Entropy Advisors Monthly Update: May 2025

DAO Programs & Initiatives Entropy Advisors Updates
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Recap of May 2025

  • Stylus Sprint: Teams are continuing to execute on their outlined milestones. Entropy has posted an update on behalf of the Stylus Sprint committee that recaps the previous 2 months of completed work.
  • OpCo: Entropy is standing by to assist the Oversight and Transparency Committee (OAT) on an ad hoc basis, but execution has largely transferred to the oversight body, and the setup is being facilitated with help from the AF. To give a general update here as well, Pedro Breuer has been appointed as the fourth member of the OAT, with a fifth appointment underway, focusing on candidates with VC or consulting experience. The Arbitrum OpCo Foundation has been officially incorporated in the Cayman Islands, with Petri Basson appointed as a director. The OAT has also started refining the initial OpCo Bylaws to ensure operational success and has identified areas within the original proposal that possibly require changes to better align with the DAO’s new direction.
  • Arbitrum DAO 2025 Events Budget: The ETH Bucharest team published a detailed impact report for the DAO as well as a summarizing video of the event. See “current initiatives” below for further updates.
  • Treasury Management v1.2 & Arbitrum Treasury Mgmt. Consolidation: The 7,500 ETH in the GMC track and the 15M ARB in the TMC track have been allocated across protocols and providers but are still in the process of being deployed. We will work with the AF to get an update posted to the forum over the coming weeks. We posted a new proposal on May 29th, which proposes the discontinuation of the TMC, GMC, and STEP Committees and replacing them with a singular Arbitrum Treasury Management Council in an effort to reduce overhead, streamline operations/communications, unify strategy, etc.
  • Watchdog Program: The Watchdog Program officially passed its onchain vote on Tally between May 9-24 with strong support (~190M votes FOR). On May 27th, 400K ARB were transferred to an Arbitrum Foundation-controlled address. This marks a significant step in Arbitrum DAO’s ability to enforce accountability and surface misuse of funds.
  • Delegate Code of Conduct + Formalizing the DAO’s Operations + MVP: Entropy has been in active conversation with the Arbitrum Foundation about potential adjustments to the Code of Conduct and DAO procedures. As the 6.5-month trial period technically recently ended, after lengthy conversations, both parties agree that moving to permanent inclusion in the constitution would be premature, as the Code of Conduct has not yet been meaningfully tested through enforcement. Our current thinking is combining constitutional language changes related to the Delegate Code of Conduct, formalizing the DAO’s operations (if any), and MVP, putting these up as a single proposal in the future.
  • Strategic Objective Setting (SOS): The Feedback Period ended on May 7, followed by the Revision Period. Following delegate feedback, Entropy extended this period indefinitely to make the process more robust and to reach a more rigid DAO consensus. We’re currently working with L2BEAT and AAEs to push this process over the finish line.
  • DeFi Renaissance Incentive Program (DRIP): The program officially passed its vote on Snapshot held from May 16-23 with strong support (~170M votes FOR). We plan to take the DRIP to Tally on Thursday, June 5, and are awaiting an official AF multisig. Procurement of vendors is in progress with many amazing partner applications already underway.
