Arbitrum DAO - Treasury contd.
Stable Treasury Endowment Program 2.0
During February 2025, an AIP outlining STEP 2.0 was passed on Tally. The key details of the program were: - diversify a further 35M ARB into real world assets that are stable in value, liquid in conversion and have yield uncorrelated to crypto markets - diversify the DAO's treasury and generate ecosystem growth for Real World Asset protocols on Arbitrum The proposal aimed to achieve 3 broad objectives: - Show that Arbitrum has a plan for the RWA vertical and projects in this sector should build on the chain, by building a regular cadence to the STEP program as the flagship program for RWA support; - Let the DAO directly own stable RWAs through a competitive selection process for providers, instead of paying 1% AUM to treasury managers for selecting and holding low risk assets on our behalf. Use yield from the products to cover operational expenses by sweeping it as USDC to the ARB DAO treasury; and - Provision funds ahead of time for optimal execution and take advantage of tailwinds when they arise for diversifying the treasury. Building up an endowment will let us weather even bear markets from an abundance mindset. The proposal outlined a similar committee structure to STEP 1.0, with each of the below committee members receiving 25k ARB compensation (10k ARB on completion and 15k ARB via a Hedgey stream over 3 years): - GFX - Northlake - Nethermind - Karpatkey - Devansh Meta (who subsequently stood down and was replaced by Entropy who waived their fee) as a non-voting facilitating member
All funds remain in the Foundation-controlled multisig.
Treasury Management V1.2
Treasury Management
The Treasury Management program is currently open for proposals and has attracted many applicants in the forum. Final allocations will be decided via Snapshot, which is not live yet. ThreeSigma outlined the TMC's recommendations around allocating funds to protocols. The initial plan was to convert 15M ARB into stablecoins to be managed on-chain, while the remaining 10M ARB was to be deployed into ARB-only strategies. The TMC suggested allocating the 15M ARB to stablecoin strategies to the below shortlisted protocols: - 5M ARB to Karpatkey, targeting 12 - 20% returns with a 0.5% management fee; - 5M ARB to Avantgarde/MYSO, targeting 5 - 15% returns with a 0.5% management fee and a 10% performance fee; and - 5M ARB to Gauntlet, targeting 8% returns with a 0.5% management fee.
The TMC recommended voting YES to the above allocation.
The TMC suggested allocating the 10M ARB-only strategies to the below shortlisted protocols: - 5M ARB to Karpatkey, targeting 7 - 20% returns with a 0.5% management fee - 5M to Avantgarde/MYSO, targeting >30% returns with a 15% performance fee
The TMC recommended voting NO to the above allocation, as they believe the current ARB proposals lack sufficient risk management and clear operational details - resulting in low yield projections - believing it is prudent to sit out on this allocation for now.
Growth Management
The Growth Management program is currently live, with the GMC outlining their recommendations for the DAO to approve via Snapshot (not yet live). Entropy outlined a proposed allocation for the 7.5k ETH to the below protocols: - 5k ETH to Lido to be staked for wstETH, expected to generate ~3.2% plus a 20% 'Reward Share' from Lido; - using the above 5k wstETH on Aave V3 on Arbitrum to act as liquidity for LST/LRT looping, expected to generate an additional 0.62% yield and 0.82% in deposit incentives, plus additional incentive programs; and - 2.5k ETH to be lent on Fluid to support ETH-based DEX lending liquidity, expected to generate 1 - 2% yield plus increasing liquidity.
A full list of applicants can be found on the forum.
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