I don’t believe that’s accurate; in fact, it’s the opposite of what Entropy stated for the last round:
This explanation was offered in response to complaints about the lack of Arbitrum protocols in the allocation. Accordingly, the program’s underperformance cannot be justified by an “ecosystem growth” focus.
The following reflects the views of L2BEAT’s governance team, composed of @kaereste, @Sinkas, and @Manugotsuka, and is based on their combined research, fact-checking, and ideation.
We voted AGAINST.
First, we agree that treasury assets should be allocated to generate yield and/or support ecosystem growth. However, we share other delegates’ view that the strategy remains unclear and that it is not evident how Entropy plans to utilize these assets. It is also surprising to see the underperformance of the allocations justified as “ecosystem support,” especially given that the opposite was emphasized during discussions around the previous allocation.
Furthermore, we echo other delegates’ concerns about Entropy’s lack of clear communication regarding allocations and the underlying strategy —both retrospectively and for this request. Even direct requests for additional information have gone unanswered (1, 2).
This lack of communication is concerning: the DAO lacks insight into the rationale behind key decisions. Entropy is not investing private assets; it is allocating DAO assets as a service provider to the DAO. The DAO should have full visibility into decision-making and strategy - both to provide feedback and to ensure continuity if responsibility is ever transferred to another provider. Currently, the DAO observes outcomes but not the strategy that produced them; if a new manager is appointed, we risk repeating the same mistakes.
In the past, we tentatively supported several programs and requested additional details after approval, but those details never materialized. Therefore, we are voting against this proposal.
However, we want to reiterate that this is not a vote against the idea of allocating idle funds, but rather a vote against this particular implementation proposal in the current context. We are happy to revisit our position and support similar proposals once communication with the DAO improves and more details on the strategy are provided.
We’ll be voting Abstain.
We’re supportive of putting idle ETH from the treasury to work, but the goals here aren’t clearly defined. Past ATMC deployments underperformed staking, and while the focus on ecosystem growth over yield maximization makes sense, the requirements for selecting Arbitrum protocols are unclear.
We agree that deploying ETH into onchain protocols on Arbitrum can strengthen the L2, but we’re wary of effectively kingmaking certain protocols over others, as it risks distorting market dynamics and alienating projects not chosen. If yield strategies continue to trail staking, this looks more like an ecosystem subsidy than treasury management. That’s fine if framed explicitly as growth, but without guardrails, it risks encouraging projects to lobby for allocations instead of focusing on product-market fit.
A suggestion would be to split treasury deployments into two tracks: one for maximizing risk-adjusted yield (benchmarked against staking), and another for ecosystem growth (explicitly framed as strategic subsidies with transparent criteria and guardrails). This would let the DAO evaluate treasury management and growth spending more clearly.
A number of the critiques raised here seem to focus on two points:
We believe both criticisms miss the mark and, in fact, run counter to the operational efficiency benefits that the ATMC structure was designed to deliver.
First, the yield history being cited stems from allocations that were made prior to the ATMC structure. Those allocations were heavily shaped by DAO input, with delegates explicitly requiring that Entropy prioritize ecosystem growth opportunities even when those choices came at the expense of yield and purposefully designed growth. It is not accurate to retroactively hold those outcomes against the current ATMC framework, which was created precisely to remove this type of slow, political, DAO-led allocation process.
Second, on the question of “why not just stake and earn more yield,” this frames treasury management as a false binary. In practice, yield and ecosystem growth are tradeoffs, and there are many cases where growth-aligned capital deployment through Protocol-Owned Liquidity makes far more sense than either pure staking or direct grants. For example: if a major lending market upgrade or exchange partnership earn product exclusively launching with Arbitrum requires ETH liquidity directed to a market in order to close, the DAO may be better served by deploying ETH directly at a modest APR rather than issuing a grant. The opportunity cost of 1–2% foregone yield is often far smaller than the cost of an incentive program to achieve the same result.
