INTRODUCTION

The Arbitrum ecosystem is rapidly evolving, and with it, so is the (V2) of the Arbitrum Research & Development Collective set up by Axis Advisory. With the ecosystem's growing positioning as a market leader in Ethereum Layer-2 technology comes the need for robust research, risk management, and security strategies to support the ecosystem's continued success. As the ecosystem expands, the DAO must carefully evaluate applicants capable of delivering impactful solutions across key focus areas such as ecosystem development, governance, risk assessment, and security.

This blog post presents an in-depth overview of the applicants who have proposed their services to support the Arbitrum DAO’s mission. From comprehensive governance analyses to cutting-edge security frameworks, these experts bring a wealth of experience and unique perspectives to address the challenges and opportunities facing the ecosystem. Their proposed scopes of work offer actionable strategies to foster growth, manage risks, and fortify the network’s security.

RESEARCH APPLICANTS

Revelo Intel (@ReveloIntel)

Experience:

Revelo Intel is a boutique research firm delivering institutional-grade insights into blockchain protocols, ecosystems, and narratives. Their expertise lies in producing tailored reports that synthesize complex project mechanics, assess market dynamics, and pinpoint adoption catalysts.

With a proven track record of publishing over 200 in-depth reports, many in collaboration with leading protocols, ReveloIntel has established itself as a trusted resource for actionable intelligence. Their most impactful research formats include (i) Project Breakdown (Diligence) Reports and (ii) Industry Intel (Narrative) Reports.

Proposed Scope of Work for Arbitrum:

• Arbitrum Stylus Developer Analysis → Comparative study of Stylus’ capabilities compared to existing solutions, developer feedback on adoption barriers and how to address them, as well as recommendations for enhancing developer experience and onboarding.
• Arbitrum Orbit Growth Study → Report identifying trends and strategies to attract projects and users to the Arbitrum Orbit ecosystem. This involves assessing key metrics and benchmarks for evaluating growth opportunities, and recommendations for fostering adoption and incentivising projects to launch within Orbit.
• Comprehensive Governance Analysis & Delegate Engagement → Evaluation of recent governance proposals, focusing on their outcomes, alignment with DAO priorities and opportunities for improvement, as well as recommendations for a delegate incentive structure to encourage active and consistent participation.

PYOR Research (@pyorxyz)

Experience

Founded in 2022 by seasoned executives from Barclays, EY, and CoinSwitch (India's leading crypto exchange), PYOR has grown into a team of over 30 professionals, backed by industry leaders such as Castle Island Ventures, Coinbase Ventures, and Balaji Srinivasan. Their expertise has supported leading protocols such as Arbitrum, ICP, Cosmos, Tezos, Compound, Venus, Osmosis, Livepeer, and Swell.

PYOR's innovations include proprietary data infrastructure, like the X-ray platform, which delivers real-time, on-chain insights into protocol performance. They also offer advanced tools for large-scale monitoring and analytics to empower data-driven decision-making.

Proposed Scope of Work for Arbitrum:

• Institutional or Sectoral Research → Conduct data-driven research to identify sectors with a low presence on Arbitrum, evaluate their growth potential, and craft targeted strategies to attract them. This includes analyzing gaps in both crypto-native and institutional sectors and benchmarking Arbitrum against competitors.
• Liquidity & Capital Migration Research → Analyse the risk profiles of large capital holders, assess the current infrastructure for migration to Arbitrum, and identify gaps. This includes interviewing capital holders to uncover their needs and attract liquidity.
• Developer Interview-Based Research on Current Dev-Tools on Arbitrum and Orbit Cluster → Conduct interviews with both existing and new builders to assess the current state of developer tooling on Arbitrum. To evaluate support needed for Orbit chain teams and explore intra-chain and cross-chain messaging challenges within the Orbit ecosystem.

The Block (@theblock__)

Experience:

The Block boasts over 5 years of experience, backed by a team of more than 35 research specialists. They have serviced over 135 clients across Web3, FinTech, VC, and traditional finance sectors, including conducting research for leading ecosystems such as Arbitrum, Ethereum, Polygon, Solana and Avalanche.

