A Vision for the Future of Arbitrum

Announcements
22

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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24

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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25

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.

1 Like
26

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?

4 Likes
27

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.

28

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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29

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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30

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 :fire::fire::fire:

7 Likes
31

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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32

The following reflects the views of L2BEAT’s governance team, composed of @krst, @Sinkas, and @Manugotsuka, and it’s based on their combined research, fact-checking, and ideation.

After extensive internal discussion and deliberation, we would like to share our thoughts on the vision outlined by the Arbitrum Foundation regarding the future of the DAO. We do not directly support nor object to the high-level changes suggested in the original post. However, we would like to offer our perspective on the expectations that those changes may bring.

Arbitrum Aligned Entities

First and foremost, we wanted to touch on the concept of Arbitrum Aligned Entities (AAEs), as their role is at the forefront in this new vision. We understand the need for AAEs to lead all the different initiatives, as opposed to having third-party service providers act as the front of Arbitrum. Having entities whose mandate is Arbitrum winning be both the strategy-setters and the operational arm of the ecosystem makes absolute sense.

However, it’s essential to clarify what exactly constitutes an ‘Arbitrum Aligned Entity’ in the scope of the DAO. In our minds, the AAEs used as examples in the post have several fundamental aspects that make them such, but they also have some key differences that we want to highlight.

Contrary to the Arbitrum Foundation, GCP, and the OpCo, Offchain Labs and Entropy are not controlled by the DAO in any way or form. We do not question their alignment in Arbitrum—if anything, they have demonstrated it multiple times. However, we think it might be a good idea to clearly state how an external entity can be considered an Arbitrum Aligned Entity. Does it require a vote? Does it require consensus within existing AAEs that they want to work with this new AAE? The three prongs of the definition provided appear to be open to interpretation, and we do not feel they sufficiently cover what is, otherwise, a very important part of this overall vision.

Operations and Execution

According to the vision:

Once a proposal is approved by the DAO, then there should be no discretionary, strategic or operational decisions conducted by anyone other than Arbitrum Aligned Entities. It will be up to the respective AAE to pick, negotiate the scope of work and hold accountable the involvement of any vendors and service providers.

Similar to the concept of AAEs, we understand the basis for this decision, and it makes sense. However, one thing that we should address is the fact that many vendors and service providers, including individual contributors, work on drafting and submitting proposals solely so they can execute them if and when a vote is successfully carried out.

Currently, it falls on service providers to convince delegates of the importance of a proposed initiative, which, as we know, is a very strenuous and time-consuming task. The reason they go through the process is that they will be rewarded if the proposal is approved, typically by being compensated to carry out the proposed work.

We understand that this causes a lot of inefficiencies, and one of the goals of introducing AAEs is to lower the burden on the service providers’ side by pushing it towards AAEs. On the other hand, this should result in better cost of services for the DAO. However, it is clear to us that this also introduces the risk that any new ideas and initiatives can only grow within AAEs, potentially stifling activity within the DAO and its surrounding ecosystem.

We want to emphasise that we see it as the responsibility of the AAEs (especially the OpCo) to mitigate this risk and actively work to reduce it. It is the AAEs’ responsibility to interact with the community transparently and openly. It is also the AAEs’ responsibility to reject initiatives that they don’t see fit to pursue, along with an explanation of why they don’t support them (other than just “it’s not on our priority list”), so that the community can then decide whether they want to give that initiative a chance outside the AAE structure, or let it go altogether.

Accountability and reporting

It is the AAEs’ responsibility to establish sufficient accountability and reporting standards for the DAO and to set the right expectations. We recognise that while DAOs are public and open environments, not all information should be made public, particularly in terms of strategy and operational details, for companies running multi-million-dollar businesses. However, at the same time, if delegates are expected to make decisions about funding allocations and whether to terminate ongoing initiatives, they need to be able to make informed decisions. With this new vision, we view it as AAE’s responsibility to ensure that delegates are well-informed and able to stay up-to-date with what’s happening. We recommend building on the existing monthly GRC calls and bi-weekly proposal calls, as they are already well-established in the DAO and have very good attendance.

Next step

Lastly, in terms of next steps for the proposed vision, we think it makes sense to first experiment with how the vision works in practice before attempting to ratify it via a vote. We can see the AAEs in action, adjust the DAOs procedures based on the new reality, and make changes to the vision itself as needed, based on the feedback loops that will be created. Only once we’ve done all that does it make sense to ratify the vision with a DAO vote.

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33

Thank you to the Arbitrum Foundation for putting forward this forward-looking vision for the ArbitrumDAO.

