OpCo – A DAO-adjacent Entity for Strategy Execution

Proposals
62

I voted FOR on Snapshot to support the establishment of OpCo.

Voting Rationale:

OpCo represents a crucial step for Arbitrum DAO to enhance governance efficiency. It addresses many of the current challenges in governance and execution, drives efficiency, supports the ecosystem’s long-term growth, and upholds decentralization principles. My main reasons for supporting this proposal are as follows:

  1. OpCo ensures the strategic execution of DAO initiatives, addressing issues like resource fragmentation and lack of accountability. It also prevents critical tasks from being disrupted due to contributor exits.

  2. While OpCo is a centralized entity, the proposal clearly states that the DAO retains ultimate control. The establishment of the Oversight and Transparency Committee (OAT) ensures accountability and transparency for OpCo.

  3. The proposal outlines OpCo’s budget and expense management processes in detail, ensuring clear and transparent fund usage while minimizing the risk of waste.

  4. The DAO can adjust OpCo’s scope or terminate its operations through voting, ensuring it always aligns with the DAO’s goals. Beyond governance optimization, OpCo can also attract top contributors and service providers, laying a solid foundation for the DAO’s future development.

Concerns and Recommendations:

  1. Establish clear Key Performance Indicators (KPIs) and provide regular performance updates to the community to ensure continuous improvement.

  2. While OpCo enhances efficiency, it is essential to monitor its operations closely to prevent any deviation from the DAO’s decentralization principles.

  3. Strictly enforce the budget during operations to avoid unnecessary expenses. High costs without results can backfire—starting with a lower baseline budget might be more practical.

  4. Maintain open communication with the community during OpCo’s strategy execution to ensure broad support for initiatives.

63

Thank you for this proposal. I generally agree with its framework and content. However, I still have some questions regarding financial and budget-related aspects, which might overlap with points discussed by other delegates:

  1. Budget Rationality and Team Size:
    The proposal outlines a budget covering initial setup and operational costs, including salaries, taxes, benefits, and other expenses. However, some parts of the budget lack transparency, especially regarding high salaries and bonuses. For instance, the CEO’s annual salary budget of $900,000 raises questions about its alignment with the role’s responsibilities. Additionally, the proposed team size of 4 to 10 members might be excessive, especially given the tasks have not been clearly defined yet.
  2. Financial Transparency:
    While the proposal mentions some short-term goals and budget allocations, it does not adequately describe mechanisms for ensuring long-term financial transparency. For example, how will specific expenditures be regularly disclosed to the community?
  3. Unclear Task Prioritization:
    The proposal lists multiple short-term objectives, such as event strategies, research reports, and code standards proposals, which are comprehensive but lack clear prioritization. This could lead to resource dispersion or delays in achieving critical goals.
1 Like
64

Hello Entropy!

I did vote in favor, I support this proposal. It would be interesting to understand who are the candidates for the Chief Chaos Coordinator role before the Tally vote, do you think is doable? It would put a lot more trust in the community knowing that there are good candidates in the pipeline. My guess is it won’t be possible by the way, but was worth asking.

65

I voted FOR on Snapshot to support the establishment of OpCo.

I have been following this proposal closely and believe it addresses a critical issue in Arbitrum’s organizational structure. This is a well-thought-out and significant proposal. Undoubtedly, the direction is clear and correct. With OpCo, responsibilities can be clarified more swiftly, resources can be better allocated, and complex projects can advance more efficiently.

While the budget seems transparent (though somewhat controversial), and detailed explanations have been provided, I personally find the costs to be on the high side. Therefore, it is essential to establish clear KPIs and oversight mechanisms to ensure OpCo delivers tangible results, such as:

• Can it attract and retain top talent?

• Can it genuinely improve project execution efficiency?

• Can it better drive ecosystem development?

Additionally, I strongly recommend implementing strict approval processes for significant expenditures (over 500K). It’s critical to ensure every dollar is spent effectively, with risk control as the top priority.

66

I am glad to see this proposal moving forward. I think this will help with the institutionalization of the DAO. The OpCo will provide a more formal operational structure and increase the strategic alignment across all the initiatives within the DAO. One of the end goals should be providing a more structural framework to coordinate the ecosystem’ initiatives and proposals.

