AGV Wind-Down: Structured Transition & Return of Capital to the DAO Treasury

[OpCo]

Co-authors: AGV Team, OpCo Team, Arbitrum Foundation & OAT

Abstract

This proposal seeks DAO approval for AGV to cease forward investment activity and return surplus capital to the DAO treasury for redeployment. Following a broader review of the Arbitrum ecosystem, the OAT, AGV, and other relevant stakeholders have determined that continuing to operate AGV as a consumer- and gaming-focused venture platform is no longer aligned with the DAO’s current priorities. Accordingly, AGV’s scope will be narrowed to focus exclusively on managing and maximising the value of the existing portfolio, including selective follow-on investments. Its grant program and any new capital investments outside the portfolio will be sunset.

Under this proposal, ~143.7 million ARB currently held for the AGV program out of the 225.0 million originally allocated will be returned to the DAO treasury. Remaining assets will be reviewed to support the existing portfolio, maintain follow-on reserves, satisfy outstanding obligations, and fund ongoing portfolio management through the end of 2026. Any surplus capital will also be returned to the DAO treasury.

To execute this, the proposal tasks the Arbitrum OpCo Foundation (under the oversight of the OAT) to effectuate the formal wind-down and associated activities, including acting in place of the current GCP Council. The specific authority being delegated to OpCo for this purpose is set out in the Delegated Authority & Powers section below.

The AGV entity will remain operational through the end of 2026 under a reduced operating model focused solely on portfolio management, reporting, and capital preservation. During the wind-down process, the OpCo, with support from AGV team members, will review the best long-term structure to house the existing investments.

Motivation

Over the past several years, Arbitrum has established itself as one of the leading blockchain ecosystems, built on a strong community, differentiated technology, and a long-term commitment to web3 infrastructure. Arbitrum Gaming Ventures (AGV) was created to support that ecosystem through an industry-focused venture program, backing companies across verticals that could generate value for the DAO.

Since its inception, the team has operated with rigorous diligence, prudent capital deployment, and close coordination with key stakeholders. We remain confident in the long-term potential of gaming and consumer applications on Arbitrum and expect these sectors to continue playing an important role in the ecosystem.

Following a review of current market conditions and the DAO’s evolving strategic priorities, the AGV Team, Arbitrum OpCo (including the OAT), and the Arbitrum Foundation have aligned on a proposal to formally wind down AGV.

Rationale

A structured wind-down preserves the most value for the DAO. Existing portfolio companies will continue receiving support, follow-on reserves will be maintained for high-performing positions, and undeployed capital will be returned to the DAO treasury. This approach reflects the same commitment to responsible stewardship that has guided AGV’s operations from the start.

Appointing OpCo to coordinate the wind-down with the independent directors and input from the current AGV GM (Michael Chang), rather than leaving it to the existing AGV structure or transferring it elsewhere, serves two purposes:

• It ensures that a full-time operations team, including the DAO-appointed OAT and any other service providers or AAEs engaged as part of the wind-down process, is responsible for coordinating and overseeing the operational, legal, and financial aspects of the wind-down in collaboration with the AGV Directors.

• It empowers the AGV Team to transition to new opportunities while remaining available to support portfolio-related matters during the process, including supporting the teams on a regular cadence and providing input on how to allocate reserve funds for high-performing positions.

Delegating the relevant tokenholder rights to OpCo is the mechanism that makes an orderly wind-down executable. It is not intended to replace the rights of tokenholders, but to enable OpCo to effectuate those rights during the wind-down process while minimising ongoing operational expense to the DAO.

Specifications

Financials & Capital Return

• 86.18 million ARB remain in the possession of the Arbitrum Foundation since the last transfer to AGV on 29th January 2026. The AF will return this ARB to the DAO treasury.

