[Non-Constitutional] Treasury Management v1.1

[Entropy]

Abstract

On September 12th, Entropy hosted a preliminary treasury working group call (recordings available here) in an effort to align all of the different parties within the DAO on the optimal path forward when it comes to managing the different sections of the DAO’s balance sheet. I.e., chain profits (ETH) and tokens that have been authorized for spend but have not entered circulation yet (ARB). The primary points of contention were around ARB diversification, the need for a DAO budget before the conversation on treasury management continues forward, whether the DAO needs active treasury managers at all, infrastructure selection, and details around a treasury committee’s implementation, e.g., how many individuals/entities, are they DAO-elected or appointed, when should we target to have this committee stood up, etc. From our perspective, we did gain consensus that the DAO’s profits (ETH) in the treasury should be turned productive and that a treasury management committee of some sort should be established. However, even on these two points that most people seem to be in favor of, specific details need to be ironed out for actionable strategies to be implemented.

We believe that we have come up with a fair compromise between all of the various perspectives on these identified issues, all of which stem from the information gathered during the working group calls and conversations with delegates. The compromise suggested herein will, in our opinion, enable the DAO to move forward and initiate the required operational standards for optimizing the use of idle tokens in the treasury. Based on the feedback received on the call on September 25th (link to recording here) where we presented the overarching ideas herein, we feel confident that this proposal aligns well with the treasury managers, infrastructure providers, and overall DAO sentiment towards treasury management. We are eager to gather more feedback from the community and continue iterating so this initiative can move forward.

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.

The Proposed Solution

TL;DR

• Establish two token management tracks (Treasury and Growth) with their own 3-seat committees. Treasury Management will focus on passive yield via ARB-only onchain strategies on Arbitrum One and create a cash-like reserve alongside a management strategy to cover service provider shortfalls. Growth Management will focus on strategic partnerships by exclusively reinvesting the DAO’s ETH holdings into “ETH-backed strategies”. ETH-backed strategies are defined as opportunities that aim to earn yield on ETH or ETH-pegged assets, with high guarantees of returning (at minimum) the original number of ETH deployed to the DAO treasury at a certain point in the future.
  • Treasury Management ™: 10M ARB for ARB-only onchain strategies + 15M ARB converted to stables or other cash-like holdings to serve as a pilot for the DAO’s “checking account”.
  • Growth Management (GM): 7,500 ETH allotted (about 75% of the DAOs ETH after BoLD bootstrapping), but all spend must be DAO-approved on a case-by-case basis.

Since inception, the DAO has spent 19.3M ARB on core DAO initiatives (long-term committees/groups that get funding directly from the DAO via proposal), grants programs, and direct DAO-to-service provider grants according to the August Token Flow report from @r3gen. So outside of protocol/user incentives and the large GCP initiative, the DAO’s spend has been relatively modest throughout the first 18 months of its life, spending about 1.07M ARB per month. The average price of ARB since the token launched sits at $1.16, which puts the DAO’s rough monthly spend on these types of initiatives at $1.24M USD.

In an ideal world, we would have a budget outlined before setting aside some ARB to be converted to stablecoins or other cash-like assets to cover general operating expenses and make up for any service provider contract shortcomings. However, we need the proper people and procedures in place in order for a budget to be executed to the expected standard. We believe that the OpCo will not only be better equipped to tackle this issue, but will also have better incentive alignment with the DAO than any other entity/individual tasked with creating a DAO budget, and more data surrounding DAO-revenue to analyze.

In many cases it is unprofessional for the DAO to put the burden of ARB volatility on its service providers. If we aren’t careful, we will negatively impact the pool of SPs that desire working with Arbitrum DAO. Given the aforementioned historical spend and the absence of a formal budget, we are suggesting the TM be given 25M ARB with the intent to swap 15M ARB for stablecoins over the course of 3 months. This stablecoin reserve may be deployed in low-risk, yield-bearing strategies or other cash-like assets and will be used to cover DAO dollar-denominated expenses and service provider contract shortfalls. This cash-like balance should not be used to give out grants, but rather to pay out service providers that demand dollars. The remaining 10M ARB is to be used on ARB-only onchain strategies that are approved by the TM Committee (TMC). The TM track will solve problems 1&2 mentioned above by putting the infrastructure and service providers in place to conduct onchain strategies on both ARB and stablecoins while ensuring service providers enjoy a professional/stress-free experience working with Arbitrum. The TMC’s mandate also indirectly supports ecosystem growth by focusing primarily on ARB-only strategies by leveraging Arbitrum protocols.