OpCo will change the manner in which the DAO operates right now substantially, I believe. We should approach its development with a flexible mindset. When I first read the proposal I saw centralization as something detrimental to the DAO’s values but now I understand the need for it. Besides, I believe the checks and balances contemplated in its design will effectively limit any undue concentration of power, as the DAO retains the ability to adjust the scope of operations or even assume full control if needed.

Its important to stress the involvement of the OAT and its role in functioning as a DAO-OpCo bridge. In fact, I view the OAT’s responsibility of maintaining a proper balance as even more critical than the CEO’s position. It should be in their scope of responsibilities to make sure the OpCo remains responsive, transparent, and accountable over the long term.

I am voting FOR this proposal in Snapshot, looking forward to its development and with the belief that this will help the DAO thrive in the always-evolving landscape we are all used to.

67

This is a very detailed and comprehensive proposal, and I can feel the rigor and attention to detail. Like some others, I believe this is an ambitious goal that requires many full-time staff. I think the budget should be reduced, and the team should expand gradually to ensure smooth progress and minimize unnecessary waste.

To help Arbitrum DAO go further, I am inclined to support this proposal. I hope to see more mechanisms for employee evaluation to prevent internal misconduct and ensure greater transparency for everyone.

Lastly, I remain concerned about salary expenditures. The team should expand gradually whenever possible; otherwise, it may lead to mismanagement. These are just some well-intentioned suggestions. Wishing us all continued success!

68

I joined this discussion a bit late, but here are my key takeaways from the proposal:

On Centralization vs. Decentralization:
One of the core strengths of DAOs is their ability to minimize gatekeepers and trusted intermediaries. As envisioned, OpCo could become a gatekeeper, interposing itself between the DAO’s broader community and potential contributors. While the DAO retains nominal authority, OpCo might end up influencing who gets contracts and which initiatives progress. This creates a power structure that’s less open, less trust-minimized, and potentially more susceptible to the sway of a few individuals.

Censorship Resistance and Legal Attack Vectors:
Introducing a legal wrapper around DAO operations inherently broadens the attack surface. Under traditional legal pressures, OpCo could be compelled to censor initiatives, freeze funds, or discriminate against certain contributors. One of the great benefits of a permissionless DAO is its built-in resilience against such censorship. By contrast, a legal entity is susceptible to the full force of conventional legal and political pressure, undermining the censorship resistance and sovereignty that define the DAO ethos.

Innovation vs. Operational Efficiency:
While supporters might argue that OpCo would bring streamlined operations, attract top talent, and ensure continuity, these benefits come at the cost of layering on a traditional corporate model. Although efficiency may improve in the short term, we risk sacrificing the long-term innovation and permissionless participation that are fundamental to the DAO’s identity. Encouraging everyone to pass through a single operational hub could stifle the very qualities that make DAOs so powerful.

Conclusion:
As a lunarpunk and a staunch advocate for trust minimization and decentralization, I see this proposal as introducing considerable centralization risks and censorship vulnerabilities. Although there may be operational advantages, I believe the DAO should pursue solutions rooted in cryptographic guarantees and decentralized frameworks rather than reverting to the familiar (but ultimately restrictive) structures of traditional entities. For these reasons, I will be voting against this proposal on Snapshot.

4 Likes
69

I voted AGAINST the proposal in its present form.

I’m not the biggest fan of the DAO having fixed employees on hand who we always have to monitor to ensure they are doing productive work.

I prefer the current setup where organizations like entropy, ARDC or APDC make proposals with discrete responsibilities. Otherwise we risk bloat and overhiring people who then need to find work to justify their continued employment.

I am also in favor of the Arbitrum Foundation expanding its ambit rather than setting up a new entity. For example, earmarking funds from any approved grant programs by the DAO for the AF to do M&E after its completion should become a standard.

As it stands, a dedicated OpCo has too high a risk of becoming a slush fund for those involved to have a good time with their friends. More targeted proposals over something as broad as OpCo is what i prefer.

6 Likes
70

I don’t think this is the right direction for the DAO. I really appreciate what the OpCo is trying to achieve and I agree with its aims, but there are leaner, more decentralized ways of achieving these objectives. I hope we continue to work on finding them, but this is a step in the wrong direction in my opinion.