Notable projects led by Block Research include guiding a $2B+ public gaming firm on its Web3 gaming market entry strategy, collaborating with billion-dollar blockchain platforms on competitive benchmarking and development strategies, informing token distribution strategies for prominent Layer 2 protocols, and co-developing institutional-grade crypto index products for top-tier funds requiring resilience in volatile markets.

Proposed Scope of Work for Arbitrum:

• Complementary Governance Models → Research, design and pilot innovative governance models such as futarchy and quadratic funding, delivering data-driven insights including sensitivity analyses to evaluate how factors such as voter turnout and proposal costs influence the models’ effectiveness.
• Community Metrics Dashboard → Aggregating indicators such as social media metrics (e.g. Twitter impressions, engagement rates and Google Trends), sentiment analysis (e.g. forums, tweets and developer discussions) and engagement metrics (e.g. Discord, Telegram and GitHub) to allow developers, investors and users to test the ‘temperature’ of the ecosystem through data-driven insights.

Llama Research & Castle Capital (@dl_research & @castle__cap)

Experience:

DefiLlama Research and Castle Capital bring complementary expertise to the table. Together, they have delivered actionable insights on Arbitrum-native protocols like GMX V2 and provided strategic guidance on DAO incentive structures and community engagement.

DefiLlama is renowned for its in-depth analyses of DeFi protocols, Layer 2 scalability solutions, and governance trends, powered by its robust on-chain data capabilities. On the other hand, Castle Capital adds deep experience in shaping Arbitrum’s governance and incentive frameworks, having contributed to initiatives like LTIPP and STIP Bridge, while creating accessible dashboards and educational content in collaboration with over 60 protocols.

Proposed Scope of Work for Arbitrum:

• Exploratory Research on Builder Retention & Expansion → Conduct a ’builder needs survey’ to identify pain points experienced by developers on Arbitrum One and Nova. Perform ‘developer segmentation’ to categorise builders by focus areas such as DeFi, GameFi, and infrastructure. To also undertake competitive benchmarking relative to other Layer 2’s and provide strategic recommendations.
• Ecosystem Building Initiatives → Analyse the impact of Retroactive Public Goods Funding (RPGF) on builder and user retention. Propose retroactive funding mechanisms for innovative projects, prioritize high-impact Arbitrum-aligned protocols for grants using an evaluation matrix, and recommend strategies to enhance ecosystem stickiness.
• Readying for Orbit Chain Interoperability → Propose non-technical UX improvements to enhance Orbit chain interoperability and public perception. Conduct a bridge design analysis, comparing intent-based bridges and recommending best practices. Review messaging layer solutions for applicability to Orbit chains, and analyse proposed solutions alignment with Ethereum's interoperability roadmap.

Blockworks Advisory (@blockworksres)

Experience:

Blockworks has established itself as a premier source of deep technical and protocol-specific research over the past two and a half years. During its participation in ARDC V1, Blockworks played a pivotal role in recovering/saving over 3.7M ARB in misused or unallocated funds for the DAO and Foundation (e.g. Furucombo and Synapse) while also facilitating important discussions around Timeboost.

Additionally, they developed a comprehensive Arbitrum data dashboard, delivering valuable insights into the platform's on-chain activity and financial metrics. They also support other leading protocols such as the Solana Foundation, Lido, and Ethena among others.

Proposed Scope of Work for Arbitrum:

• Timeboost Revenue Allocation Framework → Evaluate how revenue should be allocated and whether it makes sense for the DAO to capture all proceeds or redistribute it to impacted LPs/protocols.
• Orbit Chain Strategy → Help align the ARB token with the growth of the Orbit tech stack incorporating lessons from other ecosystems, outlining a procurement vs ownership model to identify what products/services the DAO should own.
• Unified Incentives Framework (Incentive Program Design Assistance) → Assist in the development of the next incentive program scheduled to launch in 2025, optimising ROI in various objective functions.
• General Data Services → Serve a shared data service provider that any Arbitrum working group or initiative (including the Foundation) could tap into to fulfil all data needs.
• Developer-centric Strategy Framework → Outline the developer pipeline specifically in regards to Arbitrum and provide suggestions for where DAO funding could aid in the development process.
• Financial Audit of Arbitrum Grants Programs → Conduct a retroactive analysis of the grant program to date to determine ROI for the ecosystem.

