This vote authorizes transfer of another 35 million ARB to the STEP multisig for the next edition of the Stable Treasury Endowment Program (STEP), to diversify Arbitrum DAOs treasury into real world assets that are stable in value, liquid in conversion and have yield uncorrelated to crypto markets. The goal of the STEP program is treasury diversification along with ecosystem growth for Real World Asset (RWA) protocols on Arbitrum.
This proposal kickstarts the second edition of the Stable Treasury Endowment Program, which aims to grow the RWA ecosystem (many of the top protocols do not need grants so much as AUM for their product) while simultaneously diversifying our treasury into stable, liquid and yield-generating assets (the volatility of the ARB token has highlighted the need for prudent diversification).
The RWA sector is growing at leaps and bounds with much room to grow even further considering the US treasury market by itself is $20 trillion. Arbitrum has grown from only $100k of RWAs in the beginning of 2024 to around $150 million today! Only 18% of this volume has come from the DAO itself through STEP 1, with the remaining TVL growing via organic means. To stay on top of this competitive sector, we need reliability and consistency in the programs we run for this vertical.
At the same time, we have seen increasing interest in treasury diversification initiatives across Arbitrum DAO. STEP follows 3 clear principles in dealing with service providers proposing to help with Arbitrum treasury diversification;
The STEP program is an example of how this can take place: an RFP under which projects apply with their product; a committee to review applicants; a program manager to monitor selected products
Accordingly, have projects directly apply in a competitive process on our forum if they want us to diversify into their product and be ratified in some way through a vote, not privately approach a treasury manager to get included
Passage of this proposal will bring our endowment near the $100 million mark: $30 million from STEP 1, ~$15-25 million from the treasury management initiative and now STEP 2
In mid-2024, Arbitrum DAO diversified $30 million into stable, liquid & yield generating RWAs. A comprehensive RFP process was undertake, where the DAO received 33 applications from RWA issuers, of which 16 were shortlisted and 6 were finally selected for allocations: Securitize BUIDL ($9.57 million), Ondo USDY ($5.22 million), Superstate USTB ($5.22 million), Mountain USDM ($3.48 million), OpenEden TBill ($3.48 million), and Backed Finance bIB01 ($3.48 million). These allocations helped us diversify the treasury into dollar denominated assets, got selected providers to launch on Arbitrum and are expected to generate a yield of roughly $875k for our treasury (live dashboard to track yield here)
The 1st program narrowly targeted low-risk and liquid instruments (primarily US treasury bills and money market instruments). STEP 2 will have a similar scope of products. We explored other markets but see biggest benefit in Arbitrum doubling down on the same instruments as STEP 1 and exploring other RWA sectors after they have had time to mature. After all, 99% of RWAs on Arbitrum are still U.S. Treasuries
Overall, this proposal aims to achieve 3 broad objectives;
Show that Arbitrum has a plan for the RWA vertical and projects in this sector should build on our 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.
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.
We will transfer 35 million ARB to the same foundation managed wallet (0xe41d54471EfA03eFF6365795f60545F3cAF7C97e) used in the initial STEP program
The foundation will at their discretion liquidate the ARB and once complete, announce the average conversion price on the forum
Service providers who applied in STEP 1 will have to simply communicate what has changed in their product. Ample feedback was provided to all applicants, so if they have not managed to address the concerns we do not need to re-review applicants. New applications will be reviewed fresh. The RFP will be similar as STEP 1 with some modifications that will be included in the tally vote.
The committee may at their discretion review investments made in STEP 1 and propose re-allocations from providers selected in the earlier edition. High preference will be given to providers that already have their RWA product launched on Arbitrum.
The selection committee will be same as last time with one major change: Entropy will replace Steakhouse Financial who will not be a voting member due to also being the STEP program manager.
So the committee will be composed of @GFXlabs , @northlakeslegal , @Nethermind , @Entropy and @karpatkey , with the Arbitrum Treasury and Sustainability Group led by myself as non-voting facilitating member (except in case of tie) to communicate with service providers, the DAO and the foundation. As program manager of STEP, @steakhouse will be privy to committee discussions as an observing member but not have decision making power.
Forum Discussion: September-December January: Snapshot vote (COMPLETE) January 28th: Put for vote on Tally February 20th to March 20th: Call for Applications March 20th to April 20th: Committee Review May 1st: DAO Ratification of Committee Recommendations
Diversification budget: 35 million ARB, same as STEP 1 Implementation budget: 125k ARB
Similar to STEP 1, a rate of 25k ARB x 5 committee members (GFX, Northlake, Nethermind, Karpatkey and Arbitrum T&S WG as facilitating member; Entropy to waive compensation)
10k ARB will be given upon completion of work and the remaining 15k ARB will be vested over 3 years although it can be delegated for voting power.
Rough budget estimates 50 applications 2 hours for 25 applications with few updates. 6 hours for remaining 25 new products/drastic changes. Total: 200 hours. Another 20 or so hours for all the deliberation, selections, allocation decisions we have within the committee. Average rate of $100-$150/hr would be between 25-33K, downsized to 25k ARB (10k on completion and 15k over 3 years)
STEP has developed a reputation of having a ton of due diligence. We think this is a good flag to hold high, since the benefits from being a STEP recipient go beyond just the amounts we allocate to also the legitimacy of passing heavy scrutiny by our committee. Service providers have also expressed appreciation on the feedback they got on their product, which in many cases led to different design decisions by their team.
For products that applied under STEP 1 and wish to re-apply, we ask that they comment under their old application in the Arbitrum governance forum with the following details;
Start with a table of changes narrating all that's different compared to last time. If you would like to know the reason for rejection in STEP 1, message @TheDevanshMehta on telegram.
In the application form, whatever details have changed should be in a different color or highlighted in some fashion so the committee can easily know what is the same as last time and what is new.
Updated and latest documents that you prefer not made public on the forum but which you want the committee to consider should be sent to [email protected]
For new applicants, we ask that they create a new thread on the forum with their application.
Who Should NOT apply
Following learnings from the first edition of the program, we advise the following products to refrain from applying;
Proportion of RWA is less & de-fi or crypto angle too high
Involves equities having high volatility
Not dollar denominated with foreign currency risk
A derivative product or wrapper that is majorly built from other onchain RWAs
Not launched yet
Requires bridging to other chains. As the Arbitrum RWA space has matured since STEP 1, high priority will be given to products launched on Arbitrum by March 15th 2025
Requires continual active decision making & operationally burdensome, for example individual issuances maturing without auto-roll
Transparency issues such as: black box setups, multisig in control of executive team without legal protections, product is complicated with risk difficult to quantify.
Products with a tiny AUM, exposure to a single ISIN or having fund managers without extensive prior experience or outsourced to third parties
Insufficient separation between fund manager and investment manager
No investment restrictions, especially worrisome if a provider can use leverage and hedging at discretion of the manager. We need something beyond common sense that stops a provider from taking our money and putting it into Argentinian peso bonds.
Insufficient documentation such as not providing a PPM, investment memo, counterparty for reverse repos, guidelines, restrictions, having annual audits only or from unknown auditors or managers
Redemption procedures have a lag period measured in weeks or months or are limited to a single stablecoin that is not USDC, USDT or DAI or require a bank transfer
Decentralized governance of underlying assets which require additional due diligence and/or have exposure to the Foundation add an extra layer of unpredictability
Judged as not being bankruptcy remote, opening risk of creditors taking our funds in case of disputes. This criteria includes both service providers in a jurisdiction that is uncomfortable for the committee and segregated portfolio companies with multiple portfolios.
Bankruptcy remote is not just having separate bank accounts, creditors look at whether entities are in actuality separate (their own board meeting minutes, payroll with staff, etc) so that the subsidiary entities do not get rolled into the parent one during proceedings.
If you think all these criteria are met, please read the application form below to send in your application.
Table of contents
Summary and Arbitrum info
Introduction Arbitrum governance is seeking proposals from qualified applicants for the purposes of diversifying the governance treasury and supporting ecosystem growth.
The purpose of the RFP is to identify products that provide trading volume and depth (i.e., liquidity), are stable in value, produce income for governance independent of crypto market volatility, offer transparency, and can potentially see use in developing a nascent “real-world assets” sector on Arbitrum chains.
Applicants whose products meet certain quality thresholds will be presented to ARB holders and their delegates for possible asset allocation. All final asset allocation decisions rest with ARB holders and their representatives. This RFP is intended to both collect relevant information for the committee and also to recommend allocations for tokenholders to vote upon.
Requester background
Arbitrum governance maintains and upgrades the Arbitrum technology stack, upon which are built multiple blockchains, including the largest Layer 2 on Ethereum, with more than $2.8b in assets onchain.
Description
Asset information
This program is intended to convert 35,000,000 ARB into stable, liquid and yield earning assets. The dollar notional amount of this investment is subject to market volatility, but at the time of January 16th 2025 is valued at approximately $26.46 million. These assets do not have a specific futured obligation or liability they are matched against. The Arbitrum Foundation, a Cayman Islands legal entity, will be the transacting counterparty.
Oversight
The committee is comprised of 6 members including GFX Labs, Entropy Advisors, Karpatkey, Nethermind, and North Lakes Legal. The Arbitrum Treasury & Sustainability Working Group also serves as a non-voting member of the committee, except in the case of ties. As program manager of STEP 1, Steakhouse Financial is an observing member of the committee privy to discussions.
All members are required to recuse themselves for any application in which they have a monetary interest, direct or indirect.
The Arbitrum Treasury & Sustainability Working Group leads this process and answers to stakeholders within Arbitrum governance.
Scope of service/criteria
Please include the following as part of your proposal: Sample or template investment contract and the governing instrument (credit agreement, partnership agreement, etc.). Investment selection, monitoring, and reporting plan. Compliance requirements. Be specific about requirements you anticipate from Arbitrum governance.
RFP process overview
RFP Timeline, 2025
Submissions open : Feb 20th Submissions deadline : March 20th Finalists announced : April 20th ARB holders vote on proposed allocation : May 1st
Participants
This RFP will be open to all applicants with a stable, liquid and yield earning product. The screening committee will review all submissions and announce allocation between finalists for ARB tokenholders to vote upon.
After receiving applications, the committee will prepare an allocation policy for distribution to applicants and recommend a split between them. The DAO will then vote on whether to approve the split or not. Funds will be given to providers in stablecoins or fiat transfers after signing agreements with the Arbitrum Foundation.
Questionnaire
Applicant information
Name
Address (Headquarters)
City, State, Postal Code
Country
Website
Primary contact Name
Title
Country
Email, Telegram, Forum, & other methods of contact
Key Information
Expected Yield
Expected Maturity
Underlying asset
Minimum/Maximum transaction size
Current AUM for product
Current AUM for issuer
Volume of transactions LTM
Source of first-loss capital
Basics and background
Plan design
Do investors have any shareholder, investor, creditor or similar rights?
How are Arbitrum’s assets protected vis-a-vis the bankruptcy of the brokerage or applicable financial institution (e.g., bank deposit insurance, securities insurance, etc.)?
Does the Issuer issue more than one asset? If so, what is the priority relationship between different asset classes?
Performance reporting
Pricing
Smart Contract/Architecture
Supplementary
This vote authorizes transfer of another 35 million ARB to the STEP multisig for the next edition of the Stable Treasury Endowment Program (STEP), to diversify Arbitrum DAOs treasury into real world assets that are stable in value, liquid in conversion and have yield uncorrelated to crypto markets. The goal of the STEP program is treasury diversification along with ecosystem growth for Real World Asset (RWA) protocols on Arbitrum.
This proposal kickstarts the second edition of the Stable Treasury Endowment Program, which aims to grow the RWA ecosystem (many of the top protocols do not need grants so much as AUM for their product) while simultaneously diversifying our treasury into stable, liquid and yield-generating assets (the volatility of the ARB token has highlighted the need for prudent diversification).
The RWA sector is growing at leaps and bounds with much room to grow even further considering the US treasury market by itself is $20 trillion. Arbitrum has grown from only $100k of RWAs in the beginning of 2024 to around $150 million today! Only 18% of this volume has come from the DAO itself through STEP 1, with the remaining TVL growing via organic means. To stay on top of this competitive sector, we need reliability and consistency in the programs we run for this vertical.
At the same time, we have seen increasing interest in treasury diversification initiatives across Arbitrum DAO. STEP follows 3 clear principles in dealing with service providers proposing to help with Arbitrum treasury diversification;
The STEP program is an example of how this can take place: an RFP under which projects apply with their product; a committee to review applicants; a program manager to monitor selected products
Accordingly, have projects directly apply in a competitive process on our forum if they want us to diversify into their product and be ratified in some way through a vote, not privately approach a treasury manager to get included
Passage of this proposal will bring our endowment near the $100 million mark: $30 million from STEP 1, ~$15-25 million from the treasury management initiative and now STEP 2
In mid-2024, Arbitrum DAO diversified $30 million into stable, liquid & yield generating RWAs. A comprehensive RFP process was undertake, where the DAO received 33 applications from RWA issuers, of which 16 were shortlisted and 6 were finally selected for allocations: Securitize BUIDL ($9.57 million), Ondo USDY ($5.22 million), Superstate USTB ($5.22 million), Mountain USDM ($3.48 million), OpenEden TBill ($3.48 million), and Backed Finance bIB01 ($3.48 million). These allocations helped us diversify the treasury into dollar denominated assets, got selected providers to launch on Arbitrum and are expected to generate a yield of roughly $875k for our treasury (live dashboard to track yield here)
The 1st program narrowly targeted low-risk and liquid instruments (primarily US treasury bills and money market instruments). STEP 2 will have a similar scope of products. We explored other markets but see biggest benefit in Arbitrum doubling down on the same instruments as STEP 1 and exploring other RWA sectors after they have had time to mature. After all, 99% of RWAs on Arbitrum are still U.S. Treasuries
Overall, this proposal aims to achieve 3 broad objectives;
Show that Arbitrum has a plan for the RWA vertical and projects in this sector should build on our 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.
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.
We will transfer 35 million ARB to the same foundation managed wallet (0xe41d54471EfA03eFF6365795f60545F3cAF7C97e) used in the initial STEP program
The foundation will at their discretion liquidate the ARB and once complete, announce the average conversion price on the forum
Service providers who applied in STEP 1 will have to simply communicate what has changed in their product. Ample feedback was provided to all applicants, so if they have not managed to address the concerns we do not need to re-review applicants. New applications will be reviewed fresh. The RFP will be similar as STEP 1 with some modifications that will be included in the tally vote.
The committee may at their discretion review investments made in STEP 1 and propose re-allocations from providers selected in the earlier edition. High preference will be given to providers that already have their RWA product launched on Arbitrum.
The selection committee will be same as last time with one major change: Entropy will replace Steakhouse Financial who will not be a voting member due to also being the STEP program manager.
So the committee will be composed of @GFXlabs , @northlakeslegal , @Nethermind , @Entropy and @karpatkey , with the Arbitrum Treasury and Sustainability Group led by myself as non-voting facilitating member (except in case of tie) to communicate with service providers, the DAO and the foundation. As program manager of STEP, @steakhouse will be privy to committee discussions as an observing member but not have decision making power.
Forum Discussion: September-December January: Snapshot vote (COMPLETE) January 28th: Put for vote on Tally February 20th to March 20th: Call for Applications March 20th to April 20th: Committee Review May 1st: DAO Ratification of Committee Recommendations
Diversification budget: 35 million ARB, same as STEP 1 Implementation budget: 125k ARB
Similar to STEP 1, a rate of 25k ARB x 5 committee members (GFX, Northlake, Nethermind, Karpatkey and Arbitrum T&S WG as facilitating member; Entropy to waive compensation)
10k ARB will be given upon completion of work and the remaining 15k ARB will be vested over 3 years although it can be delegated for voting power.
Rough budget estimates 50 applications 2 hours for 25 applications with few updates. 6 hours for remaining 25 new products/drastic changes. Total: 200 hours. Another 20 or so hours for all the deliberation, selections, allocation decisions we have within the committee. Average rate of $100-$150/hr would be between 25-33K, downsized to 25k ARB (10k on completion and 15k over 3 years)
STEP has developed a reputation of having a ton of due diligence. We think this is a good flag to hold high, since the benefits from being a STEP recipient go beyond just the amounts we allocate to also the legitimacy of passing heavy scrutiny by our committee. Service providers have also expressed appreciation on the feedback they got on their product, which in many cases led to different design decisions by their team.
For products that applied under STEP 1 and wish to re-apply, we ask that they comment under their old application in the Arbitrum governance forum with the following details;
Start with a table of changes narrating all that's different compared to last time. If you would like to know the reason for rejection in STEP 1, message @TheDevanshMehta on telegram.
In the application form, whatever details have changed should be in a different color or highlighted in some fashion so the committee can easily know what is the same as last time and what is new.
Updated and latest documents that you prefer not made public on the forum but which you want the committee to consider should be sent to [email protected]
For new applicants, we ask that they create a new thread on the forum with their application.
Who Should NOT apply
Following learnings from the first edition of the program, we advise the following products to refrain from applying;
Proportion of RWA is less & de-fi or crypto angle too high
Involves equities having high volatility
Not dollar denominated with foreign currency risk
A derivative product or wrapper that is majorly built from other onchain RWAs
Not launched yet
Requires bridging to other chains. As the Arbitrum RWA space has matured since STEP 1, high priority will be given to products launched on Arbitrum by March 15th 2025
Requires continual active decision making & operationally burdensome, for example individual issuances maturing without auto-roll
Transparency issues such as: black box setups, multisig in control of executive team without legal protections, product is complicated with risk difficult to quantify.
Products with a tiny AUM, exposure to a single ISIN or having fund managers without extensive prior experience or outsourced to third parties
Insufficient separation between fund manager and investment manager
No investment restrictions, especially worrisome if a provider can use leverage and hedging at discretion of the manager. We need something beyond common sense that stops a provider from taking our money and putting it into Argentinian peso bonds.
Insufficient documentation such as not providing a PPM, investment memo, counterparty for reverse repos, guidelines, restrictions, having annual audits only or from unknown auditors or managers
Redemption procedures have a lag period measured in weeks or months or are limited to a single stablecoin that is not USDC, USDT or DAI or require a bank transfer
Decentralized governance of underlying assets which require additional due diligence and/or have exposure to the Foundation add an extra layer of unpredictability
Judged as not being bankruptcy remote, opening risk of creditors taking our funds in case of disputes. This criteria includes both service providers in a jurisdiction that is uncomfortable for the committee and segregated portfolio companies with multiple portfolios.
Bankruptcy remote is not just having separate bank accounts, creditors look at whether entities are in actuality separate (their own board meeting minutes, payroll with staff, etc) so that the subsidiary entities do not get rolled into the parent one during proceedings.
If you think all these criteria are met, please read the application form below to send in your application.
Table of contents
Summary and Arbitrum info
Introduction Arbitrum governance is seeking proposals from qualified applicants for the purposes of diversifying the governance treasury and supporting ecosystem growth.
The purpose of the RFP is to identify products that provide trading volume and depth (i.e., liquidity), are stable in value, produce income for governance independent of crypto market volatility, offer transparency, and can potentially see use in developing a nascent “real-world assets” sector on Arbitrum chains.
Applicants whose products meet certain quality thresholds will be presented to ARB holders and their delegates for possible asset allocation. All final asset allocation decisions rest with ARB holders and their representatives. This RFP is intended to both collect relevant information for the committee and also to recommend allocations for tokenholders to vote upon.
Requester background
Arbitrum governance maintains and upgrades the Arbitrum technology stack, upon which are built multiple blockchains, including the largest Layer 2 on Ethereum, with more than $2.8b in assets onchain.
Description
Asset information
This program is intended to convert 35,000,000 ARB into stable, liquid and yield earning assets. The dollar notional amount of this investment is subject to market volatility, but at the time of January 16th 2025 is valued at approximately $26.46 million. These assets do not have a specific futured obligation or liability they are matched against. The Arbitrum Foundation, a Cayman Islands legal entity, will be the transacting counterparty.
Oversight
The committee is comprised of 6 members including GFX Labs, Entropy Advisors, Karpatkey, Nethermind, and North Lakes Legal. The Arbitrum Treasury & Sustainability Working Group also serves as a non-voting member of the committee, except in the case of ties. As program manager of STEP 1, Steakhouse Financial is an observing member of the committee privy to discussions.
All members are required to recuse themselves for any application in which they have a monetary interest, direct or indirect.
The Arbitrum Treasury & Sustainability Working Group leads this process and answers to stakeholders within Arbitrum governance.
Scope of service/criteria
Please include the following as part of your proposal: Sample or template investment contract and the governing instrument (credit agreement, partnership agreement, etc.). Investment selection, monitoring, and reporting plan. Compliance requirements. Be specific about requirements you anticipate from Arbitrum governance.
RFP process overview
RFP Timeline, 2025
Submissions open : Feb 20th Submissions deadline : March 20th Finalists announced : April 20th ARB holders vote on proposed allocation : May 1st
Participants
This RFP will be open to all applicants with a stable, liquid and yield earning product. The screening committee will review all submissions and announce allocation between finalists for ARB tokenholders to vote upon.
After receiving applications, the committee will prepare an allocation policy for distribution to applicants and recommend a split between them. The DAO will then vote on whether to approve the split or not. Funds will be given to providers in stablecoins or fiat transfers after signing agreements with the Arbitrum Foundation.
Questionnaire
Applicant information
Name
Address (Headquarters)
City, State, Postal Code
Country
Website
Primary contact Name
Title
Country
Email, Telegram, Forum, & other methods of contact
Key Information
Expected Yield
Expected Maturity
Underlying asset
Minimum/Maximum transaction size
Current AUM for product
Current AUM for issuer
Volume of transactions LTM
Source of first-loss capital
Basics and background
Plan design
Do investors have any shareholder, investor, creditor or similar rights?
How are Arbitrum’s assets protected vis-a-vis the bankruptcy of the brokerage or applicable financial institution (e.g., bank deposit insurance, securities insurance, etc.)?
Does the Issuer issue more than one asset? If so, what is the priority relationship between different asset classes?
Performance reporting
Pricing
Smart Contract/Architecture
Supplementary
Democratising lobbyism, on-chain. Check out lobbyfi.xyz
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/75
following the same reasons as before, for the offchain vote, this program is very well set up and thought through, and the entities involved are some of the best in the world at what they do. https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/125?u=paulofonseca
Democratising lobbyism, on-chain. Check out lobbyfi.xyz
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/75
following the same reasons as before, for the offchain vote, this program is very well set up and thought through, and the entities involved are some of the best in the world at what they do. https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/125?u=paulofonseca
We are voting “FOR” the proposal, for the following reasons: STEP 1 was a successful - and documented - program. The program fulfilled its goal of bringing more active RWA projects to Arbitrum and contributed to the diversification of the DAO's treasury. There are clear goals for STEP 2. According to Devansh Meta, there is a plan to put 1% of the treasury every 9/12 months for 5 years - within the 35M $ARB planned for STEP 2. Although the continuity of the program depends on governance, it is important for the DAO to have a percentage of its treasury in stable assets. However, we share the thoughts of some delegates about the possibility of taking STEP to TMDC, since it will be among their responsibilities to carry out the diversification of Arbitrum's treasury. Since STEP 1 was born when there was no TMDC, it made sense. Now, we can bring the framework and knowledge developed in STEP to TMDC - leaving a single organization/group responsible for this assignment. The idea is not to do end STEP or the focus on RWA, but to avoid redundancy of obligations/activities between the entities formed within Arbitrum DAO. Congratulations on the proposal and success for STEP 1 (and everyone involved in it).
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/123?u=coinflip
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/122?u=princetonblockchain
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/121
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/120?u=tane
The Event Horizon Community Voted to Support this Proposal ehARB-80: EventHorizon.vote/vote/arbitrum/ehARB-80
The Event Horizon Community Voted to Support this Proposal ehARB-80: EventHorizon.vote/vote/arbitrum/ehARB-80
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/119?u=0xdonpepe
https://forum.arbitrum.foundation/t/griff-green-delegate-communication-thread/25040/55?u=griff
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/118?u=amira
https://forum.arbitrum.foundation/t/juanrah-delegate-communication-thread/27395/25?u=juanrah
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/112?u=0x_ultra
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/111?u=blueweb
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/58
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/110?u=tekr0x.eth
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/102?u=ocandocrypto
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/60
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/52
GFX Labs served on the original STEP committee and will serve again if this program is approved. Recent market turmoil demonstrates the value of Arbitrum governance having stable-value assets to secure meeting ongoing expense obligations.
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/17?u=castlecapital
We voted FOR this proposal at Snapshot stage and our view remains unchanged. We reiterate our previous rationale here: This is good for the DAO from a treasury management, strategic, and operational perspective. I would have liked to see this done under the existing treasury management structures as it could then be managed more holistically taking into account other onchain stablecoin yield opportunities such as sUSDe, aUSDC, and similar. I hope to see this program taken up under the Treasury Management Committee in the future.
I am voting for this proposal because it will help make Arbitrum’s money more stable and safe. It will also help the project grow by supporting real-world assets. This plan is good for the future of Arbitrum.
