It’s great to see that important and respected ecosystem players like Karpatkey and Gauntlet are working towards the sustainability of Arbitrum’s treasury.
Overall this proposal seems to tackle several of the current issues at Arbitrum. We must strive to ensure the DAO’s long-term solvency, have discussions about ARB liquidity and pricing, and be more efficient in disbursing funds. It’s not only about being responsible but also about the message we send as a DAO to the market, it goes beyond the size of the main treasury or whether we are in a Bear or Bull market (both of which have been mentioned on several occasions as " motivations" for spending or not spending funds).
Having said this, we would like to provide some feedback:
We note that you have mentioned a negative gap of 61M but based on subsequent data the gap would be 76M, is there something we’re not seeing?
This worries us a little, we see it difficult to achieve this goal at current prices if the DAO allocates 58% of the treasury to illiquid assets as shown in the screenshot you attached.
We have noticed that there is little discussion of the financial viability of initiatives or their impact on the overall composition of the treasury, an indication that a global vision of the treasury and the various proposals that emerge is lacking. This underpins the need for “specialized actors” to ensure that a healthy and viable asset mix is maintained.
Assuming that we end up spending $1.4B in illiquid investments, this would leave less than 20% of the current treasury as “availabilities” excluding the $250M requested in this proposal:
It would be interesting to provide the STMG with some authority to act as managers/consultants (especially when discussing proposals involving large investments/erogations). Certain limits could be set on ARB distribution by field of interest to give an example, not only to preserve the desired asset mix in the treasury but also to ensure that each branch of interest for the DAO can reasonably obtain the necessary funding.
We have seen in other DAOs that when providing incentives, protocols are asked as a condition to incentivize pools that contain the governance token. Despite the (realistic) mention that liquidity is usually mercenary, but when it comes to providing liquidity to governance tokens, it generally responds to holders seeking to lower the opportunity cost of holding capital tied to that asset, so this approach perfectly meets two needs: high stickiness of TVL and greater market depth for ARB.
It would be positive if certain task forces such as the STMG were involved in the implementation of such incentive programs.
Considering that there is already a program that seeks to diversify the treasury into RWA and that Karpatkey is part of the Screening committee, it would be interesting to see how these two initiatives can generate synergies. We see STEP not only as a diversification strategy but also as a source of yield, so we believe the two initiatives are strongly linked.
With that said, we want to highlight that we strongly support a solution that moves in this direction.