Consolidate Idle USDC to the ATMC’s Stablecoin Balance

Proposals
1

Non-Constitutional

Key Changes Made on July 23, 2025

The 2025 Events Budget will no longer be dissolved, and instead funds will be moved to a yield bearing account managed by the Arbitrum Foundation/treasury managers. The Events Budget process will remain as currently structured until the end of 2025.

Abstract

  • Entropy proposes transferring the DAO’s 2025 Events Budget (~1.04M USDC) to the ATMC, which will top-up the budget allocated to onchain treasury managers focused on stablecoin strategies. The Events Budget will continue to operate as designed through the end of 2025, but instead be earning yield as it sits idle.
  • We also propose to send the ~1.5M USDC left over from the ARDC v2, which was recently denied an extension, to be sent to the ATMC to further top-up the budget allocation to onchain treasury managers. This modifies the recently passed proposal which defined the next step as the “AF returning all unused funds to the treasury”, which would forfeit yield until another onchain proposal process in its entirety is carried out.
  • Lastly, we propose sending any remaining funds from the ADPC Security Subsidies budget to the ATMC, which will again be used to top-up the onchain treasury managers budget.
  • The proposal will be moved to a vote on July 24th, and if passed, funds from the ARDC V2 and 2025 Events Budget will be transferred within 7 days from their current addresses to this address where the ~4.95M USDC for the ATMC currently resides. Following the completion of the ADPC Security Subsidies, whatever USDC remains will also be sent to the same address designated for onchain stablecoin strategies managed by DAO approved treasury managers.

Motivation & Rationale

2025 Events Budget

While Entropy believes events are a vertical that should for the most part fall under the Foundation’s scope and that smaller events should be funded by the D.A.O. grants program, the community has requested that this issue be taken up separately rather than being consolidated into a larger Snapshot vote. As such, we have modified this proposal to simply move the 2025 Events Budget into a yield bearing account with the ATMC to top up the stablecoin strategy allocation to treasury managers.

The Events Budget remains intact and will continue to follow the process outlined per the original proposal through 2025. Once 2025 comes to an end, the Stablecoins will remain allocated to the ATMC rather than being returned to the DAO treasury to ensure they continue to earn yield.

ARDC V2

The ARDC v2 Extension proposal recently came to a close, which resulted in the collective NOT being extended. The instructions per the proposal were defined as “(The) AF returning all unused funds to the treasury”. However, now that the funds have already been converted from ARB into stablecoins, there is no sense in sending these funds back to the treasury to sit idle, and forcing another proposer to go through the entire onchain governance process to ensure they are earning yield for the DAO.

ADPC Security Subsidies

670,543.5 USDC was transferred from the MSS to an Arbitrum Foundation controlled address as a part of the MSS wind down. Entropy Advisors is engaged in ongoing discussions with the Arbitrum Foundation in regards to what portion of these funds have already been committed to service providers versus what is remaining/owed to the DAO. We propose sending any remaining ADPC Security Subsidy funds to the ATMC as well once the AF pays out any outstanding contractual obligations. We do not want this process to stall this proposal, as doing so would potentially result in the ARDC v2 funds being returned to the DAO treasury. Instead, we seek the DAO’s approval to reallocate these funds to the treasury managers deploying onchain stablecoin strategies once the situation has been sorted.

Specifications

The 2025 Events Budget currently holds 1,044,095.59 USDC. If approved, the entirety of that balance will be moved to the Foundation controlled wallet that is designated for onchain stablecoin strategies managed by DAO approved treasury managers. The Events Budget process will remain unchanged for authors who wish to pull from this allocation of stablecoins to host an event.

The ARDC V2 currently holds 1,503,604.08 USDC and 112,245.95 ARB. The ARDC has finished and posted its final deliverable, the Arbitrum Ecosystem Mapping Report. Final invoices will now be obtained from the two research service providers, Castle Capital and DeFiLlama, and USDC payments initiated with the Arbitrum Foundation. Once these payments have been sent, the remaining USDC balance will be moved by the Foundation to the wallet designated for onchain stablecoin strategies. The remaining ARB will be returned to the DAO’s treasury.

