Consolidate Idle USDC to the ATMC’s Stablecoin Balance

Proposals
1

Non-Constitutional

Abstract

  • Entropy proposes dissolving the DAO’s 2025 Events Budget and transferring the remaining ~1.04M USDC to the ATMC, which will top-up the budget allocated to onchain treasury managers focused on stablecoin strategies. Further detailed below, but after observing the Events Budget in action, our team has determined that large-scale events are better executed by the Arbitrum Foundation, which has the dedicated staff and expertise to plan and host them effectively, while smaller community initiatives can be carried out as part of the D.A.O program.
  • 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

After observing the first few attempts to pull funds from the DAO’s 2025 Event Budget, Entropy has concluded that it is in the DAO’s best interest to relinquish large events and major sponsorships decisions to the Foundation, especially given their newfound willingness to take a more proactive stance within the Arbitrum DAO/governance process. We propose winding down the Events Budget and transferring the remaining USDC to the ATMC to be deployed in onchain stablecoin strategies, managed by DAO-approved treasury managers.

First and foremost, Entropy would like to be clear in that we are not calling into question the intentions of teams who have submitted events proposals thus far. Those teams followed the correct procedures and abided by the eligibility requirements laid out in the proposal. Having said that, our conclusion was determined after considering several factors and instances:

  • The minimum threshold of $50k has led to overly inflated budgets and overall has attracted events types that deviate from the envisioned purpose of the initial “2025 Events Budget” proposal. When written, Arbitrum specific events like GovHack were the primary focus and the Arbitrum Foundation has shown more willingness and expertise in hosting large scale events like Arbiverse and more recently, numerous events at ETH Denver as well as EthCC in Cannes.
  • While the ADPC’s market consultation helped determine the types of events delegates desired, the budget has failed so far to attract professional event organizers willing to execute on these ideas.
  • Without a mandate to craft event strategy, the events committee (Entropy, ADPC, and Disruption Joe) is unable to provide proper guidance to parties interested in utilizing the budget as each event is structured as a separate initiative. The lack of cohesion and coordination between events will in our opinion render them less valuable.
  • Entropy commends @paulofonseca for taking the lead on organizing the DAO’s involvement at ETH Bucharest, but the list of necessary decisions required highlights the difficulty and execution risk when it comes to putting boots on the ground for in-person events. We can not expect delegates and volunteers to keep picking up an amount of work that in reality requires a full-time events coordinator, a role that is already filled within the Arbitrum Foundation.
  • While not intentional, the Arbitrum Foundation was drawn into events that weren’t originally a part of their 2025 strategy, straining resources and their team’s ability to execute on other commitments. While Entropy had originally believed that the listed events committee could help play a role in streamlining communications and making sure funded events fit within the Foundation’s strategy, it is ultimately not feasible to execute on events without their (and in some cases, Offchain Labs) involvement.
  • It is impossible in the proposal’s current structure to control what does and what does not receive funding, as this is completely determined by delegates. If an event does not fit in with the Foundation’s plans, the best the events committee can do is try to communicate that to a delegate base that may or may not see this information prior to casting a vote. Delegates may not even realize that a vote is requesting funding from the Events Budget in the first place, and may mistake it as a regular temperature check. We believe the proposal from Farstar to be a good example of this, which added where the funds would be pulling from after it was already live on Snapshot and the Entropy team asked them to make it more clear.

To summarize, Entropy believes events are a vertical that should for the most part fall under the Foundation’s scope. Their Ambassador program helps build community engagement in various regions, while the DAO’s D.A.O Community and Events Domain can be available to fill the remaining gaps.

In the event that a professional events organizer comes forward with an idea, Entropy suggests that they first be directed to the Foundation or if necessary move forward with the normal proposal process.

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 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

1 Like
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?

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

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.

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

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.

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.