As a long-standing governance participant in Arbitrum, we welcome this moment of recalibration. We agree that the next phase of growth for Arbitrum must address operational inefficiencies, improve stakeholder clarity, and enhance the DAO’s ability to deliver impact.

On Arbitrum-Aligned Entities (AAEs) and Operational Efficiency

We agree that AAEs, particularly those already emerging organically like Entropy Advisors, OpCo, and the GCP, can play a pivotal role in making ArbitrumDAO more operationally effective. However, we believe the true north for any ecosystem structure must remain strategic goal alignment, not just operational convenience.

In our view, AAEs should not be the starting point for strategic direction, but rather the executors of already well-defined objectives that stem from the DAO’s broader alignment around Mission, Vision, and Purpose (MVP) and community-selected Strategic Objectives (SOSs). If the DAO remains focused on defining what outcomes it wants to achieve, the AAEs will be empowered to thrive in determining how to get there.

This principle also helps address an important concern: what happens when a proposal falls outside of an existing AAE’s scope? In such a case, we believe the proposal should not be rejected or excluded. On the contrary, if it aligns clearly with the DAO’s strategic direction, its emergence should be seen as a signal to form a new AAE capable of executing within that space. In this way, strategy leads structure, not the reverse.

Avoiding Echo Chambers: The Role of External Service Providers

As the DAO increases its reliance on AAEs, we must also ensure it does not become an operational echo chamber. AAEs, by definition, are deeply embedded in the Arbitrum ecosystem. While this drives focus and accountability, it also creates a risk of insular thinking, especially if AAEs only interface with each other or the OpCo.

This is where multi-protocol service providers bring crucial value. Vendors who work across multiple ecosystems offer broader market context, comparative insights, and the ability to challenge groupthink. Their presence ensures Arbitrum remains grounded in the competitive realities of the broader space, which is essential for maintaining an innovation edge. Rather than viewing such providers as secondary or ‘unaligned’, we encourage ensuring that external expertise continues to have meaningful access and voice in DAO operations.

Strategic Direction > Operational Structure

To summarize, we see this vision as a major step forward, and we are aligned with its spirit. However, we offer two key nuances as we move forward:

  1. Let strategy lead structure: MVPs and SOSs must remain the core compass of the DAO. AAEs should be structured in response to these goals, not define them.
  2. Protect diversity of thought: Let’s embrace the strength of a diverse contributor set by continuing to include ecosystem participants alongside internal AAEs.
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34

Organisation design

It looks to me that the proposed vision went from one extreme (no centralised execution capacity in the DAO) to the opposite extreme (only centralised capacity and also only centralised decision making of what should be done).
The vision is this sense feels reactionary and doesn’t excite me (although still an improvement upon the past, we have organisational blueprints in the likes of Haier, etc that already show how to create more effective and innovative organisations than the design proposed).

For any structure to work with such high dependency on AAEs, we’d need increased transparency from the AAEs. All listed entities (except OpCo for obvious reasons) are falling short of what we should strive for here IMO.

The organisation design could likely work 5x better if the entities had clearer mandates/domains. Currently, the definition of what it takes to join this group is unclear, and that compounds with broad mandates and little transparency, meaning the rest of the ecosystem is likely to be alienated.

Trust

Although we see the impact that Entropy has had in Arbitrum as overall positive, we struggle to see how it can be classified as an AAE. Entropy is privately owned and their exclusivity contract with Arbitrum will end soon.
If all it takes is for a service provider to have Arbitrum as sole customer, then many many others would be considered AAEs in a dysfunctional manner.

We suggest includign some sort of tiered definition of AAEs with different levels of trust and authority granted as a result.

Overall

If the issues above are addressed or at least recognised as challenges to work on, I’d be significantly more optimistic about Arbitrum.

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35

Hi all,

Thank you very much for all the comments so far!

We are very excited by the response from the community to the new vision. Let’s take this time to answer some of the questions raised and continue the discussion. Given the quantity of responses, we’ve grouped individual questions into common themes to avoid repetition and keep the answers concise.

  1. Delegates are still primarily responsible for making decisions, including approving or denying a proposal, but will most proposals go through an AAE?

Yes, OpCo will be responsible for acting as the router to ensure proposals are reviewed by the appropriate AAE and feedback is given transparently on the forum. If the AAE agrees the proposal is worth pursuing, they will undertake the task of getting the proposal through the DAO process and hopefully receive delegate approval. The AAE will then be responsible for its execution, acquiring vendors as needed, and working towards a positive result for the DAO.