The need to reinvest sequencer revenue is best depicted by the following chart, which shows the DAO has foregone ~400 ETH by not staking its idle holdings.

However, given that the primary goal of the Arbitrum DAO is spreading its technology stack and promoting growth across its ecosystem, we believe that we can do better than just staking the ETH or otherwise reinvesting DAO profits into liquid market opportunities. Furthermore, Entropy Advisors has been approached by numerous protocols interested in strengthening their alliance with the Arbitrum DAO. These protocols include market leaders within well-established DeFi and infrastructure sub sectors as well as projects in emerging verticals that have generated significant attention within the industry. Some of these projects are pre-TGE, generate significant revenue, could solve liquidity fragmentation/interoperability across Orbit chains, or strengthen ARB narratives. These types of deals require a counterparty to negotiate with and discretion until a deal is formally reached. This will be one of the primary deliverables of the Growth Management Committee (GMC), but all deals will need to be approved by the DAO via a snapshot vote with a simple majority For/Abstain, and a quorum equal to 3% of the votable token supply prior to any engagement’s execution. Again, only strategies that rely on ETH and ETH-pegged asset strategies will be pursued. It is important to note that some specific details may need to remain confidential even once the DAO begins voting via Snapshot. The GMC will play a similar role as the STEP committee so that this can be achieved.

TMC and GMC: Members, Deliverables, and Pay

While we could staff these positions via DAO election, we believe that it would be more efficient to appoint these individuals/entities given the specific qualifications required of the members. These council members will serve a 6-month term, and be eligible to receive 30k ARB each vesting linearly over 2 years beginning within 2 weeks of their start date. It is important that the individuals/entities sitting on both councils have a long-term vested interest in Arbitrum’s success to place a check/balance on their decisions.

Suggested TMC Members:

• TBU: awaiting responses from contacted facilitators
• TBU: awaiting responses from contacted facilitators
• TBU: awaiting responses from contacted facilitators

TMC Deliverables:

• Design and host an RFP process seeking treasury managers with predefined overarching strategies. E.g., the process for converting ARB to stables, how the stables can be deployed when sitting idle, whitelisted ARB strategies, etc. This will need to be ratified via a snapshot vote with a simple majority For/Abstain, and a quorum equal to 3% of the votable token supply.
• Serve as a check/balance on strategies deployed by treasury managers, and flagging any questionable strategies being deployed to the DAO.
• Developing a methodology for evaluating service provider performance, with risk-adjusted returns as the focal point.
• Prepare quarterly reports (2 over the course of their term) for the DAO forum that provides visibility into service provider performance.
  • These reports should also include updates on the stablecoin balance, and provide recommendations to the DAO in relation to liquidating more of the allocated ARB for stablecoins, or requesting additional ARB to top up the stablecoin reserve.

Suggested GMC Members:

• TBU: awaiting responses from contacted facilitators
• TBU: awaiting responses from contacted facilitators
• TBU: awaiting responses from contacted facilitators

The primary qualifications for GMC members are the ability to negotiate deals and possess large networks within the wider crypto industry. They will also be required to sign and adhere to NDAs.

GMC Deliverables:

• Design and host an RFP process seeking protocol partnerships through the deployment of the DAO’s ETH, which must target the use of ETH itself or ETH-pegged assets. This will need to be ratified via a snapshot vote with a simple majority For/Abstain, and a quorum equal to 3% of the votable token supply, and it is possible that these applications will be ongoing rather than a specified time period. Some information may need to remain confidential—this body will follow a similar playbook as the STEP Committee.
• Serve as the point of contact/negotiating body for protocol teams interested in a deeper alliance with the Arbitrum DAO.
• Coordinate the amplification/marketing of engagements across various Arbitrum contributors, e.g., the Foundation, OCL, protocols, etc.
• Prepare quarterly reports (2 over the course of their term) for the DAO forum that provides visibility into the status/general success and failures of the growth partnerships being deployed.

