Treasury Management
In February, the ARB covered calls pilot program was paused due to unfavorable market movements and will likely not be continued until prices rebound noticeably. On the ETH side, the call strategy was upsized from the initial 1.75K ETH deployed in January to a total of 5.05K ETH in February. The additional ETH is derived from idle ETH that was held in the portfolio, funds withdrawn from Camelot, as the position was underperforming the benchmark and it was approaching its range edge, as well as capital from Fluid, since the allocation was underperforming the benchmark and it achieved its original goal of bootstrapping the market.
The OAT-approved reallocation from Fluid began in late February. Withdrawals were done in 3 tranches to ensure that users weren’t negatively affected and to let the market stabilize at a new equilibrium. The withdrawals were completed on March 10th, and the newly idle ETH will be used to upsize the covered calls strategy shortly.
The OAT is currently deliberating two ATMC suggestions, which will be shared with the DAO once the committee comes to a consensus. More information regarding treasury management developments will be shared in the upcoming Treasury Management Report. The report will combine the months of January and February, as January was a relatively quiet month when it comes to treasury management actions, with most fund movements taking place in February.
Incentives: DRIP
Entropy recently posted a more comprehensive February update on behalf of the DRIP committee and retrospective of Season 1. To briefly summarize those updates, DRIP Season 1 officially ended on February 18, 2026, utilizing a total of ~16.7M ARB (base budget + discretionary) from the 24M ARB budget. ~14.6M ARB was deployed to participating lending protocols (with USD pools receiving the majority at 9.16M ARB), while ~2.1M ARB was allocated for the Bitget distribution partnership. At this point in time, approximately ~3.03M ARB (~21%) remains unclaimed and users have until May 18, 2026, to claim rewards for most protocols, and until August 18, 2026, for Aave.
As outlined in the retrospective, the program delivered highly capital-efficient growth with an adjusted cost-effectiveness ratio of 51 (every $1 of ARB deployed grew Arbitrum’s market size by $51) for ETH assets and 76 for USD assets. This outperformed previous Arbitrum incentive programs like LTIPP and comparable programs such as the Unichain campaign, despite deploying significantly less capital (~$4M).
Given current ARB price levels, the committee is briefly pausing incentives and targeting mid-to-late April for the launch of Season 2. Lastly, a formal proposal is currently being drafted to request an extension beyond the original July 1, 2026, start deadline and to introduce structural tweaks based on our learnings from Season 1.
Ecosystem Data
Arbitrum GTM Support:
- Social Media Campaigns:
The Data Team:
- arbdata.com : Added support for new OTC positions and FLUID incentives.
- DRIP Retrospective Report:
- DRIP Season 1 was a 6-month, committee-managed incentive program targeting Arbitrum’s lending ecosystem. The retrospective covers program design, protocol performance, cost effectiveness, and key lessons across 12 epochs and 14.6M ARB deployed. The headline result was a 51:1 cost effectiveness ratio, USD lending markets up 38%, yield-bearing stablecoin supply growing from $130M to $1B+, and the direct catalysation of Morpho and Euler launching on Arbitrum.
- Boros Dashboard:
- Boros is Pendle’s margin-based yield trading protocol that allows traders to go long or short on funding rates from CEXs onchain. To support this new primitive on Arbitrum, we built a dashboard tracking key protocol metrics including notional open interest, trading volume, fees generated, and exchange-level breakdown across Hyperliquid, Binance and OKX. In under a year, Boros has accumulated ~$180M in notional OI, $12B in notional volume and ~$500K in fees.
Governance Operations & Other Initiatives
Code of Conduct and DAO Procedures
In partnership with the Arbitrum Foundation and OpCo, Entropy has been preparing a draft for the next iteration of the Code of Conduct and DAO Procedures. It is nearing completion and will soon be going through an internal review. We aim to have it posted to the forum shortly so that there is time to discuss it and vote before the extended March 31st deadline.
Over the last few weeks, we received minimal feedback from delegates on requested changes. However, the OpCo is preparing a google forum in an attempt to surface feedback before we go to the forum with the V3 iteration.
Stylus Sprint
On behalf of the Stylus Sprint committee, Entropy provided a February/early-March update. Since the last update, seven payments totaling 724K ARB were processed (at an average ARB price of $0.102). As of March 11th, 5,897,036 ARB (~65.5% of the total budget) has been disbursed with one additional 25K ARB payment currently being processed by the AF. With the February 28th submission deadline officially passed, the committee estimates that the final total distribution will be ~7.41M ARB from the original 9M ARB budget.
As the Sprint drew to a close, the committee finalized necessary budget increases and milestone adjustments for several projects, including Syndicate, Stylusport, Fiet Protocol, Angel, 9 Lives, and Open Source Observer. The committee saw 30 milestone submissions in February. While a larger amount was expected, the committee is still reviewing this large batch to ensure all deliverables meet quality standards. Ultimately, 16 of the 21 remaining teams successfully submitted all of their planned deliverables.
On March 5th, Entropy hosted the second Stylus Sprint Demo Day, featuring presentations from Walnut, Fiet Protocol, ArbOS-Foundry, and StylusFuzz (Skribe). A third and final Demo Day is scheduled for March 19th for the remaining teams that completed their work. Additionally, Entropy distributed a new Stylus resource document to builders at Arbitrum’s NYC Open House through the Arbitrum Discord and continues to support the development of the StylusUp community directory.
With the submission window closed, Entropy is shifting full focus toward finalizing milestone reviews, coordinating any necessary next steps for teams with the Arbitrum Foundation and Offchain Labs, and drafting a comprehensive retrospective report. This upcoming report will detail the developer tooling foundation established by the program, analyze the challenges teams faced, and highlight early signs of Stylus adoption.
Watchdog
Entropy provided a more comprehensive update on behalf of the Watchdog Committee. Below is a summary:
Since the last update, the program received 1 new report, bringing the total unique case count to 50. The committee completed 6 investigations this month, identifying 4 valid instances of misuse. To date, 39 investigations have been completed, with 28 deemed valid. We continue to urge reporters to initiate the KYC process and remind anyone who has lost their login key or has an error when trying to sign into the Globaleaks platform to resubmit their findings with a note to the committee.
On February 18th, the reviewing committee updated the base bounty structure to be USD-denominated (still paid out in ARB) and increased the recovery bounty to 15%. This change was applied retroactively to ensure fairness for reporters who submitted reports over the last few months and to minimize operational overhead. This change resulted in ~15.9K ARB in one-time top-up payments distributed across eight previous paid-out reports.
The program successfully recovered an additional 95,865 ARB this month, bringing total recoveries to 352,289.5 ARB. The wallet currently holds ~679,254 ARB with payments for reporters totaling ~40,423 ARB and ~22,372 ARB for opex costs currently being processed by the AF. After accounting for the ~145.1K ARB in earmarked rewards and zero outstanding operational costs, the program’s estimated working budget stands at ~471,355 ARB.
Finally, with the program having officially reached its 6-month milestone as of March 8th, 2026, Entropy is currently drafting a retrospective report to gauge the program’s effectiveness. This report will summarize at a high level the types of reports the committee received, severity breakdowns, and recovery date. We aim to have it published by the end of the month.
Requests from the DAO
Please continue to reach out and pass along requests to Entropy Advisors, or visit our bi-weekly office hours on Tuesdays at 1:15pm EST. Our team is always open to input from DAO members and encourages delegates to use this time to ask Entropy questions regarding any initiative.