• 57.50 million ARB remains in AGV and will be returned to the DAO treasury

• $12.8 million USD of liquid fiat and stablecoin assets remain in AGV to be reallocated after allowing for capital retained to support portfolio management, operational expenses, follow-on investments and other ongoing requirements in 2026 and future years. An initial $7 million USD and any future surplus will be reallocated towards DAO-approved treasury programs (Link)

• $10 million has been deployed and remains invested across 15 opportunities. These investments remain illiquid and will be managed in accordance with the proposal below

The retained capital will be used exclusively to:

• Support selective follow-on participation in existing portfolio companies

• Manage and oversee the existing portfolio

• Maintain the AGV entity in good standing through the end of 2026 and beyond (if necessary)

• Satisfy any outstanding obligations associated with the portfolio and entity operations

Any assets determined to be surplus to these requirements will be returned to the DAO treasury programs within a reasonable time.

Continued Portfolio Management

AGV has already ceased making new investments; its remaining activities will be limited to portfolio management, information transfer, and the orderly completion of the wind-down process. No capital will be deployed outside of the previously committed obligations and approved follow-on participation within the existing portfolio.

OpCo will oversee continued management of the existing portfolio:

• The AGV investment team will participate on the investment committee for any follow-on funding, with the OAT serving as oversight in a manner similar to the current AGV Council

• The AGV investment team and OpCo will support existing portfolio companies to preserve and maximise future value

• Authorise follow-on reserves and evaluate liquidity opportunities

• Assess whether AGV’s existing entity should be maintained or whether its investment portfolio should be transferred to another Arbitrum Aligned Entity, after taking feedback from relevant stakeholders, including the AGV investment team and proposed participating AAEs.

• Supporting reporting and oversight responsibilities to the DAO

The primary objective of this process will be to maximise long-term value realisation for the DAO while minimising ongoing operational expenses. Given the long-duration nature of venture investments, any future structure will be designed to provide appropriate portfolio oversight and value realisation over the life of the remaining portfolio.

All follow-on investments for existing portfolio companies will be evaluated against criteria including portfolio company performance and traction, preservation of ownership and risk-adjusted return potential, strategic relevance to the Arbitrum ecosystem, and available reserve capital.

OpCo intends to draw on the experience of AGV’s investment team to support the portfolio through the transition. OpCo will determine the structure of any ongoing involvement in consultation with the team. Final decision-making authority on portfolio matters rests with OpCo, informed by input from the AGV investment team, OAT, and other advisors as appropriate.

Governance Transition

We would like to take this opportunity to thank all members of the AGV Council for their work to date. To effectively implement this proposal, the current AGV Council members’ term will end concurrent with the passing of this proposal by the DAO; they will immediately retire from council governance responsibilities, but are offered terms until July 31, 2026, to support transition and completion of handover formalities.

A new GCP entity governance structure, including GCP Council composition, will be implemented at the direction of OpCo, with input from the current GCP GM and OAT. Any use of reserves for operations or to protect and further support existing investment positions will be subject to the procedures established in this proposal.

GCP Foundation Directors remain independent and shall apply their own best judgment in good faith as they exercise their fiduciary responsibility to the Foundation.

The terms GCP and AGV are used interchangeably in this proposal and should be interpreted as referring to the same entity. GCP reflects the Cayman foundation company; AGV is the operating nomenclature.

Transparency & Reporting

OpCo will continue to provide periodic reporting to the DAO and relevant ecosystem stakeholders. The Arbitrum OpCo Foundation will provide material updates to the DAO as transition planning progresses and as any updates regarding future governance of the assets are developed.

Delegated Authority & Powers

To effectuate the wind-down described above, this proposal appoints the Arbitrum OpCo Foundation (including the OAT) to coordinate with the AGV Directors and input from the current AGV GM (Michael Chang), and authorises it to access all confidential information and legal agreements necessary to carry out the wind-down process. OpCo will direct the wind-down and approve all expenses to be used by the entity, and the AGV Directors will use all best efforts to implement the wishes of this proposal.