Specifications / “Costs”

In order to reduce ambiguity around tax, legal, and any other possible liabilities, we suggest that the Arbitrum Foundation serves as the custodian/counterparty of the funds at all times. The TMC and the GMC simply help coordinate the process, the DAO still remains as the ultimate decision maker, and the Foundation serves as the custodian/counterparty of the funds and thus abides by Cayman Islands law. While the MSS is great for serving as the DAO’s solution to multi-sigs, it is clear that the Arbitrum Foundation is the most logical party to custody these funds, until the OpCo’s legal entity is stood up, to avoid unforeseen legal liabilities. If this vote passes onchain via Tally, 7,500 ETH and 25M ARB will be moved to two separate Foundation-controlled addresses. No funds can be deployed by either the TMC or GMC—they are only tasked with providing options for the DAO to vote on, and the Arbitrum Foundation will be subject to act in accordance with how the DAO votes.

The DAO can claw back funds at any time via a snapshot vote with a simple majority For/Abstain, and a quorum equal to 3% of the votable token supply. It is worth noting that some of the initiatives in the GM may contain verbiage that prevents the DAO from clawing back a specific allotment of funds. As mentioned, the DAO will ultimately make the decision on these deals, so delegates/voters will need to review and take these factors into account when voting. Again, the GMC members will be under NDA and only be able to disclose what the partner in question is willing to share publicly. As proposed, the GMC will have members from the DAO, OCL, and the Arbitrum Foundation, so we feel confident the GMC will only have the DAO’s best interest in mind.

Lastly, we want to emphasize that this is not a proposal to spend these funds, so the funds being moved are not actually a “cost” to the DAO. Rather, these funds will be used for diversifying risks and creating yield, laying the groundwork for prudent financial management for the Arbitrum DAO, setting it up for long-term success, sustainability, and growth.

Steps to Implement and Timeline

1. September 12, 2024: Prelim. Treasury Working Group Call #1 (recording here)
2. September 24, 2024: Prelim. Treasury Working Group Call #2 (recording here)
3. September 27, 2024: Treasury Management V1 proposal posted on the Forum
4. October 10, 2024: Snapshot vote to move forward with Treasury Management V1
5. October 17, 2024: If the proposal passes, move to Tally. If the proposal fails, host another working group call in an effort to find a new path forward.
6. Early November: If the Tally vote successfully passes, funds will be moved to the Arbitrum Foundation.
7. The TMC and the GMC will have until mid-December to get a formalized RFP process on the DAO forum, and are expected to be prepared for Snapshot by December 26, 2024.
8. Barring any setbacks, the GM and TM RFPs should be open for Service Providers to apply by the beginning of 2025. Note that the TMC/GMC may elect to keep applications open/rolling.

Long-term Desires

This proposal remedies 3 key problems plaguing the Arbitrum DAO today, and sets the stage for all of the DAO’s identified financial management needs being met in the future:

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.

We envision the functions of the TMC and the GMC to roll up into OpCo once established, and depending upon the OpCo’s structure, e.g., Cayman Islands Foundation entity, the OpCo will become the custodian of these funds once the legal entity has been set up and its operations stabilized. A lot of the ground work around treasury management will be handled by the TMC and GMC in the interim, and will provide the OpCo with a rubric that can be improved upon as it relates to procuring treasury managers, budgeting, transparency/reporting, etc.

This is a good starting point as it ensures service providers do not bear the burden of ARB volatility, puts the infrastructure and SPs in place for the DAO to conduct onchain strategies, and generates revenue while spurring growth across the Arbitrum ecosystem.

