This SOS proposal includes objectives from all SOS submissions which had the most overlap and were also favored by other stakeholders, including delegates and representatives of Arbitrum Aligned Entities (AAEs).
The objectives in this submission directly support Arbitrum’s long-term vision of being home of the universal shift onchain, especially in areas such as user acquisition and distribution (Objective 1), onboarding institutions (Objective 2), and expanding into verticals beyond DeFi (Objective 5).
At the same time, these objectives uphold Arbitrum’s purpose of defending and guiding the ecosystem by maintaining leadership in DeFi (Objective 4), operating efficiently (Objective 6), bringing utility to the ARB token (Objective 7), and managing the DAO treasury responsibly (Objective 8).
Lastly, the proposal aligns with Arbitrum’s mission of empowering people with the freedom to build their best onchain world, as shown in our focus on supporting builders (Objective 3) and exploring new verticals (Objective 5).
Objective 1: Arbitrum has best-in-class distribution and user acquisition channels
Length: 2-year objective
To remain competitive and drive sustained onchain growth, Arbitrum must have best-in-class distribution and user acquisition channels.
Effective distribution means making it easy for users to onboard, engage, and stay active, which in turn increases liquidity and attracts builders.
Most users don’t understand protocol level differences between blockchains. They want fast transactions, low fees, and simple and intuitive user experience, especially on mobile.
That’s why improving Arbitrum’s mobile experience is crucial. This means integrating Arbitrum into existing mobile apps, including non-crypto apps. In some cases, users wouldn’t even need to know a blockchain is being used in the background.
We should also explore the possibility of building our own Arbitrum-dedicated mobile wallet. This would allow us to own a distribution channel (and reduce dependence on third-party platforms), as well as control the user experience on that channel.
Beyond mobile, we should explore distribution through social media and chat platforms. This includes awareness and engagement campaigns on social media, as well as integrating Arbitrum into chat apps and social networks using AI agents and mini apps. These agents could help users send and swap tokens, use DeFi, and even do things like copy trading, all within familiar platforms.
We should also consider incentive programs similar to DIP, but focused on awareness and engagement. These could retroactively reward those who meaningfully contribute to growing Arbitrum’s presence and bringing new users to its dApps.
Finally, we should not forget other user acquisition channels such as onboarding people at in-person events and conferences, with more focus being put into non-crypto events than it was so far. We should research and test our various distribution and user acquisition channels to see which ones work best.
Key results:
KR 1.1: Arbitrum is easily accessible via (or being used in the background of) many mobile apps, through user-friendly interfaces that provide simple user onboarding.
KR 1.2: Many users interact with Arbitrum through social media and chat apps, using AI agents and mini apps.
KR 1.3: Arbitrum has improved awareness across social media using various approaches (e.g. incentives programs etc.)
KR 1.4: Arbitrum has solid user acquisition channels which bring new users to existing dApps on Arbitrum.
Risks:
- Failing to build sustainable distribution channels which can work even without huge capital expenditure.
- Too big reliance on third-party controlled distribution channels which can be shut down without much notice, or could switch allegiance to a competitor.
- Moving too slow in the very competitive and rapidly changing user acquisition space.
Non-capital resources:
- Software development
- UX specialists
- Specialists in marketing, user acquisition, and communication
- Specialists in the social media space (both distributon channels as well as tech)
Objective 2: Arbitrum is the number one choice for enterprises
Length: 2-year objective
With a friendlier regulatory environment, more traditional institutions (especially in finance) are seriously exploring blockchain integrations. This creates a major opportunity for Arbitrum to position itself as the go-to solution for enterprises looking to enter the onchain world.
Institutions could integrate Arbitrum-based DeFi protocols to offer their clients yield-earning opportunities or enable direct onchain crypto trading without relying on centralized exchanges. Beyond integrations, they could also launch their own onchain products in areas like real-world assets (RWAs), remittances, cross-border payments, and tokenized credit instruments.
To make this happen, we should actively engage with institutions and get them onboarded to Arbitrum One.
This includes organizing enterprise-focused hackathons, networking at non-crypto conferences, and leveraging the personal connections that many contributors already have from previous roles in large institutions.
These efforts will help us build trust, showcase what Arbitrum can offer, and bring more institutional activity onchain.
Key results:
KR 2.1: Efforts of all entities (AAEs, working groups) within Arbitrum DAO in institutional business development are properly coordinated to increase efficiency and prevent collisions.
KR 2.2.: At least five enterprises integrated Arbitrum-based dApps or protocols into their businesses.
KR 2.3: At least two institutions launched their own products on Arbitrum.
