Wind Down the MSS + Transfer Payment Responsibilities to the Arbitrum Foundation

Proposals Finalized AIPs
12

This is Brook @rooktc from TiD Research. We appreciate Entropy’s effort to address the MSS’s challenges, but I believe framing this as a binary yes/no choice somewhat oversimplifies a multifaceted issue.

The DAO needs more information and options to make an informed decision, and I urge the community to consider the following points that lead to the problem here to ensure a balanced approach.

  1. Functional Overlap and MSS Performance

  • Entropy highlights inefficiencies due to the overlap between the Arbitrum Foundation’s compliance role (KYC/KYB, ARB-to-stablecoin conversion) and MSS’s multisig execution. However, the MSS communication thread suggests delays were primarily due to underperforming signers, not structural overlap.

  • The focus should be on improving MSS internal management—such as stricter performance expectations or more transparent reporting—rather than winding down the program.

  1. Budget Shortfall and Systemic Funding Issues

  • The ~$29,300 shortfall, driven by ARB’s price drop to ~$0.4, reflects a broader challenge of managing token-based budgets in volatile markets. This issue, also discussed in the Top-up for Hackathon Continuation Program and TMC - Stablecoin Withdrawal Process threads, isn’t unique to MSS.

  • Sunsetting MSS solely due to this shortfall risks setting a precedent that fails to address the underlying problem, which could recur in other projects.

  • We propose revisiting our suggestion for all live projects to report monthly budget statuses to the TMC, DAO, and Foundation, providing visibility into potential shortfalls and enabling proactive solutions like additional funding or stablecoin adjustments.

  1. Unclear Transition Schedule & Plan to OpCo

  • Positioning the Foundation as a temporary solution until OpCo assumes multisig duties raises concerns about the timeline and OpCo’s readiness for compliance and payment execution.

  • Without a defined plan, we risk a governance vacuum or over-reliance on the Foundation, with limited transparency into how KYC/KYB and ARB-to-stablecoin conversions are handled, which is also not disclosed in MSS update thread.

  • The DAO needs a clear schedule and a well-defined process for transferring these functions to OpCo, along with a commitment from OpCo to continue disclosing detailed information on these processes to maintain transparency and accountability.

Given the underlying issues, in addition to having Entropy & AF’s support to provide more information, I believe we should also have at least the below option available for the DAO to make better decision.

MSS Budget Top-Up

  • Allocate extra ARB + buffer to sustain MSS through its current term (August 2025).

  • Implement stricter signer performance standards (e.g., 24-hour response times) and weekly performance reports to address delays, retaining the 9/12 signer structure for security, as the Foundation recommends.

  • Use the remaining term to develop a transition plan to OpCo, with the Foundation and MSS proposing a schedule, and OpCo committing to monthly transparency reports on multisig activities.

I believe the DAO can address MSS challenges without shutting it down by focusing on better signer accountability, regular budget updates across projects, and a transparent plan for transitioning to OpCo. A budget top-up paired with stricter standards and a clear timeline would fix inefficiencies, stabilize funding, and uphold governance integrity, giving the DAO the tools to decide thoughtfully.

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