Thanks for putting together this proposal. I appreciate the thorough analysis and agree with TMC’s recommendation: YES on the Stablecoin Allocation and NO on the ARB Allocation.
Why I support the Stablecoin Allocation:
- Converting 15M ARB into stablecoins, although not the most perfectly timed move given recent price action, is a solid move to start building up a financial cushion for the DAO. Having some stablecoins on hand is important to make sure the DAO can stay afloat during rough markets (i.e. build a treasury that will last 2-4 years even if the entire market collapses by 90% and stays there for some time).
- We all know how long these proposals can take to get written, voted on, and implemented. Waiting around for a perfect market scenario isn’t always practical—especially if that moment never arrives. It’s smarter to take some steps now and put the DAO in a safer position.
Some suggestions for future Stablecoin diversifications:
- Many projects tend to buyback native tokens heavily at peak prices and diversify at the bottom. We should aim to do the opposite: build up stablecoins when things are going great and do nothing (or potentially stock up on ARB) when markets are weak.
- I’d love to see the DAO pre-approve a high-level strategy and pick a couple of reliable providers to implement it, e.g. identify how much the DAO needs for 2-4 years of runway, diversify up to that amount when ARB market cap is above fair value; halt diversification efforts (or buyback ARB) when market cap is below fair value. That way, we don’t need to spin up an entire new proposal every time we sense it might be smart to diversify, which will help us act faster when the market is hot for us to sell ARB into.
Why I don’t support the ARB Allocation deployment:
- Even if we can generate 10–30% returns with DeFi strategies, service providers take a chunk in fees, so even if the yields are decent, they can shrink pretty quickly.
- I don’t see the DAO treasury as a hedge fund or investment pool. In my view, we can generate far higher returns by investing in things that allow us to control our own destiny—investing in people (contributors), marketing, growth initiatives, and acquisitions. The returns from making Arbitrum better and more widely used will be far lower risk and higher upside than the returns generated by financial assets.
- The other issue with handing off ARB in the treasury to service providers for yield generation is that it can distract us from our main goals. We should keep our eyes on shipping products and growing the ecosystem rather than drifting our focus into hedge-fund territory (which benefits service providers at the expense of tokenholders).