As a general premise, we would like to emphasize that our comments do not indicate opposition; rather, they reflect our consideration on how to make this proposal more agreeable.
Fundamentally, we acknowledge and fully agree that Entropy has made significant contributions to the Arbitrum DAO! We witnessed how Matt and Sam bootstrapped the team, hired a group of high-context and capable members and continued to spearhead the Arbitrum DAO governance.
At the same time, we also recognize the delicate and complex nature of the relationship between service providers and the DAO, and we believe it is necessary to establish sufficient safeguards to properly align with token holders’ interests.
Exclusivity and accountability
When a service provider also controls a large delegate stake, the DAO’s “customer” and “vendor” become the same party. This concentration can create a latent COI: in edge cases, Entropy could benefit more from blocking an external provider than from maximizing DAO value. Entropy itself acknowledged this COI during the OpCo debate. Their earlier opposition to OpCo, even if well-intentioned, shows the theoretical risk: had the rest of the DAO not overruled that vote, a new organization might never have launched. In other words, vendor lock-in can make it harder for the DAO to explore, more effective alternatives.
We therefore believe the question is not whether Entropy currently acts in good faith, which we believe they do, but whether the DAO can still pivot priorities quickly if a future initiative lies outside Entropy’s core strengths and it could potentially cause a loss to Entropy. We recognize that this is an inherently sensitive matter, but we believe the DAO should at least discuss what safeguard options the DAO should have.
We may have phrased our second point imprecisely. What we actually want to solve for is this:
How will the DAO decide whether Entropy is meeting, or falling short of, its expected performance?
Separately, is it healthy for Entropy to remain the only operative in certain functional domains?
The first question calls for clear, objective measure so that underperformance is recognized early and dealt with fairly. The second question is not about Entropy’s promise to work exclusively for Arbitrum; it is about situations where Entropy, in practice, becomes the exclusive provider for a specific line of work. We should articulate in advance when that de-facto exclusivity is acceptable, when it should trigger competitive sourcing. The termination clause is clearly stated, but our question is about under what circumstances the invocation of this clause should be discussed, and how we should detect whether those circumstances have actually been met.
Concrete outputs and measurable outcomes
We agree with the perspective quoted below, but we think the primary issue here might be the relationship with OpCo.
For example, regarding treasury management, we observe substantial overlap between the domains described by Entropy and those covered by OpCo (though OpCo might be interpreted as having a bit more operational focus).
In this context, it remains unclear which entity ultimately holds accountability for the overall treasury strategy of the DAO, to whom responsibility should be assigned in the event of an issue, or to whom this DAO pays for what. While we highlight treasury management as a clear example, similar overlaps might exist in other areas as well.
Cost justification
We are aware that a high-level cost breakdown has been shared, but we do not believe it is sufficient for proper oversight.
To be clear, we are not asking Entropy to open its entire P&L. In a classic output-based model, where each deliverable carries a discrete fee, the DAO could set compensation solely by the value it receives, regardless of Entropy’s internal costs. However, much of Entropy’s mandate sits in higher-level advisory and strategic work, where outputs are less concrete and value attribution is harder. In that context, the DAO must verify that the underlying labour and overhead costs are, in fact, reasonable.
More broadly, we think the DAO should cultivate sharper cost discipline. We agree that Entropy has done good work. Nonetheless, it is our fiduciary duty to keep asking whether the same objectives could be achieved more cheaply or more efficiently. Continual cost-effectiveness checks are simply part of protecting token-holder value.
Term length
We understand the potential advantages of locking the engagement into a single two-year term. What we do not yet see is clear evidence that moving to an annual renewal would impose significant costs or operational friction. If a one-year cadence would meaningfully disrupt execution, then a two-year contract is justified. If not, a one-year term should be adequate. All we ask is a more detailed explanation of what concrete drawbacks the DAO would face under a one-year structure versus the proposed two-year tranche.
Overall
We agree entirely that the key test is whether the DAO receives value commensurate with what it pays, and we also believe Entropy has been a great partner of the Arbitrum DAO. Our point is that this test should rely on more than what major delegates perceive. Wherever results can be measured objectively, they should be. We should also ask in advance how the DAO will protect itself if events deviate from plan. This is a basic responsibility to token-holders and to the DAO’s long-term health. Given the wide range of stakeholders in a DAO, treating this rigorously is even more important than in a conventional startup.