Most importantly, as some commenters alluded to, tokenholders and delegates are not rubber stampers. They retain control of the on-chain treasury and software, and are the ultimate decision-makers. As outlined in the vision, they can pass proposals even if an AAE disagrees with them, and it will be up to the OpCo to hold the authors accountable to what was promised to the DAO.

  1. Is there an example of a proposal that was previously approved by the DAO, and how it might be different with the new vision?

Let’s take a look at the Arbitrum DAO (Domain Allocator Offerings) Grant Program (Season 3) proposal.

The proposal currently focuses on five domains: gaming, education, dev tooling, new protocols and orbit chains. It highlights the program’s past success, including a list of initiatives that it has funded and considers successful (e.g., Devrel Uni). It also includes compensation for each domain allocator and the program manager (JoJo, Juandi, Seedgov, Flook, MaxLomu and CastleCap).

In the new vision, the proposal should continue to promote the merits of the DAO grant program alongside potential domains that can be funded. The main difference is that the proposal should focus more on holistic goals (i..e, what does success mean for the program?) and not the operational details. For example, the DAO grant program proposal should be formulated in a vendor-agnostic manner and it should be an AAE, like OpCo or AF, that endorses the proposal and not an external service provider like Questbook.

If the proposal is passed, the allocated AAE will procure an appropriate vendor, which may or may not be Questbook, along with a negotiated service level agreement. The success of a DAO grant program should not depend on the platform (such as Questbook), but rather on the merits of the idea. If Questbook were to disappear or fail to meet the service level agreement, then a new vendor could be selected without going through the DAO process, ensuring the program can continue to function without significant interruptions.

If contributors are involved in the proposal, we expect the AAE to conduct a screening process to vet candidates to ensure they possess the necessary skills for the role. After the screening process, it will either be up to the AAE to select which contributors take on the job or a DAO election can be used. We do expect DAO elections to be used more sparingly and focused on more critical initiatives (e.g., selecting the OpCo’s oversight committee).

All contributors who are engaged with the program should have appropriate agreements signed with the relevant AAE as the counterparty. The agreement should outline the scope of work, compensation details, and be used to help monitor their performance and ensure they meet the DAO’s expectations. If the contributor is executing the role to the expected standard, then fantastic, but if they are not living up to the DAO’s expectation, then the AAE is expected to terminate their role.

Additionally, we expect the AAE to be more heavily involved in the proposal’s execution. This may range from helping pick domains, providing advice on individual grant applications, and some of the operational heavy lifting. It is ultimately up to the AAE to bear the responsibility to ensure the program is successful and the operations undertaken by the AAE should reflect that.

Note, none of the above should be viewed as a criticism of Questbook or any of its current contributors. It is simply an illustration of how the proposal may change if it is proposed to the DAO in the new vision alongside how an AAE is involved in supporting its execution.

  1. Empowering new AAEs should not come at the expense of contributors in the DAO.

The intention is to leverage the resources available from the five AAEs to help execute on proposals. A contributor can bring ideas to the DAO, and if the AAE believes a proposal should be implemented, they can take charge to push it through the appropriate processes to ensure its implementation.

The main idea behind the vision is that an AAE, and not contributors, bears the responsibility to ensure a program is successful and the operations undertaken by an AAE are expected to reflect that reality.

An AAE will be responsible for screening applicants, and in many cases, picking the applicant who is most qualified to carry out the task. The hired contributor will be engaged as a consultant with the relevant AAE working within a well-defined scope of work. They will work closely with the AAE to ensure there is regular feedback to support them in carrying out their duties.

If successful, we expect to see more contributors and service providers get involved in DAO approved programs.

  1. AAEs feel centralised and the process of picking a new AAE is important. What should we think about this?

To date, the ArbitrumDAO has organically created the majority (three out of five) of the new AAEs, including OpCo, GCP, and Entropy Advisors. Additionally, the DAO has the authority to appoint or remove the AF’s directors and has control over the AF’s vesting budget. In each case, the delegates and existing AAEs (AF/OCL) acknowledged the need for a new dedicated team to tackle a specific vertical within the DAO.

In some cases, this means that an existing AAE can relinquish some of its work on a vertical (like blockchain gaming) to allow a new team to arise that can dedicate significantly more attention to it. In other cases, like Entropy Advisors, there was a missing hole to fill in the DAO that existing AAEs were not executing on, especially around shepherding key partners through the DAO process, visual data dashboards, and strategic proposals.

