OpCo – A DAO-adjacent Entity for Strategy Execution

[alicecorsini]

@Entropy

Liquidate ARB into $12M worth of cash-equivalent assets (at ARB’s current price of 0.80$, this would require 15M ARB) over a time period of up to 6 months following the proposal having passed Tally at the discretion of the liquidating party with a mandate to minimize price impact

Answering to the open question, I think this approach is very responsible and a good way forward. Being the scope of OpCo supporting the DAO through operations and organisation, I think going for the safer, financially sustainable approach is the right decision.

@JoJo

My question is: can we do it, or do we need to wait for the legal entity to be setup?

To echo JoJo, my only concern is on feasibility. If it hasn’t been done already, I would suggest to “simulate” the steps needed to make this happen.

[Entropy]

Based on feedback we’ve received within the past seven days or so, we’ve made the following edits to the proposal on December 4th, 2024:

• Slight modifications to the text to clarify that with the exception of the Investments initiative category and any emerging future categories wherein other, new DAO-adjacent legal entities are set to operate, OpCo can be expanded into any current/future initiative categories through a governance vote.
• We’ve decreased the proposal’s ask from 35M to 22M ARB and added the upfront ARB liquidation structure as follows:

@Entropy

• 4M ARB allocated to a bonus pool for internal employees and OpCo’s oversight committee (3M reserved for internal employees and 1M reserved for the committee). If bonuses are paid out, they must be denominated in ARB and have a vesting structure attached, with internal employees’ payouts additionally being performance-based.
• Of the remaining 18M ARB, tokens will be liquidated until $12M worth of cash equivalents has been attained. At ARB’s current price of $1, this would require roughly 12M ARB. The liquidation will occur over up to 3 months immediately following the proposal passing Tally at the discretion of the liquidating party (the Arbitrum Foundation together with a provider of their choice for asset liquidation) with a mandate to minimize price impact.
• After subtracting the bonus allocation and the liquidation is complete, the remaining ARB of the earmarked 22M token allocation will be immediately transferred back to the DAO treasury.

• To further prevent the risk of OpCo capturing governance, we’ve included the below additional restrictions:

@Entropy

• Internal full-time employees (not OAT members): these individuals, as well as any companies and analogous entities with which these individuals maintain a professional or financial relationship, are forbidden from participating in Arbitrum DAO governance votes.
• OpCo in its capacity as a legal entity: the entity is prohibited from becoming a delegate and cannot assume token delegations.

• We’ve added text to clarify that OpCo will not have the authority to enter into contracts with service providers or individual contributors for strategies not approved by the DAO through governance, unless directly related to its operational needs (e.g., hiring an accounting firm).

Please note that barring additional major edits, this proposal will move to Snapshot on December 12th, 2024.