This proposal seeks to establish an operating directive that would automate movements of any surplus and idle funds from DAO initiatives to the ATMC.
For all capital (excluding ARB tokens) that would otherwise sit idle and unallocated outside of the treasury under scenarios including but not limited to grant allocations that were not fully spent, program surpluses, fee kickbacks, revenue share agreements, and accrued AEP fees, funds can be automatically consolidated to the ATMC portfolio instead of first being sent back to the treasury and then requiring both an offchain and onchain vote.
As is standard practice with ATMC operating protocols, these funds will still be subject to OAT deployment approval. Furthermore, as always, the DAO will retain the right to clawback any of these funds via a Snapshot vote at any time.
Background
Below is a brief status overview of the main programs that hold idle capital/might hold idle capital in the short term unless renewed:
DDA v2 Program - Established to support early-stage activity on Arbitrum through a delegated grant model. The program’s v2 continuation phase had a budget of $4M spread across various initiative categories, including Gaming, New Protocol Ideas, Dev Tooling, and Education/Community/Events. The program has ended and still holds ~$380K in idle stablecoins. Instead of sending surplus funds back to the treasury, we propose that these stablecoins be moved to the treasury management portfolio. Funds were originally sent to 0xB7c1551BBEB47Eb86266153df5F9D7dA47F08308, from where capital has been distributed to separate subwallets.
Arbitrum D.A.O. Grant Program - The continuation program to DDA v2, which began in March 2025 and is still in progress, currently holding ~4.8M USDC with ~2.2M in committed grants that have not yet been spent. Funds were originally sent to 0xb9a05fCcc841202f1ee0dEee557C6abE5cbb6615, and, similar to the DDA v2 program, have been distributed across several subwallets from where expenses are paid and grants allocated. Once the program has ended, any surplus stablecoins would be consolidated into the TM portfolio in the case that the program or a similar continuation initiative utilizing these funds isn’t approved.
Rationale & Specifications
With this proposal, Entropy looks to activate funds that have been sitting idle for an extended period of time, not generating any yield for the DAO. Instead of returning the funds to the main treasury, where they would sit undeployed to any yield opportunities and require a full governance process to be withdrawn, consolidating them to the ATMC balance would allow for yield generation, which is beneficial for the DAO overall.
Additionally, the ATMC proposes to establish the return of leftover non-ARB capital from DAO-related initiatives to the treasury management portfolio as opposed to the DAO Treasury as an ongoing default procedure. This will help the ATMC maximize revenue for the DAO by further minimizing the “cash drag” effect resulting from the requirement of periodic cash sweep proposals.
In short, the two main benefits of adhering to this operational workflow moving forward are:
The DAO minimizes the opportunity cost of idle capital as it accumulates from a variety of sources
Operational and governance overhead is reduced by routinely consolidating funds into designated AF-operated wallets, while ultimate control remains fully with governance, versus being spread across numerous wallets with separate governance proposals for each transfer to the ATMC
On a case-by-case basis, funds will be moved to AF-chosen and -operated wallets immediately when feasible. Each specific ATMC deployment utilizing the new, consolidated funds will have to be approved by the OAT before activation in accordance with the ATMC proposal.
Voting Structure
This proposal will be considered approved if it passes through the Snapshot stage. The Snapshot vote will utilize basic voting with the options “for”, “against”, and “abstain”. If there are more votes “for” than “against”, and the combined number of “for” and “abstain” votes surpasses the non-constitutional quorum (pre-DVP) at the time the offchain vote is posted, the vote will be considered ratified.
Timeline
Forum Period (February 25 - March 5): Requesting comments and time to edit the proposal with delegate/broader community suggestions
Snapshot Period (March 5 - March 12)
Approved actions will be executed as soon as possible
Thanks for the proposal. It does makes a lot of sense, in general, to allocate idle stables into yield bearing strategies, with the caveat of risk profile and liquidity being compatible and of secondary order to the operational needs of the programs involved.
I am just chiming in with a note which was already disclosed in private to Entropy: while, as stated, I agree on the general idea, we are currently discussing with OpCo first, and likely DAO later, about either a potential extention of season 3 or renewal. S3 and S2 funds would be part of this.
Albeit it might not happen, moving the funds before this discussion is over would be not ideal; that said, while is difficult to do hard projections, I do think that any decision, in favour of against, will likely happen before or around the second half of April on this very topic.