Creating a new AAE should not be easy, as it’s essentially bootstrapping an entire new dedicated team. As we have seen, new AAEs will spring up when everyone has reached the rough consensus that it is needed. Additionally, the formation of a new AAE should not be viewed as a limited-time initiative that expires, but it should be set up to ensure the AAE will be here for the long run across a multi-year horizon.

  1. How will the DAO hold the AAEs accountable?

At present, the ArbitrumDAO has control over the OpCo, GCP, and AF via on-chain governance, including replacing oversight committees and directors of the organisations. With future AAEs, we expect the OpCo to take on the role of holding AAEs accountable to their commitments towards the DAO.

There are several reasons why we think this is desirable.

First and foremost, the OpCo’s sole mandate is to represent and support the DAO. It has no other mission statement than making sure the DAO is successful. Second, the oversight committee (OAT) is elected by the DAO to represent their interests and will have access to information that cannot be publicly available, alongside being able to resolve issues without undue attention from the public. Finally, the organisation as a whole will have resources to properly vet and perform due diligence on deliverables.

Note, this does not mean an AAE should not communicate with the DAO. Just like the AF with its bi-annual transparency reports, all AAEs are encouraged to publish their results to the ArbitrumDAO, to keep the community informed on successes (and failures), and to bring the community on the journey with them. After all, the DAO should be the AAEs’ biggest cheerleader, and that is only possible if the AAE is transparent.

  1. There should be a second tier of entities and contributors who are still strongly aligned and for whom Arbitrum winning is also mission-critical to their success.

We did not intend for this post to imply that there are only five organisations that care about Arbitrum succeeding. Arbitrum is a significantly large ecosystem with many teams, builders, and contributors who want to see Arbitrum win. The ArbitrumDAO to date is a testament that this is indeed true, with its activity and ability to have an impact over the past two years.

All AAEs, certainly the AF, want to work more closely with teams that see their success dependent on Arbitrum and/or want to see Arbitrum succeed, which is what this vision is attempting to achieve. We are a little cautious about declaring a second tier of entities as it feels slightly undermining to the contributions of those organisations.

If you’re a team, project, or contributor that truly wants Arbitrum to succeed, then we’d anticipate that this vision will help them work more closely and hand-in-hand with the AAEs.

As well, the new vision should enable more Arbitrum-focused teams to participate as delegates to help share our ecosystem’s future. This is because the barrier to entry into the DAO should be a less taxing event. They can vote on strategic decisions and rely upon dedicated AAEs to execute on the operational details.

  1. Redundancy across AAEs in the support services like recruiting, finance, etc. How can we deal with this?

There are some functions that must be independent for each AAE (e.g., general counsel or finance for internal budgeting). However, when possible, it is feasible to share resources across different AAEs.

One example is recruiting. If an AAE interviews a candidate who does not fit the job description, but their profile is suitable for another AAE, then with the applicant’s permission, the profile should be shared. Current AAEs already do this for candidates who are interviewed. Another recent example is event planning, as the AF, OCL and GCP worked together to ensure Arbitrum had a significant presence at GDC.

The main consideration here should be that AAEs must be synchronised with each other and ensure they share resources to help each other succeed. We are lucky to already have a culture that enables this process, and we must ensure it is maintained as the ecosystem continues to grow.

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I’ve been interviewed for a DAO Watch podcast episode, beautifully hosted by @CryptoSI and @KlausBrave, with my thoughts on this vision and some other things at Arbitrum DAO. I hope it’s a nice watch, and you can watch it here on X.com or here on Youtube.

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The full interview is genuinely insightful and worth watching. I encourage everyone to check it out! Always nice to see Cryptosi.

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Thanks for the update/clarification on the vision.

While I’m overall supportive of this specialisation path, I would like to add a few comments/suggestions.

The proposed setup with the AAEs is the following:

And borrowing @Entropy’s image from their SOS submission, the expected/proposed relationship is the following:

image
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In my view, this resembles a company/entity with a well-defined R&D department, comms & marketing, Data & Finance, an Investment arm (focused on gaming), and an admin structure to be built (OpCo). And I see two issues here:

  • The way we have it now is like those departments are outsourced, in a way that there is no direct relationship between ARB tokenholders (or delegates) decisions and the AAEs. The AAEs will have the autonomy even to refuse to work on a proposal approved by the DAO (more about it below). The envisioned structure proposes that the AAEs drives/gates the evolution/development of the DAO (and Arbitrum itself) while the OpCo acts as a bridge between the DAO and the AAEs. I could delve into more details, but outsourcing would reflect the gist of it. This is a consequence of;

  • A lack of a formal coordination role (It can be, or should be OpCo), in the sense that the other structures are hierarchically subordinate to it. This produces a power imbalance in the relationship between the DAO and the AAEs, reducing the checks & balances between them.

