Kickoff Update
To kickstart this thread, below is a short summary of the current deployment statuses and potential developments in the short term.
DAO-approved Deployments
RWA-related Deployments
- The DAOâs active RWA portfolio is currently worth ~$28M
- ~$3.5M worth of USDM was redeemed in May, following Anchorage Digital acquiring Mountain and announcing the wind-down of USDM
- Prior to the ATM councilâs ratification, a Snapshot proposal was passed in the middle of June to reallocate the redeemed funds as follows: WisdomTree WTGXX (30%), Spiko USTBL (35%), Franklin Templeton BENJI (35%)
- Capital is currently being deployed by the Arbitrum Foundation
- Roughly half of the 35M ARB allocation for STEP 2 has been liquidated to stablecoins. Once completed, the stablecoins will be allocated in similar shares to those described above
- To date, the DAO has earned ~$900K in interest from its RWA deployments
ETH-related Deployments
- The full 2.5K ETH deployment into Fluid was finalised at the end of June
- 5K ETH has been staked and subsequently wrapped through Lido, which required bridging to and from Ethereum Mainnet to avoid slippage, with 84% of the wstETH to be deployed into Aave and 16% of the wstETH to be deployed into Camelot by the Arbitrum Foundation
Actively Managed Stablecoin Deployments
- 15M of ARB reserved for the stablecoin strategies has been converted into ~4.9M USDC
- This allocation is set to be split equally between three managers: kpk, Avantgarde, and Gauntlet
- The ATM Council is currently working with the managers to finalize the details of the deployments
For an overview of each live deploymentâs performance, please refer to Entropyâs Treasury Management dashboard. Note that the dashboard is in the process of being updated with additional metrics, graphs, and assets/deployments as funds get allocated.
Deployments Proposed to the DAO
Entropy recently posted a proposal to consolidate idle USDC to the three active managers mentioned above. If passed, ~1M USDC from the Events Budget, ~1.5M USDC from the recently discontinued ARDC V2 that would otherwise be sent back to the treasury, as well as any non-reserved USDC from the ADPC Security Subsidies budget, would be moved to the three active managers to ensure that the DAO isnât unnecessarily holding idle stablecoins and is instead earning yield.
Going Forward
The ATM council will begin posting complete monthly updates at the end of July, covering the monthly performance of the different deployments as well as updating the DAO on any possible capital reallocations or new initiatives. In tandem, Entropy is updating our treasury management-related dashboards and working towards establishing a DAO-wide budget as well as a runway management framework for initiatives that require USD-denominated funds. The first quarterly treasury management report will be released at the end of September.
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July '25 Update
Entropy is pleased to present the first full Arbitrum Treasury Management Monthly Report for July. The attached report provides an overview of the DAOâs Treasury Management portfolio and offers detailed insights into RWA holdings, ETH and ETH-correlated positions, and actively managed stablecoin deployments.
We have also updated our Treasury Management Dashboard with the latest deployments and metrics. This dashboard will continue to be expanded in the near term as additional deployments are executed.
If there are specific charts, data points, or other adjustments youâd like to see included, please reach out to @BricksIntern on Telegram.
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A few things that would be nice to haves in future reports:
- overall DAO runway estimator. based on total earmarked, planned spend, and spent funds for the last quarter or monthly period AND revenue from timeboost and treasury management.
- percent of AUM being managed by each manager. I want to be able to easily see which manager has the best strategy this month, and then judge them harshly.
overall, good report. many wins in here and its reported quite well. Incredible work on the Dune dashboards especially.
[I made a post summarizing the report.](https://x.com/CupOJoseph/status/1956406769317802095)
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When the actively managed stablecoins are deployed, it would be great to have a yield minus expenses (to the extent there are expense not reflected in the yield) so that it can be compared to the tbill funds, which pay their own expenses before providing yield.
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Thanks to Entropy and the ATM Council for this first monthly update â itâs a strong start for improving transparency around treasury activities. Iâd like to suggest two areas for further development:
1. Financial Reporting & Cashflow Visibility
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One area weâd love to see expanded is financial reporting. Beyond deployment snapshots, it would be very useful to incorporate the token flow report so the community can better connect the two reports to understand and track movement of tokens.
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Even better to take it to next level, standardized financial statements would give delegates a fuller picture of the DAOâs financial health:
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Balance Sheet: assets across RWA, ETH, stablecoin deployments, and idle funds.
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Income Statement: yields and rewards net of DAO expenses.
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Cashflow Statement: inflows/outflows, including program spending, grants, and service provider costs.
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This would allow the community to evaluate not only gross yields but net performance after expenses.
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A public report library with historical statements would further improve accessibility and institutional memory.
2. Risk Management Oversight
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Transparency on returns is really valuable, but weâd also like to touch on risk management. Is there a regular process in place to assess the risk profiles of each position, counterparty, protocol, and strategy?
