1 Poll Closing June 17, 2024
Pilot Stage – Treasury Backed Vaults research and development
Summary: This poll asks ARB holders if they support providing 250,000 ARB to design, build, and audit a module for Arbitrum governance to utilize ARB as a collateral for borrowing from DeFi protocols.
Recommendation: Vote No. Our thinking has been gradually evolving on this topic.
First, ARB in the treasury should not be considered an asset. From an accounting standpoint, counting that uncirculated ARB as an asset would violate accounting norms and perhaps even be alleged to be a misrepresentation. GFX believes in firmly stamping down the misconception that uncirculated native tokens are assets. It encourages excess spending due to a feeling of wealth, and is simply incorrect from an accounting standpoint. So utilizing ARB tokens as collateral would – aside from other objections raised by others – be the same as minting new ARB if a liquidation were to occur.
Secondly, and more optimistically, Arbitrum has other assets it could leverage for credit. Governance has access to ETH, and soon will have stable-value assets as well (even if they’re more exotic or legally encumbered RWAs). To the extent that credit is needed, we would prefer to see existing assets used as collateral instead of a dilutive mechanism.
We are voting against this proposal, but support it coming back after more discussion. Specifically, we want to see specific uses cases where Arbitrum would want to utilize a line of credit, as well as at least identification of sources of funding to repay any debt. We are not in favor of giving governance tools to become indebted before there is at least one reliable source of funds to allow for repayment without resorting to ARB token sales.
1 Poll Closing June 20, 2024
[Non-Constitutional] Betting on Builders: Infinite Launchpad Proposal
Summary: This poll asks ARB holders if they support authorizing ~$10.5m in ARB to fund three ventures-related experiments. Full details on each of the three can be found here.
Recommendation: Vote No. Because this is three different initiatives, the funding for each is sized for being experimental. But the cost structure of one of the three initiatives is simply unworkable – with $1.4m overhead to deploy $1.6m. That would require an 87% return just to break even, and is not setting the program up for success. We simply can’t support such an obvious inefficiency from the start, and recommend revisions to this plan before resubmission.
1 Poll Closing June 24, 2024
Kwenta x Perennial: Arbitrum Onboarding Incentives
Summary: This poll asks if ARB holders support 1,900,000 ARB to target existing Kwenta users on Optimism and other chains to migrate to Arbitrum.
Recommendation: Vote Yes. This is a large price tag, but the grant plan is narrowly focused on appealing to migrating the protocols’ existing user base with subsidies to migrate and increased rebates for existing users from other chains.