In a movement aimed at combating subsidies on grants and exposing fraud, the arbitrum DAO announced that it will launch a subsidy prevention program which will pay as many $ 100,000 compared to people who declare bad players among its beneficiaries of subsidies.
Arbitrum, one of the main layers of layer 2 of Ethereum, actively distributed the ARB tokens to support the development of its ecosystem. His Dao would have been deployed Several hundred million dollars in subsidies, financing service providers and incentives; However, according to Entropy Advisors, there was little surveillance on how these funds are really spent.
Interestingly, recent surveys have discovered at least three distinct incidents in the diversion of grants. One of them was the Furucombo. The Arbitrum Foundation accused Furucombo of having abused the SPIP Backfund subsidy after it did not file a final report on the way it spent the subsidy.
With other transgressions, the Arbitrum Dao Prohibit Furocombo of the DAO after a thorough vote.
Another case is the game catalyst program (GCP), which received 225 million ARB worth around $ 215 million at the start of 2024.
The GCP team is involved in allegations of embezzlement, sub-declaration and lack of transparency in its subsidy issuance, with a proposal launched to raise funding.
Recognizing the potential of new undiscovered abuses, entropy advisers have proposed a system to allow the community to report improper use with the incentive to significant monetary awards.
The premium initiative by subsidy abuse proposed by Entropy Advisors has been labeled “The Watchdog”.
In his proposal, entropy advisers have defined the abusive use of funds as “any action or inaction by a recipient of funds allowed by the DAO which directly violates the terms, objectives, agreement or overall spirit of the allowance under which these funds have been provided.”
How the surveillance program works
The surveillance program, which is proposed to operate as the most common bug bonus program, encourages community members to report inappropriate use of DAO funds in private through Globalaks, the open source denunciation platform used by governments, NGOs and investigative journalists.
As indicated in the proposal, all submissions are deprived and secure, and the denunciators can earn between $ 5,000 and $ 100,000 compared to confirmed, with payments determined by the seriousness of the violation and the quality of the evidence provided.
The process begins with a confidential submission of the results to an examination committee, made up of members of the entropy advisers, Arbitrum Foundation and Seedgov.
The Committee of Examinators then tested the validity of the submission and also determine the severity of the abusive use of funds.
The gravity, which goes from the weak to high, in turn determines the amount which will be paid to the denunciator. For low -gravity submissions, the denunciators can obtain a basic payment of 1,000 ARB, which is deducted from the funds recovered if necessary, the possible total reward being capped at $ 10,000.
For cases with an average severity, the premium proposed is a basic payment of 10,000 ARB, and the return on maximum reward in the category is $ 25,000. Finally, for cases that rank in order of gravity, the price of the premium is a basic payment of 30,000 ARB, while the maximum payment here is capped at $ 100,000.
Cases like that of Furocombo fall under the average category due to severity, as this involved the abusive use of the funds allowed by the DAO which had an impact on the resources of the DAO.
Timelines proposed for the implementation
The launch date proposed for the Bounty Watchdog program is the end of May, the proposal of the entropy advisers being subject to chain vote from May 8 to May 22. The results of the vote will have a considerable impact on the date of launching the program.
Entropy advisers also offer that 400,000 initial ARP tokens be allocated to finance the program.
According to them, the implementation of this program will not only dissuade malicious actions and actors, but it will also attract detectives and sophisticated chain investigators.
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