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/95?u=pedrob
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/94?u=mcfly
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/93?u=kuiclub
The Arbitrum DAO should not engage in active treasury management. This creates conflict of interest between token holders and the treasury managers & beneficiaries.
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/56?u=bruce
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/90?u=duokongcrypto
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/86?u=0xtalvo.eth_mty
I re-confirm my vote from Snapshot Non-Constitutional https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/44
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/84?u=tempetechie
The STEP program is a strategic and necessary step to strengthen Arbitrum DAO’s financial foundation while fostering the growth of RWAs on Arbitrum. Given its well-structured implementation, historical success, and long-term benefits, I vote FOR this proposal.
https://forum.arbitrum.foundation/t/larva-delegate-communication-thread/24476/117?u=larva
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/74?u=blockworksresearch
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/77?u=ocandocrypto
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/76?u=tane
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/75?u=bob-rossi
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/73
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/71?u=0xtalvo.eth_mty
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/70?u=0x_ultra
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/67?u=kuiclub
Democratising lobbyism, on-chain. Check out lobbyfi.xyz
https://forum.arbitrum.foundation/t/gfx-labs-delegate-communication-thread/13794
The Event Horizon Community Voted to Support this Proposal ehARB-71: EventHorizon.vote/vote/arbitrum/ehARB-71
The Event Horizon Community Voted to Support this Proposal ehARB-71: EventHorizon.vote/vote/arbitrum/ehARB-71
this program is very well set up and thought through, and the entities involved are some of the best in the world at what they do. https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/62?u=paulofonseca
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/59?u=euphoria
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/58
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/56?u=bruce
https://forum.arbitrum.foundation/t/griff-green-delegate-communication-thread/25040/55?u=griff
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/55?u=gabriel
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/54?u=mcfly
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/52?u=todayindefi
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/51?u=tekr0x.eth
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/49?u=0xdonpepe
I am voting for this proposal because it will help diversify the Arbitrum treasury into stable, yield-generating assets while supporting growth in the Real World Asset ecosystem. This ensures financial stability for the DAO and strengthens Arbitrum's position as a leader in this sector.
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/47?u=duokongcrypto
https://forum.arbitrum.foundation/t/juanrah-delegate-communication-thread/27395/17?u=juanrah
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/44?u=0xalex
https://forum.arbitrum.foundation/t/amira-delegate-communication-thread/27964/2?u=amira
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/41?u=jojo
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/40?u=tempetechie
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/35?u=pedrob
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/34?u=ezr3al
https://forum.arbitrum.foundation/t/larva-delegate-communication-thread/24476/108?u=larva
We are voting “FOR” the proposal, for the following reasons: STEP 1 was a successful - and documented - program. The program fulfilled its goal of bringing more active RWA projects to Arbitrum and contributed to the diversification of the DAO's treasury. There are clear goals for STEP 2. According to Devansh Meta, there is a plan to put 1% of the treasury every 9/12 months for 5 years - within the 35M $ARB planned for STEP 2. Although the continuity of the program depends on governance, it is important for the DAO to have a percentage of its treasury in stable assets. However, we share the thoughts of some delegates about the possibility of taking STEP to TMDC, since it will be among their responsibilities to carry out the diversification of Arbitrum's treasury. Since STEP 1 was born when there was no TMDC, it made sense. Now, we can bring the framework and knowledge developed in STEP to TMDC - leaving a single organization/group responsible for this assignment. The idea is not to do end STEP or the focus on RWA, but to avoid redundancy of obligations/activities between the entities formed within Arbitrum DAO. Congratulations on the proposal and success for STEP 1 (and everyone involved in it).
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/123?u=coinflip
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/122?u=princetonblockchain
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/121
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/120?u=tane
The Event Horizon Community Voted to Support this Proposal ehARB-80: EventHorizon.vote/vote/arbitrum/ehARB-80
The Event Horizon Community Voted to Support this Proposal ehARB-80: EventHorizon.vote/vote/arbitrum/ehARB-80
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/119?u=0xdonpepe
https://forum.arbitrum.foundation/t/griff-green-delegate-communication-thread/25040/55?u=griff
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/118?u=amira
https://forum.arbitrum.foundation/t/juanrah-delegate-communication-thread/27395/25?u=juanrah
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/112?u=0x_ultra
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/111?u=blueweb
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/58
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/110?u=tekr0x.eth
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/102?u=ocandocrypto
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/60
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/52
GFX Labs served on the original STEP committee and will serve again if this program is approved. Recent market turmoil demonstrates the value of Arbitrum governance having stable-value assets to secure meeting ongoing expense obligations.
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/17?u=castlecapital
We voted FOR this proposal at Snapshot stage and our view remains unchanged. We reiterate our previous rationale here: This is good for the DAO from a treasury management, strategic, and operational perspective. I would have liked to see this done under the existing treasury management structures as it could then be managed more holistically taking into account other onchain stablecoin yield opportunities such as sUSDe, aUSDC, and similar. I hope to see this program taken up under the Treasury Management Committee in the future.
I am voting for this proposal because it will help make Arbitrum’s money more stable and safe. It will also help the project grow by supporting real-world assets. This plan is good for the future of Arbitrum.
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/95?u=pedrob
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/94?u=mcfly
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/93?u=kuiclub
The Arbitrum DAO should not engage in active treasury management. This creates conflict of interest between token holders and the treasury managers & beneficiaries.
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/56?u=bruce
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/90?u=duokongcrypto
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/86?u=0xtalvo.eth_mty
I re-confirm my vote from Snapshot Non-Constitutional https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/44
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/84?u=tempetechie
The STEP program is a strategic and necessary step to strengthen Arbitrum DAO’s financial foundation while fostering the growth of RWAs on Arbitrum. Given its well-structured implementation, historical success, and long-term benefits, I vote FOR this proposal.
https://forum.arbitrum.foundation/t/larva-delegate-communication-thread/24476/117?u=larva
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/74?u=blockworksresearch
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/77?u=ocandocrypto
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/76?u=tane
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/75?u=bob-rossi
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/73
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/71?u=0xtalvo.eth_mty
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/70?u=0x_ultra
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/67?u=kuiclub
Democratising lobbyism, on-chain. Check out lobbyfi.xyz
https://forum.arbitrum.foundation/t/gfx-labs-delegate-communication-thread/13794
The Event Horizon Community Voted to Support this Proposal ehARB-71: EventHorizon.vote/vote/arbitrum/ehARB-71
The Event Horizon Community Voted to Support this Proposal ehARB-71: EventHorizon.vote/vote/arbitrum/ehARB-71
this program is very well set up and thought through, and the entities involved are some of the best in the world at what they do. https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/62?u=paulofonseca
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/59?u=euphoria
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/58
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/56?u=bruce
https://forum.arbitrum.foundation/t/griff-green-delegate-communication-thread/25040/55?u=griff
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/55?u=gabriel
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/54?u=mcfly
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/52?u=todayindefi
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/51?u=tekr0x.eth
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/49?u=0xdonpepe
I am voting for this proposal because it will help diversify the Arbitrum treasury into stable, yield-generating assets while supporting growth in the Real World Asset ecosystem. This ensures financial stability for the DAO and strengthens Arbitrum's position as a leader in this sector.
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/47?u=duokongcrypto
https://forum.arbitrum.foundation/t/juanrah-delegate-communication-thread/27395/17?u=juanrah
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/44?u=0xalex
https://forum.arbitrum.foundation/t/amira-delegate-communication-thread/27964/2?u=amira
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/41?u=jojo
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/40?u=tempetechie
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/35?u=pedrob
https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/34?u=ezr3al
https://forum.arbitrum.foundation/t/larva-delegate-communication-thread/24476/108?u=larva
Hi @SEEDGov - appreciate the feedback! Will reach out direct to talk more about your suggestions.
Hi @SEEDGov - appreciate the feedback! Will reach out direct to talk more about your suggestions.
Hi @thedevanshmehta thanks for writing the detailed proposal! Can you confirm where the statement "99% of RWAs on Arbitrum are t-bills", upon which the selection criteria is based, comes from? If it's the latest report from @Entropy - my understanding is that only t-bill products were looked at. Would love to understand more.
Hi @thedevanshmehta thanks for writing the detailed proposal! Can you confirm where the statement "99% of RWAs on Arbitrum are t-bills", upon which the selection criteria is based, comes from? If it's the latest report from @Entropy - my understanding is that only t-bill products were looked at. Would love to understand more.
We support the STEP 2.0 proposal. We believe aUSDC would be an excellent addition to the program. As a safe, yield-bearing stable asset, it aligns well with STEP's goals of stability, liquidity, and uncorrelated yield.
We look forward to participating in the RFP process and potentially contributing to Arbitrum's treasury diversification strategy.
We support the STEP 2.0 proposal. We believe aUSDC would be an excellent addition to the program. As a safe, yield-bearing stable asset, it aligns well with STEP's goals of stability, liquidity, and uncorrelated yield.
We look forward to participating in the RFP process and potentially contributing to Arbitrum's treasury diversification strategy.
Cross-posting for visibility: https://forum.arbitrum.foundation/t/step-2-committee-preferred-allocations/29086/35?u=arbitrum
Cross-posting for visibility: https://forum.arbitrum.foundation/t/step-2-committee-preferred-allocations/29086/35?u=arbitrum
Hi all,
Confirming the AF address as 0x54FE3425f09854E15081fa5B3276afCB4C46FCa2 for receiving the funds.
Hi all,
Confirming the AF address as 0x54FE3425f09854E15081fa5B3276afCB4C46FCa2 for receiving the funds.
We are voting FOR the proposal, for the following reasons:
We are voting FOR the proposal, for the following reasons:
However, we share the thoughts of some delegates about the possibility of taking STEP to TMDC, since it will be among their responsibilities to carry out the diversification of Arbitrum's treasury. Since STEP 1 was born when there was no TMDC, it made sense. Now, we can bring the framework and knowledge developed in STEP to TMDC - leaving a single organization/group responsible for this assignment.The idea is not to do end STEP or the focus on RWA, but to avoid redundancy of obligations/activities between the entities formed within Arbitrum DAO.
Congratulations on the proposal and success for STEP 1 (and everyone involved in it)
The PBC Governance team is voting FOR STEP 2.0 on Tally.
STEP 1.0 brought in a lot of attention from big institutional players, and we'd like to keep seeing growth in Arbitrum's RWA ecosystem. Additionally - congrats to Devansh for the new position! We're also confident that Entropy can take over as STEP's facilitating member without any major hurdles, so no concerns from us there.
I voted in favour of this proposal in Tally. This is the rationale:
I didn’t vote on this one since it happened before I got onboarded, but I’m excited to see Arbitrum holding some RWA and hoping for the bull. I’m not happy with the ARB selling, though—I still see this as kind of like what Saylor is doing with BTC. LFG!
Based on the earlier response received, Castle has decided to vote FOR the program on Tally
LobbyFi voted in favor, as the 'for' community auction pool accrued more bids in ETH than the counterparty pool for this particular proposal.
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas. It’s based on their combined research, fact-checking, and ideation.
We’re voting FOR the proposal.
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas. It’s based on their combined research, fact-checking, and ideation.
We’re voting FOR the proposal.
Since our favorable vote during the temp-check, the only thing that has changed is that Entropy will be replacing Devansh as the facilitating member due to the latter accepting a full-time offer at the Ethereum Foundation. Given that, we understand the need for replacement and support the decision.
One thing that occurred to us and should be addressed sooner rather than later is the compensation of the program manager. In STEP 1.0, the ARB earmarked for the PM's compensation wasn’t enough to cover the USD-quoted fees for the 1-year tenure, so we had to vote on a separate proposal to deal with the situation. Steakhouse’s tenure from STEP 1.0 ends on September 2025, which means that STEP 2.0 will;
In the vote mentioned above, the resulting decision was that Steakhouse would be paid its dues from the yield STEP 1.0 generates. Perhaps it’s also worth discussing something similar for STEP 2.0, as it avoids putting price pressure on ARB.
Lastly, we want to take the opportunity to state once again that we want the committee to leverage the service providers we’re engaging with for more than just using their services. This could, for example, come in the form of a co-marketing campaign for RWAs on Arbitrum.
Voting FOR the proposal
While the DAO has continued to evaluate larger wrappers for some activities, having Stable Treasury 1.0 and now 2.0 shows that we can continue to deliver on DAO objectives.
Voting FOR the proposal
While the DAO has continued to evaluate larger wrappers for some activities, having Stable Treasury 1.0 and now 2.0 shows that we can continue to deliver on DAO objectives.
The stability of knowing that the Arbitrum DAO has reviewed these protocols, and their commitment to the Arbitrum ecosystem also acts as a great proxy for defi builders to work with these same RWA issuers knowing that there is reasonable stability and adoption for them here.
I’m voting FOR on Tally. As I mentioned during temp-check: this proposal builds on a proven process to diversify our treasury into stable, yield-generating RWA assets while promoting ecosystem growth.
The only concern I have is that ARB price has dropped too much lately, and with the current yields we are earning, it will take us more than 10 years to recoup these losses, I suppose this is more of a timing the market problem, but would be nice to explore some solutions.
voting For on the current onchain vote because following the same reasons as before, for the offchain vote, this program is very well set up and thought through, and the entities involved are some of the best in the world at what they do.
I’m voting FOR this proposal on Tally. My reasons remain the same as during the Snapshot vote, plus the shorter timeline I suggested has been implemented in this version.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
We are voting FOR this proposal in Tally voting.
We support this proposal on Tally for diversifying an additional 35 million ARB into stable assets, emphasizing prudent financial management.
Voted For: After reviewing the reports, there is no reason not to further support this STEP program. Diversification of the funds in a DAO of our size is important and RWA is the best way to do it in this case. Also, I believe in the team that the execution of the 2.0 program will be done well. I do expect consistent reporting on the program during our monthly GRC calls.
I am voting FOR on Tally.
This program has a strong foundation and a proven track record of success. Devansh's recent transition and Entropy becoming the new facilitator will not change the outcome of the initiative.
I am voting FOR on Tally.
This program has a strong foundation and a proven track record of success. Devansh's recent transition and Entropy becoming the new facilitator will not change the outcome of the initiative.
I maintain my position that a program like this is a net positive for Arbitrum regarding Treasury Management. In the current landscape of market volatility, having a program like this will contribute in safeguarding long-term sustainability for the DAO.
We vote FOR the proposal on Tally.
As we supported this proposal on Snapshot, we maintain our decision and also confirm that Entropy takes over the facilitation of the program.
I voted FOR this proposal on Tally, because I believe the first version of the STEP program contributed meaningfully to Arbitrum's growth.
We are voting FOR the proposal, for the following reasons:
We are voting FOR the proposal, for the following reasons:
However, we share the thoughts of some delegates about the possibility of taking STEP to TMDC, since it will be among their responsibilities to carry out the diversification of Arbitrum's treasury. Since STEP 1 was born when there was no TMDC, it made sense. Now, we can bring the framework and knowledge developed in STEP to TMDC - leaving a single organization/group responsible for this assignment.The idea is not to do end STEP or the focus on RWA, but to avoid redundancy of obligations/activities between the entities formed within Arbitrum DAO.
Congratulations on the proposal and success for STEP 1 (and everyone involved in it)
The PBC Governance team is voting FOR STEP 2.0 on Tally.
STEP 1.0 brought in a lot of attention from big institutional players, and we'd like to keep seeing growth in Arbitrum's RWA ecosystem. Additionally - congrats to Devansh for the new position! We're also confident that Entropy can take over as STEP's facilitating member without any major hurdles, so no concerns from us there.
I voted in favour of this proposal in Tally. This is the rationale:
I didn’t vote on this one since it happened before I got onboarded, but I’m excited to see Arbitrum holding some RWA and hoping for the bull. I’m not happy with the ARB selling, though—I still see this as kind of like what Saylor is doing with BTC. LFG!
Based on the earlier response received, Castle has decided to vote FOR the program on Tally
LobbyFi voted in favor, as the 'for' community auction pool accrued more bids in ETH than the counterparty pool for this particular proposal.
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas. It’s based on their combined research, fact-checking, and ideation.
We’re voting FOR the proposal.
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas. It’s based on their combined research, fact-checking, and ideation.
We’re voting FOR the proposal.
Since our favorable vote during the temp-check, the only thing that has changed is that Entropy will be replacing Devansh as the facilitating member due to the latter accepting a full-time offer at the Ethereum Foundation. Given that, we understand the need for replacement and support the decision.
One thing that occurred to us and should be addressed sooner rather than later is the compensation of the program manager. In STEP 1.0, the ARB earmarked for the PM's compensation wasn’t enough to cover the USD-quoted fees for the 1-year tenure, so we had to vote on a separate proposal to deal with the situation. Steakhouse’s tenure from STEP 1.0 ends on September 2025, which means that STEP 2.0 will;
In the vote mentioned above, the resulting decision was that Steakhouse would be paid its dues from the yield STEP 1.0 generates. Perhaps it’s also worth discussing something similar for STEP 2.0, as it avoids putting price pressure on ARB.
Lastly, we want to take the opportunity to state once again that we want the committee to leverage the service providers we’re engaging with for more than just using their services. This could, for example, come in the form of a co-marketing campaign for RWAs on Arbitrum.
Voting FOR the proposal
While the DAO has continued to evaluate larger wrappers for some activities, having Stable Treasury 1.0 and now 2.0 shows that we can continue to deliver on DAO objectives.
Voting FOR the proposal
While the DAO has continued to evaluate larger wrappers for some activities, having Stable Treasury 1.0 and now 2.0 shows that we can continue to deliver on DAO objectives.
The stability of knowing that the Arbitrum DAO has reviewed these protocols, and their commitment to the Arbitrum ecosystem also acts as a great proxy for defi builders to work with these same RWA issuers knowing that there is reasonable stability and adoption for them here.
I’m voting FOR on Tally. As I mentioned during temp-check: this proposal builds on a proven process to diversify our treasury into stable, yield-generating RWA assets while promoting ecosystem growth.
The only concern I have is that ARB price has dropped too much lately, and with the current yields we are earning, it will take us more than 10 years to recoup these losses, I suppose this is more of a timing the market problem, but would be nice to explore some solutions.
voting For on the current onchain vote because following the same reasons as before, for the offchain vote, this program is very well set up and thought through, and the entities involved are some of the best in the world at what they do.
I’m voting FOR this proposal on Tally. My reasons remain the same as during the Snapshot vote, plus the shorter timeline I suggested has been implemented in this version.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
We are voting FOR this proposal in Tally voting.
We support this proposal on Tally for diversifying an additional 35 million ARB into stable assets, emphasizing prudent financial management.
Voted For: After reviewing the reports, there is no reason not to further support this STEP program. Diversification of the funds in a DAO of our size is important and RWA is the best way to do it in this case. Also, I believe in the team that the execution of the 2.0 program will be done well. I do expect consistent reporting on the program during our monthly GRC calls.
I am voting FOR on Tally.
This program has a strong foundation and a proven track record of success. Devansh's recent transition and Entropy becoming the new facilitator will not change the outcome of the initiative.
I am voting FOR on Tally.
This program has a strong foundation and a proven track record of success. Devansh's recent transition and Entropy becoming the new facilitator will not change the outcome of the initiative.
I maintain my position that a program like this is a net positive for Arbitrum regarding Treasury Management. In the current landscape of market volatility, having a program like this will contribute in safeguarding long-term sustainability for the DAO.
We vote FOR the proposal on Tally.
As we supported this proposal on Snapshot, we maintain our decision and also confirm that Entropy takes over the facilitation of the program.
I voted FOR this proposal on Tally, because I believe the first version of the STEP program contributed meaningfully to Arbitrum's growth.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
We are voting FOR this proposal in Tally voting.
We support this proposal on Tally for diversifying an additional 35 million ARB into stable assets, emphasizing prudent financial management.
Drawing on STEP 1.0, where the average conversion rate of ARB to USD over seven weeks was $0.87, we see the potential for managing conversions to avoid further price depreciation.
With the current ARB price at a bearish $0.46, converting now could significantly impact our recovery time. A conversion at such a low price could necessitate a nearly 90% gain, translating to a recovery period of approximately 14 years at a 5% CAGR. It's crucial to avoid hasty conversions that could undermine ARB's price stability. Instead, we advocate for a cautious approach that waits for more favourable market conditions, ensuring the DAO's actions align with long-term financial health and stability. It’s true we cannot get the best price but we believe liquidating in the low 10 percentile of the ARB’s historical price means taking a loss to gain later(14 years min).
This perspective isn't about hastening to earn yield; it's about safeguarding our assets against market lows and strategically planning for financial resilience.
I'm voting for this proposal on Tally, confirming my previous rationale https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/70
Voted FOR this on Tally – the program has the optimal team to execute on the brief, and the success of the first round gives a lot of comfort that this iteration will also succeed.
I share the concerns around potential overlap between STEP 2 and the TMC, though I think those are largely addressed by the need to get something in motion while the TMC is in startup mode.
Voted FOR this on Tally – the program has the optimal team to execute on the brief, and the success of the first round gives a lot of comfort that this iteration will also succeed.
I share the concerns around potential overlap between STEP 2 and the TMC, though I think those are largely addressed by the need to get something in motion while the TMC is in startup mode.
But I also think those concerns overlook a bigger issue, which is that the environment has changed dramatically since STEP 1. One of the things that made the first iteration so exciting was that it was not only well executed but it was a huge innovation in terms of acting on the idea of RWAs well before other ecosystems. Hats off to @thedevanshmehta and everyone involved for capitalizing on that so effectively.
The environment today is quite different, with RWAs becoming so established that there are now entire chains devoted to them, not to mention an ecosystem of service providers that goes well beyond asset issuers/fund managers. This is one example of an ecosystem map, from Tokeny:
Two things jump out when I look at this (or for an alternative with the same effect, see this one). First, it’s frustrating that Arbitrum isn’t listed given how much the DAO has already done, and second, there’s a giant space of RWA providers making business decisions about what chains to commit to that go well beyond what we’re thinking about with STEP. And Arbitrum will need to get their attention to compete with the chains that keep popping up on these lists.
This isn’t to say that STEP needs to or should fill this gap, but I do think that the program needs to contribute to building Arbitrum’s profile in the space so that when OCL or the Foundation do have whatever conversations they’re having with RWA vendors, the DAO has contributed to making those conversations more effective. This could be as simple as a comarketing but would ideally go beyond that to also include other contributions to building Arbitrum’s profile as the home for RWAs (strong agree with @krst here).
I also strongly agree with @maxlomu'ssuggestion that the program consider securities beyond purely T-bills. The US is not the only economy in the world, and simple risk diversification (including political risk) argues for at least incorporating cash-equivalent instruments from other markets.
As in @web3citizenxyz representation. Voting FOR, without retroactive in this proposal. Below the rationale:
We have voted FOR this proposal at the onchain phase. Our reasoning has not deviated from our prior comment, and our concerns and questions have been alleviated: https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/6?u=blockworksresearch
On the distribution, I’d advocate allocating part of the budget towards non-T-BILLS (both US and non-US assets) whenever possible. While this comes with a different risk profile, it aligns with encouraging a diverse set of innovations on Arbitrum.
Voting FOR on Tally with the same rationale and recommendations
First, it’s frustrating that Arbitrum isn’t listed given how much the DAO has already done, and second, there’s a giant space of RWA providers making business decisions about what chains to commit to that go well beyond what we’re thinking about with STEP. And Arbitrum will need to get their attention to compete with the chains that keep popping up on these lists.
First, it’s frustrating that Arbitrum isn’t listed given how much the DAO has already done, and second, there’s a giant space of RWA providers making business decisions about what chains to commit to that go well beyond what we’re thinking about with STEP. And Arbitrum will need to get their attention to compete with the chains that keep popping up on these lists.
This reminds me of the "whole of government" approach to a problem. This is another strong rationale for why OpCo should take up RWA growth in an integrated manner
I also strongly agree with @maxlomu’ssuggestion that the program consider securities beyond purely T-bills. The US is not the only economy in the world, and simple risk diversification (including political risk) argues for at least incorporating cash-equivalent instruments from other markets.
We did consider alternatives for STEP 2. Overall, we felt that since 99% of the $100 million RWA TVL on arbitrum is US centered, we should drill down here rather than the blue ocean exploration. This may have been an incorrect calculation and getting ahead of the curve is the wiser path, but we felt that with more limited resources than STEP 1 we should double down on existing RWAs on arbitrum.
Thanks for the support!
we hope that the committee will consider our suggestions to improve the current reporting with small changes
Thanks for the support!
we hope that the committee will consider our suggestions to improve the current reporting with small changes
Highlighting the earlier feedback once for @steakhouse. The committee gets disbanded after selection of products, so this falls squarely into the program managers domain.
DAOplomats is voting FOR this proposal on Tally.
We are happy to support this proposal for a second cohort during the onchain vote as we did during the temp check.
