This proposal builds on the ideas and concepts introduced by @dk3 in the initial Operation Company (OpCo) proposal. The OpCo is a legal entity that delegates and key stakeholders can leverage to achieve DAO-defined goals, principally by forming an operational mesh layer and assigning internal employees or negotiating and entering into agreements with service providers and individual contributors to facilitate initiatives. OpCo’s mission is to negate identified frictions affecting the DAO’s strategy execution, such as allowing for the establishment of more operational roles for the DAO, facilitating efficient and competitive contributor and service provider negotiations and information flow between these parties, creating clear responsibilities for carrying out initiatives, and helping ensure the continuation of programs the DAO depends upon. OpCo is also required to be proactive, meaning that if the entity has the bandwidth and recognizes a potential advancement that could be made within its mandated focus areas, it can work on and propose a strategy through which the entity would address the identified frictions.
As it currently stands, the Arbitrum DAO is generally unable to move swiftly when it requires specialized contributors to execute a strategy, for which there isn’t a straightforward and low-friction approach, with these processes typically requiring a vast amount of effort from the supply side instead of being driven by the demand side. Moreover, many initiatives, especially more complex and wider-reaching ones, lack clear owners in charge of ensuring a holistic approach to execution and initiatives’ continuation, meaning that in the unfortunate case that a service provider decides/is forced to disengage from its duties, there aren’t always accountable individuals or entities that would push the initiatives forward. OpCo’s goal is to function as the entity the DAO can leverage to remedy these limitations and move forward in areas that require a more structured approach.
To cover OpCo’s operating expenses over the first 30 months, including full-time staff appointed internally, setup and other admin costs, as well as the DAO-adjacent entity’s oversight committee, this proposal suggests earmarking 30M ARB (subject to change in either direction if market conditions change notably between the Snapshot and Tally votes) for the initiative:
OpCo will be able to utilize the $12M in cash equivalents as follows:
Presently, most DAO programs operate in silos, leading to, among other things, redundant efforts and non-existing cross-initiative resources. The DAO also generally depends on a single initiative leader for the continuation of a successful program, while some initiatives don’t even have clear owners, which adds significant friction to strategy execution. DAOs are also inherently disadvantaged when evaluating and swiftly engaging individual contributors or service providers, and Arbitrum is no exception. This proposal aims to provide the DAO with the capabilities to nullify the abovementioned frictions by creating a DAO-adjacent legal entity—OpCo. Among other things, the DAO may choose to leverage OpCo to manage:
OpCo will grant the Arbitrum DAO better capabilities to bootstrap initiatives and secure the continuation and execution of them, while also expanding the total addressable contributor and service provider base as certain sensitive negotiations and deal terms don’t necessarily have to be disclosed publicly. Moreover, the DAO-adjacent entity will function as the operational mesh layer for individual contributors and service providers, streamlining communications and knowledge sharing across engaged entities and individuals.
Overall, the DAO’s past, current, and likely upcoming initiatives can be divided into 5 high-level categories: Governance Frameworks, Financial Management, Investments, Ecosystem Support, and Grants. The initiatives, their respective owners, and into which of the 5 categories they fall are visualized below.
It is of utmost importance that Arbitrum DAO maintains a decentralized and bottoms-up system for bootstrapping new projects, DAO contributors, and setting strategies, including creating and steering the DAO’s vision, mission, and purpose, as well as approaches to achieve the goals and decision-making. As such, OpCo will be focused on the Ecosystem Support and Financial Management initiative categories, but note that with the exception of the Investments category and any emerging future categories wherein other, new DAO-adjacent legal entities are set to operate, the mandate can be expanded into any current/future initiative category if the DAO so chooses through a Snapshot vote (simple majority with at least 3% of all votable tokens voting either “For” or “Abstain”).
The entity’s main focus is to increase the efficiency of strategy execution through operational optimization and, in particular, activating and recruiting the optimal stakeholders, contributors, and service providers. For the avoidance of doubt, the DAO would always have ultimate authority over OpCo, with the entity purely being a helpful resource focused on streamlining wider-reaching and complex initiatives that require a more structured execution framework as well as helping push the DAO forward within areas where the entity identifies shortcomings. We want to stress the importance of ensuring that one of Arbitrum DAO’s key differentiators—enabling new participants to join the ecosystem and make an impact, growing into well-established contributors—is conserved. Without Arbitrum DAO empowering its contributors and delegates, the DAO might sacrifice one of its core strengths, and we believe that entities such as SEEDGov, Entropy Advisors, Tally, etc., are present within the ecosystem exactly because of this empowerment.
Arbitrum has one of the most active and engaged DAOs within the industry, combined with help from the Arbitrum Foundation and robust programs for bootstrapping and fostering growth within the ecosystem. Although there is always room for improvement, these factors have enabled the DAO to allocate grants with positive results, sustaining a vibrant and welcoming ecosystem. Having said that, if the DAO wishes to, it can expand OpCo’s mandate to include grants in the future through a Snapshot vote. When it comes to investments from treasury funds, the GCP has been established to facilitate capital allocation into the gaming sector, while the AVI is currently working on setting up a structure allowing the DAO to make venture bets across other verticals, which is why OpCo will be excluded from operating within the investments category. As alluded to earlier, we also feel as though it’s crucial that the facilitation and implementation of governance frameworks continue being driven by decentralized actors, but the DAO could again expand OpCo’s operations into this initiative category if it so wishes.
With that said, certain clear inefficiencies have been identified with respect to the Financial Management and Ecosystem Support categories. This is likely due to the operational frameworks enabling execution for these categories still being somewhat underexplored areas. As such, there is a lack of ownership, and the DAO has no structured way to frictionlessly operationalize contributors to push complex challenges forward within these verticals, often requiring a vast amount of Arbitrum DAO-specific knowledge and even lobbying efforts from the supply side instead of the demand side. Due to the current structure, active governance participants are generally purely incentivized to prioritize strategies that they are fit to solve. This has left certain critical domains unattended and reflects the need for an entity that could be mandated to help define the root causes of execution obstacles and provide solutions to remedy them.
The aforementioned inefficiencies are naturally amplified by the fact that the number of potential contributors is often restricted due to many initiatives requiring deep specialization. Finding the facilitators capable of managing initiatives end-to-end within these categories can be difficult. Oftentimes, the contributor and owner roles for initiatives are separated or there is not a clear owner at all, meaning that no one party is responsible for the continuation of these initiatives. For initiatives where the contributor and owner roles are the same or there is a clearly defined owner, the DAO generally relies on a single party for the continuation of the initiative. If the service provider or contributor, for any reason, decides or is forced to exit the ecosystem, there is not a well-defined framework for the initiative to be moved to a new owner.
As initiated, OpCo’s core mandate will be to enable the execution of DAO-defined strategies within the Financial Management and Ecosystem Support categories when requested by delegates. However, OpCo is also required to be proactive, meaning that if the entity has the bandwidth and recognizes an area within its focus categories where developments could be made, it can propose a strategy through which the entity would address the identified frictions.
Typically, the current protocol for the execution of strategies and new initiatives within the DAO’s two aforementioned focus areas is as follows: (i) either the proposer defines the strategic approach and goals for the initiative or a working group is created that aims to outline these specifics such that a proposal can be created, with the working group also sometimes facilitating some or all of the work required for the execution of the strategy; (ii) if not done by the working group, the proposer or proposer-connected party is contracted to facilitate the strategy or the DAO runs some type of a procurement/election process to decide the service providers or contributors; (iii) once the work has been performed and the facilitators’ term ends, a continuation proposal is created if the initiative has a clear owner. Otherwise, individual DAO contributors are required to take charge of the initiative and push it forward.
If OpCo were to be created, it would primarily be leveraged to assume responsibility for phases (ii) and (iii). I.e., the DAO defines strategies or simply strategic goals. If a clear executor to reach the key objectives exists within the DAO, they could be chosen as a facilitator and would be contracted by the OpCo. If not, OpCo could be mandated to execute these strategies by either assigning existing internal employees, hiring new internal resources, or contracting outside service providers/individual contributors to perform the required undertakings. However, if the DAO isn’t proactively defining strategies/strategic goals, OpCo is required to be active within this area as well, given it has the bandwidth to do so, with these OpCo-created strategies then ratified by the DAO through the regular voting process.
OpCo would have full discretion over hiring internal employees, while anyone interested in facilitating a DAO initiative could propose themselves (or another party) for that. Such a proposal must include a capital allocation to cover the facilitator’s expenses since OpCo’s budget only covers internal employees’ salaries. If approved through governance, the facilitator would then be contracted by OpCo as a service provider for the DAO. Depending on what is viewed as the most efficient approach, OpCo will have the ability to negotiate and run procurement processes both privately and publicly, which will further strengthen the Arbitrum DAO’s ability to attract and retain top talent, with all information that can be shared with the wider DAO being made available through oversight and financial reports. The below slide depicts OpCo’s initial focus categories, but please note that with the exception of the Investments category and any emerging future categories wherein other, new DAO-adjacent legal entities are set to operate, the mandate can be expanded into any current/future initiative category.
If a DAO-ratified strategy or strategic goal that the OpCo is mandated to facilitate doesn’t have a specific end date, the DAO-adjacent entity would continue executing until the entity feels as though the associated goals have been reached or the DAO instructs the entity to stop executing by passing a Snapshot vote (simple majority with at least 3% of all votable tokens voting either “For” or “Abstain”). If the work is expected to be long-term in nature, OpCo would be responsible for ensuring that it can be continued by accounting for associated costs in its budget extension request.
For example, delegates could define a high-level events strategy by deciding the number of events the Arbitrum DAO should be represented at in 2025, whether the strategy facilitator is the proposer, a proposer-related party, an OpCo internal employee, or someone who is chosen through a procurement process, and approving the strategy’s costs that are not covered by OpCo’s budget (i.e., salaries if the facilitators are not full-time staff appointed internally, booking event venues, catering, etc.) through the typical governance process, after which OpCo plans the exact events to participate in, contracts the required service providers or operationalizes internal employees, and manages all involved stakeholders and other related aspects throughout the process.
Service providers and individual contributors that are currently contracted, or will likely be in the near future, with the Arbitrum Foundation and fall within the Financial Management and Ecosystem Support categories, such as SEEDGov in its role as the Delegate Incentive Program Manager, MSS members, firms forming the ADPC, Entropy Advisors, etc., should collaborate closely with OpCo once its operations are fully established and stabilized. Once fully operational, OpCo will have the capacity to project manage and oversee these initiatives according to its complete mandate. The long-term vision for this process is as follows:
In the case that an integral facilitator within the Ecosystem Support or Financial Management categories (or any other category OpCo might be mandated to operate within in the future) exits the ecosystem for any reason and an initiative is left without an owner, the DAO could likewise mandate OpCo to find a replacement solution.
It’s important to note that OpCo will not have the authority to enter into contracts with service providers or individual contributors for strategies not approved by the DAO through governance, unless directly related to its operational needs (e.g., hiring an accounting firm). OpCo internal full-time employees cannot be contributors to DAO initiatives as individuals (they need to do so through OpCo) and are strictly prohibited from entering into employment engagements with other DAOs, organizations, entities, or comparable affiliations, whilst contractors that facilitate a specific vertical and are signed to OpCo can have engagements in other DAO initiatives and outside of the ecosystem. Full-time OpCo staff can only be appointed internally. However, as mentioned earlier, the DAO can roll any service provider or individual contributor into OpCo by passing an onchain vote. This vote has to request capital to cover the facilitators’ expenses since when it comes to salaries, OpCo’s budget only covers internal full-time staff. OpCo is expected to work closely with Offchain Labs as well as the Arbitrum Foundation to ensure that scopes of work do not overlap.
Individual contributors, service providers, and other analogous entities are naturally free to go directly to the DAO to propose they facilitate a workstream and get paid for it without facilitation by the OpCo. However, if the proposed scope of work falls within OpCo’s mandate, it is expected that delegates vote against such a proposal if it can be better executed via OpCo’s involvement. Proposers will be encouraged to engage with OpCo before posting a proposal to the forum to align with the DAO-adjacent entity’s internal employees. OpCo’s internal employees will also proactively communicate with proposal authors and facilitators outside of OpCo such that there is no overlap between deliverables and the future plans for all initiatives are clear.
Finally, it’s crucial to mention that the introduction of a DAO-adjacent legal entity carries risks and burdens that shouldn’t be ignored. Among other things, it requires some trust in a select group of facilitators as they are responsible for hiring and procuring the correct contributors as well as operationalizing and managing the DAO-adjacent entity, OpCo’s setup and fixed costs are quite notable, and some amount of administrative work is required that otherwise wouldn’t have arisen.
We expect the general workflow for OpCo to be as follows:
To reiterate:
OpCo’s initial capital allocation is meant to cover the entity’s setup costs and operating expenses, including full-time internal staff salaries, recurring administrative costs, and OpCo’s oversight committee. After OpCo’s core team has been hired, the entity has demonstrated product-market fit and readiness to execute according to its complete mandate, OpCo could be leveraged to help develop a DAO-wide budget, in which case the DAO-adjacent entity could hold the budgeted capital for at least the Ecosystem Support and Financial Management categories. In this case, when proposals related to these verticals are passed, no capital would have to be moved from the treasury as OpCo would be able to cover all expenses from its holdings.
Exploratory work on OpCo’s legal structure has already been initiated, but further effort and consultation with key stakeholders, delegates, legal parties, and the Arbitrum Foundation are needed to hammer down the exact structure. Any costs incurred by the Foundation for setting up the legal structure would be reimbursed from capital allocated to this initiative if this proposal were to pass.
OpCo’s initial term will tentatively be 30 months (around 6 months for setup and 24 months for operations from the entity’s official initiation date). The initial term’s length has been chosen to allow ample time for any unforeseen delays in establishing the legal entity, ramping up and stabilizing its operations, and will enable OpCo to focus on more complex and long-term strategies and internalize top talent as a longer initial term provides predictability/job security for employees. Once the first term is coming to an end, the executive-equivalent internal personnel together with OpCo’s oversight committee—the Oversight and Transparency Committee (OAT), introduced below—are required to collaborate to create the continuation proposal for the DAO-adjacent entity. This is expected to cover, among other things, the second OpCo term’s length, the required budget, and any changes or improvements that should be made. It should be noted that if OpCo is required to internalize a vast amount of facilitator roles before a DAO-wide budget is put in place, OpCo might have to create a proposal that would allocate additional funds as its initial exemplary budget has been constructed to cover up to 12 internal full-time employees at different salaries.
To enable OpCo to successfully fulfill its mandate, the entity should, among other things, have the following initial operational capabilities, internal employees, and resources:
We are looking for community feedback on this front, but some potential, apparent KPIs for OpCo (h/t @dk3 for most of these) include:
Ultimately, the OAT will be responsible for designing, finalizing, and implementing the relevant KPIs once OpCo is at a point where this can be sufficiently done. We envision that this will be a collaborative effort between the OAT and the DAO, with KPIs reviewed and adjusted periodically based on how OpCo evolves and the community’s feedback.
The two primary, immediate priorities for OpCo should be regarded as follows:
Once these two components have been achieved, the entity is prepared so that when the OAT and Foundation find the perfect initial employees for OpCo, it will be ready to begin servicing the DAO’s needs, although it will take some additional time for OpCo to ramp up to full capacity. It is important to note that the DAO should not optimize for rushing OpCo to full capacity versus optimizing to have it available for when the OAT finds the right person and the DAO needs it most.
In the twelve months following OpCo’s official initiation date (i.e., when, among other things, the entity, structure, and initial staffing have been finalized), the entity is expected to achieve the following tasks at minimum, given the DAO still finds them relevant and supports their facilitation by OpCo in the future:
The OAT is a group of five individuals with the primary mandate to oversee OpCo’s operations, ensure the DAO maintains transparency into the DAO-adjacent entity, function as the coordinator between the DAO and OpCo, and establish clear communication channels with the other committees overseeing the separate DAO-adjacent entities such as the GCP and possibly the CapCo in the future should the DAO vote accordingly. More specifically, the OAT’s responsibilities include but are not limited to:
If this proposal were to pass the onchain voting stage, the formation of the Oversight and Transparency Committee would commence. The DAO would elect 3 individuals to the OAT, with these individuals then promptly appointing 2 additional members with specialized skill sets to ensure all Arbitrum stakeholders’ interests are represented and the OAT’s proficiencies are varied and complete. Additionally, the Arbitrum Foundation will be given an observing and non-voting sixth seat on the OAT similar to the GCP. OAT members are expected to be able to contribute at least 10 hours per week to OAT-related tasks.
OAT applicants are required to apply as individuals to increase accountability. Applicants are required to disclose any current or possible future conflicts of interest in their applications, including but not limited to financial, personal, and professional. Applicants are also required to disclose all active contributor roles and payment streams related to the Arbitrum DAO that they, and entities that they have a professional or financial relationship with, have and are receiving. The application process for the 3 DAO-elected members would be initiated soon after the OpCo proposal passes an onchain vote and would run for ~3 weeks. Note that the application period can be extended if the size of the applicant pool is limited. A shutterized, weighted voting system will be utilized on Snapshot, and the 3 applicants with the most votes will be chosen as members of the OAT. The DAO-elected members should then prioritize appointing 2 additional members (required to be individuals as well). The 2 additional members don’t have to be appointed at the same time. The additional members will be added to the OAT optimistically, with the DAO having the ability to reject either/both of the additional members through a Snapshot vote (simple majority with at least 3% of all votable tokens voting either “For” or “Abstain”). All members will serve until the end of the first OAT term unless removed or they resign.
While the same internal OpCo employees as well as contracted service providers and individual contributors will continue in their roles across OpCo’s terms if the DAO-adjacent entity is extended in the future, the OAT’s term is 12 months, with a re-election process initiated when the OAT’s term has around 3 months left. The DAO would again choose 3 members who then appoint 2 additional members. If the new cohort is different from the previous one, the previous OAT members are expected to help onboard the new members when the term is coming to an end. There are no consecutive term limits for OAT members. As the OAT is mandated to assist in OpCo’s setup process, the first OAT term will be slightly longer than subsequent ones since it will include the period from when the initial OAT members are selected to the establishment of the entity, plus 12 months from the entity’s official start date.
Any individual may apply to the OAT. However, all appointed individuals that have a non-observing seat, as well as any companies with which these appointees maintain a professional or financial relationship, are required to relinquish any and all contributor roles within the Arbitrum DAO that were obtained through an official election or ratification process conducted via Snapshot or Tally. As long as an individual has a non-obseving seat on the OAT, they and their affiliates as defined above are prohibited from becoming an internal employee for OpCo, entering into service provider contracts with the entity, and applying to a contributor role related to the Arbitrum DAO that requires an official election or ratification process through Snapshot or Tally. Due to legal constraints, an OAT member and their affiliates as defined above cannot be members of another initiative’s or DAO-adjacent entity’s oversight committee. If an appointed individual or their affiliate as defined above sits on another oversight committee(s), they are required to resign from any such position(s) to be able to join the OAT.
Applicants must be individuals, not entities, and should possess familiarity with the Arbitrum DAO, governance processes, multisig operations, and a strong industry reputation. Additionally, candidates should demonstrate substantial experience and expertise in one or more of the following fields:
Corporate Finance & Financial Management
Operations & Strategy
When applying to become an OAT member, applicants should specify the primary domain(s) from the list above in which they have the most experience and describe the nature of that experience. More details about candidates’ desired skill sets and professional experience, as well as an application template, will be posted by Entropy Advisors if the onchain vote to signal approval of OpCo passes.
OAT members must be properly compensated, highly incentivized to commit their full attention to the outlined responsibilities, and aligned with Arbitrum DAO’s long-term success. OAT members’ base monthly payment is $7.5K (excluding the Arbitrum Foundation in its role as an observer). An additional 1M ARB vesting bonus payment will be allocated to OAT members (excluding the Arbitrum Foundation in its role as an observer) to ensure long-term alignment and fair compensation. At the end of the first OAT term, 50% of this ARB would be sent to a vesting contract that would release the funds after a 24-month cliff following the first OAT term’s end. Each individual who is an active member when the OAT term ends and was appointed as part of the dedicated election process will be allocated an equal share of the funds (100K ARB). If an OAT member steps down or is removed, they become ineligible for the bonus, in which case that ARB would be allocated pro rata to the replacing member. For example, if the initial OAT term’s length is 14 months and a replacement member is appointed with 7 months remaining in the initial term, they would be eligible to receive a bonus of 50K ARB subject to the same vesting terms as outlined above. The other 500K ARB will be allocated in a similar manner as described above for the second OAT term.
The non-exhaustive list of governance and compliance obligations for OpCo, its internal employees, and OAT members comprises:
OpCo’s budget is intended to fund its initial 30-month term, with funds covering the entity’s legal setup, any outsourced professional services required for operations such as legal counsel and accounting/auditing services, other incurred operating expenses such as business-critical software and insurance, internal full-time employee salaries, and the OAT’s salaries.
This proposal would earmark 30M ARB to cover OpCo’s initial term, with an exemplary budget breakdown shown below. This is not an official budget, meaning that capital may be budgeted and allocated differently once the entity is stood up. For example, Employee #4 doesn’t have to be hired at a yearly salary of ~$130K. The exemplary budget’s purpose is instead to showcase that the ask isn’t arbitrary, and how the figure has been derived. It’s also important to note that several line items, such as entity setup and legal services are notably larger than what the actual expenses are expected to be. This was done to account for any unforeseen events or worst-case scenarios which could require notable capital commitments.
Funds will be transferred to an Arbitrum Foundation-controlled address, with 4M ARB allocated to a bonus pool for internal employees and OpCo’s oversight committee. Again, if bonuses are paid out, they must be denominated in ARB and have a vesting structure attached, with internal employees’ payouts additionally being performance-based. Of the remaining 26M ARB, tokens will be liquidated until $12M worth of cash equivalents has been attained. At ARB’s price of $0.68 as of January 21, this would require roughly 18M ARB. The liquidation will occur over up to 3 months immediately following this proposal passing Tally at the discretion of the liquidating party (the Arbitrum Foundation together with a provider of their choice for asset liquidation) with a mandate to minimize price impact. After subtracting the bonus allocation and the liquidation is complete, the remaining ARB of the earmarked 30M token allocation will be immediately transferred back to the DAO treasury.
Of the $12M worth of cash equivalents, $2.5M will be released upfront. Once OpCo’s legal setup and related aspects are finalized, the entity can draw up to $500K each month. If a monthly drawdown exceeds $500K but is below $1.5M, the executive-equivalent employees must get approval from the OAT before accessing the funds. If a monthly drawdown exceeds $1.5M, OpCo must seek approval from the DAO through a Snapshot vote.
Residual ARB (as well as capital in other denominations) will be sent back to the DAO treasury at the end of OpCo’s first term if the initiative isn’t renewed. Otherwise, the budget will be rolled over. ARB associated with this initiative, held by OpCo or the Arbitrum Foundation, is prohibited from being used in governance and must be delegated to the Exclude Address wherever practicable such that these funds don’t count towards the quorum. The Chief of Coins, together with relevant parties, will be responsible for maintaining an adequate runway for covering expenses as well as establishing a low-risk management strategy for idle capital to enhance the impact of the allocated funds.
The DAO will have the capability to clawback OpCo’s funding at any time. Defunding OpCo entirely by the DAO requires a forum post outlining the rationale behind the request for change, allowing for a reasonable time for discussion, and a subsequent Temperature Check vote (simple majority with at least 3% of all votable tokens voting either “For” or “Abstain”). If a Snapshot vote to defund OpCo is passed, payments will immediately be halted and all earmarked funds returned to the DAO Treasury, with OpCo ceasing operations.
The Snapshot vote will utilize Basic Voting:
This proposal builds on the ideas and concepts introduced by @dk3 in the initial Operation Company (OpCo) proposal. The OpCo is a legal entity that delegates and key stakeholders can leverage to achieve DAO-defined goals, principally by forming an operational mesh layer and assigning internal employees or negotiating and entering into agreements with service providers and individual contributors to facilitate initiatives. OpCo’s mission is to negate identified frictions affecting the DAO’s strategy execution, such as allowing for the establishment of more operational roles for the DAO, facilitating efficient and competitive contributor and service provider negotiations and information flow between these parties, creating clear responsibilities for carrying out initiatives, and helping ensure the continuation of programs the DAO depends upon. OpCo is also required to be proactive, meaning that if the entity has the bandwidth and recognizes a potential advancement that could be made within its mandated focus areas, it can work on and propose a strategy through which the entity would address the identified frictions.
As it currently stands, the Arbitrum DAO is generally unable to move swiftly when it requires specialized contributors to execute a strategy, for which there isn’t a straightforward and low-friction approach, with these processes typically requiring a vast amount of effort from the supply side instead of being driven by the demand side. Moreover, many initiatives, especially more complex and wider-reaching ones, lack clear owners in charge of ensuring a holistic approach to execution and initiatives’ continuation, meaning that in the unfortunate case that a service provider decides/is forced to disengage from its duties, there aren’t always accountable individuals or entities that would push the initiatives forward. OpCo’s goal is to function as the entity the DAO can leverage to remedy these limitations and move forward in areas that require a more structured approach.
To cover OpCo’s operating expenses over the first 30 months, including full-time staff appointed internally, setup and other admin costs, as well as the DAO-adjacent entity’s oversight committee, this proposal suggests earmarking 30M ARB (subject to change in either direction if market conditions change notably between the Snapshot and Tally votes) for the initiative:
OpCo will be able to utilize the $12M in cash equivalents as follows:
Presently, most DAO programs operate in silos, leading to, among other things, redundant efforts and non-existing cross-initiative resources. The DAO also generally depends on a single initiative leader for the continuation of a successful program, while some initiatives don’t even have clear owners, which adds significant friction to strategy execution. DAOs are also inherently disadvantaged when evaluating and swiftly engaging individual contributors or service providers, and Arbitrum is no exception. This proposal aims to provide the DAO with the capabilities to nullify the abovementioned frictions by creating a DAO-adjacent legal entity—OpCo. Among other things, the DAO may choose to leverage OpCo to manage:
OpCo will grant the Arbitrum DAO better capabilities to bootstrap initiatives and secure the continuation and execution of them, while also expanding the total addressable contributor and service provider base as certain sensitive negotiations and deal terms don’t necessarily have to be disclosed publicly. Moreover, the DAO-adjacent entity will function as the operational mesh layer for individual contributors and service providers, streamlining communications and knowledge sharing across engaged entities and individuals.
Overall, the DAO’s past, current, and likely upcoming initiatives can be divided into 5 high-level categories: Governance Frameworks, Financial Management, Investments, Ecosystem Support, and Grants. The initiatives, their respective owners, and into which of the 5 categories they fall are visualized below.
It is of utmost importance that Arbitrum DAO maintains a decentralized and bottoms-up system for bootstrapping new projects, DAO contributors, and setting strategies, including creating and steering the DAO’s vision, mission, and purpose, as well as approaches to achieve the goals and decision-making. As such, OpCo will be focused on the Ecosystem Support and Financial Management initiative categories, but note that with the exception of the Investments category and any emerging future categories wherein other, new DAO-adjacent legal entities are set to operate, the mandate can be expanded into any current/future initiative category if the DAO so chooses through a Snapshot vote (simple majority with at least 3% of all votable tokens voting either “For” or “Abstain”).
The entity’s main focus is to increase the efficiency of strategy execution through operational optimization and, in particular, activating and recruiting the optimal stakeholders, contributors, and service providers. For the avoidance of doubt, the DAO would always have ultimate authority over OpCo, with the entity purely being a helpful resource focused on streamlining wider-reaching and complex initiatives that require a more structured execution framework as well as helping push the DAO forward within areas where the entity identifies shortcomings. We want to stress the importance of ensuring that one of Arbitrum DAO’s key differentiators—enabling new participants to join the ecosystem and make an impact, growing into well-established contributors—is conserved. Without Arbitrum DAO empowering its contributors and delegates, the DAO might sacrifice one of its core strengths, and we believe that entities such as SEEDGov, Entropy Advisors, Tally, etc., are present within the ecosystem exactly because of this empowerment.
Arbitrum has one of the most active and engaged DAOs within the industry, combined with help from the Arbitrum Foundation and robust programs for bootstrapping and fostering growth within the ecosystem. Although there is always room for improvement, these factors have enabled the DAO to allocate grants with positive results, sustaining a vibrant and welcoming ecosystem. Having said that, if the DAO wishes to, it can expand OpCo’s mandate to include grants in the future through a Snapshot vote. When it comes to investments from treasury funds, the GCP has been established to facilitate capital allocation into the gaming sector, while the AVI is currently working on setting up a structure allowing the DAO to make venture bets across other verticals, which is why OpCo will be excluded from operating within the investments category. As alluded to earlier, we also feel as though it’s crucial that the facilitation and implementation of governance frameworks continue being driven by decentralized actors, but the DAO could again expand OpCo’s operations into this initiative category if it so wishes.
With that said, certain clear inefficiencies have been identified with respect to the Financial Management and Ecosystem Support categories. This is likely due to the operational frameworks enabling execution for these categories still being somewhat underexplored areas. As such, there is a lack of ownership, and the DAO has no structured way to frictionlessly operationalize contributors to push complex challenges forward within these verticals, often requiring a vast amount of Arbitrum DAO-specific knowledge and even lobbying efforts from the supply side instead of the demand side. Due to the current structure, active governance participants are generally purely incentivized to prioritize strategies that they are fit to solve. This has left certain critical domains unattended and reflects the need for an entity that could be mandated to help define the root causes of execution obstacles and provide solutions to remedy them.
The aforementioned inefficiencies are naturally amplified by the fact that the number of potential contributors is often restricted due to many initiatives requiring deep specialization. Finding the facilitators capable of managing initiatives end-to-end within these categories can be difficult. Oftentimes, the contributor and owner roles for initiatives are separated or there is not a clear owner at all, meaning that no one party is responsible for the continuation of these initiatives. For initiatives where the contributor and owner roles are the same or there is a clearly defined owner, the DAO generally relies on a single party for the continuation of the initiative. If the service provider or contributor, for any reason, decides or is forced to exit the ecosystem, there is not a well-defined framework for the initiative to be moved to a new owner.
As initiated, OpCo’s core mandate will be to enable the execution of DAO-defined strategies within the Financial Management and Ecosystem Support categories when requested by delegates. However, OpCo is also required to be proactive, meaning that if the entity has the bandwidth and recognizes an area within its focus categories where developments could be made, it can propose a strategy through which the entity would address the identified frictions.
