Continued Funding for the Arbitrum Foundation

Proposals Finalized AIPs
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

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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.

32

I failed to vote this round, mostly because i wanted to read the foundation’s response above and then i missed the deadline, but in general the AF is a great steward of our network, I hope that they can cut the budget tho… we have to recognize the token is down bad, like really really bad. So we neeeeeeed to go thru our books and see what has impact and what doesn’t.

In general, this request did not really do enough of that… I hope that they can find a way to stay under budget this year and next… because OCL is a non-negotiable need and I hope Opco can reduce some of the work the AF has on their plate.

All that said, I would vote FOR and beg the foundation to look at the spending a few times in this 18 month period to try to reduce the spend by an order of 30-50%.

Griff Green - Delegate Communication Thread
33

Strongly support this proposal. The Arbitrum Foundation has been a critical growth engine and professional backstop for the DAO. In a highly competitive L2 landscape, having a dedicated team coordinating strategic grants, institutional partnerships, and ecosystem development is essential. The requested funding is reasonable given the scale Arbitrum has achieved, and directing all revenue back to the DAO treasury while the Foundation handles the cost of growth is a smart model.

34

Hello everyone,

Here’s the next round of AF answers to questions since the last post.

To note on the requested funding breakdown, with the onchain proposal live now, the payload includes the transfer of 230000000 ARB from DAO treasury to 0xD6c8a4E72584f24bd5517AfeD6c01D21477C17f6. The remaining funds ($16M in RWA & stablecoins and 1,740 ETH), will be drawn from the ATMC following passing of the onchain proposal.

As was laid out in the proposal and transparency reports, G&A includes costs related to full time employees, contractors, external service providers, legal and insurance, as well as other operating expenses. It’s important to also account for full costs of 31 employees, including taxes, benefits, and other statutory costs associated with personnel.

Importantly, 54% of the non-ecosystem growth funds this proposal is requesting are solely focused on running the network and funding tooling, and as such are fixed costs.

We recognize that in the current market conditions in particular, it is extremely important to translate the fundamental growth and traction of the Arbitrum protocol to prospective holders of ARB and capital partners in the ecosystem. The AF as a strategic and aligned holder of ARB, is uniquely positioned to do this and we have been taking steps towards increasing this commitment, including recent initiatives to engage with capital allocators and institutional investors. We will continue to regularly assess opportunities to drive value to the broader Arbitrum ecosystem. The ARB allocation requested will supplement the Foundation’s strategic ARB holdings and will largely be used to support new and existing ecosystem growth initiatives.

As it relates to any upcoming AAE funding requests, the AF is unable to comment and would refer to the respective AAEs for more information.

With regards to a responsibility map across AF, Offchain, OpCo, Entropy, and AGV, please see this high-level AAE overview from the recent governance call covering the funding proposal.

AAE diagram
AAE diagram1920×1082 461 KB

As mentioned in a previous answer, the AF can’t discuss details of the Offchain agreement publicly. Offchain’s funding does represent a significant portion of the reduction, but we are actively reducing costs across the board as well. To give several examples, we’re optimizing technical costs and are targeting an 8% reduction in 2026 vs. 2025 despite higher expected transaction volume and network traffic. The expected variable marketing costs for 2027 have also been reduced by 84% when compared to 2025. The overall operational budget is projected to decrease by 35% when you discount for R&D altogether, as can be seen in the table below:

operational budget
operational budget1204×650 158 KB

To quote from our answer above:

The technical budget includes server costs (like AWS) to ensure the Arbitrum One network is running reliably; security costs to ensure the technology stack remains secure, which becomes increasingly more important in the age of AI’s ability to find bugs; and third party tooling that is not only necessary for developers to build on Arbitrum, but for users to reliably access the network and send transactions. All of those cover RPCs, node infrastructure providers, software subscriptions, the Security Council, and other associated expenditures.

As was mentioned above, G&A includes costs related to full time employees, contractors, external service providers, legal and insurance, as well as other operating expenses.

Additionally, as shown in the breakdown above, the 2027 budget reflects an 8.5% cost saving compared with the 2025 budget.

36

Voting For without clear criteria and objetives for success is part of the problem. This enables the AF and other AAEs to continue seeking requests of this size with no accountability because delegates will always vote “FOR”. Next time (if the ARB token still exists), the same thing will happen.

Given this request was for 2027, There would have been no operational impact with delaying this proposal another 60 days until the AF provided clear and direct feedback. Accountability starts here.

What specific steps have been taken and how much has been spent on these initiatives? The token is at the lowest so I assume these initiatives have not been successful. Without clear objectives, there is no way of measuring accountability.

37

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 will be voting in favor of this proposal. The Foundation has been very responsive and helpful in addressing our questions throughout the review process.

That said, this will be the last time we support a proposal in its current format. Going forward, we would appreciate greater clarity around budget allocations and objectives, more comprehensive KPI reporting, and stronger collaboration across the various workstreams. We believe these improvements will help the community better evaluate progress, accountability, and overall impact.

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38

Voted FOR;

As in the previous Snapshot vote, we have voted FOR this proposal based on the reasons previously outlined, particularly the Foundation’s track record in ecosystem growth, infrastructure development, and strategic execution. We also appreciate the additional clarifications provided, which helped address several community concerns and improve the overall proposal.

That said, we believe future funding requests from all AAEs should be accompanied by more clearly defined performance metrics, stronger accountability mechanisms, and more detailed reporting on capital allocation and outcomes.

1 Like
39

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 recognize the important role the Arbitrum Foundation has played in supporting the growth and continued operation of the Arbitrum ecosystem. The Foundation carries out functions that are still important for Arbitrum’s development, including ecosystem coordination, infrastructure support, governance support, strategic growth, and acting as the DAO’s legal wrapper.

We also understand why the Foundation is coming back to the DAO for additional funding. The proposal frames the Foundation as a cost center for the ecosystem, while network revenue accrues to the DAO treasury. If the DAO wants the Foundation to continue supporting core operations, ecosystem growth, and strategic initiatives, some form of continued funding is necessary.

That said, this is still a large funding request, and many of the questions raised by delegates during the process were fair. We would like to see clearer reporting around how the requested funds, including the 230M ARB allocation, are expected to be used. “Ecosystem growth” is an important category, but it can cover many different types of spending. More clarity around runway, G&A expenses, ARB treasury management, potential sell pressure, and the relationship with any separate Offchain Labs / AGV / OpCo / Entropy funding request would make future renewals easier to evaluate.

At the on-chain stage, our vote reflects the view that the Foundation remains important to Arbitrum’s continued operation and growth. However, as the Foundation’s role becomes more recurring and institutional, the DAO’s expectations around reporting and accountability should grow as well.

41

Following the approval of the Continued Funding for the Arbitrum Foundation proposal, the payload has now been executed. The Arbitrum Foundation has received $16M in RWAs and 1,740 ETH from the ATMC, and 230M ARB from the ArbitrumDAO Treasury.

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