All corporate documents (including bylaws) will be amended to delegate tokenholder authority under the GCP Bylaws to the Arbitrum OpCo Foundation such that the Arbitrum OpCo Foundation will have the ability to implement and effectuate the rights afforded to tokenholders on their behalf, for the purpose of effectuating the ongoing operations and wind-down, including (but not limited to):

• Appointment and removal of GCP Council Members

• Providing consent to any proposed changes to these Bylaws which amend or remove the rights of Tokenholders under these Bylaws

• Providing consent to any proposed changes to the Foundation Articles which amend or remove the rights of Tokenholders under the Foundation Articles

• Instructing the Foundation Directors to wind up and/or dissolve the Foundation in accordance with the Foundation Articles

• Approving any other action in accordance with the Foundation Articles and the Bylaws

This delegation is instrumental, not a standalone transfer of tokenholder rights: it enables OpCo to effectuate the existing rights of tokenholders during the wind-down process. Further, the Arbitrum OpCo Foundation shall also be delegated all rights, powers, authorities, and responsibilities vested in the GCP Council under the Bylaws.

For the avoidance of doubt, the DAO authorises the Arbitrum OpCo Foundation to take all actions reasonably necessary to ensure an orderly and stable wind-down that protects the DAO’s investment and serves the interests of relevant stakeholders, including undertaking any unanticipated steps, tasks, or approvals that could not reasonably have been foreseen at the time of this proposal.

Voting Options

Option A — For
Approve the AGV wind-down, transition plan, return of capital, and delegation of authority as described.

Option B — Against
Do not approve. AGV continues operating under its current mandate.

Option C — Abstain
No position.

The proposal to wind down the AGV entity will follow a non-constitutional temperature-check structure without quorum requirements, as defined in the AGV’s bylaws document (3a.V & 3a.VI).

[MconnectDAO]

What’s Right:
The return of 143.7M ARB to treasury is a commendable act of capital discipline DAO funds should serve the DAO, not sit idle in a dormant program. The timeline is clear, existing portfolio obligations are not being abandoned, and the overall wind-down structure is responsible.

Core Concern:
However, granting OpCo such broad delegated authority council appointments, bylaw amendments, entity dissolution, and all tokenholder rights without any defined checks or review triggers is a governance centralization risk. If OpCo itself becomes misaligned down the line, what is the recourse for tokenholders…?

This proposal’s “structured transition” effectively hands OpCo unchecked control over the entire wind-down process. Should we mandate a periodic Snapshot review or an independent oversight committee before final dissolution?

I support the wind-down but the authority delegation structure needs tightening before this passes. Vote: For (A), with amendments requested.

@OpCo

[Entropy]

Entropy supports this proposal and will vote for Option A when it moves to an offchain vote.

The AGV team and Council deserve real recognition for their work. They took on a difficult challenge and, from our observations, operated with diligence and discipline throughout the program’s life, especially given that they are now steering an orderly transition that protects the existing portfolio and returns a majority of funds to the DAO.

Our team views the wind-down a prudent step once you look at the fund’s expense ratio. The 200M ARB allocated for investments and grants was worth several multiples higher when the DAO approved the program in June 2024. However, like many other DAO programs, the operating budget was set in dollars terms. Considering only the 2025 operating expenditure of $3.31M, that runs at more than a fifth of the fund’s current value, an expense ratio an order of magnitude above what a venture fund of this kind would normally carry. Combined with consumer and crypto gaming not producing the user adoption or breakout traction that the AGV’s original thesis anticipated, a standalone venture and grant platform dedicated to that vertical no longer matches where the ecosystem is putting its focus.

We believe OpCo with OAT oversight is well positioned to execute this wind-down as it can coordinate the legal, financial, and operational steps with the AGV Directors at lower ongoing cost than keeping the full AGV governance structure in place. Our team does not have concerns with the proposed delegated authority & powers. Concentrating execution in OpCo is the most efficient route to completing the transition and preserving value in the remaining positions.

Thank you again to everyone who built and ran AGV. Bringing the program to a responsible close on these terms reflects well on the team and leaves the DAO in a stronger position.

[Arb_Junior]

The AGV team has been a dedicated partner in nurturing gaming and consumer applications on Arbitrum for years. Their diligent capital deployment, support for portfolio companies, and long-term commitment to the ecosystem have helped strengthen Arbitrum’s position in these important verticals. Even as priorities evolve, their contributions to the growth of the ecosystem deserve genuine appreciation.

