Hello @Entropy and the rest of the Arbitrum DAO community,
We’d like to begin by expressing our full agreement on the need to continue laying the foundation for Arbitrum’s growth. Today, we can say the DAO is advancing, but often without a clear direction or strategic goals, and frequently without certainty as to whether the initiatives under discussion are indeed necessary for the project’s progress.
We’re comfortable with this new version of the MVP and don’t have much to add here, though we’d like to discuss how we believe these objectives should be achieved.
Organization
While the discussion around Mission, Vision, and Purpose is valuable, defining these alone is insufficient if the DAO continues to operate as it currently does—without organization. In this regard, we align with the points made by @krst in this post and @Entropy in the OpCo thread. Currently, the DAO functions as a series of silos, where each proposal is handled in isolation, generating no synergies between them, and with no one fulfilling an oversight role to evaluate the outcomes of the DAO-funded initiatives.
Organizing implies several considerations, among others:
- Establishment of hierarchies
- Standardized hiring practices (including competency requirements and compensation negotiations)
- Introduction of budgetary limits per vertical, sustainability analysis, fund flow reports, and other Treasury Management tasks
- Possible gatekeeping of initiatives (entailing some “centralization” in which proposals not previously discussed with the OpCo/adjacent entity to the DAO have a low probability of approval)
- Creation of rules or codes of conduct and conflict resolution systems
- Implementation of structures enabling appropriate tracking, reporting, and conclusions on each initiative’s outcome
- Service provider replacement systems and frameworks for procurement processes
These are just a few examples of the outstanding items that remain unresolved by the DAO as an organization per se (with the exception of the code of conduct, which was facilitated by Entropy but approved by the DAO). This shows that DAOs do not inherently resolve or replace the operational needs of an organization; they only change the way decisions are made. Therefore, if we want to realize the MVP and specific goals included in the SOS, it’s essential for DAO members to agree on how to approach each operational requirement.
SOS Proposal
From our perspective, the verticals mentioned by @krst in his comment provide a good starting point for debating the structure of a proposal that would likely establish the DAO’s objectives for the next 12–24 months. We’d like to add a few thoughts:
Treasury Management
It’s been mentioned that the DAO needs to work on generating additional revenue streams to support long-term sustainability and provide value to the token. There’s also an RFC under discussion: [Non-Constitutional] Treasury Management v1.2. However, we want to emphasize that the DAO needs to standardize how it utilizes and manages its treasury.
Currently, each initiative handles its own treasury management in isolation: for ARDC v2, an AERA Vault is proposed; for other initiatives, funds are transferred to the AF for conversion to stables; some initiatives are paid in ARB via MSS; and others have sold ARB directly on the market. Similarly, even the use of stream applications lacks a standard framework, with no set guidelines to determine whether Sablier, Hedgey, Superfluid, or Llamapay should be used.
While we understand that different initiatives may occasionally require distinct procedures, we believe a well-designed, flexible framework could cover most cases in the future, especially if the OpCo proceeds successfully.
There have also been many discussions and proposals related to treasury diversification (including the above-mentioned proposal), but three fundamental questions remain unresolved:
- What should the asset mix in the treasury be?
- How much immediate liquidity does the DAO need?
- How much immediate liquidity does the DAO want? (Enough to cover budgetary obligations for a few years? Some extra for potential changes to our plans? Do we need a contingency fund?)
To clarify, when referring to “immediate liquidity,” we mean stablecoins or highly liquid assets with minimal selling effort (we’re excluding ARB, as its liquidity depth limits short-term sell capacity).
As a final note, it’s important to mention that these last two points largely depend on the DAO’s ability to establish an annual budget—another aspect currently unresolved.
Onboarding New Stakeholders to the DAO
For the DAO to be more resilient to capture, genuinely decentralized in decision-making, and benefit from higher-quality proposals, it must focus on onboarding new stakeholders. This means that while growth programs aimed at expanding to new markets (i.e., new builders and users) are important, equal emphasis should be placed on encouraging DAO participation to grow and diversify alongside the ecosystem. As a community, we should be equipped to face new challenges that arise as a result of growth.
In this regard, both the Staking and DIP proposals are key to aligning the Arbitrum ecosystem with its DAO.
A Flexible Program
Considering the rapid evolution of the crypto ecosystem, even if the SOS program were created solely for the next 12 months, priorities could shift at any moment.
For example:
Even if this tweet is a mere rumor, imagine for a moment what would happen if ETH Mainnet no longer required rollups for scaling…the MVP outlined in this RFC would already be obsolete. The Arbitrum ecosystem does not rely exclusively on endogenous factors, so the DAO must be capable of quickly pivoting to a contingency plan if necessary until priorities can be redefined.