Risks:
- Moving too slow, because there’s too much time spent on coordinating, and too little on doing actual business development.
- Not having the right products for institutions to use, or not being able to translate the needs of institutions to requests for proposals for builders.
Non-capital resources:
- Business development specialists.
- People with working experience and connections in big enterprises, especially TradFi.
- Time spent networking and presenting at events where institutions are regular visitors (which is mostly non-crypto events and conferences).
Objective 3: Arbitrum is the home of builders and innovation
Length: 2-year objective
The number one incentive that attracts builders is a thriving ecosystem with active users. Because builders want to build where users are.
But beyond user activity, we also need to support builders with the right infrastructure and resources. This includes things like audit programs, angel investor networks, grants, venture capital, incubators and accelerators, educational materials, and help with marketing and engagement.
While many crypto ecosystems focus on attracting builders from other chains, Arbitrum should also prioritize bringing in builders from outside the crypto space. New web3 developers with fresh perspectives can lead to new use cases and innovation.
Some builders have also expressed in their feedback a desire for a clear request-for-proposals (RFP) list, to help them understand what’s most needed on Arbitrum.
In addition to attracting more developers to build dApps, we should also find ways to grow the number of contributors working directly on Arbitrum’s core infrastructure.
Empowering builders, whether new to crypto or long-time contributors, will help cement Arbitrum’s position as the leading ecosystem for innovation.
Key results:
KR 3.1: Builder support programs such as an audit program, angel investor program, grants, venture capital, incubator/accelerator programs, education, marketing/engagement support, etc.
KR 3.2: An RFP list with ideas for builders, evaluated and edited on a quarterly basis.
KR 3.3: Increased number of builders on Arbitrum coming directly from non-crypto backgrounds.
KR 3.4: Increased number of contributors to the Arbitrum core stack.
Risks:
- Spending time and money on builder education, and then they leave to a competing ecosystem.
- If we disregard distribution and user acquisition, builders may face a lack of users once they deploy on Arbitrum.
Non-capital resources:
- Educational material and workshops.
- Attending and networking at non-crypto developer events and conferences.
- Post-launch support for builders, especially in marketing and user acquisition.
Objective 4: DeFi is the core pillar of Arbitrum
Length: 2-year objective
Arbitrum One has established itself as one of the top blockchains in terms of liquidity, with over $10 billion in TVL. A large portion of this liquidity is tied to DeFi applications, making DeFi a core pillar of Arbitrum’s ecosystem.
Becoming a leader in DeFi is not easy. Many blockchains try to attract liquidity through aggressive incentive programs, but often struggle to retain it once the rewards dry up.
Arbitrum One, on the other hand, has lots of sticky liquidity even without incentive programs. But this position should not be taken for granted. To make sure Arbitrum remains a leader in DeFi, we must work closely with existing DeFi protocols and actively bring new ones to the platform.
By staying proactive in supporting DeFi development, we can reinforce Arbitrum’s position as the go-to blockchain for decentralized finance. This includes building relationships with DeFi projects, innovating new financial products, and continuing to attract liquidity from a diverse range of sources.
Key results:
KR 4.1: Arbitrum One is Ethereum’s most attractive liquidity venue for trading popular assets such as ETH, BTC, and stablecoins.
KR 4.2: Arbitrum One is the leading blockchain for remittances and cross-border payments.
KR 4.3: Arbitrum has a diverse ecosystem of perpetuals, leverage-based products, and other innovative DeFi products.
KR 4.4: Arbitrum One reaches $30B in TVL.
KR 4.5: Arbitrum One is the leader in tokenized real-world assets, with $1B+ RWA TVL reached.
Risks:
- Spending capital on attracting liquidity, which then leaves after incentives end.
- Inefficient allocation of capital.
Non-capital resources:
- Specialist in finance, especially in DeFi products and yield opportunities.
- Risk assessment specialists.
Objective 5: Arbitrum is a leader in other (non-DeFi) verticals
Length: 2-year objective
While DeFi remains Arbitrum’s core strength, there is a clear opportunity to become a leader in other verticals as well. The DAO has already made a strong commitment to gaming through the creation of the GCP Foundation, and this vertical should continue to be supported.
Beyond gaming, other promising areas include DePIN, Social, AI, trusted execution environments (TEE), collab tools, supply chain, logistics, enterprise software, and others. These verticals are still emerging, and it’s not yet clear which will have the strongest fit with Arbitrum’s ecosystem.
The first step should be to research these verticals, engage with promising teams and projects, analyze the market landscape, and evaluate where Arbitrum can offer the most value. This exploration phase will help identify which areas to prioritize. Once narrowed down, targeted initiatives such as grant programs or requests for proposals can be launched to support growth in the selected verticals.