Big thanks to the AGV team for their years of hard work supporting gaming and consumer projects on Arbitrum. You’ve been strong advocates and responsible stewards of DAO capital.

This structured wind-down approach is responsible and aligned with good stewardship. Returning ~143.7M ARB to the DAO treasury while ensuring proper support for existing portfolio companies and follow-on reserves through 2026 strikes the right balance. It frees up capital for the DAO to redeploy according to current priorities without abandoning the investments already made.

I support this proposal. Looking forward to seeing the existing portfolio continue to thrive under the new model.

[JoJo]

I am voting in favour of this proposal.

For context, I was elected to the AGV Council in December 2025 and onboarded in January 2026, so I have had the opportunity to observe the program’s operations and due diligence process from the inside, albeit for a relatively short period.

It is understandable to feel a sense of loss when an initiative of this scale and ambition has to be scoped down, particularly given the energy, time, and involvement that many people have poured into it, from both the AGV team, OCL people, Foundation members and even delegates.
That said, I believe this is the right call. The consumer and gaming verticals that AGV was built around were a natural fit for the previous iteration of Arbitrum as an ecosystem. As the DAO’s strategic direction has become more business-oriented, the original thesis no longer aligns cleanly with current priorities. I want to be clear: i don’t think it was wrong, just, the the industry itself has shifted, and the ecosystem’s mission and vision have evolved accordingly.

None of this diminishes the quality of the work done. The AGV team operated with a level of rigour and discipline that I had the honour to witness first-hand. The due diligence conducted by Rick, Dan, and Michael, together with Tammy’s support on the legal side, was extremely deep and profound, more than what you would have expected from the outside. Despite the fact that this would have been the year of the fund’s most significant capital deployment, the pipeline already contains several highly promising opportunities that are a reflection of this process and of the overall team’s judgment. My time working alongside them, while brief, was both a pleasure and also a learning experience.

I am glad that the proposal can retain some of this talent, albeit in a reduced capacity, to manage the existing portfolio and evaluate follow-on investments (for people unaware, this is the norm in venture environments). It’s also the right approach: we want to maximise the chances of generating meaningful returns, potentially multiples of what has been deployed, and continuing to support the winners in the portfolio is the best way to do that. AGV current team is the one that has the best knowledge to select these winners.

As a closing note, while I do support the wind-down, it would have been fascinating to see where the fund stood eighteen months from now. The overarching alignment of ecosystem entities to a coherent mission that is consistent in its strategy and execution plan matters more than any single program or any secondary goal. Crypto changed, Arbitrum’s priorities changed with it, and this proposal is effectively a consequence of this.

---

On a personal note, I want to thank Dan, Rick, Michael, and Tammy, as well as my council colleagues John, Tim, and David, for making my tenure an experience that, even if brief, was well worth undertaking. The AGV team was able to assemble a pack of people that are not only extremely competent, but also wonderful human beings. This is not a given, and I am thankful for that.

[maxlomu]

gm,

Voting FOR winding down the program, although I am quite disappointed by how everything was managed and by the final outcome.

In my opinion, the AGV was extremely slow to get off the ground, not communicative enough with stakeholders throughout most of its mandate, and not efficient in its ratio of capital managed to operating expenses, especially for what was supposed to be a startup-like organization.

Six months ago, we even voted to increase the compensation of all members (Council included), under the assumption that the workload justified higher pay.

Instead, we’re now voting to shut down the experiment.

There is one last point that puzzles me. For years, many argued that the DAO should have the ability to make direct investments into applications and projects. When we finally created a vehicle to do exactly that, it now seems that this objective is no longer considered worth pursuing.

I hope we can retain the lessons learned from the AGV and build on them, rather than abandon the objective altogether. The DAO should still aim to develop an effective way to invest in the ecosystem and and generate upside from any capital it deploys.