Typically, the current protocol for the execution of strategies and new initiatives within the DAO’s two aforementioned focus areas is as follows: (i) either the proposer defines the strategic approach and goals for the initiative or a working group is created that aims to outline these specifics such that a proposal can be created, with the working group also sometimes facilitating some or all of the work required for the execution of the strategy; (ii) if not done by the working group, the proposer or proposer-connected party is contracted to facilitate the strategy or the DAO runs some type of a procurement/election process to decide the service providers or contributors; (iii) once the work has been performed and the facilitators’ term ends, a continuation proposal is created if the initiative has a clear owner. Otherwise, individual DAO contributors are required to take charge of the initiative and push it forward.
If OpCo were to be created, it would primarily be leveraged to assume responsibility for phases (ii) and (iii). I.e., the DAO defines strategies or simply strategic goals. If a clear executor to reach the key objectives exists within the DAO, they could be chosen as a facilitator and would be contracted by the OpCo. If not, OpCo could be mandated to execute these strategies by either assigning existing internal employees, hiring new internal resources, or contracting outside service providers/individual contributors to perform the required undertakings. However, if the DAO isn’t proactively defining strategies/strategic goals, OpCo is required to be active within this area as well, given it has the bandwidth to do so, with these OpCo-created strategies then ratified by the DAO through the regular voting process.
OpCo would have full discretion over hiring internal employees, while anyone interested in facilitating a DAO initiative could propose themselves (or another party) for that. Such a proposal must include a capital allocation to cover the facilitator’s expenses since OpCo’s budget only covers internal employees’ salaries. If approved through governance, the facilitator would then be contracted by OpCo as a service provider for the DAO. Depending on what is viewed as the most efficient approach, OpCo will have the ability to negotiate and run procurement processes both privately and publicly, which will further strengthen the Arbitrum DAO’s ability to attract and retain top talent, with all information that can be shared with the wider DAO being made available through oversight and financial reports. The below slide depicts OpCo’s initial focus categories, but please note that with the exception of the Investments category and any emerging future categories wherein other, new DAO-adjacent legal entities are set to operate, the mandate can be expanded into any current/future initiative category.
If a DAO-ratified strategy or strategic goal that the OpCo is mandated to facilitate doesn’t have a specific end date, the DAO-adjacent entity would continue executing until the entity feels as though the associated goals have been reached or the DAO instructs the entity to stop executing by passing a Snapshot vote (simple majority with at least 3% of all votable tokens voting either “For” or “Abstain”). If the work is expected to be long-term in nature, OpCo would be responsible for ensuring that it can be continued by accounting for associated costs in its budget extension request.
For example, delegates could define a high-level events strategy by deciding the number of events the Arbitrum DAO should be represented at in 2025, whether the strategy facilitator is the proposer, a proposer-related party, an OpCo internal employee, or someone who is chosen through a procurement process, and approving the strategy’s costs that are not covered by OpCo’s budget (i.e., salaries if the facilitators are not full-time staff appointed internally, booking event venues, catering, etc.) through the typical governance process, after which OpCo plans the exact events to participate in, contracts the required service providers or operationalizes internal employees, and manages all involved stakeholders and other related aspects throughout the process.
Service providers and individual contributors that are currently contracted, or will likely be in the near future, with the Arbitrum Foundation and fall within the Financial Management and Ecosystem Support categories, such as SEEDGov in its role as the Delegate Incentive Program Manager, MSS members, firms forming the ADPC, Entropy Advisors, etc., should collaborate closely with OpCo once its operations are fully established and stabilized. Once fully operational, OpCo will have the capacity to project manage and oversee these initiatives according to its complete mandate. The long-term vision for this process is as follows:
In the case that an integral facilitator within the Ecosystem Support or Financial Management categories (or any other category OpCo might be mandated to operate within in the future) exits the ecosystem for any reason and an initiative is left without an owner, the DAO could likewise mandate OpCo to find a replacement solution.
It’s important to note that OpCo will not have the authority to enter into contracts with service providers or individual contributors for strategies not approved by the DAO through governance, unless directly related to its operational needs (e.g., hiring an accounting firm). OpCo internal full-time employees cannot be contributors to DAO initiatives as individuals (they need to do so through OpCo) and are strictly prohibited from entering into employment engagements with other DAOs, organizations, entities, or comparable affiliations, whilst contractors that facilitate a specific vertical and are signed to OpCo can have engagements in other DAO initiatives and outside of the ecosystem. Full-time OpCo staff can only be appointed internally. However, as mentioned earlier, the DAO can roll any service provider or individual contributor into OpCo by passing an onchain vote. This vote has to request capital to cover the facilitators’ expenses since when it comes to salaries, OpCo’s budget only covers internal full-time staff. OpCo is expected to work closely with Offchain Labs as well as the Arbitrum Foundation to ensure that scopes of work do not overlap.
Individual contributors, service providers, and other analogous entities are naturally free to go directly to the DAO to propose they facilitate a workstream and get paid for it without facilitation by the OpCo. However, if the proposed scope of work falls within OpCo’s mandate, it is expected that delegates vote against such a proposal if it can be better executed via OpCo’s involvement. Proposers will be encouraged to engage with OpCo before posting a proposal to the forum to align with the DAO-adjacent entity’s internal employees. OpCo’s internal employees will also proactively communicate with proposal authors and facilitators outside of OpCo such that there is no overlap between deliverables and the future plans for all initiatives are clear.
Finally, it’s crucial to mention that the introduction of a DAO-adjacent legal entity carries risks and burdens that shouldn’t be ignored. Among other things, it requires some trust in a select group of facilitators as they are responsible for hiring and procuring the correct contributors as well as operationalizing and managing the DAO-adjacent entity, OpCo’s setup and fixed costs are quite notable, and some amount of administrative work is required that otherwise wouldn’t have arisen.
We expect the general workflow for OpCo to be as follows:
To reiterate:
OpCo’s initial capital allocation is meant to cover the entity’s setup costs and operating expenses, including full-time internal staff salaries, recurring administrative costs, and OpCo’s oversight committee. After OpCo’s core team has been hired, the entity has demonstrated product-market fit and readiness to execute according to its complete mandate, OpCo could be leveraged to help develop a DAO-wide budget, in which case the DAO-adjacent entity could hold the budgeted capital for at least the Ecosystem Support and Financial Management categories. In this case, when proposals related to these verticals are passed, no capital would have to be moved from the treasury as OpCo would be able to cover all expenses from its holdings.
Exploratory work on OpCo’s legal structure has already been initiated, but further effort and consultation with key stakeholders, delegates, legal parties, and the Arbitrum Foundation are needed to hammer down the exact structure. Any costs incurred by the Foundation for setting up the legal structure would be reimbursed from capital allocated to this initiative if this proposal were to pass.
OpCo’s initial term will tentatively be 30 months (around 6 months for setup and 24 months for operations from the entity’s official initiation date). The initial term’s length has been chosen to allow ample time for any unforeseen delays in establishing the legal entity, ramping up and stabilizing its operations, and will enable OpCo to focus on more complex and long-term strategies and internalize top talent as a longer initial term provides predictability/job security for employees. Once the first term is coming to an end, the executive-equivalent internal personnel together with OpCo’s oversight committee—the Oversight and Transparency Committee (OAT), introduced below—are required to collaborate to create the continuation proposal for the DAO-adjacent entity. This is expected to cover, among other things, the second OpCo term’s length, the required budget, and any changes or improvements that should be made. It should be noted that if OpCo is required to internalize a vast amount of facilitator roles before a DAO-wide budget is put in place, OpCo might have to create a proposal that would allocate additional funds as its initial exemplary budget has been constructed to cover up to 12 internal full-time employees at different salaries.
To enable OpCo to successfully fulfill its mandate, the entity should, among other things, have the following initial operational capabilities, internal employees, and resources:
We are looking for community feedback on this front, but some potential, apparent KPIs for OpCo (h/t @dk3 for most of these) include:
Ultimately, the OAT will be responsible for designing, finalizing, and implementing the relevant KPIs once OpCo is at a point where this can be sufficiently done. We envision that this will be a collaborative effort between the OAT and the DAO, with KPIs reviewed and adjusted periodically based on how OpCo evolves and the community’s feedback.
The two primary, immediate priorities for OpCo should be regarded as follows:
Once these two components have been achieved, the entity is prepared so that when the OAT and Foundation find the perfect initial employees for OpCo, it will be ready to begin servicing the DAO’s needs, although it will take some additional time for OpCo to ramp up to full capacity. It is important to note that the DAO should not optimize for rushing OpCo to full capacity versus optimizing to have it available for when the OAT finds the right person and the DAO needs it most.
In the twelve months following OpCo’s official initiation date (i.e., when, among other things, the entity, structure, and initial staffing have been finalized), the entity is expected to achieve the following tasks at minimum, given the DAO still finds them relevant and supports their facilitation by OpCo in the future:
The OAT is a group of five individuals with the primary mandate to oversee OpCo’s operations, ensure the DAO maintains transparency into the DAO-adjacent entity, function as the coordinator between the DAO and OpCo, and establish clear communication channels with the other committees overseeing the separate DAO-adjacent entities such as the GCP and possibly the CapCo in the future should the DAO vote accordingly. More specifically, the OAT’s responsibilities include but are not limited to:
If this proposal were to pass the onchain voting stage, the formation of the Oversight and Transparency Committee would commence. The DAO would elect 3 individuals to the OAT, with these individuals then promptly appointing 2 additional members with specialized skill sets to ensure all Arbitrum stakeholders’ interests are represented and the OAT’s proficiencies are varied and complete. Additionally, the Arbitrum Foundation will be given an observing and non-voting sixth seat on the OAT similar to the GCP. OAT members are expected to be able to contribute at least 10 hours per week to OAT-related tasks.
OAT applicants are required to apply as individuals to increase accountability. Applicants are required to disclose any current or possible future conflicts of interest in their applications, including but not limited to financial, personal, and professional. Applicants are also required to disclose all active contributor roles and payment streams related to the Arbitrum DAO that they, and entities that they have a professional or financial relationship with, have and are receiving. The application process for the 3 DAO-elected members would be initiated soon after the OpCo proposal passes an onchain vote and would run for ~3 weeks. Note that the application period can be extended if the size of the applicant pool is limited. A shutterized, weighted voting system will be utilized on Snapshot, and the 3 applicants with the most votes will be chosen as members of the OAT. The DAO-elected members should then prioritize appointing 2 additional members (required to be individuals as well). The 2 additional members don’t have to be appointed at the same time. The additional members will be added to the OAT optimistically, with the DAO having the ability to reject either/both of the additional members through a Snapshot vote (simple majority with at least 3% of all votable tokens voting either “For” or “Abstain”). All members will serve until the end of the first OAT term unless removed or they resign.
While the same internal OpCo employees as well as contracted service providers and individual contributors will continue in their roles across OpCo’s terms if the DAO-adjacent entity is extended in the future, the OAT’s term is 12 months, with a re-election process initiated when the OAT’s term has around 3 months left. The DAO would again choose 3 members who then appoint 2 additional members. If the new cohort is different from the previous one, the previous OAT members are expected to help onboard the new members when the term is coming to an end. There are no consecutive term limits for OAT members. As the OAT is mandated to assist in OpCo’s setup process, the first OAT term will be slightly longer than subsequent ones since it will include the period from when the initial OAT members are selected to the establishment of the entity, plus 12 months from the entity’s official start date.
Any individual may apply to the OAT. However, all appointed individuals that have a non-observing seat, as well as any companies with which these appointees maintain a professional or financial relationship, are required to relinquish any and all contributor roles within the Arbitrum DAO that were obtained through an official election or ratification process conducted via Snapshot or Tally. As long as an individual has a non-obseving seat on the OAT, they and their affiliates as defined above are prohibited from becoming an internal employee for OpCo, entering into service provider contracts with the entity, and applying to a contributor role related to the Arbitrum DAO that requires an official election or ratification process through Snapshot or Tally. Due to legal constraints, an OAT member and their affiliates as defined above cannot be members of another initiative’s or DAO-adjacent entity’s oversight committee. If an appointed individual or their affiliate as defined above sits on another oversight committee(s), they are required to resign from any such position(s) to be able to join the OAT.
Applicants must be individuals, not entities, and should possess familiarity with the Arbitrum DAO, governance processes, multisig operations, and a strong industry reputation. Additionally, candidates should demonstrate substantial experience and expertise in one or more of the following fields:
Corporate Finance & Financial Management
Operations & Strategy
When applying to become an OAT member, applicants should specify the primary domain(s) from the list above in which they have the most experience and describe the nature of that experience. More details about candidates’ desired skill sets and professional experience, as well as an application template, will be posted by Entropy Advisors if the onchain vote to signal approval of OpCo passes.
OAT members must be properly compensated, highly incentivized to commit their full attention to the outlined responsibilities, and aligned with Arbitrum DAO’s long-term success. OAT members’ base monthly payment is $7.5K (excluding the Arbitrum Foundation in its role as an observer). An additional 1M ARB vesting bonus payment will be allocated to OAT members (excluding the Arbitrum Foundation in its role as an observer) to ensure long-term alignment and fair compensation. At the end of the first OAT term, 50% of this ARB would be sent to a vesting contract that would release the funds after a 24-month cliff following the first OAT term’s end. Each individual who is an active member when the OAT term ends and was appointed as part of the dedicated election process will be allocated an equal share of the funds (100K ARB). If an OAT member steps down or is removed, they become ineligible for the bonus, in which case that ARB would be allocated pro rata to the replacing member. For example, if the initial OAT term’s length is 14 months and a replacement member is appointed with 7 months remaining in the initial term, they would be eligible to receive a bonus of 50K ARB subject to the same vesting terms as outlined above. The other 500K ARB will be allocated in a similar manner as described above for the second OAT term.
The non-exhaustive list of governance and compliance obligations for OpCo, its internal employees, and OAT members comprises:
OpCo’s budget is intended to fund its initial 30-month term, with funds covering the entity’s legal setup, any outsourced professional services required for operations such as legal counsel and accounting/auditing services, other incurred operating expenses such as business-critical software and insurance, internal full-time employee salaries, and the OAT’s salaries.
This proposal would earmark 30M ARB to cover OpCo’s initial term, with an exemplary budget breakdown shown below. This is not an official budget, meaning that capital may be budgeted and allocated differently once the entity is stood up. For example, Employee #4 doesn’t have to be hired at a yearly salary of ~$130K. The exemplary budget’s purpose is instead to showcase that the ask isn’t arbitrary, and how the figure has been derived. It’s also important to note that several line items, such as entity setup and legal services are notably larger than what the actual expenses are expected to be. This was done to account for any unforeseen events or worst-case scenarios which could require notable capital commitments.
Funds will be transferred to an Arbitrum Foundation-controlled address, with 4M ARB allocated to a bonus pool for internal employees and OpCo’s oversight committee. Again, if bonuses are paid out, they must be denominated in ARB and have a vesting structure attached, with internal employees’ payouts additionally being performance-based. Of the remaining 26M ARB, tokens will be liquidated until $12M worth of cash equivalents has been attained. At ARB’s price of $0.68 as of January 21, this would require roughly 18M ARB. The liquidation will occur over up to 3 months immediately following this proposal passing Tally at the discretion of the liquidating party (the Arbitrum Foundation together with a provider of their choice for asset liquidation) with a mandate to minimize price impact. After subtracting the bonus allocation and the liquidation is complete, the remaining ARB of the earmarked 30M token allocation will be immediately transferred back to the DAO treasury.
Of the $12M worth of cash equivalents, $2.5M will be released upfront. Once OpCo’s legal setup and related aspects are finalized, the entity can draw up to $500K each month. If a monthly drawdown exceeds $500K but is below $1.5M, the executive-equivalent employees must get approval from the OAT before accessing the funds. If a monthly drawdown exceeds $1.5M, OpCo must seek approval from the DAO through a Snapshot vote.
Residual ARB (as well as capital in other denominations) will be sent back to the DAO treasury at the end of OpCo’s first term if the initiative isn’t renewed. Otherwise, the budget will be rolled over. ARB associated with this initiative, held by OpCo or the Arbitrum Foundation, is prohibited from being used in governance and must be delegated to the Exclude Address wherever practicable such that these funds don’t count towards the quorum. The Chief of Coins, together with relevant parties, will be responsible for maintaining an adequate runway for covering expenses as well as establishing a low-risk management strategy for idle capital to enhance the impact of the allocated funds.
The DAO will have the capability to clawback OpCo’s funding at any time. Defunding OpCo entirely by the DAO requires a forum post outlining the rationale behind the request for change, allowing for a reasonable time for discussion, and a subsequent Temperature Check vote (simple majority with at least 3% of all votable tokens voting either “For” or “Abstain”). If a Snapshot vote to defund OpCo is passed, payments will immediately be halted and all earmarked funds returned to the DAO Treasury, with OpCo ceasing operations.
The Snapshot vote will utilize Basic Voting:
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/28
Democratising lobbyism, on-chain. Check out lobbyfi.xyz
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/28
Democratising lobbyism, on-chain. Check out lobbyfi.xyz
We are voting “AGAINST” the proposal, for the following reasons: 1. Centralization in the hiring of service providers. We understand that the OpCo will have the commitment to go through the DAO to hire the SPs to achieve the objectives set by the Arbitrum DAO, but it is not clear when the distinction will be made between hiring SPs directly by the OpCo vs hired by the DAO. This lack of clarity may make it simpler to hire via OpCo which, despite being more agile, will not necessarily be more efficient. 2. Redundancy with the Arbitrum Foundation. We note that the Arbitrum Foundation supports the proposal, mainly because it reduces the DAO's dependence on the Foundation. However, there could be a redundancy between the functions of OpCo and the foundation, as well as a conflict between the actions/obligations of DAO and OpCo - since the company can expand its scope if it sees fit and has the resources to do so. 3. High operating costs. As brought up by other delegates, the high remuneration assigned to C-level positions (above that practiced in the market) and lack of clarity on the allocation of remuneration for future OpCo employees. The operating cost of similar entities at Lido and dYdX had a much lower initial cost. We think it's important to bring in a competitive remuneration to attract talent to OpCo, but balanced with what is already practiced in the market (perhaps a lower fixed remuneration and a higher bonus with clearer KPIs). We know that Arbitrum needs to improve its efficiency and there are frictions in doing this in a DAO. However, if the option is to increase centralization in order to gradually decentralize, this proposal could lead to more risks for the DAO, consuming its resources (U$15M) in a risky experiment for the organization. For those who are curious, we've studied models to better understand how the structure of the entities/companies that DAOs have works: - The dYdX - https://www.dydxopsdao.com/about - Lido - https://research.lido.fi/t/organize-the-lido-alliance-program-as-a-lido-dao-adjacent-borg/8173 I see that they are necessary and can really help. But I found the cost of the proposal very high. Despite this, the proposal was generally well received by the delegates.
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/161?u=princetonblockchain
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/160?u=tane
The Event Horizon Community Voted to Support this Proposal ehARB-79: EventHorizon.vote/vote/arbitrum/ehARB-79
The Event Horizon Community Voted to Support this Proposal ehARB-79: EventHorizon.vote/vote/arbitrum/ehARB-79
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/158?u=griff
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/157?u=tekr0x.eth
https://forum.arbitrum.foundation/t/juanrah-delegate-communication-thread/27395/24?u=juanrah
I actually think this is an important proposal. Yes it's a lot of money, but having an organization dedicated to assisting the DAO would benefit Arbitrum enormously in my opinion.
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/150?u=0x_ultra
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/143?u=euphoria
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/96
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/149?u=amira
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/148?u=todayindefi
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/146?u=0xdonpepe
I am voting against this proposal because the budget is too big, and there is no clear plan for how DAO will get back the 30M ARB. Most of the money goes to operations and salaries, but we need to invest more in growth and projects that bring value. Also, there is no strong oversight, and the funds could be wasted or misused.
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/140?u=ocandocrypto
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/137
https://forum.arbitrum.foundation/t/the-opco-scale-structure-synergy/22737/31
From a decentralization standpoint, this offers the benefit of a parallel route to the Arbitrum Foundation for tasks requiring a legal counterparty. The cost is, however, not small. Additionally, while the AF is far from perfect and can be credibly critiqued, it tends to be fairly deferential to Arbitrum governance already, making it an exception in the space. There haven’t been, to our knowledge, any challenges where DAO activities were blocked or significantly delayed because the AF was unable or unwilling to provide the services the OpCo would, making the main benefit of the OpCo that the DAO is less reliant upon the AF. It may be better to hold plans for an OpCo, or simply set it up formally but wait to begin operations, until the AF fails to perform desired tasks for the DAO.
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/88?u=castlecapital
We voted against at Snapshot stage and our view remains unchanged - this represents poor value for the DAO.
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/131?u=pedrob
Confirming our snapshot vote to support the OpCo initiative https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/89?u=mcfly
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/130?u=kuiclub
Bloated expenses and structure for the purpose. Also creating conflict of interest between ARB holders and treasury managers in the OpCo. This is bureaucratic capture.
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/63?u=bruce
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/128?u=duokongcrypto
Because while not the best option imho, I'm willing to trust the proposing team to try.
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/125?u=0xtalvo.eth_mty
Even if the budegt is still pretty high for such entity I think this entity is needed for the future of Arbitrum and I have chosen to re-confirm my vote from Snapshot OpCo https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/76
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/124?u=tempetechie
OpCo represents a logical, structured, and necessary evolution for Arbitrum DAO’s operational capabilities. With strong oversight, controlled spending, and a clear governance framework, this initiative empowers the DAO to execute efficiently while preserving decentralization. Given the strategic benefits, financial safeguards, and governance transparency, I vote FOR this proposal.
https://forum.arbitrum.foundation/t/larva-delegate-communication-thread/24476/116?u=larva
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/120?u=jojo
as I mentioned previously, this should be tried and experimented with a much smaller budget. For example, we could even keep the same costs but fund just the OAT for now and see how it performs on its first tasks, and then gradually fund more and more scope. https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/118?u=paulofonseca
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/102?u=maxlomu
We are voting FOR OpCo, and we will share our rationale shortly.
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/28?u=bob-rossi
We are voting FOR the OpCo proposal in the temperature check vote, we will be sharing additional rationale for the vote in the forum thread shortly.
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/101?u=0x_ultra
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/71
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/100?u=pedrob
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/99?u=tekr0x.eth
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/98?u=euphoria
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/96
I need more time to review this in detail than I had available this week. https://forum.arbitrum.foundation/t/griff-green-delegate-communication-thread/25040/54?u=griff
we should experiment with this setup in a much smaller amount at first, otherwise we are setting this up for failure. https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/94?u=paulofonseca
The Event Horizon Community Voted to Support this Proposal ehARB-69: EventHorizon.vote/vote/arbitrum/ehARB-69
The Event Horizon Community Voted to Support this Proposal ehARB-69: EventHorizon.vote/vote/arbitrum/ehARB-69
A more effecient entity that is overseen by the DAO is a good idea. Ideally this is a well run program and it could help drive direction, mission, vision and goals for the DAO.
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/91?u=seedgov
We need to support good leaders to make the change we want to see. I have trust in entropy to try to do this well. We will see in a year though.
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/89?u=mcfly
https://forum.arbitrum.foundation/t/gfx-labs-delegate-communication-thread/13794
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/86?u=tempetechie
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/80?u=0xtalvo.eth_mty
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/79?u=ocandocrypto
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/75?u=todayindefi
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/76?u=0xalex
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/73?u=gabriel
I am voting for OpCo because it will help the DAO execute plans more effectively by creating a structured way to hire contributors and manage projects.
I think there are leaner, more decentralized options of achieving the goals stated in this proposal. I see the value of this, and want to thank all the individuals involved in the preparation and discussion of this proposal, but I think it's a step in the wrong direction.
We are happy with the implementations made by EA following our feedback on the forums. https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/32?u=immutablelawyer
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/68?u=0xdonpepe
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/66
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/65?u=kuiclub
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/63?u=bruce
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/62?u=duokongcrypto
Democratising lobbyism, on-chain. Check out lobbyfi.xyz
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/60?u=ezr3al
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/59?u=jojo
https://forum.arbitrum.foundation/t/larva-delegate-communication-thread/24476/105?u=larva
We are voting “AGAINST” the proposal, for the following reasons: 1. Centralization in the hiring of service providers. We understand that the OpCo will have the commitment to go through the DAO to hire the SPs to achieve the objectives set by the Arbitrum DAO, but it is not clear when the distinction will be made between hiring SPs directly by the OpCo vs hired by the DAO. This lack of clarity may make it simpler to hire via OpCo which, despite being more agile, will not necessarily be more efficient. 2. Redundancy with the Arbitrum Foundation. We note that the Arbitrum Foundation supports the proposal, mainly because it reduces the DAO's dependence on the Foundation. However, there could be a redundancy between the functions of OpCo and the foundation, as well as a conflict between the actions/obligations of DAO and OpCo - since the company can expand its scope if it sees fit and has the resources to do so. 3. High operating costs. As brought up by other delegates, the high remuneration assigned to C-level positions (above that practiced in the market) and lack of clarity on the allocation of remuneration for future OpCo employees. The operating cost of similar entities at Lido and dYdX had a much lower initial cost. We think it's important to bring in a competitive remuneration to attract talent to OpCo, but balanced with what is already practiced in the market (perhaps a lower fixed remuneration and a higher bonus with clearer KPIs). We know that Arbitrum needs to improve its efficiency and there are frictions in doing this in a DAO. However, if the option is to increase centralization in order to gradually decentralize, this proposal could lead to more risks for the DAO, consuming its resources (U$15M) in a risky experiment for the organization. For those who are curious, we've studied models to better understand how the structure of the entities/companies that DAOs have works: - The dYdX - https://www.dydxopsdao.com/about - Lido - https://research.lido.fi/t/organize-the-lido-alliance-program-as-a-lido-dao-adjacent-borg/8173 I see that they are necessary and can really help. But I found the cost of the proposal very high. Despite this, the proposal was generally well received by the delegates.
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/161?u=princetonblockchain
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/160?u=tane
The Event Horizon Community Voted to Support this Proposal ehARB-79: EventHorizon.vote/vote/arbitrum/ehARB-79
The Event Horizon Community Voted to Support this Proposal ehARB-79: EventHorizon.vote/vote/arbitrum/ehARB-79
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/158?u=griff
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/157?u=tekr0x.eth
https://forum.arbitrum.foundation/t/juanrah-delegate-communication-thread/27395/24?u=juanrah
I actually think this is an important proposal. Yes it's a lot of money, but having an organization dedicated to assisting the DAO would benefit Arbitrum enormously in my opinion.
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/150?u=0x_ultra
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/143?u=euphoria
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/96
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/149?u=amira
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/148?u=todayindefi
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/146?u=0xdonpepe
I am voting against this proposal because the budget is too big, and there is no clear plan for how DAO will get back the 30M ARB. Most of the money goes to operations and salaries, but we need to invest more in growth and projects that bring value. Also, there is no strong oversight, and the funds could be wasted or misused.
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/140?u=ocandocrypto
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/137
https://forum.arbitrum.foundation/t/the-opco-scale-structure-synergy/22737/31
From a decentralization standpoint, this offers the benefit of a parallel route to the Arbitrum Foundation for tasks requiring a legal counterparty. The cost is, however, not small. Additionally, while the AF is far from perfect and can be credibly critiqued, it tends to be fairly deferential to Arbitrum governance already, making it an exception in the space. There haven’t been, to our knowledge, any challenges where DAO activities were blocked or significantly delayed because the AF was unable or unwilling to provide the services the OpCo would, making the main benefit of the OpCo that the DAO is less reliant upon the AF. It may be better to hold plans for an OpCo, or simply set it up formally but wait to begin operations, until the AF fails to perform desired tasks for the DAO.
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/88?u=castlecapital
We voted against at Snapshot stage and our view remains unchanged - this represents poor value for the DAO.
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/131?u=pedrob
Confirming our snapshot vote to support the OpCo initiative https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/89?u=mcfly
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/130?u=kuiclub
Bloated expenses and structure for the purpose. Also creating conflict of interest between ARB holders and treasury managers in the OpCo. This is bureaucratic capture.
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/63?u=bruce
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/128?u=duokongcrypto
Because while not the best option imho, I'm willing to trust the proposing team to try.
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/125?u=0xtalvo.eth_mty
Even if the budegt is still pretty high for such entity I think this entity is needed for the future of Arbitrum and I have chosen to re-confirm my vote from Snapshot OpCo https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/76
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/124?u=tempetechie
OpCo represents a logical, structured, and necessary evolution for Arbitrum DAO’s operational capabilities. With strong oversight, controlled spending, and a clear governance framework, this initiative empowers the DAO to execute efficiently while preserving decentralization. Given the strategic benefits, financial safeguards, and governance transparency, I vote FOR this proposal.
https://forum.arbitrum.foundation/t/larva-delegate-communication-thread/24476/116?u=larva
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/120?u=jojo
as I mentioned previously, this should be tried and experimented with a much smaller budget. For example, we could even keep the same costs but fund just the OAT for now and see how it performs on its first tasks, and then gradually fund more and more scope. https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/118?u=paulofonseca
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/102?u=maxlomu
We are voting FOR OpCo, and we will share our rationale shortly.
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/28?u=bob-rossi
We are voting FOR the OpCo proposal in the temperature check vote, we will be sharing additional rationale for the vote in the forum thread shortly.
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/101?u=0x_ultra
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/71
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/100?u=pedrob
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/99?u=tekr0x.eth
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/98?u=euphoria
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/96
I need more time to review this in detail than I had available this week. https://forum.arbitrum.foundation/t/griff-green-delegate-communication-thread/25040/54?u=griff
we should experiment with this setup in a much smaller amount at first, otherwise we are setting this up for failure. https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/94?u=paulofonseca
The Event Horizon Community Voted to Support this Proposal ehARB-69: EventHorizon.vote/vote/arbitrum/ehARB-69
The Event Horizon Community Voted to Support this Proposal ehARB-69: EventHorizon.vote/vote/arbitrum/ehARB-69
A more effecient entity that is overseen by the DAO is a good idea. Ideally this is a well run program and it could help drive direction, mission, vision and goals for the DAO.
