Voted FOR this on Tally – the program has the optimal team to execute on the brief, and the success of the first round gives a lot of comfort that this iteration will also succeed.
I share the concerns around potential overlap between STEP 2 and the TMC, though I think those are largely addressed by the need to get something in motion while the TMC is in startup mode.
But I also think those concerns overlook a bigger issue, which is that the environment has changed dramatically since STEP 1. One of the things that made the first iteration so exciting was that it was not only well executed but it was a huge innovation in terms of acting on the idea of RWAs well before other ecosystems. Hats off to @thedevanshmehta and everyone involved for capitalizing on that so effectively.
The environment today is quite different, with RWAs becoming so established that there are now entire chains devoted to them, not to mention an ecosystem of service providers that goes well beyond asset issuers/fund managers. This is one example of an ecosystem map, from Tokeny:
Two things jump out when I look at this (or for an alternative with the same effect, see this one). First, it’s frustrating that Arbitrum isn’t listed given how much the DAO has already done, and second, there’s a giant space of RWA providers making business decisions about what chains to commit to that go well beyond what we’re thinking about with STEP. And Arbitrum will need to get their attention to compete with the chains that keep popping up on these lists.
This isn’t to say that STEP needs to or should fill this gap, but I do think that the program needs to contribute to building Arbitrum’s profile in the space so that when OCL or the Foundation do have whatever conversations they’re having with RWA vendors, the DAO has contributed to making those conversations more effective. This could be as simple as a comarketing but would ideally go beyond that to also include other contributions to building Arbitrum’s profile as the home for RWAs (strong agree with @krst here).
I also strongly agree with @maxlomu’ssuggestion that the program consider securities beyond purely T-bills. The US is not the only economy in the world, and simple risk diversification (including political risk) argues for at least incorporating cash-equivalent instruments from other markets.
Highlighting the earlier feedback once for @steakhouse. The committee gets disbanded after selection of products, so this falls squarely into the program managers domain.
This reminds me of the “whole of government” approach to a problem. This is another strong rationale for why OpCo should take up RWA growth in an integrated manner
We did consider alternatives for STEP 2. Overall, we felt that since 99% of the $100 million RWA TVL on arbitrum is US centered, we should drill down here rather than the blue ocean exploration. This may have been an incorrect calculation and getting ahead of the curve is the wiser path, but we felt that with more limited resources than STEP 1 we should double down on existing RWAs on arbitrum.
Thanks to all for the support so far in additional diversification of the treasury. The fluctuations in ARB price have shown the need to have a stable endowment from where we can make decisions via a position of strength irrespective of market conditions.
Before the vote concludes, I want to intimate delegates of a material change: @Entropy will be taking over from me as facilitating member of the STEP committee. I have been offered a position at the Ethereum Foundation to work on AI & public goods/governance, which would preclude me from doing justice to RWA provider outreach that this proposal deserves.
I am very grateful to the Arbitrum community for all it has given me over the past 2 years: not just sustenance and purpose, but also a stage upon which to show value. I am proud that the 2 seasons of our Treasury and Sustainability Working Group diversified 2% of Arbitrum’s treasury, let us be early on the RWA game and produced other valuable research for the DAO.
While I am bowing out for now, I am confident that Entropy will take STEP 2 to the finish line with the excellence that the program has come to be known for.
We have voted FOR this proposal at the onchain phase. Our reasoning has not deviated from our prior comment, and our concerns and questions have been alleviated:
Voted For: After reviewing the reports, there is no reason not to further support this STEP program. Diversification of the funds in a DAO of our size is important and RWA is the best way to do it in this case. Also, I believe in the team that the execution of the 2.0 program will be done well. I do expect consistent reporting on the program during our monthly GRC calls.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
We are voting FOR this proposal in Tally voting.
We support this proposal on Tally for diversifying an additional 35 million ARB into stable assets, emphasizing prudent financial management.
Drawing on STEP 1.0, where the average conversion rate of ARB to USD over seven weeks was $0.87, we see the potential for managing conversions to avoid further price depreciation.
With the current ARB price at a bearish $0.46, converting now could significantly impact our recovery time. A conversion at such a low price could necessitate a nearly 90% gain, translating to a recovery period of approximately 14 years at a 5% CAGR.
It’s crucial to avoid hasty conversions that could undermine ARB’s price stability. Instead, we advocate for a cautious approach that waits for more favourable market conditions, ensuring the DAO’s actions align with long-term financial health and stability. It’s true we cannot get the best price but we believe liquidating in the low 10 percentile of the ARB’s historical price means taking a loss to gain later(14 years min).
This perspective isn’t about hastening to earn yield; it’s about safeguarding our assets against market lows and strategically planning for financial resilience.
This program has a strong foundation and a proven track record of success. Devansh’s recent transition and Entropy becoming the new facilitator will not change the outcome of the initiative.
I maintain my position that a program like this is a net positive for Arbitrum regarding Treasury Management. In the current landscape of market volatility, having a program like this will contribute in safeguarding long-term sustainability for the DAO.
I’m voting FOR this proposal on Tally. My reasons remain the same as during the Snapshot vote, plus the shorter timeline I suggested has been implemented in this version.
I’m voting FOR on Tally. As I mentioned during temp-check: this proposal builds on a proven process to diversify our treasury into stable, yield-generating RWA assets while promoting ecosystem growth.
The only concern I have is that ARB price has dropped too much lately, and with the current yields we are earning, it will take us more than 10 years to recoup these losses, I suppose this is more of a timing the market problem, but would be nice to explore some solutions.
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas. It’s based on their combined research, fact-checking, and ideation.
We’re voting FOR the proposal.
Since our favorable vote during the temp-check, the only thing that has changed is that Entropy will be replacing Devansh as the facilitating member due to the latter accepting a full-time offer at the Ethereum Foundation. Given that, we understand the need for replacement and support the decision.
One thing that occurred to us and should be addressed sooner rather than later is the compensation of the program manager. In STEP 1.0, the ARB earmarked for the PM’s compensation wasn’t enough to cover the USD-quoted fees for the 1-year tenure, so we had to vote on a separate proposal to deal with the situation. Steakhouse’s tenure from STEP 1.0 ends on September 2025, which means that STEP 2.0 will;
Either have to complete within 3 months, from early May after the DAO ratification of committee recommendations to September, or
Hold yet another vote to decide how to deal with the compensation of the program manager.
In the vote mentioned above, the resulting decision was that Steakhouse would be paid its dues from the yield STEP 1.0 generates. Perhaps it’s also worth discussing something similar for STEP 2.0, as it avoids putting price pressure on ARB.
Lastly, we want to take the opportunity to state once again that we want the committee to leverage the service providers we’re engaging with for more than just using their services. This could, for example, come in the form of a co-marketing campaign for RWAs on Arbitrum.
The PBC Governance team is voting FOR STEP 2.0 on Tally.
STEP 1.0 brought in a lot of attention from big institutional players, and we’d like to keep seeing growth in Arbitrum’s RWA ecosystem. Additionally - congrats to Devansh for the new position! We’re also confident that Entropy can take over as STEP’s facilitating member without any major hurdles, so no concerns from us there.
