While we understand the reasoning, this seems like it risks Entropy becoming answerable to the Foundation + OCL, given they hold two of the seats on the OpCo oversight board.
We would be more comfortable with Entropy remaining unambiguously answerable to governance and governance only. With AF and OCL holding seats on the OpCo oversight group, Entropy is really the only entity currently positioned to represent the DAO should there be a disagreement between the DAO and AF/OCL.
This isn’t just hypothetical. Remember the initial AIP-1 situation. It would be cleaner to have Entropy negotiating with a governance-only counterparty.
We just want to confirm that these negotiations will be concluded with final agreements shared with the community before this proposal moves to at least an onchain vote.
Thank you for taking the community’s feedback into account.
You’ve conducted a thorough analysis, but I still have some financial concerns:
You still don’t account for the fact that part of your work will be transitioned to the OpCo, which means you won’t need as many employees.
You’re not fully giving up the bonus — only proposing to receive part of it based on performance. But it’s still unclear to me why a bonus is necessary if you’re already planning to receive extremely high salaries — around $30,000/month — which is excessive even by the standards of an overvalued crypto market. Isn’t that already sufficient compensation for exclusive work?
I genuinely appreciate the work you’re doing, and I would very much like to see you continue working with Arbitrum. However, at the current cost, Entropy is proving to be very expensive for the DAO. I would only support continuing this collaboration if the salaries are reduced. Additionally, I’d suggest capping them at a fixed percentage of Arbitrum’s revenues — similar to what Optimism proposed in their recent strategy. That would be a more sustainable, long-term approach.
First, we want to recognise the excellent work Entropy Advisors has delivered so far for the Arbitrum DAO. They have proved to be highly effective contributors in their first year of operations. Their efforts around cost optimisations, improved stakeholder communication, and the coordination of diverse initiatives have meaningfully strengthened the Arbitrum ecosystem.
Given this strong track record, we strongly support Entropy’s renewed commitment to the DAO.
Below, our thoughts on the current proposal:
Two-year timeframe
We believe that a two-year timeframe is sensible. This aligns with similar structures in other ecosystems (for example, the Uniswap Foundation recently secured a two-year mandate and funding from the Uniswap DAO). A multi-year horizon allows Entropy to plan and execute initiatives with sufficient depth and long-term impact rather than being constrained by shorter, reactive cycles.
That said, we would encourage the proposal to include clear one-year goals. We understand that specific KPIs will be negotiated with the OAT and tied to the proposed 10M ARB performance bonus, which is a sound mechanism. However, defining simple success criteria for each area of focus—and communicating those to the community—would significantly enhance transparency and accountability.
For example:
Under Financial Planning, Analysis, and Guiding Capital Deployment, it could be valuable to set a goal such as: “Ensure a minimum of X months of runway for the DAO, factoring in forecasted expenses and revenues.”
Under Incentives, a goal might be: “Grow Arbitrum’s market share to X across L2s,” or “Position Arbitrum as a top-5 revenue-generating L2 by X.”
These types of measurable objectives would help clarify priorities for Entropy and the DAO, provide concrete milestones to evaluate progress, and build greater stakeholder confidence regarding the impact of this budget allocation.
Areas of focus
1. Financial Planning, Analysis, and Guiding Capital Deployment
We appreciate the effort to reduce fragmentation across the DAO’s various treasury management initiatives. While we believe directly engaging a dedicated treasury manager—either an external service provider or an internal team—is often the most effective solution (and is being adopted by a variety of DAOs), it has become clear over the past two years that the Arbitrum DAO is not currently comfortable with this option.
Given this context, finding the right balance between execution and DAO-driven decision-making is critical to the success of any treasury initiative. Based on this premise, we believe Entropy is an excellent candidate to cover this role. They have demonstrated a strong commitment to the ecosystem, responsible management, and transparency. We are strongly supportive of their decision to consolidate efforts, and it’s encouraging to see a shift from experimentation toward a more strategic and unified approach to asset management.
2. Incentives
We think the DAO’s decision to step away from the LTIPP and STIP programs was wise, helping to cut back on programs that were either ineffective or inefficiently managed. The newly approved DRIP program appears promising and reflects a more sustainable and thoughtful structure. Based on this, we are confident that Entropy can effectively lead this effort to deploy incentives that meaningfully grow the Arbitrum ecosystem strategically.
3. Ecosystem Data This is one of Entropy’s main strengths. We deeply appreciate the insights their Dune dashboards have provided to the community, significantly improving both transparent communication and data-driven decision-making. We are strongly supportive of Entropy continuing this work. Data will also be a crucial input for informed decisions in both treasury management and ecosystem incentives.