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/91?u=seedgov
We need to support good leaders to make the change we want to see. I have trust in entropy to try to do this well. We will see in a year though.
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/89?u=mcfly
https://forum.arbitrum.foundation/t/gfx-labs-delegate-communication-thread/13794
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/86?u=tempetechie
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/80?u=0xtalvo.eth_mty
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/79?u=ocandocrypto
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/75?u=todayindefi
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/76?u=0xalex
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/73?u=gabriel
I am voting for OpCo because it will help the DAO execute plans more effectively by creating a structured way to hire contributors and manage projects.
I think there are leaner, more decentralized options of achieving the goals stated in this proposal. I see the value of this, and want to thank all the individuals involved in the preparation and discussion of this proposal, but I think it's a step in the wrong direction.
We are happy with the implementations made by EA following our feedback on the forums. https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/32?u=immutablelawyer
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/68?u=0xdonpepe
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/66
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/65?u=kuiclub
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/63?u=bruce
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/62?u=duokongcrypto
Democratising lobbyism, on-chain. Check out lobbyfi.xyz
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/60?u=ezr3al
https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/59?u=jojo
https://forum.arbitrum.foundation/t/larva-delegate-communication-thread/24476/105?u=larva
It sounds good！I support that
It sounds good！I support that
If you imagine that you are the owner of a company that offers vacancies, you would hardly set maximum salaries on the market, it seems to me that Arbitrum should be treated as your own company and save its funds where it is acceptable.
If you imagine that you are the owner of a company that offers vacancies, you would hardly set maximum salaries on the market, it seems to me that Arbitrum should be treated as your own company and save its funds where it is acceptable.
Just to chime in here, I think the salary ranges in the proposal need to be viewed not as set salaries for the respective positions but as projected budget line items.
The analogy above is not quite correct. Since a business owner is in full control of the budget and can make decisions alone, should he pursue top-tier talent or not?
The proposed budget, particularly for salaries enables the OpCo and the OAT to actually go after the top-tier talent necessary to get the most value for the Arbitrum DAO out of the OpCo.
On a more general note, competitive compensation is necessary to attract top-tier talent. And top-tier talent is instrumental for the success of any organization.
Liquidate ARB into $12M worth of cash-equivalent assets (at ARB’s current price of 0.80$, this would require 15M ARB) over a time period of up to 6 months following the proposal having passed Tally at the discretion of the liquidating party with a mandate to minimize price impact
Thank you @Entropy for pushing forward this very valuable initiative.
I really appreciate your work, but want to provide a few suggestions that hopefully will make OpCo more effective and efficient:
Thank you @Entropy for pushing forward this very valuable initiative.
I really appreciate your work, but want to provide a few suggestions that hopefully will make OpCo more effective and efficient:
If you imagine that you are the owner of a company that offers vacancies, you would hardly set maximum salaries on the market, it seems to me that Arbitrum should be treated as your own company and save its funds where it is acceptable.
If you imagine that you are the owner of a company that offers vacancies, you would hardly set maximum salaries on the market, it seems to me that Arbitrum should be treated as your own company and save its funds where it is acceptable.
Just to chime in here, I think the salary ranges in the proposal need to be viewed not as set salaries for the respective positions but as projected budget line items.
The analogy above is not quite correct. Since a business owner is in full control of the budget and can make decisions alone, should he pursue top-tier talent or not?
The proposed budget, particularly for salaries enables the OpCo and the OAT to actually go after the top-tier talent necessary to get the most value for the Arbitrum DAO out of the OpCo.
On a more general note, competitive compensation is necessary to attract top-tier talent. And top-tier talent is instrumental for the success of any organization.
Liquidate ARB into $12M worth of cash-equivalent assets (at ARB’s current price of 0.80$, this would require 15M ARB) over a time period of up to 6 months following the proposal having passed Tally at the discretion of the liquidating party with a mandate to minimize price impact
Thank you @Entropy for pushing forward this very valuable initiative.
I really appreciate your work, but want to provide a few suggestions that hopefully will make OpCo more effective and efficient:
Thank you @Entropy for pushing forward this very valuable initiative.
I really appreciate your work, but want to provide a few suggestions that hopefully will make OpCo more effective and efficient:
Liquidate ARB into $12M worth of cash-equivalent assets (at ARB’s current price of 0.80$, this would require 15M ARB) over a time period of up to 6 months following the proposal having passed Tally at the discretion of the liquidating party with a mandate to minimize price impact
Answering to the open question, I think this approach is very responsible and a good way forward. Being the scope of OpCo supporting the DAO through operations and organisation, I think going for the safer, financially sustainable approach is the right decision.
My question is: can we do it, or do we need to wait for the legal entity to be setup?
To echo JoJo, my only concern is on feasibility. If it hasn't been done already, I would suggest to "simulate" the steps needed to make this happen.
Hi Arbitrum DAO,
I am Valentin, currently director and team lead of the dYdX Operations subDAO - a similar entity within the dYdX DAO. I have been leading the operational setup of the Ops subDAO, the reorganization of the legal structure, and getting the entities operational (Bank account, admin infrastructure, and initial SOPs).
Hi Arbitrum DAO,
I am Valentin, currently director and team lead of the dYdX Operations subDAO - a similar entity within the dYdX DAO. I have been leading the operational setup of the Ops subDAO, the reorganization of the legal structure, and getting the entities operational (Bank account, admin infrastructure, and initial SOPs).
This is a very well-structured and interesting proposal. Many of the issues raised resonate with me, and I can confirm that such an entity if structured, set up, and operated correctly, can significantly alleviate these.
Additionally, I want to tip my hat at the great feedback the proposal has gotten most of my concerns or comments have already been made hence, I want to second the important ones and share my thoughts on them specifically:
In my opinion, the most important aspect of establishing a DAO is not to relinquish control completely but to delegate responsibility while retaining veto power.
This should and can be facilitated by tying the OpCo's mandate and certain decisions within its legal entity to the Arbitrum DAO Governance decisions in the legal entity's founding documents. @immutablelawyer, please correct me if I am wrong. This is possible in most practical legal entities.
If this is the case the question of which projects or initiatives are included in the mandate (which needs to be well-defined and approved by governance) is answered more quickly and as stated in the proposal initiatives outside of the mandate would require additional governance approvals.
The structuring of the OAT Council also makes a lot of sense, and I can report from experience that capable individuals with specialized knowledge in the mentioned areas are of the utmost importance, particularly in the setup period. This is especially true if, as I understand, the OAT will be operating without additional staff for most of the initial six-month setup period.
After the initial setup, the OAT will need to transition into establishing transparency and creating a reporting culture while enforcing a high standard of both, requiring full-time staff to deliver recurring reports and updates on operations and finances.
Considering this, I second the opinion that the proposed compensation of the OAT is below industry standard, considering the expected responsibility, seniority, opportunity cost, time commitment as well as the availability of talent.
The call for clear KPIs in this thread is completely understandable considering the amount of money proposed to be deployed. As mentioned above a crucial part of the OAT initial setup deliverables is to develop meaningful KPIs under which the OpCo will be held accountable. As this is a new initiative and the exact activities are dependent on a lot of different, still developing factors, developing KPIs in the proposal stage is not practical in my opinion.
Happy to share more of my experience within the dYdX subDAO, hopefully enabling the OpCo to avoid some of the mistakes and delays we had to deal with.
Liquidate ARB into $12M worth of cash-equivalent assets (at ARB’s current price of 0.80$, this would require 15M ARB) over a time period of up to 6 months following the proposal having passed Tally at the discretion of the liquidating party with a mandate to minimize price impact
Answering to the open question, I think this approach is very responsible and a good way forward. Being the scope of OpCo supporting the DAO through operations and organisation, I think going for the safer, financially sustainable approach is the right decision.
My question is: can we do it, or do we need to wait for the legal entity to be setup?
To echo JoJo, my only concern is on feasibility. If it hasn't been done already, I would suggest to "simulate" the steps needed to make this happen.
Hi Arbitrum DAO,
I am Valentin, currently director and team lead of the dYdX Operations subDAO - a similar entity within the dYdX DAO. I have been leading the operational setup of the Ops subDAO, the reorganization of the legal structure, and getting the entities operational (Bank account, admin infrastructure, and initial SOPs).
Hi Arbitrum DAO,
I am Valentin, currently director and team lead of the dYdX Operations subDAO - a similar entity within the dYdX DAO. I have been leading the operational setup of the Ops subDAO, the reorganization of the legal structure, and getting the entities operational (Bank account, admin infrastructure, and initial SOPs).
This is a very well-structured and interesting proposal. Many of the issues raised resonate with me, and I can confirm that such an entity if structured, set up, and operated correctly, can significantly alleviate these.
Additionally, I want to tip my hat at the great feedback the proposal has gotten most of my concerns or comments have already been made hence, I want to second the important ones and share my thoughts on them specifically:
In my opinion, the most important aspect of establishing a DAO is not to relinquish control completely but to delegate responsibility while retaining veto power.
This should and can be facilitated by tying the OpCo's mandate and certain decisions within its legal entity to the Arbitrum DAO Governance decisions in the legal entity's founding documents. @immutablelawyer, please correct me if I am wrong. This is possible in most practical legal entities.
If this is the case the question of which projects or initiatives are included in the mandate (which needs to be well-defined and approved by governance) is answered more quickly and as stated in the proposal initiatives outside of the mandate would require additional governance approvals.
The structuring of the OAT Council also makes a lot of sense, and I can report from experience that capable individuals with specialized knowledge in the mentioned areas are of the utmost importance, particularly in the setup period. This is especially true if, as I understand, the OAT will be operating without additional staff for most of the initial six-month setup period.
After the initial setup, the OAT will need to transition into establishing transparency and creating a reporting culture while enforcing a high standard of both, requiring full-time staff to deliver recurring reports and updates on operations and finances.
Considering this, I second the opinion that the proposed compensation of the OAT is below industry standard, considering the expected responsibility, seniority, opportunity cost, time commitment as well as the availability of talent.
The call for clear KPIs in this thread is completely understandable considering the amount of money proposed to be deployed. As mentioned above a crucial part of the OAT initial setup deliverables is to develop meaningful KPIs under which the OpCo will be held accountable. As this is a new initiative and the exact activities are dependent on a lot of different, still developing factors, developing KPIs in the proposal stage is not practical in my opinion.
Happy to share more of my experience within the dYdX subDAO, hopefully enabling the OpCo to avoid some of the mistakes and delays we had to deal with.
Finally, it’s crucial to mention that establishing a DAO-adjacent legal entity introduces risks and responsibilities that shouldn’t be overlooked. This setup inherently requires some level of trust in a select group of facilitators, as they will handle hiring and procuring the right contributors, as well as managing the setup and operational costs of the entity. Additionally, there is administrative work that wouldn’t otherwise exist.
Finally, it’s crucial to mention that establishing a DAO-adjacent legal entity introduces risks and responsibilities that shouldn’t be overlooked. This setup inherently requires some level of trust in a select group of facilitators, as they will handle hiring and procuring the right contributors, as well as managing the setup and operational costs of the entity. Additionally, there is administrative work that wouldn’t otherwise exist.
Just to add a few comments to @Immutablelawyer on the legal design:
Firstly - this is not legal advice. I'm just a humble, working-class boy from the backstreets of Sydney. You’ve got some sharp lawyers on this, so consider this purely for entertainment value.
There’s much more to cover under each point, not to mention tax issues better left to specialists—so that’s probably enough for now.
Cue the gigabrains over at Axis and @immutablelawyer to crack open some Zyn and give us the good sauce!
@Juanrah Hi all, on a recent call, Juan suggested I run a simscore study on this opco proposal decision process. I created it for him and I recently got feedback.
Here is the SimScore Study - Arb opco proposal https://rndadocs.notion.site/SimScore-Study-19e786e93779803abe9dcbbd513c7ee6?pvs=4
The Arbitrum Foundation will oversee all aspects of the OpCo's setup, including (non-exhaustive):
The Arbitrum Foundation will oversee all aspects of the OpCo's setup, including (non-exhaustive):
Although Entropy Advisors voted AGAINST the proposal, they have committed to its execution as per their comment above, particularly in overseeing OAT elections and assisting us with implementing governance structures that enable effective oversight. The Arbitrum Foundation will be supported by Entropy Advisors on these efforts, ensuring proper hiring, termination, and authorization processes, and maintaining transparent coordination with the DAO and other key stakeholders. In addition, the AF will also be very involved in designing relevant KPIs.
We will work with Entropy Advisors in setting up the entity and its processes to ensure the OAT and OpCo team is positioned to uphold accountability by monitoring OpCo’s mandate, financial oversight, and execution of DAO-approved strategies.
Finally, it’s crucial to mention that establishing a DAO-adjacent legal entity introduces risks and responsibilities that shouldn’t be overlooked. This setup inherently requires some level of trust in a select group of facilitators, as they will handle hiring and procuring the right contributors, as well as managing the setup and operational costs of the entity. Additionally, there is administrative work that wouldn’t otherwise exist.
Finally, it’s crucial to mention that establishing a DAO-adjacent legal entity introduces risks and responsibilities that shouldn’t be overlooked. This setup inherently requires some level of trust in a select group of facilitators, as they will handle hiring and procuring the right contributors, as well as managing the setup and operational costs of the entity. Additionally, there is administrative work that wouldn’t otherwise exist.
Just to add a few comments to @Immutablelawyer on the legal design:
Firstly - this is not legal advice. I'm just a humble, working-class boy from the backstreets of Sydney. You’ve got some sharp lawyers on this, so consider this purely for entertainment value.
There’s much more to cover under each point, not to mention tax issues better left to specialists—so that’s probably enough for now.
Cue the gigabrains over at Axis and @immutablelawyer to crack open some Zyn and give us the good sauce!
@Juanrah Hi all, on a recent call, Juan suggested I run a simscore study on this opco proposal decision process. I created it for him and I recently got feedback.
Here is the SimScore Study - Arb opco proposal https://rndadocs.notion.site/SimScore-Study-19e786e93779803abe9dcbbd513c7ee6?pvs=4
The Arbitrum Foundation will oversee all aspects of the OpCo's setup, including (non-exhaustive):
The Arbitrum Foundation will oversee all aspects of the OpCo's setup, including (non-exhaustive):
Although Entropy Advisors voted AGAINST the proposal, they have committed to its execution as per their comment above, particularly in overseeing OAT elections and assisting us with implementing governance structures that enable effective oversight. The Arbitrum Foundation will be supported by Entropy Advisors on these efforts, ensuring proper hiring, termination, and authorization processes, and maintaining transparent coordination with the DAO and other key stakeholders. In addition, the AF will also be very involved in designing relevant KPIs.
We will work with Entropy Advisors in setting up the entity and its processes to ensure the OAT and OpCo team is positioned to uphold accountability by monitoring OpCo’s mandate, financial oversight, and execution of DAO-approved strategies.
Hi all,
Confirming the AF address as 0xf67DB74DEc758fE7C3fB521aB0dB77E8Df9c8178 for the on chain proposal.
Here is the SimScore AI executive summary. The summary is based on the top 20 SimScore replies weighted by similarity.
Here is the SimScore AI executive summary. The summary is based on the top 20 SimScore replies weighted by similarity.
The OpCo proposal has elicited a broad spectrum of feedback, reflecting diverse perspectives on its potential impact on the Arbitrum DAO. The following summary is weighted by similarity scores, highlighting the most resonant opinions:
Strategic Alignment and Operational Efficiency
Enhanced Execution Capabilities
Safeguards and Flexibility
Risks to Decentralized Ethos
Checks and Balances
Alternative Approaches
Budgetary Concerns
Refining Scope and Objectives
Trial Periods and Iterative Feedback
Stakeholder Engagement
While the OpCo proposal presents significant opportunities for enhancing the Arbitrum DAO’s governance and execution, it also raises valid concerns about centralization and cost. The prevailing sentiment is cautiously optimistic, with strong support for the proposal’s potential benefits, contingent upon robust safeguards and iterative development. A phased approach, clear accountability mechanisms, and ongoing dialogue will be essential to successfully implement this transformative initiative.
Here is the SimScore Report based on Forum replies during the Snapshot voting period. (Dec 12 - Jan 9) It is divided into 3 clusters.
The report is intended as a primer for the upcoming meeting on Monday.
Hi all,
Confirming the AF address as 0xf67DB74DEc758fE7C3fB521aB0dB77E8Df9c8178 for the on chain proposal.
Here is the SimScore AI executive summary. The summary is based on the top 20 SimScore replies weighted by similarity.
Here is the SimScore AI executive summary. The summary is based on the top 20 SimScore replies weighted by similarity.
The OpCo proposal has elicited a broad spectrum of feedback, reflecting diverse perspectives on its potential impact on the Arbitrum DAO. The following summary is weighted by similarity scores, highlighting the most resonant opinions:
Strategic Alignment and Operational Efficiency
Enhanced Execution Capabilities
Safeguards and Flexibility
Risks to Decentralized Ethos
Checks and Balances
Alternative Approaches
Budgetary Concerns
Refining Scope and Objectives
Trial Periods and Iterative Feedback
Stakeholder Engagement
While the OpCo proposal presents significant opportunities for enhancing the Arbitrum DAO’s governance and execution, it also raises valid concerns about centralization and cost. The prevailing sentiment is cautiously optimistic, with strong support for the proposal’s potential benefits, contingent upon robust safeguards and iterative development. A phased approach, clear accountability mechanisms, and ongoing dialogue will be essential to successfully implement this transformative initiative.
Here is the SimScore Report based on Forum replies during the Snapshot voting period. (Dec 12 - Jan 9) It is divided into 3 clusters.
The report is intended as a primer for the upcoming meeting on Monday.
We are aware that contributors in the ArbitrumDAO are asking what is the Arbitrum Foundation’s opinion on the proposal and whether we can take on and/or already take on the work that is proposed for OpCo.
Since the birth of the DAO (~20 months ago), we have focused on helping contributors form their own collective identity and enabling contributors to truly have autonomy when executing with their proposals. We have provided ops-related support to help facilitate proposals (i.e. KYC/compliance, investigating misuse of funds, custodying of funds for certain initiatives, serving as the counter party in liaising with service providers, etc.), but it has been narrow in scope.
We are aware that contributors in the ArbitrumDAO are asking what is the Arbitrum Foundation’s opinion on the proposal and whether we can take on and/or already take on the work that is proposed for OpCo.
Since the birth of the DAO (~20 months ago), we have focused on helping contributors form their own collective identity and enabling contributors to truly have autonomy when executing with their proposals. We have provided ops-related support to help facilitate proposals (i.e. KYC/compliance, investigating misuse of funds, custodying of funds for certain initiatives, serving as the counter party in liaising with service providers, etc.), but it has been narrow in scope.
It is in the realm of possibility for the Arbitrum Foundation to take on additional ops-related work like project management of proposals, but, in our opinion, it is not the best path forward.
With the OpCo, or perhaps another proposal, the ArbitrumDAO has a unique opportunity to stand up on its own two feet, form its own organisational structure, and truly form its own collective of contributors. This is only possible because the ArbitrumDAO has many independent contributors with the willingness to do so.
The OpCo has been in discussion for several months and to date it is the most viable proposal we have seen that enables the ArbitrumDAO to execute on its proposals faster and in a more efficient manner. If done properly, OpCo can become a key component of the DAO’s operations, offering the resources and expertise needed to simplify decision making, improve execution, optimize governance operations, and drive long-term growth and success for the ecosystem.
Of course, while the OpCo may support the DAO’s initiatives, the DAO should remain the ultimate decision maker over the DAO treasury and it should still have the freedom to spin up other initiatives (with or without the support of the OpCo) as it sees fit.
We are aware that contributors in the ArbitrumDAO are asking what is the Arbitrum Foundation’s opinion on the proposal and whether we can take on and/or already take on the work that is proposed for OpCo.
Since the birth of the DAO (~20 months ago), we have focused on helping contributors form their own collective identity and enabling contributors to truly have autonomy when executing with their proposals. We have provided ops-related support to help facilitate proposals (i.e. KYC/compliance, investigating misuse of funds, custodying of funds for certain initiatives, serving as the counter party in liaising with service providers, etc.), but it has been narrow in scope.
We are aware that contributors in the ArbitrumDAO are asking what is the Arbitrum Foundation’s opinion on the proposal and whether we can take on and/or already take on the work that is proposed for OpCo.
Since the birth of the DAO (~20 months ago), we have focused on helping contributors form their own collective identity and enabling contributors to truly have autonomy when executing with their proposals. We have provided ops-related support to help facilitate proposals (i.e. KYC/compliance, investigating misuse of funds, custodying of funds for certain initiatives, serving as the counter party in liaising with service providers, etc.), but it has been narrow in scope.
It is in the realm of possibility for the Arbitrum Foundation to take on additional ops-related work like project management of proposals, but, in our opinion, it is not the best path forward.
With the OpCo, or perhaps another proposal, the ArbitrumDAO has a unique opportunity to stand up on its own two feet, form its own organisational structure, and truly form its own collective of contributors. This is only possible because the ArbitrumDAO has many independent contributors with the willingness to do so.
The OpCo has been in discussion for several months and to date it is the most viable proposal we have seen that enables the ArbitrumDAO to execute on its proposals faster and in a more efficient manner. If done properly, OpCo can become a key component of the DAO’s operations, offering the resources and expertise needed to simplify decision making, improve execution, optimize governance operations, and drive long-term growth and success for the ecosystem.
Of course, while the OpCo may support the DAO’s initiatives, the DAO should remain the ultimate decision maker over the DAO treasury and it should still have the freedom to spin up other initiatives (with or without the support of the OpCo) as it sees fit.
The following reflects the views of GMX’s Governance Committee, and is based on the combined research, evaluation, and consensus of various committee members.
The OpCo proposal is a critical step toward operationalizing the Arbitrum DAO and addressing inefficiencies. GMX sees its potential as a value-add for the ecosystem but highlights the importance of maintaining decentralization while enabling effective execution of DAO objectives.
The following reflects the views of GMX’s Governance Committee, and is based on the combined research, evaluation, and consensus of various committee members.
The OpCo proposal is a critical step toward operationalizing the Arbitrum DAO and addressing inefficiencies. GMX sees its potential as a value-add for the ecosystem but highlights the importance of maintaining decentralization while enabling effective execution of DAO objectives.
From our perspective, OpCo should prioritize supporting emerging projects, enabling new entrants, and fostering innovation. Direct collaboration on incentive program development could provide significant value, making it essential to define clear pathways for engagement with builders.
Striking the right balance between flexibility and structure is key. OpCo must operate within clear frameworks that empower researchers and service providers to contribute across initiatives while avoiding excessive centralization. Its budget should align with market rates and demonstrate full justification, with performance-based KPIs ensuring accountability and transparency.
While GMX supports the need for operational capacity, success depends on OpCo’s ability to deliver measurable results, empower the ecosystem, and remain aligned with the decentralized ethos of the DAO.
We would like to see updates with clearer explanations of the following before supporting:
Hey, We took the liberty to run a SimScore report on the Opco Discussion Thread above. (Nov 19). The purpose of the report is to point out the highest ranking replies from the Forum Discussion. There were 224 opinions expressed in the forum.
For Brevity, we will limit our reply to the top 5 ranked comments.
Hey, We took the liberty to run a SimScore report on the Opco Discussion Thread above. (Nov 19). The purpose of the report is to point out the highest ranking replies from the Forum Discussion. There were 224 opinions expressed in the forum.
For Brevity, we will limit our reply to the top 5 ranked comments.
: "The proposal specifies that the OpCo would only affect operational efficiency, not the strategic goals of the DAO; however, there is a risk of centralizing decision-making if not enough transparency is given. I believe that the OAT role would be key to make this function properly so there would need to be adequate mechanisms for it to be transparent, accountable and with well-defined roles and responsibilities. It should also be subject to checks and balances, with clear guidelines, so that there is no concentration of authority that could potentially undermine the DAO’s decentralization focus. If I understood correctly, the OAT will be responsible for the OpCo to operate with adequate checks on spending, staffing, and project prioritization so it will become a major position within the DAO structure. I am not sure how complex it would be for five persons to oversight every project and maintain a clear boundary between OpCo’s role and the DAO’s mission.”
: "It is true that the structure Arbitrum DAO currently has leads to so much friction and this needs to be addressed, yet we believe that we should avoid centralization when it comes to proposal of this kind. We do recognize the OpCo comes to help and facilitate the solving of these issues, but under the new structure we see a potential centralization that at least every single proposal that has to fall under OpCo’s scope should have OpCo’s members in between the proposer and the proposal itself. That’s why we would like to know if the incorporation of Opco will be mandatory in all the processes mentioned, or if it could be optional?”
"From this, we can see that the proposal is well-intentioned, aiming to improve the operational efficiency of DAOs and enhance their attractiveness and competitiveness. However, in actual operation, if the management of OpCo is not in place or the use of funds is not transparent, resources may be wasted. Seeing the above comments, people are most concerned about the management of OpCo’s funds. The proposal plans to allocate 34 million ARBs to OpCo, of which 10 million ARBs will be released first and the remaining 24 million will be distributed gradually over the next 24 months. While the DAO can oversee OpCo, OpCo has a high degree of autonomy, particularly in recruiting and contracting personnel. This raises concerns as to whether OpCo will be able to use the funds efficiently and transparently. If the market fluctuates, will OpCo be able to operate in a stable manner?”
"We appreciate this OpCo tool finally being pushed forward since counting on a legal entity is quite valuable for the DAO and something we consider should have been part of the DAO for a while as to prevent us all from legal issues tha may arise. We like to see that the OpCo also intends to fill gaps after proposals are passed and executed, nevertheless we have certain reservations about what it seems to be a centralization of proposals if they fall under an OpCo’s mandate scope (Financial Management and Ecosystem Support). We see some other delegates have also shared this concern and so we line-up with them to manifest our preoccupation about this.”
"the Arbitrum constitution could be enhanced to authorize the Foundation or OpCo (or both) to act on the DAO’s behalf and clarify the DAO’s role in funding or indemnifying legal action. Launching an OpCo could be an opportune moment to address these gaps and define the OpCo’s role relative to the DAO.”
Today, the Devcon Recap includes this statement.
Finally, after a long day, we had a brief discussion on execution in the DAO and using OpCo. Basically, how can the DAO make sure it is putting the right people in the right places to execute the objectives the DAO defines? After ~8 hours of high-impact discussion, many were understandably low on energy, but the conversation was fruitful nonetheless. Most delegates want OpCo (1) set up with haste so Entropy will be dedicating increased resources to this initiative. Another point was that (2) OpCo should have a lot of autonomy and agency to operate on its own with its oversight layer, which is feedback that we have taken into account and differs a bit from its current state. Finally, we spoke about what (3) types of people OpCo will need in order to fill current gaps in the ecosystem.
There seems to be a disconnect between the Forum Discussion and the Devcon Recap.
Though Devcon delegates may wish for a hasty set up of Opco, the forum discussion indicates consistent high ranked concerns related to centralization and wasted funds.
Thanks @Entropy for the robust proposal.
As someone who runs a team at a foundation that facilitates the execution of DAO-approved proposals, I fully agree that an entity like OpCo is a valuable resource to the DAO.
The feedback thread is substantive so I'll keep my builds brief. In essence, I would encourage the following risk areas to be addressed:
Thanks @Entropy for the robust proposal.
As someone who runs a team at a foundation that facilitates the execution of DAO-approved proposals, I fully agree that an entity like OpCo is a valuable resource to the DAO.
The feedback thread is substantive so I'll keep my builds brief. In essence, I would encourage the following risk areas to be addressed:
Concentration of power:
Reduced incentive for well-thought proposals:
Clarity of scope & operations:
Hope these thoughts are helpful! Looking forward to seeing this proposal evolve and progress!
The following reflects the views of GMX’s Governance Committee, and is based on the combined research, evaluation, and consensus of various committee members.
The OpCo proposal is a critical step toward operationalizing the Arbitrum DAO and addressing inefficiencies. GMX sees its potential as a value-add for the ecosystem but highlights the importance of maintaining decentralization while enabling effective execution of DAO objectives.
The following reflects the views of GMX’s Governance Committee, and is based on the combined research, evaluation, and consensus of various committee members.
The OpCo proposal is a critical step toward operationalizing the Arbitrum DAO and addressing inefficiencies. GMX sees its potential as a value-add for the ecosystem but highlights the importance of maintaining decentralization while enabling effective execution of DAO objectives.
From our perspective, OpCo should prioritize supporting emerging projects, enabling new entrants, and fostering innovation. Direct collaboration on incentive program development could provide significant value, making it essential to define clear pathways for engagement with builders.
Striking the right balance between flexibility and structure is key. OpCo must operate within clear frameworks that empower researchers and service providers to contribute across initiatives while avoiding excessive centralization. Its budget should align with market rates and demonstrate full justification, with performance-based KPIs ensuring accountability and transparency.
While GMX supports the need for operational capacity, success depends on OpCo’s ability to deliver measurable results, empower the ecosystem, and remain aligned with the decentralized ethos of the DAO.
We would like to see updates with clearer explanations of the following before supporting:
Hey, We took the liberty to run a SimScore report on the Opco Discussion Thread above. (Nov 19). The purpose of the report is to point out the highest ranking replies from the Forum Discussion. There were 224 opinions expressed in the forum.
For Brevity, we will limit our reply to the top 5 ranked comments.
Hey, We took the liberty to run a SimScore report on the Opco Discussion Thread above. (Nov 19). The purpose of the report is to point out the highest ranking replies from the Forum Discussion. There were 224 opinions expressed in the forum.
For Brevity, we will limit our reply to the top 5 ranked comments.
: "The proposal specifies that the OpCo would only affect operational efficiency, not the strategic goals of the DAO; however, there is a risk of centralizing decision-making if not enough transparency is given. I believe that the OAT role would be key to make this function properly so there would need to be adequate mechanisms for it to be transparent, accountable and with well-defined roles and responsibilities. It should also be subject to checks and balances, with clear guidelines, so that there is no concentration of authority that could potentially undermine the DAO’s decentralization focus. If I understood correctly, the OAT will be responsible for the OpCo to operate with adequate checks on spending, staffing, and project prioritization so it will become a major position within the DAO structure. I am not sure how complex it would be for five persons to oversight every project and maintain a clear boundary between OpCo’s role and the DAO’s mission.”
