This announcement marks a strategic shift—not just in operations, but in how power, decision-making, and participation are structured across the Arbitrum ecosystem. While many of the inefficiencies highlighted in the post are accurate and well-understood by high-context delegates, its heavy-handed recommendations disproportionately fault the DAO, overlooking how the Foundation and OCL’s intentional hands-off strategy has contributed to the DAO’s present challenges.
It’s ironic that the delegates and contributors who drove meaningful discussions and deliberations around the creation of the AAEs, and let’s not forget, also funded these entities, are now being stripped of their voice and power. Publishing this as an “Announcement” without a clear voting timeline turns what should be a formal governance process into a top‑down directive.
Our intention is to provide constructive recommendations that preserve the fundamental elements of decentralization and the guiding values of The DAO’s Constitution, while aligning them with the mandates and structure of the Arbitrum Aligned Entities.
Our Recommendations for Constructive Revision
Introduce Checks and Balances for AAEs
If Arbitrum is to formalize a class of operational entities with discretionary power over proposal creation and execution, the DAO must also formalize oversight mechanisms. Additionally, with the Foundation now taking an opinionated stance, which inevitably carries a lot of weight, we recommend the DAO explores engaging a neutral third party who is an expert in governance systems to assess the current design and propose a revised design with robust checks and balances between the DAO and the AAEs.
Align on AAE Designation
The current criteria for AAE designation: competence, primary focus on Arbitrum, and mission-critical alignment—are directionally useful but applied too narrowly. As written, they are unclear and appear tailored to a pre-selected group of entities. For example, entities like Entropy, though highly capable, was founded independently and could easily serve any DAO, which questions its “mission‑critical” designation.
Meanwhile, organizations like @SEEDGov, which have been instrumental in the DAO’s operations and have held a similarly high bar in their own execution, don’t appear to qualify under the current label.
To be clear, we are not implying that Entropy should not be an AAE. Rather, if additional entities are to be designated as AAEs in the future (which the post encourages), we need a clearer definition of the term.
Additionally, the current structure excludes key segments of Arbitrum’s contributors. This creates the risk of disenfranchising the individuals and organizations who nurtured and governed the DAO through its two year history.
Specifically, the new structure needs to have clear pathways for:
- High-performing individual contributors
- Ecosystem-native orgs that are deeply committed, even if not exclusively focused
- Emerging operators with the potential to grow into mission-critical partners
Without these changes, the new structure risks alienating long-standing contributors and undermining the Community Values written in The Constitution, specifically the guiding values of “socially inclusive” and “neutral and open”.
Preserve a Meaningful Role for Delegates
As the post explicitly says, the role of delegates will change to “approving or denying Arbitrum Aligned Entities with the authority, funds and mandate to act.” Effectively, this means that delegates will be stripped of their collective autonomy, turning us into rubber stamps.
Furthermore, the proposed social change to the proposal process will create a culture of decentralization theater. Under these changes, the DAO effectively forfeits its collective autonomy to OpCo and the OAT who have the power to authorize proposal pivots and cancel DAO initiatives.
There remains a critical gap in how the proposed structure handles novel ideas that fall outside existing AAE scopes. The new vision suggests that proposals lacking an “aligned” AAE for execution would effectively be sidelined, even if they offer significant value to Arbitrum. This creates an innovation void where good ideas die simply because they don’t fit neatly into predefined operational or strategic categories. As a result, we risk creating blind spots in Arbitrum’s success, missing opportunities that don’t align with current AAE mandates but might represent tomorrow’s growth areas.
We can look to SEEDGov’s SOS submission as a viable solution to this problem. By creating specialization and a reputation system amongst delegates, delegates can champion proposals that are born in the DAO and select experts within the DAO to execute.
We Support the Direction—But the Design Needs Improvement
The Foundation and Offchain Labs stepping in with renewed energy and structure is welcome and, frankly, desired. Execution must improve, and coordination across stakeholders must be strengthened.
But the path forward cannot disregard the contributors who helped sustain the DAO through its most experimental stage. Empowering new operational structures should not come at the cost of silencing those who have invested significant time, reputation, and ideas into ArbitrumDAO.
We support the strategic vision to enhance Arbitrum’s efficiency and coordination. However, the proposed AAE model requires significant governance refinements. The implementation centralizes too much power without proper checks and balances, sidelines established contributors, and reduces delegates to rubber stamps.
We need a clearer path for non-AAE innovation, stronger delegate involvement, and formal oversight mechanisms before moving forward with this fundamental restructuring.
Although these improvements may slow down the DAO in the short term, we believe they will cultivate a healthy, thriving governance system that is not only aligned with its values set out in the Constitution but designed to thrive well into the future.