As mentioned above, once the Arbitrum Foundation pays out any outstanding contractual obligations related to the ADPC Security Subsidies program, the remaining USDC will be sent to the ATMC. The ATMC will update the DAO once this has occurred on its dedicated forum thread.

The 15M ARB allocated to stablecoin strategies was recently converted into ~4.95M USDC, but this proposal would increase this allocation to ~7.5-8M USDC. These funds will either be split pro-rata amongst various treasury managers already approved by the DAO, or allocated according to the newly introduced ATMC procedures i.e., allocation recommendation from Entropy followed by OAT approval. These funds have been idle for several months, which could have otherwise been earning yield. This proposal is a part of a larger effort to strengthen the Arbitrum DAO’s financial position to enable long-term sustainable growth/increasing revenue.

Timeline

July 14th: Forum post
July 24th - July 31st : Snapshot vote
By August 7th: If passed, funds will be transferred to the stablecoin strategy address within 7 days

5 Likes
2

gm, overall in support of the initiative.

A couple of notes:

:white_check_mark: Dissolve DAO’s 2025 Events Budget: I also think the Foundation is better suited to manage larger events (the Arbiverse editions I’ve attended were impressive for example).

Given that tasks and accountability are being shuffled, I believe we need a clear overview of which AAE handles what, with defined responsibilities and contact points.

:white_check_mark: ARDC Budget: In favor of allocating it to yield generating opportunities, or better to help new protocols bootstrap their initial liquidity.

:red_question_mark: ADPC Security Subsidies: shouldn’t this budget be allocated instead to the new audit-sponsored initiative by the @Arbitrum Foundation?

1 Like
3

Supportive.

We should think about something for the events issue (post OpCo setup) but agree that the way the events budget was structured didn’t work out. So this makes sense

1 Like
4

Thank you for putting this together—overall, I support the goal of utilising idle assets, especially now that the DAO has established mechanisms to manage treasury yield generation.

That said, I’d like to propose a middle-ground approach specifically for the Events Budget:

Instead of dissolving it, I suggest moving the funds under the ATMC balance to generate yield, while earmarking it for future event opportunities.

I agree with many of the points raised. However, I believe it’s valuable for the DAO to retain the option to directly support smaller, DAO-native initiatives that might not fall within the Foundation’s roadmap or the D.A.O. Grants threshold. Removing this budget entirely would eliminate a flexible tool that could be useful for unique opportunities, especially in H2.

By integrating the Events Budget into ATMC-managed strategies, we avoid leaving funds idle while preserving optionality. This approach ensures that if compelling event proposals emerge, they can be supported without requiring new budget allocations or delaying governance cycles.

In short: let’s keep the Events Budget productive, not dissolved.

4 Likes
5

I have mixed feelings.
On one hand, I fully support transferring stablecoins to ATMC, as this provides direct yield.

On the other hand, there are a few concerns that I believe are worth highlighting:

  1. DAO decision is being overridden — the DAO had previously voted to return all funds back to the DAO. It’s possible that we would have later reallocated them to ATMC anyway, but formally we are now choosing not to follow through on the original vote.
    Suggestion: going forward, any funds already converted to stablecoins should be transferred to ATMC for the benefit of the DAO.
  2. Multiple programs bundled in a single vote — this makes it difficult for DAO participants to express their opinion on each request individually.
    Suggestion: each program should have a distinct vote so that sentiment can be reflected separately. This can be achieved through either a complex multi-option vote or several simple yes/no votes.
  3. Centralization concern — this creates an impression that the DAO is unable to organize anything without AF, Entropy, or OpCo (in the future).
    Initiatives are gradually being shifted to centralized management. The control of ATMC, where the funds will be sent, will be handled by Entropy.
    I respect Entropy’s professionalism — but in terms of decentralization, this is moving in the wrong direction.
    There’s no specific suggestion here — just a thought that we should strive for more decentralization, not less.
6 Likes
6

We appreciate Entropy’s thoughtful proposal and the clear rationale provided for consolidating idle USDC balances under ATMC management. Given that the DAO has already approved the existence and operational mandate of the ATMC, we agree it is logical to consolidate idle or unused funds into its custody for yield generation.