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We would also like to inquire about the current risk management policy: for example, what are the maximum allocations permitted to a single asset, counterparty, or strategy, and how are those limits enforced?
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Even a ârisk dashboardâ highlighting exposures, diversification levels, and any red flags would greatly enhance our understanding of how treasury safety is being managed.
Weâre grateful for this kickoff update and see it as a strong foundation. Adding structured financial statements and making risk oversight more visible would take reporting to the next level, giving the DAO the ability to evaluate both returns and risks holistically.
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August '25 Update
Entropy is pleased to present the second Arbitrum Treasury Management Monthly Report. The attached report provides an overview of the DAOâs Treasury Management portfolio and offers detailed insights into RWA holdings, ETH and ETH-correlated positions, and stablecoin deployments.
If there are specific charts, data points, or other adjustments youâd like to see included, please reach out to @BricksIntern on Telegram.
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Q3 '25 Update
Entropy is pleased to present the first Arbitrum Treasury Management Quarterly Report. The attached report provides an overview of the DAOâs financial performance and treasury management portfolio, offering detailed insights into income, expenses, runway, RWA holdings, ETH and ETH-correlated positions, and stablecoin deployments.
If there are specific charts, data points, or other adjustments youâd like to see included, please reach out to @BricksIntern on Telegram.
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Ad-Hoc Update (Nov 5 '25)
In light of recent market events and volatility, we would like to issue a quick statement reassuring the healthy state of the Arbitrum DAO Treasury. Actively deployed assets from the DAO Treasury remain secure with zero exposure to the recent Balancer exploit or Stream xUSD incident, and are not impacted by any protocols, pools, or vaults facing losses as a result.
Allocations remain conservative in risk, with ETH deployments consisting of Lido/Aave for wstETH (unaffected), Fluid ETH (unaffected), and Camelot for liquidity provision of wstETH (unaffected). As expected, the largest portion of the treasury management portfolio, RWAs, remains entirely unimpacted by these events.
The core stablecoin position in the portfolio is USDC allocated to the Morpho Gauntlet Prime vault, which is currently only supplied into underlying markets with WBTC and wstETH as collateral. A smaller portion of treasury stablecoins are allocated to kpk for active management strategies, and they indicated they have proactively withdrawn USDC from Compound due to uncertainty over exposure to Elixir assets, as they may relate to xUSD. The active positions managed by kpk currently comprise: USDC supplied on Spark, USDC supplied on Fluid, and USDT supplied on Aave.
All treasury holdings remain fully safe and intact, and aside from price impact to ETH due to market volatility, are unaffected by this weekâs security incidents and protocol/asset design risks or failures. The Entropy Data team is actively working on enhanced vault transparency metrics for treasury management dashboards, enabling near-real-time monitoring of treasury position exposures in the future.
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October '25 Update
Entropy is pleased to present the third Arbitrum Treasury Management Monthly Report. The attached report provides an overview of the DAOâs Treasury Management portfolio and offers detailed insights into RWA holdings, ETH and ETH-correlated positions, stablecoin deployments, and incentive tokens earned.
If there are specific charts, data points, or other adjustments youâd like to see included, please reach out to @BricksIntern on Telegram.
November '25 Update
Entropy is pleased to present the fourth Arbitrum Treasury Management Monthly Report. The attached report provides an overview of the DAOâs Treasury Management portfolio and offers detailed insights into RWA holdings, ETH and ETH-correlated positions, stablecoin deployments, and incentive tokens earned.
If there are specific charts, data points, or other adjustments youâd like to see included, please reach out to @BricksIntern on Telegram.
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Q4 '25 Update
Entropy is pleased to present the second Arbitrum Treasury Management Quarterly Report. The attached report provides an overview of the DAOâs financial performance and treasury management portfolio, offering detailed insights into income, expenses, runway, RWA holdings, ETH and ETH-correlated positions, stablecoin deployments, and more.
If there are specific charts, data points, or other adjustments youâd like to see included, please reach out to @BricksIntern on Telegram.
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Jan & Feb '26 Update
Entropy is pleased to present the fifth Arbitrum Treasury Management Monthly Report. The report combines the months of January and February, as January was a relatively quiet month when it comes to treasury management actions, with most fund movements taking place in February.
The attached report provides an overview of the DAOâs Treasury Management portfolio and offers detailed insights into RWA holdings, ETH and ETH-correlated positions, stablecoin deployments, and more.
If there are specific charts, data points, or other adjustments youâd like to see included, please reach out to @BricksIntern on Telegram.
Ad-Hoc Update (Mar 23 â26)
Following the Resolv USR unbacked minting exploit over the weekend, Entropy would like to issue a quick statement affirming that DAO Treasury positions do not have exposure to, nor face losses from the exploit, and that the greater Arbitrum DAO Treasury remains unimpacted.
