I’m voting abstain on this proposal because its the closest proxy i can find for this is a great idea in concept but still requires more work.
Having the dao continue down the path of investment vs grants i think is very important so i hope this proposal continues to be iterated.
The LevelK Delegation is voting FOR this off chain proposal. We have read and reflected upon the critiques of this proposal. We acknowledge there are potential functional issues and would love to see some of the other delegates concerns addressed if this makes it to an onchain vote.
We support this pilot proposal that functions as an experiment, but wanted to raise some questions and thoughts.
Here are some of our questions:
Should this be a separate from the LTIPP and STIP? Or should it be integrated somehow?
How do you measure success in this program? Longterm alignment with arbitrum?
Is there an alternative way to structure the program that doesn’t include a committee?
Could qualitative research be conducted with the protocols that could provide compelling support of this initiative?
Do protocols want to be involved in Arbitrum Governance? (If they aren’t already)
Thoughts:
Thinking about the difference between incentives (providing ARB to protocols with the agreement they will distribute them to users) and swaps (where each party swaps and holds their tokens). Would it be possible to integrate SWAPs into the incentives program?
On a spectrum: one end we could have just giving arb, on the other end have swaps with locks. While in the middle we could have a hybrid that allows a preferential swap (ex: 10 ARB to 1 BAL) where the protocol is expected to spend the received ARB as incentives. This way the DAO is still signaling their support by holding the protocol’s token and the protocol is provided with liquidity to use as incentives. It also benefits the DAO compared to just giving tokens as incentives because the DAO get’s something in return, even if it is a low market cap volatile token. This hybrid could allow for SWAPs to become an essential incentive mechanism while not cluttering the DAO with various ways for protocols to engage.
These are just the thoughts or our delegation. We are in support the idea of swapping, and would like to see further discussion around these ideas.
We vote FOR the proposal on Snapshot.
While we acknowledge various concerns related to this program, we support the experimental nature of it and rely on the judgement and evaluations done by the selected program members. As GFX mentioned, the budget wouldn’t be used if the token swap doesn’t make sense. We see similar programs done by other DAOs while they are not necessarily proven successful yet. Many pointed out the risks, but there will be potential upsides that the DAO can take from this program and we believe it’s worth looking into.
We would request changes if it goes to the onchain though: 1) as other delegates suggested, the lock-in period should be longer like 2-years for Arbitrum and target protocols to be aligned for the long term. 2) considering the experimental nature of the program, the compensations should be somehow split into an advance as the minimum base, and retroactive rewards based on successful token swap cases, otherwise, the program would pay out much expense without any success case (or lead to unnecessary pressure to the members to make some token swap happen.)
DAOplomats is voting ABSTAIN on Snapshot.
This is a good initiative so we aren’t against it. We would, however, love to see our initial questions answered and some more clarity on the proposal generally before we can fully support it.
The following reflects the views of the Lampros Labs DAO governance team, composed of @Blueweb(Chain_L), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
We are Voting Abstain as we are not sure about the success of the program as desired.
We acknowledge the contribution of @thedevanshmehta to the DAO & @LuukDAO over many open-source projects. We thank the contributors to this proposal for having placed this proposal and opened a channel to discuss it for the DAO. We should consider this proposal as a success of Firestarter program by ThankARB.
The example mentioned about Treasure DAO’s move to ZK Sync seems perfect but difficult to conclude that native Account Abstraction was the real reason vs token swap.
Investing in ecosystem projects should be important for the DAO, but we can do this via the Arbitrum Venture Initiative which can get a better share for the Arbitrum DAO.
Adding an observation that the amount we are trying with the proposal to swap is way less than what the DAO can recover by making the current programs more efficient. This could look out of context but happy to talk on it with anyone interested. 
I still support the discussion and want to see as much talk about treasury diversification as possible, but after thinking about it and reading all the comments… I’ll echo what @griff said as I probably agree with their take the most (although I agree with a lot of others).
The premise is good as it’s a tangible way to support other projects and other projects support us, but I’d like to see a longer commitment and LPing.
I know the shorter period is probably more to do with the pilot program aspect, but in terms of a pilot I think the variable to adjust here is spend, not length.