Messari (@messaricrypto)

Experience:

Messari is a leader in market intelligence, research, and data analytics for the digital asset industry, supported by a team of 130 crypto-natives. They have provided strategic support to nearly 100 projects, including base-layer protocols, DeFi, gaming, interoperability, and scaling solutions, offering deep technical research, on-chain financial reporting, and incentives analysis.

Notable contributions include ecosystem metrics deep dives and governance-focused analytics, as showcased in their State of DeFi Q3 2024 and Ethereum Quarterly Report Q2 2024. Equipped with advanced tools and ecosystem mapping capabilities, Messari enhances decision-making with the support of its analysts, data scientists, and governance experts.

Proposed Scope of Work for Arbitrum:

• Comprehensive Ecosystem Analysis → Aggregate on-chain data (e.g. transaction volumes, active users) and benchmark it against other Layer 2 solutions.
• Governance Framework Review → Prepare an evaluation report analysing existing governance structures, gathering feedback from DAO stakeholders and researching best practices from other DAOs.
• Treasury Management Assessment → Review historical treasury spending and revenue sources, identify potential risks and mitigation strategies, and propose diversification options to enhance financial resilience.
• Community Engagement Initiative → Develop educational content explaining governance processes, hosting webinars or workshops for community feedback and collaboration, and creating channels for ongoing community input.

RISK APPLICANTS

Vending Machine (@VM_TokenDesign)

Experience

Vending Machine is a token design and research firm with over two years of experience in crafting and simulating token systems, crypto-economic mechanisms, and incentive strategies for more than ten protocols. Their team brings deep expertise in data engineering, advanced modeling, simulations, and mechanism design.

The firm employs a rigorous Model-Based Systems Engineering (MBSE) approach to token design and simulation, ensuring a systematic, well-structured process for creating and parameterizing mechanisms. This comprehensive process includes multiple phases: research, objective definition, design concept generation, concept selection, simulations, parameterisation, and final delivery. Vending Machine has also successfully delivered projects for high-profile clients such as Fuel Network, Arch Network, Berachain, and Everclear, among others.

Proposed Scope of Work for Arbitrum:

• Conduct stakeholder interviews to define system objectives and requirements
• Create multiple design concepts and present these to the DAO for discussion and feedback
• Iterate if necessary and select the final design with the DAO
• Build a model of the token system to parameterize the design
• Simulate the design and present the DAO with a simulation report
• Present the DAO with a fully parameterized token design

TAU Labs (@628Labs)

Experience

TAU Labs is a Tokenomics and Data Science Lab specialising in token and incentive engineering, financial modeling, economic simulations, and mechanism design. Over the past year, they have worked with more than 15 clients, with a focus on DeFi protocols, such as MORE Markets, Rain.FI, and YieldNest among others.

Their multidisciplinary team includes data scientists, chartered financial analysts, and DeFi specialists. TAU Labs is particularly skilled in data science and economic modeling, leveraging Monte Carlo simulations and rigorous stress testing to ensure resilient risk management. They enhance transparency and stakeholder engagement by delivering public Machinations models and custom-built Python dashboards, making their research and recommendations accessible and actionable for all stakeholders.

Proposed Scope of Work for Arbitrum: Building on their deep analytical expertise, TAU Labs proposes to enhance Arbitrum's LTIPP and STIP programs by delivering targeted macro-level improvements and micro-level optimizations. The proposed scope includes:

• Summarizing key findings from existing LTIPP and STIP analysis and supplement it with secondary research, filling any gaps with primary research.
• Identifying room for optimization on the macro level.
• Ideating micro-level optimizations through user segmentation. Collaboratively evaluate tradeoffs and feasibility with the DAO, then plan, budget, and execute experiments for multiple promising approaches to generate insights.
• Providing a final report with key learnings.

Jupiter Block (@JupiterBlock)

Experience

Jupiter Block is an experienced law firm specialising in Web3 projects, Cayman foundation companies, BVI tokenization structures, investment funds, capital markets, M&A, Strategy as well as Risk Management and Governance. They are building a decentralized risk management framework based on an application of ERM in a decentralized setting, with a risk dashboard and Guardian Roles.

