Thanks for the proposal and for explaining the decision after the repercussions, as well as for your openness to modifying it if the DAO expresses the need to do so.
I assume these discussions are taking place in Denver and that there’s already something more or less settled. Still, I’d like to share my two cents on how I think the ETH revenue from sequencer fees should be used.
I don’t believe the right way to frame the approach is “which of these protocols is Arbitrum-aligned”, because, as you’ve realized, that’s a very difficult concept to define and would lead to an endless debate—one that could even change over time.
However, I also don’t think the approach should be as simplistic as “safe yield for the DAO.”
The ETH the DAO wants to invest comes from transaction fees paid by users operating on Arbitrum, whether they are:
- Ethereum L1 users looking for a safe and affordable place to transact (with Arbitrum being the home of DeFi on L2), or
- Arbitrum-native users who are here for the culture, technology, and opportunities the DeFi ecosystem in Arbitrum offers.
In either case, I believe this should be the framework upon which the strategy is built: Am I using the ETH to support Ethereum? Am I using the ETH to support Arbitrum?
With those objectives as guiding principles, strategies can be explored that simultaneously offer secure yield opportunities for the DAO.
Of course, I understand that the yield generated from this investment will eventually be used to support builders in Arbitrum, which I think is fantastic. However, we can start supporting these goals from the very selection of the yield source. I believe this approach best represents the values outlined in the Arbitrum Constitution:
Now, in light of this approach to ETH treasury management, I believe the proposed strategy falls short.
In this regard, we could do better by:
- Supporting a greater diversity of LSTs.
- Supporting ETH (not an LST) as the primary asset of the Ethereum economy.
- Supporting more protocols that are Arbitrum-native, meaning they originated on Arbitrum.
This would be the approach I’d take for the ETH generated from the sequencer. It might not be the most yield-efficient strategy, but I think it would be more aligned with supporting the Ethereum ecosystem as a whole and Arbitrum ecosystem in particular, by sending a message and providing more reasons to choose Arbitrum as your native chain.
For all the given reasons, a good option would be to reopen a submission window for new proposals from applicants that align with your idea of safe yield for the DAO, while simultaneously promoting the objectives I and others mentioned.