4. Special Projects
While this area is more loosely defined than the previous sections, we support granting Entropy discretion to pursue initiatives they deem valuable for Arbitrum. The team has a deep understanding of both the Arbitrum ecosystem and the broader crypto industry. We are confident they have the skills and perspective to identify opportunities or challenges early and propose effective paths forward.
Budget
We believe it’s important to clarify the numbers. Our understanding is that Entropy plans to expand its team from the current 9 members to approximately 14 members. Assuming the entire $3 million annual budget was allocated purely to salaries, this would average closer to ~$18,000 per month per person, not $30,000. In practice, however, a significant portion of the budget will likely go toward other operating costs, including legal expenses, accounting, infrastructure and tools, and travel and community engagement. And, to events such as Arbitrum Delegates Day, which we understand Entropy plans to continue hosting.
Considering these expenses, we believe the overall budget request appears reasonable, especially given the value Entropy demonstrated in its first year.
Regarding bonuses, we are supportive of the team receiving ARB incentives. We believe aligning Entropy’s long-term incentives with the success of the Arbitrum ecosystem is both logical and beneficial. Equity-style vesting in ARB encourages sustained commitment and performance, provided clear KPIs and accountability measures are in place.
Thank you for clarifying that the team consists of 14 people.
As I mentioned earlier, I don’t understand why such a large team is necessary. Entropy doesn’t have clearly defined tasks that require a specific number of people — it’s Entropy itself that proposes the DAO’s direction. I’m uncomfortable with the idea of justifying the budget based on team size. After all, someone could simply say, “We need 100 people, so our budget should be $15 million,” and that would sound reasonable for that team size. But the real question is: why do you need so many people?
Even looking at last year’s report — both here and on Twitter — we don’t see detailed expenses or a clear scope of work. We just see a set of initiatives and organizational efforts. Why even five people are needed for that is unclear to me. Before Entropy, many initiatives were created by just one or two contributors. Now we see a large team looking to grow further. And again — some of these functions will move to OpCo (which already has a multi-million-dollar budget), so Entropy should require fewer resources going forward, not more.
I genuinely believe that Entropy’s compensation should be tied to the actual economic value it brings to Arbitrum. And right now, all I see is a growing budget and even greater DAO spending.
I urge everyone to evaluate the budget based on objectives, not on the number of people planning to work on them. We don’t even know how much the individual team members are actually paid or how effective they are. What I do see is that the DAO’s spending is increasing at an unsustainable pace year after year — and we need to pay attention to this before we find ourselves with an empty treasury
LobbyFi’s rationale on the price and making the voting power available for sale for this proposal. The auction will be turned off since only party has direct financial interest in that proposal.
The cumulated program costs $9,6M (0,36 (ARB/USD now) * 5M + 0,36 * 10M * 0,5 (50% factor for future allocation) + 6M = 9,6 M). The instant buy price will be set at 1% of that, at 34,5 ETH for on-chain and 3,45 ETH for off-chain vote.
Update: the price will be set at 10 ETH for the on-chain vote after analysing the snapshot votes.
I saw no real effort to reduce Arbitrum’s spending on Entropy, nor did I receive answers to many of the concerns I previously raised. In addition to those earlier points, I’d like to highlight a few key reasons why I oppose the proposal:
Staff increase to 14 people
Entropy plans to significantly expand its team, but the proposal lacks clarity on why such a large headcount is necessary. They set their own direction without detailing the specific tasks that justify this growth. Basing the budget on team size instead of actual deliverables is problematic. Even last year’s report doesn’t clearly outline expenses or workload.
Delegation of responsibilities to OpCo
Entropy itself played a key role in creating OpCo, which now handles implementation and operations — and has a $12 million budget over 2.5 years. That should mean fewer responsibilities for Entropy, not more. Yet they continue growing their team. This contradiction remains unexplained.
DAO spending continues to grow
Entropy’s compensation should be tied to the actual economic value it brings to Arbitrum. What we’re seeing instead is a steady increase in budget and operating costs, with limited transparency. Budget decisions should be based on clear objectives — not headcount — before this spending trend becomes unsustainable
I would like some additional clarity on salary/workload expectations. For example..
It is stated that there is “8 full-time and 1 intern”, but (without naming anyone specifically, as I believe that would be inappropriate) based on a bit of digging I get the impression this is in some cases “fulltime” in a very loose sense of the word.
I understand that talent is hard to find and sometimes compromises have to be made, but when it seems that the truth has been bent to give a better appearance in one part of the proposal, I immediately now have to assume that is true for the rest of the proposal as well.
A yearly and monthly amount is set aside for salaries and a list of envisioned hires is provided, but I can’t seem to find a system for separating funds intended for future hires from funds intended for current team. I am concerned that this could potentially create a perverse incentive not to hire, as salary funds can then in the meantime go to the members of the existing team.
