STEP 2 Committee Preferred Allocations

DAO Programs & Initiatives STEP Applications & Updates
1

STEP 2 Committee Preferred Allocations

Following the completion of the allocations made in STEP 1, in February 2025 the Arbitrum DAO passed a proposal for the diversification of an additional 35 million ARB into stable, liquid, and yield bearing assets with the STEP 2 proposal.

We thank all applicants for their submissions and thoughtful participation in the process. The candidate pool was extremely robust, with over 50 applications including those from STEP 1.

The total value of the allocated ARB, still awaiting diversification, is currently ~$10.66M as of April 20th, 2025. The committee appointed to examine applications has come out with its preference for allocation and Entropy has been tasked to post on the committee’s behalf. After review of each application, the final recommendations are as follows (denominated as a percentage of the total budget);

WisdomTree WTGXX: 30%

Spiko USTBL: 35%

Franklin Templeton FOBXX (BENJI): 35%

Some general thoughts on the program:

  • In order to achieve the most value out of the allocations and the potential growth value it comes with, making sure a sufficient dollar denominated value is allocated to each product is important. Spreading the allocation too thin would likely result in less symbiotic value long-term.
  • There is an abundance of amazing options for T-Bill exposure on Arbitrum. The committee had to think further than just fees, bankruptcy remoteness, and domicile and into opinions on the ability for a product to achieve organic traction.
  • It will be extremely important for Arbitrum to create outlets for RWAs. Asset manager compliance, which is generally in charge of adding eligible addresses to the transfer function whitelist for an RWA, makes this extremely difficult. That said, this vertical is what will long-term set Arbitrum apart in its competitive environment.
  • The committee aimed to strike the right balance between fees, existing live TVL, risk-adjusted setups, and community involvement.

Applicants who are not selected will have an opportunity to reapply in the next round and are welcome to message a committee member for private feedback. As a part of the evaluation in STEP 2, the committee reevaluated the commitments made in STEP 1 with some thoughts and requests relayed privately to the issuers of the tokens.

The committee is happy to field any questions under this forum post or privately and plans to take this proposal to Snapshot for final ratification on Thursday, May 1st.

Disclaimer The information provided in this proposal is for educational and informational purposes only and does not constitute financial, legal, or tax advice. Nothing in this proposal should be interpreted as an endorsement, recommendation, or advice to engage in any specific transaction, strategy, or investment. The information is presented “as is” without any warranties of accuracy or completeness. Delegates should consult with professional advisors for specific guidance before making any financial, legal, or tax-related decisions. Use of this committee recommendation is entirely at your own risk.

5 Likes
2

As a member of the screening committee, GFX Labs wants to thank all the applicants, our colleagues on the screening committee, and also Credora for providing some additional reference material.

Arbitrum is blessed with a wealth of strong, innovative, and exciting real-world asset issuers. Even within the very competitive Treasury bill space, Arbitrum has a dominant position, and STEP serves to build up Arbitrum governance’s financial sustainability out of this abundance of strong applicants.

GFX Labs strongly recommends all candidates consider reapplying at the next STEP round when more funds become available, and are excited to see the continued growth and explosion of RWAs on Arbitrum.

1 Like
3

This a great initiative and we are happy to see it continue. We would like to know where the best dashboard or other source is to look at the STEP allocations and their performance.

4

This forum category (STEP Applications & Updates). The March report from Steakhouse can be found here.

1 Like
5

We spun up a dashboard to analyze RWA landscape holistically (see section 2 for STEP)

https://dune.com/entropy_advisors/arbitrum-rwa-case-study

4 Likes
6

Gauntlet thanks the committee for their review of the applications. We’re particularly excited to see this recent tranche of RWA providers onboarded to the Arbitrum DAO’s balance sheet and into the Arbitrum ecosystem.

1 Like
7

Update on DAO STEP II Token Conversions:

  • Over the past 2 months, the market has experienced unprecedented volatility. In light of this, the foundation has not sold any ARB tokens allocated to the DAO’s STEP program. This decision aligns with our internal treasury policy, which restricts token sales during periods of high market instability. The same standard has been applied to the DAO’s holdings to ensure consistency and prudent management.
  • The Foundation will responsibly initiate the conversion once the market condition stablizes & we will provide a further update when progress is made.
  • The DAO retains the option for us to return 35 million ARB tokens back to the DAO’s treasury if needed via a temperature check vote.
1 Like
8

I voted “FOR” this allocation and thanks the committee for their thorough due diligence. The selected issuers have a robust track record, and the even distribution among the three is a prudent choice.