Key results:
KR 5.1: Crypto verticals are properly researched (and publicly discussed with delegates) by a designated AAE or a working group, with the most promising verticals narrowed down.
KR 5.2: Selected verticals are pursued with various initiatives, e.g. grant programs or requests for proposals.
Risks:
- Focusing on too many verticals and spreading ourselves thin.
- Failing to identify the right verticals to focus on in the upcoming couple of years.
Non-capital resources:
- People with experiences from various verticals.
- Research specialists.
Objective 6: Arbitrum DAO operates with efficiency
Length: 1-year objective
The new vision proposed by the Arbitrum Foundation brings a new operational model centered around Arbitrum Aligned Entities (AAEs). These entities will be responsible for carrying out the DAO’s strategy and executing proposals approved by governance. Initially we’ll have five AAEs, but more may be created over time.
To support this evolving structure, the DAO needs clear frameworks and guidelines for how new AAEs and working groups are created, operated, and eventually sunset if necessary. There may also be cases where none of the existing AAEs can take on a task. In those situations, the DAO should retain the ability to form ad hoc working groups with limited scope and duration to fill the gap.
To efficiently oversee the work of both AAEs and working groups, the DAO needs a framework and guidelines for how AAEs and working groups report progress, including how to handle sensitive information without compromising negotiations or deals. With strong governance practices in place, the DAO can operate more efficiently, reduce bottlenecks, and make faster, more coordinated progress.
Key results:
KR 6.1: A framework and guidelines for launching new AAEs and working groups, as well as ways to properly shut them down.
KR 6.2: A framework for overseeing the work of AAEs and working groups.
KR 6.3: Quarterly strategic planning sessions with leads from all DAO-funded programs and AAEs to synchronize goals, budgets, and execution timelines.
KR 6.4: Research on alternative decision-making systems (e.g. futarchy, quadratic voting, reputation system, etc.)
KR 6.5: The majority of objectives and key results set in the SOS proposal are successfully achieved after being worked on by AAEs and working groups.
Risks:
- The DAO becomes more reliant on specific contributors.
- Optimizing and standardizing the new operational structure will take some time.
- Transforming vendors into AAEs for verticals that require high specialization might be difficult.
Non-capital resources:
- People with experience in setting up organizational structures, frameworks, and guidelines.
- Active and sustained participation of delegates and contributors.
- Specialists in alternative decision-making systems.
Objective 7: ARB token has additional premium and utility
Length: 2-year objective
The ARB token plays a crucial role in Arbitrum DAO, but its declining price poses potential security risks for the governance. To strengthen the token’s value and encourage greater participation, it’s important to explore ways to give it a premium and increase its utility.
This objective focuses on researching new approaches to enhance the ARB token’s usefulness and attractiveness to holders. It also aims to identify strategies to increase participation in DAO governance, especially when it comes to reaching voting quorums.
Since this objective involves many unknowns, the emphasis should be on conducting thorough research that can lead to actionable solutions down the line.
Key results:
KR 7.1: Research on how to give more premium and utility to ARB token.
KR 7.2: ARB liquidity is increased in DEX pool pairs, lending pools, etc.
KR 7.3: Research on how to increase participation in DAO voting.
KR 7.4: Increase in the average voting participation in Arbitrum DAO proposals.
Risks:
- Inefficient capital allocation.
Non-capital resources:
- A group of specialists in areas such as tokenomics, governance, and finance.
Objective 8: Arbitrum DAO treasury is well managed and has multiple revenue streams
Length: 2-year objective
The Arbitrum treasury currently benefits from a few key revenue streams, primarily from Timeboost and other financial investments like STEP and the Treasury Management program.
To ensure long-term sustainability, it’s important to not only continue and expand these initiatives but also explore additional sources of revenue.
Our objective is to achieve compounded growth through multiple, diverse revenue streams that strengthen the treasury’s position. By doing so, the DAO can better support its ongoing operations and strategic goals with a steady and growing financial foundation.
Key results:
KR 8.1: Set short- and long-term profitability targets and establish annual budgets.
KR 8.2: Consensus on target portfolio composition and management strategies.
KR 8.3: Standardized process for converting and managing ARB and related assets allocated as working capital.
KR 8.4: Research on promising new revenue streams.
KR 8.5: Decision on when to start using revenue to cover expenses.
Risks:
- Smart contract risks
- Custody risk
- Inefficient allocation of capital where management fees exceed yield returns
Non-capital resources:
- Specialist in finance, especially in DeFi products and yield opportunities.
- Risk assessment specialists.