: "It is true that the structure Arbitrum DAO currently has leads to so much friction and this needs to be addressed, yet we believe that we should avoid centralization when it comes to proposal of this kind. We do recognize the OpCo comes to help and facilitate the solving of these issues, but under the new structure we see a potential centralization that at least every single proposal that has to fall under OpCo’s scope should have OpCo’s members in between the proposer and the proposal itself. That’s why we would like to know if the incorporation of Opco will be mandatory in all the processes mentioned, or if it could be optional?”
"From this, we can see that the proposal is well-intentioned, aiming to improve the operational efficiency of DAOs and enhance their attractiveness and competitiveness. However, in actual operation, if the management of OpCo is not in place or the use of funds is not transparent, resources may be wasted. Seeing the above comments, people are most concerned about the management of OpCo’s funds. The proposal plans to allocate 34 million ARBs to OpCo, of which 10 million ARBs will be released first and the remaining 24 million will be distributed gradually over the next 24 months. While the DAO can oversee OpCo, OpCo has a high degree of autonomy, particularly in recruiting and contracting personnel. This raises concerns as to whether OpCo will be able to use the funds efficiently and transparently. If the market fluctuates, will OpCo be able to operate in a stable manner?”
"We appreciate this OpCo tool finally being pushed forward since counting on a legal entity is quite valuable for the DAO and something we consider should have been part of the DAO for a while as to prevent us all from legal issues tha may arise. We like to see that the OpCo also intends to fill gaps after proposals are passed and executed, nevertheless we have certain reservations about what it seems to be a centralization of proposals if they fall under an OpCo’s mandate scope (Financial Management and Ecosystem Support). We see some other delegates have also shared this concern and so we line-up with them to manifest our preoccupation about this.”
"the Arbitrum constitution could be enhanced to authorize the Foundation or OpCo (or both) to act on the DAO’s behalf and clarify the DAO’s role in funding or indemnifying legal action. Launching an OpCo could be an opportune moment to address these gaps and define the OpCo’s role relative to the DAO.”
Today, the Devcon Recap includes this statement.
Finally, after a long day, we had a brief discussion on execution in the DAO and using OpCo. Basically, how can the DAO make sure it is putting the right people in the right places to execute the objectives the DAO defines? After ~8 hours of high-impact discussion, many were understandably low on energy, but the conversation was fruitful nonetheless. Most delegates want OpCo (1) set up with haste so Entropy will be dedicating increased resources to this initiative. Another point was that (2) OpCo should have a lot of autonomy and agency to operate on its own with its oversight layer, which is feedback that we have taken into account and differs a bit from its current state. Finally, we spoke about what (3) types of people OpCo will need in order to fill current gaps in the ecosystem.
There seems to be a disconnect between the Forum Discussion and the Devcon Recap.
Though Devcon delegates may wish for a hasty set up of Opco, the forum discussion indicates consistent high ranked concerns related to centralization and wasted funds.
Thanks @Entropy for the robust proposal.
As someone who runs a team at a foundation that facilitates the execution of DAO-approved proposals, I fully agree that an entity like OpCo is a valuable resource to the DAO.
The feedback thread is substantive so I'll keep my builds brief. In essence, I would encourage the following risk areas to be addressed:
Thanks @Entropy for the robust proposal.
As someone who runs a team at a foundation that facilitates the execution of DAO-approved proposals, I fully agree that an entity like OpCo is a valuable resource to the DAO.
The feedback thread is substantive so I'll keep my builds brief. In essence, I would encourage the following risk areas to be addressed:
Concentration of power:
Reduced incentive for well-thought proposals:
Clarity of scope & operations:
Hope these thoughts are helpful! Looking forward to seeing this proposal evolve and progress!
We find this proposal to be a comprehensive and well-thought-out framework for establishing an operational entity that could meaningfully enhance Arbitrum's execution capabilities. The initiative is proficient in addressing current operational inefficiencies while maintaining appropriate governance oversight and control mechanisms.
The proposal shows a thorough understanding of existing limitations, particularly within the Financial Management and Ecosystem Support categories, where the lack of structured operational frameworks and clear ownership has arguably hindered effective execution. The proposed solution thoughtfully balances the need for operational efficiency with the preservation of Arbitrum's bottom-up, decentralized nature.
We find this proposal to be a comprehensive and well-thought-out framework for establishing an operational entity that could meaningfully enhance Arbitrum's execution capabilities. The initiative is proficient in addressing current operational inefficiencies while maintaining appropriate governance oversight and control mechanisms.
The proposal shows a thorough understanding of existing limitations, particularly within the Financial Management and Ecosystem Support categories, where the lack of structured operational frameworks and clear ownership has arguably hindered effective execution. The proposed solution thoughtfully balances the need for operational efficiency with the preservation of Arbitrum's bottom-up, decentralized nature.
One aspect of the proposal that could benefit from further considearation is the 30-month initial term. While it provides operational stability, it may be worth exploring interim performance review mechanisms beyond the suggested bi-annual reports.
The financial framework appears reasonable, with the 34M ARB allocation including appropriate buffers for market volatility. The vesting structure of 1M ARB every 30 days over 24 months, combined with the ability to convert some ARB to stablecoins, provides both operational stability and risk management.
We are in support of this proposal as it represents an important step forward in enhancing the ecosystem's operational capabilities while maintaining appropriate governance controls and accountability mechanisms.
Attached is SimScore Report.
Using tech that underpins data science, the consensus report has 8 clusters each with it's own priority list.
The highest priority statements are:
We find this proposal to be a comprehensive and well-thought-out framework for establishing an operational entity that could meaningfully enhance Arbitrum's execution capabilities. The initiative is proficient in addressing current operational inefficiencies while maintaining appropriate governance oversight and control mechanisms.
The proposal shows a thorough understanding of existing limitations, particularly within the Financial Management and Ecosystem Support categories, where the lack of structured operational frameworks and clear ownership has arguably hindered effective execution. The proposed solution thoughtfully balances the need for operational efficiency with the preservation of Arbitrum's bottom-up, decentralized nature.
We find this proposal to be a comprehensive and well-thought-out framework for establishing an operational entity that could meaningfully enhance Arbitrum's execution capabilities. The initiative is proficient in addressing current operational inefficiencies while maintaining appropriate governance oversight and control mechanisms.
The proposal shows a thorough understanding of existing limitations, particularly within the Financial Management and Ecosystem Support categories, where the lack of structured operational frameworks and clear ownership has arguably hindered effective execution. The proposed solution thoughtfully balances the need for operational efficiency with the preservation of Arbitrum's bottom-up, decentralized nature.
One aspect of the proposal that could benefit from further considearation is the 30-month initial term. While it provides operational stability, it may be worth exploring interim performance review mechanisms beyond the suggested bi-annual reports.
The financial framework appears reasonable, with the 34M ARB allocation including appropriate buffers for market volatility. The vesting structure of 1M ARB every 30 days over 24 months, combined with the ability to convert some ARB to stablecoins, provides both operational stability and risk management.
We are in support of this proposal as it represents an important step forward in enhancing the ecosystem's operational capabilities while maintaining appropriate governance controls and accountability mechanisms.
Attached is SimScore Report.
Using tech that underpins data science, the consensus report has 8 clusters each with it's own priority list.
The highest priority statements are:
Attached is SimScore Report.
Using tech that underpins data science, the consensus report has 8 clusters each with it's own priority list.
The highest priority statements are:
"The proposal specifies that the OpCo would only affect operational efficiency, not the strategic goals of the DAO; however, there is a risk of centralizing decision-making if not enough transparency is given. I believe that the OAT role would be key to make this function properly so there would need to be adequate mechanisms for it to be transparent, accountable and with well-defined roles and responsibilities. It should also be subject to checks and balances, with clear guidelines, so that there is no concentration of authority that could potentially undermine the DAO’s decentralization focus. If I understood correctly, the OAT will be responsible for the OpCo to operate with adequate checks on spending, staffing, and project prioritization so it will become a major position within the DAO structure. I am not sure how complex it would be for five persons to oversight every project and maintain a clear boundary between OpCo’s role and the DAO’s mission." by @Juanrah
"From this, we can see that the proposal is well-intentioned, aiming to improve the operational efficiency of DAOs and enhance their attractiveness and competitiveness. However, in actual operation, if the management of OpCo is not in place or the use of funds is not transparent, resources may be wasted. Seeing the above comments, people are most concerned about the management of OpCo’s funds. The proposal plans to allocate 34 million ARBs to OpCo, of which 10 million ARBs will be released first and the remaining 24 million will be distributed gradually over the next 24 months. While the DAO can oversee OpCo, OpCo has a high degree of autonomy, particularly in recruiting and contracting personnel. This raises concerns as to whether OpCo will be able to use the funds efficiently and transparently. If the market fluctuates, will OpCo be able to operate in a stable manner?" by @duokongcrypto
"It is true that the structure Arbitrum DAO currently has leads to so much friction and this needs to be addressed, yet we believe that we should avoid centralization when it comes to proposal of this kind. We do recognize the OpCo comes to help and facilitate the solving of these issues, but under the new structure we see a potential centralization that at least every single proposal that has to fall under OpCo’s scope should have OpCo’s members in between the proposer and the proposal itself. That’s why we would like to know if the incorporation of Opco will be mandatory in all the processes mentioned, or if it could be optional?" by @Argonaut
Main concern is centralization among many others.
Hi @immutablelawyer - The exploratory work that Entropy conducted with the Arbitrum Foundation is still in its early stages. While the legal entity will provide the DAO with necessary oversight, we believe this is not the core focus of this proposal at this stage. Rather, we believe that it should be on the mission statements and goal of the OpCo, to make sure it realizes the vision of what the DAO needs.
Attached is SimScore Report.
Using tech that underpins data science, the consensus report has 8 clusters each with it's own priority list.
The highest priority statements are:
"The proposal specifies that the OpCo would only affect operational efficiency, not the strategic goals of the DAO; however, there is a risk of centralizing decision-making if not enough transparency is given. I believe that the OAT role would be key to make this function properly so there would need to be adequate mechanisms for it to be transparent, accountable and with well-defined roles and responsibilities. It should also be subject to checks and balances, with clear guidelines, so that there is no concentration of authority that could potentially undermine the DAO’s decentralization focus. If I understood correctly, the OAT will be responsible for the OpCo to operate with adequate checks on spending, staffing, and project prioritization so it will become a major position within the DAO structure. I am not sure how complex it would be for five persons to oversight every project and maintain a clear boundary between OpCo’s role and the DAO’s mission." by @Juanrah
"From this, we can see that the proposal is well-intentioned, aiming to improve the operational efficiency of DAOs and enhance their attractiveness and competitiveness. However, in actual operation, if the management of OpCo is not in place or the use of funds is not transparent, resources may be wasted. Seeing the above comments, people are most concerned about the management of OpCo’s funds. The proposal plans to allocate 34 million ARBs to OpCo, of which 10 million ARBs will be released first and the remaining 24 million will be distributed gradually over the next 24 months. While the DAO can oversee OpCo, OpCo has a high degree of autonomy, particularly in recruiting and contracting personnel. This raises concerns as to whether OpCo will be able to use the funds efficiently and transparently. If the market fluctuates, will OpCo be able to operate in a stable manner?" by @duokongcrypto
"It is true that the structure Arbitrum DAO currently has leads to so much friction and this needs to be addressed, yet we believe that we should avoid centralization when it comes to proposal of this kind. We do recognize the OpCo comes to help and facilitate the solving of these issues, but under the new structure we see a potential centralization that at least every single proposal that has to fall under OpCo’s scope should have OpCo’s members in between the proposer and the proposal itself. That’s why we would like to know if the incorporation of Opco will be mandatory in all the processes mentioned, or if it could be optional?" by @Argonaut
Main concern is centralization among many others.
Hi @immutablelawyer - The exploratory work that Entropy conducted with the Arbitrum Foundation is still in its early stages. While the legal entity will provide the DAO with necessary oversight, we believe this is not the core focus of this proposal at this stage. Rather, we believe that it should be on the mission statements and goal of the OpCo, to make sure it realizes the vision of what the DAO needs.
LobbyFi voted Against this proposal for the reason mentioned in the rationale on making the VP available above: since the voting power was not acquired, the Against vote was cast just as it was pre-programmed for proposals where the auction is not made available.
We are maintaining our “Abstain” vote on the on-chain proposal. Although the DAO clearly needs an operational scaffolding, this proposal relies heavily on the OAT election and a single hire without a clear process or an identified candidate versed in Arbitrum DAO operations. That dependence creates too much uncertainty to support blindly.
We also remain concerned about the proposal’s broad scope. We understand the tradeoff in flexibility, but the final version remains purposefully vague despite our concerns that it lacks specific KPIs and a defined roadmap. Compounding matters, several entities—including the Arbitrum Foundation, Offchain Labs, and even the proposal’s original authors—are now publicly positioning themselves to fulfill or redefine the roles OpCo intended to occupy. If the operational scope were clearer, it would be easier to support OpCo.
We are maintaining our “Abstain” vote on the on-chain proposal. Although the DAO clearly needs an operational scaffolding, this proposal relies heavily on the OAT election and a single hire without a clear process or an identified candidate versed in Arbitrum DAO operations. That dependence creates too much uncertainty to support blindly.
We also remain concerned about the proposal’s broad scope. We understand the tradeoff in flexibility, but the final version remains purposefully vague despite our concerns that it lacks specific KPIs and a defined roadmap. Compounding matters, several entities—including the Arbitrum Foundation, Offchain Labs, and even the proposal’s original authors—are now publicly positioning themselves to fulfill or redefine the roles OpCo intended to occupy. If the operational scope were clearer, it would be easier to support OpCo.
We acknowledge the DAO’s need for sovereign operational infrastructure. However, in light of these evolving dynamics, it is difficult to see how OpCo, as currently proposed, can confidently serve that function. Consequently, we will maintain our Abstain vote.
Should the proposal pass, Gauntlet will fully support the setup and aims to be heavily involved as a delegate to support the success of OpCo. It will be critical to the DAO's success that this entity is staffed with capable and committed people.
errr... I got a bit confused by these 2 comments to be honest. so, if we would only have to choose one entity, that the delegates should look up to as the entity that will be responsible for the OpCo proposal execution, is it @Entropy or the @Arbitrum Foundation?
I voted FOR to this proposal in Tally. This is the Rationale:
We voted AGAINST as we do not believe this level of spend is necessary to achieve the objectives. We believe that spending by Arbitrum DAO has become excessive and further initiatives involving large spend should be frozen until a cleanup has taken place.
@pedrob our opinion is that OAT members should have diverse expertise such that they can generally oversee/advise the entity no matter what objectives the DAO chooses/how the entity’s mandate solidifies. An OAT that is extremely specialised on current objectives could be counterproductive, given that the DAO can vote to change its objectives at any time, and these don’t necessarily have to be similar in any way to the previous ones.
Just my 2cents since I am ex-Lido and know the dYdX sub-DAO very well (my husband has been with it since inception & and is the current GM):
Voting FOR this proposal
For not because this proposal is perfect, if anything the fact that Entropy was tasked with stewarding this proposal and then basically ran chicken away from it shows it was far from perfect. It had a bloated budget and created as sense that this would simply superseed all DAO activity, which I think is far from the truth.
Voting FOR this proposal
For not because this proposal is perfect, if anything the fact that Entropy was tasked with stewarding this proposal and then basically ran chicken away from it shows it was far from perfect. It had a bloated budget and created as sense that this would simply superseed all DAO activity, which I think is far from the truth.
The DAO though doesn't have the option of ignoring the challenges in front of it. We need to ensure that now and in the future the ability to marshal resources to to meet our growth in terms of product, strategy, investment, delivery and oversight.
Setting up OpCo is at this stage only a shell. How far and what we want it to do will be fully subject to oversight electing a council to oversee its activity and especially its setup. The mandates may or may not have been fully established but programs like LTIPP, GCP, STEP show that as a DAO one thing we are capable of is electing and putting in place the oversight needed.
With OpCo we have options, and that alone can help ensure that contributors, vendors, administrators of programs have to work with the DAO that is not helpless to do anything itself and stop contracting with us as if we are in a position of weakness.
If OpCo doesn't pass is the DAO fatally damaged? Nope, it just means that not today but in the future when we want to move quickly we will have to take more time and may not have had time to work out the hiccups that will delay us at that stage. We will continue to establish programs, and be reliant on external parties, life will go on but we just won't be as geared up.
The PBC Governance team is voting FOR establishing the OpCo on Tally.
The proposal is just about to hit quorum onchain (with ~8 hours remaining), so we're throwing our two cents in here to help it along.
The PBC Governance team is voting FOR establishing the OpCo on Tally.
The proposal is just about to hit quorum onchain (with ~8 hours remaining), so we're throwing our two cents in here to help it along.
There's been a clear vibe shift in the DAO these past few weeks, and we believe that the OpCo can help keep the fire going. Having an aligned entity staffed by full-time contributors can really help execute where we've struggled before. It's time for the DAO to cook.
This proposal successfully passed the onchain voting stage last week, and we would like to share a few updates to provide transparency and clarity to the community.
First and foremost, we want to emphasize Entropy’s commitment to advancing OpCo and putting every ounce of our ability into ensuring its success despite our no vote due to the recent changes within the DAO. We are closely collaborating with the Arbitrum Foundation to ensure the setup and election processes run smoothly.
This proposal successfully passed the onchain voting stage last week, and we would like to share a few updates to provide transparency and clarity to the community.
First and foremost, we want to emphasize Entropy’s commitment to advancing OpCo and putting every ounce of our ability into ensuring its success despite our no vote due to the recent changes within the DAO. We are closely collaborating with the Arbitrum Foundation to ensure the setup and election processes run smoothly.
We still believe it is extremely important to add further scope to OpCo’s mandate, which we are currently working on with several parties. That said, there is no reason that these activities can’t be done in tandem.
The plan is to initiate the Oversight and Transparency Committee Application & Nomination period on Monday, February 24th. Entropy will post the process documents and application form this week to get the ball rolling.
LobbyFi voted Against this proposal for the reason mentioned in the rationale on making the VP available above: since the voting power was not acquired, the Against vote was cast just as it was pre-programmed for proposals where the auction is not made available.
We are maintaining our “Abstain” vote on the on-chain proposal. Although the DAO clearly needs an operational scaffolding, this proposal relies heavily on the OAT election and a single hire without a clear process or an identified candidate versed in Arbitrum DAO operations. That dependence creates too much uncertainty to support blindly.
We also remain concerned about the proposal’s broad scope. We understand the tradeoff in flexibility, but the final version remains purposefully vague despite our concerns that it lacks specific KPIs and a defined roadmap. Compounding matters, several entities—including the Arbitrum Foundation, Offchain Labs, and even the proposal’s original authors—are now publicly positioning themselves to fulfill or redefine the roles OpCo intended to occupy. If the operational scope were clearer, it would be easier to support OpCo.
We are maintaining our “Abstain” vote on the on-chain proposal. Although the DAO clearly needs an operational scaffolding, this proposal relies heavily on the OAT election and a single hire without a clear process or an identified candidate versed in Arbitrum DAO operations. That dependence creates too much uncertainty to support blindly.
We also remain concerned about the proposal’s broad scope. We understand the tradeoff in flexibility, but the final version remains purposefully vague despite our concerns that it lacks specific KPIs and a defined roadmap. Compounding matters, several entities—including the Arbitrum Foundation, Offchain Labs, and even the proposal’s original authors—are now publicly positioning themselves to fulfill or redefine the roles OpCo intended to occupy. If the operational scope were clearer, it would be easier to support OpCo.
We acknowledge the DAO’s need for sovereign operational infrastructure. However, in light of these evolving dynamics, it is difficult to see how OpCo, as currently proposed, can confidently serve that function. Consequently, we will maintain our Abstain vote.
Should the proposal pass, Gauntlet will fully support the setup and aims to be heavily involved as a delegate to support the success of OpCo. It will be critical to the DAO's success that this entity is staffed with capable and committed people.
errr... I got a bit confused by these 2 comments to be honest. so, if we would only have to choose one entity, that the delegates should look up to as the entity that will be responsible for the OpCo proposal execution, is it @Entropy or the @Arbitrum Foundation?
I voted FOR to this proposal in Tally. This is the Rationale:
We voted AGAINST as we do not believe this level of spend is necessary to achieve the objectives. We believe that spending by Arbitrum DAO has become excessive and further initiatives involving large spend should be frozen until a cleanup has taken place.
@pedrob our opinion is that OAT members should have diverse expertise such that they can generally oversee/advise the entity no matter what objectives the DAO chooses/how the entity’s mandate solidifies. An OAT that is extremely specialised on current objectives could be counterproductive, given that the DAO can vote to change its objectives at any time, and these don’t necessarily have to be similar in any way to the previous ones.
Just my 2cents since I am ex-Lido and know the dYdX sub-DAO very well (my husband has been with it since inception & and is the current GM):
Voting FOR this proposal
For not because this proposal is perfect, if anything the fact that Entropy was tasked with stewarding this proposal and then basically ran chicken away from it shows it was far from perfect. It had a bloated budget and created as sense that this would simply superseed all DAO activity, which I think is far from the truth.
Voting FOR this proposal
For not because this proposal is perfect, if anything the fact that Entropy was tasked with stewarding this proposal and then basically ran chicken away from it shows it was far from perfect. It had a bloated budget and created as sense that this would simply superseed all DAO activity, which I think is far from the truth.
The DAO though doesn't have the option of ignoring the challenges in front of it. We need to ensure that now and in the future the ability to marshal resources to to meet our growth in terms of product, strategy, investment, delivery and oversight.
Setting up OpCo is at this stage only a shell. How far and what we want it to do will be fully subject to oversight electing a council to oversee its activity and especially its setup. The mandates may or may not have been fully established but programs like LTIPP, GCP, STEP show that as a DAO one thing we are capable of is electing and putting in place the oversight needed.
With OpCo we have options, and that alone can help ensure that contributors, vendors, administrators of programs have to work with the DAO that is not helpless to do anything itself and stop contracting with us as if we are in a position of weakness.
If OpCo doesn't pass is the DAO fatally damaged? Nope, it just means that not today but in the future when we want to move quickly we will have to take more time and may not have had time to work out the hiccups that will delay us at that stage. We will continue to establish programs, and be reliant on external parties, life will go on but we just won't be as geared up.
The PBC Governance team is voting FOR establishing the OpCo on Tally.
The proposal is just about to hit quorum onchain (with ~8 hours remaining), so we're throwing our two cents in here to help it along.
The PBC Governance team is voting FOR establishing the OpCo on Tally.
The proposal is just about to hit quorum onchain (with ~8 hours remaining), so we're throwing our two cents in here to help it along.
There's been a clear vibe shift in the DAO these past few weeks, and we believe that the OpCo can help keep the fire going. Having an aligned entity staffed by full-time contributors can really help execute where we've struggled before. It's time for the DAO to cook.
This proposal successfully passed the onchain voting stage last week, and we would like to share a few updates to provide transparency and clarity to the community.
First and foremost, we want to emphasize Entropy’s commitment to advancing OpCo and putting every ounce of our ability into ensuring its success despite our no vote due to the recent changes within the DAO. We are closely collaborating with the Arbitrum Foundation to ensure the setup and election processes run smoothly.
This proposal successfully passed the onchain voting stage last week, and we would like to share a few updates to provide transparency and clarity to the community.
First and foremost, we want to emphasize Entropy’s commitment to advancing OpCo and putting every ounce of our ability into ensuring its success despite our no vote due to the recent changes within the DAO. We are closely collaborating with the Arbitrum Foundation to ensure the setup and election processes run smoothly.
We still believe it is extremely important to add further scope to OpCo’s mandate, which we are currently working on with several parties. That said, there is no reason that these activities can’t be done in tandem.
The plan is to initiate the Oversight and Transparency Committee Application & Nomination period on Monday, February 24th. Entropy will post the process documents and application form this week to get the ball rolling.
Just my 2cents since I am ex-Lido and know the dYdX sub-DAO very well (my husband has been with it since inception & and is the current GM):
Just wanted to give this clarification in case other delegates read this and still need to vote.
gm!
Now that the OpCo has been approved, would it make sense to wait before moving forward with nominations and elections until the discussion on the DAO's strategic objectives is concluded? The discussion on short- and medium-term objectives should impact the profiles being nominated and voted on by the DAO for the OAT. Just a friendly suggestion
We vote FOR the proposal on Tally.
Even after acknowledging that the Foundation steps up into a more active role in the DAO operations and Entropy's updated stance on the OpCo, we still believe the strategy execution is an important function of the DAO and if correctly managed, it will make a significant impact in tandem with Entropy and the Foundation as well as critical service providers and delegates.
After much consideration, I have decided to vote FOR this proposal, as there are clear benefits for its implementation, and it might kickstart a new era of positive and swift movement for Arbitrum.
One of the key elements that made me lean to make this decision has to do with the need to employ people working full time for the DAO, as there are limitations to what we delegates can do and the speed at which we can achieve certain objectives that can be more easily tackled by a more professional and specialized organization.
After much consideration, I have decided to vote FOR this proposal, as there are clear benefits for its implementation, and it might kickstart a new era of positive and swift movement for Arbitrum.
One of the key elements that made me lean to make this decision has to do with the need to employ people working full time for the DAO, as there are limitations to what we delegates can do and the speed at which we can achieve certain objectives that can be more easily tackled by a more professional and specialized organization.
I believe that the probable benefits of passing this proposal, given the protections that are also part of it regarding the performance and objectives of OpCo, are far more enticing than its potential drawbacks (which do exist).
This is a real tough one for me. I wanted to vote yes and no several different times.
In general, I like the spirit of this initiative, it aspires to solve real problems. I think it would level up our professionalism for sure.
This is a real tough one for me. I wanted to vote yes and no several different times.
In general, I like the spirit of this initiative, it aspires to solve real problems. I think it would level up our professionalism for sure.
However, on the other hand this is a lot of extra cost for a lot of redundant effort a $12M initiative probably could be a little more structured. Entropy, ADCP and ARDC fulfill a lot of these needs and if the Foundation is coming in to take a more active role, I could see them filling the rest of the coordination gaps. Will OpCo work to coordinate all these parties...? Maybe. But the scope is broad and vague.
Also, dumping ~25M ARB on the market right now, while i'm sure the markets can handle it, sends a pretty bad signal. Is it worth it?
This is what I ask myself... but in the end, the foundation supports it, and we need a major push right now so:
This is an important moment in Arbitrum history, we need to turn the tide, we used to dominate the L2 space by a wide margin, but no longer. Base is eating our lunch, and there are more rollups coming with some competitive differences. If we have the Foundation, Entropy and OpCo, making a push right now, we can change the momentum, and bring us back into dominance.
It is not a moment to rest on our laurels. LFG.
Voted Against: It took me quite some time to wrap my thoughts around this proposal. In general, I fully agree to set up an entity that would execute for the DAO. I am sure this would result in much more efficient operations. But based on how the proposal is structured, I decided to vote against it. I don't like that the OpCo proposal is set for such a long period (2+ years).
Since it's that long, the budget is also significant (30M ARB). The proposal already plans to hire 12 full-time employees (besides OAT members) from the start. This kind of approach reminds me of government-funded agencies or something. A big concern for me is also about the "off switch." In case things don't turn out as we expect, will we really terminate this? Will we fire people that we worked alongside for the last 2 years? This could become a mess for all of us.
Voted Against: It took me quite some time to wrap my thoughts around this proposal. In general, I fully agree to set up an entity that would execute for the DAO. I am sure this would result in much more efficient operations. But based on how the proposal is structured, I decided to vote against it. I don't like that the OpCo proposal is set for such a long period (2+ years).
Since it's that long, the budget is also significant (30M ARB). The proposal already plans to hire 12 full-time employees (besides OAT members) from the start. This kind of approach reminds me of government-funded agencies or something. A big concern for me is also about the "off switch." In case things don't turn out as we expect, will we really terminate this? Will we fire people that we worked alongside for the last 2 years? This could become a mess for all of us.
The argument here is that with a big treasury, we need to make big moves. I disagree. We do have a big treasury, but the DAO space is still very early and inexperienced. We need to experiment, and we do that by staying lean and agile. I support the idea of OpCo, but not at this size.
After hearing the last call i decided to keep my stance and vote again "for" in tally. I still belive the OpCo will have a greater benefit than drawbacks.
We maintain our earlier stance and have voted FOR OpCo on Tally https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/88?u=castlecapital
I voted FOR this proposal on Tally. I believe the DAO needs a fully-empowered, fully-aligned organization in place to drive forward the (many) initiatives that are difficult to execute via decentralized governance. I'm excited about the Arbitrum Foundation stepping up to take on a larger role, but I believe OpCo is still needed.
We are voting “AGAINST” the proposal, for the following reasons:
We are voting “AGAINST” the proposal, for the following reasons:
We know that Arbitrum needs to improve its efficiency and there are frictions in doing this in a DAO. However, if the option is to increase centralization in order to gradually decentralize, this proposal could lead to more risks for the DAO, consuming its resources (U$15M) in a risky experiment for the organization.
For those who are curious, we've studied models to better understand how the structure of the entities/companies that DAOs have works: • The dYdX - https://www.dydxopsdao.com/about • Lido - https://research.lido.fi/t/organize-the-lido-alliance-program-as-a-lido-dao-adjacent-borg/8173
I see that they are necessary and can really help. But I found the cost of the proposal very high. Despite this, we understand why the proposal was generally well received by the delegates.
I am voting FOR this proposal in Tally. I respect Entropy’s concerns about overlapping with the Foundation’s evolving role, but I believe the OpCo’s benefits will complement existing initiatives for control.
OpCo is expected to work closely with Offchain Labs as well as the Arbitrum Foundation to ensure that scopes of work do not overlap.
I am voting FOR this proposal in Tally. I respect Entropy’s concerns about overlapping with the Foundation’s evolving role, but I believe the OpCo’s benefits will complement existing initiatives for control.
OpCo is expected to work closely with Offchain Labs as well as the Arbitrum Foundation to ensure that scopes of work do not overlap.
As I mentioned earlier, I think that the OAT’s oversight is crucial for the OpCo to operate within the boundaries of the DAO’s oversight. The proposal also has strong safeguards in place, if OpCo isn't working well or becomes unnecessary, the DAO can adjust its role or shut it down completely.
The DAO will have the capability to clawback OpCo’s funding at any time.
I also consider the safeguards that are in place regarding fund management as an important part of the proposal.