Thanks Entropy for putting this forward. We broadly support the intent here. Automating the consolidation of genuinely idle, non-ARB funds into the ATMC to reduce cash drag and governance overhead makes sense, provided the deployed strategies remain aligned with the appropriate risk profile and liquidity needs of each program.
That said, we want to explicitly echo and support the point @JoJo raised on timing and D.A.O. program continuity.
As Questbook Domain Allocators, we’ve been close to the operational reality of these grant programs and we’re aware that there are active discussions with OpCo (and potentially the DAO later) around a possible extension of Season 3 or some form of renewal/continuation. While it may or may not materialize, the key issue is that this is a live topic with a plausible near-term decision window. In that context, treating all balances as “surplus/idle” before those discussions conclude risks creating avoidable operational friction, even if the funds could technically be reclaimed later through governance.
We think it’s important to distinguish between capital that is truly idle (i.e., long-dormant leftovers with no realistic short-term program use) versus capital that is temporarily sitting in program wallets while the DAO/OpCo decides whether the program itself will continue. From an execution standpoint, moving funds during an active renewal conversation can add churn, introduce coordination overhead, and create uncertainty for teams that are trying to plan responsibly, especially when the program’s operational needs and continuity are being actively evaluated.
It’s also worth noting that the current program’s active phase hasn’t concluded yet. Submissions remain open until mid-March, and grant approvals will continue through the end of March. Beyond that, the program enters a wind-down phase where committed grants are still being disbursed to grantees who have met their milestones. The Snapshot vote window for this proposal would therefore overlap with a period in which the program is still operationally active.
If the proposal’s intent is to establish a default workflow going forward, we’re on board. We just think the implementation should remain mindful of the fact that some “idle” balances are only idle pending a continuity decision, rather than idle because the DAO has definitively moved on from the initiative.
I broadly agree with the intent of reducing cash drag.
Capital is an amplifier — leaving it unused carries a real opportunity cost.
That said, I think automation and program continuity don’t have to be in tension. They can coexist if the rules are clearly defined. The real question might not be whether funds move, but under what conditions they are truly considered “idle.”
A few practical elements could help reduce friction:
• A clear definition of idle capital (for example, a time-based threshold).
• A way to define the minimum operational runway a program should keep, based on projected obligations.
• A periodic sweep mechanism (say, monthly), where only the surplus beyond that buffer consolidates into ATMC — unless governance decides otherwise.
This way we preserve capital efficiency without disrupting ongoing program discussions or operational planning.
As no major pushback has been posted to the forum, this proposal has been moved to Snapshot.
Thank you to everyone who contributed feedback on this proposal. A few comments from our end can be found below:
To clarify, if this proposal were to pass, only S2 surplus capital would be consolidated into the treasury management portfolio in the short term. Our stance is that this capital should not be kept locked for an initiative that might or might not happen, especially since the S4 proposal hasn’t even been posted to the forum yet, and S2 officially ended around 9 months ago. As such, we consider S2 surplus funds truly idle. Funds related to S3 would only be consolidated if it becomes clear that no continuation program will pass, and once the ongoing program cannot incur any new expenses/outgoing grants.
We at Entropy have historically tended to write proposals with a vast amount of rigorous definitions and rule sets. Over time, we’ve noticed that this often leads to more harm than good, especially when it comes to operational efficiency, given that there will always be edge cases that cannot be accounted for when a proposal is created. This then leads to situations where a suboptimal approach has to be taken just because the proposal requires it. Consequently, we believe the best approach here is not to attach a rigorous rule set to the default workflow.
We will be voting FOR this proposal on Snapshot. It makes total sense to generate yield off of idle funds, given that the funds are legitimately dormant. To this point, the distinction between S2 surplus capital and S3-S4 is very important.
We also agree that returning the funds to the main treasury would build counterproductive bureaucratic walls around using the funds, which makes little sense because they are dormant anyway. As such, the ATMC is a perfect home for them.
We appreciate this proposal, and are proud to vote for it.
Michigan Blockchain || Jack Verrill || TG @JackVerrill
At a high level, it just makes sense. If surplus stablecoins from concluded programs are sitting idle, they should be put to work generating yield through the ATMC rather than remaining unused. We also think it’s reasonable to avoid running a full governance vote every single time funds need to be swept, especially when the DAO has bigger decisions that deserve delegate attention.
The timing concern raised by @JoJo and @SEEDGov was valid, but we think @Entropy ’s clarification addressed it well. Only S2 surplus funds would be moved right away, while the currently active D.A.O. Grant Program funds would remain untouched until that program actually concludes. Just as importantly, the DAO still retains clawback rights at any time, so governance control is fully preserved.