  • STEP 2.0: The STEP 2 committee’s preferred allocations were officially ratified via Snapshot on May 8th, with strong backing from the community (~164M votes FOR). This cleared the way for the Foundation to proceed with diversifying ARB into stablecoins, in accordance with the STEP committee’s proposed allocations. Shortly after, it was announced that Mountain Protocol had been acquired by Anchorage Digital, and the orderly wind-down of USDM would begin. The STEP portfolio held ~$3.6M in USDM at the time of the announcement. The Arbitrum Foundation has already safely redeemed all USDM holdings and Entropy, in collaboration with the STEP 2 committee, has moved a proposal to the forum to transfer these funds, held in USDC, to the STEP 2 budget.
  • ARDC V2: At the beginning of the month, the ARDC published its first three-month recap, offering a comprehensive review of its activities and impact to date. In parallel, three in-depth analyses commissioned by the ARDC were released: Analysis of Vote Buying Services and Analysis of the DAO’s Technical Decision Making Process by DefiLlama Research, as well as Incentive Program Assessments & Recommendations by Castle Capital together with DefiLlama Research. Entropy has directly partnered with the researchers, relevant key stakeholders, and subject matter experts to provide feedback and help facilitate best-in-class research output. Additionally, we’ve collaborated closely with @Juanrah to ensure ARDC’s progress is well-documented, updates are timely, and new research receives maximal visibility.
  • Wind Down the MSS + Transfer Payment Responsibilities to the Arbitrum Foundation: On May 23, Entropy posted a forum proposal to formally wind down the Multisig Support Services (MSS) and transfer payment administration responsibilities to the Arbitrum Foundation. This recommendation follows a collaborative assessment with MSS members and the Foundation, recognizing the MSS’s nearing budget shortfall, the Foundation’s existing operational involvement in multisig execution, and a route for the initiative to possibly be moved under OpCo in the future. The proposal includes a phased transition of active multisigs and final payments for MSS members, with the MSS set to dissolve by June 15.
  • Arbitrum GTM Support:
  • The Data Team:
    • Ethereum: Pectra Upgrade: The Ethereum Pectra upgrade, launched May 7, 2025, enhances scalability and user experience with 11 EIPs. Our Pectra Dashboard provides real-time data on blob fees, EIP-7702 authorizations, and validator activity, helping the Arbitrum community optimize transaction costs and leverage improved L2 scalability.
    • USD.ai Series (WIP): The USD.ai Series features two dashboards: USD.ai and sUSD.ai, providing in-depth analytics and insights into both tokens. The dashboards cover key areas including market capitalization, DEX liquidity and volume, price peg stability, and holder distribution. This initiative is part of Entropy’s broader effort to support Arbitrum projects through data-driven approaches to go-to-market, transparency, and risk management.
    • Timeboost Impact (WIP): The Arbitrum Timeboost Impact Dashboard offers a comprehensive overview of how Timeboost affects Arbitrum One. It tracks key performance indicators, including transaction dynamics, chain revenue, and broader ecosystem impacts, providing valuable insights into the influence of Timeboost on network activity.
    • Fluid DEX (WIP): Fluid is one of the leading DeFi projects on Arbitrum, offering both a DEX and a lending market. This dashboard delivers a comprehensive analysis of Fluid DEX, focusing on key metrics such as profitability, trading volume, LP fees, and its position within the competitive landscape.