Using this as an example, there is an SOS submission about focusing on institutional entities. What happens if the DAO approves this proposal and no AAE supports it? How would this proposal move forward? While having, in theory, the manpower and the knowledge to execute it, today, if the AAE does not believe this is the way to go, there is no straightforward way to “enforce” its execution, which will increase the friction and the inefficiency within the DAO (in a way that is worse than what we have today).

If, for any reason, the DAO ultimately approves a proposal, then they have to come up with a way to execute it. This is an example of outsourcing and a lack of hierarchy that may hurt Arbitrum in the long run (and we are at the right time to discuss this).

TL; DR: While the proposed vision is a way to move forward, I would prefer a setup where it is clearly defined at any other AAEs are subordinated to OpCo, at least operationally, as it will be the DAO’s representative. IMO, it is a step further than what is mentioned here:

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Hey everyone,

I’ve been closely following this thoughtful discussion and appreciate the diverse perspectives shared. While the conversation has covered many essential topics around centralization, transparency, and accountability, I noticed a few subtle yet important areas that may still benefit from deeper exploration:

  • With operational power increasingly concentrated within Arbitrum Aligned Entities (AAEs), there’s a risk that direct community engagement may become limited to formal voting periods. How might we ensure that broader community sentiment is consistently reflected in governance decisions beyond structured voting?
  • The current approach largely depends on periodic reports and informal feedback loops. This may unintentionally lead to unclear or subjective assessments of AAEs’ and delegates’ performance. Is there room to consider more transparent, objective, and verifiable mechanisms for measuring contributions and outcomes?
  • Handing significant operational responsibilities to AAEs can undoubtedly enhance efficiency, but what happens if an AAE’s actions ever significantly deviate from the community’s mandate or expectations? It might be helpful to discuss how we can implement robust and decentralized emergency measures for such exceptional scenarios.
  • While formal governance calls and structured updates are valuable, they might not fully capture informal, ongoing community concerns or foster regular dialogue among stakeholders. Could we consider additional consistent avenues for open, direct conversations between AAEs, delegates, and the broader community?
  • With increased operational centralization, clear and independent conflict resolution mechanisms become crucial. It could be worthwhile to explore ways to introduce a trusted, neutral arbitration layer to transparently resolve potential disputes or conflicts.

I’d love to hear whether these concerns resonate with others or if there are angles I’ve overlooked. If these areas strike a chord, perhaps we can collectively explore practical solutions in a follow-up discussion.

Looking forward to your insights!

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I’ve been mulling over this vision ever since it was posted almost 1 month ago. I have refrained from sharing my views about it until now, because first, I wanted to let the dust settle on it for a little bit and see what everybody else thinks about it, but most importantly, because my initial reaction to it was quite visceral. I didn’t want to say something with a hot head, that I would later regret.

As I shared above, I did a podcast interview about it where I tried to remain factual and neutral about this vision and the consequences it can have for Arbitrum DAO, which you can watch here.

For context, I’ve been dedicating my time and energy to Arbitrum DAO, almost exclusively and full-time, since I quit my job at Thrive Protocol and went to Brussels to participate in (and eventually win) the Arbitrum GovHack in ETHcc in July 2024. Since then, I’ve been a very active delegate (as you can see from my track record here in this forum and on the Karma DIP dashboards) and I’ve been building proposals.app with @andreiv to serve Arbitrum DAO and its contributors. That’s mostly because to me, Arbitrum DAO is the biggest DAO in the world, and it is my deep belief that we need decentralized governance to work if we want to survive as a species, since governance is the endgame for humanity. That’s why I’ve been into DAOs since The DAO, and that’s why I’ve been actively building DAOs and other DAO tools exclusively for the last 4 years of my life. Also, a big percentage of my personal net worth is in $ARB, and the organization I’m building right now, proposals.app is serving Arbitrum exclusively, so on top of it all, I’m also an Arbitrum Aligned Builder.

So long story short, my opinion about this vision from the @arbitrum Foundation is that posting this vision in the forum, in this way, has effectively already killed the DAO in Arbitrum.