If a monthly drawdown exceeds $500K but is below $1.5M, the executive-equivalent employees must get approval from the OAT before accessing the funds.
About the budget size, I agree it is a valid concern, but the need for institutionalization and bringing structure to the DAO's operations justifies this investment in the mid to long term.
DAOplomats is voting FOR this proposal on Tally.
We initially supported this initiative during the temp check and we are maintaining our support during the onchain vote.
Given that the proposal has not undergone substantial changes since the temperature check, I am maintaining my support and voting in favor on Tally for the same reasons as previously stated (https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/101)
I’m voting AGAINST this proposal. Given the author’s change in stance, I don’t feel confident moving forward with it.
I'm voting against OpCo on Tally, my position hasn't changed much since temp-check:
On Centralization vs. Decentralization: One of the core strengths of DAOs is their ability to minimize gatekeepers and trusted intermediaries. As envisioned, OpCo could become a gatekeeper, interposing itself between the DAO’s broader community and potential contributors. While the DAO retains nominal authority, OpCo might end up influencing who gets contracts and which initiatives progress. This creates a power structure that’s less open, less trust-minimized, and potentially more susceptible to the sway of a few individuals.
Censorship Resistance and Legal Attack Vectors: Introducing a legal wrapper around DAO operations inherently broadens the attack surface. Under traditional legal pressures, OpCo could be compelled to censor initiatives, freeze funds, or discriminate against certain contributors. One of the great benefits of a permissionless DAO is its built-in resilience against such censorship. By contrast, a legal entity is susceptible to the full force of conventional legal and political pressure, undermining the censorship resistance and sovereignty that define the DAO ethos.
Innovation vs. Operational Efficiency: While supporters might argue that OpCo would bring streamlined operations, attract top talent, and ensure continuity, these benefits come at the cost of layering on a traditional corporate model. Although efficiency may improve in the short term, we risk sacrificing the long-term innovation and permissionless participation that are fundamental to the DAO’s identity. Encouraging everyone to pass through a single operational hub could stifle the very qualities that make DAOs so powerful.
Conclusion: As a lunarpunk and a staunch advocate for trust minimization and decentralization, I see this proposal as introducing considerable centralization risks and censorship vulnerabilities. Although there may be operational advantages, I believe the DAO should pursue solutions rooted in cryptographic guarantees and decentralized frameworks rather than reverting to the familiar (but ultimately restrictive) structures of traditional entities. For these reasons, I will be voting against this proposal on Snapshot.
gm, voted FOR on Tally as well. The recent activities and conversations in the DAO convinced me even more that a more structured approach within the DAO can speed up the ecosystem's progress.
We need people who are fully focused on executing and delivering results for Arbitrum -- the OpCo is a great shot at that.
Voting AGAINST this proposal on Tally
Reasons:
Voting AGAINST this proposal on Tally
Reasons:
Given these developments, and especially the fact that the original proposer of this - Entropy changed their position to be against this proposal, we are firmly still against this proposal.
We recognize the need for an Opco but it seems that role may be able to handled in a more streamlined way through the participation of Entropy and AF, and this proposal may not be the best way to handle it.
Our main concerns with OpCo, outside of the aforementioned, surround being weary of its potential to attract the right talent that will lead it to being an impactful initiative instead of another competing foundation with bloat, lacking executors who drive the DAO in the right direction.
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.
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.
Moving from Snapshot to Tally, and noting the budget adjustment based on the current state of the market, we maintain our position, trusting in OpCo's ability to effectively manage the outlined responsibilities.
As @krst mentioned:
For the second question, we expect Entropy and the Arbitrum Foundation to step in and help source the right people. Since the newly formed and DAO-elected OAT will hire for the executive-level positions, we want to ensure that they will have access to a solid pipeline of candidates.
The selection of the team, especially the OAT members, is critical. We agree with the suggestion that Entropy and the Arbitrum Foundation can actively help find the right people for these roles.
It's important that the team formed for 30 months as mentioned in the proposal should be capable, disciplined, and determined enough to support the growth of Arbitrum until that time and not to drop in between.
We believe OpCo's strategic management and operational capabilities could greatly enhance our ability to prioritize and deploy new projects, making our ecosystem stronger and more dynamic. We trust this initiative will keep power decentralized, protecting the future of Arbitrum.
Entropy has voted AGAINST on OpCo.
To start, some context might be helpful. OpCo was an idea that started at ETH Denver last year. In short, it was a solution to the problem that was the DAO not having full-time contributors. DK followed up by proposing a high-level vision for OpCo that got many excited about its value for the DAO, a second and more active Foundation. Following DK's proposal, and Entropy's funding, Entropy was asked by many delegates to drive the initiative forward in an executable and optimal way. We believe we have done this and fulfilled our original mandate as a facilitator for the initiative and a tool that drives forward the items that the DAO prioritizes. That said, it is our opinion the need for the OpCo is now overstated and likely to even lead to operational friction and unnecessary costs. With the Arbitrum Foundation committing to taking an active role in governance and Entropy Advisors doing the same, the landscape has completely changed from this time last year. Our main concerns with OpCo, outside of the aforementioned, surround being weary of its potential to attract the right talent that will lead it to being an impactful initiative instead of another competing foundation with bloat, lacking executors who drive the DAO in the right direction. We believe with the structure as proposed, OpCo is a safe experiment (although with some sunk cost), given if the 3 members elected to the OAT cannot find a talented lead, the entity can be stopped even after its funding.
Just my 2cents since I am ex-Lido and know the dYdX sub-DAO very well (my husband has been with it since inception & and is the current GM):
Just wanted to give this clarification in case other delegates read this and still need to vote.
gm!
Now that the OpCo has been approved, would it make sense to wait before moving forward with nominations and elections until the discussion on the DAO's strategic objectives is concluded? The discussion on short- and medium-term objectives should impact the profiles being nominated and voted on by the DAO for the OAT. Just a friendly suggestion
We vote FOR the proposal on Tally.
Even after acknowledging that the Foundation steps up into a more active role in the DAO operations and Entropy's updated stance on the OpCo, we still believe the strategy execution is an important function of the DAO and if correctly managed, it will make a significant impact in tandem with Entropy and the Foundation as well as critical service providers and delegates.
After much consideration, I have decided to vote FOR this proposal, as there are clear benefits for its implementation, and it might kickstart a new era of positive and swift movement for Arbitrum.
One of the key elements that made me lean to make this decision has to do with the need to employ people working full time for the DAO, as there are limitations to what we delegates can do and the speed at which we can achieve certain objectives that can be more easily tackled by a more professional and specialized organization.
After much consideration, I have decided to vote FOR this proposal, as there are clear benefits for its implementation, and it might kickstart a new era of positive and swift movement for Arbitrum.
One of the key elements that made me lean to make this decision has to do with the need to employ people working full time for the DAO, as there are limitations to what we delegates can do and the speed at which we can achieve certain objectives that can be more easily tackled by a more professional and specialized organization.
I believe that the probable benefits of passing this proposal, given the protections that are also part of it regarding the performance and objectives of OpCo, are far more enticing than its potential drawbacks (which do exist).
This is a real tough one for me. I wanted to vote yes and no several different times.
In general, I like the spirit of this initiative, it aspires to solve real problems. I think it would level up our professionalism for sure.
This is a real tough one for me. I wanted to vote yes and no several different times.
In general, I like the spirit of this initiative, it aspires to solve real problems. I think it would level up our professionalism for sure.
However, on the other hand this is a lot of extra cost for a lot of redundant effort a $12M initiative probably could be a little more structured. Entropy, ADCP and ARDC fulfill a lot of these needs and if the Foundation is coming in to take a more active role, I could see them filling the rest of the coordination gaps. Will OpCo work to coordinate all these parties...? Maybe. But the scope is broad and vague.
Also, dumping ~25M ARB on the market right now, while i'm sure the markets can handle it, sends a pretty bad signal. Is it worth it?
This is what I ask myself... but in the end, the foundation supports it, and we need a major push right now so:
This is an important moment in Arbitrum history, we need to turn the tide, we used to dominate the L2 space by a wide margin, but no longer. Base is eating our lunch, and there are more rollups coming with some competitive differences. If we have the Foundation, Entropy and OpCo, making a push right now, we can change the momentum, and bring us back into dominance.
It is not a moment to rest on our laurels. LFG.
Voted Against: It took me quite some time to wrap my thoughts around this proposal. In general, I fully agree to set up an entity that would execute for the DAO. I am sure this would result in much more efficient operations. But based on how the proposal is structured, I decided to vote against it. I don't like that the OpCo proposal is set for such a long period (2+ years).
Since it's that long, the budget is also significant (30M ARB). The proposal already plans to hire 12 full-time employees (besides OAT members) from the start. This kind of approach reminds me of government-funded agencies or something. A big concern for me is also about the "off switch." In case things don't turn out as we expect, will we really terminate this? Will we fire people that we worked alongside for the last 2 years? This could become a mess for all of us.
Voted Against: It took me quite some time to wrap my thoughts around this proposal. In general, I fully agree to set up an entity that would execute for the DAO. I am sure this would result in much more efficient operations. But based on how the proposal is structured, I decided to vote against it. I don't like that the OpCo proposal is set for such a long period (2+ years).
Since it's that long, the budget is also significant (30M ARB). The proposal already plans to hire 12 full-time employees (besides OAT members) from the start. This kind of approach reminds me of government-funded agencies or something. A big concern for me is also about the "off switch." In case things don't turn out as we expect, will we really terminate this? Will we fire people that we worked alongside for the last 2 years? This could become a mess for all of us.
The argument here is that with a big treasury, we need to make big moves. I disagree. We do have a big treasury, but the DAO space is still very early and inexperienced. We need to experiment, and we do that by staying lean and agile. I support the idea of OpCo, but not at this size.
After hearing the last call i decided to keep my stance and vote again "for" in tally. I still belive the OpCo will have a greater benefit than drawbacks.
We maintain our earlier stance and have voted FOR OpCo on Tally https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/88?u=castlecapital
I voted FOR this proposal on Tally. I believe the DAO needs a fully-empowered, fully-aligned organization in place to drive forward the (many) initiatives that are difficult to execute via decentralized governance. I'm excited about the Arbitrum Foundation stepping up to take on a larger role, but I believe OpCo is still needed.
We are voting “AGAINST” the proposal, for the following reasons:
We are voting “AGAINST” the proposal, for the following reasons:
We know that Arbitrum needs to improve its efficiency and there are frictions in doing this in a DAO. However, if the option is to increase centralization in order to gradually decentralize, this proposal could lead to more risks for the DAO, consuming its resources (U$15M) in a risky experiment for the organization.
For those who are curious, we've studied models to better understand how the structure of the entities/companies that DAOs have works: • The dYdX - https://www.dydxopsdao.com/about • Lido - https://research.lido.fi/t/organize-the-lido-alliance-program-as-a-lido-dao-adjacent-borg/8173
I see that they are necessary and can really help. But I found the cost of the proposal very high. Despite this, we understand why the proposal was generally well received by the delegates.
I am voting FOR this proposal in Tally. I respect Entropy’s concerns about overlapping with the Foundation’s evolving role, but I believe the OpCo’s benefits will complement existing initiatives for control.
OpCo is expected to work closely with Offchain Labs as well as the Arbitrum Foundation to ensure that scopes of work do not overlap.
I am voting FOR this proposal in Tally. I respect Entropy’s concerns about overlapping with the Foundation’s evolving role, but I believe the OpCo’s benefits will complement existing initiatives for control.
OpCo is expected to work closely with Offchain Labs as well as the Arbitrum Foundation to ensure that scopes of work do not overlap.
As I mentioned earlier, I think that the OAT’s oversight is crucial for the OpCo to operate within the boundaries of the DAO’s oversight. The proposal also has strong safeguards in place, if OpCo isn't working well or becomes unnecessary, the DAO can adjust its role or shut it down completely.
The DAO will have the capability to clawback OpCo’s funding at any time.
I also consider the safeguards that are in place regarding fund management as an important part of the proposal.
If a monthly drawdown exceeds $500K but is below $1.5M, the executive-equivalent employees must get approval from the OAT before accessing the funds.
About the budget size, I agree it is a valid concern, but the need for institutionalization and bringing structure to the DAO's operations justifies this investment in the mid to long term.
DAOplomats is voting FOR this proposal on Tally.
We initially supported this initiative during the temp check and we are maintaining our support during the onchain vote.
Given that the proposal has not undergone substantial changes since the temperature check, I am maintaining my support and voting in favor on Tally for the same reasons as previously stated (https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/101)
I’m voting AGAINST this proposal. Given the author’s change in stance, I don’t feel confident moving forward with it.
I'm voting against OpCo on Tally, my position hasn't changed much since temp-check:
On Centralization vs. Decentralization: One of the core strengths of DAOs is their ability to minimize gatekeepers and trusted intermediaries. As envisioned, OpCo could become a gatekeeper, interposing itself between the DAO’s broader community and potential contributors. While the DAO retains nominal authority, OpCo might end up influencing who gets contracts and which initiatives progress. This creates a power structure that’s less open, less trust-minimized, and potentially more susceptible to the sway of a few individuals.
Censorship Resistance and Legal Attack Vectors: Introducing a legal wrapper around DAO operations inherently broadens the attack surface. Under traditional legal pressures, OpCo could be compelled to censor initiatives, freeze funds, or discriminate against certain contributors. One of the great benefits of a permissionless DAO is its built-in resilience against such censorship. By contrast, a legal entity is susceptible to the full force of conventional legal and political pressure, undermining the censorship resistance and sovereignty that define the DAO ethos.
Innovation vs. Operational Efficiency: While supporters might argue that OpCo would bring streamlined operations, attract top talent, and ensure continuity, these benefits come at the cost of layering on a traditional corporate model. Although efficiency may improve in the short term, we risk sacrificing the long-term innovation and permissionless participation that are fundamental to the DAO’s identity. Encouraging everyone to pass through a single operational hub could stifle the very qualities that make DAOs so powerful.
Conclusion: As a lunarpunk and a staunch advocate for trust minimization and decentralization, I see this proposal as introducing considerable centralization risks and censorship vulnerabilities. Although there may be operational advantages, I believe the DAO should pursue solutions rooted in cryptographic guarantees and decentralized frameworks rather than reverting to the familiar (but ultimately restrictive) structures of traditional entities. For these reasons, I will be voting against this proposal on Snapshot.
gm, voted FOR on Tally as well. The recent activities and conversations in the DAO convinced me even more that a more structured approach within the DAO can speed up the ecosystem's progress.
We need people who are fully focused on executing and delivering results for Arbitrum -- the OpCo is a great shot at that.
Voting AGAINST this proposal on Tally
Reasons:
Voting AGAINST this proposal on Tally
Reasons:
Given these developments, and especially the fact that the original proposer of this - Entropy changed their position to be against this proposal, we are firmly still against this proposal.
We recognize the need for an Opco but it seems that role may be able to handled in a more streamlined way through the participation of Entropy and AF, and this proposal may not be the best way to handle it.
Our main concerns with OpCo, outside of the aforementioned, surround being weary of its potential to attract the right talent that will lead it to being an impactful initiative instead of another competing foundation with bloat, lacking executors who drive the DAO in the right direction.
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.
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.
Moving from Snapshot to Tally, and noting the budget adjustment based on the current state of the market, we maintain our position, trusting in OpCo's ability to effectively manage the outlined responsibilities.
As @krst mentioned:
For the second question, we expect Entropy and the Arbitrum Foundation to step in and help source the right people. Since the newly formed and DAO-elected OAT will hire for the executive-level positions, we want to ensure that they will have access to a solid pipeline of candidates.
The selection of the team, especially the OAT members, is critical. We agree with the suggestion that Entropy and the Arbitrum Foundation can actively help find the right people for these roles.
It's important that the team formed for 30 months as mentioned in the proposal should be capable, disciplined, and determined enough to support the growth of Arbitrum until that time and not to drop in between.
We believe OpCo's strategic management and operational capabilities could greatly enhance our ability to prioritize and deploy new projects, making our ecosystem stronger and more dynamic. We trust this initiative will keep power decentralized, protecting the future of Arbitrum.
Entropy has voted AGAINST on OpCo.
To start, some context might be helpful. OpCo was an idea that started at ETH Denver last year. In short, it was a solution to the problem that was the DAO not having full-time contributors. DK followed up by proposing a high-level vision for OpCo that got many excited about its value for the DAO, a second and more active Foundation. Following DK's proposal, and Entropy's funding, Entropy was asked by many delegates to drive the initiative forward in an executable and optimal way. We believe we have done this and fulfilled our original mandate as a facilitator for the initiative and a tool that drives forward the items that the DAO prioritizes. That said, it is our opinion the need for the OpCo is now overstated and likely to even lead to operational friction and unnecessary costs. With the Arbitrum Foundation committing to taking an active role in governance and Entropy Advisors doing the same, the landscape has completely changed from this time last year. Our main concerns with OpCo, outside of the aforementioned, surround being weary of its potential to attract the right talent that will lead it to being an impactful initiative instead of another competing foundation with bloat, lacking executors who drive the DAO in the right direction. We believe with the structure as proposed, OpCo is a safe experiment (although with some sunk cost), given if the 3 members elected to the OAT cannot find a talented lead, the entity can be stopped even after its funding.
Entropy has voted AGAINST on OpCo.
To start, some context might be helpful. OpCo was an idea that started at ETH Denver last year. In short, it was a solution to the problem that was the DAO not having full-time contributors. DK followed up by proposing a high-level vision for OpCo that got many excited about its value for the DAO, a second and more active Foundation. Following DK's proposal, and Entropy's funding, Entropy was asked by many delegates to drive the initiative forward in an executable and optimal way. We believe we have done this and fulfilled our original mandate as a facilitator for the initiative and a tool that drives forward the items that the DAO prioritizes. That said, it is our opinion the need for the OpCo is now overstated and likely to even lead to operational friction and unnecessary costs. With the Arbitrum Foundation committing to taking an active role in governance and Entropy Advisors doing the same, the landscape has completely changed from this time last year. Our main concerns with OpCo, outside of the aforementioned, surround being weary of its potential to attract the right talent that will lead it to being an impactful initiative instead of another competing foundation with bloat, lacking executors who drive the DAO in the right direction. We believe with the structure as proposed, OpCo is a safe experiment (although with some sunk cost), given if the 3 members elected to the OAT cannot find a talented lead, the entity can be stopped even after its funding.
We think it is important to mention that Entropy does have a COI. We believe that in tandem with a now more hands-on Foundation, Entropy can achieve many of the values and purposes of OpCo in a leaner manner, without the DAO having to take on additional risk in the form of, e.g., finding leaders for the entity. Over the coming weeks, we will start to synergize more heavily with Arbitrum-aligned teams, using our role as a more opinionated leader in the DAO rather than solely as a tool for delegates.
This proposal has some good ideas, but there are important concerns. I am agree that this plan could make the DAO stronger, but also the creation of OpCo also adds many layers of management, which may slow down decision-making instead of making it more efficient.
There is no clear way for the DAO to recover its funds if OpCo does not work as expected.
This proposal has some good ideas, but there are important concerns. I am agree that this plan could make the DAO stronger, but also the creation of OpCo also adds many layers of management, which may slow down decision-making instead of making it more efficient.
There is no clear way for the DAO to recover its funds if OpCo does not work as expected.
30 million ARB is a big amount, and most of it goes to operational costs instead of investments that can bring value back to the DAO. It is important to focus more on investments rather than just covering salaries, administration, and other expenses. Also, there is no clear explanation of how the DAO can earn back the 30M ARB. Will OpCo generate revenue, or will it just spend funds without returning value?
To be ohnest I think it would be better if the budget of proposal will be reduced.
Against. Arbitrum DAO is the most active DAO, with a large number of innovations, including many grant requests. Do you really need a three-year plan to build a highly efficient Arbitrum DAO? In reality, this just creates inefficiency.
Your plan involves a huge budget, but I don’t see a more effective approach. This is a waste.
As in @web3citizenxyz representation. Voting FOR, without retroactive in this proposal. Below the rationale:
I am also voting FOR this proposal, given that Entropy has shown value with first the AF grant received, then their DAO proposal and all of this would now get merged into OpCo. I hope my concerns about overhiring and employees trying to create work to appear engaged don't come to pass.
As things are right now, and if we want to be objective, the DAO isn’t a great partner to work with. Even the smallest proposal must overcome many hurdles to pass, and that’s a deterrent for many projects wishing to collaborate with or work for the DAO.
I am also voting FOR this proposal, given that Entropy has shown value with first the AF grant received, then their DAO proposal and all of this would now get merged into OpCo. I hope my concerns about overhiring and employees trying to create work to appear engaged don't come to pass.
As things are right now, and if we want to be objective, the DAO isn’t a great partner to work with. Even the smallest proposal must overcome many hurdles to pass, and that’s a deterrent for many projects wishing to collaborate with or work for the DAO.
I can maybe shed some light here as one of those that made a proposal to the DAO, with 3 points that OpCo can make the process easier for folks like me
My biggest hurdle (in terms of time) was actually figuring out the program manager selection for STEP and its monitoring, not doing the actual work with the committee in selecting products. With OpCo, my wish would be that proposal writers can execute what they need within a fixed timeframe, with details of implementation and monitoring thereafter taken care of by the OpCo.
For those elephants here with long memories, another issue with STEP 1 was the controversy around committee pay. Having OpCo negotiate and approve the pay would make things significantly easier.
The third is around program evaluation. If i state that STEP was a success, it is naturally met with skepticism since reputation blowback wouldn't let me say otherwise. Entropy doing analysis on RWA growth of the chain since STEP led to it being easier to propose STEP 2. Having OpCo as an impartial but opinionated arbitrator stating whether DAO programs are worth renewing is another avenue I hope they take under their wing.
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, following our support during the temp-check. We didn’t post our rationale back during the Snapshot vote, so we’ll explain our train of thought and decision-making process for both votes in this reply.
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, following our support during the temp-check. We didn’t post our rationale back during the Snapshot vote, so we’ll explain our train of thought and decision-making process for both votes in this reply.
Ever since the idea of an OpCo was first discussed following DK’s post (linked in the original proposal), we saw and understood the need for the entity described. To outside participants, Arbitrum DAO might seem like a hive buzzing with energy, with contributors carrying out different initiatives. However, To insiders, the operational gaps are apparent and have been for months.
As things are right now, and if we want to be objective, the DAO isn’t a great partner to work with. Even the smallest proposal must overcome many hurdles to pass, and that’s a deterrent for many projects wishing to collaborate with or work for the DAO.
While the OpCo won’t necessarily be the solution to all the operational problems, it definitely has the potential to be. But with that potential comes risk: failure, centralization, overspending, etc.
Internally, we discussed and assessed the proposal based on our understanding and vision of what the OpCo can be, and, given we’re no seers, not of how it will actually work. That’s important to clarify, as the practical implementation of how the OpCo operates within a DAO is somewhat subjective and not necessarily analogous to operational companies as understood in more traditional industries.
The team behind the OpCo, from the Chief Chaos Officer down to the last employee, will play a central role in how the entity operates. Unless those individuals are fully aligned with the DAO and Arbitrum, we probably won’t see OpCo having the desired impact. Working for the DAO’s OpCo should expand beyond the scope of the job description in terms of responsibility for carrying out the tasks. In essence, and akin to a startup, the premise of success lies with the people rather than with the structure of the entity itself.
Given that, the two questions that we asked ourselves were:
For the second question, we expect Entropy and the Arbitrum Foundation to step in and help source the right people. Since the newly formed and DAO-elected OAT will hire for the executive-level positions, we want to ensure that they will have access to a solid pipeline of candidates.
Overall, we expect that attracting and hiring the right talent will be one of the biggest challenges we’ll need to overcome to make OpCo work effectively. The OpCo and its employees need to make the whole thing work in a DAO setting and not have the entity work as a hub of the top delegates.
The OAT, specifically the people who compose it, will be pivotal in the success or failure of the whole endeavor. They need to ensure that they hire the right people and that the OpCo is executing for the benefit of the DAO and not for the benefit of its own existence.
To summarize, we believe that the OpCo will be a proving ground for the DAO. The structure itself is something that can be tweaked, but the whole initiative will, at least at first, heavily rely on the people who make up the OAT and the OpCo itself. We cannot stress enough how important it is for the DAO to figure out how to make this whole thing work.
After thinking about it, vote on tally：AGAINST Mainly because there are still a lot of concerns against the proposal and because other things may happen in practice as well. The approximate reasons.：
I still see the value in setting up OpCo for Arbitrum. It could help streamline management, finances, and strategy, while bringing more professionalism and transparency to the DAO.
Although I do have some concerns about the 30-month timeline and the 30M ARB budget, I’m willing to give it a shot and see how it impacts the DAO.
I still see the value in setting up OpCo for Arbitrum. It could help streamline management, finances, and strategy, while bringing more professionalism and transparency to the DAO.
Although I do have some concerns about the 30-month timeline and the 30M ARB budget, I’m willing to give it a shot and see how it impacts the DAO.
Hopefully with OpCo, we’ll have a healthier, stronger, and more decentralized DAO with expert contributions.
Voted For on Tally!
I voted NO because I believe DAOs should operate with the minimum structure necessary. We need to stay as decentralized as possible, allowing initiatives to grow organically and enabling the community to swarm toward the ultimate goal of increasing ARB’s value by showing growth within our ecosystem.
Additionally, while not the sole reason for my vote, I’d like to point out that the proposal lacks clear execution details, such as how OpCo will be structured, how leadership will be chosen, and what mechanisms will ensure alignment with DAO governance.
Voting in FAVOUR
I have multiple concerns with this proposal that I have shared multiple times and don't feel they've been addressed properly. However, the DAO is in bad need of execution capacity and so I'm supporting this, begrudgingly
For the reasons outlined during the temp-check vote, I vote FOR this proposal on Tally
I'm voting against this proposal on tally because I think the budget is too high, I think we should start with something smaller even thought the idea itself sounds great. I't looks like it could be over-hiring...
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 other than the adjustment of the amount to be requested based on the current state of the market, we maintain our position, previously justified in this comment.
Voted FOR the OpCO. See my Commenting Rationale.
I decided to vote in favor of this proposal on Tally for the following reasons:
I voted AGAINST this proposal on Tally. Echoing the sentiment from here, as increasing regulatory concerns (which are not sufficiently clear in the proposal) makes it so that establishing an OpCo and committing to it for a long time frame warrants much greater consideration.
While I recognize there are clear benefits in creating a separate legal entity, this should ideally be given a proper trial run on a smaller scale to increase its chances of passing with a proven track record of efficiency that can off balance most voters apprehensions as of today.
I voted AGAINST this proposal on Tally. While I agree with having an OpCo, I think the proposal's budget is too high and the team size is too big. I see no point in having a full-time, in-house legal counsel, as well as some other employee roles at this point. I've seen in other DAOs that they started similar entities with as little as one employee and would scale later on if necessary.
The correct approach is to start lean, with a narrow scope, a short initial (pilot) phase, and then evaluate and scale the budget and the team if necessary. If the proposal was framed like that, I would have supported it.
I have decided to vote against this proposal on Tally for the reasons I mention before:
#1 Complexity of governance:
I have decided to vote against this proposal on Tally for the reasons I mention before:
#1 Complexity of governance:
While the participation of new users in the forum has been increasing, the attendance of new users in the call has also increased by 15% - 20% each month, which tells us about a scenario with a greater number of requests (proposals) that strengthen the DAO. The importance of an entity like OpCo for project management will be necessary but not at this time. Centralizing the entity can lend itself to favoritism regarding who obtains new contracts and which projects are given more focus.
#2 Budgetary transparency:
I understand that the budget mentioned is an approximation of the estimate based on the number of staff who will be supporting this initiative from the start. However, not knowing the authors who are going to carry out the activities raises doubts about whether these people are sufficiently qualified to perform in their area. It is also mentioned that there will be a variation in salaries if there is compliance with indicators, but these indicators have not yet been mentioned or detailed for either OpCo or OAT.
I voted FOR as the editions made between the Snapshot vote and the Tally touched most points I was raising.
Entropy has voted AGAINST on OpCo.
To start, some context might be helpful. OpCo was an idea that started at ETH Denver last year. In short, it was a solution to the problem that was the DAO not having full-time contributors. DK followed up by proposing a high-level vision for OpCo that got many excited about its value for the DAO, a second and more active Foundation. Following DK's proposal, and Entropy's funding, Entropy was asked by many delegates to drive the initiative forward in an executable and optimal way. We believe we have done this and fulfilled our original mandate as a facilitator for the initiative and a tool that drives forward the items that the DAO prioritizes. That said, it is our opinion the need for the OpCo is now overstated and likely to even lead to operational friction and unnecessary costs. With the Arbitrum Foundation committing to taking an active role in governance and Entropy Advisors doing the same, the landscape has completely changed from this time last year. Our main concerns with OpCo, outside of the aforementioned, surround being weary of its potential to attract the right talent that will lead it to being an impactful initiative instead of another competing foundation with bloat, lacking executors who drive the DAO in the right direction. We believe with the structure as proposed, OpCo is a safe experiment (although with some sunk cost), given if the 3 members elected to the OAT cannot find a talented lead, the entity can be stopped even after its funding.
We think it is important to mention that Entropy does have a COI. We believe that in tandem with a now more hands-on Foundation, Entropy can achieve many of the values and purposes of OpCo in a leaner manner, without the DAO having to take on additional risk in the form of, e.g., finding leaders for the entity. Over the coming weeks, we will start to synergize more heavily with Arbitrum-aligned teams, using our role as a more opinionated leader in the DAO rather than solely as a tool for delegates.
This proposal has some good ideas, but there are important concerns. I am agree that this plan could make the DAO stronger, but also the creation of OpCo also adds many layers of management, which may slow down decision-making instead of making it more efficient.
There is no clear way for the DAO to recover its funds if OpCo does not work as expected.
This proposal has some good ideas, but there are important concerns. I am agree that this plan could make the DAO stronger, but also the creation of OpCo also adds many layers of management, which may slow down decision-making instead of making it more efficient.
There is no clear way for the DAO to recover its funds if OpCo does not work as expected.
30 million ARB is a big amount, and most of it goes to operational costs instead of investments that can bring value back to the DAO. It is important to focus more on investments rather than just covering salaries, administration, and other expenses. Also, there is no clear explanation of how the DAO can earn back the 30M ARB. Will OpCo generate revenue, or will it just spend funds without returning value?
