Arbitrum DAO Launches Watchdog Bounty Program to Combat Grant Misuse
The Arbitrum DAO has approved a new program called "The Watchdog" to monitor and prevent misuse of its grant funds. The program comes after discovering three instances of fund misappropration across various DAO initiatives, which have distributed over 422M ARB tokens for different purposes.
Under the new system, community members can submit anonymous reports about potential fund misuse through a designated platform. A committee of three reviewers, including representatives from the Arbitrum Foundation, Entropy Advisors, and the elected Research Member of the ARDC, will evaluate these reports. The program offers rewards ranging from 1K to 30K ARB tokens plus 5% of recovered funds, depending on the severity of the reported misuse.
The program defines three levels of fund misuse: Low (such as accidental double payments), Medium (involving recoverable misuse of funds), and High (including large-scale deliberate misuse or fraud). To maintain transparency while protecting whistleblowers, reports will be made public only after attempts to resolve issues privately have failed, and only in cases deemed necessary by the committee.
The initiative has received strong support from the DAO community, with 94.17% voting in favor, 1.78% against, and 4.05% abstaining. The total budget allocated for the program is 400,000 ARB tokens, which will be used for rewards and the development of the reporting platform. Once this budget is exhausted, the DAO will vote on whether to extend or end the program.
To receive rewards, whistleblowers must complete KYC verification with the Foundation. The program includes safeguards against potential abuse, such as requiring two or more reviewers to agree on the validity of reports. In cases where legal action is necessary, the Foundation will determine the viability of pursuing legal recourse based on the size of funds involved and the jurisdiction of the accused party.
The program's implementation will begin with a Request for Proposal (RFP) process to select a platform provider for the secure submission system. Entropy Advisors, who proposed the program, will conduct a six-month review to evaluate its effectiveness, including data on total misuse cases, severity breakdowns, and the amount of ARB recovered. This information will help the DAO decide whether to continue the program in its current form or make adjustments.