It’s reasonable that salary asks and figures are not completely transparent and cannot be set in stone ahead of time. The right talent might take negotiation, could come cheaper than one assumed or might cost more than one had hoped, this is understandable. However part of the additional requested amount could be set aside as a show of good faith. Alternately, an external party, perhaps an appropriate individual from an AAE or a few trusted Arbitrum Aligned Individuals, could be given insight into the salary spend and negotiation process, to reassure..or some entirely different solution that I haven’t thought of.
As things stand right now with this proposal, as much as I would like for it to be otherwise I would only feel comfortable voting “Against”.
After consideration, the @SEEDgov delegation decided to vote FOR on this proposal at theSnapshot Vote.
Rationale
First and foremost, SEEDGov would like to thank Entropy for the work delivered so far. While there are areas for improvement — as already mentioned in this discussion — we believe their presence in Arbitrum has been and continues to be a positive force for the DAO.
Over the past year, we’ve built a sustained relationship through joint work on various initiatives such as the Staking Working Group and the Stylus Sprint, as well as through ongoing mutual consultation between Entropy and SEEDGov.
These interactions have given us the opportunity to witness firsthand their professionalism and working methodology. Moreover, we’ve been able to lean on their support, which has had a meaningful impact on the quality of what the DAO is delivering to the protocol.
If we want to make Arbitrum win, we need more teams whose success is directly tied to Arbitrum’s success.
We would also like to highlight the Dune dashboards — a vertical that Entropy has focused on in recent months. This effort fills a crucial gap, and we must say that, as Program Managers of the DIP, these dashboards have been valuable tools for conducting internal analysis as well as for preparing the Mid-Term Report shared a few weeks ago.
Regarding the proposal itself, we support allocating 10M ARB to milestones to be negotiated with the OAT.
We understand the requested amount is significant, but it is also true that Entropy has consistently delivered value to Arbitrum’s operations and ecosystem-wide initiatives. This value is often difficult to quantify, which is why we believe it would be unfair to focus solely on the cost Entropy represents — instead, we should view it as an investment.
Entropy Advisors has proven their value in Year 1 by driving execution, improving treasury transparency, and supporting key Arbitrum initiatives like DRIP, STEP, and data reporting.
Their focus on capital efficiency, incentive design, and strategic alignment is exactly what Arbitrum needs to scale as a sustainable, growth focused DAO.
Although the budget is quite large and reflects a ~20% increase from the previous term, the long term value and alignment justify the cost.
I support renewing their mandate to keep building momentum.
I’m voting YES because Entropy Advisors has consistently added real value to Arbitrum governance. From improving treasury transparency to supporting initiatives like DRIP and STEP, they’ve proven they can execute and contribute strategically. Their dashboards have also helped improve data access and reporting. While the budget is sizable, I see it as an investment in a capable, aligned team that’s already delivering results. Let’s build on that momentum.
Several critical improvements were seen to address concerns raised during the discussion. While we still see some unresolved issues, such as whether the compensation is fully justified or whether a two-year term is strictly necessary, we believe the revised incentive structure, which ties a significant portion of ARB allocation to milestone-based alignment, represents a material step forward in accountability and DAO alignment.
Most importantly, Entropy Advisors has already become an indispensable contributor to the Arbitrum DAO, consistently delivering high-value work and helping professionalize the ecosystem. With this extension, we expect their impact to grow even further in the coming term.
We support the renewal of Entropy Advisors’ mandate based on their demonstrated contributions to the Arbitrum DAO and their role in driving strategic initiatives, improving coordination, and enhancing DAO professionalism. However, we believe the proposal can be strengthened with clearer articulation of outcomes, defined KPIs, and a roadmap aligned with DAO priorities such as the SOS framework. A two-year term offers operational stability, but it’s important to pair that with transparent performance metrics, budget clarity, and alignment incentives to ensure continued accountability and value delivery. With these additions, we view this proposal as a strong step toward maturing the DAO’s execution capacity and long-term sustainability.
I voted FOR this proposal, as the 15M ARB allocation was reworked to include a milestone-based component. Thanks, Entropy, for listening to the delegates’ feedback regarding this matter.
Entropy has done important work building out the DAO’s governance infrastructure and the coordination of all these proposals and stakeholder alignment has helped keep things running smoothly.
Given their performance so far, doubling down makes sense!
We need a clear plan to maintain Arbitrum’s governance effectiveness over time, it is important to ensure continued success, I am hopeful Entropy can be a big part of managing that.
We’ve worked closely with Entropy over the past year and have seen firsthand the impact they’ve had across Arbitrum.
