Updating the OpCo Foundation’s Operational Capability

[pedrob]

Thank you all for your comments, feedback, and for joining the call.

Here you can find the recording and the notes.

I’ll address each of the concerns raised one by one.

@GFXlabs

We’ll reply in more detail later, but this seems like a total rewrite of the purpose of OpCo. The whole point of OpCo was to be a ministerial, not decision-making, arm of the DAO. It was to take action on behalf of governance.

@Hawheik

This proposal suggest to rewriting, even rendering moot to some extent, very clearly stated parts of the passed OpCo proposal.

According to the approved proposal, the OpCo has a dual mandate: to support the operations of DAO-approved proposals, and to proactively identify opportunities that could benefit the DAO:

@Entropy

OpCo is also required to be proactive, meaning that if the entity has the bandwidth and recognizes a potential advancement that could be made within its mandated focus areas, it can work on and propose a strategy through which the entity would address the identified frictions.

This proposal does not change the scope or purpose of the OpCo. Rather, it aims to offer more flexibility in engaging service providers and utilizing available funds to develop proposals that may benefit the DAO. The key of having an operational entity is to enable frictionless execution

The points identified by the OAT and proposed as modifications refer to restrictions that would prevent this mandate from being carried out smoothly, which is ultimately the very reason the entity was created.

@JoJo

This could be one of the most controversial point for the DAO: basically using funds allocated initially only for people of OpCo and for the ops strictly for OpCo, to be used to fund also initiatives instead.

@cp0x

Third, If OpCo is struggling to fulfill its functions and lacks the necessary expert knowledge or experience, I don’t see any problem with approving the expenses through Snapshot by the DAO — it only takes one week

As illustrated by the given examples, the intention behind these modifications is to enable agile funding of groundwork needed to prepare proposals that will be submitted to the DAO. This aligns with the overarching goal of reducing friction in order to fulfill the approved mandate.

OpCo should only kickstart initiatives and ideas when it recognizes a potential advancement, in line with the initial proposal, while any significant expenses such as carrying out larger initiatives to fully execute a proposal will always need to be approved by the DAO, since the OpCo does not have funding for that.

@JoJo

It will fall in the same framework posted above: each time there is a meaningful decision, clearly explain to the DAO and other AAEs why it should fall into OpCo, why alternatives are not necessarily advised, and how OpCo should potentially be a better executor.

The OpCo will be the entity responsible for executing the operations approved by the DAO. That has not changed, so the final decision will always remain with the DAO.

@karpatkey

Understandably, OpCo needs the ability to engage service providers directly to execute its mandate. However, this flexibility must be paired with financial accountability. We believe the following principles should apply:

@karpatkey

We support the idea of OpCo having access to a discretionary budget, provided there are clear guardrails:

• Spending should be capped at a pre-agreed amount.

• OAT members should unanimously approve usage.

• All spending should be transparently reported to the DAO.

Thank you for the feedback. At the OAT, accountability is a top priority, so there will definitely be regular transparency reports.

Regarding caps, the approved proposal already includes them:

@Entropy

• Once OpCo has officially operationalized, the entity can draw up to $500K of cash equivalents each month.

• If a monthly drawdown exceeds $500K but is below $1.5M, the executive-equivalent employees must get approval from the OAT before accessing the funds.

• If a monthly drawdown exceeds $1.5M, OpCo must seek approval from the DAO through a Snapshot vote.

@cp0x

I don’t quite understand the essence of this proposal, since there is already a separate pool of funds for salaries. This pool is only for bonuses.

The rationale behind this is to equip the OAT with the tools needed to negotiate compensation with OpCo employees. Our vision is to establish a compensation structure that includes token vesting, ensuring incentive alignment with Arbitrum’s long-term success.

@bertani

That said, I have some concerns around how the proposal addresses the issue of conflicts of interest—something that is endemic to DAO governance and must be handled with more rigor

The goal of the proposed policy is to ensure that talented individuals, who are capable of adding value and have a genuine interest in Arbitrum’s success, are able to apply. In any case, the DAO will always have the final say through the vote.

@jameskbh

I view the OpCo as operational infrastructure to address the most common demands within the DAO, and evaluating proposal “worthiness” is a core part of this. Therefore, relying on external SPs to fulfil this should be an exception, rather than the rule, and it would need a DAO approval for the request.

In its dual role as the entity executing operations and proactively identifying new opportunities, or evaluating those that arise, as you mentioned, we envision the OpCo having access to a budget to collaborate with contributors or service providers in preparing robust proposals for the DAO.

The goal is to reduce friction and enable the OpCo to operate smoothly and remain adaptable to emerging needs. In any case, such expenditures would need to be approved by the OAT, the body elected by the DAO to represent it.

@jameskbh

We are bundling several items in this topic. What is the voting strategy you are envisioning for this?

We will aim to put a vote up on Snapshot for 12th June 2025 to enact the above changes with a non-constitutional Quorum. The options will be For, Against or Abstain.

Update to the proposal:

Based on the feedback received during today’s call, we’ve added an update to the proposal to clarify that if an individual is elected on behalf of an organisation, then it is tied to them and the position cannot be rotated by the organisation.

@Arbitrum

We believe it should be fixed with the following:

• Proposed Fix: An individual will be entitled to run as a candidate for the election. No single organisation should be overly represented in the OAT. There should be no more than 1 candidate associated with a single entity. No candidate with conflicts of interest that would prevent them from acting in the best interests of the ArbitrumDAO which include, but not limited to: affiliates with direct Arbitrum competitors, proven histories of exploiting projects and others. If a candidate is elected on behalf of an organisation, then the OAT membership is tied to them and cannot be rotated to someone else in the organisation. It will be up to the current OAT to enforce the above policy, and if a candidate is excluded from the election, then the rationale must be publicly disclosed to the ArbitrumDAO. If the DAO disagrees, they can initiate a vote with a non-constitutional quorum to overturn the OAT’s decision to exclude a candidate.

Thank you all for the feedback, and just a reminder that there will be a new call next Monday to discuss the matter further. Feel free to leave any additional questions or feedback on the proposal.