Continued Funding for the Arbitrum Foundation

Proposals
21

I am seeing several comments indicating support for this proposal while requesting additional details and clarification later. Respectfully, I disagree with this approach.

The purpose of governance process is to evaluate a proposal based on clearly defined objectives, responsibilities, KPIs, and expected outcomes before funding is approved. The responses provided by the AF are high level in nature and do not provide sufficient details for delegates to accurately assess.

The AF has stated Offchain and other AAEs will request funding separately. If that is the case, delegates should understand exactly what the AF alone is responsible for delivering and how success will be measured. What assurances do delegates have that future funding requests from other AAEs will not offset the reductions? If multiple entities return to the DAO requesting substantial funding independently, the aggregate cost to DAO could be significantly higher.

Most importantly, there are still no clearly defined KPIs, milestone based funding triggers or measurable ROI targets that justify a request of this size. Approving funding first and seeking clarity later sets a concerning precedent as it effectively signals that large funding requests can be approved without defining expectations.

22

Merlyn Labs is voting FOR on this proposal. The Foundation has demonstrated a clear track record of turning capital into ecosystem growth.

Continued funding is the cost of keeping the network running. We’re confident this allocation sustains the flywheel that benefits all ARB stakeholders.

24

I want to share my perspective given that several delegates have raised concerns about the lack of clarity in the responsibilities of the various AAEs, particularly AF and OpCo.

I think that the main reason is that, to date, the OpCo is not yet 100% operational as originally designed. Fortunately, although not yet officially announced, the Head of OpCo is already part of the structure and is currently being onboarded.

So far, the absence of this figure, central to the entity and its role in inter-entity coordination, prevented the OpCo from advancing on a public strategy definition and the establishment of medium to long term objectives. With this key hire in place, both will take shape.

That said, the OpCo’s current core mandate is to operationalize new initiatives coming from the DAO, the coordination across AAEs and to proactively develop new business lines that generate revenue for the DAO.

On the first and second point, significant progress has been made. As shared in the recent transparency report, the OpCo Team took over initiatives such as Firestarters, DAO Events, RAD, Watchdog, Code of Conduct, various DAO’s Calls, and a number of other initiatives that are not visible on the forum, as they relate to coordination between AAEs and stakeholders. The OpCo Team also served as a receiving point for several new initiative proposals and delegate feedback, which were internally validated across the various AAEs teams. That coordination work does not always end up with a forum post but is heavily time consuming.

As for the Arbitrum Foundation, they detailed their responsibilities in their recent response:

Nowadays, with the DAO operations running much more smoothly thanks to the OpCo Team’s efforts, the clearest expression of what sets the OpCo apart from the Arbitrum Foundation will come from the discovery and development of new business lines that generate revenue for the DAO treasury. That work is only now beginning, though with the Head of OpCo and a CFO recently onboard, I expect it to translate into concrete and measurable impact for the DAO.

25

Voting FOR, as the AF has been doing very good work and I have confidence that they’ll continue to do so and continue to operate in good faith. I share the attitude expressed by @Entropy and others that should be seen as an injection with the expectation that future requests include more concrete KPIs / roadmaps for reaching profitability; I think this is a reasonable expectation given the % of treasury assets that the funding requests represents (which is largely due to current token prices).

DZack23.eth Delegate Communications thread
26

I voted FOR on this proposal because the Arbitrum Foundation remains critical to the DAO across the four areas highlighted in the proposal: strategic grants and partnerships, technical advancement and infrastructure maintenance, marketing/community/education, and tokenholder relations/governance/DAO wrapper.

That said, as the DAO matures, we need to normalize a higher standard for recurring budget visibility. The goal should be constructive accountability: giving AAEs the resources they need while making it easier for delegates/tokenholders to understand what is being funded, what outcomes are expected, and how performance will be evaluated over time.

27

Blockworks Advisory is voting ABSTAIN on this proposal; this is not a decision that comes at a judgement of the proposal at hand in anyway, rather, Blockworks Advisory is currently winding down its voting responsibilities and delegation. As such, we will be voting abstain on proposals in this cycle.

Thank you.

1 Like
28

I am voting ABSTAIN because I would like to see a clearer articulation of value accrual to $ARB holders, a defined path toward profitability, and more concrete KPIs for measuring outcomes.