Specifically regarding the Events Budget, we agree that continuing to maintain idle funds generates an unnecessary opportunity cost. At the same time, shifting this budget to yield-generating strategies under ATMC does not inherently preclude community-driven events, as smaller-scale or grassroots initiatives can still leverage existing DAO structures, such as the D.A.O. program or targeted collaboration with the Foundation. Regarding the ARDC v2 budget and ADPC Security Subsidies, we similarly support consolidating these balances for more effective management and yield optimization, particularly given the flexibility to redeploy funds back to related activities if needed.

That said, we suggest exploring the creation of DAO-wide operational guidelines, whereby all DAO-approved, USD-denominated budgets would, by default, be allocated into specified, yield-bearing vaults at approval. Under these guidelines, budgeted funds would be earning yield with distinct wallets before being withdrawn strictly at the point of actual payment obligations. Non-budgeted, general treasury assets would then remain under the strategic management of the ATMC, enabling balanced risk-adjusted allocation across the entire Arbitrum treasury portfolio.
Rather than simply withdrawing idle funds as outlined in this proposal, we believe it would be possible to address these cases by introducing the above guidelines. We encourage Entropy and the ATMC to explore formalizing such guidelines, as this could enhance the efficiency and sustainability of DAO treasury operations, while reducing operational friction and easing the burden associated with repeated governance proposals and approvals.

2 Likes
7

Thank you to Entropy for putting forward a thoughtful and well-structured proposal. We support the overall intent to consolidate idle funds into yield-generating strategies managed under the ATMC, which is aligned with the DAO’s long-term goals of capital efficiency and sustainability as outlined in the MVP and Strategic Objectives initiatives. That said, we would like to suggest a few refinements and explore certain areas where clarity or adjustments could further strengthen the proposal’s alignment with broader community needs and operational flexibility.

First, we echo the suggestions from @cp0x and @jameskbh regarding the Events Budget. While we understand the challenges with its current structure, we suggest earmarking these funds within the ATMC rather than fully dissolving them. This approach would allow the funds to remain productive while preserving the DAO’s ability to support future DAO-native or regionally relevant event opportunities that may not align with the Foundation’s roadmap or qualify under the D.A.O. Grants Program. We also encourage the team to explore how liquidity can be maintained to ensure that these earmarked funds are accessible for time-sensitive opportunities, should they arise.

Second, as more capital is entrusted to the ATMC, we suggest increased transparency around how these funds will be allocated. While the proposal outlines the general stablecoin strategy, it would be beneficial to explore publishing a lightweight investment framework that includes expected yield ranges, preferred protocol characteristics, and risk parameters. This would help delegates better understand the trade-offs involved and improve overall oversight.

Third, while we recognize that the OAT plays a key role in oversight, we recommend clarifying how governance and reporting processes will apply to the newly allocated funds. This includes confirming that all fund deployments will be publicly disclosed in the ATMC’s forum thread and that quarterly reporting will be provided with performance data and strategy updates. These practices would support the DAO’s broader push for transparency and operational accountability.

Regarding the unused ADPC Security Subsidies, we suggest exploring whether any unallocated funds could be coordinated with the Arbitrum Foundation’s upcoming security or audit initiatives. If these initiatives are well-defined and mission-aligned, they may represent a more targeted use of capital than passive yield alone.

Finally, we support the point raised by @maxlomu regarding the need for a clearer breakdown of responsibilities between the ATMC, AAEs, and the Foundation. As operational roles expand, publishing a simple responsibility map would help DAO contributors and proposers understand where to engage and who to coordinate with across different verticals.

In summary, we support the spirit and intent of this proposal and appreciate the work done by Entropy and the ATMC. By incorporating the above suggestions and exploring these improvements, we believe the proposal can deliver even greater value to the DAO while upholding the principles of transparency, flexibility, and community alignment. We welcome any clarification or iteration from the proposers and would be happy to support further discussion to refine these ideas.

1 Like
8

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 appreciate the initiative to consolidate idle USDC into yield-generating strategies and commends Entropy for the careful analysis of past event funding challenges.

We support the underlying motivation like consolidating idle stablecoin balances into the ATMC’s onchain strategies is a good step toward maximizing the DAO’s capital efficiency. The DAO’s financial sustainability depends on productive asset management, and we recognize the ATMC’s mandate.