On March 22nd, a malicious actor compromised Resolvâs key infrastructure, resulting in the unauthorized minting of approximately 80M of uncollateralized USR tokens. The subsequent sales of new, unbacked tokens into secondary markets caused severe depegs in USR, wstUSR, and RLP. These tokens were utilized within several DeFi protocols across multiple chains and thus have wide-reaching impacts. Although small in comparison to impacts on other ecosystems, there are protocols on Arbitrum that have exposure to Resolv-related assets.
On Arbitrum, wstUSR was used as collateral for ~$631K of loans within Fluid across 5 vaults, causing the supply rates for USDC and USDT to briefly spike beyond 30%, but these have since reverted closer to the 10% range. The team has announced that a short-term loan has been secured to cover 100% of the bad debt currently in the protocol. The DAOâs active stablecoin manager, kpk, had ~$1M worth of USDC supplied to Fluid when the USR exploit took place, but this position was successfully divested without incurring losses on Sunday.
The only exposure to Resolv-related assets on Morphoâs Arbitrum instance comes from the RLP / USDC market, to which Clearstarâs High Yield USDC and kpkâs USDC Yield vaults have together supplied ~$5K worth of USDC. The DAO has no exposure to the market in question. Although the Gauntlet USDC Core vault, which the DAO has allocated ~$1.7M into, currently has the market included, the supply cap has been set to zero. The market is in the process of being removed from the vault, pending the timelock, with deposits into the vault paused until the removal is finalized.
The Euler Arbitrum Yield market has ~$500K USDC loans collateralized by RLP. RLP has been disabled as collateral within the market, and Euler Earn USDC on Arbitrum no longer allocates to Euler Arbitrum Yield, although it currently has ~$430K of exposure to the market. Arbitrum DAO has no exposure to Euler.
Entropy is continuing to actively monitor the consequences of the USR exploit and will provide further updates if necessary. Resolv has stated that the underlying collateral backing pre-exploit USR remains mostly unaffected, with âthe only realized impact identified being approximately ~500k in redemptions processed prior to the pauseâ. According to Resolv, the team is preparing to enable redemptions for pre-incident USR as an initial step, potentially reducing or eliminating bad debt associated with impacted lending platforms. Further updates to affected protocolsâ recovery rates for affected markets depend on the remediation process for USR, wstUSR, and RLP.
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Thanks for the thorough writeup, Entropy.
To add some colour on the kpk side, both on Ethereum mainnet and Arbitrum.
Ethereum (Morpho USDC Yield): The ~$222k exposure to the RLP/USDC market was fully recovered with zero losses. Recovery happened in the same block liquidity returned to the market, over 24 hours after the exploit, as a borrower repayment cascaded through the vaultâs withdrawal queue. The vault had been pre-positioned for exit (risk appetite set to zero, supply queue emptied) the moment the exploit was detected. The architecture did what it was designed to do.
Arbitrum (USDC Yield): Worth noting upfront: kpkâs meaningful Resolv exposure was on Ethereum mainnet. On Arbitrum, the vault had only ~$1.1k of residual exposure to the RLP/USDC market, 0.11% of vault TVL, a negligible amount. Rather than waiting on organic borrower repayments, kpkâs treasury directly deposited 1,100 USDC into the affected market and simultaneously withdrew from the vault, cascading through the withdrawal queue to clear the position entirely. Zero user funds lost. Deposits have since been re-enabled.
One thing worth highlighting explicitly: withdrawals were never impacted on either vault. Throughout the entire incident, on both Ethereum and Arbitrum, kpk vaults always had liquidity available for depositors to exit. This was not the case for all curators.
A few things worth highlighting from a risk architecture standpoint.
Concentration limits bounded the potential exposure before any incident. The loss ceiling is set at inception: RLP carried a 0.40 risk appetite, and with 17+ markets competing for allocation, actual exposure was a small fraction of vault TVL. For context, other curators reported exposure exceeding $6M to the Resolv ecosystem.
kpk does not use Morphoâs Public Allocator. This was the primary contagion vector for several curators who saw exposure grow after the exploit as automated allocations continued routing capital into already-defaulted markets. All kpk automation runs through agents operating within community-approved, permissioned boundaries, documented in our automation docs.
Prime vaults had zero exposure by design. RLP is Tier C collateral, the lowest tier in kpkâs risk classification framework, and is ineligible for Prime vaults. Tier separation is a structural firewall, not a label.
Weâre also addressing gaps the incident exposed, particularly around oracle divergence alerts not being directly coupled to exit agents. Supply queue emergency protocols have been implemented, and additional agent improvements are now in place to enable an even faster response in future incidents. Oracle alerts require smarter thresholds and multi-source price validation rather than a binary trigger.
Happy to share more details on the architecture for anyone interested. Weâve also written up a full technical case study covering both incidents in depth.
Hey this Notion page is not accessible - could you update the permissions and possibly attach as a PDF? Thanks!