More recently they published a research paper with the Crypto Valley Association relating to DAO legal wrappers, DAOs as automated cybernetic organisms and risk management frameworks in DAOs, also serving as members of the LexDAO operating committee and co-founding Ixian.tech, a hybrid law, management and Web3 legal engineering firm building legal products for the world of tomorrow.

Proposed Scope of Work for Arbitrum:

• Addressing the strategic and management gap present within Arbitrum
• Highlighting good practices on the risk side developed in other industries and fields to adopt a holistic approach
• Develop a decentralized risk management framework, comparable to what ERM is currently for traditional organizations, helping improve the quality of interactions and increase credibility for Arbitrum as a whole.

DeFiSafety (@DefiSafety)

Experience

DeFiSafety has been specialising in risk transparency and mitigation for DeFi protocol over the past 4 years, producing over 600 reports, including 40 reviews of protocols on the Arbitrum network. Notably, Arbitrum was one of the first chains reviewed using DeFiSafety’s chain scores process. The team’s risk management expertise originates from their prior careers in aerospace, specifically in avionics, ensuring a methodical, safety-first approach to their work.

DeFiSafety's core output is its protocol review reports, with more than 300 publicly available on their website. They have collaborated with top-tier DeFi protocols on various initiatives, such as the Compound Protocol Multisig Improvement Program, which aimed to mitigate risks associated with lost keys and enhance trust in multisig wallets through increased transparency. Additionally, they have delivered independent chain reports to evaluate the security and performance of various L1 and L2 chains, as well as token risk assessment reports.

Proposed Scope of Work for Arbitrum:

• Development of a risk management plan through a collaborative process involving a series of meetings with DAO members. These discussions will focus on identifying key risks and understanding the priorities and concerns of the DAO community. Based on these insights, tailored mitigation measures will be designed, accompanied by clear justifications to support the investment in these risk management strategies.
• Develop a quality system that guides new users in navigating the ecosystem safely. This system will highlight wallets and protocols that adhere to audited best practices, enhancing user confidence.

Nethermind (@NethermindEth)

Experience

Nethermind is a leading infrastructure builder, researcher and core development team in the blockchain space. Their risk research team was a member of the STEP Committee where they rigorously vetted yield-bearing stablecoin opportunities, which led to a successful vote whereby $35M of DAO funds were deployed into yield-bearing stablecoins.

Nethermind’s research team combines expertise in finance, risk management, quantitative modeling, and on-chain data analysis, drawing from experience in prestigious financial institutions and hedge funds. They have also been long-term partners of hedge funds and VC funds, providing due diligence on projects, assessing technical and financial risks, and identifying areas for improvement. Their recent projects include working with dYdX to calibrate tokenomics and incentives for their Megavault product, and assisting Puffer Finance in designing their Validator Ticket pricing system.

Proposed Scope of Work for Arbitrum:

• Making DEXs more competitive in comparison to other L2s and CEXs.
• Impact Analysis after the deployment of ARB Staking → Assess how staking affects treasury funding, user engagement in governance, potential price volatility, and liquidity conditions in the ARB market, including recommendations for optimising staking incentives to align with community and DAO objectives.
• Impact Analysis after deployment of the Timeboost update on the Arbitrum ecosystem → Assess how Timeboost changes transaction ordering policies, its influence on miner/extractor value (MEV), and its potential effects on user fees and sequencer revenues.
• Restaking (Ethereum and BTC) and LRTs, examining their risks and identifying which AVS Arbitrum should strategically incentivize.

SECURITY APPLICANTS

OpenZeppelin (@OpenZeppelin)

Experience

OpenZeppelin has been a foundational security provider in the blockchain ecosystem since 2016, with their open-source OpenZeppelin Contracts library being widely trusted and serving as the core infrastructure for secure smart contract development. Previous work with Arbitrum includes evaluating key governance upgrades, verifying proposal correctness, and conducting security design assessments for projects like Timeboost and BOLD. Their contributions to the Stylus Contracts Library further solidify their integration into the Arbitrum ecosystem, leveraging expertise in Stylus runtime.