Both @jameskbh and @Curia made great points about not throwing away all optionality for DAO-native events. It makes sense to earmark some of these funds within the ATMC, let the capital generate yield, yes, but keep the window open for special initiatives that fall outside the Foundation’s core plans. Otherwise, we risk shutting the door on creative or regional experiments, which have driven growth in other DAOs.

As the ATMC’s remit expands and the managed capital increases, we encourage Entropy and the ATMC to publish a lightweight investment framework, describing protocol selection criteria, yield benchmarks, and risk management standards. Additionally, we ask that all fund movements, including any future redeployment for event support or security initiatives, be fully disclosed within ATMC’s reporting.

Lastly, we echo @maxlomu and @Curia’s calls for a published breakdown or visual map of operational roles and touchpoints between the Foundation, ATMC, AAEs, and (future) OpCo. This would help community members and proposers navigate where to direct proposals and inquiries, given the evolving flow of programmatic and treasury responsibilities.

Overall, we are in support of the idea of the proposal. Moving idle funds is the right play, but let’s do it in a way that doesn’t shut down the flexibility and transparency that have made the DAO what it is.

1 Like
9

Thank you for this proposal, Entropy — it’s a pragmatic step toward optimizing the DAO’s idle assets and ensuring they’re put to productive use through the ATMC’s stablecoin strategies. As a delegate, I support the underlying goal of consolidating these funds to generate yield and bolster Arbitrum’s financial sustainability, especially given the rationale around events execution and the inefficiencies observed so far.

That said, while the ideas here align well overall, I believe the proposal would benefit from being split into separate votes for each component: one for the Events Budget dissolution, another for the ARDC v2 funds, and a third for the ADPC Security Subsidies remainder. This modular approach would allow delegates to evaluate and approve each on its merits, avoiding the risk of bundling strong elements with potentially contentious ones and ensuring more targeted governance.

I’m optimistic about the potential here and look forward to seeing how this evolves in the discussion!

1 Like
10

Appreciate Entropy’s proactive effort in addressing the fragmentation of unused USDC across expired or inactive initiatives.

This proposal will help improve capital efficiency in Arbitrum’s treasury while keeping things safe and under proper governance.

Instead of letting funds sit around in separate, underused budgets, consolidating them into a single strategic wallet makes it easier to track performance and manage them effectively.

Also, DAO is shifting from a grant-heavy toward a more sustainable finance model using existing assets to generate long term yield. This will reduce the need to sell ARB and helps strengthen the DAO’s yield layer.

Just small concern, about the events part, I agree that scattered and uncoordinated efforts without a clear strategy can be confusing and ineffective. But since there’s still a large portion of the budget left, I’m curious if are there any events already being planned that haven’t launched yet?
If we suddenly pull funding, it might disrupt ongoing work.

Just want to make sure Entropy has coordinated with the involved parties before we vote.

1 Like
11

Hi this is Brook from TiD Research. I share the concern raised by others regarding clawing back the Events Budget without preserving any room for DAO-driven or community-initiated participation. While the Arbitrum Foundation has consistently demonstrated strong execution on marquee events, I believe there’s a risk in leaving the decision-making entirely in the hands of the Foundation—especially in a fast-evolving environment like right now.

At the moment there are multiple narratives and emerging verticals in the market where delegates and community members often might have better visibility than the Foundation. These opportunities can include regionally relevant events, ecosystem-specific meetups, or narrative-aligned activations that may not be on the Foundation’s radar. If the DAO loses the ability to flag and support such events, we risk missing out on high-value opportunities that could meaningfully advance Arbitrum’s presence.

At the same time, I do believe that the Foundation is usually better positioned than most of us to handle the operational aspects of event planning and execution. With that in mind, perhaps a more balanced structure could be considered—one where the DAO retains a channel to propose or prioritize events, and the Foundation takes on execution.

