# OpCo – A DAO-adjacent Entity for Strategy Execution **URL:** \ **Category:** Finalized AIPs\ **Created:** [October 30, 2024, 9:23pm UTC](https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361 "2024-10-30T21:23:24Z")\ **Posts on this page:** 1\ **Showing post:** 19
**Author:** ![SEEDGov](https://yyz1.discourse-cdn.com/flex029/user_avatar/forum.arbitrum.foundation/seedgov/32/14560_2.png) [@SEEDGov](https://forum.arbitrum.foundation/u/SEEDGov)\ **Post date:** [November 5, 2024, 10:06pm UTC](https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/19 "2024-11-05T22:06:47Z")
**Hello @Entropy! It’s a pleasure to finally see the much-needed proposal for OpCo for Arbitrum DAO. Thank you so much for all the hard work you’ve put into it; we know it hasn’t been easy.** > [@Entropy](#): > > _A new key objective is introduced, but the roadmap to achieve that objective is unclear_: Delegates have the option to create a Snapshot proposal to direct OpCo to produce an onchain proposal that defines the strategy to achieve the key objective(s), whether the entity would procure a facilitator or hire/operationalize an internal employee, as well as any funds needed to cover the strategy’s expenses, excluding OpCo’s internal employee costs. If approved, OpCo would begin facilitating the proposal created by itself. > > - Example: The DAO wants to run an incentive program to expand the ecosystem, but the incentive program’s structure and size are unclear. A proposal is passed for OpCo to operationalize internal employees and create the exact strategy. OpCo then defines, e.g., the amount of incentives to be distributed, what the application process to receive incentives looks like, how success will be measured, etc. A proposal to ratify the strategy, the incentives to be distributed, and the required workforce is then created. If passed, OpCo will activate the needed facilitators (program manager, data team, etc.) and strategy execution begins. We are slightly concerned that this option might create an incentive for “lazy” proposals that rely on OpCo to fill in the details. Don’t get us wrong—we understand the rationale behind including this option. However, it might be better to establish clearer boundaries on what can be requested from OpCo. To better illustrate our point, let’s take an example: Suppose the DAO seeks a new long-term incentive program. With OpCo established, a delegate could propose a Snapshot vote stating, “Should OpCo work on a new incentive program for protocols?” without providing any notion of the execution strategy. - How can we be confident that OpCo would be able to facilitate such a proposal, with all it entails? - What if the DAO passes 20 such Snapshot proposals (i.e., mandating OpCo to facilitate an idea from scratch)? Where is the limit to OpCo’s operational capacity? > [@Entropy](#): > > Furthermore, if OpCo has bandwidth and recognizes an area within its mandated verticals that isn’t currently addressed, there is no clear owner for that area, and addressing that area would be beneficial for the DAO While this statement partially addresses the above concern, the point is that OpCo’s assessment of whether an area is beneficial for the DAO may differ from the DAO’s own perspective as expressed through Snapshot. > [@Entropy](#): > > Once fully operational, OpCo will have the capacity to project manage and oversee these initiatives according to its complete mandate. The long-term vision for this process is as follows: Does this mean that once fully operational, OpCo will act as the PM for all initiatives, effectively replacing current SPs? If so, this objective conflicts with what is stated here: > [@Entropy](#): > > Without Arbitrum DAO empowering its contributors and delegates, the DAO might sacrifice one of its core strengths, and we believe that entities such as SEEDGov, Entropy Advisors, Tally, etc., are present within the ecosystem exactly because of this empowerment. and here: > [@Entropy](#): > > As alluded to earlier, we also feel as though it’s crucial that the facilitation and implementation of governance frameworks continue being driven by decentralized actors, but these could be overseen by OpCo (e.g., OpCo could be the entity enforcing the code of conduct). We agree that there are initiatives without a clear owner and that certain verticals have struggled to attract contributors with the required background. Additionally, even where ownership/SPs are clear, there is no established procedure to continue a program if the SP decides to step down or is forced out. That said, and while we acknowledge our position may be biased since we are currently Service Providers for the DAO, _ **we believe OpCo should only manage programs when no viable service provider or clear ownership exists and it should supervise those that do.** _ > [@Entropy](#): > > ## OAT Applicant Requirements > > Applicants must be individuals, not entities, and should possess familiarity with the Arbitrum DAO, governance processes, multisig operations, and a strong industry reputation. Additionally, candidates should demonstrate substantial experience and expertise in one or more of the following fields: > > 1. Corporate Finance & Financial Management > > - Treasury Management > > - Finance / Accounting / Budgeting > > 1. Operations & Strategy > > - (DAO) Operations / Business Development / Growth / Strategy > > - Procurement / HR / People > > - Crypto Law / Compliance We believe that roles within the OAT should be more clearly defined to avoid having all members with similar backgrounds, ensuring sufficient diversity to cover all possible verticals (e.g., limiting members by field). ### Regarding Budget and Disbursements > [@Entropy](#): > > OAT members must be properly compensated, highly incentivized to commit their full attention to the outlined responsibilities, and aligned with Arbitrum DAO’s long-term success. OAT members’ base monthly payment is $5K > [@Entropy](#): > > ![Screenshot 2024-10-30 at 13.07.04](https://canada1.discourse-cdn.com/flex029/uploads/arbitrum1/original/2X/f/fe02d894cf5b59db9c26dc340b8fca81d84cf791.png) - Despite the bonus, OAT members’ compensation seems low. This is a critical role for both the DAO and OpCo, effectively overseeing all operations and requiring candidates to forgo other jobs/positions for full-time commitment. The opportunity cost for joining the OAT is high, and we worry that a low base compensation might deter potential applicants (who must also have a seniority level commensurate with the role). - Indeed, within the provided budget example, the five OAT members would account for only 5.7% of the total excluding the optional bonus (almost 1.5% per member), while the employees they supervise might potentially earn more. - Based on this example as a real scenario, monthly expenses per term are around $500,000 (approximately 1M ARB), while the monthly unlocks are 1M ARB (barely enough at current prices). We mention this because it may be worthwhile to review the unlocking rate to avoid situations like the one with AF, where the vesting unlocks were insufficient to cover committed expenses and/or support new initiatives. Our concern is that 1M ARB per month might restrict OpCo’s capacity to expand, creating an operational bottleneck. We understand that part of the initial 10M ARB disbursement could mitigate this situation during the first term and that costs are purposefully overestimated in this example (such as legal expenses, which considers the worst-case scenario), but we wanted to bring this up to avoid OpCo potentially being limited by a vesting scheme. - Do you think it is possible to establish predefined salary ranges for the different roles? (beyond the chiefs). We understand that this isn’t easy, as the final salary for each position will depend on a variety of hard-to-predict factors, but it would be valuable for the DAO to have a sense of which roles warrant a $100k salary per year versus those that merit $200k (as an example). --- _[View the full topic](https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361)._