[Curia]

We support this proposal and think it is the right move for where things stand now. Instead of seeing the AGV wind down as a failure, we would rather take it as a lesson for how the DAO invests in the future. It showed us that betting everything on gaming and consumer was too narrow, that the running costs were high compared to how much was actually invested, and that things could have moved faster. We think these are useful lessons to carry forward. Returning around 143.7M ARB to the treasury makes sense, and we hope that money is put to good use on the DAO’s current priorities, while still keeping the door open for the DAO to invest directly in the ecosystem, just with a leaner setup, clearer goals, and more room to follow what is actually working. For these reasons, we will vote for Option A.

[Abel189]

I support this proposal.

One aspect I particularly appreciate is that the proposal separates two different objectives that are often confused: preserving the value of an existing investment portfolio and continuing to deploy new capital. In this case, it recognizes that the original mandate is no longer aligned with the DAO’s current priorities while avoiding the mistake of forcing a premature exit from long-term venture investments.

Returning a significant portion of the undeployed capital to the DAO Treasury increases strategic flexibility, allowing governance to reallocate resources where they can generate greater value today. At the same time, maintaining sufficient reserves to support existing portfolio companies and manage follow-on opportunities demonstrates a responsible approach to capital stewardship.

The delegated authority granted to OpCo is necessarily broad to execute an orderly wind-down. For that reason, I believe regular reporting and clear communication with the DAO will remain essential throughout the transition, ensuring that operational flexibility is matched by continued transparency and accountability.

Overall, I see this proposal as an example of pragmatic governance: adapting strategy as priorities evolve while protecting the long-term interests of the DAO.

[whizwang]

I am voting FOR for winding down the AGV program in the structured fashion outlined in the proposal, given the DAO’s updated priorities. This will allow capital to be redeployed according to the current long-term priorities of the DAO. Thank you to the AGV team for their efforts through the years.

[Flook]

Merlyn Labs is voting FOR this proposal because returning around 143.7M ARB to the treasury is the right move now that the original gaming and consumer focus no longer fits the DAO’s current priorities. A structured wind-down keeps enough reserves to support existing portfolio companies while letting the DAO put that capital to better use elsewhere.

[TodayInDeFi]

Voting: For (Option A)

Thanks to the AGV team and council for putting forward a clear, responsible wind-down rather than letting the program drift.

My support comes down to capital efficiency and a thesis that didn’t deliver on its timeline. AGV was underwritten in June 2024 on the expectation that gaming and consumer apps would hit breakout adoption — that traction hasn’t materialized in the window the fund was built for, and the broader gaming-and-consumer cycle has clearly run colder than the 2024 outlook assumed. Pair that with ~$3.31M in annual operating costs against ~$10M actually deployed, and the case for continuing forward investment just isn’t there. Returning ~143.7M ARB to the treasury restores meaningful optionality to the DAO.

To be fair to the team, this is a sector-thesis and cost-structure outcome, not a diligence failure — capital was deployed prudently across the 15 positions, and continued stewardship of those through 2026 is sensible.

One note before I’d call this fully settled: I share the concern about the breadth of authority delegated to OpCo. Given the cost pressure I’m comfortable approving, I don’t think routine oversight votes make sense — they’d just recreate the overhead we’re retiring. What I would ask for is transparent quarterly reporting on wind-down expenses, portfolio status, and dissolution progress, plus a single Snapshot sign-off on the final dissolution itself. Reporting keeps delegates informed without gating day-to-day execution, and a vote on the one irreversible step ensures the entity isn’t closed out without the DAO’s explicit approval.

Appreciate the work that went into structuring this transition.

[Zeptimus]

Voting for.

Winding down the AGV arm makes sense to me. It doesn’t really fit the DAO’s priorities at this point in time, and sending the funds back to the treasury is the right call. I’ve actually seen some of the games AGV was backing and there’s real potential there. It looks like a lot of money on paper, but gaming is its own beast and these bets take time to play out. That’s why I’m glad OpCo is going to keep checking in on and nurturing the investments the DAO already made.

I also appreciate the signal from the other AAEs that AGV was doing genuine due diligence. That gives me confidence in how this was run.