To be ohnest I think it would be better if the budget of proposal will be reduced.
Against. Arbitrum DAO is the most active DAO, with a large number of innovations, including many grant requests. Do you really need a three-year plan to build a highly efficient Arbitrum DAO? In reality, this just creates inefficiency.
Your plan involves a huge budget, but I don’t see a more effective approach. This is a waste.
As in @web3citizenxyz representation. Voting FOR, without retroactive in this proposal. Below the rationale:
I am also voting FOR this proposal, given that Entropy has shown value with first the AF grant received, then their DAO proposal and all of this would now get merged into OpCo. I hope my concerns about overhiring and employees trying to create work to appear engaged don't come to pass.
As things are right now, and if we want to be objective, the DAO isn’t a great partner to work with. Even the smallest proposal must overcome many hurdles to pass, and that’s a deterrent for many projects wishing to collaborate with or work for the DAO.
I am also voting FOR this proposal, given that Entropy has shown value with first the AF grant received, then their DAO proposal and all of this would now get merged into OpCo. I hope my concerns about overhiring and employees trying to create work to appear engaged don't come to pass.
As things are right now, and if we want to be objective, the DAO isn’t a great partner to work with. Even the smallest proposal must overcome many hurdles to pass, and that’s a deterrent for many projects wishing to collaborate with or work for the DAO.
I can maybe shed some light here as one of those that made a proposal to the DAO, with 3 points that OpCo can make the process easier for folks like me
My biggest hurdle (in terms of time) was actually figuring out the program manager selection for STEP and its monitoring, not doing the actual work with the committee in selecting products. With OpCo, my wish would be that proposal writers can execute what they need within a fixed timeframe, with details of implementation and monitoring thereafter taken care of by the OpCo.
For those elephants here with long memories, another issue with STEP 1 was the controversy around committee pay. Having OpCo negotiate and approve the pay would make things significantly easier.
The third is around program evaluation. If i state that STEP was a success, it is naturally met with skepticism since reputation blowback wouldn't let me say otherwise. Entropy doing analysis on RWA growth of the chain since STEP led to it being easier to propose STEP 2. Having OpCo as an impartial but opinionated arbitrator stating whether DAO programs are worth renewing is another avenue I hope they take under their wing.
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, following our support during the temp-check. We didn’t post our rationale back during the Snapshot vote, so we’ll explain our train of thought and decision-making process for both votes in this reply.
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, following our support during the temp-check. We didn’t post our rationale back during the Snapshot vote, so we’ll explain our train of thought and decision-making process for both votes in this reply.
Ever since the idea of an OpCo was first discussed following DK’s post (linked in the original proposal), we saw and understood the need for the entity described. To outside participants, Arbitrum DAO might seem like a hive buzzing with energy, with contributors carrying out different initiatives. However, To insiders, the operational gaps are apparent and have been for months.
As things are right now, and if we want to be objective, the DAO isn’t a great partner to work with. Even the smallest proposal must overcome many hurdles to pass, and that’s a deterrent for many projects wishing to collaborate with or work for the DAO.
While the OpCo won’t necessarily be the solution to all the operational problems, it definitely has the potential to be. But with that potential comes risk: failure, centralization, overspending, etc.
Internally, we discussed and assessed the proposal based on our understanding and vision of what the OpCo can be, and, given we’re no seers, not of how it will actually work. That’s important to clarify, as the practical implementation of how the OpCo operates within a DAO is somewhat subjective and not necessarily analogous to operational companies as understood in more traditional industries.
The team behind the OpCo, from the Chief Chaos Officer down to the last employee, will play a central role in how the entity operates. Unless those individuals are fully aligned with the DAO and Arbitrum, we probably won’t see OpCo having the desired impact. Working for the DAO’s OpCo should expand beyond the scope of the job description in terms of responsibility for carrying out the tasks. In essence, and akin to a startup, the premise of success lies with the people rather than with the structure of the entity itself.
Given that, the two questions that we asked ourselves were:
For the second question, we expect Entropy and the Arbitrum Foundation to step in and help source the right people. Since the newly formed and DAO-elected OAT will hire for the executive-level positions, we want to ensure that they will have access to a solid pipeline of candidates.
Overall, we expect that attracting and hiring the right talent will be one of the biggest challenges we’ll need to overcome to make OpCo work effectively. The OpCo and its employees need to make the whole thing work in a DAO setting and not have the entity work as a hub of the top delegates.
The OAT, specifically the people who compose it, will be pivotal in the success or failure of the whole endeavor. They need to ensure that they hire the right people and that the OpCo is executing for the benefit of the DAO and not for the benefit of its own existence.
To summarize, we believe that the OpCo will be a proving ground for the DAO. The structure itself is something that can be tweaked, but the whole initiative will, at least at first, heavily rely on the people who make up the OAT and the OpCo itself. We cannot stress enough how important it is for the DAO to figure out how to make this whole thing work.
After thinking about it, vote on tally：AGAINST Mainly because there are still a lot of concerns against the proposal and because other things may happen in practice as well. The approximate reasons.：
I still see the value in setting up OpCo for Arbitrum. It could help streamline management, finances, and strategy, while bringing more professionalism and transparency to the DAO.
Although I do have some concerns about the 30-month timeline and the 30M ARB budget, I’m willing to give it a shot and see how it impacts the DAO.
I still see the value in setting up OpCo for Arbitrum. It could help streamline management, finances, and strategy, while bringing more professionalism and transparency to the DAO.
Although I do have some concerns about the 30-month timeline and the 30M ARB budget, I’m willing to give it a shot and see how it impacts the DAO.
Hopefully with OpCo, we’ll have a healthier, stronger, and more decentralized DAO with expert contributions.
Voted For on Tally!
I voted NO because I believe DAOs should operate with the minimum structure necessary. We need to stay as decentralized as possible, allowing initiatives to grow organically and enabling the community to swarm toward the ultimate goal of increasing ARB’s value by showing growth within our ecosystem.
Additionally, while not the sole reason for my vote, I’d like to point out that the proposal lacks clear execution details, such as how OpCo will be structured, how leadership will be chosen, and what mechanisms will ensure alignment with DAO governance.
Voting in FAVOUR
I have multiple concerns with this proposal that I have shared multiple times and don't feel they've been addressed properly. However, the DAO is in bad need of execution capacity and so I'm supporting this, begrudgingly
For the reasons outlined during the temp-check vote, I vote FOR this proposal on Tally
I'm voting against this proposal on tally because I think the budget is too high, I think we should start with something smaller even thought the idea itself sounds great. I't looks like it could be over-hiring...
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 other than the adjustment of the amount to be requested based on the current state of the market, we maintain our position, previously justified in this comment.
Voted FOR the OpCO. See my Commenting Rationale.
I decided to vote in favor of this proposal on Tally for the following reasons:
I voted AGAINST this proposal on Tally. Echoing the sentiment from here, as increasing regulatory concerns (which are not sufficiently clear in the proposal) makes it so that establishing an OpCo and committing to it for a long time frame warrants much greater consideration.
While I recognize there are clear benefits in creating a separate legal entity, this should ideally be given a proper trial run on a smaller scale to increase its chances of passing with a proven track record of efficiency that can off balance most voters apprehensions as of today.
I voted AGAINST this proposal on Tally. While I agree with having an OpCo, I think the proposal's budget is too high and the team size is too big. I see no point in having a full-time, in-house legal counsel, as well as some other employee roles at this point. I've seen in other DAOs that they started similar entities with as little as one employee and would scale later on if necessary.
The correct approach is to start lean, with a narrow scope, a short initial (pilot) phase, and then evaluate and scale the budget and the team if necessary. If the proposal was framed like that, I would have supported it.
I have decided to vote against this proposal on Tally for the reasons I mention before:
#1 Complexity of governance:
I have decided to vote against this proposal on Tally for the reasons I mention before:
#1 Complexity of governance:
While the participation of new users in the forum has been increasing, the attendance of new users in the call has also increased by 15% - 20% each month, which tells us about a scenario with a greater number of requests (proposals) that strengthen the DAO. The importance of an entity like OpCo for project management will be necessary but not at this time. Centralizing the entity can lend itself to favoritism regarding who obtains new contracts and which projects are given more focus.
#2 Budgetary transparency:
I understand that the budget mentioned is an approximation of the estimate based on the number of staff who will be supporting this initiative from the start. However, not knowing the authors who are going to carry out the activities raises doubts about whether these people are sufficiently qualified to perform in their area. It is also mentioned that there will be a variation in salaries if there is compliance with indicators, but these indicators have not yet been mentioned or detailed for either OpCo or OAT.
I voted FOR as the editions made between the Snapshot vote and the Tally touched most points I was raising.
For the reasons outlined during the temp-check vote, I vote FOR this proposal on Tally
I am very pleased with @Entropy 's work on designing this proposal and with how they adapted it based on delegate feedback. Thank you very much for that.
My concerns have been addressed, and I eagerly look forward to seeing how it is executed
I decided to vote in favor of this proposal on Tally for the following reasons:
2、After its establishment, it should be able to solve the problem of resource allocation, attract more high-quality contributors and service providers, and expand the operable scope of DAOs
3, The establishment and operation of OpCo requires financial support of 30M ARB, which may put pressure on DAO's short-term financial liquidity. In particular, it also adds a very high budget. Although it is not the perfect solution at the moment, OpCo will set up an Oversight Committee (OAT) to ensure transparency in the use of funds and regular reports on implementation, a mechanism that can enhance the DAO's ability to oversee the implementation of funds and strategies. Therefore it is still hoped that this big step will be taken from the DAO level.
I voted FOR as the editions made between the Snapshot vote and the Tally touched most points I was raising.
Once these two components have been achieved, the entity is prepared so that when the OAT and Foundation find the perfect initial employees for OpCo, it will be ready to begin servicing the DAO’s needs, although it will take some additional time for OpCo to ramp up to full capacity. It is important to note that the DAO should not optimize for rushing OpCo to full capacity versus optimizing to have it available for when the OAT finds the right person and the DAO needs it most.
In the twelve months following OpCo’s official initiation date (i.e., when, among other thi
Voted yes as outlined here https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/60?u=ezr3al
I voted in favor of OpCo. It is not the perfect solution but currently the DAO is the opposite of a well-oiled machine which is what we need to stay competitive. Other DAOs with full-time employees can execute faster, lose less time (and money) in the process, and rally behind a mission quicker.
I gotta say, I am excited to vote in favour on tally. I don't usually comment when we go onchain, yes there are changes but here what is worth pointing out are the kpi for the first 12 months: achievable, but ambitious. OpCo in 12 months should be able to consolidate TM + STEP, should have a framework and structure to onboard SP, should be able to handle (excluding funding) an initiative top down, from drafting to vote to onboarding to kyc/b to disbursement of payments. This is literally the bare minimum. At the same time, it would be quite a step ahead in our DAO if we think how convoluted are our processes now. And yes, looking at the interim goal we have for the year, continuing the SOS proposal up to the reporting part (this will depend on how technical the tasks are tho, and there could be needed a technical support but we will see), absorbing event budget/watchdog, creating standard reporting for financials. Doable as well. Likely the most complex task is the branding/marketing with the Foundation, because is probably the most abstract goal of the pack. But is exciting to think about being able, as a DAO, to have an enabler like the opco to do things that so far we have had to task others to do on our behalf.
Strong vote in favor.
This is a proposal we’re excited to get behind as it proceeds to onchain vote. As members of the ADPC and having led the M&A work for the DAO, we have seen the necessity of establishing an OpCo for the DAO on the ground. We have even recommended either of the creation of an OpCo or some kind of legal entity for the DAO in our past reports (here and here).
We do believe that the OpCo has a chance to enable the DAO to do strategic initiatives it couldn't do before, e.g., Venture, M&A, while addressing fragmentation in initiative execution and lack of clear ownership for critical programs.
This is a proposal we’re excited to get behind as it proceeds to onchain vote. As members of the ADPC and having led the M&A work for the DAO, we have seen the necessity of establishing an OpCo for the DAO on the ground. We have even recommended either of the creation of an OpCo or some kind of legal entity for the DAO in our past reports (here and here).
We do believe that the OpCo has a chance to enable the DAO to do strategic initiatives it couldn't do before, e.g., Venture, M&A, while addressing fragmentation in initiative execution and lack of clear ownership for critical programs.
While timelines on this work have not been met so far (the initial target was for the OpCo to be live at DevCon 2024), we do see and appreciate the work that has gone into it. In order to ensure a smooth landing, we feel it is important to establish clear processes from the onset regarding the OpCo formation and to conduct more handholding with key parties involved in the target OpCo. One key area to look at is the relationship between OpCo and existing service providers. We need to move from theory to practice rather sooner than later, i.e., let's get service providers / contributors / and anyone else in a room to discuss the granularities. Denver might be a good occasion for this. There should be transparent processes around transitioning existing contracts, defining specific criteria for determining what initiatives should be executed through OpCo and working with existing DAO groups to ensure fair competition, efficient procurement and preventing vendor lock-in.
Thanks to @EntropyAdvisors, @dk3, for the longstanding efforts towards this initiative. We will be voting in support during the onchain vote.
voting Against the current onchain proposal because as I mentioned previously, this should be tried and experimented with a much smaller budget. For example, we could even keep the same costs but fund just the OAT for now and see how it performs on its first tasks, and then gradually fund more and more scope.
LobbyFi’s rationale on the price and making this proposal available after its activation for on-chain voting
The OpCo employee salaries and OAT compensations are at the upper bound of what is sensible, hence these are not being priced in by LobbyFi. Although LobbyFi will set the instant buy price based on the 100% of the bonuses that are requested, more specifically at 1% of that sum: 4m ARB * 0,6 (current price of ARB) * 1% ≈ 7.5 ETH.
LobbyFi’s rationale on the price and making this proposal available after its activation for on-chain voting
The OpCo employee salaries and OAT compensations are at the upper bound of what is sensible, hence these are not being priced in by LobbyFi. Although LobbyFi will set the instant buy price based on the 100% of the bonuses that are requested, more specifically at 1% of that sum: 4m ARB * 0,6 (current price of ARB) * 1% ≈ 7.5 ETH.
While the broader community is the greatest beneficiary of the proposal, we see a potential higher interest of the OpCo-affiliated parties (now or in future) in it going though due to a “competitive” package it offers to its contributors. Based on the proposal’s nature we do not expect the community to be interested to participate in the community auction - for this reason, the auction will be deactivated for this proposal. Given the snapshot vote outcome of 130m votes in favor and 26m abstaining, we expect the proposal to easily pass the quorum on-chain with or without LobbyFi’s support. At the same time, we would like to emphasize that LobbyFi will automatically vote against the proposal in case the voting power is not acquired before the end of the voting period, which is programmed in the implementation smart contract for proposals which go live for sale WITHOUT the auction activated.
Thanks for your comment @cp0x.
Just to clarify, the underlying ask has stayed the same ($12M in cash equivalents and 4M ARB reserved for bonuses). The total ARB-denominated request was changed due to the decrease in ARB’s price (from ~$1 when the proposal was updated in December 2024 for the offchain voting process to ~$0.68 on January 21st, 2025). The total 30M ARB allocation also includes a buffer, meaning that unless the price of ARB continues falling relative to the $0.68 level, a notable portion of the total ask will be immediately returned to the DAO treasury once the bonus allocation has been subtracted and the liquidation of ARB to cash equivalents is complete. The potential for a change in the total earmarked ARB was clearly outlined in the proposal that passed Snapshot:
Thanks for your comment @cp0x.
Just to clarify, the underlying ask has stayed the same ($12M in cash equivalents and 4M ARB reserved for bonuses). The total ARB-denominated request was changed due to the decrease in ARB’s price (from ~$1 when the proposal was updated in December 2024 for the offchain voting process to ~$0.68 on January 21st, 2025). The total 30M ARB allocation also includes a buffer, meaning that unless the price of ARB continues falling relative to the $0.68 level, a notable portion of the total ask will be immediately returned to the DAO treasury once the bonus allocation has been subtracted and the liquidation of ARB to cash equivalents is complete. The potential for a change in the total earmarked ARB was clearly outlined in the proposal that passed Snapshot:
(subject to change in either direction if market conditions change notably between the Snapshot and Tally votes)
Moreover, the reserved cash equivalents and ARB-denominated bonuses are based on an exemplary budget. In other words, if the proposal is approved, this capital should be considered allocated, not spent. The entity will naturally incur some setup costs and a certain minimum level of OpEx. Aside from these, expenses only scale if the DAO requests OpCo to internalize more roles to facilitate initiatives. It’s also worth reiterating that the exemplary budget has been constructed with drivers that are on the higher side of the range to account for any unforeseen events or worst-case scenarios that could require notable capital commitments.
Nevertheless, as an example with the following assumptions:
OpCo’s first-term costs would amount to ~$7.5M in USD-denominated expenses and ~2.7M ARB in ARB-denominated expenses (or ~13.8M ARB in total at an ARB price of $0.68).
And now you are adding an additional 8 million ARB (due to the fall in cost).
And now you are adding an additional 8 million ARB (due to the fall in cost).
this is pretty normal, most expenses are USD denominated so while they are asking arb they need to be realistic in term of outcome. What is the problem? Any leftover will be sent back to the dao regardless.
I remember how many doubted entering into an agreement with you for a year due to the high cost of your services, but this proposal is 10 times more expensive
I am still skeptical about this initiative. The idea itself is great, but the proposed implementation is too expensive. And now you are adding an additional 8 million ARB (due to the fall in cost).
I liked the list of goals, but I urge you to reduce the costs for this task.
I am still skeptical about this initiative. The idea itself is great, but the proposed implementation is too expensive. And now you are adding an additional 8 million ARB (due to the fall in cost).
I liked the list of goals, but I urge you to reduce the costs for this task.
I remember how many doubted entering into an agreement with you for a year due to the high cost of your services, but this proposal is 10 times more expensive (and the efficiency of this structure is still difficult to understand, but the costs are too high)
This proposal passed the Snapshot voting stage last week, with ~81% of the total ~162M cast votes being FOR. That said, considering the proposal’s potential major impact on the ecosystem, we believe there are still too many unaddressed concerns from delegates for us to move forward with the process.
As such, we are modifying the order of the next steps (reflected in the newest version of the proposal under the Timeline section) as follows:
This proposal passed the Snapshot voting stage last week, with ~81% of the total ~162M cast votes being FOR. That said, considering the proposal’s potential major impact on the ecosystem, we believe there are still too many unaddressed concerns from delegates for us to move forward with the process.
As such, we are modifying the order of the next steps (reflected in the newest version of the proposal under the Timeline section) as follows:
Wishing everyone a great Holiday Break!
Please find the OpCo Community Call (Monday, January 13th, 2025) recording, transcript, and chat log below:
OpCo - Community Call (Recording) OpCo - Community Call (Transcript) OpCo - Community Call (Chat Log)
An OpCo Community Call has been scheduled and added to the governance calendar. The call will take place on Monday 13th, at 10 AM ET (3 PM GMT).
You can also find the link to join the call here: meet.google.com/kvw-efjg-znh
Voted FOR, since I am supportive of this idea. Having an formal entity and people directly working on it will make processes go faster and in turn enable faster innovation, which is needed to attract even more talent and remove organizational silos (one of the biggest pain points here right now, imo). I do believe the budget overall is very large, and there are multiple ways to optimize it, but having spending cap control and an independent committee helped address this concern. Excited for this phase in the DAO.
DAOplomats voted FOR on Snapshot.
Creating this DAO-adjacent entity does pose a couple of questions, especially along the lines of centralization. However, we believe the potential is worth the risk so we were supportive of the initiative.
We voted FOR the proposal on Snapshot.
We support the overall direction of the initiative and greatly appreciate the effort, as well as the articulate and well-thought-out proposal by @Entropy. We recognize the value of an OpCo or its equivalent, as highlighted by @WintermuteGovernance. Our experience with dYdX governance reinforces our belief that such structures are critical and practical solutions for maturing DAOs with a broad base of stakeholders and delegates, like Arbitrum.
gm, I just voted FOR the proposal.
I don't have further comments to contribute to the discussion, but find myself very aligned with the positive perspective of @WinVerse ("The potential is worth the risk"), and some of the concerns raised by @CastleCapital, which I would love to see addressed in the final form on Tally.
gm, I just voted FOR the proposal.
I don't have further comments to contribute to the discussion, but find myself very aligned with the positive perspective of @WinVerse ("The potential is worth the risk"), and some of the concerns raised by @CastleCapital, which I would love to see addressed in the final form on Tally.
Excited to see a DAO that can move fast and effectively. Kudos to @Entropy and everyone who collaborated for this monumental effort.
Gm, first I want to say that I was happy to see so much involvement around this proposal. It wasn't easy to make a decision since this proposal was really polarizing, but after carefully reviewing both pros and cons and closely following the discussions, I've eventually decided to support it.
The main concern revolves around potential centralization and its impact on our decentralized ethos. While I recognize this as a valid point, I also think that this initiative is worth experimenting with. I believe that the prospective benefits in terms of operational efficiency and strategic execution outweigh these risks. It's important to remember that this proposal includes safeguards against overreach, and if the OpCo risks moving too far from the DAO's interests, we can halt its execution after the trial period. The risk is present, but I believe we have sufficient monitoring mechanisms in place to mitigate it.
I vote in favor of this proposal. I believe that creating a structure of this kind, with sufficient checks and balances and the possibility of effective oversight by the DAO, is the right way to properly balance decentralization with efficiency and the execution of initiatives.
I am very pleased with @Entropy 's work on designing this proposal and with how they adapted it based on delegate feedback. Thank you very much for that.
I vote in favor of this proposal. I believe that creating a structure of this kind, with sufficient checks and balances and the possibility of effective oversight by the DAO, is the right way to properly balance decentralization with efficiency and the execution of initiatives.
I am very pleased with @Entropy 's work on designing this proposal and with how they adapted it based on delegate feedback. Thank you very much for that.
My concerns have been addressed, and I eagerly look forward to seeing how it is executed.
In particular, I support these principles and believe they represent the right approach for the efficient execution of proposals:
the relevant internal OpCo employees can then coordinate across service providers and the DAO, so no operational roles have to be filled for such an initiative, and in the case that one service provider drops out, OpCo can ensure continuation by swiftly finding a replacement solution.
One important difference between ARDC v1 and OpCo is that the latter is required to be proactive (we’ve added clearer language around this for the updated proposal), meaning that if delegates aren’t actively engaging the entity, it’ll have the ability to push the ecosystem forward by itself, given that the initiatives that come out of OpCo are accepted by the DAO.
For example, the CFO-type role—the Chief of Coins—would be spearheading financial management by, among other things, bringing together STEP and possibly the treasury management initiatives that just passed Snapshot to a cohesive strategy, facilitating the creation of a DAO-wide budget, and continuously monitoring Arbitrum’s financial performance and making recommendations to the DAO based on this. This is just one example of where the entity could be extremely useful by filling an operational gap the DAO currently faces.
The key lies in filling the operational gap and properly coordinating all the DAO's initiatives.
Following community feedback, we’ve expanded this mandate to include quarterly updates to the community as well as designing relevant KPIs for the entity once it is at a point where this can be sufficiently done
Lastly, I find this crucial, as without clear KPIs, there is a risk of lacking a sufficiently defined mandate and the DAO not fully understanding what to expect.
Thank you very much for all the hard work!
For the reasons outlined during the temp-check vote, I vote FOR this proposal on Tally
I am very pleased with @Entropy 's work on designing this proposal and with how they adapted it based on delegate feedback. Thank you very much for that.
My concerns have been addressed, and I eagerly look forward to seeing how it is executed
I decided to vote in favor of this proposal on Tally for the following reasons:
2、After its establishment, it should be able to solve the problem of resource allocation, attract more high-quality contributors and service providers, and expand the operable scope of DAOs
3, The establishment and operation of OpCo requires financial support of 30M ARB, which may put pressure on DAO's short-term financial liquidity. In particular, it also adds a very high budget. Although it is not the perfect solution at the moment, OpCo will set up an Oversight Committee (OAT) to ensure transparency in the use of funds and regular reports on implementation, a mechanism that can enhance the DAO's ability to oversee the implementation of funds and strategies. Therefore it is still hoped that this big step will be taken from the DAO level.
I voted FOR as the editions made between the Snapshot vote and the Tally touched most points I was raising.
Once these two components have been achieved, the entity is prepared so that when the OAT and Foundation find the perfect initial employees for OpCo, it will be ready to begin servicing the DAO’s needs, although it will take some additional time for OpCo to ramp up to full capacity. It is important to note that the DAO should not optimize for rushing OpCo to full capacity versus optimizing to have it available for when the OAT finds the right person and the DAO needs it most.
In the twelve months following OpCo’s official initiation date (i.e., when, among other thi
Voted yes as outlined here https://forum.arbitrum.foundation/t/opco-a-dao-adjacent-entity-for-strategy-execution/27361/60?u=ezr3al
I voted in favor of OpCo. It is not the perfect solution but currently the DAO is the opposite of a well-oiled machine which is what we need to stay competitive. Other DAOs with full-time employees can execute faster, lose less time (and money) in the process, and rally behind a mission quicker.
I gotta say, I am excited to vote in favour on tally. I don't usually comment when we go onchain, yes there are changes but here what is worth pointing out are the kpi for the first 12 months: achievable, but ambitious. OpCo in 12 months should be able to consolidate TM + STEP, should have a framework and structure to onboard SP, should be able to handle (excluding funding) an initiative top down, from drafting to vote to onboarding to kyc/b to disbursement of payments. This is literally the bare minimum. At the same time, it would be quite a step ahead in our DAO if we think how convoluted are our processes now. And yes, looking at the interim goal we have for the year, continuing the SOS proposal up to the reporting part (this will depend on how technical the tasks are tho, and there could be needed a technical support but we will see), absorbing event budget/watchdog, creating standard reporting for financials. Doable as well. Likely the most complex task is the branding/marketing with the Foundation, because is probably the most abstract goal of the pack. But is exciting to think about being able, as a DAO, to have an enabler like the opco to do things that so far we have had to task others to do on our behalf.
Strong vote in favor.
This is a proposal we’re excited to get behind as it proceeds to onchain vote. As members of the ADPC and having led the M&A work for the DAO, we have seen the necessity of establishing an OpCo for the DAO on the ground. We have even recommended either of the creation of an OpCo or some kind of legal entity for the DAO in our past reports (here and here).
We do believe that the OpCo has a chance to enable the DAO to do strategic initiatives it couldn't do before, e.g., Venture, M&A, while addressing fragmentation in initiative execution and lack of clear ownership for critical programs.
This is a proposal we’re excited to get behind as it proceeds to onchain vote. As members of the ADPC and having led the M&A work for the DAO, we have seen the necessity of establishing an OpCo for the DAO on the ground. We have even recommended either of the creation of an OpCo or some kind of legal entity for the DAO in our past reports (here and here).
We do believe that the OpCo has a chance to enable the DAO to do strategic initiatives it couldn't do before, e.g., Venture, M&A, while addressing fragmentation in initiative execution and lack of clear ownership for critical programs.
While timelines on this work have not been met so far (the initial target was for the OpCo to be live at DevCon 2024), we do see and appreciate the work that has gone into it. In order to ensure a smooth landing, we feel it is important to establish clear processes from the onset regarding the OpCo formation and to conduct more handholding with key parties involved in the target OpCo. One key area to look at is the relationship between OpCo and existing service providers. We need to move from theory to practice rather sooner than later, i.e., let's get service providers / contributors / and anyone else in a room to discuss the granularities. Denver might be a good occasion for this. There should be transparent processes around transitioning existing contracts, defining specific criteria for determining what initiatives should be executed through OpCo and working with existing DAO groups to ensure fair competition, efficient procurement and preventing vendor lock-in.
Thanks to @EntropyAdvisors, @dk3, for the longstanding efforts towards this initiative. We will be voting in support during the onchain vote.
voting Against the current onchain proposal because as I mentioned previously, this should be tried and experimented with a much smaller budget. For example, we could even keep the same costs but fund just the OAT for now and see how it performs on its first tasks, and then gradually fund more and more scope.
LobbyFi’s rationale on the price and making this proposal available after its activation for on-chain voting
The OpCo employee salaries and OAT compensations are at the upper bound of what is sensible, hence these are not being priced in by LobbyFi. Although LobbyFi will set the instant buy price based on the 100% of the bonuses that are requested, more specifically at 1% of that sum: 4m ARB * 0,6 (current price of ARB) * 1% ≈ 7.5 ETH.
LobbyFi’s rationale on the price and making this proposal available after its activation for on-chain voting
The OpCo employee salaries and OAT compensations are at the upper bound of what is sensible, hence these are not being priced in by LobbyFi. Although LobbyFi will set the instant buy price based on the 100% of the bonuses that are requested, more specifically at 1% of that sum: 4m ARB * 0,6 (current price of ARB) * 1% ≈ 7.5 ETH.
While the broader community is the greatest beneficiary of the proposal, we see a potential higher interest of the OpCo-affiliated parties (now or in future) in it going though due to a “competitive” package it offers to its contributors. Based on the proposal’s nature we do not expect the community to be interested to participate in the community auction - for this reason, the auction will be deactivated for this proposal. Given the snapshot vote outcome of 130m votes in favor and 26m abstaining, we expect the proposal to easily pass the quorum on-chain with or without LobbyFi’s support. At the same time, we would like to emphasize that LobbyFi will automatically vote against the proposal in case the voting power is not acquired before the end of the voting period, which is programmed in the implementation smart contract for proposals which go live for sale WITHOUT the auction activated.
Thanks for your comment @cp0x.
Just to clarify, the underlying ask has stayed the same ($12M in cash equivalents and 4M ARB reserved for bonuses). The total ARB-denominated request was changed due to the decrease in ARB’s price (from ~$1 when the proposal was updated in December 2024 for the offchain voting process to ~$0.68 on January 21st, 2025). The total 30M ARB allocation also includes a buffer, meaning that unless the price of ARB continues falling relative to the $0.68 level, a notable portion of the total ask will be immediately returned to the DAO treasury once the bonus allocation has been subtracted and the liquidation of ARB to cash equivalents is complete. The potential for a change in the total earmarked ARB was clearly outlined in the proposal that passed Snapshot:
Thanks for your comment @cp0x.