Arbitrum’s Stage 1 decentralization, deep DeFi liquidity, and technical strenght make it a top contender in the RWA space, as evidenced by recent developments like Securitize and Ethena building Convergence on Arbitrum. It’s inspiring to see the DAO proactively allocating funds and collaborating with key players in this sector !

9

Thank you for the committee’s work. I approve of this proposal, and I am particularly looking forward to Arbitrum’s deployment on RAW. This channel is very necessary; the Web3 model serving Web2 assets is a logical combination.

10

I voted For this proposal.

I especially appreciate the balancing act taken between diversification of applicants and the deployment of enough value in each selected candidate to make it “worth the while”.

11

The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.

We are voting FOR this proposal in the Snapshot voting.

We trust the committee’s judgment in selecting partners for this round, given their thorough evaluation and strategic focus on stability, liquidity, and risk-adjusted setups.

Building on the success of STEP v1, which delivered strong outcomes, we believe this continued approach will strengthen Arbitrum’s long-term growth and competitive position. The committee’s focus on RWAs and overcoming compliance challenges also reflects a forward-thinking strategy to differentiate Arbitrum in the ecosystem.

12

LobbyFi’s rationale on the price and making the voting power available for sale for this proposal:

The proposal is put in place to suggest a way to allocate the funds that were already approved for usage with the STEP proposal - which we have previously commented on and which is a good example of a proposal that benefits the broader community. For this reason, the auction will be on.

The cumulated fee of the three suggested applicants amounts to ~$25k (3.2M*0.25% for WTGXX, 3.7M * 0.25% for USTBL, 3.7M * 0.2% for FOBXX). The instant buy price will be set at 10% of tha, at 1.4 ETH.

13

Voting Yes, the balance seems fine and the rest needs to be observed when live.

14

Looking ahead to the evolution of the program, i believe it would be valuable to explore a rotating or pilot framework to onboard emerging RWA projects. Allocating a small portion of the budget to test innovative solutions with potential could allow for experimentation without compromising the portfolio’s overall stability or core objectives.

Additionally, including clear KPIs, such as net yield, assets under management, or impact on on-chain liquidity, would help the community track the performance of these allocations in a more transparent and actionable way. Having visibility into this data would support more informed discussions and ongoing improvements in future DAO decisions.

Overall, solid proposal!

15

gm, I voted FOR. The selected allocations look like the best risk-adjusted setup for the current early stage of the program. Also, the dashboard is fantastic - really well done.

That said, I think it’s worth continuing to sharpen the strategy around the ultimate goals of the program:

  1. Diversify the treasury and generate risk-adjusted returns for the DAO. The choice to concentrate into just 3 providers this round makes sense to avoid spreading capital too thin - this has been nailed.

  2. Strengthen relationships with top asset issuers and encourage them to tokenize on Arbitrum first. Are we seeing meaningful movement here? What KPIs specifically are we using to track this?

  3. Support the growth of emerging RWA protocols on Arbitrum. I echo @Oni’s point. Once the committee is comfortable shifting toward higher-risk initiatives, allocating smaller amounts to early-stage protocols (for example, $1M to Estate Protocol would increase their TVL by 20%) can help improve their credibility and signal serious institutional interest.

Thanks again for all the hard work.

16

Following up on my previous vote in the relevant discussion — and given that the DAO retains the ability to return 35 million ARB to the treasury via a temp check if necessary — I will remain in favor.

17

We voted FOR, as a continuity of our initial support for the STEP 2.0.

18

I’m voting for this proposal on Snapshot, because it makes sense to spread Arbitrum’s funds into safe and reliable options that can earn steady returns. The three picks seem solid and well thought out, and I trust the committee’s review. It feels like a smart move to help Arbitrum grow and stay strong long-term.

19

I fully support this allocation preference and have voted in favor. I have complete trust in the committee, especially given the results from STEP 1 and the strong track record of the selected applications. I also appreciate the strategy behind the allocation ratios and the decision to focus resources on just three products, ensuring a more impactful approach. I look forward to following the future results of this program!

20

I voted FOR in this proposal. The allocation is well balanced and the assets chosen makes sense.