LPing I’d like to see more discussion on, as I’m starting to value more importantly getting sustainable returns on projects. Just a token swap essentially guarantees one of the partners to be a ‘loser’, which I think will sour the whole project.
Voting Abstain, not sure about the success of the program.
Blockworks Research will be voting AGAINST this proposal.
While we believe this proposal is directionally correct, we would like to say that executing this program on the basis of alignment may not be in the best interest of the DAO, and that this should be further investigated before moving forward.
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking, and ideation of the two.
We’re voting AGAINST the proposal.
While we’re not against the concept of a token swap program in general, we feel that the proposal doesn’t address two major components of such a swap:
Overall, the direction might be worth exploring, but this proposal would need to be significantly amended for us to be comfortable supporting it.
The results are in for the [Non-Constitutional] Arbitrum Token Swap Pilot Program off-chain proposal.
See how the community voted and more Arbitrum stats:
Hey all, thanks for sharing the rationale behind your votes!
I harvested the following sentiment:
As noted before, I think the best fit for a Token Swap program would be as part of a larger-scale ecosystem Development / Incentive program, where we can optimize the Token Swap conditions to align with the overall strategic mandate and objectives.
Hopefully, we can weigh in our perspectives and potentially become part of such a future program. Until that time, I’ll be on the sidelines refining the hypotheses. 
After consideration, the @SEEDgov delegation has decided to vote “AGAINST” on this proposal at the Snapshot Vote.
From SEEDGov we provided feedback before this proposal was voted on in Snapshot. While some of our questions were answered, several key issues remain unresolved.
We voted against this proposal as it falls under our stance against continued unclear and unnecessary spending by the DAO. There are far better ways to encourage continued support of protocols within the ecosystem that would have higher impact for the cost than this token swap proposal.
Good day there!
Centrifuge is here!
This is a very interesting proposal as well the timing also is quite surprising because right now, on the Centrifuge Gov forum, we have a proposal CP132 - Strategic Token Swap.
I personally wonder if Centrifuge and Arbitrum can cook something interesting together!
Greetings! I enjoyed reading your post, I share your gratitude towards this proposal; also, truly valid concern regarding the conflict-of-interest rules I must say; I also liked the reply that came with your inquiry, it gave me the insight I was looking for. I am highly interested in this topic and everything related to it, the way this proposal was presented was just mesmerizing! Very well structured and clear. Just by looking at the list with the 19 candidates or the so called “blue chips” I can calm my mind since this pilot prioritizes mature projects with significant past engagement with Arbitrum; It is clear that the eligible protocols were sorted by loyalty, in addition, each candidate must pass through the filter of being eligible by complying the requirements which adds safety to the process so we can be sure we will have the best of the best to deploy. I also like the parameters considered by the committee members in order to determine the exact swap size, I think they are being thoroughly and this pilot deserves it. It is important to remember that the swaps will be executed through Hedgey Finance (most used DAO token swap solution); If the parties involved do their part well there is no reason for corruption, and the process is so detailed and its phases transparent that any negative attempt or vested interests would be detected on the spot, of course there will always be risks but hoping for the best and planning for the bad never hurts right? I say this with all due respect, because I liked your post so much, it got me thinking a lot you know? We must not forget that despite the risk involved in a process, if the reward is bigger than the risk, then we must push forward!
The rationale makes it clear:
Also, regarding the following note:
-If insufficient projects are willing to participate in the exchange, we’ll explore alternative eligibility requirements and submit an additional Snapshot vote to ratify these changes. -
I just hope for the eligibility requirements to remain strict and selective in order to bring the best to the table in order to keep rewarding loyalty and promising projects.
Thanks for your input, have an excellent day! 
@ocandocrypto I had my doubts at the beginning, just like you; We have to strongly consider the gains vs the risks and also have in mind the rationale behind this proposal. After all, the 19 prospects seem to be alright and in a healthy situation, anyway just my humble opinion.
Voted Against the Proposal
Reasons:
Below are the opinions of the UADP:
We voted For this proposal since 1) it’s a pilot program that will help iron out some of the specific operational aspects through trial 2) the practice of token swaps, done well, can be a means for effectively aligning protocols within an ecosystem, while simultaneously acting as a means of capital investment for the purpose of a direct monetary return.
