Pilot Phase: M&A for Arbitrum DAO

[Non-Constitutional] Pilot Phase: M&A for Arbitrum DAO


Hi all, after the first kick-off in Denver and 6 weeks of running the Arbitrum M&A Working Group where we focused on developing an initial entity and operational structure for a potential M&A unit, formed an initial view on target selection, and aligned with interested parties, this proposal constitutes a detailed view on the pilot phase we intend to conduct over the next eight weeks.

For this 8-week pilot phase proposal, we would like to get your view as key delegates and stakeholders in the Arbitrum DAO. Besides contribution to this thread, we will reach out individually to schedule 1-on-1 feedback/calls.

As we have already discussed the M&A proposal, including the pilot phase, for two weeks, we plan to submit the pilot phase for a Snapshot vote soon. This is aimed at accelerating the feedback process, given that there is already a substantial group of high-context voters in the DAO.



This pilot phase proposal is the next step toward the Arbitrum M&A proposal which outlines the opportunity for Arbitrum DAO to form an M&A Unit focused on identifying and executing on M&A opportunities.

With the M&A Proposal, we aim to enable the Arbitrum DAO to utilize M&A activities as a key growth driver for the Arbitrum ecosystem and to help the DAO expand non-organically through acquisition opportunities that are not accessible to competing ecosystems.

For ease of overview, this thread is merely focused on the pilot phase with the aim to gain conviction on the strategic opportunity and alignment on target areas. Further granular details on the operational processes and structure you can find in the Arbitrum M&A Core Proposal.

Edit 17/05: The M&A proposal works with the ambition in mind to be plugged into existing structures of Arbitrum DAO. Should there be an overarching initiative that combines different elements of what we are proposing we are open to make it part of a larger structure and work under the premise to make our learnings usable for whatever structure there will be.

Pilot phase

The 8-week pilot phase is designed to provide the DAO with sufficient information to make an informed go/no-go decision regarding the further operationalization of the M&A unit and its funding requirements. It is the natural progression of our 6 weeks Working Group sprint to develop an initial structure of the M&A unit.

In addition to conducting an in-depth strategy study on the value upside of M&A, analyzing strategic target areas, aligning them with key stakeholders (both online and at the GovHack in Brussels), and providing exemplary analyses on targets, the pilot phase should serve as a facilitated platform for in-depth discussions based on data rather than opinions.


I. Why Pilot Phase & Expected Outcomes
II. Work Packages & Deliverables
III. Team and Budget
IV. Next Steps

I. Why Pilot Phase & Expected Outcomes

Why conducting a pilot phase?

  • Operating an M&A unit for Arbitrum involves significant complexity and high potential. Not only is it a first of its kind undertaking with precedent potential for the space, it is a multi-faceted complex undertaking that involves high capital needs.
  • Thus, we do not want to rush it and take decisions or even ask for funding for such a structure prematurely.
  • Based on detailed feedback from the last six weeks, there’s apparent consensus on conducting a pilot phase to analyze key themes thoroughly before moving forward with the operationalization of the structure.
  • We’ve expanded the scope of our initial pilot phase proposal significantly, at no additional cost to the DAO, to include valuable elements such as exploring strategic target areas, which are beneficial across the DAO even beyond M&A considerations.

Expected Outcomes

The dedicated goals of the pilot phase are the following:

  1. Equip the DAO with sufficient knowledge to make an informed decision about the operationalization of the fund.
  2. Align the DAO on strategic target areas by providing strategic analysis and coordinating key delegates and stakeholders.
  3. Provide an orchestrated platform for discussion of the efforts over an extended period of time to further sharpen the edges.

II. Work Packages and Deliverables

The pilot phase (as detailed in the proposal) will entail an 8-week sprint structured into 3 work packages and underlying deliverables to:

1. Analysis of M&A value upside for Arbitrum DAO
  • Arbitrum M&A value upside analysis, incl. benchmarking for the DAO
  • Assessment of tactical importance of M&A for the DAO, incl. activities that M&A will enable the DAO to engage in
  • Impact analyses of determined target areas
2. Development of strategic areas for Arbitrum DAO supported by in-depth analyses, incl. alignment of target areas with key stakeholders in the DAO
  • In-depth strategic analyses of target areas, incl. financial and strategic upside to the Arbitrum ecosystem
  • Facilitating interactions across the DAO to present results of analyses and align stakeholders. Key part of these will be held at the GovHack in EthCC.
3. Analyses of target examples and presentation to the DAO
  • Exemplary target identification on one target area to provide the DAO with a better understanding of what it would mean to have the M&A Mgmt Unit operate
  • Target analysis and example of outside-in due diligence process
  • Integration options per target in context of Arbitrum DAO

The insights from the analyses will be condensed into an assessment report to be presented to the DAO.

