Entropy Advisors: Exclusively Working With Arbitrum DAO

[paulofonseca]

@BlockworksResearch

but would recommend to slow the hiring process so that funds are used properly.

hey @BlockworksResearch what leads you to believe that… funds could be used non-properly?

[Vertex_Protocol]

Copying from our delegate thread for visibility:

We voted for this at the temp check stage but would like to see some more discussion and possible changes made to the proposal before it’s posted to Tally. We think the Entropy team is doing good work, and that retaining their services would be beneficial to the DAO. However, there are aspects of this proposal that we would like to see tweaked slightly. As other delegates have mentioned, we’re not sure that a full team of 10 people will be necessary. We don’t think Entropy will hire for the sake of it, but we think it could be good to have some lightweight mechanism for expansions to the team to be approved by the DAO. One possible option is to have a quick report from Entropy when they want to expand the team beyond specific breakpoints. Reports could be as simple as explaining what work the team is not able to do with their current capacity, and what they’re trying to get out of the next hire. These can be approved optimistically to allow Entropy the space to expand into roles that are clearly necessary, while still allowing the DAO a chance to evaluate whether the scope of Entropy’s work is appropriate and if additional members are truly needed.

[Entropy]

To address some contributors concerns around team scaling - We commit to not aggressively hire for the sake of hiring. We will only grow as our workload outpaces our bandwidth, and have a pipeline of the highest tier of talent available on the market who we can pull in to work on Arbitrum full-time. Throughout our conversations with some of the delegates who had minor concerns, it became apparent that the Snapshot vote’s overwhelming support made it illogical to make any large structural changes to our proposal. We wanted to share this information on the forum so others could have visibility into our decision to proceed to Tally with minimal alterations.

We did make 2 small non-structural changes after the Snapshot vote passed (on Aug 2nd), please see the below, which is quoted from the top of our forum post for optimal transparency.

@Entropy

Changes made on Aug 2nd:
Added language about how we will facilitate the ability for the DAO to directly input into our workload.

In order to address our promise to give the DAO the ability to directly and openly provide input into the work we are facilitating, we will be posting monthly Short Term Deliverables similar to the ones included above in an “Entropy” category in the forum. We will call for feedback on our workload and goals, and ask for suggestions as to how to either add new initiatives or remove existing ones from our workload. We will additionally host an Entropy office hour biweekly open to all.

Non-material change clarifying that Entropy has the ability to claim/bill its monthly payments instead of the foundation transferring funds at a monthly cadence. The only alteration is in the verbiage from “draw” to “eligible to claim” with the addition that "Payments that have accrued can be claimed at any time.”

While the Entropy team scales, they will be eligible to claim a reduced $100,000 per month and after crossing the threshold of 7 employees dedicated to Arbitrum, will be eligible to claim regular monthly payments ($2,470,000/12 = $205,834) for the remainder of the 12 month term. Payments that have accrued can be claimed at any time.

Before:

While the Entropy team scales, they will draw a reduced $100,000 per month and after crossing the threshold of 7 employees dedicated to Arbitrum, will start receiving regular monthly payments ($2,470,000/12 = $205,834) for the remainder of the 12 month term.

[stonecoldpat]

We have created a multisig to receive the funds and perform our duty as outlined in the proposal:

Safe{Wallet}

[WinVerse]

DAOplomats voted Against this proposal on Snapshot.

We are very pleased with the work Entropy does and we see the ripples across the DAO. However, we had concerns with the cost — we believe it is too much of an ask. We don’t support the goal of hiring 10 employees which in turn justifies the ask.

With the proposal passing regardless, we are happy to see your commitment to not hiring just for its sake and looking forward to the quarterly reports.

[ITUblockchain]

Entropy Advisors is a non-profit company that has been part of Arbitrum DAO for a long time and has consistently worked for the benefit of the DAO. They have identified the problems Arbitrum is facing and have already started working to solve them. In particular, they aim to facilitate communication between active delegates, contributors, and DAO leaders, and they are currently holding meetings for this purpose. Additionally, their plans to significantly reduce the scope and funding demand by helping to formulate operational procedures until the OpCo is realized will also benefit Arbitrum DAO. Their research to enhance the value of the treasury, their plans to develop the DAO ecosystem, and their ability to stay connected with developers and review new technologies are among the reasons we support Entropy Advisors.