One possible setup:

  • Community event signaling round — Every quarter, for example, delegates and community members could surface key events they think the DAO should be part of. Nothing too heavy, just a forum thread or Snapshot poll to gauge interest.
  • Foundation picks up execution — From there, the Foundation could take the lead on logistics and implementation with full discretion, while trying to align with the top community-surfaced priorities.
  • Small co-funding pool — If there’s an event with strong community support but not a fit for the Foundation’s roadmap, maybe a small pool of funds could be set aside for DAO-led or co-sponsored activations.
  • Lightweight RFP option — And if something comes up between cycles, we could allow quick pitches for event participation—short, focused asks that delegates can approve without a huge process.

This kind of setup would give the DAO a voice in shaping where Arbitrum shows up, without slowing things down or overcomplicating execution. Curious to hear what others think—or if anyone’s seen similar setups work well in other ecosystems.

12

Thanks for putting this forward — we’re strongly aligned with the spirit and direction of this proposal.

2025 Event Budget

We fully agree with this assessment. Earlier in the year, we supported a more structured, DAO-led process for events, but it’s become clear that the Arbitrum Foundation is in a better position to lead on this front. They have the resources, network, and strategic alignment to convert events into meaningful ecosystem growth — something the DAO, at least in its current form, isn’t optimised for.

This was a worthwhile experiment, and we appreciate its intent. That said, we’re now in favour of cutting our losses and recovering whatever funds are left.

ARDC V2

Again, this makes sense to us. Since the funds are already in stablecoins and the ARDC is no longer active, folding these into the ATMC’s treasury management efforts is a logical next step.

ADPC Security Subsidies

We also support redirecting unused ADPC Security Subsidy funds to the ATMC once outstanding commitments are fulfilled. These funds were initially earmarked for valuable initiatives, but have since sat idle — putting them to work is the pragmatic move.

Conclusion

While the amounts may be relatively small and not significantly contribute to the runway, it’s about building better habits around fund stewardship and signalling a commitment to the DAO’s long-term sustainability. This is a step in the right direction: improving capital efficiency, optimising costs, and taking a more proactive approach to treasury management.

1 Like
13

We support this proposal because the Arbitrum Foundation has the right staff and experience to run large events, and letting stablecoins sit idle is wasteful. The plan moves about 1.04 million USDC left in the 2025 Events Budget, roughly 1.5 million USDC being returned from the ARDC v2 program, and any extra from the ADPC security fund into the ATMC stablecoin balance so the treasury can earn yield. This would raise the ATMC pool to more than seven million USDC and start earning interest right away. Therefore, we support this proposal.

14

Is this strictly a ministerial/custodial change? It does or does not revoke each budget?

We just want to be clear if the proposal is only moving funds, or if it is also formally reducing budgets, particularly the Events Budget.

If the latter, it would be great to get the movement of idle funds in one poll, and the budget change in a separate poll.

15

Hello Everyone,

Thank you to all of those who have provided feedback on this proposal.

It appears to us that the only qualm with this proposal relates to the Event’s Budget wind-down, rather than the idle funds of expired programs (the ADPC Security Subsidies and the ARDC v2). As such, we will be modifying this proposal such that the Events Budget remains intact per the original proposal, but that the funds are transferred to a wallet that earns yield while the funds sit idle. Entropy does not believe that entities outside of the AF or OCL should host large scale events, and that smaller events are better suited for the D.A.O. Grants program, but we would like to prioritize ensuring the assets at hand are earning yield while sitting idle instead of increasing the complexity of this proposal by attempting to dissolve the 2025 DAO Events Budget in one vote.

The proposal has been modified to reflect the above, and will be sent to Snapshot for vote on Thursday, July 24th.

Lastly, Max brought up the idea of transferring the ADPC Security Subsidies budget to the new audit program:

The Arbitrum Foundation was allocated 30m ARB (currently $13M) for this program, which we view as enough money to support this initiative. If the AF needs additional funds, we can allocate this capital to them in the future, but we might as well be earning yield on it in the interim.

On a side note: Any proposal authors seeking to utilize the 2025 DAO Events Budget moving forward will be held to an extremely high standard when it comes to winning Entropy’s vote, and we encourage other delegates to do the same.

2 Likes
16

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.