From unblocking proposal pipelines to coordinating across the Foundation, Offchain Labs, and delegates, Entropy has consistently shown up in moments where high-context, fast execution was needed. Having a fully dedicated team focused solely on Arbitrum has been invaluable, especially in a space where most contributors are spread thin. Their data work, in particular, stands out, not just for quality, but for how it’s shaped conversations and helped improve decision-making at all levels of the DAO, and Arbitrum as a whole.
We recognise that the cost of this engagement is relatively high, and it would be entirely reasonable to request more granular visibility into how that budget is allocated. But in our view, the value Entropy brings outweighs the need for that level of financial transparency at this time. The team has built trust through execution, and with OpCo acting as a formal counterparty going forward, we’re confident in the mechanisms being put in place to ensure proper oversight.
That said, it’s worth acknowledging that the DAO is effectively funding the growth of a private organisation without direct ownership or deep insight into its internal operations. While that’s not inherently problematic, it does reinforce the need for strong alignment mechanisms.
We appreciate the recent revision to the ARB alignment structure, particularly the shift of the majority of tokens into a milestone-based pool overseen by OAT. As @Juanrah aptly put it:
“A purely time-based vesting schedule doesn’t fully align incentives with the DAO’s strategic goals… we should link the vesting… to the successful achievement of key outcomes.”
We think the updated approach strikes a much better balance between trust and accountability.
Looking ahead, we still believe there’s room for light structure especially over a two-year term. As @TodayInDeFi noted:
“We can’t rely purely on narrative or vibes… interim milestone check-ins are critical for mid-course correction and accountability.”
We expect that with OpCo operationalising oversight and reporting standards, this kind of structured feedback loop will become standard practice.
All in all, we believe Entropy has proven themselves as a trusted, high-value contributor to the Arbitrum ecosystem. We’re voting FOR this proposal on Snapshot and look forward to seeing the team continue to support the DAO in its next phase of growth.
Camelot is casting the vote in favor on the Entropy Advisors proposal for Years 2 and 3.
We do appreciate the foundational work Entropy Advisors has delivered over the past year. As a key contributor to the Arbitrum ecosystem, we’ve seen how they’ve started the process of professionallization of the DAO’s operations, and we think a prime example is their role in the creation of the OpCo, which promises to streamline execution and reduce governance bottlenecks.
That said, it’s clear this was the inaugural big year for both the Arbitrum DAO and Entropy, and not everything landed perfectly. Initiatives like the GMC/TMC proposal fell short in properly allocating resources to protocols, leading to missed opportunities for ecosystem growth. While we are obviously biased being a protocol, and while we were the only native Arbitrum one getting an allocation, we do aim for an higher tide that lifts all the boats to grow the ecosystem.
The proposal does request an important monetary commitment, totalling $6M plus 15M ARB as bonuses over two years. This is not insignificant, looking at it also in the optic of general treasury management discussion. We don’t view this as a dealbreaker. If Entropy delivers on their commitments, the ROI will far exceed the costs through tangible ecosystem expansion in the form of treasury strategies and better incentives programs.
To us the key point is that this extension positions Entropy just slightly below entities like Offchain Labs and the Arbitrum Foundation in terms of expectations and accountability.
We now have narrower, clearer goals outlined for years 2 and 3 compared to the first year, and for this reason we expect Entropy to step up and produce measurable, tangible value for the DAO. Passing this proposal raises the bar significantly.
As the Arbitrum’s native DEX, we’re particularly keen on seeing Entropy prioritize the utilization of the DAO’s liquid treasury assets within onchain Arbitrum protocols. This means actively demonstrating how the DAO can push for sustainable growth by acting as the “first customer” for builders. We’ve built Camelot to power real yield and liquidity for the ecosystem; we strongly believe Arbitrum is the home of DeFi; we believe Entropy’s efforts here could amplify Camelot’s flywheel and the whole ecosystem growth.
Overall, our expectations are high. We are entrusting Entropy in having a key role in the future of our ecosystem, and we are committed to support them in their work to reach the results we all expect them to achieve.
DAOplomats is voting FOR this proposal on Snapshot.
Entropy did a pretty solid job in Y1. They put good structures in place and a very good job organizing and aligning with the Foundation.
Our major concern with the Y2-Y3 plan was in the area of compensation and the vesting schedule. However, with better alignment on how the 15M ARB will be used, we are comfortable supporting this proposal during the temp check.
I am voting yes because Entropy Advisors has done good work helping the Arbitrum DAO grow and stay organized. They are focused on long-term success, and I believe they will continue to bring value to the ecosystem. I support giving them more time and resources to keep building.
Entropy has proven they provided value over their 1st year of work and it makes sense to extend two more years. The visions laid out in this proposal I think will add value to the ARB DAO so I see no reason not to extend.
Edit 7.31 to save forum space: My opinion above has not materially changed between the Snapshot and Tally vote, so editing here to save forum space. I will maintain my “For” vote