One piece of feedback, I’d love to see these investments marketed more. Build some hype around them, bootstrap marketing opportunities, and keep the DAO more in the loop on how the portfolio is doing. The work is there, and deserves more noise.

[Griff]

Voting yes.

AGV was a good bet at the time but the market shifted, and time will tell if it pays off.

I’m a big believer in us hodling ARB as much as we can during the bear. ARB is under a lot of selling pressure as well as the rest of the market, so returning the ARB to the treasury is probably a good decision to reduce the pressure

I’m also really glad OpCo is stepping in to look after the existing investments instead of going cold just because the vehicle is changing. OpCo running point, carrying over feels like the right, natural home for that work. It should be an easy transition

AGV was careful with their budget, and I’d like to praise that, but I also want to mention they could have done a better job communicating with delegates and on marketing with the DAO in general.

AGV didn’t maximize the impact of being part of a DAO… They needed to lean into that as a unique advantage and get us more involved in their investments, IMO that was their biggest mistake.

They treated us like a problem instead of an opportunity and kept us at arm’s length, working in backrooms instead of pushing for network effects.

[Saurabh]

The GMX Governance Committee is voting For the AGV wind-down on behalf of GMX’s ARB delegation.

Winding down the new investment mandate makes sense. A gaming and consumer venture arm was a reasonable early bet, but the DAO’s priorities have moved and there’s little case for keeping 225M ARB earmarked for new deals. Returning ~143.7M ARB to the treasury frees up real capital the DAO can use better now.

We also like that it’s a structured exit, not a hard stop. Keeping reserves for the strongest positions, covering obligations, and funding management through end-2026 protects money already deployed. Backing existing portfolio companies to maturity, with any surplus sent back to the treasury, is worth more to the DAO than pulling out a few months early.

Running execution through OpCo under OAT oversight is the right structure, and keeps the AGV team on hand for portfolio continuity. We’ll be watching for clear reporting on the remaining balance as the long-term home for the portfolio is decided.

A responsible approach, and one we’re happy to support. Thanks to the AGV, OpCo, OAT, and Foundation teams for a clean transition.

[cornellbc.eth]

We are voting FOR the wind-down. We agree that AGV’s initial thesis is no longer valid, and it sadly doesn’t make sense to keep the program running especially when the token price is so low. Additionally, we resonated with Entropy’s point about the operational costs taking up a much larger portion of the budget because of the decline in token price. Because of these factors, we approve the wind-down.

[Manugotsuka]

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

We voted FOR.

We think winding down AGV’s active investment mandate is the right call. The DAO’s priorities have changed, and it does not make much sense to keep running AGV as an active consumer and gaming venture program if that is no longer where the DAO wants to focus its capital.

The return of unused capital is also a strong reason to support this vote. Bringing approximately 143.7M ARB back to the DAO treasury is a meaningful outcome, especially while keeping enough structure in place to manage the investments that have already been made. In our view, this is a better path than either continuing the program by inertia or shutting everything down in a way that could harm the existing portfolio.

We also think it is reasonable to keep a reduced structure around AGV for now. Venture investments take time, and the existing portfolio should not be left unmanaged just because the active mandate is ending. Selective follow-ons, portfolio support, and basic operational continuity can make sense if they are used carefully and only in service of preserving or improving the DAO’s existing positions.

That said, the wind-down should not become a black box. OpCo will have a broad role in coordinating the transition, approving expenses, and helping determine how the remaining portfolio is managed. We are comfortable supporting that direction, but we would like to see regular updates to the DAO around retained reserves, follow-on decisions, operating costs, surplus capital returned, and the longer-term structure for the portfolio.

We would also like to see a proper retrospective on AGV. Even if the program is not continuing, the DAO should try to learn from it. What worked? What did not? Were venture-style programs a good fit for the DAO? What should be done differently if Arbitrum ever considers a similar structure again? Those lessons are important, especially for a program of this size.

[Arbitrum]

Following the approval of the AGV Wind-Down proposal, the Arbitrum Foundation has returned the 86.18M ARB that it held on behalf of the AGV, to the DAO treasury (see transaction).