Although the premise of alignment based on holding the native token of another protocol can be questioned, we believe that it has solid grounding. The lockup term here matters, of course. That’s why we would’ve liked to see a longer period where both parties are subject to a lockup, and once that cliff is reached, a gradual vesting process.
Each counterparty should also be treated differently. A token swap with GMX vs one with Thales would be very different, not only due to the relative size of each party but also based on their relative contributions to the Arbitrum ecosystem. In effect, the council is in place for the sake of underwriting, and even if this process could be relegated to the DAO, we believe that such processes are best conducted under the purview of a council. The future management of this capital is up for discussion, and in our opinion, is a point to discuss as soon as possible but need not be a blocker for this trial. It is a conversation that can occur while the due diligence for swaps occurs—more than likely we won’t be selling off our swapped treasury assets immediately due to contractual lockups.
There have also been concerns about swapping tokens with projects that lack potential upward trajectory. While this may be the case, token swaps are very much a combination of effective portfolio allocation and strategic alignment. Traditional companies, for instance, often take controlling interest in firms that they want to collaborate with, often to attain higher degrees of ownership across the value chain. In similar fashion, Arbitrum would be able to vote on the proposals of these protocols to ensure their alignment. The degree of governance that Arb DAO can partake in with these small DAOs is a fair concern.
To the portfolio allocation point, the amount of the swap would of course be lower for more risky partners. A protocol like GMX would likely warrant a larger swap due to their tried and tested nature—plus, the recent buyback+distribution program that they’ve been running only brings more value to GMX token holders. Alignment should also not be the primary impetus for token swaps, although not entirely disregarded, of course. This would mean analyzing projects that aren’t exactly Arbitrum native, which could also be a prudent practice from a pure investment return perspective. More blue chip assets from multi-chain protocols would benefit Arb’s treasury by ideally reducing its overall volatility, especially since smaller cap Arbitrum native tokens would only increase the Arb treasury’s beta to the $ARB token itself. Swaps with larger protocols can also help Arb attain a stake in the governance of notable DAOs.
Snapshot Vote: I voted against the proposal, as I didn’t feel it was well thought out or effectively communicated. The wording was a bit unclear, almost as if it was intentionally challenging to understand.
The criteria for protocols to meet swap eligibility seemed somewhat arbitrary, and the lack of specific guidelines on how to use this ARB raised concerns. For example, can it be used in governance, or simply sold off by 10% bits after the three-month holding period (which is extremely low)? Realistically, any protocol tokens received by the DAO may end up just sitting unused, as the process involves multiple layers—multi-sigs, DAOs, foundations—which makes it harder to act on. On the other hand, ARB tokens distributed to teams have more liquidity and flexibility but come with less oversight. For these reasons, and although open to exploring token swaps, I’m not in favor of supporting this proposal under this structure.
Vote: FOR
Type: Snapshot
Proposal link: Arbitrum Token Swap Pilot Proposal
Voting Rationale Link: Alex Lumley (Savvy DAO) Delegate Communication Thread - #35 by AlexLumley
=== COMMENTING ON PROPOSAL: ===
This Token Swap Pilot program presents an opportunity to align Arbitrum’s ecosystem incentives with some of its key “blue-chip” projects. By supporting this pilot, Arbitrum DAO can engage in meaningful partnerships with mature protocols, helping to strengthen mutual financial and strategic interests. While there are valid concerns about the short lock-in period, the lack of clawbacks, and the potential volatility of token swaps, these aspects can be refined through trial and feedback during this initial pilot. Additionally, the selection of 3-7 protocols out of the 19 pre-identified candidates adds a layer of selectivity, focusing on entities most aligned with Arbitrum’s ecosystem goals.
This program provides a practical method to gauge how well token swaps function as a means of fostering ecosystem loyalty and expanding our financial interests. Although some raised concerns about the long-term effectiveness and potential illiquidity of swapped tokens, this pilot phase offers a measured approach to test these dynamics on a small scale. An emphasis on mature protocols also addresses some concerns about stability and future growth potential. Aligning financial interests in this manner can offer Arbitrum DAO a direct stake in projects, thereby enabling it to participate in governance and decision-making processes that may benefit the ecosystem.