We're voting for the proposal on Tally as we believe the actions proposed will facilitate
We're voting for the proposal on Tally as we believe the actions proposed will facilitate
However, we also believe that the following points of concern should be considered and dealt with when moving forward with the proposal
This comment is representative of the Event Horizon team and does not represent the entirety of the Event Horizon community nor can it reflect any certainty of how the Event Horizon community may meta-govern this proposal should it come to a vote:
The Event Horizon team strongly supports treasury diversification and has worked closely with many of the committee teams as well as Devansh, and thus has a high degree of confidence in their ability to properly guide this initiative. Two questions which emerged were:
This comment is representative of the Event Horizon team and does not represent the entirety of the Event Horizon community nor can it reflect any certainty of how the Event Horizon community may meta-govern this proposal should it come to a vote:
The Event Horizon team strongly supports treasury diversification and has worked closely with many of the committee teams as well as Devansh, and thus has a high degree of confidence in their ability to properly guide this initiative. Two questions which emerged were:
Has the STEP team considered eth-based stable yield opportunities such as Etherna sUSDe which are both Ethereum Ecosystem supportive and over notable yield (10% APY at present)? – We’ve been informed that this may be a better fit for the strategic treasury management initiative, but still felt this point was salient enough to at least flag for discussion here.
This may have been previously addressed, but what is the modality for acquiring these stable assets as to minimize price impact? Is there an effort for or interest in OTC solutions?
After consideration, the @SEEDgov delegation has decided to “FOR” on this proposal at the Tally Vote.
Considering that the proposal has not undergone significant changes, we maintain our position, previously justified in this comment.
However, we hope that the committee will consider our suggestions to improve the current reporting with small changes.
Voted For on Tally as same reason on Snapshot. I support diversifying the treasury and promoting the growth of RWAs on Arbitrum since it will reduce reliance on higher risk assets and help DAO build a stable reserve fund :)
Thanks to all for the support so far in additional diversification of the treasury. The fluctuations in ARB price have shown the need to have a stable endowment from where we can make decisions via a position of strength irrespective of market conditions.
Before the vote concludes, I want to intimate delegates of a material change: @Entropy will be taking over from me as facilitating member of the STEP committee. I have been offered a position at the Ethereum Foundation to work on AI & public goods/governance, which would preclude me from doing justice to RWA provider outreach that this proposal deserves.
Hello, I voted FOR this proposal in temp-check Snapshot. I like its previous execution, reporting stats, results, committee members, comp structure & vesting, and smooth coordination with the ARBFND. Cost is also reasonable. Agreed on the eventual integration with OpCo, and until then, voting FOR this iteration. Really great work!
In Tally, I'm inclined to support the proposal, and after reading the entire exhaustive response, believe that the STEP 2 proposal could provide significant financial stability and ecological growth opportunities for the Arb DAO through funding diversification and RWA ecosystem development.
STEP 1 has successfully diversified $30 million into multiple RWA products and generated significant revenue, and STEP 2 builds on STEP 1 to further optimize the process and ensure greater efficiency and transparency.
In Tally, I'm inclined to support the proposal, and after reading the entire exhaustive response, believe that the STEP 2 proposal could provide significant financial stability and ecological growth opportunities for the Arb DAO through funding diversification and RWA ecosystem development.
STEP 1 has successfully diversified $30 million into multiple RWA products and generated significant revenue, and STEP 2 builds on STEP 1 to further optimize the process and ensure greater efficiency and transparency.
Despite the risks involved, its transparent, efficient process and proven successful model make it a worthy proposal to support.
Among other things, the STEP program uses a rigorous RFP (Request for Proposal) process to ensure transparency and fairness in the allocation of funds. The committee consists of multiple independent parties that can effectively oversee and execute the allocation of funds to avoid conflicts of interest. Meanwhile, by establishing an endowment fund, DAO can utilize the proceeds from the stabilized assets to pay for its operating expenses and reduce its reliance on ARB tokens. This long-term financial planning helps DAO maintain stable operations in a bear market.
Since the first STEP, Arbitrum DAO invested $30 million in stable and liquid assets such as US Treasury bonds and other low-risk instruments. These assets generated income that helped diversify the treasury and create a solid foundation for further steps. STEP 1 demonstrated the importance of carefully selecting projects through a competitive process, which also benefited both the Arbitrum ecosystem and the services that launched on the platform. Given the success of STEP 1, I see no obstacles to continuing and transfer of another 35 million ARB to the STEP multisig for the next edition of the Stable Treasury Endowment Program
Decided to vote 'for' on Tally following the same reasoning as my previous temp check vote.
For the same reasons I voted against it during the temp-check, I am voting against it again on Tally.
I'm voting for it on tally. 1, this proposal to make the DAO treasury more stable, reduce the dependence on ARB price fluctuations, you can see that ARB price fluctuations are large, and there is no value capture, when the market downturn, the capital reserve will shrink, affecting the long-term operation of the DAO, STEP program can be replaced part of the ARB into a stable, income-generating real-world assets (RWAs), there is a steady income to cover operating expenses, very This is very practical and practical. There is no intermediary, the DAO directly manages the options, and the DAO audits the projects by itself instead of letting the intermediary organization manage the projects on its behalf, which saves a lot of management costs. The funds will not be given directly to a certain organization, but through the open bidding of DAO (RFP mechanism), each project will apply and the DAO representatives will vote to decide which projects will be supported by the funds. I agree with this point. STEP 1 allocated $30 million to six RWA projects, which are expected to generate $875,000 in annual revenue for the DAO, proving that this model is feasible. Looking forward to S2's continued depth
We voted AGAINST the proposal.
Diversifying the treasury introduces direct conflict of interest between ARB holders and the treasury managers and should not happen a priori. Taking RWA on the balance sheet and investing them in selected protocols is a slippery slope that invites centralisation and nepotism.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
We are voting FOR this proposal in Tally voting.
We support this proposal on Tally for diversifying an additional 35 million ARB into stable assets, emphasizing prudent financial management.
Drawing on STEP 1.0, where the average conversion rate of ARB to USD over seven weeks was $0.87, we see the potential for managing conversions to avoid further price depreciation.
With the current ARB price at a bearish $0.46, converting now could significantly impact our recovery time. A conversion at such a low price could necessitate a nearly 90% gain, translating to a recovery period of approximately 14 years at a 5% CAGR. It's crucial to avoid hasty conversions that could undermine ARB's price stability. Instead, we advocate for a cautious approach that waits for more favourable market conditions, ensuring the DAO's actions align with long-term financial health and stability. It’s true we cannot get the best price but we believe liquidating in the low 10 percentile of the ARB’s historical price means taking a loss to gain later(14 years min).
This perspective isn't about hastening to earn yield; it's about safeguarding our assets against market lows and strategically planning for financial resilience.
I'm voting for this proposal on Tally, confirming my previous rationale https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/70
Voted FOR this on Tally – the program has the optimal team to execute on the brief, and the success of the first round gives a lot of comfort that this iteration will also succeed.
I share the concerns around potential overlap between STEP 2 and the TMC, though I think those are largely addressed by the need to get something in motion while the TMC is in startup mode.
Voted FOR this on Tally – the program has the optimal team to execute on the brief, and the success of the first round gives a lot of comfort that this iteration will also succeed.
I share the concerns around potential overlap between STEP 2 and the TMC, though I think those are largely addressed by the need to get something in motion while the TMC is in startup mode.
But I also think those concerns overlook a bigger issue, which is that the environment has changed dramatically since STEP 1. One of the things that made the first iteration so exciting was that it was not only well executed but it was a huge innovation in terms of acting on the idea of RWAs well before other ecosystems. Hats off to @thedevanshmehta and everyone involved for capitalizing on that so effectively.
The environment today is quite different, with RWAs becoming so established that there are now entire chains devoted to them, not to mention an ecosystem of service providers that goes well beyond asset issuers/fund managers. This is one example of an ecosystem map, from Tokeny:
Two things jump out when I look at this (or for an alternative with the same effect, see this one). First, it’s frustrating that Arbitrum isn’t listed given how much the DAO has already done, and second, there’s a giant space of RWA providers making business decisions about what chains to commit to that go well beyond what we’re thinking about with STEP. And Arbitrum will need to get their attention to compete with the chains that keep popping up on these lists.
This isn’t to say that STEP needs to or should fill this gap, but I do think that the program needs to contribute to building Arbitrum’s profile in the space so that when OCL or the Foundation do have whatever conversations they’re having with RWA vendors, the DAO has contributed to making those conversations more effective. This could be as simple as a comarketing but would ideally go beyond that to also include other contributions to building Arbitrum’s profile as the home for RWAs (strong agree with @krst here).
I also strongly agree with @maxlomu'ssuggestion that the program consider securities beyond purely T-bills. The US is not the only economy in the world, and simple risk diversification (including political risk) argues for at least incorporating cash-equivalent instruments from other markets.
As in @web3citizenxyz representation. Voting FOR, without retroactive in this proposal. Below the rationale:
We have voted FOR this proposal at the onchain phase. Our reasoning has not deviated from our prior comment, and our concerns and questions have been alleviated: https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/6?u=blockworksresearch
On the distribution, I’d advocate allocating part of the budget towards non-T-BILLS (both US and non-US assets) whenever possible. While this comes with a different risk profile, it aligns with encouraging a diverse set of innovations on Arbitrum.
Voting FOR on Tally with the same rationale and recommendations
First, it’s frustrating that Arbitrum isn’t listed given how much the DAO has already done, and second, there’s a giant space of RWA providers making business decisions about what chains to commit to that go well beyond what we’re thinking about with STEP. And Arbitrum will need to get their attention to compete with the chains that keep popping up on these lists.
First, it’s frustrating that Arbitrum isn’t listed given how much the DAO has already done, and second, there’s a giant space of RWA providers making business decisions about what chains to commit to that go well beyond what we’re thinking about with STEP. And Arbitrum will need to get their attention to compete with the chains that keep popping up on these lists.
This reminds me of the "whole of government" approach to a problem. This is another strong rationale for why OpCo should take up RWA growth in an integrated manner
I also strongly agree with @maxlomu’ssuggestion that the program consider securities beyond purely T-bills. The US is not the only economy in the world, and simple risk diversification (including political risk) argues for at least incorporating cash-equivalent instruments from other markets.
We did consider alternatives for STEP 2. Overall, we felt that since 99% of the $100 million RWA TVL on arbitrum is US centered, we should drill down here rather than the blue ocean exploration. This may have been an incorrect calculation and getting ahead of the curve is the wiser path, but we felt that with more limited resources than STEP 1 we should double down on existing RWAs on arbitrum.
Thanks for the support!
we hope that the committee will consider our suggestions to improve the current reporting with small changes
Thanks for the support!
we hope that the committee will consider our suggestions to improve the current reporting with small changes
Highlighting the earlier feedback once for @steakhouse. The committee gets disbanded after selection of products, so this falls squarely into the program managers domain.
DAOplomats is voting FOR this proposal on Tally.
We are happy to support this proposal for a second cohort during the onchain vote as we did during the temp check.
We're voting for the proposal on Tally as we believe the actions proposed will facilitate
We're voting for the proposal on Tally as we believe the actions proposed will facilitate
However, we also believe that the following points of concern should be considered and dealt with when moving forward with the proposal
This comment is representative of the Event Horizon team and does not represent the entirety of the Event Horizon community nor can it reflect any certainty of how the Event Horizon community may meta-govern this proposal should it come to a vote:
The Event Horizon team strongly supports treasury diversification and has worked closely with many of the committee teams as well as Devansh, and thus has a high degree of confidence in their ability to properly guide this initiative. Two questions which emerged were:
This comment is representative of the Event Horizon team and does not represent the entirety of the Event Horizon community nor can it reflect any certainty of how the Event Horizon community may meta-govern this proposal should it come to a vote:
The Event Horizon team strongly supports treasury diversification and has worked closely with many of the committee teams as well as Devansh, and thus has a high degree of confidence in their ability to properly guide this initiative. Two questions which emerged were:
Has the STEP team considered eth-based stable yield opportunities such as Etherna sUSDe which are both Ethereum Ecosystem supportive and over notable yield (10% APY at present)? – We’ve been informed that this may be a better fit for the strategic treasury management initiative, but still felt this point was salient enough to at least flag for discussion here.
This may have been previously addressed, but what is the modality for acquiring these stable assets as to minimize price impact? Is there an effort for or interest in OTC solutions?
After consideration, the @SEEDgov delegation has decided to “FOR” on this proposal at the Tally Vote.
Considering that the proposal has not undergone significant changes, we maintain our position, previously justified in this comment.
However, we hope that the committee will consider our suggestions to improve the current reporting with small changes.
Voted For on Tally as same reason on Snapshot. I support diversifying the treasury and promoting the growth of RWAs on Arbitrum since it will reduce reliance on higher risk assets and help DAO build a stable reserve fund :)
Thanks to all for the support so far in additional diversification of the treasury. The fluctuations in ARB price have shown the need to have a stable endowment from where we can make decisions via a position of strength irrespective of market conditions.
Before the vote concludes, I want to intimate delegates of a material change: @Entropy will be taking over from me as facilitating member of the STEP committee. I have been offered a position at the Ethereum Foundation to work on AI & public goods/governance, which would preclude me from doing justice to RWA provider outreach that this proposal deserves.
Hello, I voted FOR this proposal in temp-check Snapshot. I like its previous execution, reporting stats, results, committee members, comp structure & vesting, and smooth coordination with the ARBFND. Cost is also reasonable. Agreed on the eventual integration with OpCo, and until then, voting FOR this iteration. Really great work!
In Tally, I'm inclined to support the proposal, and after reading the entire exhaustive response, believe that the STEP 2 proposal could provide significant financial stability and ecological growth opportunities for the Arb DAO through funding diversification and RWA ecosystem development.
STEP 1 has successfully diversified $30 million into multiple RWA products and generated significant revenue, and STEP 2 builds on STEP 1 to further optimize the process and ensure greater efficiency and transparency.
In Tally, I'm inclined to support the proposal, and after reading the entire exhaustive response, believe that the STEP 2 proposal could provide significant financial stability and ecological growth opportunities for the Arb DAO through funding diversification and RWA ecosystem development.
STEP 1 has successfully diversified $30 million into multiple RWA products and generated significant revenue, and STEP 2 builds on STEP 1 to further optimize the process and ensure greater efficiency and transparency.
Despite the risks involved, its transparent, efficient process and proven successful model make it a worthy proposal to support.
Among other things, the STEP program uses a rigorous RFP (Request for Proposal) process to ensure transparency and fairness in the allocation of funds. The committee consists of multiple independent parties that can effectively oversee and execute the allocation of funds to avoid conflicts of interest. Meanwhile, by establishing an endowment fund, DAO can utilize the proceeds from the stabilized assets to pay for its operating expenses and reduce its reliance on ARB tokens. This long-term financial planning helps DAO maintain stable operations in a bear market.
Since the first STEP, Arbitrum DAO invested $30 million in stable and liquid assets such as US Treasury bonds and other low-risk instruments. These assets generated income that helped diversify the treasury and create a solid foundation for further steps. STEP 1 demonstrated the importance of carefully selecting projects through a competitive process, which also benefited both the Arbitrum ecosystem and the services that launched on the platform. Given the success of STEP 1, I see no obstacles to continuing and transfer of another 35 million ARB to the STEP multisig for the next edition of the Stable Treasury Endowment Program
Decided to vote 'for' on Tally following the same reasoning as my previous temp check vote.
For the same reasons I voted against it during the temp-check, I am voting against it again on Tally.
I'm voting for it on tally. 1, this proposal to make the DAO treasury more stable, reduce the dependence on ARB price fluctuations, you can see that ARB price fluctuations are large, and there is no value capture, when the market downturn, the capital reserve will shrink, affecting the long-term operation of the DAO, STEP program can be replaced part of the ARB into a stable, income-generating real-world assets (RWAs), there is a steady income to cover operating expenses, very This is very practical and practical. There is no intermediary, the DAO directly manages the options, and the DAO audits the projects by itself instead of letting the intermediary organization manage the projects on its behalf, which saves a lot of management costs. The funds will not be given directly to a certain organization, but through the open bidding of DAO (RFP mechanism), each project will apply and the DAO representatives will vote to decide which projects will be supported by the funds. I agree with this point. STEP 1 allocated $30 million to six RWA projects, which are expected to generate $875,000 in annual revenue for the DAO, proving that this model is feasible. Looking forward to S2's continued depth
We voted AGAINST the proposal.
Diversifying the treasury introduces direct conflict of interest between ARB holders and the treasury managers and should not happen a priori. Taking RWA on the balance sheet and investing them in selected protocols is a slippery slope that invites centralisation and nepotism.
Thanks to all for the support so far in additional diversification of the treasury. The fluctuations in ARB price have shown the need to have a stable endowment from where we can make decisions via a position of strength irrespective of market conditions.
Before the vote concludes, I want to intimate delegates of a material change: @Entropy will be taking over from me as facilitating member of the STEP committee. I have been offered a position at the Ethereum Foundation to work on AI & public goods/governance, which would preclude me from doing justice to RWA provider outreach that this proposal deserves.
I am very grateful to the Arbitrum community for all it has given me over the past 2 years: not just sustenance and purpose, but also a stage upon which to show value. I am proud that the 2 seasons of our Treasury and Sustainability Working Group diversified 2% of Arbitrum's treasury, let us be early on the RWA game and produced other valuable research for the DAO.
While I am bowing out for now, I am confident that Entropy will take STEP 2 to the finish line with the excellence that the program has come to be known for.
For the same reasons I voted against it during the temp-check, I am voting against it again on Tally.
From our perspective, why have a RWA grants program when you can instead buy their financial product & force them to launch it here to get the business?
From a mature projects perspective, why care about grants when you can instead have the legitimacy of Arbitrum being a customer of your product? Plus for their investors grants are less important than showing market need for what they’ve built
Sorry for not replying to your questions earlier. I'm not against what you're saying, but rather against this initiative running independently while other initiatives are already in place to manage the same tools.
I understand that they may have different "objectives" (though one could argue that the treasury management initiative has the same effect when it comes to grants vs. investments), but I believe this approach (having separte managements) is inefficient and lacks coordination with a long-term vision.
In this regard, I still believe there is no need to renew a program that is still ongoing, especially when the DAO has already approved another treasury management initiative, which is currently in the process of onboarding service providers.
Additionally, I remain concerned about the liquidity of the ARB token and the impact of continuously dumping it for stablecoins to fund DAO activities without a plan to mitigate this effect.
Lastly, I also have significant doubts about the timing of this vote (though this is not the proposers' responsibility), as ARB is at historical lows, and this may not be the best moment to sell.
Again, I think you did a great job, and I’m grateful for it.
I’m voting for this one. RWA is trending, and funny enough, just today ETH dropped to $2,170 on Binance, and MANTRA, the top RWA coin, is up 14% while all the alts dropped hard as well. I’m citing this as an argument to support the proposal. I also believe that with boomers joining the party, this will keep going up.
Why would I hold these papers with all those legal bureaucracies just to say a house is mine? I believe RWA is a needed tech for the cryptoanarchist dream I believe we are moving towards.
I’m voting for this one. RWA is trending, and funny enough, just today ETH dropped to $2,170 on Binance, and MANTRA, the top RWA coin, is up 14% while all the alts dropped hard as well. I’m citing this as an argument to support the proposal. I also believe that with boomers joining the party, this will keep going up.
Why would I hold these papers with all those legal bureaucracies just to say a house is mine? I believe RWA is a needed tech for the cryptoanarchist dream I believe we are moving towards.
I don’t like the idea of selling ARB, especially without a plan to buy back, but voting yes because I believe it’s good to capture this value.
Confirming our snapshot vote on Tally to support a stable treasury v2 https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/54?u=mcfly
Thanks for the constructive feedback! Our thinking with STEP 2 was to simply replicate what worked with STEP 1 to keep some continuity, without too much innovation baked into it.
Once OpCo is setup, delegates have expressed a desire for their takeover of the STEP program. Having distribution, speaker engagements etc for the RWA boost by STEP routed through the OpCo would be our approach, rather than trying to include it within the purview of STEP 2 which is narrowly focused on the RWA products on Arbitrum that are best for our treasury and growth of the ecosystem.
I'm supportive of the STEP program.
It has been a terrific program but I'd prefer that we included some distribution. Rather than depending solely on OCL to discuss this there should be funds to drive adoption.
Additionally, I think rather than make STEP about applications we would be bettter to set a goal, build a team and enbable them towards that goal.
I'm supportive of the STEP program.
It has been a terrific program but I'd prefer that we included some distribution. Rather than depending solely on OCL to discuss this there should be funds to drive adoption.
Additionally, I think rather than make STEP about applications we would be bettter to set a goal, build a team and enbable them towards that goal.
This is where distribution would naturally get included in that workstream. For example, we could have TOM of Entropy or Devansh to go to conferences and speak about RWAs and check how they grew towards driving the KPI.
I will vote FOR on Tally. Overall this initiative targets the type of diversification that is aligned with the DAOs long-term objective, while also promising greater sustainability regardless of how crypto markets and tokens perform.
Timing is also perfect, so executing this in 2025 is definitely the way to go.
DAOplomats voted FOR this proposal on Snapshot.
The cohort one was solid. It had many positives. The idea of diversifying the treasury, and exploring RWA is still net positive for the DAO, so it was easy to support this second installment of the program.
I vote in favor on Tally for the following reason: https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/71?u=0xtalvo.eth_mty
I'm voting FOR the proposal on Tally for the same reasons as stated in my Snapshot vote.
Voted abstain for the following reasons https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/34?u=ezr3al
LobbyFi’s rationale on the price and making this proposal available after its activation for on-chain voting As the result of this proposal, the DAO would roughly earn in a year: 35.000.000 (ARBs invested) * 0,6 (correct price of ARB) * 0,04 (% yearly) = $840.000.
Since the snapshot proposal went through with 135m+ of votes in favor and the quorum is at 121m ARB on-chain, we expect this proposal to go though relatively easily with or without LobbyFi’s support + we do not expect that LobbyFi will block it or prevent the proposal from hitting the quorum - hence low risk of us selling the voting power on this overall.
LobbyFi’s rationale on the price and making this proposal available after its activation for on-chain voting As the result of this proposal, the DAO would roughly earn in a year: 35.000.000 (ARBs invested) * 0,6 (correct price of ARB) * 0,04 (% yearly) = $840.000.
Since the snapshot proposal went through with 135m+ of votes in favor and the quorum is at 121m ARB on-chain, we expect this proposal to go though relatively easily with or without LobbyFi’s support + we do not expect that LobbyFi will block it or prevent the proposal from hitting the quorum - hence low risk of us selling the voting power on this overall.
Based on this input + financial benefit the DAO treasury gets within a year, we will set the instant buy price for this at 1% of that; so approx 2.5 ETH but would not expect it to be bought in the end. We would expect it to be sold via community auction (which we will turn on), yet the volume would also most probably not be too high since there is nothing controversial about the proposal + the DAO is the direct beneficiary in a sense.
After consideration, the @SEEDgov delegation has decided to “FOR” on this proposal at the Snapshot Vote.
From our perspective, STEP is one of the best-executed programs within the DAO.
Several strong points allow us to continue trusting the team designated for this task:
Thanks for the ~unanimous vote of support for the STEP program!
We appreciate delegates recognizing the success of the first program and renewing our mandate for a second version. We are in agreement with the feedback that this should be the last time we hold STEP with the same committee members.
Thanks for the ~unanimous vote of support for the STEP program!
We appreciate delegates recognizing the success of the first program and renewing our mandate for a second version. We are in agreement with the feedback that this should be the last time we hold STEP with the same committee members.
We have updated the proposal to keep a slightly shorter timeline, added @steakhouse as an observing member of the STEP committee in their role as program manager and also uploaded the RFP under which applicants would need to apply.
We will keep this up for a week to get a final round of feedback before uploading to Tally next week on January 28th. Thanks for all the improvements and making this a smooth process!
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking, and ideation of the two.
We’re voting FOR the proposal.
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking, and ideation of the two.
We’re voting FOR the proposal.
The first iteration of STEP was a good first step towards a more streamlined approach to diversifying our treasury and expanding it by allocating more money and opening it up to more providers makes sense.
We have discussed STEP (both 1.0 and 2.0) with Devansh quite a lot over the past few months, and we appreciate the work he’s put into the proposal, particularly in addressing some of the concerns and things we’ve brought up in our discussions.
We are aware of the comment that some other delegates have raised about STEP falling under the scope of the TMC/GM established with the Treasury Management proposal. Although we generally agree, we do not think that now is the right time to do that. STEP should continue as a standalone program for the time being while the TMC and GM focus on other areas and potentially fall under their scope down the line.
One last thing we’d like to raise and open a discussion about is that we would like to see Arbitrum leverage the service providers we’re engaging with for more than just using their services. That could come in the form of additional marketing for Arbitrum or ecosystem growth (e.g. by whitelisting Arbitrum protocols to be able to use tokenized t-bills as lending collateral). STEP 2.0 is a great opportunity to explore more of those opportunities and how we can leverage them.
gm, voted FOR.
Voted against, for the same reasons as the Snapshot vote.
As stated above, I'll always think treasury diversity is important. I think this has (and will continue to) be a good step to achieve that goal. I also appreciate that there has been reporting to show that there has been success with the first iteration.