Overall, this feels like a practical operational improvement that makes treasury management more efficient without weakening oversight, and we’re happy to support it.
I’ll be voting to abstain. I fully support the intent, but the vote feels rushed and we should explore better coordination. If DAO Grants is having an S4, I don’t see the need to pull funds from an active initiative including S2. I’m abstaining rather than voting against because I do see value in moving quickly given the current market conditions.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb) and @Euphoria, based on our combined research, analysis, and ideation.
We are voting FOR this proposal in the Snapshot voting.
Several DAO initiatives hold capital in program wallets, and when these initiatives finish or do not fully spend their allocations, the remaining funds often sit idle for long periods. Leaving stablecoins unused creates an opportunity cost for the DAO.
Routing genuinely unused non-ARB capital into the ATMC portfolio allows these funds to generate yield instead of remaining idle, while still maintaining governance oversight. Any deployment of these funds continues to require OAT approval, and the DAO retains the ability to claw back funds through governance if necessary.
Getting yield out of idle stables is the way to go, and I also think its nice to consolidate DAO funds if they go unused. I get where JoJo and SEEDGov are coming from with their concerns about timing and not getting in the way of the S3 talks. But overall I agree with Entropy’s point about this the S2 surplus money that’s been sitting around for 9 months…. How much value is lost to inflation of USD?
I think the real deciding factor is who owns this money? If this money is owned by the DAO then yes we should earn yield on it… and thats the end of the convo… If I am wrong and the DAO doesn’t own this money, if it’s still Questbook’s… then it’s a bigger discussion.
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 agree that allowing the DAO to generate yield from funds not actively used can improve capital efficiency and reduce the opportunity cost of leaving assets idle for long periods.
That said, we think it is important to clarify how consolidated funds will be used once moved into the treasury management portfolio. In general, funds allocated to specific initiatives were originally approved by the DAO for a defined purpose, so consolidating them should not unintentionally change that mandate.
I agree with this take.
Voting FOR as it makes sense to keep harvesting and reinvesting idle funds. That said, it would be good to see an approach that remains mindful of future capital needs by allocating part of the funds to ultra short term deployments (Aave aUSDC, for example - no IL, fast exit path, no fees).
As stated above, I do see value in an overall process that puts liquid funds at use right away, especially in a market such the one we have. At the same time, I don’t think that this justify adding overhead to any specific plan from delegates or other entities; specifically, as mentioned, there is an ongoing discussion about continuation of the grant program using funds from both S2 and S3. Having had that resolved before calling on this vote would have been ideal, to avoid double transfer if any.
This proposal will pass, and is fine. If the grant program will be renewed, in the new vote it will be specified how the portion of funds of S2 will have to be sent back to it from the ATMC, alongside S3 funds being rolled.
Layer3 Voting Rationale: Automate the Consolidation of Idle Funds into the Treasury Management Portfolio Vote: FOR
We support this proposal. Idle stablecoins sitting across completed programs generate zero yield for the DAO. Automating their consolidation into the ATMC portfolio is sound capital management, plus adequate safeguards remain in place (OAT deployment approval, Snapshot clawback).
We agree fully with taking funds that would otherwise be sitting idle and moving them into the treasury to earn yield, thus providing greater fiscal benefits to the DAO. Automatically putting them in the treasury automatically avoids the time delay of waiting for the DAO to manually approve the transfer of funds, helping to minimize the lost opportunity cost. We also felt reassured because the DAO still gets control over vetoing any transfer.
Letting millions in stablecoins sit idle across program wallets is not-optimal treasury management. If the DAO already has a treasury management framework, surplus capital should default into it so the balance sheet actually works for the DAO.
The current process creates unnecessary governance overhead for what is basically operational housekeeping. Automating these sweeps lets governance focus on real allocation decisions instead of repetitive fund-movement votes.
Importantly, this doesn’t reduce governance control. Deployments still require approval and the DAO can claw funds back at any time, so we gain efficiency without giving up authority.
The following reflects the views of GMX’s Governance Committee, and is based on the combined research, evaluation, consensus, and ideation of various committee members.
We have voted in favour of this proposal.
This proposal makes a lot of sense. Idle capital sitting across various program wallets generates no yield and requires repeated governance cycles to move both of which are inefficient for the DAO. ATMC is using them to good use and generating revenue for the DAO.