives.

Melger responded by saying that the information he shared had been public for a long time.

It is proving almost impossible to have an Optimism’s grants matter that does not involve some sort of controversy.

Previous controversies included grant recipients allegedly misappropriating funds and grantors not disclosing their links to recipients.

Finally, an update on the Avalanche-based social media protocol Stars Arena, which suffered a $3 million hack last week.

Stars Arena has successfully negotiated a return of the stolen funds, allowing the attacker to keep 10% — or $300,000 — as a so-called white hat bounty.

The protocol is also relaunching with a new smart contract after the hack was linked to faults in the code it copied from leading social protocol friend.tech.

Stars Arena is now looking to reopen, with the developers confidently saying “We are so back.”

Data of the week

With Arbitrum’s short-term incentives programme finished, there’s a treasure trove of data to unpack and analyse.

@404DAO gives a rundown of the most important data points, and has created some excellent GIFs to show the progression of various metrics.

Check out the full X thread to see them all in action.

This week in DeFi governance

PROPOSAL: Steakhouse floats USDP stablecoin incentives to MakerDAO

VOTE: Rarible DAO polls $1.2 million ecosystem fund

VOTE: Aave votes to activate v3 governance

Post of the week

Yesterday, a false announcement that the SEC had approved BlackRock’s spot ETF filing spurred volatility in the crypto market.

Pseudonymous developer 0xfoobar emphasises the absurdity of the situation with an accurate but convoluted explanation.

What we’re watching

After extensive DAO forum discussion and a community vote, liquid staking provider Lido has decided to sunset its Solana version.

Have you joined our Telegram channel yet? Check out our News Feed for the latest breaking stories, community polls, and of course — the memes. https://t.me/dlnewsinfo

Osato Avan-Nomayo is DL News’ Nigeria-based DeFi correspondent. Reach out to him with tips at osato@dlnews.com.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out to him with tips at tim@dlnews.com.