As others have mentioned, with the passing of other treasury diversification projects this now creates some redundancies... however I think that this project is more then simple treasury diversification at the end of the day. Its about supporting an RWA market. So in some sense I think it is a little unique in that role. I'd also contend that those projects are still relatively new, so keeping this running will present an opportunity for a soft transition if you will.
Blockworks Advisory will be voting FOR this proposal on Snapshot.
We were pleased with the first STEP, and after seeing the first few reports from Steakhouse we believe that a continuation is warranted. While STEP does fall within the mandate of the TMC/GM, based on past performance and the standard of execution to which STEP has shown, we do not think that it would be a good idea to discontinue STEP.
Voted FOR this proposal. I particularly like the evolution of the compensation structure to include the 3 year vesting.
In addition to the "endowment", it would be great to see a Stables spending fund for maybe yearly/semestrely DAO expenses. With a recent proposal, we're having to do A LOT of coordiantion with the MSS and AF around swaping Arb tokens and inclued a 30% buffer which almost wasnt enough and stressed about potentially having to cancel or ask the DAO for more money. All that could be refactored away from individual proposals.
I think there is merit to dollar cost averaging, in price impact for the market, ecosystem growth that evolves over this timeframe, and getting overall better execution.
voting For the current offchain proposal because this program is very well set up and thought through, and the entities involved are some of the best in the world at what they do.
Thanks to all for the support so far in additional diversification of the treasury. The fluctuations in ARB price have shown the need to have a stable endowment from where we can make decisions via a position of strength irrespective of market conditions.
Before the vote concludes, I want to intimate delegates of a material change: @Entropy will be taking over from me as facilitating member of the STEP committee. I have been offered a position at the Ethereum Foundation to work on AI & public goods/governance, which would preclude me from doing justice to RWA provider outreach that this proposal deserves.
I am very grateful to the Arbitrum community for all it has given me over the past 2 years: not just sustenance and purpose, but also a stage upon which to show value. I am proud that the 2 seasons of our Treasury and Sustainability Working Group diversified 2% of Arbitrum's treasury, let us be early on the RWA game and produced other valuable research for the DAO.
While I am bowing out for now, I am confident that Entropy will take STEP 2 to the finish line with the excellence that the program has come to be known for.
For the same reasons I voted against it during the temp-check, I am voting against it again on Tally.
From our perspective, why have a RWA grants program when you can instead buy their financial product & force them to launch it here to get the business?
From a mature projects perspective, why care about grants when you can instead have the legitimacy of Arbitrum being a customer of your product? Plus for their investors grants are less important than showing market need for what they’ve built
Sorry for not replying to your questions earlier. I'm not against what you're saying, but rather against this initiative running independently while other initiatives are already in place to manage the same tools.
I understand that they may have different "objectives" (though one could argue that the treasury management initiative has the same effect when it comes to grants vs. investments), but I believe this approach (having separte managements) is inefficient and lacks coordination with a long-term vision.
In this regard, I still believe there is no need to renew a program that is still ongoing, especially when the DAO has already approved another treasury management initiative, which is currently in the process of onboarding service providers.
Additionally, I remain concerned about the liquidity of the ARB token and the impact of continuously dumping it for stablecoins to fund DAO activities without a plan to mitigate this effect.
Lastly, I also have significant doubts about the timing of this vote (though this is not the proposers' responsibility), as ARB is at historical lows, and this may not be the best moment to sell.
Again, I think you did a great job, and I’m grateful for it.
I’m voting for this one. RWA is trending, and funny enough, just today ETH dropped to $2,170 on Binance, and MANTRA, the top RWA coin, is up 14% while all the alts dropped hard as well. I’m citing this as an argument to support the proposal. I also believe that with boomers joining the party, this will keep going up.
Why would I hold these papers with all those legal bureaucracies just to say a house is mine? I believe RWA is a needed tech for the cryptoanarchist dream I believe we are moving towards.
I’m voting for this one. RWA is trending, and funny enough, just today ETH dropped to $2,170 on Binance, and MANTRA, the top RWA coin, is up 14% while all the alts dropped hard as well. I’m citing this as an argument to support the proposal. I also believe that with boomers joining the party, this will keep going up.
Why would I hold these papers with all those legal bureaucracies just to say a house is mine? I believe RWA is a needed tech for the cryptoanarchist dream I believe we are moving towards.
I don’t like the idea of selling ARB, especially without a plan to buy back, but voting yes because I believe it’s good to capture this value.
Confirming our snapshot vote on Tally to support a stable treasury v2 https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/54?u=mcfly
Thanks for the constructive feedback! Our thinking with STEP 2 was to simply replicate what worked with STEP 1 to keep some continuity, without too much innovation baked into it.
Once OpCo is setup, delegates have expressed a desire for their takeover of the STEP program. Having distribution, speaker engagements etc for the RWA boost by STEP routed through the OpCo would be our approach, rather than trying to include it within the purview of STEP 2 which is narrowly focused on the RWA products on Arbitrum that are best for our treasury and growth of the ecosystem.
I'm supportive of the STEP program.
It has been a terrific program but I'd prefer that we included some distribution. Rather than depending solely on OCL to discuss this there should be funds to drive adoption.
Additionally, I think rather than make STEP about applications we would be bettter to set a goal, build a team and enbable them towards that goal.
I'm supportive of the STEP program.
It has been a terrific program but I'd prefer that we included some distribution. Rather than depending solely on OCL to discuss this there should be funds to drive adoption.
Additionally, I think rather than make STEP about applications we would be bettter to set a goal, build a team and enbable them towards that goal.
This is where distribution would naturally get included in that workstream. For example, we could have TOM of Entropy or Devansh to go to conferences and speak about RWAs and check how they grew towards driving the KPI.
I will vote FOR on Tally. Overall this initiative targets the type of diversification that is aligned with the DAOs long-term objective, while also promising greater sustainability regardless of how crypto markets and tokens perform.
Timing is also perfect, so executing this in 2025 is definitely the way to go.
DAOplomats voted FOR this proposal on Snapshot.
The cohort one was solid. It had many positives. The idea of diversifying the treasury, and exploring RWA is still net positive for the DAO, so it was easy to support this second installment of the program.
I vote in favor on Tally for the following reason: https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/71?u=0xtalvo.eth_mty
I'm voting FOR the proposal on Tally for the same reasons as stated in my Snapshot vote.
Voted abstain for the following reasons https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/34?u=ezr3al
LobbyFi’s rationale on the price and making this proposal available after its activation for on-chain voting As the result of this proposal, the DAO would roughly earn in a year: 35.000.000 (ARBs invested) * 0,6 (correct price of ARB) * 0,04 (% yearly) = $840.000.
Since the snapshot proposal went through with 135m+ of votes in favor and the quorum is at 121m ARB on-chain, we expect this proposal to go though relatively easily with or without LobbyFi’s support + we do not expect that LobbyFi will block it or prevent the proposal from hitting the quorum - hence low risk of us selling the voting power on this overall.
LobbyFi’s rationale on the price and making this proposal available after its activation for on-chain voting As the result of this proposal, the DAO would roughly earn in a year: 35.000.000 (ARBs invested) * 0,6 (correct price of ARB) * 0,04 (% yearly) = $840.000.
Since the snapshot proposal went through with 135m+ of votes in favor and the quorum is at 121m ARB on-chain, we expect this proposal to go though relatively easily with or without LobbyFi’s support + we do not expect that LobbyFi will block it or prevent the proposal from hitting the quorum - hence low risk of us selling the voting power on this overall.
Based on this input + financial benefit the DAO treasury gets within a year, we will set the instant buy price for this at 1% of that; so approx 2.5 ETH but would not expect it to be bought in the end. We would expect it to be sold via community auction (which we will turn on), yet the volume would also most probably not be too high since there is nothing controversial about the proposal + the DAO is the direct beneficiary in a sense.
After consideration, the @SEEDgov delegation has decided to “FOR” on this proposal at the Snapshot Vote.
From our perspective, STEP is one of the best-executed programs within the DAO.
Several strong points allow us to continue trusting the team designated for this task:
Thanks for the ~unanimous vote of support for the STEP program!
We appreciate delegates recognizing the success of the first program and renewing our mandate for a second version. We are in agreement with the feedback that this should be the last time we hold STEP with the same committee members.
Thanks for the ~unanimous vote of support for the STEP program!
We appreciate delegates recognizing the success of the first program and renewing our mandate for a second version. We are in agreement with the feedback that this should be the last time we hold STEP with the same committee members.
We have updated the proposal to keep a slightly shorter timeline, added @steakhouse as an observing member of the STEP committee in their role as program manager and also uploaded the RFP under which applicants would need to apply.
We will keep this up for a week to get a final round of feedback before uploading to Tally next week on January 28th. Thanks for all the improvements and making this a smooth process!
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking, and ideation of the two.
We’re voting FOR the proposal.
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking, and ideation of the two.
We’re voting FOR the proposal.
The first iteration of STEP was a good first step towards a more streamlined approach to diversifying our treasury and expanding it by allocating more money and opening it up to more providers makes sense.
We have discussed STEP (both 1.0 and 2.0) with Devansh quite a lot over the past few months, and we appreciate the work he’s put into the proposal, particularly in addressing some of the concerns and things we’ve brought up in our discussions.
We are aware of the comment that some other delegates have raised about STEP falling under the scope of the TMC/GM established with the Treasury Management proposal. Although we generally agree, we do not think that now is the right time to do that. STEP should continue as a standalone program for the time being while the TMC and GM focus on other areas and potentially fall under their scope down the line.
One last thing we’d like to raise and open a discussion about is that we would like to see Arbitrum leverage the service providers we’re engaging with for more than just using their services. That could come in the form of additional marketing for Arbitrum or ecosystem growth (e.g. by whitelisting Arbitrum protocols to be able to use tokenized t-bills as lending collateral). STEP 2.0 is a great opportunity to explore more of those opportunities and how we can leverage them.
gm, voted FOR.
Voted against, for the same reasons as the Snapshot vote.
As stated above, I'll always think treasury diversity is important. I think this has (and will continue to) be a good step to achieve that goal. I also appreciate that there has been reporting to show that there has been success with the first iteration.
As others have mentioned, with the passing of other treasury diversification projects this now creates some redundancies... however I think that this project is more then simple treasury diversification at the end of the day. Its about supporting an RWA market. So in some sense I think it is a little unique in that role. I'd also contend that those projects are still relatively new, so keeping this running will present an opportunity for a soft transition if you will.
Blockworks Advisory will be voting FOR this proposal on Snapshot.
We were pleased with the first STEP, and after seeing the first few reports from Steakhouse we believe that a continuation is warranted. While STEP does fall within the mandate of the TMC/GM, based on past performance and the standard of execution to which STEP has shown, we do not think that it would be a good idea to discontinue STEP.
Voted FOR this proposal. I particularly like the evolution of the compensation structure to include the 3 year vesting.
In addition to the "endowment", it would be great to see a Stables spending fund for maybe yearly/semestrely DAO expenses. With a recent proposal, we're having to do A LOT of coordiantion with the MSS and AF around swaping Arb tokens and inclued a 30% buffer which almost wasnt enough and stressed about potentially having to cancel or ask the DAO for more money. All that could be refactored away from individual proposals.
I think there is merit to dollar cost averaging, in price impact for the market, ecosystem growth that evolves over this timeframe, and getting overall better execution.
voting For the current offchain proposal because this program is very well set up and thought through, and the entities involved are some of the best in the world at what they do.
After consideration, the @SEEDgov delegation has decided to “FOR” on this proposal at the Snapshot Vote.
From our perspective, STEP is one of the best-executed programs within the DAO.
Several strong points allow us to continue trusting the team designated for this task:
To expand on the current board's criteria, we highlight the transparency and reasonability for rejecting applicants:
No investment restrictions, especially worrisome if a provider can use leverage and hedging at discretion of the manager. As one of the committee members expressed, we need something beyond common sense that stops a provider from taking our money and putting it into Argentinian peso bonds.
Segregated portfolio companies with multiple portfolios are an added risk. Bankruptcy remote is not just having separate bank accounts, creditors look at whether entities are in actuality separate (their own board meeting minutes, payroll with staff, etc) so that the subsidiary entities do not get rolled into the parent one during proceedings.
Products with a tiny AUM, exposure to a single ISIN or having fund managers without extensive prior experience or outsourced to third parties are riskier bets
Providers using their own proprietary blockchain or solely that of a competitor were passed on in this round
Decentralized governance of underlying assets which require additional due diligence and/or have exposure to the Foundation for the same add an extra layer of unpredictability
Redemption procedures have a lag period measured in weeks or months or are limited to a single stablecoin that is not USDC, USDT or DAI or require a bank transfer
Insufficient documentation such as not providing a PPM, investment memo, counterparty for reverse repos, guidelines, restrictions, having annual audits only or from unknown auditors or managers
High fees that are uncompetitive in the current rates environment
Appears unlikely unlikely to develop secondary market liquidity to underwrite against
Operationally burdensome and requires more active oversight than is desired since individual issuances mature without auto-roll
All these points speak to the committee's due diligence before approving or rejecting a Service Provider, which we highly value.
We hope they continue on the same path, prioritizing the security and liquidity of the invested assets.
gm, voted FOR.
On the distribution, I’d advocate allocating part of the budget towards non-T-BILLS (both US and non-US assets) whenever possible. While this comes with a different risk profile, it aligns with encouraging a diverse set of innovations on Arbitrum.
As stated above, I'll always think treasury diversity is important. I think this has (and will continue to) be a good step to achieve that goal. I also appreciate that there has been reporting to show that there has been success with the first iteration.
As others have mentioned, with the passing of other treasury diversification projects this now creates some redundancies... however I think that this project is more then simple treasury diversification at the end of the day. Its about supporting an RWA market. So in some sense I think it is a little unique in that role. I'd also contend that those projects are still relatively new, so keeping this running will present an opportunity for a soft transition if you will.
All that said, between the first iteration being relatively successful and what I perceive as a continued need for diversification in the moment, I will be voting "for" this project to continue.
I think there is merit to dollar cost averaging, in price impact for the market, ecosystem growth that evolves over this timeframe, and getting overall better execution.
I agree that this is important, so I think it's worth considering increasing the percentage to at least 3% per year. The final amount of 5% of all treasuries in stablecoins seems small to me.
Considering that this strategy has been previously validated and that an improvement in the DAO's stability and sustainability is expected, I vote in favor on Snapshot. Likewise, it would be beneficial to explore more decentralized solutions, utilizing on-chain tools to maximize Arbitrum's innovative capacity.
Thanks @paulofonseca for taking the time to also document this!
We can confirm that Paulo was one of the bidders Against the proposal and ended up winning the auction along with the other bidder(s).
I support the proposal with the following additional comments and suggestions to optimise some of the details in its implementation: I. Reasons for support: 1, Diversification of funds is necessary: as a low-risk, highly liquid investment, RWA (Real World Assets) can effectively balance the risk of continuous fluctuations in ARB and ensure the stability and long-term growth of DAO's funds. 2. STEP 1 has practical results: from the data of the first phase, some gains have indeed been made after the funds were allocated to RWA, and some protocols have been promoted for development on Arbitrum at the same time. 3. Enhancement of ecological competitiveness: more RWA projects are attracted to join Arbitrum through the STEP programme, which can further enhance the competitive advantages of the ecology. II. Suggestions: 1 Transparency of liquidation of ARBs: It is recommended that DAO clarify and publish the plan before liquidation, such as the timetable for liquidation in batches, target price range, etc., to avoid negative impact on the market. 2 Strengthening community supervision: the committee has more power, and it is recommended to add community representatives or a third-party independent supervision mechanism to ensure that the distribution of funds is more transparent and fair. 3 Balance ecological support: It is recommended that while investing in RWA, a portion of the funds should be set aside to support Arbitrum's local ecological projects, such as the construction of DeFi, NFT and Layer 2 infrastructure. 4 Dynamic Adjustment of Strategy: RWA market is changing rapidly, it is recommended to review the funding strategy regularly and adjust it dynamically according to market opportunities and ecological needs.
As in @web3citizenxyz representation, voting FOR in this proposal. Below the rationale:
The first iteration made sense as there was no structure in place. If STEP it is a treasury diversification strategy, it would fall into TMC mandate. If it is a growth initiative, under GMC. We are adding more costs, creating/keeping fragmented (or siloed) structures for something that should be managed at one place.
The first iteration made sense as there was no structure in place. If STEP it is a treasury diversification strategy, it would fall into TMC mandate. If it is a growth initiative, under GMC. We are adding more costs, creating/keeping fragmented (or siloed) structures for something that should be managed at one place.
I voted AGAINST following my reasoning in my previous comment.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
We are voting FOR this proposal on Snapshot voting.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
We are voting FOR this proposal on Snapshot voting.
We support the STEP 2.0 proposal as it shows a clear path to growing Arbitrum's treasury through stable, revenue-generating RWAs. The success of STEP 1.0 in bringing $150M in RWA value to Arbitrum, with most growth coming from market participants, proves this approach works. Moving forward with STEP 2.0 will help build a strong foundation for Arbitrum's long-term growth in the RWA space.
We like the program's combination of smart treasury management and ecosystem development. While we support investing in US Treasury bills for stability, as mentioned by other delegates, we'd also encourage exploring new RWA opportunities that fully take advantage of Arbitrum's technology. The program's thorough review process has already set high standards for RWA projects, and continuing this will help maintain Arbitrum's position as a leading chain for RWAs. Given these points and the proven results from STEP 1.0, we support allocating 35M ARB to advance these goals.
I also put in an Against bid for the 891.5k ARB of voting power available in lobbyfi.xyz to vote Against in this offchain proposal https://arbiscan.io/tx/0x0635f83fc4a7a4e14cd4c40f6ab6691d1116e8f7552a8ab7c43cad4f948340c8
This bid ended up winning the auction and the LobbyFi vote was casted as Against. But, as I said above, I personally voted For on this offchain proposal. https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/62?u=paulofonseca
We vote FOR the proposal on Snapshot.
We appreciate Devan and the committee members for their diligent executions and reporting in the initial STEP. The estimated annual yield, $875k from the $30 million endowment isn't particularly impressive, but it should have played a good role in the Arbitrum RWA ecosystem. On condition that this is the last term of the STEP, considering other treasury diversification programs are planned, we support the continuation of the program with a great selection of the established actors in the committee and a reasonable budget.
I'm voting FOR this proposal after carefully weighing the pros and cons. While I acknowledge some concerns raised about potential overlap with the Treasury Management Committee initiative or OpCo, I've decided to support this proposal. Although it may not be a perfect solution, it provides a path towards financial sustainability for the DAO and leverages the expertise of a proven team. I believe that RWA represent a crucial investment opportunity and are key to the long-term stability and appeal of the ecosystem.
Besides that, I agree with @Jojo that this should be the last iteration of the STEP program in its current form. Moving forward, we should focus on developing a well-structured handover plan that ensures the necessary expertise is retained - whether through OpCo, TMC, or an alternative solution.
We have voted FOR this proposal. It was a good example of how the DAO can do a reasonable and competitive RFP for key services and continuing the program forward makes sense. We would like to have continued oversight and reporting from the relevant teams as this initiative progresses.
Where can we see the latest updates and information relevant to this program?
Voted FOR this proposal Rationale
Where can we see the latest updates and information relevant to this program?
Here's a live dashboard for STEP 1: https://dune.com/steakhouse/step-dashboard/1b508c7c-63ec-42e9-86d9-c3a86d23766e
I vote “FOR” for this proposal. There is no doubt that the STEP is of crucial of importance in extension of DAO system and RAW is so important that we are supposed to be involved in. Still, 35 millions ARB is a huge sum of money, how to used wisely and transparently is a tricks issue.
LobbyFi has voted AGAINST the proposal for the following reason:
through the internal community auction, the LobbyFi users that bid against the proposal have overweighted those that were for the proposal (in this particular case, none has voted in favor).
I voted 'for' in Snapshot as I think RWA is critical for Arbitrum and will support proposals that focus on building in this area. However, I still believe this overlaps and may need to be taken over by the OpCo in the future as other responsibilities.
Two points I would like to add:
I voted 'for' in Snapshot as I think RWA is critical for Arbitrum and will support proposals that focus on building in this area. However, I still believe this overlaps and may need to be taken over by the OpCo in the future as other responsibilities.
Two points I would like to add:
Would love to see more detailed monthly reports and future diversification beyond T-bills, ie onchain stables money markets, but overall, it's a solid strategy for building a stable reserve fund. Voted yes on snapshot!
Thanks for the support! Batching together some similar points around the themes of STEP 1 evaluation, expansion to assets beyond tbills and operational concerns
STEP 1 evaluation
However, a part of me says that it is a bit premature if the step reports are just materializing,
I would like to express my agreement with the proposal. However, I would like to highlight a few key points that I personally focus on: 1. Whether the detailed performance report of STEP 1 is transparent and clear. 2. Whether the ARB liquidation strategy is open and reasonable. 3. Whether the roles and compensation of the committee are fair and tied to execution effectiveness. 4. Whether the proposal supports RWA while also considering the development of the Arbitrum native ecosystem.
Among these details, I am particularly concerned about the transparency of STEP 1’s results, the prioritization of fund diversification, the committee’s compensation, and the specifics of ARB liquidation.
I'm happy to see you pushing this forward. In my opinion, it has been one of the best organized and executed programs - and it works towards solving two issues.
I'm also impressed with the decision to stream the majority of payment over 3 years.
As a DAO, we need to develop the culture of doubling down on winners. This is a great opportunity to do so.
As my previous comment, I support diversifying the treasury and promoting the growth of RWAs on Arbitrum since it will reduce reliance on higher risk assets and help DAO build a stable reserve fund :)
Plus, STEP 2 could create stable yields (estimated $875k) to cover DAO operational costs. So of course, I voted for on snapshot!
After consideration, the @SEEDgov delegation has decided to “FOR” on this proposal at the Snapshot Vote.
From our perspective, STEP is one of the best-executed programs within the DAO.
Several strong points allow us to continue trusting the team designated for this task:
To expand on the current board's criteria, we highlight the transparency and reasonability for rejecting applicants:
No investment restrictions, especially worrisome if a provider can use leverage and hedging at discretion of the manager. As one of the committee members expressed, we need something beyond common sense that stops a provider from taking our money and putting it into Argentinian peso bonds.
Segregated portfolio companies with multiple portfolios are an added risk. Bankruptcy remote is not just having separate bank accounts, creditors look at whether entities are in actuality separate (their own board meeting minutes, payroll with staff, etc) so that the subsidiary entities do not get rolled into the parent one during proceedings.
Products with a tiny AUM, exposure to a single ISIN or having fund managers without extensive prior experience or outsourced to third parties are riskier bets
Providers using their own proprietary blockchain or solely that of a competitor were passed on in this round
Decentralized governance of underlying assets which require additional due diligence and/or have exposure to the Foundation for the same add an extra layer of unpredictability
Redemption procedures have a lag period measured in weeks or months or are limited to a single stablecoin that is not USDC, USDT or DAI or require a bank transfer
Insufficient documentation such as not providing a PPM, investment memo, counterparty for reverse repos, guidelines, restrictions, having annual audits only or from unknown auditors or managers
High fees that are uncompetitive in the current rates environment
Appears unlikely unlikely to develop secondary market liquidity to underwrite against
Operationally burdensome and requires more active oversight than is desired since individual issuances mature without auto-roll
All these points speak to the committee's due diligence before approving or rejecting a Service Provider, which we highly value.
We hope they continue on the same path, prioritizing the security and liquidity of the invested assets.
gm, voted FOR.
On the distribution, I’d advocate allocating part of the budget towards non-T-BILLS (both US and non-US assets) whenever possible. While this comes with a different risk profile, it aligns with encouraging a diverse set of innovations on Arbitrum.
As stated above, I'll always think treasury diversity is important. I think this has (and will continue to) be a good step to achieve that goal. I also appreciate that there has been reporting to show that there has been success with the first iteration.
As others have mentioned, with the passing of other treasury diversification projects this now creates some redundancies... however I think that this project is more then simple treasury diversification at the end of the day. Its about supporting an RWA market. So in some sense I think it is a little unique in that role. I'd also contend that those projects are still relatively new, so keeping this running will present an opportunity for a soft transition if you will.
All that said, between the first iteration being relatively successful and what I perceive as a continued need for diversification in the moment, I will be voting "for" this project to continue.
I think there is merit to dollar cost averaging, in price impact for the market, ecosystem growth that evolves over this timeframe, and getting overall better execution.
I agree that this is important, so I think it's worth considering increasing the percentage to at least 3% per year. The final amount of 5% of all treasuries in stablecoins seems small to me.
Considering that this strategy has been previously validated and that an improvement in the DAO's stability and sustainability is expected, I vote in favor on Snapshot. Likewise, it would be beneficial to explore more decentralized solutions, utilizing on-chain tools to maximize Arbitrum's innovative capacity.
Thanks @paulofonseca for taking the time to also document this!
We can confirm that Paulo was one of the bidders Against the proposal and ended up winning the auction along with the other bidder(s).