Just to clarify, the underlying ask has stayed the same ($12M in cash equivalents and 4M ARB reserved for bonuses). The total ARB-denominated request was changed due to the decrease in ARB’s price (from ~$1 when the proposal was updated in December 2024 for the offchain voting process to ~$0.68 on January 21st, 2025). The total 30M ARB allocation also includes a buffer, meaning that unless the price of ARB continues falling relative to the $0.68 level, a notable portion of the total ask will be immediately returned to the DAO treasury once the bonus allocation has been subtracted and the liquidation of ARB to cash equivalents is complete. The potential for a change in the total earmarked ARB was clearly outlined in the proposal that passed Snapshot:
(subject to change in either direction if market conditions change notably between the Snapshot and Tally votes)
Moreover, the reserved cash equivalents and ARB-denominated bonuses are based on an exemplary budget. In other words, if the proposal is approved, this capital should be considered allocated, not spent. The entity will naturally incur some setup costs and a certain minimum level of OpEx. Aside from these, expenses only scale if the DAO requests OpCo to internalize more roles to facilitate initiatives. It’s also worth reiterating that the exemplary budget has been constructed with drivers that are on the higher side of the range to account for any unforeseen events or worst-case scenarios that could require notable capital commitments.
Nevertheless, as an example with the following assumptions:
OpCo’s first-term costs would amount to ~$7.5M in USD-denominated expenses and ~2.7M ARB in ARB-denominated expenses (or ~13.8M ARB in total at an ARB price of $0.68).
And now you are adding an additional 8 million ARB (due to the fall in cost).
And now you are adding an additional 8 million ARB (due to the fall in cost).
this is pretty normal, most expenses are USD denominated so while they are asking arb they need to be realistic in term of outcome. What is the problem? Any leftover will be sent back to the dao regardless.
I remember how many doubted entering into an agreement with you for a year due to the high cost of your services, but this proposal is 10 times more expensive
I am still skeptical about this initiative. The idea itself is great, but the proposed implementation is too expensive. And now you are adding an additional 8 million ARB (due to the fall in cost).
I liked the list of goals, but I urge you to reduce the costs for this task.
I am still skeptical about this initiative. The idea itself is great, but the proposed implementation is too expensive. And now you are adding an additional 8 million ARB (due to the fall in cost).
I liked the list of goals, but I urge you to reduce the costs for this task.
I remember how many doubted entering into an agreement with you for a year due to the high cost of your services, but this proposal is 10 times more expensive (and the efficiency of this structure is still difficult to understand, but the costs are too high)
This proposal passed the Snapshot voting stage last week, with ~81% of the total ~162M cast votes being FOR. That said, considering the proposal’s potential major impact on the ecosystem, we believe there are still too many unaddressed concerns from delegates for us to move forward with the process.
As such, we are modifying the order of the next steps (reflected in the newest version of the proposal under the Timeline section) as follows:
This proposal passed the Snapshot voting stage last week, with ~81% of the total ~162M cast votes being FOR. That said, considering the proposal’s potential major impact on the ecosystem, we believe there are still too many unaddressed concerns from delegates for us to move forward with the process.
As such, we are modifying the order of the next steps (reflected in the newest version of the proposal under the Timeline section) as follows:
Wishing everyone a great Holiday Break!
Please find the OpCo Community Call (Monday, January 13th, 2025) recording, transcript, and chat log below:
OpCo - Community Call (Recording) OpCo - Community Call (Transcript) OpCo - Community Call (Chat Log)
An OpCo Community Call has been scheduled and added to the governance calendar. The call will take place on Monday 13th, at 10 AM ET (3 PM GMT).
You can also find the link to join the call here: meet.google.com/kvw-efjg-znh
Voted FOR, since I am supportive of this idea. Having an formal entity and people directly working on it will make processes go faster and in turn enable faster innovation, which is needed to attract even more talent and remove organizational silos (one of the biggest pain points here right now, imo). I do believe the budget overall is very large, and there are multiple ways to optimize it, but having spending cap control and an independent committee helped address this concern. Excited for this phase in the DAO.
DAOplomats voted FOR on Snapshot.
Creating this DAO-adjacent entity does pose a couple of questions, especially along the lines of centralization. However, we believe the potential is worth the risk so we were supportive of the initiative.
We voted FOR the proposal on Snapshot.
We support the overall direction of the initiative and greatly appreciate the effort, as well as the articulate and well-thought-out proposal by @Entropy. We recognize the value of an OpCo or its equivalent, as highlighted by @WintermuteGovernance. Our experience with dYdX governance reinforces our belief that such structures are critical and practical solutions for maturing DAOs with a broad base of stakeholders and delegates, like Arbitrum.
gm, I just voted FOR the proposal.
I don't have further comments to contribute to the discussion, but find myself very aligned with the positive perspective of @WinVerse ("The potential is worth the risk"), and some of the concerns raised by @CastleCapital, which I would love to see addressed in the final form on Tally.
gm, I just voted FOR the proposal.
I don't have further comments to contribute to the discussion, but find myself very aligned with the positive perspective of @WinVerse ("The potential is worth the risk"), and some of the concerns raised by @CastleCapital, which I would love to see addressed in the final form on Tally.
Excited to see a DAO that can move fast and effectively. Kudos to @Entropy and everyone who collaborated for this monumental effort.
Gm, first I want to say that I was happy to see so much involvement around this proposal. It wasn't easy to make a decision since this proposal was really polarizing, but after carefully reviewing both pros and cons and closely following the discussions, I've eventually decided to support it.
The main concern revolves around potential centralization and its impact on our decentralized ethos. While I recognize this as a valid point, I also think that this initiative is worth experimenting with. I believe that the prospective benefits in terms of operational efficiency and strategic execution outweigh these risks. It's important to remember that this proposal includes safeguards against overreach, and if the OpCo risks moving too far from the DAO's interests, we can halt its execution after the trial period. The risk is present, but I believe we have sufficient monitoring mechanisms in place to mitigate it.
I vote in favor of this proposal. I believe that creating a structure of this kind, with sufficient checks and balances and the possibility of effective oversight by the DAO, is the right way to properly balance decentralization with efficiency and the execution of initiatives.
I am very pleased with @Entropy 's work on designing this proposal and with how they adapted it based on delegate feedback. Thank you very much for that.
I vote in favor of this proposal. I believe that creating a structure of this kind, with sufficient checks and balances and the possibility of effective oversight by the DAO, is the right way to properly balance decentralization with efficiency and the execution of initiatives.
I am very pleased with @Entropy 's work on designing this proposal and with how they adapted it based on delegate feedback. Thank you very much for that.
My concerns have been addressed, and I eagerly look forward to seeing how it is executed.
In particular, I support these principles and believe they represent the right approach for the efficient execution of proposals:
the relevant internal OpCo employees can then coordinate across service providers and the DAO, so no operational roles have to be filled for such an initiative, and in the case that one service provider drops out, OpCo can ensure continuation by swiftly finding a replacement solution.
One important difference between ARDC v1 and OpCo is that the latter is required to be proactive (we’ve added clearer language around this for the updated proposal), meaning that if delegates aren’t actively engaging the entity, it’ll have the ability to push the ecosystem forward by itself, given that the initiatives that come out of OpCo are accepted by the DAO.
For example, the CFO-type role—the Chief of Coins—would be spearheading financial management by, among other things, bringing together STEP and possibly the treasury management initiatives that just passed Snapshot to a cohesive strategy, facilitating the creation of a DAO-wide budget, and continuously monitoring Arbitrum’s financial performance and making recommendations to the DAO based on this. This is just one example of where the entity could be extremely useful by filling an operational gap the DAO currently faces.
The key lies in filling the operational gap and properly coordinating all the DAO's initiatives.
Following community feedback, we’ve expanded this mandate to include quarterly updates to the community as well as designing relevant KPIs for the entity once it is at a point where this can be sufficiently done
Lastly, I find this crucial, as without clear KPIs, there is a risk of lacking a sufficiently defined mandate and the DAO not fully understanding what to expect.
Thank you very much for all the hard work!
Once these two components have been achieved, the entity is prepared so that when the OAT and Foundation find the perfect initial employees for OpCo, it will be ready to begin servicing the DAO’s needs, although it will take some additional time for OpCo to ramp up to full capacity. It is important to note that the DAO should not optimize for rushing OpCo to full capacity versus optimizing to have it available for when the OAT finds the right person and the DAO needs it most.
In the twelve months following OpCo’s official initiation date (i.e., when, among other things, the entity, structure, and initial staffing have been finalized), the entity is expected to achieve the following tasks at minimum, given the DAO still finds them relevant and supports their facilitation by OpCo in the future:
We aim to move this proposal to the onchain voting stage next week, with voting starting on January 30th.
We voted FOR the proposal on Snapshot.
We support the overall direction of the initiative and greatly appreciate the effort, as well as the articulate and well-thought-out proposal by @Entropy. We recognize the value of an OpCo or its equivalent, as highlighted by @WintermuteGovernance. Our experience with dYdX governance reinforces our belief that such structures are critical and practical solutions for maturing DAOs with a broad base of stakeholders and delegates, like Arbitrum.
However, we also have concerns regarding the size and budget of The OAT. While the OAT has hiring as its important task in the beginning, its key mandate should focus on observing and overseeing OpCo's activities. In this context, having five members seems excessive. Additionally, bonus compensation should be outcome-based rather than granted simply for remaining in their positions.
Gm, first I want to say that I was happy to see so much involvement around this proposal. It wasn't easy to make a decision since this proposal was really polarizing, but after carefully reviewing both pros and cons and closely following the discussions, I've eventually decided to support it.
The main concern revolves around potential centralization and its impact on our decentralized ethos. While I recognize this as a valid point, I also think that this initiative is worth experimenting with. I believe that the prospective benefits in terms of operational efficiency and strategic execution outweigh these risks. It's important to remember that this proposal includes safeguards against overreach, and if the OpCo risks moving too far from the DAO's interests, we can halt its execution after the trial period. The risk is present, but I believe we have sufficient monitoring mechanisms in place to mitigate it.
While the centralization risks should not be dismissed, I see this as a valuable opportunity for our DAO to evolve and potentially enhance its effectiveness. This is why I support the initiative.
Voted For: I think I haven't spent more time on a proposal than on this one. When I first went through a proposal, my opinion was that we were voting on centralizing our DAO, that the budget was way too big, and that the duration was too long (30 months). There are so many ways that this can play out, and many of them can be harmful to Arbitrum DAO.
We opened so many questions and issues and they were addressed. Arbitrum Foundation's post and fellow delegates raised some good points about why OpCo could become such a competitive advantage in the future that it might be worth trying it out. Great to see OAT serving as an off-switch here. I hope this is enough. We need more control as a DAO here.
Voted For: I think I haven't spent more time on a proposal than on this one. When I first went through a proposal, my opinion was that we were voting on centralizing our DAO, that the budget was way too big, and that the duration was too long (30 months). There are so many ways that this can play out, and many of them can be harmful to Arbitrum DAO.
We opened so many questions and issues and they were addressed. Arbitrum Foundation's post and fellow delegates raised some good points about why OpCo could become such a competitive advantage in the future that it might be worth trying it out. Great to see OAT serving as an off-switch here. I hope this is enough. We need more control as a DAO here.
I decided to vote For because I believe having a positive mindset in this space is better. We can do so much with a well-structured and managed OpCo here to make Arbitrum the leader in this space. Responsibility is super big, and I just hope Entropy can deliver.
The following reflects the views of the Lampros DAO (formerly ‘Lampros Labs 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 (formerly ‘Lampros Labs 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 OpCo has been in discussion for several months and to date it is the most viable proposal we have seen that enables the ArbitrumDAO to execute on its proposals faster and in a more efficient manner. If done properly, OpCo can become a key component of the DAO’s operations, offering the resources and expertise needed to simplify decision making, improve execution, optimize governance operations, and drive long-term growth and success for the ecosystem.
As mentioned by the foundation, we echo that OpCo can become a key component to ease the DAO's operations. Additionally, the strategic management and operational capabilities that OpCo brings could significantly enhance how we prioritize and deploy new initiatives and projects, making our ecosystem more robust and dynamic.
And this is the other reason why I think is fine to vote for it. With the OAT and the capabilities of the DAO to claw back funds, we still retain the ability to call a day to the initiative if it is needed.
We agree with @JoJo's point that this is worth experimenting with initially. Should anything not go as planned (fingers crossed it doesn’t), we maintain the ability to discontinue the initiative.
To conclude, we place our faith in the proposal creators and trust that this structure will avoid centralizing power, thus preserving the decentralized future of Arbitrum. We support this initiative for the significant positive impact it promises to bring.
Confirming @paulofonseca has acquired our voting power.
We voted Against the proposal with 804.770,97 ARB since the voting power has been trustlessly acquired on lobbyfi.xyz.
We appreciate the effort behind the OpCo proposal, but we will vote against it. As other delegates have noted, OpCo introduces centralization risks by concentrating power and creating a potential gatekeeper, which conflicts with the DAO’s decentralized ethos. The proposed budget of 22M ARB is also significant, and while this is one potential solution, we would prefer to see an approach that better balances decentralization without granting excessive power to a single entity.
After consideration, the @SEEDgov delegation has decided to “FOR” on this proposal at the Snapshot Vote.
We believe our initial doubts and concerns have been adequately addressed by Entropy, and we commend the team’s willingness to incorporate feedback from most delegates—including some of our suggestions, such as increasing the compensation for members of the OAT Committee.
After consideration, the @SEEDgov delegation has decided to “FOR” on this proposal at the Snapshot Vote.
We believe our initial doubts and concerns have been adequately addressed by Entropy, and we commend the team’s willingness to incorporate feedback from most delegates—including some of our suggestions, such as increasing the compensation for members of the OAT Committee.
Overall, we feel strongly aligned with the OpCo proposal. As Service Providers for the DAO, we understand the operational advantages it can bring. Today, compliance processes and agreement drafting rely almost entirely on the AF, with only a few exceptions. While we value the Foundation’s efforts, it is crucial for the DAO to be truly autonomous—otherwise, the “A” in its name would hold little meaning.
It is also important to note that most current programs lack well-documented frameworks, making transitions to new Service Providers particularly challenging.
There are only two areas that remain a source of “concern” for us:
Initially, we were concerned that the OpCo might “capture” delegates with the highest VP, leading to centralized decision-making within the DAO. However, considering that the OAT Committee can only include individuals with no economic ties to the DAO (or those willing to forgo such ties), it is now difficult to envision who might fill these roles. The requirement for alignment with the ecosystem, relevant context, and the expertise needed for such a demanding task further complicates this.
While we understand that the proposed salary ranges are merely illustrative and not final figures—and that the proposer’s intention is to empower the OpCo to negotiate and attract top talent—we want to stress that the salaries for the Chief of Chaos and Chief of Coins could be lower. For reference, the median salary for a COO in the United States is approximately $500,000 (base compensation). In this regard, we trust that the future OAT Committee will prioritize austerity wherever possible, as this sets a critical precedent when negotiating compensation with the broader team and various Service Providers.
I also bought the 804.770,97 ARB of voting power available in lobbyfi.xyz to vote Against in this offchain proposal https://arbiscan.io/tx/0x6078a1cb52ee7b5ed547e62429fe0a6b2be41d875f0616069fe8cbf1b2e00917
voting Against the current offchain proposal because I believe we should experiment with this setup in a much smaller amount at first, otherwise we are setting this up for failure.
As expressed on community calls, in the forum, and with Entropy, Gauntlet favors the OpCo entity. Entropy has done great work and incorporated stakeholder feedback, to compile a massive proposal with OpCo. We view this temperature check as a critical momentum vote to keep progress moving on the proposal's development. However, we have expressed concerns about outlining the specific tasks and objectives the OpCo needs to achieve in its first six months.
As such, we will abstain from this proposal to express our support for its momentum and direction, pending future changes. Gauntlet looks forward to the appropriate changes to support OpCo with the highest chance of success. In this regard, we believe the DAO should measure twice and cut once.
We are supportive of the OpCo at the TEMP CHECK stage, however, we do share some concerns about various aspects of the proposal that we would like to see discussed and potentially changed prior to the onchain vote.
Firstly, having something like the OpCo is extremely valuable for most DAOs and similar setups are prevalent amongst some of the largest DAOs in the space. We've had first-hand experience with setting something similar up for dYdX (dYdX Ops subDAO), which enabled the DAO to hire contractors, set up bank accounts, work with service providers, and set up key vital infrastructure for the launch of dYdX V4. Without a legal entity, this would've been a nightmare and simply impossible. Concretely, the OpCo will unlock functionality for the DAO while making the DAO more accessible to less-crypto native individuals and companies.
We are supportive of the OpCo at the TEMP CHECK stage, however, we do share some concerns about various aspects of the proposal that we would like to see discussed and potentially changed prior to the onchain vote.
Firstly, having something like the OpCo is extremely valuable for most DAOs and similar setups are prevalent amongst some of the largest DAOs in the space. We've had first-hand experience with setting something similar up for dYdX (dYdX Ops subDAO), which enabled the DAO to hire contractors, set up bank accounts, work with service providers, and set up key vital infrastructure for the launch of dYdX V4. Without a legal entity, this would've been a nightmare and simply impossible. Concretely, the OpCo will unlock functionality for the DAO while making the DAO more accessible to less-crypto native individuals and companies.
However, we have some concerns with this structure, which is rather expensive and there isn't a clearly defined scope and set of deliverables which could easily lead to unnecessary expenditure and bloat. We'd much prefer to have a leaner structure with a clear set of objectives that expands over time as the DAO seeks the legal structure to operate necessary initiatives.
We are also quite against the size of the OAT and share similar concerns to others about there being a large overlap in responsibilities between OAT members and OpCo employees. In our opinion, the OAT should serve as 'observers' or 'enforcers' (if we draw comparison to the dYdX Ops subDAO) to ensure that there is no miss appropriation of funds and that internal initiatives are done in line with the OpCo's mandate. This can be achieved quite easily with 2 members. There are clear redundancies and overlaps in having 5 OAT members especially when the OpCo has a budget for yearly audits and is required to maintain high transparency. Lastly, we are unsure that OAT members should receive bonuses and struggle to understand the justification for it.
https://x.com/DisruptionJoe/status/1869454667400524067
https://x.com/DisruptionJoe/status/1869454667400524067
After careful consideration, I’ve voted For this proposal. I think Entropy is working on something very needed, and very difficult to appease everyone. Their vision is in the right place so I’d like to extend the grace to them to believe in their ability to get it done right.
Concerns
If one year from now, Entropy or OpCo is the driver of more than 50% of working groups by ARB funded, we should reassess this approach.
We're voting FOR the OpCo proposal. Here's why:
The DAO's current operational model is clearly broken. We have fragmented initiatives, unclear ownership, and massive friction in executing strategies. As @JoJo pointed out, we lack proper accountability structures and compensation frameworks that would favor actual responsibility.
We're voting FOR the OpCo proposal. Here's why:
The DAO's current operational model is clearly broken. We have fragmented initiatives, unclear ownership, and massive friction in executing strategies. As @JoJo pointed out, we lack proper accountability structures and compensation frameworks that would favor actual responsibility.
The 34M ARB allocation, while significant, represents investment in critical infrastructure. @JoJo makes a compelling case for the 30-month timeline - anything shorter would waste setup costs and prevent us from seeing real impact. New personnel need time to understand DAO mechanics, build relationships, and create synergies.
The proposal includes key safeguards:
Yes, there are centralization risks. But as several delegates noted, the DAO maintains ultimate authority. The alternative - continuing with our current fragmented operations - presents a greater risk to Arbitrum's long-term success.
Question: Can the monthly drawdown caps (500K standard, 1.5M with DAO approval) be adjusted dynamically based on OpCo's demonstrated efficiency and market conditions?
After careful consideration and deliberation, we have update our stance and decided to vote FOR this proposal at Snapshot.
After careful consideration and deliberation, we have update our stance and decided to vote FOR this proposal at Snapshot.
We would like to thank @Entropy for their continued hard work and efforts in driving this (and other) initiative(s), and in explaining the nuances of such a complex proposal to alleviate our concerns.
It is in the realm of possibility for the Arbitrum Foundation to take on additional ops-related work like project management of proposals, but, in our opinion, it is not the best path forward.
I vote AGAINST this proposal. While I think having a legal entity is beneficial, I think it should (at least initially) be a more passive and lean entity, used only when there's a need for it. Cutting costs is harder than adding costs, so I think OpCo should start as lean as possible, and with the shorter initial (pilot) phase which could later be extended with a new proposal.
inter-delegate Discussions like this could also be carried over DMs or telegram, but I do want to state that we have no issue with large sized proposals at all - if there is a track record.
in this case the proposal is of a large size for a new organization which is unproven. the issue with the proposal in terms of budget is not purely the budget but that it is a very large ask for a new experimental initiative, not that it is a large ask. Should have been more clear about this in our rationale.
Ok, I get your point and i understand what you are trying to say, but this brings on my mind a another question, How big or how small should the size of the proposal be in (ARB) in order to be fair and maintain a decentralized entities proposal, or commit to a decentralized protocols. Cuz i mean… are we ever gonna ever archive that? I mean, thats what we are trying to do. Am i wrong?
the proposal starts out focusing on ecosystem support and financial management which are not operated on currently, but has provisions to easily expand its scope, and if you look at the size of the proposal (22M ARB) and the compensation going to the staff, it is designed to do so.
Thank you for the effort that @Entropy and the team put into answering questions, adjusting budgets, and providing a brief summary of the progress in the governance call. I would also like to thank @Maets23 for presenting us with the most relevant information and with the most discussion in SimScore https://rndadocs.notion.site/OpCo-A-DAO-adjacent-Entity-for-Strategy-Execution-a1cda474ac494174bb544ddaa898e411, it is undoubtedly a very useful tool for identifying the most relevant aspects of the proposals.
I have decided to vote against this proposal on Snapshot for the following reasons:
I agree with you when you say "is a massive proposal that could stand to be cut down either in scope, or split into milestones. and should be test in smaller quantity or like you say make a prototype phase.... that could also be arrange, .... but what do you mean when you say: "The proposal claims to promote decentralization but then proposes a centralized entity to control other entities and help operate all initiatives under its umbrella" ...???
As in @web3citizenxyz representation, voting "Against" in this proposal. Below the rationale:
Once these two components have been achieved, the entity is prepared so that when the OAT and Foundation find the perfect initial employees for OpCo, it will be ready to begin servicing the DAO’s needs, although it will take some additional time for OpCo to ramp up to full capacity. It is important to note that the DAO should not optimize for rushing OpCo to full capacity versus optimizing to have it available for when the OAT finds the right person and the DAO needs it most.
In the twelve months following OpCo’s official initiation date (i.e., when, among other things, the entity, structure, and initial staffing have been finalized), the entity is expected to achieve the following tasks at minimum, given the DAO still finds them relevant and supports their facilitation by OpCo in the future:
We aim to move this proposal to the onchain voting stage next week, with voting starting on January 30th.
We voted FOR the proposal on Snapshot.
We support the overall direction of the initiative and greatly appreciate the effort, as well as the articulate and well-thought-out proposal by @Entropy. We recognize the value of an OpCo or its equivalent, as highlighted by @WintermuteGovernance. Our experience with dYdX governance reinforces our belief that such structures are critical and practical solutions for maturing DAOs with a broad base of stakeholders and delegates, like Arbitrum.
However, we also have concerns regarding the size and budget of The OAT. While the OAT has hiring as its important task in the beginning, its key mandate should focus on observing and overseeing OpCo's activities. In this context, having five members seems excessive. Additionally, bonus compensation should be outcome-based rather than granted simply for remaining in their positions.
Gm, first I want to say that I was happy to see so much involvement around this proposal. It wasn't easy to make a decision since this proposal was really polarizing, but after carefully reviewing both pros and cons and closely following the discussions, I've eventually decided to support it.
The main concern revolves around potential centralization and its impact on our decentralized ethos. While I recognize this as a valid point, I also think that this initiative is worth experimenting with. I believe that the prospective benefits in terms of operational efficiency and strategic execution outweigh these risks. It's important to remember that this proposal includes safeguards against overreach, and if the OpCo risks moving too far from the DAO's interests, we can halt its execution after the trial period. The risk is present, but I believe we have sufficient monitoring mechanisms in place to mitigate it.
While the centralization risks should not be dismissed, I see this as a valuable opportunity for our DAO to evolve and potentially enhance its effectiveness. This is why I support the initiative.
Voted For: I think I haven't spent more time on a proposal than on this one. When I first went through a proposal, my opinion was that we were voting on centralizing our DAO, that the budget was way too big, and that the duration was too long (30 months). There are so many ways that this can play out, and many of them can be harmful to Arbitrum DAO.
We opened so many questions and issues and they were addressed. Arbitrum Foundation's post and fellow delegates raised some good points about why OpCo could become such a competitive advantage in the future that it might be worth trying it out. Great to see OAT serving as an off-switch here. I hope this is enough. We need more control as a DAO here.
Voted For: I think I haven't spent more time on a proposal than on this one. When I first went through a proposal, my opinion was that we were voting on centralizing our DAO, that the budget was way too big, and that the duration was too long (30 months). There are so many ways that this can play out, and many of them can be harmful to Arbitrum DAO.
We opened so many questions and issues and they were addressed. Arbitrum Foundation's post and fellow delegates raised some good points about why OpCo could become such a competitive advantage in the future that it might be worth trying it out. Great to see OAT serving as an off-switch here. I hope this is enough. We need more control as a DAO here.
I decided to vote For because I believe having a positive mindset in this space is better. We can do so much with a well-structured and managed OpCo here to make Arbitrum the leader in this space. Responsibility is super big, and I just hope Entropy can deliver.
The following reflects the views of the Lampros DAO (formerly ‘Lampros Labs 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 (formerly ‘Lampros Labs 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 OpCo has been in discussion for several months and to date it is the most viable proposal we have seen that enables the ArbitrumDAO to execute on its proposals faster and in a more efficient manner. If done properly, OpCo can become a key component of the DAO’s operations, offering the resources and expertise needed to simplify decision making, improve execution, optimize governance operations, and drive long-term growth and success for the ecosystem.
As mentioned by the foundation, we echo that OpCo can become a key component to ease the DAO's operations. Additionally, the strategic management and operational capabilities that OpCo brings could significantly enhance how we prioritize and deploy new initiatives and projects, making our ecosystem more robust and dynamic.
And this is the other reason why I think is fine to vote for it. With the OAT and the capabilities of the DAO to claw back funds, we still retain the ability to call a day to the initiative if it is needed.
We agree with @JoJo's point that this is worth experimenting with initially. Should anything not go as planned (fingers crossed it doesn’t), we maintain the ability to discontinue the initiative.
To conclude, we place our faith in the proposal creators and trust that this structure will avoid centralizing power, thus preserving the decentralized future of Arbitrum. We support this initiative for the significant positive impact it promises to bring.
Confirming @paulofonseca has acquired our voting power.
We voted Against the proposal with 804.770,97 ARB since the voting power has been trustlessly acquired on lobbyfi.xyz.
We appreciate the effort behind the OpCo proposal, but we will vote against it. As other delegates have noted, OpCo introduces centralization risks by concentrating power and creating a potential gatekeeper, which conflicts with the DAO’s decentralized ethos. The proposed budget of 22M ARB is also significant, and while this is one potential solution, we would prefer to see an approach that better balances decentralization without granting excessive power to a single entity.
After consideration, the @SEEDgov delegation has decided to “FOR” on this proposal at the Snapshot Vote.
We believe our initial doubts and concerns have been adequately addressed by Entropy, and we commend the team’s willingness to incorporate feedback from most delegates—including some of our suggestions, such as increasing the compensation for members of the OAT Committee.
After consideration, the @SEEDgov delegation has decided to “FOR” on this proposal at the Snapshot Vote.
We believe our initial doubts and concerns have been adequately addressed by Entropy, and we commend the team’s willingness to incorporate feedback from most delegates—including some of our suggestions, such as increasing the compensation for members of the OAT Committee.
Overall, we feel strongly aligned with the OpCo proposal. As Service Providers for the DAO, we understand the operational advantages it can bring. Today, compliance processes and agreement drafting rely almost entirely on the AF, with only a few exceptions. While we value the Foundation’s efforts, it is crucial for the DAO to be truly autonomous—otherwise, the “A” in its name would hold little meaning.
It is also important to note that most current programs lack well-documented frameworks, making transitions to new Service Providers particularly challenging.
There are only two areas that remain a source of “concern” for us:
Initially, we were concerned that the OpCo might “capture” delegates with the highest VP, leading to centralized decision-making within the DAO. However, considering that the OAT Committee can only include individuals with no economic ties to the DAO (or those willing to forgo such ties), it is now difficult to envision who might fill these roles. The requirement for alignment with the ecosystem, relevant context, and the expertise needed for such a demanding task further complicates this.
While we understand that the proposed salary ranges are merely illustrative and not final figures—and that the proposer’s intention is to empower the OpCo to negotiate and attract top talent—we want to stress that the salaries for the Chief of Chaos and Chief of Coins could be lower. For reference, the median salary for a COO in the United States is approximately $500,000 (base compensation). In this regard, we trust that the future OAT Committee will prioritize austerity wherever possible, as this sets a critical precedent when negotiating compensation with the broader team and various Service Providers.
I also bought the 804.770,97 ARB of voting power available in lobbyfi.xyz to vote Against in this offchain proposal https://arbiscan.io/tx/0x6078a1cb52ee7b5ed547e62429fe0a6b2be41d875f0616069fe8cbf1b2e00917
voting Against the current offchain proposal because I believe we should experiment with this setup in a much smaller amount at first, otherwise we are setting this up for failure.
As expressed on community calls, in the forum, and with Entropy, Gauntlet favors the OpCo entity. Entropy has done great work and incorporated stakeholder feedback, to compile a massive proposal with OpCo. We view this temperature check as a critical momentum vote to keep progress moving on the proposal's development. However, we have expressed concerns about outlining the specific tasks and objectives the OpCo needs to achieve in its first six months.
As such, we will abstain from this proposal to express our support for its momentum and direction, pending future changes. Gauntlet looks forward to the appropriate changes to support OpCo with the highest chance of success. In this regard, we believe the DAO should measure twice and cut once.
We are supportive of the OpCo at the TEMP CHECK stage, however, we do share some concerns about various aspects of the proposal that we would like to see discussed and potentially changed prior to the onchain vote.