1 Like
71

I appreciate Entropy’s efforts wranglign cats and advancing a detailed proposal.

I’m voting Against this proposal as: TLDR the purpose outlined seems to contradict the design (details to follow)

  • the anchored budget for the CEO (aka chief chaos officer) is anchored as what a mid-large corporate executive would earn, alas here we’re talking of an OpCo, which should have a more focused scope (there is no management of hundreds or even thousands of employees, the strategy is still set by the DAO in theory, etc.).
  • there are no mechanisms to avoid the OpCo becoming a bottleneck (the ideal being hte OpCo as an ecosystem orchestrator, coordinator, and enabler of other iniciatives through working with the community). The only assurance provided is defaulting to the DAO governance which is an inssuficient mechanism.
  • 600k to setup the entity is excessive. We have scoped setting a Cayman Company for our needs for 20k for year 1 not counting legals nor director. Add an extra 10-15k for a professional director. And ok, let’s add legal consultation for 50k. We’re at about 100k if we’re making this more complicated. Say we increase the scope futher… 200k and then are being charged premium because Arbitrum is a big brand so 300k. How do we get to 600k? GCP is setup to manage 200mn, here we’re talking a 10th of that. So I’m a bit lost about what’s being considered here. Transparency would be reassuring.
  • Why can’t the Foundation cover for some of the mentioned needs? This is more of a clarification question as my understanding of the legal constraints or otherwise direction of the foundation is limited at this point.

We encourage Entropy to conside these points and revise the proposal before a Tally vote. We’ll reconsider our position if reassurance can be provided towards making the OpCo an enabler for an open platform as opposed to a centralisation chockepoint.

Setting up multiple, lower cost and more targetted operational vehicles would be preferred IMO. These could have a single legal wraper and centralised compliance, etc. to reduce costs, but I don’t see why we need such an expensive and top down centralised entity with such a broad mandate.

3 Likes
72

We are voting for OpCo because it will help the DAO execute plans more effectively by creating a structured way to hire contributors and manage projects. This will reduce delays and make it easier to keep important programs running smoothly. OpCo will also give the DAO flexibility to address challenges and take advantage of opportunities as they arise.

73

Thank you for the proposal, Entropy.

After carefully reviewing the proposal and the multiple revisions, I have decided to vote “FOR” the creation of the OpCo in snapshot. I am convinced that this initiative will bring significantly more benefits to the DAO than drawbacks.

I would like to go through some key points and share my thoughts on each:

High Costs: From my perspective, the costs are negligible for a DAO of this size. Any company has operating expenses, and if we want ARB to continue thriving and moving forward rapidly, we must invest where it is necessary. Attracting and retaining top-tier talent is not cheap. I also want to thank Entropy for listening to the community and reducing the budget to 22M ARB.

Decentralization: While it is true that creating a traditional entity introduces a new attack vector, this is not the time to sacrifice efficiency for decentralization maximalism. We need to focus on growth, innovation, and ensuring adoption. After 30 months, we can always reassess and explore more distributed operations if needed.

Lastly, I want to emphasize the importance of ensuring that all three OAT members are completely free from any conflicts of interest as they will be crucial to maintain the correct balance.

74

Im totally in favor because It is true, it is of utmost importance that Arbitrum DAO maintains a decentralized, bottom-up system to promote new projects, DAO contributors, and establish strategies, including the creation and direction of the DAO’s vision, mission, and purpose, as well as approaches to achieve objectives and decision-making… And we need the OpCo to work with the DAO…this will definitely save time and bring a lot of benefits

1 Like
75

Voting AGAINST this proposal

There are good reasons to support an operations co and I am a fan of the idea and original proposal by @dk3 but I have too many reservations for this version:

Decentraization
The proposal claims to promote decentralization but then proposes a centralized entity to control other entities and help operate all initiatives under its umbrella

While I support efficiency, this is a drastic change from the current setup that I think may be a bit too quick. I do note that the expansion woudl happen by vote so its not a vote blocker for me just a concern.

Vagueness/unclarity/ lack of clear plan
For a proposal of this magnitude, there is lack of clarity and specificity about not just the op co but specific KPIs, milestones.