I support the proposal with the following additional comments and suggestions to optimise some of the details in its implementation: I. Reasons for support: 1, Diversification of funds is necessary: as a low-risk, highly liquid investment, RWA (Real World Assets) can effectively balance the risk of continuous fluctuations in ARB and ensure the stability and long-term growth of DAO's funds. 2. STEP 1 has practical results: from the data of the first phase, some gains have indeed been made after the funds were allocated to RWA, and some protocols have been promoted for development on Arbitrum at the same time. 3. Enhancement of ecological competitiveness: more RWA projects are attracted to join Arbitrum through the STEP programme, which can further enhance the competitive advantages of the ecology. II. Suggestions: 1 Transparency of liquidation of ARBs: It is recommended that DAO clarify and publish the plan before liquidation, such as the timetable for liquidation in batches, target price range, etc., to avoid negative impact on the market. 2 Strengthening community supervision: the committee has more power, and it is recommended to add community representatives or a third-party independent supervision mechanism to ensure that the distribution of funds is more transparent and fair. 3 Balance ecological support: It is recommended that while investing in RWA, a portion of the funds should be set aside to support Arbitrum's local ecological projects, such as the construction of DeFi, NFT and Layer 2 infrastructure. 4 Dynamic Adjustment of Strategy: RWA market is changing rapidly, it is recommended to review the funding strategy regularly and adjust it dynamically according to market opportunities and ecological needs.
As in @web3citizenxyz representation, voting FOR in this proposal. Below the rationale:
The first iteration made sense as there was no structure in place. If STEP it is a treasury diversification strategy, it would fall into TMC mandate. If it is a growth initiative, under GMC. We are adding more costs, creating/keeping fragmented (or siloed) structures for something that should be managed at one place.
The first iteration made sense as there was no structure in place. If STEP it is a treasury diversification strategy, it would fall into TMC mandate. If it is a growth initiative, under GMC. We are adding more costs, creating/keeping fragmented (or siloed) structures for something that should be managed at one place.
I voted AGAINST following my reasoning in my previous comment.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
We are voting FOR this proposal on Snapshot voting.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
We are voting FOR this proposal on Snapshot voting.
We support the STEP 2.0 proposal as it shows a clear path to growing Arbitrum's treasury through stable, revenue-generating RWAs. The success of STEP 1.0 in bringing $150M in RWA value to Arbitrum, with most growth coming from market participants, proves this approach works. Moving forward with STEP 2.0 will help build a strong foundation for Arbitrum's long-term growth in the RWA space.
We like the program's combination of smart treasury management and ecosystem development. While we support investing in US Treasury bills for stability, as mentioned by other delegates, we'd also encourage exploring new RWA opportunities that fully take advantage of Arbitrum's technology. The program's thorough review process has already set high standards for RWA projects, and continuing this will help maintain Arbitrum's position as a leading chain for RWAs. Given these points and the proven results from STEP 1.0, we support allocating 35M ARB to advance these goals.
I also put in an Against bid for the 891.5k ARB of voting power available in lobbyfi.xyz to vote Against in this offchain proposal https://arbiscan.io/tx/0x0635f83fc4a7a4e14cd4c40f6ab6691d1116e8f7552a8ab7c43cad4f948340c8
This bid ended up winning the auction and the LobbyFi vote was casted as Against. But, as I said above, I personally voted For on this offchain proposal. https://forum.arbitrum.foundation/t/non-constitutional-stable-treasury-endowment-program-2-0/26819/62?u=paulofonseca
We vote FOR the proposal on Snapshot.
We appreciate Devan and the committee members for their diligent executions and reporting in the initial STEP. The estimated annual yield, $875k from the $30 million endowment isn't particularly impressive, but it should have played a good role in the Arbitrum RWA ecosystem. On condition that this is the last term of the STEP, considering other treasury diversification programs are planned, we support the continuation of the program with a great selection of the established actors in the committee and a reasonable budget.
I'm voting FOR this proposal after carefully weighing the pros and cons. While I acknowledge some concerns raised about potential overlap with the Treasury Management Committee initiative or OpCo, I've decided to support this proposal. Although it may not be a perfect solution, it provides a path towards financial sustainability for the DAO and leverages the expertise of a proven team. I believe that RWA represent a crucial investment opportunity and are key to the long-term stability and appeal of the ecosystem.
Besides that, I agree with @Jojo that this should be the last iteration of the STEP program in its current form. Moving forward, we should focus on developing a well-structured handover plan that ensures the necessary expertise is retained - whether through OpCo, TMC, or an alternative solution.
We have voted FOR this proposal. It was a good example of how the DAO can do a reasonable and competitive RFP for key services and continuing the program forward makes sense. We would like to have continued oversight and reporting from the relevant teams as this initiative progresses.
Where can we see the latest updates and information relevant to this program?
Voted FOR this proposal Rationale
Where can we see the latest updates and information relevant to this program?
Here's a live dashboard for STEP 1: https://dune.com/steakhouse/step-dashboard/1b508c7c-63ec-42e9-86d9-c3a86d23766e
I vote “FOR” for this proposal. There is no doubt that the STEP is of crucial of importance in extension of DAO system and RAW is so important that we are supposed to be involved in. Still, 35 millions ARB is a huge sum of money, how to used wisely and transparently is a tricks issue.
LobbyFi has voted AGAINST the proposal for the following reason:
through the internal community auction, the LobbyFi users that bid against the proposal have overweighted those that were for the proposal (in this particular case, none has voted in favor).
I voted 'for' in Snapshot as I think RWA is critical for Arbitrum and will support proposals that focus on building in this area. However, I still believe this overlaps and may need to be taken over by the OpCo in the future as other responsibilities.
Two points I would like to add:
I voted 'for' in Snapshot as I think RWA is critical for Arbitrum and will support proposals that focus on building in this area. However, I still believe this overlaps and may need to be taken over by the OpCo in the future as other responsibilities.
Two points I would like to add:
Would love to see more detailed monthly reports and future diversification beyond T-bills, ie onchain stables money markets, but overall, it's a solid strategy for building a stable reserve fund. Voted yes on snapshot!
Thanks for the support! Batching together some similar points around the themes of STEP 1 evaluation, expansion to assets beyond tbills and operational concerns
STEP 1 evaluation
However, a part of me says that it is a bit premature if the step reports are just materializing,
I would like to express my agreement with the proposal. However, I would like to highlight a few key points that I personally focus on: 1. Whether the detailed performance report of STEP 1 is transparent and clear. 2. Whether the ARB liquidation strategy is open and reasonable. 3. Whether the roles and compensation of the committee are fair and tied to execution effectiveness. 4. Whether the proposal supports RWA while also considering the development of the Arbitrum native ecosystem.
Among these details, I am particularly concerned about the transparency of STEP 1’s results, the prioritization of fund diversification, the committee’s compensation, and the specifics of ARB liquidation.
I'm happy to see you pushing this forward. In my opinion, it has been one of the best organized and executed programs - and it works towards solving two issues.
I'm also impressed with the decision to stream the majority of payment over 3 years.
As a DAO, we need to develop the culture of doubling down on winners. This is a great opportunity to do so.
As my previous comment, I support diversifying the treasury and promoting the growth of RWAs on Arbitrum since it will reduce reliance on higher risk assets and help DAO build a stable reserve fund :)
Plus, STEP 2 could create stable yields (estimated $875k) to cover DAO operational costs. So of course, I voted for on snapshot!
Voted FOR this proposal Rationale
Where can we see the latest updates and information relevant to this program?
Here's a live dashboard for STEP 1: https://dune.com/steakhouse/step-dashboard/1b508c7c-63ec-42e9-86d9-c3a86d23766e
And here's the latest report @steakhouse our program manager wrote for december: https://forum.arbitrum.foundation/t/step-report-december-2024/28094
Thanks for the support! Batching together some similar points around the themes of STEP 1 evaluation, expansion to assets beyond tbills and operational concerns
STEP 1 evaluation
However, a part of me says that it is a bit premature if the step reports are just materializing,
While the objectives are commendable, expanding the program might be a little premature given the early stage of STEP 1’s implementation
Posting a short report every month or every three months is expected
As @Juanrah noted, we have had 3 monthly reports already. You can see the latest one here - https://forum.arbitrum.foundation/t/step-report-december-2024/28094
Overall, these are the main metrics to ensure accountability and success for the STEP program;
The qualitative metric is number of RWA providers who launch their products on arbitrum
The current numbers for these metrics which @Entropy dug up are overwhelmingly positive, showing its worth taking a risk for a second edition of the program to so we solidify our advantage in the RWA space.
Expansion to Assets beyond Tbills
I also think expanding beyond US Treasury bills could be a good idea. The program could look into other conservative, yield-generating RWAs such as corporate bonds or similar low-risk instruments
While doubling down on U.S. Treasuries makes sense now, could we explore a timeline or benchmarks for expanding into other RWA sectors in 2026?
My only recommendation, as others have noted, is to expand beyond T-Bills by including government bonds from other countries, which, while slightly riskier, could further enhance diversification
On a final note, I hope we will be able to diversify the issuers with the next RFP, obviously always while being compatible with the risk profile the committee will deem necessary. But I would like to see also new issuers, since the growth is one of the target of this program.
So my thinking on this topic is to follow the lead of the market. Currently, 99% of the $150 million RWAs on arbitrum are t-bills. When this situation changes and we see a more competitive market for other instruments, definitely worth doing a similar program for those. Until then, smaller programs for growth of nascent sectors and STEP like programs for mature sectors is what I'd recommend as a balance between treasury risk and ecosystem growth.
Operational Concerns
On OpCo or TMC overlap
this, ideally, should be the last iteration of this program as it is. For the next one we will either have 1) opco up and running 2) treasury initiative going to expiration with a potential renewal if opco is not ready. I would like an handover of the program. To clarify, doesn’t mean it would need a new committee for example (but there could be a merit to reduce it if the current treasury management committee has some experience, to avoid surplus), nor that steakhouse won’t be the PM until the end of the mandate. But if in 6 months we want to add another 40, 50, $100M to the program, it should be done under either opco or currently elected treasury managers.
So I'm definitely in agreement that this should be the last term of the STEP committee, since otherwise we risk entrenching them as the people deciding diversification for Arbitrum dao (and its healthy to rotate the power, similar to how bureaucrats get transferred).
However, I don't think OpCo or the TMC initiative can by themselves replace the STEP committee for adequate due diligence.
For example, do either of those initiatives have an expert RWA lawyer like @northlakeslegal who can tell whether a service provider is bankruptcy remote? Are there technology leads like @Nethermind who can look into a code base? A well rounded selection committee is needed to uphold the high standards of due diligence that the STEP brand is based on.
So OpCo or TMC can take the lead in putting together such a committee but it needs to be well balanced and not just deciding by themselves, especially at the higher diversification amounts that STEP has.
On operational pay
please potentially reconsider the budget for the 4 committee members. It’s quite likely there should be more applications, and the budget might be on the low end here. An increase of 20-25% to 30-32.5k per member could be ok imho,
Thanks for the feedback! We probably wouldn't want to change the amounts now since its already up on snapshot. Our thinking was lower end of the ballpark estimates put it near the range of pay received last time, so less contentious to go with what has been approved in the past edition (especially since most parts of the program are based on what happened earlier).
hat said, I would like to see monthly expenses as a category in each report.
@steakhouse , worth adding this to the STEP reports if its not there already!
Timelines and Amount
too cautious development. Too low a growth rate of treasuries will not provide significant profit. We conducted testing and it was successful. Based on the results of 9 months, we can understand that this amount should be increased to at least 100,000,000 ARB (or even more)
Thanks for the feedback and strong show of support! Our current thinking is around 1% of treasury every 9-12 months for 5 years.
I think there is merit to dollar cost averaging, in price impact for the market, ecosystem growth that evolves over this timeframe, and getting overall better execution.
That said, the timeline feels unnecessarily stretched. With the right focus, we could fast-track implementation and make this process more efficient without compromising its impact. It’s a great initiative; let’s execute it with speed and purpose.
I would generally say that the timelines fit with holding a STEP program every 9-12 months, so there is no undue need of haste.
I can see scope for shortening by 2 weeks at the most, so committee review begins March 15th, depending on Tally approval.
the revised timeline would be tally approval by early Feb, a one month submission window, one month committee review.
I would like to express my agreement with the proposal. However, I would like to highlight a few key points that I personally focus on: 1. Whether the detailed performance report of STEP 1 is transparent and clear. 2. Whether the ARB liquidation strategy is open and reasonable. 3. Whether the roles and compensation of the committee are fair and tied to execution effectiveness. 4. Whether the proposal supports RWA while also considering the development of the Arbitrum native ecosystem.
Among these details, I am particularly concerned about the transparency of STEP 1’s results, the prioritization of fund diversification, the committee’s compensation, and the specifics of ARB liquidation.
Although I agree with and support this proposal, I would still recommend that the foundation publicly disclose specific plans for ARB liquidation in advance, such as the quantity and timing of phased liquidations, and provide real-time updates on the progress to strengthen community trust. Additionally, for the compensation of committee members, it would be beneficial to introduce performance indicators, such as linking compensation to fund returns or the implementation outcomes of STEP 2, to avoid purely hourly-based remuneration.
We support the STEP 2 proposal as it aligns with our commitment to treasury diversification into stable, yield-generating RWAs, ensuring long-term financial stability for the DAO. Like other delegates, we share the vision of fostering the growth of RWA protocols on-chain within the Arbitrum ecosystem. At the same time, we’d love to see more focus on exploring and prioritizing on-chain solutions to strengthen decentralization and make the most of Arbitrum’s potential for RWA innovation.
Thank you, @thedevanshmehta for the detailed proposal.
I appreciate the effort to diversify the treasury and support Real World Asset protocols on Arbitrum.
Thank you, @thedevanshmehta for the detailed proposal.
I appreciate the effort to diversify the treasury and support Real World Asset protocols on Arbitrum.
Service providers who applied in STEP 1 will have to simply communicate what has changed in their product. Ample feedback was provided to all applicants, so if they have not managed to addressed the concerns we do not need to re-review applicants. New applications will be reviewed fresh. The RFP will be similar as STEP 1 with some modifications that will be included in the tally vote.
This part suggests that returning applicants only need to highlight updates to their products, while new applicants will go through a fresh review process. However, it does not explicitly address how the evaluation process will ensure that both groups are assessed fairly under the same criteria.
One question: How will the committee ensure fair evaluation of both returning and new applicants?
While doubling down on U.S. Treasuries makes sense now, could we explore a timeline or benchmarks for expanding into other RWA sectors in 2026? This will provide better visibility for long-term goals.
I'm voting FOR on Snapshot. This proposal builds on a proven process to diversify our treasury into stable, yield-generating RWA assets while promoting ecosystem growth. My only recommendation, as others have noted, is to expand beyond T-Bills by including government bonds from other countries, which, while slightly riskier, could further enhance diversification.
Excited to see this come live! This STEP program addresses a critical need for Arbitrum by diversifying treasury assets into stable, yield-generating instruments. this reduces the DAO's reliance on volatile ARB token prices and we are in support of the proposal as a whole.
Some thoughts:
Excited to see this come live! This STEP program addresses a critical need for Arbitrum by diversifying treasury assets into stable, yield-generating instruments. this reduces the DAO's reliance on volatile ARB token prices and we are in support of the proposal as a whole.
Some thoughts:
Overall super interested in setting this expand.
I am voting FOR because I support the diversification of the treasury and the promotion of RWA growth in Arbitrum. However, a part of me says that it is a bit premature if the step reports are just materializing, but I still vote FOR because I think it is important to continue with ARB's treasury investment strategies.
I am voting FOR this proposal as I believe it is essential for ArbitrumDAO to diversify its Treasury and be among the leaders of RWA. Based on the first monthly reports and the Dune dashboard, the initial iteration of STEP appears to be a success.
I strongly believe that Real-World Assets (RWA) represent a strategic vertical with significant potential for the future, and Arbitrum should continue prioritizing this area. As highlighted by other Delegates, I agree that Treasury management activities would benefit from being overseen by an entity with a comprehensive macro overview, I think this should fall under the scope of the OpCo at some point.
I like this program and its gradual development. I see a good income considering the operating budget.
What I like about the proposal:
What I don't like:
I like this program and its gradual development. I see a good income considering the operating budget.
What I like about the proposal:
What I don't like:
What I expected from this proposal:
I repeat once again - I really like this treasury and it seems to me that there should be an end goal for it. That is, we must decide how much % of the total treasury will be in this program. And also in how many years should we reach this amount (and why so many years, why not immediately).
also, will there be something other than RWA? There are many more profitable options for placing funds for stables. I would like to see some analysis of allocating some share of funds in this direction.
Voted For: I like this program and its meaning for the DAO. I would, however, love to see some more detailed reports coming out of this. Posting a short report every month or every three months is expected. Some great feedback can be seen in the comments about diversifying outside T-bills. I would love to see that as well so the funds are more diversified across RWA. Otherwise, I am excited to see version 2.0 in action. I support the program.
I am mostly agreeing with @pedrob here; despite so, will vote in favour.
I think is worth hammering the table on one of the narrative in which arbitrum is leading, which is RWA. I would have rather preferred to see some changes, including either
I am mostly agreeing with @pedrob here; despite so, will vote in favour.
I think is worth hammering the table on one of the narrative in which arbitrum is leading, which is RWA. I would have rather preferred to see some changes, including either
Understanding that continuity here means moving relatively fast (relatively cause is ognna take months according to the timeline), the handover of the program would likely be such to further increment this time. For this reason, and knowing the very good professional background of Paper & Gang on these instruments, I prefer a continuation as it is. With a caveat: this, ideally, should be the last iteration of this program as it is. For the next one we will either have 1) opco up and running 2) treasury initiative going to expiration with a potential renewal if opco is not ready. I would like an handover of the program. To clarify, doesn't mean it would need a new committee for example (but there could be a merit to reduce it if the current treasury management committee has some experience, to avoid surplus), nor that steakhouse won't be the PM until the end of the mandate. But if in 6 months we want to add another 40, 50, $100M to the program, it should be done under either opco or currently elected treasury managers.
On a final note, I hope we will be able to diversify the issuers with the next RFP, obviously always while being compatible with the risk profile the committee will deem necessary. But I would like to see also new issuers, since the growth is one of the target of this program.
As a final note: please potentially reconsider the budget for the 4 committee members. It's quite likely there should be more applications, and the budget might be on the low end here. An increase of 20-25% to 30-32.5k per member could be ok imho, knowing that there is in these programs a somehow linear effort based on the amount of applicants.
I voted FOR the proposal on Snapshot. The operational expenses are low enough to be easily covered by the earned interest (by my calculations, expenses currently represent less than 30% of the profits - on a monthly basis). That said, I would like to see monthly expenses as a category in each report. ARB liquidation will be done by the Arbitrum Foundation, hopefully they will do it in a way that it least effects the price (e.g. OTC) :crossed_fingers:
I vote against this proposal on Snapshot.
I commend the team behind the development and implementation of STEP 1, as it has validated the thesis that Arbitrum can and should be a home for tokenized traditional assets.
That said, I am voting against it for two reasons:
I vote against this proposal on Snapshot.
I commend the team behind the development and implementation of STEP 1, as it has validated the thesis that Arbitrum can and should be a home for tokenized traditional assets.
That said, I am voting against it for two reasons:
First, the recent approval of Treasury Management v1.2 established a new committee to manage investments of ARB converted to stablecoins. Having two committees handling similar responsibilities through different channels and processes seems unnecessarily redundant.
Additionally, the results of STEP are just beginning to materialize in reports. It feels premature to vote on the renewal of a program only three months after its launch.
If the DAO intends to allocate additional resources to RWA, the newly formed committee should be responsible for managing them. However, I believe that if the DAO has just voted to allocate 10M to stablecoin investments, it reflects that this is the amount it deems appropriate at this time.
Secondly, as I have mentioned previously in other votes, I oppose the continued addition of isolated programs that use ARB to generate yield without a specific objective, projections, or long-term plan. While I support treasury management and investments, I disagree with the current approach, which lacks a comprehensive view of long-term needs and strategy.
Given that the OpCo has already been approved in the temp check and that treasury management will be one of its primary functions, I expect it to take on this responsibility as outlined, adopting an integral approach that considers the DAO's medium- and long-term needs.
Im overall supportive of diversifying treasury assets and put them to work. The general question im asking myself is, is this the right timing for going into T-bills? We have onchain yield that is currently extremely high due to Ethena and and extrem usage of stablecoins overall. Why arent we make use of these? It would be onchain (what we all want) and could be executed basically within minutes.
Interest rates are going down and so will the yield. What we would do here is to take Tradfi assets and their associated risks (although very low), then tokenize them and put them into a smart contract (take the onchain risk). So we basically double the trouble for small single digit yield.
I’m voting FOR this proposal. The intentions are well-placed, and since this builds on an already existing program, it gives us a clear framework to gauge success. A continuation like this demonstrates consistency and accountability, which are key to DAO growth.
The point about having the DAO directly own stable RWAs through a competitive provider selection process—avoiding a 1% AUM fee—is prudent. It’s a smart way to maximize value and retain control over low-risk assets.
I’m voting FOR this proposal. The intentions are well-placed, and since this builds on an already existing program, it gives us a clear framework to gauge success. A continuation like this demonstrates consistency and accountability, which are key to DAO growth.
The point about having the DAO directly own stable RWAs through a competitive provider selection process—avoiding a 1% AUM fee—is prudent. It’s a smart way to maximize value and retain control over low-risk assets.
That said, the timeline feels unnecessarily stretched. With the right focus, we could fast-track implementation and make this process more efficient without compromising its impact. It’s a great initiative; let’s execute it with speed and purpose.
Several folks have asked about timing and exposure to tbills vs alternative investments. This is a good time to remember that tbills are primarily a store of value, though they are yield bearing. There is not really a better alternative, since bank deposits are not backed by the full faith and credit of the US government above a fairly low limit. Tbills have the benefit of that full faith and credit, and also exist outside the banking system. The only comparable holding would be repo agreements, which are lending against overcollateralized buckets of tbills, but require more administration.
STEP is currently designed to make sure there are stablecoins/cash available when or if Arbitrum governance no longer pays contributors or funds programs in ARB. This is best viewed as a rainy day fund, with secondary benefits of some yield and improving the RWA ecosystem.
Thanks for your feedback and continued engagement! There's one point I would like to push back strongly on;
I oppose the continued addition of isolated programs that use ARB to generate yield without a specific objective, projections, or long-term plan
Thanks for the question! Attaching the tweet where i referenced the information from in a photo.
We appreciate the effort put into this proposal and overall, we support its objectives. Diversifying the DAO's treasury and generating stable, uncorrelated yields are important for long-term financial sustainability. However, we have some questions and points for further consideration:
Thanks for thinking through the feedback and writing it up!
So i have some thoughts here;
IMO, it does not make sense to expand/renew this program now that the DAO approved the Treasury Management v1.2 proposal, which has 2 different committees, TMC (treasury management) and GMC (growth),
I will be voting FOR this proposal in Snapshot as I believe that diversifying the DAO's treasury with minimal volatility assets is generally a positive action. Regarding other delegates' comments on a lack of evaluation of STEP's first iteration, I think the Dune dashboard and the STEP Monthly reports are enough to consider the current STEP iteration as a successful program, achieving mitigation of risk and promoting the growth of the on-chain RWA ecosystem.
About the overlap of functions with the Treasury Management Committee (TMC) and Growth Management Committee (GMC) I share the sentiment that clarity and structure are essential for smooth governance. However, given that these committees are still in process of being fully established and that it will take time to develop their processes and resource efficiency, it makes more sense to maintain a proven program like STEP, which is already delivering positive outcomes for the DAO. When the TMC is running as intended, then we can revisit whether to transition the program under their oversight. For now, keeping STEP as it is strikes me as the right balance to continue supporting ecosystem growth and safeguarding the DAO's finances trough diversification.
I wonder if @steakhouse or @GFXlabs have any data showing how much yield we are losing because we can only accept the tokenized version of tbills :thinking:
Voted FOR this proposal Rationale
Where can we see the latest updates and information relevant to this program?
Here's a live dashboard for STEP 1: https://dune.com/steakhouse/step-dashboard/1b508c7c-63ec-42e9-86d9-c3a86d23766e
And here's the latest report @steakhouse our program manager wrote for december: https://forum.arbitrum.foundation/t/step-report-december-2024/28094
Thanks for the support! Batching together some similar points around the themes of STEP 1 evaluation, expansion to assets beyond tbills and operational concerns
STEP 1 evaluation
However, a part of me says that it is a bit premature if the step reports are just materializing,
While the objectives are commendable, expanding the program might be a little premature given the early stage of STEP 1’s implementation
Posting a short report every month or every three months is expected
As @Juanrah noted, we have had 3 monthly reports already. You can see the latest one here - https://forum.arbitrum.foundation/t/step-report-december-2024/28094
Overall, these are the main metrics to ensure accountability and success for the STEP program;
The qualitative metric is number of RWA providers who launch their products on arbitrum
The current numbers for these metrics which @Entropy dug up are overwhelmingly positive, showing its worth taking a risk for a second edition of the program to so we solidify our advantage in the RWA space.