In terms of transparency around performance we have all of the funds tagged and tracked on a dashboard accessible to anyone (see here and here), provide regular updates on open DAO calls when appropriate, and have a dedicated thread on the forum where we post monthly updates and other relevant information to treasury management. Additionally, Entropy hosts bi-weekly office hours where anyone can join to ask questions on treasury management. We spend an exuberant amount of time each month simply providing information and remaining transparent, and as mentioned already, we cannot even move any funds without approval from the DAO-elected OAT and Arbitrum Foundation (custodian). We also scheduled a call for Thursday October 9th at 9am ET. Finally, we aim to do a better job in our reporting at segregating yield focused and growth focused allocation per the suggestions of Reverie. This is a great flag and will be addressed, our reporting will include as many details around justification as possible, though note at times NDA/private deal structures prevent it.
Finally, the governance structure itself already addresses the concern that decisions could be made unilaterally. The OAT, an elected body, serves as the check and balance. Entropy proposes allocations and will at times decide that the value of growth is worth lower risk-adjusted yield; the OAT reviews, approves, or rejects them. This is the mechanism through which the DAO retains oversight without dragging every operational decision back into a forum-level RFP debate.
In short, the ATMC was designed to (i) remove inefficiency, (ii) enable responsive treasury management, and (iii) balance yield and growth in a way that grants alone cannot. To vote on this proposal without analyzing the context of why the ATMC exists in the first place does Arbitrum a disservice, and foregoing yield in hopes of higher yield is net bad for the ARB token.
While acknowledging that Entropy has a COI as a member of the ATMC, our belief that it’s of the utmost importance to get this 8,500 ETH to work immediately has led us to vote FOR on Snapshot. For the wider community, if we assume just 2% of yield on 8,500 ETH ($4,100/ETH), the DAO is foregoing almost ~$58,000 every month as these funds sit idle in the treasury. This is obviously not in the best interest of the DAO and ARB token holders.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb) and @Euphoria, based on our combined research, analysis, and ideation.
We are voting AGAINST this proposal in the Snapshot voting.
We support the idea of putting idle ETH to work, but we cannot approve a large transfer now because the ATMC’s recent ETH allocations have underperformed simple staking, and there is no clear implementation plan for how the 8,500 ETH will be used.
The proposal mentions a blended 30-day APY near 2.4% and roughly 43.4 ETH generated since May. For a transfer of this size, those headline numbers are not enough; we need a side-by-side comparison of net APY after fees and costs against passive staking options (wstETH / Lido / Rocket Pool) and against high-quality DVT/validator options.
Equally important, the proposal does not lay out a concrete allocation plan. Moving 8,500 ETH without clear per-protocol allocations, caps, or documented selection rationale is premature. As other delegates mentioned, it is “premature to transfer ETH before a concrete and approved plan exists,” and we agree that funds should not be transferred first and decided upon later.
If part of the goal is ecosystem support, the proposal should also include measurable KPIs for those growth allocations and a timeline to reassess impact.
For these reasons, we are voting against it at this moment.
There is a lot of underestimation about the second-order effects of making the DAO the first customers of Arbitrum protocols. Any 0.x% more yield we could get on the Ethereum we have will greatly be outpaced by any positive mindshare that changes how the ecosystem is perceived..
I want to highlight this quote from Jojo, because I think it touches on a crucial aspect that deserves more consideration.
Thank you for the proposal!
As always, I support solutions that increase revenue and reduce costs. However, what happens if a choice increases revenue but not in the most efficient way?
I recognize the importance of activating idle treasury assets, and this proposal presents a solid opportunity. This opportunity is the alignment of the treasury management with ecosystem support during DRIP, generating a sustainable yield (around 2% and maybe slightly higher), and diversifying beyond ARB. The governance safeguards (OAT approval, DAO wallets excluded from rewards) also inspire confidence.
That said, two factors are keeping me from being totally in favor of this proposal:
For these reasons, I will vote ABSTAIN at this stage. If clearer allocation plans and concrete KPIs are provided, I would have no reason not to support the proposal in future rounds. Otherwise, I will unfortunately have to vote against.