IV. Team and Budget


The initiative will be led by a dedicated team from Areta.
We are the leading independent crypto-native investment bank specializing in M&A and complex financial transactions for some of the leading ecosystems in the crypto space.
We bring deep transaction expertise, leveraging our experience from prior careers at Blackstone and JPMorgan, which helped us lead complex transactions like the first acquisition of Coingecko or the sale of Solscan to Etherscan.
We have a long-term vision for Arbitrum DAO and our governance team has been long-time contributors to Arbitrum’s Initiatives. Relevant experiences include leading workstreams in the ArbitrumDAO Procurement Committee or initiating and leading the Uniswap-Arbitrum Grant Program.


  • Operational budget: Minimal budget to cover cost for a lean team conducting the execution of outlined work packages: $25k ARB / month
  • Access to Data Providers/Research Platforms: $2k in ARB (remaining budget to be refunded to the DAO)

V. Next Steps

As we have already discussed the M&A proposal, including the pilot phase, for two weeks, we plan to submit the pilot phase for a Snapshot vote as soon as we have gathered sufficient engagement, ideally by the end of the week. This slightly accelerated feedback process is due to the fact that there is already a substantial group of high-context voters in the DAO.

Appreciate any further feedback on and off the forum!


@krst, @AlexLumley, @coinflip, @jacobpphillips, @hiringdevs.eth, @JoJo, @Sinkas, @MattOnChain, @Djinn

Helpful links:

  • M&A Core Proposal: here
  • M&A Working Group Progress: here
  • M&A Telegram Group: here
  • Easy-to-digest Video Summary (s/o to Sinkas): here

I didn’t see what I thought was important for the purposes of this proposal.
Legal issues have previously been discussed as an important point in this proposal.
So, I would like this point to also be included in the proposal:

  • will there be some kind of separate company that will be a layer between the DAO and the acquired company,
  • or can the DAO itself own the companies?
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Hi @cp0x, thanks for taking the time to digest and pointing this out.

Being mindful that it’s not straightforward, there are two proposals online: this one, which will soon be put up for a vote, and the core M&A proposal, which will be addressed after the pilot.

The legal details are included in the core M&A proposal here.

For ease of access, here’s the excerpt clarifying the latest state:

TL;DR: The major initial legal obstacles are now out of the way. Detailed M&A-specific considerations will follow in the next phase.

Let me know if that makes sense, or if you have further questions. And thanks again for reviewing!


As we said and spoke about for almost 2 months now the whole program is complex in term of solving specific legal questions and unlocking new possibilities, unexplored for this dao, that will require a certain capital.

At this point, the pilot program can likely be what the DAO needs to understand how it would work in practice, without having too much of an hard commitment in the short term for funds and also workload. Excited to see where this initiative will be going :smile:


Thank you to the Areta team for persistently working on this topic, incorporating feedback and proposing a pilot program. As others have pointed out this pilot approach significantly derisks the complexities involved with the former approach and can offer the DAO clear insights on the need and value such a topic can offer. Hence I am supportive of this proposal.


@Bernard, It’s great to see this moving forward.

This pilot program will help to bridge any of the existing knowledge gaps on the topic and lend to a more informed decision making process for the DAO. I’m looking forward to seeing the conclusions and recommended next steps from your team.


Very excited to see Arbitrum pioneer M&A this is a really smart strategy to bring value to the DAO. Respect to @Bernard, team and all those contributing in the working group. The quality of your work is evident in these updates here on the Forum and working group’s conduct and output.
Fully support this initiative.

Happy to have played a role with GovHack ETHDenver to host those early conversations and am here to help facilitate whatever you need to move things forward on the lead-up to and IRL at GovHack ETHcc Brussels in July, let’s make it happen.


I’m excited to see this initiative reach the proposal phase and think this pilot program will help solve a lot of the unanswered questions around execution.


Excited to see this initiative progress. M&A in the industry is heating up with Mirror and MintFun getting acquired over the last week and putting in the initial work of this Pilot Phase is essential to prepare Arbitrum for a structured and comprehensive M&A rollout. Some areas that I find extremely exciting to see the development in:

  • Assessing the value add of targets
  • Target niches/verticals
  • Timing (with dramatic differences in both public and private valuations between bull and bear markets, ensuring a systematic and grounded approach towards M&A is instrumental)

For some individual context, the weekly sprint calls leading up to this proposal were very helpful in our eyes. We think seeing the scope and outline shift over the last couple of months into something cohesive was great and should be a standard for future initiatives.

From a budget standpoint, would it make more sense to just say $50k for the pilot phase? It is $25k/month and if its going to be 2 months, might make sense to just use total budget?


Based on my response above, voting “for” on snapshot.

  • The whole initiative has a merit
  • We are solving for how to buy stuff, legal approach, ownership and so on
  • in any business you don’t want to reinvent the wheel every day, sometimes you just go out there and buy what you need
  • while I have a lot of trust and faith in both bernard, sid and areta, I understand the concerns of the DAO and i think the pilot program is effectively a very good answer to understanding how this will pan out at scale plus what we can all expect.