Here’s why:

  1. This vision is the direct result of the conversations in the secretly held Arbitrum Delegate Day meeting in ETH Denver in 26th of February 2025, as it was confirmed by @stonecoldpat here. Which means that this method of deliberation and definition of “A Vision for the Future of Arbitrum”, was done effectively behind closed doors, where the attendance of that meeting was gated by some arbitrary criteria (and no, it wasn’t just by the stated 2.5m ARB voting power threshold since, for example, @lobbyfi founders were in Denver but they were not invited to that meeting). I have an issue with this method of deliberation and communication of a unified vision, since it’s unclear which big delegates are onboard and pushing this vision for Arbitrum, besides the @arbitrum Foundation. It’s also unclear if @offchainlabs agrees with this vision (I think they do, at least from what I heard in the last call where Steven and AJ reinforced the same talking points in this vision) but more importantly, it’s not clear how much of a role Offchain Labs had in the definition of this vision. It would be great to have more clarity on the entities that contributed to the authorship and feel ownership of this vision for the Arbitrum DAO. Maybe a quick and easy way to bring this clarity would be to release the list of attendees of the secret delegate meeting in Denver, and then the larger community could assume that whoever was there agrees, supports, and backs this vision for our DAO.

  2. I called out on April 11th, in the first call about this vision, that this vision post should not have been posted in the Announcements category of this forum. The fact that it was posted in this forum category makes it look like an official and already DAO-ratified vision for Arbitrum DAO, which it isn’t, at least not yet. I understand why the @Arbitrum Foundation chose to submit this post under this category, for visibility purposes, but I would add that that utility has already been accomplished by this date, and that this post should be moved to either the Proposals category (where the intent would be to put it up for a constitutional onchain vote and update the constitution with this new governance process) or the SOS category (where the intent would be to have it included in the SOS feedback period of that strategic objective setting framework). And also, the overall intent and next steps for this vision should be shared by the @Arbitrum Foundation soon, instead of acting as if it is already the de facto way the DAO is going to govern itself going forward. Meta governance changes like this are exactly the ones that need the broadest consensus possible in a DAO, and the audacity of proposing them in this way and acting as if they are already in place is either delusional or tyrannical.

  3. Since this vision was posted, and for the past month, Arbitrum DAO has had way fewer offchain and onchain votes, way fewer proposals posted on the forum, way fewer Telegram chats, and way fewer forum comments than before. It feels like engagement is at an all-time low, just like the $ARB token price for these past months, which is the perfect storm to kill the organic engagement in this DAO. We used to pride ourselves that Arbitrum DAO was probably the most active and vibrant DAO in the world, and that’s not the case anymore. Those of us who were at the Arbitrum booth at ETH Bucharest 2025 felt that the DAO was alive and kicking. Then, a few days later, this vision was posted by the Arbitrum Foundation, and the vibe shifted hard to be the complete opposite of that. On a personal note, it feels very weird to me that in almost every call in this DAO for the past few weeks, I’m one of the very, very few that are paying attention to the call and almost always the only one that asks any sort of question. For the past month, ever since this vision was posted, it feels like either nobody cares anymore, or they are just afraid to speak any kind of truth to power.

  1. In my opinion, this statement above is misleading and borderline disingenuous since effectively, the proposed changes to the governance process detailed in this vision, effectively gatekeep any other entity that is not a sanctioned Arbitrum Aligned Entity (AAE) from proposing, getting funding and executing on a proposal they find important for the Arbitrum DAO. It feels like, even entities like @SeedGov and @404DAO, who have been contributing to Arbitrum DAO in a super valuable way for years, don’t know how to continue their engagements going forward. And I would imagine it’s the same thing for the @ADPC Service Providers (ever since the Foundation took over the Audit Subsidy Program), Hack Humanity with their GovHacks (since they haven’t submit any proposal to fund another similar event under the 2025 Event Budget that was targetting those kind of events), so on and so forth.

  2. I think last week was the first time Steven Goldfeder, the CEO of Offchain Labs, participated in a DAO call. And as I pointed out in that call, historically, Offchain Labs has been very hands-off in the DAO, just participating and commenting here on the forum whenever some technical issues call for their attention. For example, here’s a situation where they commented on a DAO issue, and here’s another situation of when they were explicitly asked to comment, but didn’t yet. As previously pointed out by @KlausBrave, the nature of the relationship between @offchainlabs and the Arbitrum Foundation is very unclear.
    For example, it’s weird that nobody knows how much of the spending of the Arbitrum Foundation in 2024 was paid to Offchain Labs for their contracted services, if any. According to the Arbitrum Foundation 2024 Transparency Report, the total that the Arbitrum Foundation spent in 2024 was roughly $117M USD ($74,491,895 USD + 39,656,742 ARB, and if we assume an average ARB price of $1.08 USD per ARB in 2024, it adds up to roughly $117M USD) and it begs the question: how much of those $117M USD were paid to Offchain Labs for their contracted services in 2024, by the Arbitrum Foundation? Given that Offchain Labs is considered an AAE and apparently the DAO is paying for their services via the Arbitrum Foundation, it’s only fair that, at the very least, the DAO knows how much it’s paying to this AAE, like it does for all the other AAEs.