[Larva]

Thanks for the great proposal. I have 2 questions:

1. How will 15M ARB be swapped to stablecoins within 3 months? Will it be sold directly on CEXs or via OTC? Could this cause significant market volatility? Given the current liquidity shortage, 15M ARB represents a large selling pressure. If not handled properly, it could harm all ARB holders and the overall interests of Arbitrum DAO. Is there a detailed plan in place?

2. How can we ensure the security of funds during transfers and subsequent management? Will the ARB and ETH stay on-chain, or be moved to CEXs? If transferred to CEXs, maintaining full transparency will be challenging. What contingency plans are in place in case of a hack or theft?

[BlockworksResearch]

It’s good to finally address this conversation. Given the overlap between the proposed Treasury Committee and the Growth Committee, what are the plans for STEP II and its Steering Committee? Should we consider these as completely separate initiatives?

We agree that the ARB token is in poor standing. Referencing Sidd’s State of ARB report, we can see that liquidity for ARB on centralized exchanges has dropped significantly, with trades as small as $2 million possibly causing a 20% price impact. With this in mind, swapping into stables on CEXes seems somewhat difficult; to echo @Larva here, is there a plan to OTC the ARB instead? Additionally, in general it has been observed that ARB’s liquidity is low compared to its market cap.

Given the current state of the ARB token, what steps can we take to increase its liquidity on centralized exchanges? Regarding on-chain liquidity, the token has improved, but is there a long-term plan to expand its DeFi capabilities to drive up demand? It may benefit the DAO to get ARB accepted as collateral in more lending protocols. While ARB is accepted on Aave as collateral, this is within our own ecosystem. Should we consider enhancing ARB’s cross-chain liquidity or increasing listings?

From a management perspective, will these committees use Zodiac modules to manage the ARB token and optimize DAO security? We agree with the core idea here—improving ARB with on-chain strategies and addressing our idle ETH. Our questions are intended more as future considerations than immediate concerns, although CEX liquidity remains an important consideration here.

[jon1]

what happened to dao budgeting? wasn’t there a consensus that dao-wide budget needs to be figured out before deploying any capital and treasury-management in general?
like this treasury is not gonna go anywhere, why the rush?

[cp0x]

I like the direction of thought when we start thinking about strategies for storing and growing our funds.
However, there are a few points that are unclear to me:

1. You wrote that you do not want an election.

@Entropy

we believe that it would be more efficient to appoint these individuals/entities given the specific qualifications required of the members

But if you wrote requirements for the GMC, then there is nothing similar for the TMC. Therefore, I do not understand on what basis you propose members of this committee.

2. You are offering 30k ARB, which is 5k ARB per month for committee members.

@Entropy

be eligible to receive 30k ARB each vesting linearly over 2 years beginning within 2 weeks of their start date

This is a small amount and therefore, it may not be as effective if you do not use incentives for these committees.

Very often, when giving funds to management, performers can count on an additional bonus for achieving the result. I think this is worth considering.

3. And finally, why was the amount of 10 million ARB chosen for the Treasury organization? Given the expenses you indicated,

@Entropy

monthly spend on these types of initiatives at $1.24M USD

do you expect the committee to earn at least 1.24 million USD per month from these funds?
If not, then why exactly this amount?

4. Is it worth allocating some amount of ARB to Market Makers in various CEX|DEX?

[ggmatch]

I appreciate the structured approach to treasury management; it’s essential for ensuring the DAO’s financial health. However, I echo Larva’s BlockworksResearch and concerns regarding the proposed 15M ARB swap into stablecoins, which could generate significant market volatility (15M ARB represents a large selling pressure, given the current liquidity available).
We should explore both OTC options and engaging with more market makers.

Moreover, there is no need to rush structuring this before the budget is approved, as originally planned. Taking the time to align treasury plans with the approved budget would allow for a more coherent, rational, transparent and effective approach.

[Euphoria]

The following reflects the views of the Lampros Labs DAO governance team.

We appreciate the well-structured proposal and the thorough thought process behind Treasury Management v1.1. However, we have a few questions regarding certain aspects of the proposal that we believe require further clarification:

1. Could you elaborate on the specific performance metrics that will be used to assess the success of both the Treasury Management and Growth Management committees?