Considering their contributions to Arbitrum, along with their goals and plans, we, as the ITU Blockchain Delegation Team, voted to fund them.

[0x_ultra]

I’m voting FOR on Tally. The Entropy Advisors team has already provided a valuable contribution in the past and I believe that their role is essential for the DAO. The requested amount is high and not all of the feedback raised around pricing has been incorporated into the final proposal, but I am sure that we will be repaid with quality and good performance.

Snapshot vote comment:

Entropy Advisors: Exclusively Working With Arbitrum DAO

I’m voting in favor. First of all, I appreciate how the Entropy team has integrated some of the feedback over time, showing a real commitment in shaping a good quality proposal. I support this proposal because I think that more coordination should be a key component for the development of the DAO. More coordination means more efficiency and less waste of resources and this proposal would certainly make the difference. However, I share the same doubts as @Pepperoni_Jo3 on the commercial structu…

[pedrob]

I am voting AGAINST on tally.

I think the Entropy team is great, and overall, the proposal looks good. However, I cannot vote for a deal where the high price paid for exclusivity is not equally balanced with fair renewal terms.

@pedrob

However, I would like to reiterate my concern about the renewal terms. In my opinion, the high price being paid for exclusivity also requires a commitment from Entropy not to condition the renewal option on the DAO agreeing to pay a bonus. I would like to see these terms modified in the tally vote.

[ocandocrypto]

@Entropy Are there any updates on the concerns raised above?

also, really interesting and understand your perspective and point of you.

Entropy Advisors: Exclusively Working With Arbitrum DAO

DAOplomats voted Against this proposal on Snapshot. We are very pleased with the work Entropy does and we see the ripples across the DAO. However, we had concerns with the cost — we believe it is too much of an ask. We don’t support the goal of hiring 10 employees which in turn justifies the ask. With the proposal passing regardless, we are happy to see your commitment to not hiring just for its sake and looking forward to the quarterly reports.

[Frisson]

@Frisson

I am in favor of this proposal.

The work the Entropy team has done to-date on sequencer fee settings, DAO budget, DAO ops and more is highly valuable. There is no one else taking ownership of and moving forward on these key strategic issues.

It’s important to consider not just the direct cost, but also the opportunity cost of a team like Entropy committing full-time to Arbitrum. Matt, Sam, Pruitt and team are strong operators. The incentive in this case is to spread out across many ecosystems to maximize negotiating power and funding opportunities. I think having a small (yes, 10 is small in the real world) team of top-tier folks focused exclusively on the success of the Arbitrum DAO is worth it.

I voted FOR this proposal on Tally for the reasons outlined here

[Entropy]

The 3-year vesting period is designed to ensure that our interests are closely aligned with those of the DAO and the ARB token holders over the long-term. This alignment helps to foster a shared commitment to the success of the Arbitrum ecosystem, ensuring that our incentives are tied to long-term value creation for the DAO.

The primary reason we structured the payment plan as $100k initially, increasing to $200k as we scale, is to allow us the flexibility to grow as the DAO’s needs us to evolve. While we’re not in a rush to scale the team, this approach ensures we have the capacity to expand as necessary. We’ve observed that with other initiatives, the demand for work can quickly exceed capacity, which is a situation we’d prefer to avoid. As already stated we will not be scaling for the sake of scaling which would be to the detriment of Entropy as well.

Another important consideration, which is a bit delicate to discuss openly, is the opportunity cost associated with our exclusivity. Committing to two years of exclusive work with capped growth could be challenging from a business perspective, as it of course nullifies our ability to take on other opportunities. While our desire is to remain with Arbitrum for as long as the community will have us, we believe continued exclusivity should come with the long-term alignment described above and that the bonus structure is quite fair with all things considered.

[0xDonPepe]

I voted FOR this proposal as it strategically empowers Arbitrum DAO by securing a dedicated team focused solely on enhancing governance and operational efficiency. Entropy Advisors have demonstrated their value through impactful initiatives. With a proven track record and a clear vision for long-term success, Entropy Advisors are poised to drive Arbitrum’s evolution as a leading scaling solution.