The argument coudl very well be made defining such things this early on could be too early. In which case my response woudl be if its too early to specifiy specific KPIs its probably too early to be asking for 22 Million ARB

Cost
Cost should not be the main consideration for major changes that have potential to improve the DAO , but 22 Million ARB makes this a much tougher proposal to approve. The cost does not seem entirely justified in my opinion as it seems compensation heavy for the operators of the Opco.

Overhead
The Opco claims to improve efficiency of the organization – by adding another overseeing organization. I’m not saying this won’t work but combined with the centralization of power and need for additional oversight of the opco im not entirely convinced it will truly lead to more efficiency.

Massive proposal
The biggest issue I have isnt that this is a bad idea but that it is simply a massive proposal that coudl stand to be cut down either in scope, or split into milestones. In software development this is “waterfall” as opposed to agile or iterative development, and without a testing or prototype phase.

Feedback:
I dont think the proposal is totally without merit, its true proejcts move faster with some centralization. But I would want to see an idea like this either proposed with an MVP first to validate the idea - and then scaled up,

or rolled out in phases with funding released upon successful completion of milestones.

3 Likes
76

Thank you for this proposal @Entropy. I am voting FOR it as I believe the Arbitrum DAO should be responsible for setting the Vision, while the OpCo should focus on executing it with clear roles and responsibilities. The DAO should not need to vote on minor tasks where the OpCo is accountable.

However, I share concerns regarding the budget, which I find oversized. Like many other Delegates, I would prefer to see it reviewed and reduced, particularly for the top positions within the OpCo. The proposed compensation for these roles appears misaligned with industry standards and seems excessively high.

I believe the OpCo should initially operate with a lean budget as a testing phase before gradually expanding its scope. Taking steps in this direction would strengthen my confidence and confirm my vote on Tally

77

I voted FOR. I believe that this is something needed within ArbitrumDAO to help us to move in the right direction.

That being said, I think that the proposal needs improvements, especially in what success will look like and what is the mandate we expect it to fulfil. I have high hopes that the OP will take the collective feedback and present a new iteration with extra structure for the Tally proposal.

78

I agree with you when you say "is a massive proposal that could stand to be cut down either in scope, or split into milestones. and should be test in smaller quantity or like you say make a prototype phase… that could also be arrange, … but what do you mean when you say: “The proposal claims to promote decentralization but then proposes a centralized entity to control other entities and help operate all initiatives under its umbrella” …???

79

As in @web3citizenxyz representation, voting "Against" in this proposal. Below the rationale:

1 Like
80

Thank you for the effort that @Entropy and the team put into answering questions, adjusting budgets, and providing a brief summary of the progress in the governance call. I would also like to thank @Maets23 for presenting us with the most relevant information and with the most discussion in SimScore Notion – The all-in-one workspace for your notes, tasks, wikis, and databases., it is undoubtedly a very useful tool for identifying the most relevant aspects of the proposals.

I have decided to vote against this proposal on Snapshot for the following reasons:

Complexity of governance:

While the participation of new users in the forum has been increasing, the attendance of new users in the call has also increased by 15% each month, which tells us about a scenario with a greater number of requests (proposals) that strengthen the DAO. The importance of an entity like OpCo for project management will be necessary but not at this time. Centralizing the entity can lend itself to favoritism regarding who obtains new contracts and which projects are given more focus.

Budgetary transparency:

I understand that the budget mentioned is an approximation of the estimate based on the number of staff who will be supporting this initiative from the start. However, not knowing the authors who are going to carry out the activities raises doubts about whether these people are sufficiently qualified to perform in their area. It is also mentioned that there will be a variation in salaries if there is compliance with indicators, but these indicators have not yet been mentioned or detailed for either OpCo or OAT.

I consider it to be a well-intentioned proposal and that what is sought is order, support, and to make the most of the team’s expertise to continue building on Arbitrum. I believe that operations could be sought that do not necessarily have to be centralized, but rather audited by entities with a proven track record of teamwork.

I look forward to the modifications that this proposal will make before moving on to Tally for voting.

1 Like
81

the proposal starts out focusing on ecosystem support and financial management which are not operated on currently, but has provisions to easily expand its scope, and if you look at the size of the proposal (22M ARB) and the compensation going to the staff, it is designed to do so.

1 Like