  3. In this proposed new vision, there is no openness, set of criteria, or even just a simple proposed procedure for any other entity to become an Arbitrum Aligned Entity (AAE) and join the club of the selected few that will have the authority to gatekeep new initiatives in Arbitrum DAO. This is probably the thing that pisses me off the most about this vision, because in my mind, a well intentioned vision that would aim at truly increasing the effectiveness of the DAO would have to include a very clear procedure to onboard new and diverse AAEs going forward. The fact that this vision was posted without that shows that the powers that be are not preoccupied with either increasing the scope surface area of the AAEs or, more importantly, with maintaining a semblance of decentralization and credible neutrality. It clearly shows that there is no interest in sharing power outside the selected 5 AAEs. And it also shows that there isn’t even an interest in just reconciling the standards by which an AAE should be bound when it serves the Arbitrum DAO. For the record, I believe that the standards for a truly Arbitrum Aligned Entity should be: a non-profit entity, with open and transparent finances, and whose output is always open-source. And currently, none of the selected 5 AAEs are even remotely close to that level of transparency. In DAOs, we should always enforce the cypherpunk ethic of “Privacy for the weak, transparency for the powerful”. And it’s kinda poetic how we can see this principle at play in this very forum thread, where the most liked comment is an anonymous comment of someone speaking truth to power, and the latest Arbitrum Foundation response is dismissive, evasive and doesn’t offer any more transparency than previously, despite multiple direct questions asking for that increased transparency.

I could go on and on with more arguments, examples, and reasons as to why this vision has already killed the Arbitrum DAO, but I want to end with a little bit of a zoomed-out perspective. Over the last 9 months, ever since I’m been following Arbitrum DAO more closely and became a delegate, a bunch of changes gradually took place that I would like to highlight, and offer as context as to why I think the Arbitrum DAO is effectively dead today (since the posting of this vision is the final nail in the coffin, so to say) and how we’re all betraying the values enshrined in the The Amended Constitution of the Arbitrum DAO.

As a reminder, our constitution mentions 6 Community Values:

  • Ethereum-Aligned
  • Sustainable
  • Secure
  • Socially inclusive,
  • Technically inclusive
  • User-focused
  • Neutral and open

In the past, we previously undermined the “Ethereum-aligned” value ever since we voted to approve this change to the Arbitrum Expansion Program, as I pointed out before. And now with this vision, we are undermining the “Socially inclusive” and “Neutral and open” values in the constitution, as others have pointed out above:

At the same time, with the recent dissolution of the ADPC by moving the Audit Subsidy Program under the Arbitrum Foundation, with the DIP being curbed down by including a Voting Power parameter that effectively excludes small delegates from getting delegate incentives, with the Arbitrum Foundation recommending delegates to vote against the only onboarding effort in the DAO, with the recently expressed wish by the Arbitrum Foundation to be included in the writing of the final submission of the SOS to be voted and ratified by the DAO, with the Events Budget being mostly used by the Arbitrum Foundation, and all at once, and being deprecated soon because nobody dares to apply for it, with the MSS being restructured soon to move under the Arbitrum Foundation as well, with the Arbitrum Foundation spending $117M USD per year and starting 2025 hiring for 32 open positions, so on and so forth… I feel that at this rate, there will be no community-driven initiative in Arbitrum DAO, driven by any entity other than one of the 5 current AAEs.

Arbitrum DAO used to be the main example of a decentralized organization with several service providers serving it simultaneously, a vibrant community of contributors and delegates, weekly discussions and experiments going on, and continuous learning for all that participated. But now, that’s not the case anymore. All in the name of a supposed effectiveness, that comes from an insidious idea that DAOs should be run like centralized companies. They shouldn’t.

As I said in my podcast interview above, Arbitrum will never be able to compete with Base at being centralized. Base will always kick our ass on being centralized. Arbitrum was created to be, as it says in the footer on arbitrum.io “The Most Decentralized L2 Technology”. Therefore, we should act as the most decentralized L2 technology, which obviously includes having the most decentralized DAO in the space.

This vision from the Arbitrum Foundation steers Arbitrum in the complete opposite direction. It kills the DAO in Arbitrum.