OpenZeppelin’s approach to security includes fuzzing, and rigorous manual review that addresses vulnerabilities from multiple angles, even developing the Defender platform and being the only security provider to identify a critical vulnerability in their Uniswap V4 Audit. Having participated in the ARDC V1, OpenZeppelin carried out reviews of governance upgrades, verification of proposal correctness, and security design evaluations.

Proposed Scope of Work for Arbitrum:

• Proposer Assistance and Payload Preparation → Support non-technical proposal authors in preparing their proposals, guiding them through best practices in proposal construction, and offering security insights throughout the drafting process to pre-emptively address any potential vulnerabilities.
• Proposal Security Review Process → Security reviews of Tally proposal payloads, ensuring alignment with intended governance actions. This includes manual and automated checks, a final verification of on-chain deployment, and transparent forum reports to enhance community engagement and proposal security.
• Governance Upgrade Audits → Collaborate with Tally and Scopelift to ensure secure, roadmap-aligned upgrades for the Arbitrum DAO. They will also explore feature enhancements for OpenZeppelin Governor through the newly launched Governor Working Group with Tally, ScopeLift, and Agora.
• Security Council Improvements → Recommend improvements to the Arbitrum Security Council, including multi-sig support for streamlined operations and technical requirements ensuring at least 9 of 12 members possess the technical skills to independently verify emergency upgrades.
• Additional Security Audits → Security audits for other smart contracts that the Supervisory Council considers to be in scope for the ARDC.

Trail of Bits (@trailofbits)

Experience

Trail of Bits has been a leader in software security for over 12 years, combining cutting-edge security research with an attacker’s perspective to minimize risks and strengthen code. They have performed over 300 blockchain security reviews, dedicating 200+ engineer weeks of Arbitrum security reviews through their work with Offchain Labs, reviewing essential components such as Nitro, Timeboost Auction, Stylus, BoLD and the majority of ArbOS updates.

Trail of Bits excel in program analysis and tooling, as demonstrated by their numerous open-source projects, such as Slither, Echidna, Medusa, which combine a pragmatic approach and fundamental knowledge to create tools that provide value to their users. Setting them apart from other security consulting firms, Trail of Bits maintains a dedicated Research & Engineering division that integrates the latest advancements in security research into every project.

Arbitrum Scope of Work:

• Review on-chain proposal code updates → Conduct white-box security reviews of source code using both manual and automated methods to identify design flaws and ensure security and correctness. Deliverables include comprehensive security reports featuring an executive summary, code maturity evaluation, a detailed list of vulnerabilities, and recommendations.
• Invariants development → Develop security invariants for future upgrades to ensure correctness at both function and system levels. This includes identifying security risks, testing with advanced fuzzers (e.g., Echidna, Medusa), and providing documentation to guide community contributions. Deliverables include runnable invariant code with full documentation and tool instructions.
• Tooling Creation and Enhancement → Develop and enhance tooling to improve Arbitrum's security, including static bug detectors, governance contract state visualizations, and tools to verify encoded values. Deliverables will include open-source PRs with detailed descriptions of their impact on DAO goals.
• Other offerings → Office hours, security consultation, incident response/disaster recovery alongside any additional services the ARDC may need (e.g. design review, threat modelling, blogs, cryptography reviews).

CONCLUSION

The applicants showcased in this post bring forward an impressive array of skills and expertise, underpinned by proven track records and tailored solutions for the Arbitrum ecosystem. From enhancing governance structures and community engagement to providing advanced risk management frameworks and pioneering security research, their proposals aim to unlock new growth opportunities and ensure the network's resilience in an ever-changing landscape.

As the Arbitrum DAO continues to lead in innovation and adoption, the careful selection of partners from this pool of accomplished applicants will be critical. By aligning with experts who deeply understand the ecosystem’s dynamics, the DAO is poised to drive sustainable development, inspire confidence among stakeholders, and uphold its position as a transformative force in the blockchain space.

We look forward to the elections!

Relevant Links: https://forum.arbitrum.foundation/t/election-application-thread-v2-arbitrum-research-development-collective/27267

https://www.tally.xyz/gov/arbitrum/proposal/36792157050667056852025000136263368859227883753318633087194112219909798752014?govId=eip155:42161:0x789fC99093B09aD01C34DC7251D0C89ce743e5a4

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