GMC's Preferred Choices for 7,500 ETH RFP

[olimpio]

I support this proposal and options presented by the GMC.

@BlockworksResearch

We don’t think that the GMC should be used as a show of dominance in face of the recent critiques of Arbitrum. Arbitrum has been in poor discussion because of the performance of the token, flippant spending, and so on and so forth. Frankly, this situation could easily be spun in the opposite direction: “Arbitrum DAO could have invested its GMC funds into stable yield but chose to allocate to more risk-on protocols just because they were ARB aligned…” Indeed, using DAO funds for alignment signaling should not be considered. Framing this as “the DAO is here to support you Arbitrum builder” is also tricky. We often talk about attracting users, but attracting protocols is important as well, but this means protocols at any stage.

100% agreed with this opinion. The alternatives presented had a reasonable growth-kickback to Arbitrum in general (at least in theory) so making it mandatory or voting against this just with the sole argument the protocols might be or not be Arbitrum exclusive is a terrible take. And as we all know, exclusivity can change in no time.

Anyway, it all comes down to the objective of the capital deployment. Yield, ecosystem support, liquidity expansion, attracting retail users, give out grants for talent… all are valid options and all vectors demand a different analysis and choices on where and why to deploy funds on a specific location. In the context of Treasury Management and specifically looking for ETH yield (not ecosystem or developer support, which although a nice to have, not the main objective) this makes sense.

These were the shortfalls the initial proposal wanted to address:

@Entropy

Key Issues Treasury Management can Solve Today

1. Service Provider Shortfalls: DAO-funded programs as well as service providers that have proved valuable to the DAO (the ARDC, Steakhouse’s services as a part of STEP, etc.) have run into the problem of having dollar-denominated contracts and not enough ARB to meet the agreed upon rate for services rendered.
2. Flexible & Metrics-Driven Capital Deployment: The DAO is reliant on RWAs/Treasuries for passive yield on dollars, but has no mechanism for reallocating to onchain strategies as we enter a global rate cutting regime that could make onchain yields more attractive. The DAO also currently lacks the ability to frictionlessly assess the returns and underlying risks of comparative liquid market investments, how much of/when ARB in the treasury should be diversified, and how to optimize operating cash-like reserves.
3. Reinvesting Sequencer Revenue: The DAO has neglected to do anything productive with its ETH holdings, which could provide the DAO leverage to fuel growth and partnerships alongside yield—consistent with the DAO’s growth-first mindset.

For all of the above, the choices make sense to me. I have voted ABSTAIN instead of FOR since I am an investor in Fluid.