Expansion to Assets beyond Tbills
I also think expanding beyond US Treasury bills could be a good idea. The program could look into other conservative, yield-generating RWAs such as corporate bonds or similar low-risk instruments
While doubling down on U.S. Treasuries makes sense now, could we explore a timeline or benchmarks for expanding into other RWA sectors in 2026?
My only recommendation, as others have noted, is to expand beyond T-Bills by including government bonds from other countries, which, while slightly riskier, could further enhance diversification
On a final note, I hope we will be able to diversify the issuers with the next RFP, obviously always while being compatible with the risk profile the committee will deem necessary. But I would like to see also new issuers, since the growth is one of the target of this program.
So my thinking on this topic is to follow the lead of the market. Currently, 99% of the $150 million RWAs on arbitrum are t-bills. When this situation changes and we see a more competitive market for other instruments, definitely worth doing a similar program for those. Until then, smaller programs for growth of nascent sectors and STEP like programs for mature sectors is what I'd recommend as a balance between treasury risk and ecosystem growth.
Operational Concerns
On OpCo or TMC overlap
this, ideally, should be the last iteration of this program as it is. For the next one we will either have 1) opco up and running 2) treasury initiative going to expiration with a potential renewal if opco is not ready. I would like an handover of the program. To clarify, doesn’t mean it would need a new committee for example (but there could be a merit to reduce it if the current treasury management committee has some experience, to avoid surplus), nor that steakhouse won’t be the PM until the end of the mandate. But if in 6 months we want to add another 40, 50, $100M to the program, it should be done under either opco or currently elected treasury managers.
So I'm definitely in agreement that this should be the last term of the STEP committee, since otherwise we risk entrenching them as the people deciding diversification for Arbitrum dao (and its healthy to rotate the power, similar to how bureaucrats get transferred).
However, I don't think OpCo or the TMC initiative can by themselves replace the STEP committee for adequate due diligence.
For example, do either of those initiatives have an expert RWA lawyer like @northlakeslegal who can tell whether a service provider is bankruptcy remote? Are there technology leads like @Nethermind who can look into a code base? A well rounded selection committee is needed to uphold the high standards of due diligence that the STEP brand is based on.
So OpCo or TMC can take the lead in putting together such a committee but it needs to be well balanced and not just deciding by themselves, especially at the higher diversification amounts that STEP has.
On operational pay
please potentially reconsider the budget for the 4 committee members. It’s quite likely there should be more applications, and the budget might be on the low end here. An increase of 20-25% to 30-32.5k per member could be ok imho,
Thanks for the feedback! We probably wouldn't want to change the amounts now since its already up on snapshot. Our thinking was lower end of the ballpark estimates put it near the range of pay received last time, so less contentious to go with what has been approved in the past edition (especially since most parts of the program are based on what happened earlier).
hat said, I would like to see monthly expenses as a category in each report.
@steakhouse , worth adding this to the STEP reports if its not there already!
Timelines and Amount
too cautious development. Too low a growth rate of treasuries will not provide significant profit. We conducted testing and it was successful. Based on the results of 9 months, we can understand that this amount should be increased to at least 100,000,000 ARB (or even more)
Thanks for the feedback and strong show of support! Our current thinking is around 1% of treasury every 9-12 months for 5 years.
I think there is merit to dollar cost averaging, in price impact for the market, ecosystem growth that evolves over this timeframe, and getting overall better execution.
That said, the timeline feels unnecessarily stretched. With the right focus, we could fast-track implementation and make this process more efficient without compromising its impact. It’s a great initiative; let’s execute it with speed and purpose.
I would generally say that the timelines fit with holding a STEP program every 9-12 months, so there is no undue need of haste.
I can see scope for shortening by 2 weeks at the most, so committee review begins March 15th, depending on Tally approval.
the revised timeline would be tally approval by early Feb, a one month submission window, one month committee review.
I would like to express my agreement with the proposal. However, I would like to highlight a few key points that I personally focus on: 1. Whether the detailed performance report of STEP 1 is transparent and clear. 2. Whether the ARB liquidation strategy is open and reasonable. 3. Whether the roles and compensation of the committee are fair and tied to execution effectiveness. 4. Whether the proposal supports RWA while also considering the development of the Arbitrum native ecosystem.
Among these details, I am particularly concerned about the transparency of STEP 1’s results, the prioritization of fund diversification, the committee’s compensation, and the specifics of ARB liquidation.
Although I agree with and support this proposal, I would still recommend that the foundation publicly disclose specific plans for ARB liquidation in advance, such as the quantity and timing of phased liquidations, and provide real-time updates on the progress to strengthen community trust. Additionally, for the compensation of committee members, it would be beneficial to introduce performance indicators, such as linking compensation to fund returns or the implementation outcomes of STEP 2, to avoid purely hourly-based remuneration.
We support the STEP 2 proposal as it aligns with our commitment to treasury diversification into stable, yield-generating RWAs, ensuring long-term financial stability for the DAO. Like other delegates, we share the vision of fostering the growth of RWA protocols on-chain within the Arbitrum ecosystem. At the same time, we’d love to see more focus on exploring and prioritizing on-chain solutions to strengthen decentralization and make the most of Arbitrum’s potential for RWA innovation.
Thank you, @thedevanshmehta for the detailed proposal.
I appreciate the effort to diversify the treasury and support Real World Asset protocols on Arbitrum.
Thank you, @thedevanshmehta for the detailed proposal.
I appreciate the effort to diversify the treasury and support Real World Asset protocols on Arbitrum.
Service providers who applied in STEP 1 will have to simply communicate what has changed in their product. Ample feedback was provided to all applicants, so if they have not managed to addressed the concerns we do not need to re-review applicants. New applications will be reviewed fresh. The RFP will be similar as STEP 1 with some modifications that will be included in the tally vote.
This part suggests that returning applicants only need to highlight updates to their products, while new applicants will go through a fresh review process. However, it does not explicitly address how the evaluation process will ensure that both groups are assessed fairly under the same criteria.
One question: How will the committee ensure fair evaluation of both returning and new applicants?
While doubling down on U.S. Treasuries makes sense now, could we explore a timeline or benchmarks for expanding into other RWA sectors in 2026? This will provide better visibility for long-term goals.
I'm voting FOR on Snapshot. This proposal builds on a proven process to diversify our treasury into stable, yield-generating RWA assets while promoting ecosystem growth. My only recommendation, as others have noted, is to expand beyond T-Bills by including government bonds from other countries, which, while slightly riskier, could further enhance diversification.
Excited to see this come live! This STEP program addresses a critical need for Arbitrum by diversifying treasury assets into stable, yield-generating instruments. this reduces the DAO's reliance on volatile ARB token prices and we are in support of the proposal as a whole.
Some thoughts:
Excited to see this come live! This STEP program addresses a critical need for Arbitrum by diversifying treasury assets into stable, yield-generating instruments. this reduces the DAO's reliance on volatile ARB token prices and we are in support of the proposal as a whole.
Some thoughts:
Overall super interested in setting this expand.
I am voting FOR because I support the diversification of the treasury and the promotion of RWA growth in Arbitrum. However, a part of me says that it is a bit premature if the step reports are just materializing, but I still vote FOR because I think it is important to continue with ARB's treasury investment strategies.
I am voting FOR this proposal as I believe it is essential for ArbitrumDAO to diversify its Treasury and be among the leaders of RWA. Based on the first monthly reports and the Dune dashboard, the initial iteration of STEP appears to be a success.
I strongly believe that Real-World Assets (RWA) represent a strategic vertical with significant potential for the future, and Arbitrum should continue prioritizing this area. As highlighted by other Delegates, I agree that Treasury management activities would benefit from being overseen by an entity with a comprehensive macro overview, I think this should fall under the scope of the OpCo at some point.
I like this program and its gradual development. I see a good income considering the operating budget.
What I like about the proposal:
What I don't like:
I like this program and its gradual development. I see a good income considering the operating budget.
What I like about the proposal:
What I don't like:
What I expected from this proposal:
I repeat once again - I really like this treasury and it seems to me that there should be an end goal for it. That is, we must decide how much % of the total treasury will be in this program. And also in how many years should we reach this amount (and why so many years, why not immediately).
also, will there be something other than RWA? There are many more profitable options for placing funds for stables. I would like to see some analysis of allocating some share of funds in this direction.
Voted For: I like this program and its meaning for the DAO. I would, however, love to see some more detailed reports coming out of this. Posting a short report every month or every three months is expected. Some great feedback can be seen in the comments about diversifying outside T-bills. I would love to see that as well so the funds are more diversified across RWA. Otherwise, I am excited to see version 2.0 in action. I support the program.
I am mostly agreeing with @pedrob here; despite so, will vote in favour.
I think is worth hammering the table on one of the narrative in which arbitrum is leading, which is RWA. I would have rather preferred to see some changes, including either
I am mostly agreeing with @pedrob here; despite so, will vote in favour.
I think is worth hammering the table on one of the narrative in which arbitrum is leading, which is RWA. I would have rather preferred to see some changes, including either
Understanding that continuity here means moving relatively fast (relatively cause is ognna take months according to the timeline), the handover of the program would likely be such to further increment this time. For this reason, and knowing the very good professional background of Paper & Gang on these instruments, I prefer a continuation as it is. With a caveat: this, ideally, should be the last iteration of this program as it is. For the next one we will either have 1) opco up and running 2) treasury initiative going to expiration with a potential renewal if opco is not ready. I would like an handover of the program. To clarify, doesn't mean it would need a new committee for example (but there could be a merit to reduce it if the current treasury management committee has some experience, to avoid surplus), nor that steakhouse won't be the PM until the end of the mandate. But if in 6 months we want to add another 40, 50, $100M to the program, it should be done under either opco or currently elected treasury managers.
On a final note, I hope we will be able to diversify the issuers with the next RFP, obviously always while being compatible with the risk profile the committee will deem necessary. But I would like to see also new issuers, since the growth is one of the target of this program.
As a final note: please potentially reconsider the budget for the 4 committee members. It's quite likely there should be more applications, and the budget might be on the low end here. An increase of 20-25% to 30-32.5k per member could be ok imho, knowing that there is in these programs a somehow linear effort based on the amount of applicants.
I voted FOR the proposal on Snapshot. The operational expenses are low enough to be easily covered by the earned interest (by my calculations, expenses currently represent less than 30% of the profits - on a monthly basis). That said, I would like to see monthly expenses as a category in each report. ARB liquidation will be done by the Arbitrum Foundation, hopefully they will do it in a way that it least effects the price (e.g. OTC) :crossed_fingers:
I vote against this proposal on Snapshot.
I commend the team behind the development and implementation of STEP 1, as it has validated the thesis that Arbitrum can and should be a home for tokenized traditional assets.
That said, I am voting against it for two reasons:
I vote against this proposal on Snapshot.
I commend the team behind the development and implementation of STEP 1, as it has validated the thesis that Arbitrum can and should be a home for tokenized traditional assets.
That said, I am voting against it for two reasons:
First, the recent approval of Treasury Management v1.2 established a new committee to manage investments of ARB converted to stablecoins. Having two committees handling similar responsibilities through different channels and processes seems unnecessarily redundant.
Additionally, the results of STEP are just beginning to materialize in reports. It feels premature to vote on the renewal of a program only three months after its launch.
If the DAO intends to allocate additional resources to RWA, the newly formed committee should be responsible for managing them. However, I believe that if the DAO has just voted to allocate 10M to stablecoin investments, it reflects that this is the amount it deems appropriate at this time.
Secondly, as I have mentioned previously in other votes, I oppose the continued addition of isolated programs that use ARB to generate yield without a specific objective, projections, or long-term plan. While I support treasury management and investments, I disagree with the current approach, which lacks a comprehensive view of long-term needs and strategy.
Given that the OpCo has already been approved in the temp check and that treasury management will be one of its primary functions, I expect it to take on this responsibility as outlined, adopting an integral approach that considers the DAO's medium- and long-term needs.
Im overall supportive of diversifying treasury assets and put them to work. The general question im asking myself is, is this the right timing for going into T-bills? We have onchain yield that is currently extremely high due to Ethena and and extrem usage of stablecoins overall. Why arent we make use of these? It would be onchain (what we all want) and could be executed basically within minutes.
Interest rates are going down and so will the yield. What we would do here is to take Tradfi assets and their associated risks (although very low), then tokenize them and put them into a smart contract (take the onchain risk). So we basically double the trouble for small single digit yield.
I’m voting FOR this proposal. The intentions are well-placed, and since this builds on an already existing program, it gives us a clear framework to gauge success. A continuation like this demonstrates consistency and accountability, which are key to DAO growth.
The point about having the DAO directly own stable RWAs through a competitive provider selection process—avoiding a 1% AUM fee—is prudent. It’s a smart way to maximize value and retain control over low-risk assets.
I’m voting FOR this proposal. The intentions are well-placed, and since this builds on an already existing program, it gives us a clear framework to gauge success. A continuation like this demonstrates consistency and accountability, which are key to DAO growth.
The point about having the DAO directly own stable RWAs through a competitive provider selection process—avoiding a 1% AUM fee—is prudent. It’s a smart way to maximize value and retain control over low-risk assets.
That said, the timeline feels unnecessarily stretched. With the right focus, we could fast-track implementation and make this process more efficient without compromising its impact. It’s a great initiative; let’s execute it with speed and purpose.
Several folks have asked about timing and exposure to tbills vs alternative investments. This is a good time to remember that tbills are primarily a store of value, though they are yield bearing. There is not really a better alternative, since bank deposits are not backed by the full faith and credit of the US government above a fairly low limit. Tbills have the benefit of that full faith and credit, and also exist outside the banking system. The only comparable holding would be repo agreements, which are lending against overcollateralized buckets of tbills, but require more administration.
STEP is currently designed to make sure there are stablecoins/cash available when or if Arbitrum governance no longer pays contributors or funds programs in ARB. This is best viewed as a rainy day fund, with secondary benefits of some yield and improving the RWA ecosystem.
Thanks for your feedback and continued engagement! There's one point I would like to push back strongly on;
I oppose the continued addition of isolated programs that use ARB to generate yield without a specific objective, projections, or long-term plan
Thanks for the question! Attaching the tweet where i referenced the information from in a photo.
We appreciate the effort put into this proposal and overall, we support its objectives. Diversifying the DAO's treasury and generating stable, uncorrelated yields are important for long-term financial sustainability. However, we have some questions and points for further consideration:
Thanks for thinking through the feedback and writing it up!
So i have some thoughts here;
IMO, it does not make sense to expand/renew this program now that the DAO approved the Treasury Management v1.2 proposal, which has 2 different committees, TMC (treasury management) and GMC (growth),
I will be voting FOR this proposal in Snapshot as I believe that diversifying the DAO's treasury with minimal volatility assets is generally a positive action. Regarding other delegates' comments on a lack of evaluation of STEP's first iteration, I think the Dune dashboard and the STEP Monthly reports are enough to consider the current STEP iteration as a successful program, achieving mitigation of risk and promoting the growth of the on-chain RWA ecosystem.
About the overlap of functions with the Treasury Management Committee (TMC) and Growth Management Committee (GMC) I share the sentiment that clarity and structure are essential for smooth governance. However, given that these committees are still in process of being fully established and that it will take time to develop their processes and resource efficiency, it makes more sense to maintain a proven program like STEP, which is already delivering positive outcomes for the DAO. When the TMC is running as intended, then we can revisit whether to transition the program under their oversight. For now, keeping STEP as it is strikes me as the right balance to continue supporting ecosystem growth and safeguarding the DAO's finances trough diversification.
I wonder if @steakhouse or @GFXlabs have any data showing how much yield we are losing because we can only accept the tokenized version of tbills :thinking:
Im overall supportive of diversifying treasury assets and put them to work. The general question im asking myself is, is this the right timing for going into T-bills? We have onchain yield that is currently extremely high due to Ethena and and extrem usage of stablecoins overall. Why arent we make use of these? It would be onchain (what we all want) and could be executed basically within minutes.
Interest rates are going down and so will the yield. What we would do here is to take Tradfi assets and their associated risks (although very low), then tokenize them and put them into a smart contract (take the onchain risk). So we basically double the trouble for small single digit yield.
Maybe its not the best time now and we should rather seek for onchain yield and then slowly move into RWA. Otherwise the DAO will simply loose on yielding profits.
Im neither for or against the proposal because the overall idea totally makes sense if the risks associated can be minimized. But i do not think that the timing is great.
Im going to vote ABSTAIN.
Thanks for your feedback and continued engagement! There's one point I would like to push back strongly on;
I oppose the continued addition of isolated programs that use ARB to generate yield without a specific objective, projections, or long-term plan
There is a very specific plan here: for STEP to be Arbitrum's flagship RWA program, where rather than grants we do a ton of diligence on your product and if found worthy, add it to our DAO treasury for prudent diversification
From our perspective, why have a RWA grants program when you can instead buy their financial product & force them to launch it here to get the business?
From a mature projects perspective, why care about grants when you can instead have the legitimacy of Arbitrum being a customer of your product? Plus for their investors grants are less important than showing market need for what they've built
We have already seen success with this approach, growing RWA TVL on Arbitrum from $100k at start of 2024 to over $150 million today.
We appreciate the effort put into this proposal and overall, we support its objectives. Diversifying the DAO's treasury and generating stable, uncorrelated yields are important for long-term financial sustainability. However, we have some questions and points for further consideration:
Thank you for bringing forward this initiative, and we look forward to seeing its progression.
Thanks for thinking through the feedback and writing it up!
So i have some thoughts here;
IMO, it does not make sense to expand/renew this program now that the DAO approved the Treasury Management v1.2 proposal, which has 2 different committees, TMC (treasury management) and GMC (growth),
I view STEP as a hybrid between TMC and GMC. We had pretty big success on both fronts. So i would be hesitant to put it in either bucket.
But that's not the main point i want to make, which is that even if we are changing our internal processes, external RWA projects know of STEP and have a good impression of it. Not to blow my own trumpet, but tell me one other program that gave out $30 million without controversy.
So my own take is, RWA has massively grown on Arbitrum since STEP 1 was announced. We should continue another edition of it with the same committee to build on the success and not try breaking anything which has been proven to work pretty well. Let TMC and GMC prove themselves before we put all our eggs in their basket
As we are going to have proper structures in place, does it make sense to keep this as a separated treasury initiative over the years?
This one is punted over to another proposal. as it stands, I believe Steakhouse' contract is until October. I hope OpCo is operational by then and can take over some of this work.
I will be voting FOR this proposal in Snapshot as I believe that diversifying the DAO's treasury with minimal volatility assets is generally a positive action. Regarding other delegates' comments on a lack of evaluation of STEP's first iteration, I think the Dune dashboard and the STEP Monthly reports are enough to consider the current STEP iteration as a successful program, achieving mitigation of risk and promoting the growth of the on-chain RWA ecosystem.
About the overlap of functions with the Treasury Management Committee (TMC) and Growth Management Committee (GMC) I share the sentiment that clarity and structure are essential for smooth governance. However, given that these committees are still in process of being fully established and that it will take time to develop their processes and resource efficiency, it makes more sense to maintain a proven program like STEP, which is already delivering positive outcomes for the DAO. When the TMC is running as intended, then we can revisit whether to transition the program under their oversight. For now, keeping STEP as it is strikes me as the right balance to continue supporting ecosystem growth and safeguarding the DAO's finances trough diversification.
I also think expanding beyond US Treasury bills could be a good idea. The program could look into other conservative, yield-generating RWAs such as corporate bonds or similar low-risk instruments. This would further expand diversification and support a wider variety of RWAs in the ecosystem. Of course this has to be done by taking a measured approach, evaluating risk, liquidity and compliance.
I wonder if @steakhouse or @GFXlabs have any data showing how much yield we are losing because we can only accept the tokenized version of tbills :thinking:
The short answer is that Arbitrum could get either more or less yield by holding tbills directly. It's not rocket science to hold tbills, but there's execution risk. Kind of like how an all-powerful monarch is simultaneously the best and worst possible government -- it all depends on how good they are at what they do.
STEP generally prioritized safety and liquidity. Yield generation was, for at least ourselves, of secondary concern. Especially in the case of tbills and at this size of allocation, an extra 20 or 30 bps probably doesn't offset even a small increase in risk that the funds become lost or stuck. NFA, DYOR, just our opinion when allocating within a universe of only very liquid, very safe, cash-adjacent assets.
thanks for the answer. To be clear, I think that the dao, opco, whoever, should usually as default go for the tokenized product. This initiative is half treasury related, half growth related, any forfeit yield if compatible with the mission is not really lost but just cost of doing business on chain and would personally like for it to be in this way. Maybe could make sense to have directly tbill at some point but just on the premise of risk management, which would compete to any cfo/manager.
Yeah that's a good question! If nothing else it would allow us to assess the "cost" of having a tokenized tbill vs a regular one. Once OpCo is live it would be possible to directly invest in t-bills vs only being able to use the tokenized version. As a DAO i think we should still stick to the tokenized version since we can track yield on Dune dashboards and ensure the correct amount is swept back into our treasury.
I wonder if @steakhouse or @GFXlabs have any data showing how much yield we are losing because we can only accept the tokenized version of tbills :thinking:
Gmgm!
Firstly, and before I post some questions hereunder to get a better understanding, I'd like to state that STEP seems to be going well from a structural perspective and thus I'd like to thank @thedevanshmehta and others for the good work here (I was a skeptic, but always very happy to be proven wrong - and I think I'm gonna be happy :) )
Gmgm!
Firstly, and before I post some questions hereunder to get a better understanding, I'd like to state that STEP seems to be going well from a structural perspective and thus I'd like to thank @thedevanshmehta and others for the good work here (I was a skeptic, but always very happy to be proven wrong - and I think I'm gonna be happy :) )
Posting some queries hereunder for us to be able to get a better understanding of some matters before voting or discussing further:
You mention positive ecosystem growth results (e.g., OpenEdenLabs’ TVL growth, Ondo USDY launch). Could you provide specific data on the financial performance of the $30 million endowment in terms of yield generated so far?
What specific metrics or KPIs should the community look for in the monthly report from Steakhouse to evaluate STEP 1’s success before proceeding with STEP 2?
You mention avoiding liquidation when ARB is at all-time lows. What criteria will the foundation use to determine optimal conditions for liquidation? Could a delay in favorable conditions stall the diversification process indefinitely? (Fine if the above are privileged conversations by the way, I don't expect a reply to these).
Are there contingency plans if the price of ARB does not reach the target level in a reasonable timeframe?
You note that Steakhouse’s term is for one year. How will the community ensure accountability and performance evaluation for the current program manager before considering an extension or additional funding?
Will the proposal include any budget for increased responsibilities, or is that planned for a separate proposal?
Beyond ecosystem growth, what financial targets (e.g., yield percentage, asset allocation goals) does STEP 2 aim to achieve?
How will the DAO measure the success of diversification in terms of risk management and yield generation?
You propose taking STEP 2 to a snapshot vote after Steakhouse’s first report. Has the report been published?
Kind regards, Joseph Axis Advisory
Thanks for all the feedback provided so far!
Has any type of update / tracking dashboard been provided so far?
Thanks for all the feedback provided so far!
Has any type of update / tracking dashboard been provided so far?
We have now had 2 months of reports on STEP including a dune dashboard.
October report: https://forum.arbitrum.foundation/t/step-report-october-2024/27642
November report: https://forum.arbitrum.foundation/t/step-report-november-2024/27914
To date, we have earned approximately $162,500 in yield! Not counting the benefits of Arbitrum RWA product launches like ondo, blackrock, franklin templeton and more.
We need to keep up the momentum so we become the home of both De-Fi and RWA. After the holidays, we plan to move the second edition of the STEP program to a snapshot vote.
I've updated the first post in the thread with all the details but here are some summarized highlights with the key details.
The scope of products bought will be similar to STEP 1. We explored other markets but they are mostly too nascent with either too much risk or without a competitive market. The biggest benefit for Arbitrum will be had by doubling down for this year and exploring other RWA sectors later in the year or in 2026 once they have time to mature.
Service providers who applied in STEP 1 will have to simply communicate what has changed in their product. Ample feedback was provided to all applicants, so if they have not managed to addressed the concerns we do not need to re-review applicants. New applications will be reviewed fresh.
The selection committee will be same as last time with one major change: Entropy will replace Steakhouse Financial who will not be a voting member due to also being the STEP program manager.
So the committee will compose of @GFXlabs , @northlakeslegal , @Nethermind , @Entropy and @karpatkey , with the T & S led by myself as facilitating member to communicate with service providers, the DAO and the foundation.
The total amount diversified in STEP 2 will also be the same as last time: 35 million ARB. With this, our endowment size will be hopefully reaching the $100 million mark ($30 million from STEP 1, ~$15-25 million from treasury management and now STEP 2), putting us in a strong position to weather even bear markets from an abundance mindset.
The budget for committee members will also be the same as last time, at 25k ARB per committee member. 10k ARB will be given upon completion of work and the remaining 15k ARB vested over 3 years.
Entropy will be waiving their fees while Nethermind will perform committee member duties outside their scope as ARDC risk member, due to differing compensation structures.
Our rough estimates show the amount paid to them would be higher if they did the same work in the role of ARDC risk member.
50 applications
2 hours for 25 applications with few updates.