Arbitrum should be an Ethereum-aligned, sustainable, secure, socially and technically inclusive, user-focused, and most importantly, a neutral and open DAO, just like it says in our constitution.

And we should fight for it to be kept that way, even if that requires the DAO to enact the nuclear option of replacing the Arbitrum Foundation directors and therefore categorically rejecting this proposed vision.

Because this DAO is the only way we can ensure to all stakeholders in our ecosystem that the rules of engagement will not change under their feet willy-nilly by a centralized actor, and therefore the best builders in the space can safely choose to build their businesses, apps, and products on Arbitrum, because Arbitrum is a DAO and should continue to be so. That’s our biggest competitive edge.

https://x.com/paulofonseca__/status/1918037276073882011

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As a builder, until recently, I considered myself deeply aligned with Arbitrum. A year ago, I pivoted my entire career to build tools for what I believe is a unique intersection: the bleeding edge of democracy and the bleeding edge of technology. My focus became DAOs, specifically Arbitrum DAO, because it stood out as the only credibly decentralized DAO governing the most technologically advanced L2.

I’ve been through this rodeo before with Senate, and I pushed hard to NOT incorporate and to NOT raise money. I saw firsthand how external investment can subtly distort product development for DAO tools, pushing towards decisions that compromise the integrity of the democratic process. That was a compromise I wasn’t willing to make, and we decided on a different path: building as a public good, prioritizing user experience above all, guided by FOSS-inspired values.

Our commitment wasn’t just theoretical. We won the GovHack, viewing it as validation for our idea. We went for a Questbook grant to build it, and recently completed it, documenting every step of the way. We mentored the first in-person publicly available Stylus hackathon, a couple of weeks after Stylus went into beta, not because we were knowledgeable about it, but because we were excited about it. We learned it, fixed bugs, and researched solutions together with the hackers and had a lot of fun just based on our shared enthusiasm about the tech. We pushed against a proposal which undermines technical superiority to convenience, Paulo very quickly became one of the most recognized and involved delegates, and I ran for the Dev Tooling grants track on an agenda of having fewer but better tools, instead of number go up.

We talked about the messiness of governance from a social perspective and the messiness of governance composability from a technical perspective in public, on stage, because we believe we shouldn’t only build in the space, but also criticize it when necessary, if we want it to become better. We talked about our failures together on stage in the most frightening way, because we believe lessons should be shared to help others, no matter how embarrassing they are.

I share these examples not as virtue signaling, but to illustrate the values that drove me to commit fully to this space and to build together with my friend and co-founder. These actions stem from a core belief system.

Your post describes no values. It only describes processes and red tape, with the overarching theme of “Arbitrum Alignment”, under the excuse of efficiency. Arbitrum Alignment should not mean being aligned to some other people or entities, it should mean being aligned to shared values, values this space was founded on: decentralization, permissionlessness, censorship resistance, ownership, composability.

More importantly, let’s be clear: the Arbitrum Foundation is just one player in this whole vision. While I strongly disagree with their current direction, and I even consider it unconstitutional, I can, to some extent, understand their reasoning. They are, in large part, likely looking out for their own interests.

But my deepest disappointment is reserved for the delegates. Your fundamental purpose in a DAO, your core responsibility, is to act as the vanguard, the watchdog, to fiercely protect the DAO from becoming something it was never intended to be—a centralized body just pretending to be decentralized. This protective role means actively defending the principles of decentralization, permissionlessness, and community governance against any encroachment. You are meant to be the staunchest defenders of these very principles. Yet, what we’re largely seeing from many of you is a deafening silence or, at best, ambiguous posturing. This absence of courageous, clearly articulated positions, whether firmly in support of genuine decentralization or in strong opposition to this proposed vision makes me question: if you’re giving up without a fight, have we all just been participants in decentralization theater all along?

I will not pledge allegiance to Arbitrum Foundation, Offchain Labs, Entropy advisors or any other person or entity just to be aligned. I am willing to pledge allegiance to values, but you are not describing any. If I wanted efficiency above all, I would be in jessie’s dms, not here.

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Does @Arbitrum know yet if this will be followed up with a proposal? Or will this continue to be only a forum conversation to collect feedback and decide later whether to follow up with a proposal?

We ask because if there’s no proposal coming immediately, then that would probably help everyone relax a bit. Not knowing whether this vision will remain simply an aspirational opinion of AF or teasing a major reorganization proposal is taking a lot of the oxygen and bandwidth.

(If a proposal is going to come in the next few weeks, it would be great to get it posted earlier than is necessary since it would have a lot of complexity and details to review)

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