[BlockworksResearch]

Blockworks Research will be voting to ABSTAIN on this proposal on Tally.

As stated earlier in this thread, Entropy Advisors is formed in part by former Blockworks Research folks, and thus to prevent conflict of interest, we will be abstaining.

[ermia]

I had initially voted for the proposal on snapshot but after a second thought and considering the cost on DAO I’ll vote against it on Tally. This is not underestimating the great contributions Entropy has made for the DAO. I’d be happy to support the proposal with a more conservative budget.

[X_0001]

The Treasure ARC voted in favor of this proposal. This was reflected by Entropy’s contribution to Arbitrum to date and aligned long term goals. As Pepperoni Joe put it Entropy we would like to see a future where Entropy is embedded in Arbitrum DAO and able to effect meaningful change, which we believe they have the ability to do.

We maintain concerns over the size and structure of the financial side however balancing that against having or not having Entropy, believe that it is best to have them on board. Regarding the scale of the agreement, as others have mentioned, there will be sizeable expectations on the Entropy team but we are quite confident that they can deliver.

[Tane]

We vote FOR the proposal on Tally.

We maintain the rationale made for its Snapshot voting and continue to support the proposal as it is.

[ocandocrypto]

I decided to vote “For” this proposal.

Entropy Advisors: Exclusively Working With Arbitrum DAO

I’ve closely followed Entropy’s work over the past few months, and I’m impressed by their significant influence within the DAO and their strong commitment to execution. Their full-time dedication to the DAO is particularly valuable, especially given the need for senior expertise in creating and managing initiatives of this scale. Entropy clearly possesses this experience. As part of the onboarding working group, we recognize this need and are exploring ways to support this initiative as we mov…

As I mentioned in my previous comment on the forum, I strongly believe in the value of their work and find it important to continue having them work exclusively with Arbitrum DAO. They have also been responsive to questions and have improved the proposal based on the feedback they received in the Governance forum.

Entropy Advisors: Exclusively Working With Arbitrum DAO

@Entropy Are there any updates on the concerns raised above? also, really interesting and understand your perspective and point of you.

This for me is a clear demonstration of their commitment to the DAO.

Entropy Advisors: Exclusively Working With Arbitrum DAO

The 3-year vesting period is designed to ensure that our interests are closely aligned with those of the DAO and the ARB token holders over the long-term. This alignment helps to foster a shared commitment to the success of the Arbitrum ecosystem, ensuring that our incentives are tied to long-term value creation for the DAO. The primary reason we structured the payment plan as $100k initially, increasing to $200k as we scale, is to allow us the flexibility to grow as the DAO’s needs us to evolv…

[mcfly]

I’ve decided to confirm my vote in favor of the Entropy proposal, but my support comes with a vision for the future. Here’s my thinking:

Short-term benefits:

1. Entropy can provide immediate, focused support that Arbitrum DAO needs.
2. It’ll help us get more laser-focused on crucial decisions and projects.
3. We’ll likely see improved coordination and faster progress on key initiatives.

Long-term vision:
I see this as a stepping stone towards a more democratic structure, like a senate that would:

• Make strategic decisions
• Truly represent our diverse community
• Balance different stakeholder interests
• Ensure long-term sustainability of Arbitrum

Long-term concerns:

1. Concentration of power in a small, unelected group
2. Potential for reduced community involvement in decision-making, by relying only on a “privy-council” of “important delegates”.
3. Risk of becoming overly dependent on a single entity
4. Possible stifling of diverse perspectives and innovation

By supporting Entropy now, we’re getting short-term help while investing in our future. But we need to actively work on transitioning to a more democratic system during this period.

I expect to see concrete steps towards this goal during Entropy’s engagement, and offer my help to make it a reality. After a year, we should be ready to evolve our governance to address these long-term concerns.

Let’s use this opportunity wisely to build a stronger, more decentralized Arbitrum DAO for the future.

[krst]

The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking, and ideation of the two.

Following our support for this proposal during the temperature check we’ll vote FOR this proposal in the onchain vote.

[snowdot]

The results are in for the Entropy Advisors: Exclusively Working With Arbitrum DAO on-chain proposal.

See how the community voted and more Arbitrum stats:

# Entropy Advisors: Exclusively Working With Arbitrum DAO