6 hours for remaining 25 new products/drastic changes.
Total: 200 hours. Another 20 or so hours for all the deliberation, selections, allocation decisions we have within the committee.
Average rate of $150/hr would be 33K.
STEP has developed a reputation of having a ton of due diligence. We think this is a good flag to hold high, since the benefits from being a recipient in STEP go beyond just the amounts we allocate to also the legitimacy of passing heavy scrutiny by our committee.
Keen to hear feedback before moving for a vote in the new year!
I went through all the comments and this looks good to me. I look forward to the STEP report before voting
Appreciate the prompt reply @thedevanshmehta - Thanks a lot for the additional context ser!
As the conversation is moving forward, I will present here the same arguments I made in the TG channel:
IMO, it does not make sense to expand/renew this program now that the DAO approved the Treasury Management v1.2 proposal, which has 2 different committees, TMC (treasury management) and GMC (growth), and OpCo is going to a Tally vote.
As the conversation is moving forward, I will present here the same arguments I made in the TG channel:
IMO, it does not make sense to expand/renew this program now that the DAO approved the Treasury Management v1.2 proposal, which has 2 different committees, TMC (treasury management) and GMC (growth), and OpCo is going to a Tally vote.
The first iteration made sense as there was no structure in place. If STEP it is a treasury diversification strategy, it would fall into TMC mandate. If it is a growth initiative, under GMC. We are adding more costs, creating/keeping fragmented (or siloed) structures for something that should be managed at one place.
For STEP 1, we are already paying Steakhouse 174k for one year of reporting/management. As we are going to have proper structures in place, does it make sense to keep this as a separated treasury initiative over the years?
I'm happy to join the discussion, as I will soon be a delegate in the Arb DAO :). I noticed there was no outcome report from the previous STEP, which makes it difficult for me to evaluate the current proposal. Am I missing something? Is there a report for STEP 2?
Btw, I support diversifying the treasury and promoting the growth of RWAs on Arbitrum, especially since RWAs were a hot topic at Token2049 this year and are expected to be significant in near future.
one thing that would be good to see is the aggregated yield of the underlying instruments vs what we effectively get as a dao.
Let's start from scratch, let's say we have mostly tbills that generates a certain amount of yield on a yearly basis. My undertanding is that we will always underperform this metric just on costs on top from tokenization provider, which is fine: to me, this lower amount is de facto the cost to do business on chain and to advertise the growth of the ecosystem.
one thing that would be good to see is the aggregated yield of the underlying instruments vs what we effectively get as a dao.
Let's start from scratch, let's say we have mostly tbills that generates a certain amount of yield on a yearly basis. My undertanding is that we will always underperform this metric just on costs on top from tokenization provider, which is fine: to me, this lower amount is de facto the cost to do business on chain and to advertise the growth of the ecosystem.
But it would be interesting to see this number, aka: if we just did put the initial capital in tbills vs here, what would have been the spread in performances.
I also understand this is not trivial because we are talking about different vehicles, deployed in different times etc. But was worth asking.
And if not doable for step1, maybe could be doable for step2.
For example, I would have paid more attention to topics related to the timing of conversions, the value of conversions, risk control and risk diversification.
For example, I would have paid more attention to topics related to the timing of conversions, the value of conversions, risk control and risk diversification.
This one is actually quite a difficult one to answer and hinges in part on whether STEP is an ecosystem growth initiative or a treasury diversification one.
if its the former, we want to ensure STEP is an annual occurence. If its diversification, we want to be patient and strategically build up the endowment with a good rate.
My only concern remains the same old issue that everyone talks about: transparency in fund management. Can the current strategy completely eliminate irregularities or even misuse in fund management?
This is one reason why @GFXlabs insisted on yield being streamed back to the treasury.
As long as we know that managers are only responsible for protecting principal, with all interest being put back in our treasury, it is much easier to ensure there is no irregularity.
Makers experience is that programming yield to cover expenses, compound the principal, etc just adds complexity which makes misuse easier to hide.
noticed there was no outcome report from the previous STEP, which makes it difficult for me to evaluate the current proposal
@steakhouse will be coming out with a report after allocations are complete and they sign a contract with the foundation. we will only be moving this to a snapshot after the first report comes out for voters to analyse.
I support diversifying the treasury and promoting the growth of RWAs on Arbitrum
Curious to know which of these 2 goals you think is more important.
Currently thinking through liquidation strategies in STEP programs, which would be quite different depending on the goal.
We look forward to participating in the RFP process and potentially contributing to Arbitrum’s treasury diversification strategy.
Will be great to have your application in the next iteration of the program! Feedback we've got is that even if service providers were not chosen, they appreciated the indepth look into their product
We appreciate the vision behind STEP 2.0, as building a sustainable endowment through real-world assets (RWAs) is crucial for the long-term stability of the Arbitrum DAO. However, there are several concerns that need to be addressed before we can fully support the proposal.
We appreciate the vision behind STEP 2.0, as building a sustainable endowment through real-world assets (RWAs) is crucial for the long-term stability of the Arbitrum DAO. However, there are several concerns that need to be addressed before we can fully support the proposal.
Performance Reviews and Reporting from STEP 1: We believe that before allocating an additional 35 million ARB, there should be comprehensive reporting on the performance and outcomes of STEP 1. While there have been positive developments like OpenEden’s TVL increase and Ondo's token launch, we still lack formal performance reports that clearly demonstrate the success and lessons from STEP 1. Transparency is key here—without it, we risk compounding any inefficiencies from the pilot phase.
Program Manager Compensation: The proposed doubling of ARB for management raises questions about whether the program manager’s compensation should also be increased proportionally. While managing more assets could justify additional compensation, there needs to be clear evidence of outperformance or added responsibilities before considering any adjustments to the program manager’s pay. Proper evaluation of their role and deliverables from STEP 1 would help guide this decision.
Thanks for the feedback!
Which reports are you referring to again?
We have 2 monthly reports out already and the Dune dashboard too.
October: https://forum.arbitrum.foundation/t/step-report-october-2024/27642
November: https://forum.arbitrum.foundation/t/step-report-november-2024/27914
https://dune.com/steakhouse/step-dashboard/1b508c7c-63ec-42e9-86d9-c3a86d23766e
Overall, the direction of the proposal is good, but clearer implementation steps and transparent communication could be used to ensure that the program is implemented smoothly and to best effect. For example, I would have paid more attention to topics related to the timing of conversions, the value of conversions, risk control and risk diversification.
If practicality is predicated on concrete processes and results orientation, the community needs to be transparent and engaged by having regularly updated reports to report on progress, especially regarding the conversion of funds and the selection of projects.
Generally speaking, we’re in favor of this proposal; however, we have a few concerns. While we know the previous STEP term recently concluded, we believe it would be best for the DAO to have some evaluation to see how performance of STEP was carried out previously. Steakhouse offered to complete monthly reports at the close of each calendar month following the first deployments for each program, should we expect something similar to this?
i've just updated the proposal with the latest thinking!
Could you provide specific data on the financial performance of the $30 million endowment in terms of yield generated so far?
The following reflects the views of the Lampros Labs DAO governance team.
We welcome the move to diversify into various sectors of RWAs, which signals strong support for projects deploying on Arbitrum. However, there is still some confusion about when the ARB will be liquidated at the target price of $0.85. The alignment of major projects deploying on Arbitrum will likely happen with the completion of STEP 2.
The following reflects the views of the Lampros Labs DAO governance team.
We welcome the move to diversify into various sectors of RWAs, which signals strong support for projects deploying on Arbitrum. However, there is still some confusion about when the ARB will be liquidated at the target price of $0.85. The alignment of major projects deploying on Arbitrum will likely happen with the completion of STEP 2.
While allocating ARB for GCP & Foundation Strategic Partnerships is important, the risk of depleting ARB tokens in the treasury may leave room for governance attacks at a lower cost. If not in this proposal, this issue should be addressed.
Additionally, directly holding the tokens and saving the 1% AUM fee is a beneficial improvement.
I'm for this, as I think treasury diversification is important. However I would agree with others that we should get some type of reporting on how STEP 1.0 has gone so far. Has any type of update / tracking dashboard been provided so far?
Thanks to @cp0x for kickstarting the discussion and to the others for pitching in with questions. Can already see a major change to the proposal on the timing for putting this up for vote.
How can we define optimal conditions? Is it at ARB price at $1, $2 or $5? This is a tough one.
Maybe setting a timeline of slowly DCAing ARB into stables over some time (6 months for example) would be a better option?
Hello!
I have some questions: why have this proposal detached from the revamps criteria to allocate the funds? At the first iteration, we decided the amount as well. For example, if the committee identifies more opportunities and it makes sense to have a higher amount deployed?
It doesn't make much sense to have this proposal before the work of the committee, IMHO.
Im overall supportive of diversifying treasury assets and put them to work. The general question im asking myself is, is this the right timing for going into T-bills? We have onchain yield that is currently extremely high due to Ethena and and extrem usage of stablecoins overall. Why arent we make use of these? It would be onchain (what we all want) and could be executed basically within minutes.
Interest rates are going down and so will the yield. What we would do here is to take Tradfi assets and their associated risks (although very low), then tokenize them and put them into a smart contract (take the onchain risk). So we basically double the trouble for small single digit yield.
Maybe its not the best time now and we should rather seek for onchain yield and then slowly move into RWA. Otherwise the DAO will simply loose on yielding profits.
Im neither for or against the proposal because the overall idea totally makes sense if the risks associated can be minimized. But i do not think that the timing is great.
Im going to vote ABSTAIN.
Thanks for your feedback and continued engagement! There's one point I would like to push back strongly on;
I oppose the continued addition of isolated programs that use ARB to generate yield without a specific objective, projections, or long-term plan
There is a very specific plan here: for STEP to be Arbitrum's flagship RWA program, where rather than grants we do a ton of diligence on your product and if found worthy, add it to our DAO treasury for prudent diversification
From our perspective, why have a RWA grants program when you can instead buy their financial product & force them to launch it here to get the business?
From a mature projects perspective, why care about grants when you can instead have the legitimacy of Arbitrum being a customer of your product? Plus for their investors grants are less important than showing market need for what they've built
We have already seen success with this approach, growing RWA TVL on Arbitrum from $100k at start of 2024 to over $150 million today.
We appreciate the effort put into this proposal and overall, we support its objectives. Diversifying the DAO's treasury and generating stable, uncorrelated yields are important for long-term financial sustainability. However, we have some questions and points for further consideration:
Thank you for bringing forward this initiative, and we look forward to seeing its progression.
Thanks for thinking through the feedback and writing it up!
So i have some thoughts here;
IMO, it does not make sense to expand/renew this program now that the DAO approved the Treasury Management v1.2 proposal, which has 2 different committees, TMC (treasury management) and GMC (growth),
I view STEP as a hybrid between TMC and GMC. We had pretty big success on both fronts. So i would be hesitant to put it in either bucket.
But that's not the main point i want to make, which is that even if we are changing our internal processes, external RWA projects know of STEP and have a good impression of it. Not to blow my own trumpet, but tell me one other program that gave out $30 million without controversy.
So my own take is, RWA has massively grown on Arbitrum since STEP 1 was announced. We should continue another edition of it with the same committee to build on the success and not try breaking anything which has been proven to work pretty well. Let TMC and GMC prove themselves before we put all our eggs in their basket
As we are going to have proper structures in place, does it make sense to keep this as a separated treasury initiative over the years?
This one is punted over to another proposal. as it stands, I believe Steakhouse' contract is until October. I hope OpCo is operational by then and can take over some of this work.
I will be voting FOR this proposal in Snapshot as I believe that diversifying the DAO's treasury with minimal volatility assets is generally a positive action. Regarding other delegates' comments on a lack of evaluation of STEP's first iteration, I think the Dune dashboard and the STEP Monthly reports are enough to consider the current STEP iteration as a successful program, achieving mitigation of risk and promoting the growth of the on-chain RWA ecosystem.
About the overlap of functions with the Treasury Management Committee (TMC) and Growth Management Committee (GMC) I share the sentiment that clarity and structure are essential for smooth governance. However, given that these committees are still in process of being fully established and that it will take time to develop their processes and resource efficiency, it makes more sense to maintain a proven program like STEP, which is already delivering positive outcomes for the DAO. When the TMC is running as intended, then we can revisit whether to transition the program under their oversight. For now, keeping STEP as it is strikes me as the right balance to continue supporting ecosystem growth and safeguarding the DAO's finances trough diversification.
I also think expanding beyond US Treasury bills could be a good idea. The program could look into other conservative, yield-generating RWAs such as corporate bonds or similar low-risk instruments. This would further expand diversification and support a wider variety of RWAs in the ecosystem. Of course this has to be done by taking a measured approach, evaluating risk, liquidity and compliance.
I wonder if @steakhouse or @GFXlabs have any data showing how much yield we are losing because we can only accept the tokenized version of tbills :thinking:
The short answer is that Arbitrum could get either more or less yield by holding tbills directly. It's not rocket science to hold tbills, but there's execution risk. Kind of like how an all-powerful monarch is simultaneously the best and worst possible government -- it all depends on how good they are at what they do.
STEP generally prioritized safety and liquidity. Yield generation was, for at least ourselves, of secondary concern. Especially in the case of tbills and at this size of allocation, an extra 20 or 30 bps probably doesn't offset even a small increase in risk that the funds become lost or stuck. NFA, DYOR, just our opinion when allocating within a universe of only very liquid, very safe, cash-adjacent assets.
thanks for the answer. To be clear, I think that the dao, opco, whoever, should usually as default go for the tokenized product. This initiative is half treasury related, half growth related, any forfeit yield if compatible with the mission is not really lost but just cost of doing business on chain and would personally like for it to be in this way. Maybe could make sense to have directly tbill at some point but just on the premise of risk management, which would compete to any cfo/manager.
Yeah that's a good question! If nothing else it would allow us to assess the "cost" of having a tokenized tbill vs a regular one. Once OpCo is live it would be possible to directly invest in t-bills vs only being able to use the tokenized version. As a DAO i think we should still stick to the tokenized version since we can track yield on Dune dashboards and ensure the correct amount is swept back into our treasury.
I wonder if @steakhouse or @GFXlabs have any data showing how much yield we are losing because we can only accept the tokenized version of tbills :thinking:
Gmgm!
Firstly, and before I post some questions hereunder to get a better understanding, I'd like to state that STEP seems to be going well from a structural perspective and thus I'd like to thank @thedevanshmehta and others for the good work here (I was a skeptic, but always very happy to be proven wrong - and I think I'm gonna be happy :) )
Gmgm!
Firstly, and before I post some questions hereunder to get a better understanding, I'd like to state that STEP seems to be going well from a structural perspective and thus I'd like to thank @thedevanshmehta and others for the good work here (I was a skeptic, but always very happy to be proven wrong - and I think I'm gonna be happy :) )
Posting some queries hereunder for us to be able to get a better understanding of some matters before voting or discussing further:
You mention positive ecosystem growth results (e.g., OpenEdenLabs’ TVL growth, Ondo USDY launch). Could you provide specific data on the financial performance of the $30 million endowment in terms of yield generated so far?
What specific metrics or KPIs should the community look for in the monthly report from Steakhouse to evaluate STEP 1’s success before proceeding with STEP 2?
You mention avoiding liquidation when ARB is at all-time lows. What criteria will the foundation use to determine optimal conditions for liquidation? Could a delay in favorable conditions stall the diversification process indefinitely? (Fine if the above are privileged conversations by the way, I don't expect a reply to these).
Are there contingency plans if the price of ARB does not reach the target level in a reasonable timeframe?
You note that Steakhouse’s term is for one year. How will the community ensure accountability and performance evaluation for the current program manager before considering an extension or additional funding?
Will the proposal include any budget for increased responsibilities, or is that planned for a separate proposal?
Beyond ecosystem growth, what financial targets (e.g., yield percentage, asset allocation goals) does STEP 2 aim to achieve?
How will the DAO measure the success of diversification in terms of risk management and yield generation?
You propose taking STEP 2 to a snapshot vote after Steakhouse’s first report. Has the report been published?
Kind regards, Joseph Axis Advisory
Thanks for all the feedback provided so far!
Has any type of update / tracking dashboard been provided so far?
Thanks for all the feedback provided so far!
Has any type of update / tracking dashboard been provided so far?
We have now had 2 months of reports on STEP including a dune dashboard.
October report: https://forum.arbitrum.foundation/t/step-report-october-2024/27642
November report: https://forum.arbitrum.foundation/t/step-report-november-2024/27914
To date, we have earned approximately $162,500 in yield! Not counting the benefits of Arbitrum RWA product launches like ondo, blackrock, franklin templeton and more.
We need to keep up the momentum so we become the home of both De-Fi and RWA. After the holidays, we plan to move the second edition of the STEP program to a snapshot vote.
I've updated the first post in the thread with all the details but here are some summarized highlights with the key details.
The scope of products bought will be similar to STEP 1. We explored other markets but they are mostly too nascent with either too much risk or without a competitive market. The biggest benefit for Arbitrum will be had by doubling down for this year and exploring other RWA sectors later in the year or in 2026 once they have time to mature.
Service providers who applied in STEP 1 will have to simply communicate what has changed in their product. Ample feedback was provided to all applicants, so if they have not managed to addressed the concerns we do not need to re-review applicants. New applications will be reviewed fresh.
The selection committee will be same as last time with one major change: Entropy will replace Steakhouse Financial who will not be a voting member due to also being the STEP program manager.
So the committee will compose of @GFXlabs , @northlakeslegal , @Nethermind , @Entropy and @karpatkey , with the T & S led by myself as facilitating member to communicate with service providers, the DAO and the foundation.
The total amount diversified in STEP 2 will also be the same as last time: 35 million ARB. With this, our endowment size will be hopefully reaching the $100 million mark ($30 million from STEP 1, ~$15-25 million from treasury management and now STEP 2), putting us in a strong position to weather even bear markets from an abundance mindset.
The budget for committee members will also be the same as last time, at 25k ARB per committee member. 10k ARB will be given upon completion of work and the remaining 15k ARB vested over 3 years.
Entropy will be waiving their fees while Nethermind will perform committee member duties outside their scope as ARDC risk member, due to differing compensation structures.
Our rough estimates show the amount paid to them would be higher if they did the same work in the role of ARDC risk member.
50 applications
2 hours for 25 applications with few updates.
6 hours for remaining 25 new products/drastic changes.
Total: 200 hours. Another 20 or so hours for all the deliberation, selections, allocation decisions we have within the committee.
Average rate of $150/hr would be 33K.
STEP has developed a reputation of having a ton of due diligence. We think this is a good flag to hold high, since the benefits from being a recipient in STEP go beyond just the amounts we allocate to also the legitimacy of passing heavy scrutiny by our committee.
Keen to hear feedback before moving for a vote in the new year!
I went through all the comments and this looks good to me. I look forward to the STEP report before voting
Appreciate the prompt reply @thedevanshmehta - Thanks a lot for the additional context ser!
As the conversation is moving forward, I will present here the same arguments I made in the TG channel:
IMO, it does not make sense to expand/renew this program now that the DAO approved the Treasury Management v1.2 proposal, which has 2 different committees, TMC (treasury management) and GMC (growth), and OpCo is going to a Tally vote.
As the conversation is moving forward, I will present here the same arguments I made in the TG channel:
IMO, it does not make sense to expand/renew this program now that the DAO approved the Treasury Management v1.2 proposal, which has 2 different committees, TMC (treasury management) and GMC (growth), and OpCo is going to a Tally vote.
The first iteration made sense as there was no structure in place. If STEP it is a treasury diversification strategy, it would fall into TMC mandate. If it is a growth initiative, under GMC. We are adding more costs, creating/keeping fragmented (or siloed) structures for something that should be managed at one place.
For STEP 1, we are already paying Steakhouse 174k for one year of reporting/management. As we are going to have proper structures in place, does it make sense to keep this as a separated treasury initiative over the years?
I'm happy to join the discussion, as I will soon be a delegate in the Arb DAO :). I noticed there was no outcome report from the previous STEP, which makes it difficult for me to evaluate the current proposal. Am I missing something? Is there a report for STEP 2?
Btw, I support diversifying the treasury and promoting the growth of RWAs on Arbitrum, especially since RWAs were a hot topic at Token2049 this year and are expected to be significant in near future.
one thing that would be good to see is the aggregated yield of the underlying instruments vs what we effectively get as a dao.
Let's start from scratch, let's say we have mostly tbills that generates a certain amount of yield on a yearly basis. My undertanding is that we will always underperform this metric just on costs on top from tokenization provider, which is fine: to me, this lower amount is de facto the cost to do business on chain and to advertise the growth of the ecosystem.
one thing that would be good to see is the aggregated yield of the underlying instruments vs what we effectively get as a dao.
Let's start from scratch, let's say we have mostly tbills that generates a certain amount of yield on a yearly basis. My undertanding is that we will always underperform this metric just on costs on top from tokenization provider, which is fine: to me, this lower amount is de facto the cost to do business on chain and to advertise the growth of the ecosystem.
But it would be interesting to see this number, aka: if we just did put the initial capital in tbills vs here, what would have been the spread in performances.
I also understand this is not trivial because we are talking about different vehicles, deployed in different times etc. But was worth asking.
And if not doable for step1, maybe could be doable for step2.
For example, I would have paid more attention to topics related to the timing of conversions, the value of conversions, risk control and risk diversification.
For example, I would have paid more attention to topics related to the timing of conversions, the value of conversions, risk control and risk diversification.
This one is actually quite a difficult one to answer and hinges in part on whether STEP is an ecosystem growth initiative or a treasury diversification one.
if its the former, we want to ensure STEP is an annual occurence. If its diversification, we want to be patient and strategically build up the endowment with a good rate.
My only concern remains the same old issue that everyone talks about: transparency in fund management. Can the current strategy completely eliminate irregularities or even misuse in fund management?
This is one reason why @GFXlabs insisted on yield being streamed back to the treasury.
As long as we know that managers are only responsible for protecting principal, with all interest being put back in our treasury, it is much easier to ensure there is no irregularity.
Makers experience is that programming yield to cover expenses, compound the principal, etc just adds complexity which makes misuse easier to hide.
noticed there was no outcome report from the previous STEP, which makes it difficult for me to evaluate the current proposal
@steakhouse will be coming out with a report after allocations are complete and they sign a contract with the foundation. we will only be moving this to a snapshot after the first report comes out for voters to analyse.
I support diversifying the treasury and promoting the growth of RWAs on Arbitrum
Curious to know which of these 2 goals you think is more important.
Currently thinking through liquidation strategies in STEP programs, which would be quite different depending on the goal.
We look forward to participating in the RFP process and potentially contributing to Arbitrum’s treasury diversification strategy.
Will be great to have your application in the next iteration of the program! Feedback we've got is that even if service providers were not chosen, they appreciated the indepth look into their product
We appreciate the vision behind STEP 2.0, as building a sustainable endowment through real-world assets (RWAs) is crucial for the long-term stability of the Arbitrum DAO. However, there are several concerns that need to be addressed before we can fully support the proposal.
We appreciate the vision behind STEP 2.0, as building a sustainable endowment through real-world assets (RWAs) is crucial for the long-term stability of the Arbitrum DAO. However, there are several concerns that need to be addressed before we can fully support the proposal.
Performance Reviews and Reporting from STEP 1: We believe that before allocating an additional 35 million ARB, there should be comprehensive reporting on the performance and outcomes of STEP 1. While there have been positive developments like OpenEden’s TVL increase and Ondo's token launch, we still lack formal performance reports that clearly demonstrate the success and lessons from STEP 1. Transparency is key here—without it, we risk compounding any inefficiencies from the pilot phase.
Program Manager Compensation: The proposed doubling of ARB for management raises questions about whether the program manager’s compensation should also be increased proportionally. While managing more assets could justify additional compensation, there needs to be clear evidence of outperformance or added responsibilities before considering any adjustments to the program manager’s pay. Proper evaluation of their role and deliverables from STEP 1 would help guide this decision.
Thanks for the feedback!
Which reports are you referring to again?
We have 2 monthly reports out already and the Dune dashboard too.
October: https://forum.arbitrum.foundation/t/step-report-october-2024/27642
November: https://forum.arbitrum.foundation/t/step-report-november-2024/27914
https://dune.com/steakhouse/step-dashboard/1b508c7c-63ec-42e9-86d9-c3a86d23766e
Overall, the direction of the proposal is good, but clearer implementation steps and transparent communication could be used to ensure that the program is implemented smoothly and to best effect. For example, I would have paid more attention to topics related to the timing of conversions, the value of conversions, risk control and risk diversification.
If practicality is predicated on concrete processes and results orientation, the community needs to be transparent and engaged by having regularly updated reports to report on progress, especially regarding the conversion of funds and the selection of projects.
Generally speaking, we’re in favor of this proposal; however, we have a few concerns. While we know the previous STEP term recently concluded, we believe it would be best for the DAO to have some evaluation to see how performance of STEP was carried out previously. Steakhouse offered to complete monthly reports at the close of each calendar month following the first deployments for each program, should we expect something similar to this?
i've just updated the proposal with the latest thinking!
