Hi everyone, thanks for joining the call earlier last Friday. Here’s a recording of the session -
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Overall this is a good move imo as the DAO lacks dedicated entities that wanna see Arbitrum WIN and the delegation spectrum does indeed lack entities/people that are personally invested in Arbitrums success + the builder side not being well represented.
The question becomes, what will ensure that these Aligned Arbitrum Entities will in fact serve Arbitrum and put Arbitrum first, what’s the mechanism/strategy/etc? Or do we have to assume they will just do it?
Except OCL who kinda created Arbitrum and most likely want to see it win because it’s their baby + Arbitrum investors, afaik the other AAE are being PAID by the DAO at the moment so the question becomes how will we know if they are putting Arbitrum first? Should we just trust their word on it?
It’s naive to believe that people/entities getting paid by X will put X first because they have their incentives to put themselves first.
Just an honest view from someone who’s not getting paid by the DAO atm and has a small personal investment in Arbitrum(>50k$)
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We can see Arbitrum DAO Treasury has become one of the most sought-after in the ecosystem, for grants, service work, and everything in between. But with that comes noise, inefficiency, and a flood of proposals.
We’ve also all felt the friction: bureaucratic votes, and an ops structure that just doesn’t scale.
I think the core team has had enough, and this proposal is a way of taking back control, not to centralize, but to streamline.
Moreover, AAE makes sense: bring in mission aligned teams to execute, backed by DAO oversight. It’s a functional upgrade that mirrors what other high performing DAOs are already doing.
Of course, we need safeguards such as transparency, term limits, KPIs, and appeal paths to protect community input.
All in all, I see this as a healthy evolution. I support the vision but let’s make sure it’s implemented with care.
Maybe can take a look at the post from my team about this for more insight https://x.com/PinkBrains_io/status/1911732145376415929
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Won’t repeat what has been said already (much needed approach to improve efficiency but a tight rope to walk on wrt decentralization & how can we actually make sure AAEs who are stand-alone businesses are truly aligned?)
A comment during the call from @0xRecruiter I believe made me think the following:
There will be /is already quite some redundancy across AAEs when is comes to “support services” e.g., recruiting, finance. Every AAE dealing with it separately means
- every AAE onboarding a different service provider (or someone internal) aka training/ making sure they understand the Arbitrum Ecosystem enough to perform in their function
- for talent: there is no structured way to refer someone from e.g., GCP to Entropy or OCL because they would be a better fit there
- for research: every AAE dealing with research SPs separately, often not knowing what the counterparty already knows from previous engagements with another AAE
Etc
What I could imagine is e.g., one AAE “taking over” the talent function (could be AF?), putting a solid structure in place and “feeding” the rest of the AAEs (like a service center). Similarly with Finance, one AAE contracting a finance/accounting SP, provinding context and “servicing” the rest of the AAEs. Or with Research having the AAE in charge of research, “managing” the relationships with SPs and “servicing” other AAEs when research requests arise.
Top of my head is talent,finance and research → maybe there are more.
There also might be some regulatory concerns (tbd). Or maybe also all AAEs are better connected in these terms than I thought and this is a non-issue.
There is a lot I can say on this vision and suggested implementation, I’m still gathering my thoughts for a more comprehensive post.
For now one line jumped out for me that didn’t make sense:
Offchain Labs is a “Contracted Service Provider to Foundation”.
This doesn’t fit my mental model for how I thought things worked. @Arbitrum Foundation, can you clarify has this already been happening historically does Offchain Labs get paid by the Foundation from its treasury for contracted work? or is this a future intent?
My understanding is that OCL has raised $124m VC, last round in 2023, OCL has no inflows of income as I understand it, I am not sure how OCL plans to be sustainable once remaining VC runway is depleted.
I think OCL does fantastic work and for long-term sustainable operation we should plan and organise a clear way for them to be compensated by the market, the DAO, or transparently from the Foundation suggested here.
@Arbitrum Foundation, @offchainlabs can you explain how this Foundation-OCL contract works historically and how you propose it work going forward?
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I support the idea behind “The Watchdog” bounty program. Introducing a structured incentive to report misuse of DAO grants is a positive step toward increasing transparency and accountability within the Arbitrum ecosystem.
The allocation of 500,000 ARB for valid reports and 20,000 ARB for verification shows a serious commitment to fund protection. However, I would suggest clear guidelines around what qualifies as “misuse” and a robust appeal process to ensure fairness for grantees being reviewed.
Overall, this initiative strengthens trust in the DAO’s operations, and I look forward to seeing how it evolves.
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.
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Now that the honeymoon, rocket emoji smashing period appears to have ended for this proposal, we want to make sure an important technocratic upgrade does not get lost in the broader discussion:
AF posting this thread under announcements rather than proposals, and aggressive moderation on other threads of views not favored by AF demonstrates the need for this.
As a result, regardless of whether this vision moves to a formal proposal, it is good practice to separate moderation and adjudication responsibilities from the AF.
Good governance requires separation of powers, and having AF police comments while taking on a political role, much like AF deciding eligibility requirements for elections where its own members are competing with any candidate that would be disqualified, is simply bad practice.
We invite AF to reach out to collaborate on drafting a proposal to fill this gap with apolitical service providers.
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Here is the heart of the problem, right? And the motivation for doing all this.
Why is this the case?
Why didn’t the builders in the ecosystem join the DAO? Why aren’t there large delegates with strong technical understanding of what upgrades are coming to arbitrum next? Why is there barely any difference in control of the DAO compared to the day after it launched more than 2 years ago?
IMO, lack of checks and balances, & governance apathy driven by barriers to contribute created this situation. I challenge the foundation & OCL teams to start new Anon accounts, which positively contributes to the DAO using your full “holistic context” and see you if you can get 5k ARB delegated to you from 5 people. I bet you can’t.
So hep me pass this, and let’s work on these underlying issues together:
I welcome more direction & leadership from OCL, especially on coordinating technical upgrades to the network with the strategic direction of the DAO, as it is something I have been asking for from leadership for 6+ months.
This is sooooo real 
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I’m supportive of this new vision and view it as a worthwhile experiment as the bottlenecks identified are real, and the proposed structural changes could meaningfully reduce them.
That said, there are a few points that I think would benefit from greater clarity:
AAE Definition
My main worry is that AAEs are defined too loosely, which could become a sticking point later on:
- What exactly counts as a “primary focus” on Arbitrum?
- Must all team members be full-time on Arbitrum too?
- If part‑time contributors are allowed, is there an upper limit (e.g., ≤ 20 % of staff)?
If the intent is full‑time dedication, the definition should say so explicitly—e.g., “Arbitrum is the only focus.” At the same time, requiring 100% dedication from everyone could significantly limit the available talent pool.
Scope Assignment
When a proposal lands in a grey area not already covered by an existing AAE, how is ownership decided? I don’t think this was made very clear in the proposal. For example:
- Do existing AAEs get first right of refusal, or is there a competitive process?
- Under what conditions is a new AAE created instead?
- Who makes the final call—OpCo, the OAT, or the DAO?
We need a clear mechanism to avoid (i) spinning up so many AAEs that we recreate today’s bottlenecks, and (ii) overloading current AAEs beyond their bandwidth or expertise.
Transition Roadmap
Lastly, it would be helpful to have greater clarity on the migration path by (i) outlining which current DAO programs would roll into which AAEs, (ii) which ones would be sunsetted, and (iii) any remaining gaps, to make sure nothing mission‑critical falls through the cracks.
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