1 Like
29

This was an extremely conflicted vote for me.

I decided to vote in favour.

I can say that the feedback from @Entropy helped me shape my own view here.

I strongly agree with Matt, Sam & Co.: to be blunt, we can’t keep going as we are now. We are in a spending review period across the whole industry. In Arbitrum specifically, we have seen several initiatives not being renewed or being shut down, with potentially more to follow.

The Foundation’s request is somewhat of an outlier here. While I do see that the total amount requested, $45M, is below the $65M from the previous two years, we have:

  • a request that is generally extremely high on an absolute basis, especially on the ARB side, and very heavy on the ATM side, basically cancelling out more than what we have earned so far since inception;
  • a discount that, while I am sure reflects greater efficiency from the Foundation, does not take into account what AF has spent over the years as a cost related to OCL, which, as we see above, might potentially come to the DAO at a later stage for further funding.

Effectively, we cannot know whether this is simply a discount, or whether AF has renegotiated the deal with OCL in a way that means the cost will now be accrued directly by the DAO, with no intermediary.

I do think we need the Foundation today. I think about the scenario of not funding them now, having them devise a plan over the next 30 to 60 days, and then having them come back to us with a plan to further cut headcount, events, and partnerships, beyond what has already happened. I am unsure whether the following 12 months would be better or worse for Arbitrum in that scenario.

I do think we have to fight today to maintain the market share and mindshare we have, especially with new ecosystems emerging on top of us and absorbing liquidity, reputation, and opportunities, such as Hyperliquid.

This is why, like Entropy, I am in favour of this financing today. But I do expect the Foundation to spend the year:

  • continuing to grow the pie for us;
  • cutting spending that, one year from now, will be much more difficult to approve than it is today.

There would be a lot to say here. A lot to say about the amount of ARB currently held by the Foundation, how it has been spent in the past, and how we will see these 23M ARB being deployed. There would also be more to say about KPIs. I do agree that a good part of Arbitrum’s success is also due to the Foundation, but I am also mindful of the risk of falling into a “post hoc, propter hoc” mentality, especially with unclear transparency reports that should, in my opinion, be better addressed in the future.

All of this, though, is secondary to the overarching thesis / idea I mentioned above.

My expectation is that, one year from now, we will come back to a new request with:

  • clearer transparency reports compared to what we have historically had;
  • better disclosure of both successes and failures;
  • better coordination with the different AAEs. We have started now, also thanks to OpCo and with AF/OCL members being involved, but it is a long road;
  • a leaner budget, since what we are granting today likely cannot be granted again one year from now.

I am also expecting, hoping, and believing in a Foundation that will keep leading the ecosystem with even greater credibility, and that will continue to generate, in coordination with OCL, Entropy, and OpCo, success stories like Robinhood and others that are coming our way.

Onwards

1 Like
JoJo Delegate Communication Thread
30

Great feedback. One area that I would like you and other delegates to reconsider is NOT voting for at this stage.

The funding is intended to support operations in 2027; I do not believe is unreasonable to delay this proposal until July or August (30-60 days as you mentioned) to allow Arbitrum Foundation to provide clearer details around KPIs, ROI expectations, mid to long term ARB holder alignment. I would rather see the DAO take an additional one or two months than approve it now, and attempt to resolve fundamental questions afterward.

Given that this funding is for 2027, there does not appear to be an urgent need to rush the decision. Taking additional time to define expectations, measurable outcomes, and accountability mechanisms would ultimately benefit Arbitrum Foundation, $ARB token holders and the DAO.

31

Voted FOR;

Although we have some reservations, the Foundation has demonstrated a strong track record of ecosystem growth, infrastructure support, and strategic execution over the past years, making a compelling case that continued funding is necessary to maintain and expand Arbitrum’s momentum. We also appreciate the clarifications given by Foundation members and other AAEs regarding the proposal, which also shows a significant alignment with the rest of the ecosystem stakeholders.

At the same time, the size of the funding request, the limited granularity around certain budget categories, and, more than anything, the broad discretion granted over ecosystem growth allocations isn’t something that leaves us 100% comfortable.

Future funding requests would benefit from clearer performance metrics, stronger accountability mechanisms, and more detailed reporting on capital deployment. With that said, we consider that these concerns are not sufficient to outweigh the importance of ensuring operational continuity.