Could you provide specific data on the financial performance of the $30 million endowment in terms of yield generated so far?
The following reflects the views of the Lampros Labs DAO governance team.
We welcome the move to diversify into various sectors of RWAs, which signals strong support for projects deploying on Arbitrum. However, there is still some confusion about when the ARB will be liquidated at the target price of $0.85. The alignment of major projects deploying on Arbitrum will likely happen with the completion of STEP 2.
The following reflects the views of the Lampros Labs DAO governance team.
We welcome the move to diversify into various sectors of RWAs, which signals strong support for projects deploying on Arbitrum. However, there is still some confusion about when the ARB will be liquidated at the target price of $0.85. The alignment of major projects deploying on Arbitrum will likely happen with the completion of STEP 2.
While allocating ARB for GCP & Foundation Strategic Partnerships is important, the risk of depleting ARB tokens in the treasury may leave room for governance attacks at a lower cost. If not in this proposal, this issue should be addressed.
Additionally, directly holding the tokens and saving the 1% AUM fee is a beneficial improvement.
I'm for this, as I think treasury diversification is important. However I would agree with others that we should get some type of reporting on how STEP 1.0 has gone so far. Has any type of update / tracking dashboard been provided so far?
Thanks to @cp0x for kickstarting the discussion and to the others for pitching in with questions. Can already see a major change to the proposal on the timing for putting this up for vote.
How can we define optimal conditions? Is it at ARB price at $1, $2 or $5? This is a tough one.
Maybe setting a timeline of slowly DCAing ARB into stables over some time (6 months for example) would be a better option?
Hello!
I have some questions: why have this proposal detached from the revamps criteria to allocate the funds? At the first iteration, we decided the amount as well. For example, if the committee identifies more opportunities and it makes sense to have a higher amount deployed?
It doesn't make much sense to have this proposal before the work of the committee, IMHO.
Thanks for the feedback!
Which reports are you referring to again?
We have 2 monthly reports out already and the Dune dashboard too.
October: https://forum.arbitrum.foundation/t/step-report-october-2024/27642
November: https://forum.arbitrum.foundation/t/step-report-november-2024/27914
https://dune.com/steakhouse/step-dashboard/1b508c7c-63ec-42e9-86d9-c3a86d23766e
And for an overarching view of the growth of RWAs and STEPs proportion in it, we have this thread from Entropy.
There aren't any other forthcoming reports before the vote except the monthly reports from Steakhouse.
Generally speaking, we’re in favor of this proposal; however, we have a few concerns. While we know the previous STEP term recently concluded, we believe it would be best for the DAO to have some evaluation to see how performance of STEP was carried out previously. Steakhouse offered to complete monthly reports at the close of each calendar month following the first deployments for each program, should we expect something similar to this?
Steakhouse will publish monthly reports at the close of each calendar month, with the initial report posted the month following the first deployment of capital from the program. Each report will include the following information:
Transaction activity during the month
Market price and investment notional amount
Monthly profit/loss
Performance comparison to US Treasury benchmark
Liquidity metrics
Portfolio covenant compliance
Any relevant operational updates from the issuer
Additionally, once capital is deployed, Steakhouse will create a Dune dashboard for real-time reporting on the portfolio, to the extent possible with on-chain data.
Moreover, when should we expect the first round of transparency reports, there was prior mention that these would come with the first deployment of capital from the program.
We understand that RWA deployments are a slow and lengthy process from start to finish, but as others have pointed out, it is difficult to move forward without some review of prior results or operational workstreams.
In the STEP Committee Recommendation thread, there was a list of general reflections, has there been any changes in the operational pipeline to answer some of the reflections prior?
i've just updated the proposal with the latest thinking!
Could you provide specific data on the financial performance of the $30 million endowment in terms of yield generated so far?
So far, its $167k, estimated to be $875k annually.
You can track yield earned in real time at this dune dashboard: https://dune.com/steakhouse/step-dashboard/1b508c7c-63ec-42e9-86d9-c3a86d23766e
What specific metrics or KPIs should the community look for in the monthly report from Steakhouse to evaluate STEP 1’s success before proceeding with STEP 2?
I think an important overall metric is the ratio of RWAs owned by ARB DAO vs total RWAs on arbitrum
Currently its around 18% of RWAs are from the DAO, we've seen insane growth since the STEP program where RWAs as a portion of our TVL grew from $100k at beginning 2024 to now nearing $85 million.
You mention avoiding liquidation when ARB is at all-time lows
We have changed this language to give full rein to the foundation. Let them cook without any instructions from us
This will be a separate proposal, not included here. Mainly because we don't know how long the new investments in step 2 will take to deploy and whether that would fall under their current term or be delayed until their next one.
In any case, Steakhouse will have to make a tally proposal for the remaining 6 months of their contract to be paid to them from the yield earned so a lot of these questions will be asked and answered then.
We are starting off with the lowest risk product, T-bills or money market instruments, even for STEP 2. They make the most sense to double down on given that 99% of Arbitrum RWAs are of this form so we need to be supporting this particular subsector.
Our main quantitative metric is growth of RWA as a percentage of total TVL on arbitrum. And a sub metric is the proportion of that RWA TVL which is owned by ARB DAO vs by others on the chain.
The qualitative metric is number of RWA providers who launch their products on arbitrum. Getting them here is key.
We have 2 reports out so far!
October: https://forum.arbitrum.foundation/t/step-report-october-2024/27642
November: https://forum.arbitrum.foundation/t/step-report-november-2024/27914
Funds are transferred to the Arbitrum Foundation who give the payouts for opex.
committee members get paid 10k ARB upon completion of work ie ratification of recommendations by the DAO. The remaining 15k ARB will be streamed over 3 years to get long term alignment.
Hope that answers all the questions! We've updated the main proposal in the first post with some of these details too
Thanks to @cp0x for kickstarting the discussion and to the others for pitching in with questions. Can already see a major change to the proposal on the timing for putting this up for vote.
Maybe setting a timeline of slowly DCAing ARB into stables over some time (6 months for example) would be a better option?
The reason to not do simple DCA is I don't think we should be liquidating anything when ARB is at all time lows. We already have an endowment of $30 million thanks to STEP 1 and so we should play additional diversification from a position of strength and without urgency to increase its size.
The only instructions given in the proposal are to not liquidate at a price that is much below the rate obtained in STEP 1, primarily to address the valid issue raised by @krst
We should be mindful of the fact that ARB token is a governance token that controls the whole Arbitrum ecosystem. Securing the value of the token is critical from the ecosystem security perspective. Increasing the liquidity of the token without a plan for securing its’ value increases the risk of governance attack on the protocol.
we believe it would be best for the DAO to have some evaluation to see how performance of STEP was carried out previously. Steakhouse offered to complete monthly reports at the close of each calendar month
We have obtained some greatly positive results on the ecosystem growth front. @OpenEdenLabs has massively increased their TVL from $30 million at time of application to $115 million; Ondo USDY launched on Arbitrum following their selection; and Securitize (BlackRock distributor) is on Arbitrum, to name some Ws.
Franklin Templeton was rejected in part because we would have had to take funds to Stellar (their primary blockchain at the time), but they too have since launched on Arbitrum in August, showing some indirect ways STEP has made us a chain you need to have a presence on if you are in RWA.
The above comments are valid that we need to see how the program itself performs in giving us an endowment where we can spend from yield earned.
I propose that we take STEP 2 to a snapshot vote only after @steakhouse has completed at least one of their monthly reports, and to tally only once some yield from STEP 1 trickles in to our treasury. Until then, we keep the proposal open for iteration, discussion and improvement.
We have found financial discrepancies in the payment of the manager of this program. Given the increase in the amount of funding for which the manager is planned to be responsible from 35 to 70 million, should the manager’s funding increase? If so, then it is worth including these costs in this proposal.
Steakhouse' term as program manager is for one year only. I'm hoping that we have STEP 2 complete by the time their term ends, so that the new election for program manager will have the updated endowment amount and program managers can give quotations accordingly. It will be tricky timing though.
How can we define optimal conditions? Is it at ARB price at $1, $2 or $5? This is a tough one.
Ah this was the tricky part on which there was some back & forth with Matt from @Entropy. Creating a publicized sell wall is probably not a good idea, which is why we have left so many details vague and up to the interpretation of the foundation finance team, not even specifying what "similar" to the last STEP program exactly means.
It doesn’t make much sense to have this proposal before the work of the committee
The main reason to pass this sooner rather than later is so the foundation finance team has time to cook. The longer the period for conversion, the better the rate and lesser the price impact. More generally, I believe doing 1% of treasury every year for 5 years will set us up for long term success.
i hope you agree we should at least avoid the DCA over 7 weeks like we did in STEP 1. The work of the committee should proceed in parallel with transfer of funds to the foundation for STEP, not sequentially, if we are to be smart about timing.
Moreover, when should we expect the first round of transparency reports,
The foundation required the snapshot vote ratifying the program manager terms of tenure to be complete before signing an agreement, so hopefully should be soon as that just got over. I am hoping we get their 1st report in Uptober but it might be November too, all in the hands of the foundation at this point.
In the STEP Committee Recommendation thread, there was a list of general reflections, has there been any changes in the operational pipeline to answer some of the reflections prior?
And finally - what results will be acceptable for the community, what are the specific goals of this stage? (It seems to me that it would be good to think through the strategy, what costs the DAO bears, how much we compensate with this program and what further steps to equalize expenses and income, if this is the goal)
Getting the funds to the finance team sooner for better conversion is the first of the changes. We were lucky in the 1st edition of STEP to obtain a decent endowment size, but we shouldn't be relying on chance (it could have been much worse).
There will also be an incoming proposal from the STEP steering committee to work on the RFP for STEP 2, which additional asset types should be eligible, the members of the selection committee, etc :soon:
we agree it’s important to first assess the outcomes of the initial STEP program before allocating additional funds. By analyzing detailed reports and performance metrics from the first iteration, we can identify successes and areas for improvement, ensuring that the next phase is even more effective.
we agree it’s important to first assess the outcomes of the initial STEP program before allocating additional funds. By analyzing detailed reports and performance metrics from the first iteration, we can identify successes and areas for improvement, ensuring that the next phase is even more effective.
This is good feedback and one reason why we want to wait until the first report from STEP comes in before moving to any vote.
Hypothetically, we might regret not selling earlier. To avoid the risks of speculation, it’s better to follow a consistent strategy like DCA. You could also set a rule to sell if the price increases by more than 10%, allowing you to capitalize on gains without getting caught up in emotional decisions.
Still thinking through the best way of liquidating. One option is dollar cost averaging to make sure there is a STEP held within a definite timeframe, creating predictability. Another is to be strategic in building up an endowment without compromising Arbitrums security, since the security of our protocol depends on ARB token price and we already have a $30 million endowment through the first program.
Could you provide any specific data or analysis to support the statement? It would be interesting to see if there are financial models or historical precedents that back up this approach.
You can see Karpatkey's report which did some financial modeling to try understanding how ALL expenses can be covered from yield earned.
To achieve a desired diversification target, measured as the share of ETH vs the share of Stablecoins/RWAs, the DAO would need to allocate between $2.4 billion and $5.3 billion towards yield-generating strategies.
In the optimal scenario where ETH value is stable or rising and conservative expense projections are applied, the DAO would need to allocate about 40% of its treasury to yield-generating assets.
If we follow a patient strategy where diversification for STEP can only happen above a floor price set by the earlier diversification programs, we should reach 10% of present expenses covered via yield (~250 million RWA endowment) with 5% of treasury.
That also leaves ample room for other diversification initiatives like the treasury manager proposal, GCP, etc
i'm sorry but
i'm sorry but
To me it seems like this proposal is not only not well timed (no step results, literally program didn't even start), but also doesn't take in consideration the necessity of doing it vs the price of the underlying assets we have. And, the mechanism to solve for that, are not good enough.
I am generally for diversification.
However, I have several questions:
I am generally for diversification.
However, I have several questions:
I now recognize the significance of diversifying DAO funds, at least it would make external expenditures much more convenient. My only concern remains the same old issue that everyone talks about: transparency in fund management. Can the current strategy completely eliminate irregularities or even misuse in fund management?
While we appreciate the initiative to further diversify the treasury and support the growth of RWA on Arbitrum, we agree it's important to first assess the outcomes of the initial STEP program before allocating additional funds. By analyzing detailed reports and performance metrics from the first iteration, we can identify successes and areas for improvement, ensuring that the next phase is even more effective.
Regarding the ARB price, we're currently at a low point, but it's uncertain whether it will drop further. Hypothetically, we might regret not selling earlier. To avoid the risks of speculation, it’s better to follow a consistent strategy like DCA. You could also set a rule to sell if the price increases by more than 10%, allowing you to capitalize on gains without getting caught up in emotional decisions.
While we appreciate the initiative to further diversify the treasury and support the growth of RWA on Arbitrum, we agree it's important to first assess the outcomes of the initial STEP program before allocating additional funds. By analyzing detailed reports and performance metrics from the first iteration, we can identify successes and areas for improvement, ensuring that the next phase is even more effective.
Regarding the ARB price, we're currently at a low point, but it's uncertain whether it will drop further. Hypothetically, we might regret not selling earlier. To avoid the risks of speculation, it’s better to follow a consistent strategy like DCA. You could also set a rule to sell if the price increases by more than 10%, allowing you to capitalize on gains without getting caught up in emotional decisions.
More generally, I believe doing 1% of treasury every year for 5 years will set us up for long term success.
Could you provide any specific data or analysis to support the statement? It would be interesting to see if there are financial models or historical precedents that back up this approach.
Thanks you.
Thanks for the feedback!
Which reports are you referring to again?
We have 2 monthly reports out already and the Dune dashboard too.
October: https://forum.arbitrum.foundation/t/step-report-october-2024/27642
November: https://forum.arbitrum.foundation/t/step-report-november-2024/27914
https://dune.com/steakhouse/step-dashboard/1b508c7c-63ec-42e9-86d9-c3a86d23766e
And for an overarching view of the growth of RWAs and STEPs proportion in it, we have this thread from Entropy.
There aren't any other forthcoming reports before the vote except the monthly reports from Steakhouse.
Generally speaking, we’re in favor of this proposal; however, we have a few concerns. While we know the previous STEP term recently concluded, we believe it would be best for the DAO to have some evaluation to see how performance of STEP was carried out previously. Steakhouse offered to complete monthly reports at the close of each calendar month following the first deployments for each program, should we expect something similar to this?
Steakhouse will publish monthly reports at the close of each calendar month, with the initial report posted the month following the first deployment of capital from the program. Each report will include the following information:
Transaction activity during the month
Market price and investment notional amount
Monthly profit/loss
Performance comparison to US Treasury benchmark
Liquidity metrics
Portfolio covenant compliance
Any relevant operational updates from the issuer
Additionally, once capital is deployed, Steakhouse will create a Dune dashboard for real-time reporting on the portfolio, to the extent possible with on-chain data.
Moreover, when should we expect the first round of transparency reports, there was prior mention that these would come with the first deployment of capital from the program.
We understand that RWA deployments are a slow and lengthy process from start to finish, but as others have pointed out, it is difficult to move forward without some review of prior results or operational workstreams.
In the STEP Committee Recommendation thread, there was a list of general reflections, has there been any changes in the operational pipeline to answer some of the reflections prior?
i've just updated the proposal with the latest thinking!
Could you provide specific data on the financial performance of the $30 million endowment in terms of yield generated so far?
So far, its $167k, estimated to be $875k annually.
You can track yield earned in real time at this dune dashboard: https://dune.com/steakhouse/step-dashboard/1b508c7c-63ec-42e9-86d9-c3a86d23766e
What specific metrics or KPIs should the community look for in the monthly report from Steakhouse to evaluate STEP 1’s success before proceeding with STEP 2?
I think an important overall metric is the ratio of RWAs owned by ARB DAO vs total RWAs on arbitrum
Currently its around 18% of RWAs are from the DAO, we've seen insane growth since the STEP program where RWAs as a portion of our TVL grew from $100k at beginning 2024 to now nearing $85 million.
You mention avoiding liquidation when ARB is at all-time lows
We have changed this language to give full rein to the foundation. Let them cook without any instructions from us
This will be a separate proposal, not included here. Mainly because we don't know how long the new investments in step 2 will take to deploy and whether that would fall under their current term or be delayed until their next one.
In any case, Steakhouse will have to make a tally proposal for the remaining 6 months of their contract to be paid to them from the yield earned so a lot of these questions will be asked and answered then.
We are starting off with the lowest risk product, T-bills or money market instruments, even for STEP 2. They make the most sense to double down on given that 99% of Arbitrum RWAs are of this form so we need to be supporting this particular subsector.
Our main quantitative metric is growth of RWA as a percentage of total TVL on arbitrum. And a sub metric is the proportion of that RWA TVL which is owned by ARB DAO vs by others on the chain.
The qualitative metric is number of RWA providers who launch their products on arbitrum. Getting them here is key.
We have 2 reports out so far!
October: https://forum.arbitrum.foundation/t/step-report-october-2024/27642
November: https://forum.arbitrum.foundation/t/step-report-november-2024/27914
Funds are transferred to the Arbitrum Foundation who give the payouts for opex.
committee members get paid 10k ARB upon completion of work ie ratification of recommendations by the DAO. The remaining 15k ARB will be streamed over 3 years to get long term alignment.
Hope that answers all the questions! We've updated the main proposal in the first post with some of these details too
Thanks to @cp0x for kickstarting the discussion and to the others for pitching in with questions. Can already see a major change to the proposal on the timing for putting this up for vote.
Maybe setting a timeline of slowly DCAing ARB into stables over some time (6 months for example) would be a better option?
The reason to not do simple DCA is I don't think we should be liquidating anything when ARB is at all time lows. We already have an endowment of $30 million thanks to STEP 1 and so we should play additional diversification from a position of strength and without urgency to increase its size.
The only instructions given in the proposal are to not liquidate at a price that is much below the rate obtained in STEP 1, primarily to address the valid issue raised by @krst
We should be mindful of the fact that ARB token is a governance token that controls the whole Arbitrum ecosystem. Securing the value of the token is critical from the ecosystem security perspective. Increasing the liquidity of the token without a plan for securing its’ value increases the risk of governance attack on the protocol.
we believe it would be best for the DAO to have some evaluation to see how performance of STEP was carried out previously. Steakhouse offered to complete monthly reports at the close of each calendar month
We have obtained some greatly positive results on the ecosystem growth front. @OpenEdenLabs has massively increased their TVL from $30 million at time of application to $115 million; Ondo USDY launched on Arbitrum following their selection; and Securitize (BlackRock distributor) is on Arbitrum, to name some Ws.
Franklin Templeton was rejected in part because we would have had to take funds to Stellar (their primary blockchain at the time), but they too have since launched on Arbitrum in August, showing some indirect ways STEP has made us a chain you need to have a presence on if you are in RWA.
The above comments are valid that we need to see how the program itself performs in giving us an endowment where we can spend from yield earned.
I propose that we take STEP 2 to a snapshot vote only after @steakhouse has completed at least one of their monthly reports, and to tally only once some yield from STEP 1 trickles in to our treasury. Until then, we keep the proposal open for iteration, discussion and improvement.
We have found financial discrepancies in the payment of the manager of this program. Given the increase in the amount of funding for which the manager is planned to be responsible from 35 to 70 million, should the manager’s funding increase? If so, then it is worth including these costs in this proposal.
Steakhouse' term as program manager is for one year only. I'm hoping that we have STEP 2 complete by the time their term ends, so that the new election for program manager will have the updated endowment amount and program managers can give quotations accordingly. It will be tricky timing though.
How can we define optimal conditions? Is it at ARB price at $1, $2 or $5? This is a tough one.
Ah this was the tricky part on which there was some back & forth with Matt from @Entropy. Creating a publicized sell wall is probably not a good idea, which is why we have left so many details vague and up to the interpretation of the foundation finance team, not even specifying what "similar" to the last STEP program exactly means.
It doesn’t make much sense to have this proposal before the work of the committee
The main reason to pass this sooner rather than later is so the foundation finance team has time to cook. The longer the period for conversion, the better the rate and lesser the price impact. More generally, I believe doing 1% of treasury every year for 5 years will set us up for long term success.
i hope you agree we should at least avoid the DCA over 7 weeks like we did in STEP 1. The work of the committee should proceed in parallel with transfer of funds to the foundation for STEP, not sequentially, if we are to be smart about timing.
Moreover, when should we expect the first round of transparency reports,
The foundation required the snapshot vote ratifying the program manager terms of tenure to be complete before signing an agreement, so hopefully should be soon as that just got over. I am hoping we get their 1st report in Uptober but it might be November too, all in the hands of the foundation at this point.
In the STEP Committee Recommendation thread, there was a list of general reflections, has there been any changes in the operational pipeline to answer some of the reflections prior?
And finally - what results will be acceptable for the community, what are the specific goals of this stage? (It seems to me that it would be good to think through the strategy, what costs the DAO bears, how much we compensate with this program and what further steps to equalize expenses and income, if this is the goal)
Getting the funds to the finance team sooner for better conversion is the first of the changes. We were lucky in the 1st edition of STEP to obtain a decent endowment size, but we shouldn't be relying on chance (it could have been much worse).
There will also be an incoming proposal from the STEP steering committee to work on the RFP for STEP 2, which additional asset types should be eligible, the members of the selection committee, etc :soon:
we agree it’s important to first assess the outcomes of the initial STEP program before allocating additional funds. By analyzing detailed reports and performance metrics from the first iteration, we can identify successes and areas for improvement, ensuring that the next phase is even more effective.
we agree it’s important to first assess the outcomes of the initial STEP program before allocating additional funds. By analyzing detailed reports and performance metrics from the first iteration, we can identify successes and areas for improvement, ensuring that the next phase is even more effective.
This is good feedback and one reason why we want to wait until the first report from STEP comes in before moving to any vote.
Hypothetically, we might regret not selling earlier. To avoid the risks of speculation, it’s better to follow a consistent strategy like DCA. You could also set a rule to sell if the price increases by more than 10%, allowing you to capitalize on gains without getting caught up in emotional decisions.
Still thinking through the best way of liquidating. One option is dollar cost averaging to make sure there is a STEP held within a definite timeframe, creating predictability. Another is to be strategic in building up an endowment without compromising Arbitrums security, since the security of our protocol depends on ARB token price and we already have a $30 million endowment through the first program.
Could you provide any specific data or analysis to support the statement? It would be interesting to see if there are financial models or historical precedents that back up this approach.
You can see Karpatkey's report which did some financial modeling to try understanding how ALL expenses can be covered from yield earned.
To achieve a desired diversification target, measured as the share of ETH vs the share of Stablecoins/RWAs, the DAO would need to allocate between $2.4 billion and $5.3 billion towards yield-generating strategies.
In the optimal scenario where ETH value is stable or rising and conservative expense projections are applied, the DAO would need to allocate about 40% of its treasury to yield-generating assets.
If we follow a patient strategy where diversification for STEP can only happen above a floor price set by the earlier diversification programs, we should reach 10% of present expenses covered via yield (~250 million RWA endowment) with 5% of treasury.
That also leaves ample room for other diversification initiatives like the treasury manager proposal, GCP, etc
i'm sorry but
i'm sorry but
To me it seems like this proposal is not only not well timed (no step results, literally program didn't even start), but also doesn't take in consideration the necessity of doing it vs the price of the underlying assets we have. And, the mechanism to solve for that, are not good enough.
I am generally for diversification.
However, I have several questions:
I am generally for diversification.
However, I have several questions:
I now recognize the significance of diversifying DAO funds, at least it would make external expenditures much more convenient. My only concern remains the same old issue that everyone talks about: transparency in fund management. Can the current strategy completely eliminate irregularities or even misuse in fund management?
While we appreciate the initiative to further diversify the treasury and support the growth of RWA on Arbitrum, we agree it's important to first assess the outcomes of the initial STEP program before allocating additional funds. By analyzing detailed reports and performance metrics from the first iteration, we can identify successes and areas for improvement, ensuring that the next phase is even more effective.
Regarding the ARB price, we're currently at a low point, but it's uncertain whether it will drop further. Hypothetically, we might regret not selling earlier. To avoid the risks of speculation, it’s better to follow a consistent strategy like DCA. You could also set a rule to sell if the price increases by more than 10%, allowing you to capitalize on gains without getting caught up in emotional decisions.
While we appreciate the initiative to further diversify the treasury and support the growth of RWA on Arbitrum, we agree it's important to first assess the outcomes of the initial STEP program before allocating additional funds. By analyzing detailed reports and performance metrics from the first iteration, we can identify successes and areas for improvement, ensuring that the next phase is even more effective.
Regarding the ARB price, we're currently at a low point, but it's uncertain whether it will drop further. Hypothetically, we might regret not selling earlier. To avoid the risks of speculation, it’s better to follow a consistent strategy like DCA. You could also set a rule to sell if the price increases by more than 10%, allowing you to capitalize on gains without getting caught up in emotional decisions.
More generally, I believe doing 1% of treasury every year for 5 years will set us up for long term success.
Could you provide any specific data or analysis to support the statement? It would be interesting to see if there are financial models or historical precedents that back up this approach.
Thanks you.
