Arbitrum Treasury Management Council - Consolidating Efforts

Proposals
26

I voted FOR this proposal

I support the general goal of the proposal - to streamline Arbitrum DAO’s treasury management and reduce fragmentation. However, I would like to highlight several key risks that should be addressed as part of future on-chain implementation.

I see several key risks here:

  • Too much power in the hands of a single entity (Entropy Advisors)
    Entropy is granted an exclusive and central role as Treasurer without a clear mechanism for replacement. This creates a potential dependency, where the DAO could face increased costs in the future without alternatives.
  • Lack of cost transparency
    There is no breakdown of Entropy’s internal expenses. The DAO has no visibility into how much time and money is actually being spent, making it difficult to evaluate whether this structure is more cost-effective than previous ones (TMC, GMC and STEP)
  • Fixed salary regardless of performance
    Under the current structure, Entropy receives payment regardless of performance outcomes. There are no KPIs or metrics to ensure accountability or to link compensation to impact.

What I suggest to improve this ATMC:

  1. Make the Treasurer role replaceable
  • Define the “Treasurer” role as a DAO-delegated position.
  • Allow for open competitive applications for this role every 12 months.
  • Enable the DAO to consider alternative teams with better terms or strategies.
    Benefits:
    The DAO retains flexibility and independence, while encouraging competitive efficiency from Treasurer
  1. Introduce KPIs and detailed reporting
  • Require quarterly reports, including:
    • Number of hours spent on ATMC
    • Direct and indirect costs
  • Set minimum performance KPIs, such as 5%+ annualized return on managed assets.
    Benefits:
    This gives the DAO objective tools to measure ATMC performance and make informed renewal or replacement decisions of Treasurer
  1. Implement budget caps
  • Define a maximum operating budget for the Execution Body, relative to total AUM or yield.
  • Require an independent audit once per year
    Benefits:
    Spending is kept under control, and trust in the structure increases through independent verification

All these suggestions and risks were raised to ensure that Arbitrum can be confident about its future. This doesn’t mean that Entropy is doing a poor job or that I find their work unsatisfactory - on the contrary, their work has greatly benefited Arbitrum.
However, they are a private company with their own financial interests, while Arbitrum must prioritize its own interests and have the ability to protect them when necessary