Nice job


I vote IN FAVOR of this proposal.

Any effort that under a model of experimentation, clarity and a controlled environment seeks profit and net income efforts for the DAO is something I agree with.

Creating steps in the short term for the sustainability of this ecosystem in the long term it’s important.


Just voted FOR.

This is a good pilot program to experiment with a powerful investment vehicle that can drive significant value for the DAO.

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I voted in favor of the proposal. This pilot phase is essential to prepare the DAO for a further possible operationalization of the M&A unit in a more structured way.
I look forward to seeing the results and the follow-ups.

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Here’s why the UADP voted FOR this proposal:

Firstly, the approach that Areta has taken in terms of introducing this topic to the Arbitrum DAO was done quite well. From an outsider’s perspective, an M&A unit for a DAO can seem rather outlandish–and in a way it is, largely because this is unexplored territory. Therefore, easing the DAO to this idea via a 6-week ideation phase, and now, if this Snapshot passes, a more constructive research phase, is the right way to approach this initiative. Having been on a handful of these calls, it’s been helpful to hear Areta’s thought process, along with their team’s willingness to incorporate delegate feedback.

The general merits outlined by Bernard and team are clear. Most previous M&A deals are led directly by a legal entity separate from the DAO, like a Labs or Foundation. However, as an ecosystem matures and adopts a goal of progressive decentralization, it’s logical that the DAO itself becomes responsible for creating and managing strategic synergies via talent and technology acquisitions. For these reasons, our team is in support of approving this pilot phase.

Even if this group isn’t fully formalized after the pilot phase, it’s important that this sort of research is conducted. The lack of standardization and exploration into unique forms of valuation and legal structures in crypto can make this industry quite messy, deterring many traditional players from entering the space. Establishing these working groups will hopefully allow us to develop streamlined and systematic mechanisms for advancing DAOs. Piggybacking on traditional models like the mentioned “build vs buy” and shifting that over to a “fork vs build”, for instance, is one instance that highlights this thought process.


We decided to vote “For” this proposal because it provides a strategic, controlled approach to mergers and acquisitions for the DAO, aiming to enhance profitability and sustainability. This initiative, underpinned by experimentation and clarity, will help establish long-term viable practices for growth. The trusted leadership of Bernard, Sid, and Areta and the methodical framework of this pilot program ensure that we can effectively scale our operations while maintaining prudent governance.

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This is a personal comment and doesn’t necessarily reflect the views of the L2BEAT governance team.

I was reading through the pilot phase proposal as well as the core M&A proposal and the notes from the working group meetings and I just had to take a minute to say congratulations to @Bernard for the excellent ‘admin’ work. It’s a small thing by comparison, but reading through everything has been a breeze thanks to the meticulous reporting from Bernard, as well as the good formatting of the posts. I hope to see that kind of considerate approach more broadly in the DAO.


The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking, and ideation of the two.

We are voting FOR this proposal in the temperature check.

Having read both the core and the pilot M&A proposals, and having discussed it in depth with multiple stakeholders, we’re not quite sure whether there are enough M&A opportunities for the DAO to execute on the scale outlined in the original proposal.

For M&A deals to be executed properly, the DAO should have the necessary business and legal structures set in place. While some initiatives are working to that end (e.g. the OpCo and the venture capital entity, etc.), none of them are yet established.

We are not entirely sure how much potential an M&A unit in the DAO has, but we understand that the purpose of the pilot proposal is to help us gauge the potential and better understand any existing possibilities in the broader landscape.

Additionally, we recognize and appreciate the amount of work put in so far by Bernard and the rest of the working group and we’d like to see it taken one step further and hopefully get some tangible, actionable results out of that work. Therefore, we’ll be voting in favor of the pilot phase proposal.

Having said that, we want to stress that our support here does not immediately translate to future support in pursuing the core M&A proposal. When that time comes, we’ll be assessing that proposal separately on its own merit, based on the learnings from the pilot phase, as well as the status of the DAO at that time.

Lastly, we’d like to express our interest in being involved in the process of developing strategic areas of interest by way of providing feedback and assisting in the alignment of the proposal with the DAO.


We support the M&A Pilot Program proposal as a prudent way to explore M&A opportunities without excessive upfront commitment. This trial phase will provide valuable insights before considering the broader core M&A proposal. For this reason, we are voting FOR this proposal at the Snapshot stage.

Blockworks Research will be voting FOR this proposal on Snapshot.

With the DAO quickly maturing and beginning to explore new initiatives, potentially expanding into the M&A vertical makes a lot of sense to us. The pilot phase appears to be a logical solution to explore the suitability further without overcommitting, ideally helping the DAO better understand the associated complexities to make a final decision on initiating a full program.

Edit (May 23rd, 2024): As nothing has materially changed since the proposal passed Snapshot, we will vote FOR the proposal on Tally.