While we’re supportive of consolidating idle USDC and utilizing it to generate yield, we do not think that the Events Budget should be dissolved. There have been numerous events since the DAO Events Budget was established, during which the DAO could have had a presence but didn’t. On the other hand, there were also numerous occasions where the DAO community took initiative and organized something, but without support from this event budget (examples: Arbitrum Day at ETHMilan, Arbitrum Run and Delegate Dinner at EthCC, upcoming ArbitrumDay at ETHLatam).

If anything, we think this is a hint that the problem isn’t the need for such a budget, but rather its administration. Its entire structure, as also confirmed in this proposal, was based on requests, rather than proactively seeking to craft an events strategy and pursue Arbitrum’s presence in various events.

Perhaps it’s more prudent to move the funds’ administration from Entropy to a different party. In the meantime, the USDC could be utilised for yield, but without scrapping the idea of the Events Budget altogether.

7 Likes
17

It makes sense to consolidate the funds and begin a more coordinated effort to preserve DAO budget moving forward. Gaining some idle yield on stablecoin funds is perfectly reasonable and should have been mandated originally anyways.

Blockworks Advisory will support this proposal as it heads to Snapshot.

18

Voted in favor.

Knowing that funds send back to the treasury means having them idle in whatever assets they were sent in the first place, is quite easy to choose to instead put the capital at work, even more if this happens as form of growth of Arbitrum protocols and liquiidity.

That said, as others mentioned, we do need rules to make this process straighforward. When a program ends and stable funds are left over, we have the following options:

  • send funds back to treasury
  • send funds to TMC
  • roll over the funds into the next iteration of the same program.

In my opinion the management of these 3 choices should be straightforward and not require a vote. In the same fashion we just voted to update the Code of Conduct to manage a team member leaving/getting removed in case it was not specified by the initiative itself, we should also implement such measures for stable funds. Specifically:

  1. for any initiatives having stables, assume that leftover stables will be sent to the TMC initiatives at the very end, minus any amount that should be retained for possible expenses, payments and others
  2. any initiative can specify, when approved in the onchain vote, the optionality of retaining the stables remaining from their initial funding for a continuation of the program if/when this further iteration will be voted; assuming there would be uncertainty on renewal, or maybe just a window of time that is “large enough”, the funds could be sent at interim to the tmc. But, in this case, we would rely on the program manager of that initiatives for the decision: it might just not make sense for example to send the equivalent of 50k USDC for a single month to the tmc.

The same framework should be utilized in case initiatives hold ETH, to be sent to the GMC initiative, albeit this seems a very hedge case.

I want to also stretch this forward and put up a practical example. Entropy asked me to gather info on remaining funds of Questbook Season 2. While I am not the program manager for that initiative, I did try to come up with the number of how much fund we can send back vs how much we should retain to finance on going initiatives (we are at the natural end of the program but a few milestones still need to be paid). With several members of the team being OOO, it was impossible to gather an answer in time to include also season 2 in this package, and we are now in the situation of either sending funds back to the treasury or put up a new vote.

All of this to say: we do need to have clear rules on

  • team management (hiring, firing, leaving)
  • fund management (leftover mostly; asking for more would require a change of scope and so a new vote regardless)

My question for @Entropy and for the whole dao is: a rule like the above, where should be put? The code of conduct seems like a stretch, but maybe is the only answer. Have thought about the question, but not the answer honestly.

1 Like
19

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.

The updates in the proposal reflect a clear improvement. It balances capital efficiency with operational flexibility, something we specifically called out in our earlier comment. Keeping the Events Budget active while letting the funds earn yield is the right call.

The plan for reallocating ARDC V2 and ADPC funds makes sense, and the sequencing avoids unnecessary delay. We do think stronger transparency around treasury flows, especially from Foundation-controlled wallets, will be important as ATMC’s role continues to grow.

20

We have voted in favor of this proposal.

Previously, we expressed ideas regarding certain aspects of Entropy’s initial proposal, specifically highlighting the need for a more structured framework to ensure that idle funds could generate yield without necessitating a reduction in available resources for ongoing activities. We are pleased to see that our feedback has been incorporated more directly and comprehensively than anticipated, by maintaining the Events Budget while optimizing its capital efficiency through yield-generating strategies. This proactive and thoughtful integration is highly appreciated. Overall, we fully support the refined proposal.