2. Additionally, could you clarify what is meant by “high guarantees” in the context of ETH-backed strategies? We are particularly interested in understanding how the DAO will assess and minimize risks while ensuring the safe return of ETH. What mechanisms or safeguards will be in place to protect the DAO’s funds and ensure these strategies remain low-risk?

@Entropy

with high guarantees of returning (at minimum) the original number of ETH deployed to the DAO treasury at a certain point in the future.

[gauntlet]

Gauntlet supports Entropy’s initiative to advance discussions on DAO treasury management and appreciates the progress made. The persistent challenge of converting ARB to USDC for operational budgets highlights the urgent need for a non-custodial toolset that allows the DAO to deposit and withdraw USDC and/or earn risk-adjusted yield on those idle assets. Gauntlet would also support an RFP process, with a disclosure that Gauntlet supports and powers the Aera Protocol, a non-custodial treasury management solution allowing autonomous treasury management with minimal governance input.

Before proceeding to a Snapshot vote, we urge the DAO to consider the amount of ARB the DAO is comfortable depositing into this initiative if its intended use is to be used for funding DAO working groups. We’d also ask for clarification around the withdrawal process (e.g., are funds accessible only after six months?) and how the committee will decide which vendor(s) funds will be withdrawn.

Another potential pain point is scalability. Assuming the DAO selects multiple vendors and demand increases for a larger USDC allocation, how is this increase managed? What will the standard be for reporting and accounting? Establishing guardrails around the approved protocols, strategies, and contracts would be prudent to ensure managers act responsibly and toward the appropriate KPIs as they participate in the TMC.

Lastly, it’s worth highlighting that there’s an opportunity for meaningful technical advancement in how the DAO manages its treasury. As we progress, we’d urge the DAO to explore alternatives to committees and leverage onchain tooling that minimizes governance and advances toward more autonomous and transparent stewardship in each of its workstreams, including treasury management.

One goal might be establishing onchain functionality that allows the Arbitrum DAO to maintain custody of its active treasury. Even better would be integrating these assets into Tally frontends, enabling the community to view them, create withdrawal proposals directly, and adjust, rebalance, and evaluate automated strategies (or active managers) in real-time.

[jameskbh]

Thanks for the proposal!

As the DAO has a lot of moving parts (and proposals running in parallel) I wanted to highlight these two points:

@Entropy

Growth Management (GM): 7,500 ETH allotted (about 75% of the DAOs ETH after BoLD bootstrapping), but all spend must be DAO-approved on a case-by-case basis.

Ans, from the ARB Staking proposal:

@Frisson

Parallel workstreams: Staking Rewards and Delegation working groups

In parallel with the development of ARB Staking, we will lead two separate DAO working groups that are focused on aspects of the system that will be implemented after development is complete.

• The Staking Rewards working group will focus on how to fund staking rewards. It will develop a recommendation about whether staking rewards should be funded by sequencer fees, MEV fees, validator fees, token inflation, treasury diversification, and/or DAO venture investments and how to implement such rewards.

There is a non-zero chance that both proposals are going after the same resources here (the ETH from the sequencer fees). Is there a plan to better coordinate (or to adjust one proposal) so we don’t “double-spend” the resources? Mostly likely, the Staking Rewards WG will present a study/proposal before this one is approved on Tally.

[Gabriel]

@Entropy

• Treasury Management ™: 10M ARB for ARB-only onchain strategies + 15M ARB converted to stables or other cash-like holdings to serve as a pilot for the DAO’s “checking account”.
• Growth Management (GM): 7,500 ETH allotted (about 75% of the DAOs ETH after BoLD bootstrapping), but all spend must be DAO-approved on a case-by-case basis.

I think we should rethink the 15m ARB convertion to stables as ARB has underperformed the market and this has hurt holders and stakeholders.

Maybe we should explore OTC sales or a really long sale in a 6 month period.