Current Initiatives

  • Stylus Sprint: Our team’s focus remains on monitoring progress, ensuring timely milestone evaluations, and working with OCL’s marketing team to amplify deliverables when appropriate.
  • OpCo: With day-to-day execution now largely driven by the OAT, and Entropy providing support on an ad hoc basis, the best places to stay informed on the initiative’s progress are through the Operation Company (OpCo) forum subcategory and the OpCo Monthly Update calls that have been added to the governance calendar.
  • Arbitrum DAO 2025 Events Budget: Entropy is actively reworking this proposal to fit in line with the recently unveiled vision post from the Arbitrum Foundation. This item has fallen lower on the priority list, but remains in our backlog, ready to move forward.
  • Delegate Code of Conduct + Formalizing the DAO’s Operations + MVP: Entropy is collaborating with the Arbitrum Foundation on a follow-up proposal that may introduce refinements to the current Code of Conduct and DAO procedures. This proposal will be brought forward for delegate feedback and a Snapshot vote to determine whether to extend the trial period for these initiatives and adopt any suggested adjustments.
  • Treasury Management v1.2 & Arbitrum Treasury Mgmt. Consolidation: As mentioned above, the GMC and TMC funds are in the process of being deployed, and we are moving forward with a new treasury management initiative.
  • Watchdog Program: After getting approved by the DAO, Entropy is now collaborating closely with the Arbitrum Foundation to launch a dedicated GlobaLeaks instance, ensuring secure and anonymous reporting capabilities for community watchdogs. Following the creation of the platform, Entropy will work with the AF and SeedGov to create the exact intake form and necessary materials for the program launch.
  • Strategic Objective Setting (SOS): Continue collaborating with L2BEAT and AAEs to increase community consensus, clarify the ownership structure of already existing verticals and goals, increase the path to executability for objectives, etc., with the goal of pushing the initiative over the finish line.
  • DeFi Renaissance Incentive Program (DRIP): Following DRIP’s approval on Snapshot, Entropy is preparing to address feedback and has moved the proposal to Tally. Preparations are also underway to launch the first season in early H2 2025. The inaugural season will focus on targeted, user-facing incentives aimed at increasing Arbitrum’s market share in high-impact DeFi activities and emerging verticals that are showing high potential for organic market penetration. Entropy is coordinating with stakeholders to ensure a structured rollout that aligns with DRIP’s strategic goals.
  • STEP 2.0: The Arbitrum Foundation is continuing to convert the STEP 2.0 ARB into USDC. Once completed, the USDC will be disbursed based on the now approved allocations recommended by the STEP 2.0 committee. Entropy plans to move the proposal to transfer the $3.5m from the redeemed USDM to the STEP 2.0 allocations to Snapshot on Thursday, June 6th.
  • ARDC V2: The ARDC is now focused on identifying any possible ecosystem gaps and strategic growth opportunities for Arbitrum through the Arbitrum Ecosystem Positioning report, facilitated by DefiLlama Research & Castle Capital. Entropy is coordinating with the initiative owner, @Immutablelawyer, to publish the proposal determining whether the ARDC should be extended by six months.
  • Wind Down the MSS + Transfer Payment Responsibilities to the Arbitrum Foundation: This proposal is now up on Snapshot. If approved, the Arbitrum Foundation will assume payment responsibilities for the active MSS-managed multisigs, with the MSS completing its final duties by mid-June before formally dissolving. Remaining funds will be returned to the DAO Treasury, and future multisig management may transition to the OpCo once fully operational.
  • Data: Our focus for the upcoming month will be completing the remaining MEV analysis on Arbitrum and expanding ecosystem support with Fluid and gradually incorporating more applications. We’re also prioritizing support for ecosystem growth through data-driven work with RWA issuers and DeFi projects, alongside broader ecosystem analysis to provide insights into network activity, project development, and adoption trends across Arbitrum One.
  • Arbitrum-Aligned Builder Rewards Program: Progress on this initiative is still being made behind the scenes, but we are currently working through a few roadblocks. We will continue to attempt to move forward with this initiative, but we expect delays that could extend if the program we had initially designed needs to be entirely reworked.

Goals for June

  • Move forward the recently introduced “Arbitrum Treasury Management Council - Consolidating Efforts” proposal to Snapshot, thus ratifying its structure and dismantling the STEP committee, TMC, and GMC. We will also work with the AF to get an update on the forum as to where the GMC and TMC funds are with respect to their deployment process.
  • We feel confident we will be able to get Entropy’s next engagement proposal onto the forum in June. It is currently in its final stages of internal edits, and we are excited to share it with the broader community to introduce clarity around Entropy’s future involvement in the Arbitrum DAO.
  • Get the DRIP through Tally, make a choice for both the evaluation and distribution partner, begin work on first season design. Continue spreading awareness with apps that could be eligible for season one to hopefully get them live on Arbitrum.
  • Continue our deep involvement in the ARDC, ensuring there is clarity around the initiative’s continuation by the end of the month.
  • Launch the Watchdog Program portal and program.
  • Post the Events Budget Rework proposal onto the forum, assuming our current initiatives move forward smoothly (thus not further delaying this proposal). It has already been drafted, but we do not view this proposal as a high-priority item for June.
  • Publishing the recommended changes to the DAO’s procedures and Delegate Code of Conduct based on conversations with the Arbitrum Foundation and observations over the last 6 months.
  • Data Team:
    • Complete the full suite of dashboards for Fluid, ensuring end-to-end visibility into protocol activity and performance
    • Support the go-to-market launch of USD.ai with analytics, tracking, and performance insights
    • Expand ecosystem support by onboarding a new project, with a focus on Real World Assets (RWA)
    • Provide analytics and tracking for upcoming DAO initiatives, including Treasury Management and STEP 2.0
    • Kick-start the initial development of an Arbitrum Ecosystem Overview Dashboard to map key activity and trends across the network

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 ET. Our team is always open to input from DAO members on which problems we should dedicate our efforts towards.

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Is it possible to make a locked thread with all documentation links as it becomes available so there’s a permanent bulletin board where people can find docs and reports? Similar to the request we had for GCP

Thanks!

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