Camelot is voting Abstain for this proposal.
We agree the treasury should be put to work: assets sitting idle are a missed opportunity for the DAO. That said, an approach that is exclusively yield-oriented is, in our view, myopic.
We were one of the few recipients of the last treasury allocation, which testifies to Camelot’s key role in the ecosystem. We were the only Arbitrum exclusive protocol to receive funds. While the other choices make sense on paper, they don’t necessarily favor the specific development of the chain or the teams that have been investing more heavily, in the past or currently, in our ecosystem with a particular focus on Arbitrum.
We also see a lot of confusion in how ATMC has evolved. In the first round the process was open (protocols could submit proposals, though few were selected). The process was fairly long with an open approach to proposals in terms of submission, but not in terms of discussion; the risk parameters the commission was looking for to decide on an allocation were not clear enough, and the end result was that we only had allocations in Lido-staked ETH, AAVE, Fluid, and Camelot, with our protocol being effectively 100% focused on Arbitrum. Note that this doesn’t mean that allocations can’t go to multi-chain ones, because we do understand how, for example, AAVE is the leading lending market on our chain, to name just one of the chosen protocols. But the end result of the previous round was quite underwhelming compared to the initial set of expectations.
We were hoping to have more clarity beforehand for this round. This doesn’t necessarily mean having a granular list at this moment, before the voting, but instead understanding what the outcome will be and what we can reasonably expect for our chains and protocols.
We think the goal of the DAO with its treasury should be to produce yield and foster growth. It doesn’t necessarily have to happen in this round, but setting a clear path ahead is necessary to avoid what seems like a partial plan, with some key decisions potentially taken at the last minute.
Voting “For”, as I believe it’s important to move idle treasury assets into a yield bearing system.
I agree with @Michigan_Blockchain that discussion should be had about a minimum threshold that automatically triggers a transfer - whether that is a ETH amount, $ amount, or recurring % of ETH.
I believe earning a lower yield in exchange of supporting the ecosystem is better than just maximizing yield (i.e., buying a staking token). We’ve seen a similar idea with the stablecoin funds for example.
I also will point out that this project has the OAT, which to my understanding is reviewing & approving / rejecting investments to avoid buearocratic issues like this - DAO members wanting to re-assess the program with every vote. If there is concerns they should catch and address them with the DAO, and if the DAO is unsatisfied with that I think it’s a separate issue to discuss and put to vote.
maybe not a good idea just yet, since it didn’t achieve the current 3% quorum of 141.5m ARB on the offchain vote, since 113.2m + 18.6m = 131.8m ARB
gm, I voted against this proposal on snapshot echoing the concerns of L2Beat, Camelot, cp0x and other delegates.
Absolutely in favor to allocate idle funds into productive pools.
Against a DAO stripped of the ability to even review and influence strategy pre-allocation, with its role reduced to passively viewing a dashboard after allocation, in the name of efficiency.
On Snapshot, quorum = For+Against+Abstain = 113.2+25.5+18.6 = 157.3 ARB
On Arbitrum DAO, we don’t use the snapshot native quorum, we follow the Arbitrum DAO constitution definition of quorum, which in the case of non-constitutional, Arbitrum Treasury Governor onchain proposals like this one, is 3% of votable tokens casting their voting power on For + Abstain, not on Against.
As a reminder there is not a quorum requirement for a Snapshot vote unless it is otherwise self-imposed by the author. Given this is a proposal that requires an onchain vote for the transfer of funds, no such requirement was outlined. While Entropy is confident that this proposal can meet the non-constitutional quorum in an onchain vote, we recognize the criticism and feedback from delegates. At this stage we feel it is best to get everyone on the same page, and will be delaying the Tally vote until after we give everyone more insight into the allocation strategy on our call next Thursday at 1 pm UTC. During this we will share the first high-level draft of our Investment Policy Statement.