[Argonaut]

Appointing committee members without a DAO election might lead to questions about transparency and accountability. Could we consider a hybrid approach where nominees are proposed based on qualifications but still require DAO approval through a voting process? Or at least disclose the names of the members of each group before launching on Snapshot?

Also, ensuring that committee members have no conflicts of interest is important. What measures will be in place to prevent potential self-dealing or favoritism towards certain service providers or partners?

Also, while converting ARB to stablecoins to pay service providers is a practical solution. How does this align with long-term considerations for the value of ARB? If the DAO itself isn’t holding ARB, why would people choose to hold it?

[0xDonPepe]

Would be great to see a more detailed framework on how the DAO will evaluate and remove committee members if they are underperforming or acting against the DAO’s interests. This would address concerns about the lack of elections and build trust in the proposed governance structure.

[CastleCapital]

The proposal addresses several pressing issues hindering the DAO’s efficiency and growth potential. By establishing the Treasury Management and Growth Management committees, Arbitrum DAO can strategically manage its assets to ensure operational stability and foster ecosystem expansion.

This proposal is a comprehensive and well-considered approach to optimizing the Arbitrum DAO’s treasury management. We at Castle are in favour of this, with some caveats:

1. We understand the need to appoint members with the right skills and experience to the specific committees. However, a process should be in place to propose and vote out committee members to ensure the governance process continues to be upheld.
2. Regarding the allocation of ARB and ETH now without a defined budget, we suggest a timeline be included in this proposal when the respective committees will revert with a budget breakdown and schedule for regular updates on planned budget utilization.
3. The plan for converting ARB tokens into stables should also be a point for the committee responsible to revert to the DAO prior to execution.
4. How will the committees under Treasury Management be aligned with other initiatives?
5. There should be a performance component to the Committee compensation and not solely be reliant on a fixed fee… we want to ensure the committee is incentivized to achieve the best possible result for the funds managed

This proposal proposes too many shortcuts, and more needs to be detailed out and verbalized to mitigate and potentially address potential risks by selecting this path forward. We look forward to a response clarifying the above concerns.

[0xTALVO.ETH_MTY]

It would be useful to more explicitly establish performance metrics and accountability mechanisms. Otherwise, there is a risk that these committees may operate without effective oversight, which could lead to problems in the future. Additionally, the plan to reinvest sequencer revenues seems promising, but it would be beneficial to have greater transparency regarding the specific strategies that could be adopted to ensure the security of the funds and mitigate risks.

Given the current state of ARB token liquidity, how is the plan to convert 15M ARB to stablecoins anticipated to affect relationships with service providers and the overall growth of the Arbitrum ecosystem?

[Bob-Rossi]

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.

IMO, unless I’m misunderstanding a stipulation of the payments of these groups, a lot of this falls on these projects for not immediately selling their ARB into dollar-denominated equivalents. I’m not understanding why they have an expected $X,XXX a month in admin expenses yet hold ARB over a stable coin.

Growth Management (GM): 7,500 ETH allotted (about 75% of the DAOs ETH after BoLD bootstrapping), but all spend must be DAO-approved on a case-by-case basis.

Having the DAO approve spend for each investment decision creates a lot of negatives with really no positives. I think needing DAO approval needs to be removed here. The DAO either trusts the people in charge of this or not, forcing them to come back to us every investment:

• Creates unnecessary burden for the DAO & Investment Team, in that every decision must go through a 1 month voting process
• The wait time will affect investment performance. Sometimes high APR events only last days / weeks. Or imagine a case like the LTIPP where incentive periods are only 3 months. Having to go through a DAO approval process could result in the opportunity being long passed by the time its approved.
• Likely will affect the Investment Team’s decision making. If you know every time you change investments you have to go through a DAO vote it incentivizes the project to avoid changing investment products.
• Is going to scare away potential applicants who apply for this role due to it being to restrictive in nature (I’ve already seen this happen with other projects)

All that said, as noted in the proposal the DAO can at any time clawback the funds. So having to approve case-by-case just adds an unnecessary layer of control. Given there already is an ‘approval’ mechanism built in.