Firstly, having something like the OpCo is extremely valuable for most DAOs and similar setups are prevalent amongst some of the largest DAOs in the space. We've had first-hand experience with setting something similar up for dYdX (dYdX Ops subDAO), which enabled the DAO to hire contractors, set up bank accounts, work with service providers, and set up key vital infrastructure for the launch of dYdX V4. Without a legal entity, this would've been a nightmare and simply impossible. Concretely, the OpCo will unlock functionality for the DAO while making the DAO more accessible to less-crypto native individuals and companies.
We are supportive of the OpCo at the TEMP CHECK stage, however, we do share some concerns about various aspects of the proposal that we would like to see discussed and potentially changed prior to the onchain vote.
Firstly, having something like the OpCo is extremely valuable for most DAOs and similar setups are prevalent amongst some of the largest DAOs in the space. We've had first-hand experience with setting something similar up for dYdX (dYdX Ops subDAO), which enabled the DAO to hire contractors, set up bank accounts, work with service providers, and set up key vital infrastructure for the launch of dYdX V4. Without a legal entity, this would've been a nightmare and simply impossible. Concretely, the OpCo will unlock functionality for the DAO while making the DAO more accessible to less-crypto native individuals and companies.
However, we have some concerns with this structure, which is rather expensive and there isn't a clearly defined scope and set of deliverables which could easily lead to unnecessary expenditure and bloat. We'd much prefer to have a leaner structure with a clear set of objectives that expands over time as the DAO seeks the legal structure to operate necessary initiatives.
We are also quite against the size of the OAT and share similar concerns to others about there being a large overlap in responsibilities between OAT members and OpCo employees. In our opinion, the OAT should serve as 'observers' or 'enforcers' (if we draw comparison to the dYdX Ops subDAO) to ensure that there is no miss appropriation of funds and that internal initiatives are done in line with the OpCo's mandate. This can be achieved quite easily with 2 members. There are clear redundancies and overlaps in having 5 OAT members especially when the OpCo has a budget for yearly audits and is required to maintain high transparency. Lastly, we are unsure that OAT members should receive bonuses and struggle to understand the justification for it.
https://x.com/DisruptionJoe/status/1869454667400524067
https://x.com/DisruptionJoe/status/1869454667400524067
After careful consideration, I’ve voted For this proposal. I think Entropy is working on something very needed, and very difficult to appease everyone. Their vision is in the right place so I’d like to extend the grace to them to believe in their ability to get it done right.
Concerns
If one year from now, Entropy or OpCo is the driver of more than 50% of working groups by ARB funded, we should reassess this approach.
We're voting FOR the OpCo proposal. Here's why:
The DAO's current operational model is clearly broken. We have fragmented initiatives, unclear ownership, and massive friction in executing strategies. As @JoJo pointed out, we lack proper accountability structures and compensation frameworks that would favor actual responsibility.
We're voting FOR the OpCo proposal. Here's why:
The DAO's current operational model is clearly broken. We have fragmented initiatives, unclear ownership, and massive friction in executing strategies. As @JoJo pointed out, we lack proper accountability structures and compensation frameworks that would favor actual responsibility.
The 34M ARB allocation, while significant, represents investment in critical infrastructure. @JoJo makes a compelling case for the 30-month timeline - anything shorter would waste setup costs and prevent us from seeing real impact. New personnel need time to understand DAO mechanics, build relationships, and create synergies.
The proposal includes key safeguards:
Yes, there are centralization risks. But as several delegates noted, the DAO maintains ultimate authority. The alternative - continuing with our current fragmented operations - presents a greater risk to Arbitrum's long-term success.
Question: Can the monthly drawdown caps (500K standard, 1.5M with DAO approval) be adjusted dynamically based on OpCo's demonstrated efficiency and market conditions?
After careful consideration and deliberation, we have update our stance and decided to vote FOR this proposal at Snapshot.
After careful consideration and deliberation, we have update our stance and decided to vote FOR this proposal at Snapshot.
We would like to thank @Entropy for their continued hard work and efforts in driving this (and other) initiative(s), and in explaining the nuances of such a complex proposal to alleviate our concerns.
It is in the realm of possibility for the Arbitrum Foundation to take on additional ops-related work like project management of proposals, but, in our opinion, it is not the best path forward.
I vote AGAINST this proposal. While I think having a legal entity is beneficial, I think it should (at least initially) be a more passive and lean entity, used only when there's a need for it. Cutting costs is harder than adding costs, so I think OpCo should start as lean as possible, and with the shorter initial (pilot) phase which could later be extended with a new proposal.
inter-delegate Discussions like this could also be carried over DMs or telegram, but I do want to state that we have no issue with large sized proposals at all - if there is a track record.
in this case the proposal is of a large size for a new organization which is unproven. the issue with the proposal in terms of budget is not purely the budget but that it is a very large ask for a new experimental initiative, not that it is a large ask. Should have been more clear about this in our rationale.
Ok, I get your point and i understand what you are trying to say, but this brings on my mind a another question, How big or how small should the size of the proposal be in (ARB) in order to be fair and maintain a decentralized entities proposal, or commit to a decentralized protocols. Cuz i mean… are we ever gonna ever archive that? I mean, thats what we are trying to do. Am i wrong?
the proposal starts out focusing on ecosystem support and financial management which are not operated on currently, but has provisions to easily expand its scope, and if you look at the size of the proposal (22M ARB) and the compensation going to the staff, it is designed to do so.
Thank you for the effort that @Entropy and the team put into answering questions, adjusting budgets, and providing a brief summary of the progress in the governance call. I would also like to thank @Maets23 for presenting us with the most relevant information and with the most discussion in SimScore https://rndadocs.notion.site/OpCo-A-DAO-adjacent-Entity-for-Strategy-Execution-a1cda474ac494174bb544ddaa898e411, it is undoubtedly a very useful tool for identifying the most relevant aspects of the proposals.
I have decided to vote against this proposal on Snapshot for the following reasons:
I agree with you when you say "is a massive proposal that could stand to be cut down either in scope, or split into milestones. and should be test in smaller quantity or like you say make a prototype phase.... that could also be arrange, .... but what do you mean when you say: "The proposal claims to promote decentralization but then proposes a centralized entity to control other entities and help operate all initiatives under its umbrella" ...???
As in @web3citizenxyz representation, voting "Against" in this proposal. Below the rationale:
It is in the realm of possibility for the Arbitrum Foundation to take on additional ops-related work like project management of proposals, but, in our opinion, it is not the best path forward.
The OpCo has been in discussion for several months and to date it is the most viable proposal we have seen that enables the ArbitrumDAO to execute on its proposals faster and in a more efficient manner. If done properly, OpCo can become a key component of the DAO’s operations, offering the resources and expertise needed to simplify decision making, improve execution, optimize governance operations, and drive long-term growth and success for the ecosystem.
Thank you for your opinion Foundation. This is what a lot of people asked, both here and in the delegates' chat: is the Foundation capable and willing to take on more tasks such as the ones proposed by the OpCo? Here we have an answer. Not only we have an answer, but we also have a Foundation that sees is as a key initiative if properly executed.
With the OpCo, or perhaps another proposal, the ArbitrumDAO has a unique opportunity to stand up on its own two feet, form its own organisational structure, and truly form its own collective of contributors.
Of course, while the OpCo may support the DAO’s initiatives, the DAO should remain the ultimate decision maker over the DAO treasury and it should still have the freedom to spin up other initiatives (with or without the support of the OpCo) as it sees fit.
And this is the other reason why I think is fine to vote for it. With the OAT and the capabilities of the DAO to claw back funds, we still retain the ability to call a day to the initiative if it is needed. Remember, we always have the DAO Constitution (to which we should honestly refer more) that establishes the rights of every contributor and the community values for which the DAO is among others [...] Sustainable, [...] Socially inclusive, [...] User-focused and Neutral and open. I am here reiterating the support for this initiative, despite having published the vote rationale, because I am confident that we will respect all of above going forward, with or without the OpCo.
Thank you for the effort that @Entropy and the team put into answering questions, adjusting budgets, and providing a brief summary of the progress in the governance call. I would also like to thank @Maets23 for presenting us with the most relevant information and with the most discussion in SimScore https://rndadocs.notion.site/OpCo-A-DAO-adjacent-Entity-for-Strategy-Execution-a1cda474ac494174bb544ddaa898e411, it is undoubtedly a very useful tool for identifying the most relevant aspects of the proposals.
I have decided to vote against this proposal on Snapshot for the following reasons:
Complexity of governance:
While the participation of new users in the forum has been increasing, the attendance of new users in the call has also increased by 15% each month, which tells us about a scenario with a greater number of requests (proposals) that strengthen the DAO. The importance of an entity like OpCo for project management will be necessary but not at this time. Centralizing the entity can lend itself to favoritism regarding who obtains new contracts and which projects are given more focus.
Budgetary transparency:
I understand that the budget mentioned is an approximation of the estimate based on the number of staff who will be supporting this initiative from the start. However, not knowing the authors who are going to carry out the activities raises doubts about whether these people are sufficiently qualified to perform in their area. It is also mentioned that there will be a variation in salaries if there is compliance with indicators, but these indicators have not yet been mentioned or detailed for either OpCo or OAT.
I consider it to be a well-intentioned proposal and that what is sought is order, support, and to make the most of the team's expertise to continue building on Arbitrum. I believe that operations could be sought that do not necessarily have to be centralized, but rather audited by entities with a proven track record of teamwork.
I look forward to the modifications that this proposal will make before moving on to Tally for voting.
I voted FOR. I believe that this is something needed within ArbitrumDAO to help us to move in the right direction.
That being said, I think that the proposal needs improvements, especially in what success will look like and what is the mandate we expect it to fulfil. I have high hopes that the OP will take the collective feedback and present a new iteration with extra structure for the Tally proposal.
Voting AGAINST this proposal
There are good reasons to support an operations co and I am a fan of the idea and original proposal by @dk3 but I have too many reservations for this version:
Decentraization The proposal claims to promote decentralization but then proposes a centralized entity to control other entities and help operate all initiatives under its umbrella
Voting AGAINST this proposal
There are good reasons to support an operations co and I am a fan of the idea and original proposal by @dk3 but I have too many reservations for this version:
Decentraization The proposal claims to promote decentralization but then proposes a centralized entity to control other entities and help operate all initiatives under its umbrella
While I support efficiency, this is a drastic change from the current setup that I think may be a bit too quick. I do note that the expansion woudl happen by vote so its not a vote blocker for me just a concern.
Vagueness/unclarity/ lack of clear plan For a proposal of this magnitude, there is lack of clarity and specificity about not just the op co but specific KPIs, milestones.
The argument coudl very well be made defining such things this early on could be too early. In which case my response woudl be if its too early to specifiy specific KPIs its probably too early to be asking for 22 Million ARB
Cost Cost should not be the main consideration for major changes that have potential to improve the DAO , but 22 Million ARB makes this a much tougher proposal to approve. The cost does not seem entirely justified in my opinion as it seems compensation heavy for the operators of the Opco.
Overhead The Opco claims to improve efficiency of the organization -- by adding another overseeing organization. I'm not saying this won't work but combined with the centralization of power and need for additional oversight of the opco im not entirely convinced it will truly lead to more efficiency.
Massive proposal The biggest issue I have isnt that this is a bad idea but that it is simply a massive proposal that coudl stand to be cut down either in scope, or split into milestones. In software development this is "waterfall" as opposed to agile or iterative development, and without a testing or prototype phase.
Feedback: I dont think the proposal is totally without merit, its true proejcts move faster with some centralization. But I would want to see an idea like this either proposed with an MVP first to validate the idea - and then scaled up,
or rolled out in phases with funding released upon successful completion of milestones.
Thank you for this proposal @Entropy. I am voting FOR it as I believe the Arbitrum DAO should be responsible for setting the Vision, while the OpCo should focus on executing it with clear roles and responsibilities. The DAO should not need to vote on minor tasks where the OpCo is accountable.
However, I share concerns regarding the budget, which I find oversized. Like many other Delegates, I would prefer to see it reviewed and reduced, particularly for the top positions within the OpCo. The proposed compensation for these roles appears misaligned with industry standards and seems excessively high.
Thank you for this proposal @Entropy. I am voting FOR it as I believe the Arbitrum DAO should be responsible for setting the Vision, while the OpCo should focus on executing it with clear roles and responsibilities. The DAO should not need to vote on minor tasks where the OpCo is accountable.
However, I share concerns regarding the budget, which I find oversized. Like many other Delegates, I would prefer to see it reviewed and reduced, particularly for the top positions within the OpCo. The proposed compensation for these roles appears misaligned with industry standards and seems excessively high.
I believe the OpCo should initially operate with a lean budget as a testing phase before gradually expanding its scope. Taking steps in this direction would strengthen my confidence and confirm my vote on Tally
Im totally in favor because It is true, it is of utmost importance that Arbitrum DAO maintains a decentralized, bottom-up system to promote new projects, DAO contributors, and establish strategies, including the creation and direction of the DAO's vision, mission, and purpose, as well as approaches to achieve objectives and decision-making... And we need the OpCo to work with the DAO...this will definitely save time and bring a lot of benefits
Thank you for the proposal, Entropy.
After carefully reviewing the proposal and the multiple revisions, I have decided to vote "FOR" the creation of the OpCo in snapshot. I am convinced that this initiative will bring significantly more benefits to the DAO than drawbacks.
I would like to go through some key points and share my thoughts on each:
Thank you for the proposal, Entropy.
After carefully reviewing the proposal and the multiple revisions, I have decided to vote "FOR" the creation of the OpCo in snapshot. I am convinced that this initiative will bring significantly more benefits to the DAO than drawbacks.
I would like to go through some key points and share my thoughts on each:
High Costs: From my perspective, the costs are negligible for a DAO of this size. Any company has operating expenses, and if we want ARB to continue thriving and moving forward rapidly, we must invest where it is necessary. Attracting and retaining top-tier talent is not cheap. I also want to thank Entropy for listening to the community and reducing the budget to 22M ARB.
Decentralization: While it is true that creating a traditional entity introduces a new attack vector, this is not the time to sacrifice efficiency for decentralization maximalism. We need to focus on growth, innovation, and ensuring adoption. After 30 months, we can always reassess and explore more distributed operations if needed.
Lastly, I want to emphasize the importance of ensuring that all three OAT members are completely free from any conflicts of interest as they will be crucial to maintain the correct balance.
We are voting for OpCo because it will help the DAO execute plans more effectively by creating a structured way to hire contributors and manage projects. This will reduce delays and make it easier to keep important programs running smoothly. OpCo will also give the DAO flexibility to address challenges and take advantage of opportunities as they arise.
I appreciate Entropy's efforts wranglign cats and advancing a detailed proposal.
I'm voting Against this proposal as: TLDR the purpose outlined seems to contradict the design (details to follow)
It is of utmost importance that Arbitrum DAO maintains a decentralized and bottoms-up system for bootstrapping new projects, DAO contributors, and setting strategies, including creating and steering the DAO’s vision, mission, and purpose, as well as approaches to achieve the goals and decision-making. As such, OpCo will be focused on the Ecosystem Support and Financial Management initiative categorie
I appreciate Entropy's efforts wranglign cats and advancing a detailed proposal.
I'm voting Against this proposal as: TLDR the purpose outlined seems to contradict the design (details to follow)
It is of utmost importance that Arbitrum DAO maintains a decentralized and bottoms-up system for bootstrapping new projects, DAO contributors, and setting strategies, including creating and steering the DAO’s vision, mission, and purpose, as well as approaches to achieve the goals and decision-making. As such, OpCo will be focused on the Ecosystem Support and Financial Management initiative categorie
We encourage Entropy to conside these points and revise the proposal before a Tally vote. We'll reconsider our position if reassurance can be provided towards making the OpCo an enabler for an open platform as opposed to a centralisation chockepoint.
Setting up multiple, lower cost and more targetted operational vehicles would be preferred IMO. These could have a single legal wraper and centralised compliance, etc. to reduce costs, but I don't see why we need such an expensive and top down centralised entity with such a broad mandate.
I don't think this is the right direction for the DAO. I really appreciate what the OpCo is trying to achieve and I agree with its aims, but there are leaner, more decentralized ways of achieving these objectives. I hope we continue to work on finding them, but this is a step in the wrong direction in my opinion.
I voted AGAINST the proposal in its present form.
I'm not the biggest fan of the DAO having fixed employees on hand who we always have to monitor to ensure they are doing productive work.
I voted AGAINST the proposal in its present form.
I'm not the biggest fan of the DAO having fixed employees on hand who we always have to monitor to ensure they are doing productive work.
I prefer the current setup where organizations like entropy, ARDC or APDC make proposals with discrete responsibilities. Otherwise we risk bloat and overhiring people who then need to find work to justify their continued employment.
I am also in favor of the Arbitrum Foundation expanding its ambit rather than setting up a new entity. For example, earmarking funds from any approved grant programs by the DAO for the AF to do M&E after its completion should become a standard.
As it stands, a dedicated OpCo has too high a risk of becoming a slush fund for those involved to have a good time with their friends. More targeted proposals over something as broad as OpCo is what i prefer.
I joined this discussion a bit late, but here are my key takeaways from the proposal:
On Centralization vs. Decentralization: One of the core strengths of DAOs is their ability to minimize gatekeepers and trusted intermediaries. As envisioned, OpCo could become a gatekeeper, interposing itself between the DAO’s broader community and potential contributors. While the DAO retains nominal authority, OpCo might end up influencing who gets contracts and which initiatives progress. This creates a power structure that’s less open, less trust-minimized, and potentially more susceptible to the sway of a few individuals.
I joined this discussion a bit late, but here are my key takeaways from the proposal:
On Centralization vs. Decentralization: One of the core strengths of DAOs is their ability to minimize gatekeepers and trusted intermediaries. As envisioned, OpCo could become a gatekeeper, interposing itself between the DAO’s broader community and potential contributors. While the DAO retains nominal authority, OpCo might end up influencing who gets contracts and which initiatives progress. This creates a power structure that’s less open, less trust-minimized, and potentially more susceptible to the sway of a few individuals.
Censorship Resistance and Legal Attack Vectors: Introducing a legal wrapper around DAO operations inherently broadens the attack surface. Under traditional legal pressures, OpCo could be compelled to censor initiatives, freeze funds, or discriminate against certain contributors. One of the great benefits of a permissionless DAO is its built-in resilience against such censorship. By contrast, a legal entity is susceptible to the full force of conventional legal and political pressure, undermining the censorship resistance and sovereignty that define the DAO ethos.
Innovation vs. Operational Efficiency: While supporters might argue that OpCo would bring streamlined operations, attract top talent, and ensure continuity, these benefits come at the cost of layering on a traditional corporate model. Although efficiency may improve in the short term, we risk sacrificing the long-term innovation and permissionless participation that are fundamental to the DAO’s identity. Encouraging everyone to pass through a single operational hub could stifle the very qualities that make DAOs so powerful.
Conclusion: As a lunarpunk and a staunch advocate for trust minimization and decentralization, I see this proposal as introducing considerable centralization risks and censorship vulnerabilities. Although there may be operational advantages, I believe the DAO should pursue solutions rooted in cryptographic guarantees and decentralized frameworks rather than reverting to the familiar (but ultimately restrictive) structures of traditional entities. For these reasons, I will be voting against this proposal on Snapshot.
This is a very detailed and comprehensive proposal, and I can feel the rigor and attention to detail. Like some others, I believe this is an ambitious goal that requires many full-time staff. I think the budget should be reduced, and the team should expand gradually to ensure smooth progress and minimize unnecessary waste.
To help Arbitrum DAO go further, I am inclined to support this proposal. I hope to see more mechanisms for employee evaluation to prevent internal misconduct and ensure greater transparency for everyone.
This is a very detailed and comprehensive proposal, and I can feel the rigor and attention to detail. Like some others, I believe this is an ambitious goal that requires many full-time staff. I think the budget should be reduced, and the team should expand gradually to ensure smooth progress and minimize unnecessary waste.
To help Arbitrum DAO go further, I am inclined to support this proposal. I hope to see more mechanisms for employee evaluation to prevent internal misconduct and ensure greater transparency for everyone.
Lastly, I remain concerned about salary expenditures. The team should expand gradually whenever possible; otherwise, it may lead to mismanagement. These are just some well-intentioned suggestions. Wishing us all continued success!
I am glad to see this proposal moving forward. I think this will help with the institutionalization of the DAO. The OpCo will provide a more formal operational structure and increase the strategic alignment across all the initiatives within the DAO. One of the end goals should be providing a more structural framework to coordinate the ecosystem' initiatives and proposals.
OpCo will change the manner in which the DAO operates right now substantially, I believe. We should approach its development with a flexible mindset. When I first read the proposal I saw centralization as something detrimental to the DAO's values but now I understand the need for it. Besides, I believe the checks and balances contemplated in its design will effectively limit any undue concentration of power, as the DAO retains the ability to adjust the scope of operations or even assume full control if needed.
Hello Entropy!
I did vote in favor, I support this proposal. It would be interesting to understand who are the candidates for the Chief Chaos Coordinator role before the Tally vote, do you think is doable? It would put a lot more trust in the community knowing that there are good candidates in the pipeline. My guess is it won't be possible by the way, but was worth asking.
I voted FOR on Snapshot to support the establishment of OpCo.
I have been following this proposal closely and believe it addresses a critical issue in Arbitrum’s organizational structure. This is a well-thought-out and significant proposal. Undoubtedly, the direction is clear and correct. With OpCo, responsibilities can be clarified more swiftly, resources can be better allocated, and complex projects can advance more efficiently.
I voted FOR on Snapshot to support the establishment of OpCo.
I have been following this proposal closely and believe it addresses a critical issue in Arbitrum’s organizational structure. This is a well-thought-out and significant proposal. Undoubtedly, the direction is clear and correct. With OpCo, responsibilities can be clarified more swiftly, resources can be better allocated, and complex projects can advance more efficiently.
While the budget seems transparent (though somewhat controversial), and detailed explanations have been provided, I personally find the costs to be on the high side. Therefore, it is essential to establish clear KPIs and oversight mechanisms to ensure OpCo delivers tangible results, such as:
• Can it attract and retain top talent?
• Can it genuinely improve project execution efficiency?
• Can it better drive ecosystem development?
Additionally, I strongly recommend implementing strict approval processes for significant expenditures (over 500K). It’s critical to ensure every dollar is spent effectively, with risk control as the top priority.
Thank you for this proposal. I generally agree with its framework and content. However, I still have some questions regarding financial and budget-related aspects, which might overlap with points discussed by other delegates:
Exciting to see this hit Snapshot! A lot of this is great, and very comprensive. Overall some thoughts we had for this/emphasis on comments/community's points:
I voted FOR on Snapshot to support the establishment of OpCo.
Voting Rationale:
OpCo represents a crucial step for Arbitrum DAO to enhance governance efficiency. It addresses many of the current challenges in governance and execution, drives efficiency, supports the ecosystem’s long-term growth, and upholds decentralization principles. My main reasons for supporting this proposal are as follows:
Hey all, just read through the OpCo proposal and wanted to share some thoughts.
We or better say Entropy is looking to solve some real pain points we've been struggling with - like how slow everything moves and how hard it is to actually execute on initiatives. The pitch is pretty straightforward: create a legal entity that can hire talent, manage complex projects, and cut through all the governance nonsense that typically kills momentum in DAOs. They're putting up 22M ARB to get this off the ground, which is no small chunk of change.
Hey all, just read through the OpCo proposal and wanted to share some thoughts.
We or better say Entropy is looking to solve some real pain points we've been struggling with - like how slow everything moves and how hard it is to actually execute on initiatives. The pitch is pretty straightforward: create a legal entity that can hire talent, manage complex projects, and cut through all the governance nonsense that typically kills momentum in DAOs. They're putting up 22M ARB to get this off the ground, which is no small chunk of change.
DAOs have so much potential, but right now they're like a bunch of brilliant people stuck in endless meetings or proposals. This could be a game-changer.
Sure, there are risks. Another governance layer could just add more complexity. But I'd rather see someone try something bold than keep doing the same ineffective stuff we currently have. What im still not sure about (maybe i simply haven't seen it or i do not understand) is, will OpCo basically be the controlling layer of governance? I have to admit im struggling to understand. Maybe someone can ELI5 this to me.
Im going to vote YES for snapshot and will re-read again to see if I fully got it.
Already gave plenty of feedbacks, here, here and here, plus some more scattered. And in general, as a judgment on specific topic, have engaged in this interesting convo.
To me situation is relative straight forward:
I definitely see the value in OpCo for Arbitrum – it will really help optimize management, finances, and strategy while bringing more professionalism and transparency to the DAO.
That being said, the 30-month timeline feels long for such a proposal, especially with a budget of 22M ARB (even after it was reduced from 35M ARB). That's a big sum, and if it's not managed properly, we could see financial inflation 🙂
I definitely see the value in OpCo for Arbitrum – it will really help optimize management, finances, and strategy while bringing more professionalism and transparency to the DAO.
That being said, the 30-month timeline feels long for such a proposal, especially with a budget of 22M ARB (even after it was reduced from 35M ARB). That's a big sum, and if it's not managed properly, we could see financial inflation 🙂
I’ve voted yes on Snapshot, but I’d love to know how we ensure the 22M ARB is spent effectively and doesn’t have unnecessary costs? Also, what’s the plan to protect the DAO if OpCo doesn’t meet their goals or fails to deliver on commitments?
It is in the realm of possibility for the Arbitrum Foundation to take on additional ops-related work like project management of proposals, but, in our opinion, it is not the best path forward.
The OpCo has been in discussion for several months and to date it is the most viable proposal we have seen that enables the ArbitrumDAO to execute on its proposals faster and in a more efficient manner. If done properly, OpCo can become a key component of the DAO’s operations, offering the resources and expertise needed to simplify decision making, improve execution, optimize governance operations, and drive long-term growth and success for the ecosystem.
Thank you for your opinion Foundation. This is what a lot of people asked, both here and in the delegates' chat: is the Foundation capable and willing to take on more tasks such as the ones proposed by the OpCo? Here we have an answer. Not only we have an answer, but we also have a Foundation that sees is as a key initiative if properly executed.
With the OpCo, or perhaps another proposal, the ArbitrumDAO has a unique opportunity to stand up on its own two feet, form its own organisational structure, and truly form its own collective of contributors.
Of course, while the OpCo may support the DAO’s initiatives, the DAO should remain the ultimate decision maker over the DAO treasury and it should still have the freedom to spin up other initiatives (with or without the support of the OpCo) as it sees fit.
And this is the other reason why I think is fine to vote for it. With the OAT and the capabilities of the DAO to claw back funds, we still retain the ability to call a day to the initiative if it is needed. Remember, we always have the DAO Constitution (to which we should honestly refer more) that establishes the rights of every contributor and the community values for which the DAO is among others [...] Sustainable, [...] Socially inclusive, [...] User-focused and Neutral and open. I am here reiterating the support for this initiative, despite having published the vote rationale, because I am confident that we will respect all of above going forward, with or without the OpCo.
Thank you for the effort that @Entropy and the team put into answering questions, adjusting budgets, and providing a brief summary of the progress in the governance call. I would also like to thank @Maets23 for presenting us with the most relevant information and with the most discussion in SimScore https://rndadocs.notion.site/OpCo-A-DAO-adjacent-Entity-for-Strategy-Execution-a1cda474ac494174bb544ddaa898e411, it is undoubtedly a very useful tool for identifying the most relevant aspects of the proposals.
I have decided to vote against this proposal on Snapshot for the following reasons:
Complexity of governance:
While the participation of new users in the forum has been increasing, the attendance of new users in the call has also increased by 15% each month, which tells us about a scenario with a greater number of requests (proposals) that strengthen the DAO. The importance of an entity like OpCo for project management will be necessary but not at this time. Centralizing the entity can lend itself to favoritism regarding who obtains new contracts and which projects are given more focus.
Budgetary transparency:
I understand that the budget mentioned is an approximation of the estimate based on the number of staff who will be supporting this initiative from the start. However, not knowing the authors who are going to carry out the activities raises doubts about whether these people are sufficiently qualified to perform in their area. It is also mentioned that there will be a variation in salaries if there is compliance with indicators, but these indicators have not yet been mentioned or detailed for either OpCo or OAT.
I consider it to be a well-intentioned proposal and that what is sought is order, support, and to make the most of the team's expertise to continue building on Arbitrum. I believe that operations could be sought that do not necessarily have to be centralized, but rather audited by entities with a proven track record of teamwork.
I look forward to the modifications that this proposal will make before moving on to Tally for voting.
I voted FOR. I believe that this is something needed within ArbitrumDAO to help us to move in the right direction.
That being said, I think that the proposal needs improvements, especially in what success will look like and what is the mandate we expect it to fulfil. I have high hopes that the OP will take the collective feedback and present a new iteration with extra structure for the Tally proposal.
Voting AGAINST this proposal
There are good reasons to support an operations co and I am a fan of the idea and original proposal by @dk3 but I have too many reservations for this version:
Decentraization The proposal claims to promote decentralization but then proposes a centralized entity to control other entities and help operate all initiatives under its umbrella
Voting AGAINST this proposal
There are good reasons to support an operations co and I am a fan of the idea and original proposal by @dk3 but I have too many reservations for this version:
Decentraization The proposal claims to promote decentralization but then proposes a centralized entity to control other entities and help operate all initiatives under its umbrella
While I support efficiency, this is a drastic change from the current setup that I think may be a bit too quick. I do note that the expansion woudl happen by vote so its not a vote blocker for me just a concern.
Vagueness/unclarity/ lack of clear plan For a proposal of this magnitude, there is lack of clarity and specificity about not just the op co but specific KPIs, milestones.
The argument coudl very well be made defining such things this early on could be too early. In which case my response woudl be if its too early to specifiy specific KPIs its probably too early to be asking for 22 Million ARB
Cost Cost should not be the main consideration for major changes that have potential to improve the DAO , but 22 Million ARB makes this a much tougher proposal to approve. The cost does not seem entirely justified in my opinion as it seems compensation heavy for the operators of the Opco.
Overhead The Opco claims to improve efficiency of the organization -- by adding another overseeing organization. I'm not saying this won't work but combined with the centralization of power and need for additional oversight of the opco im not entirely convinced it will truly lead to more efficiency.
Massive proposal The biggest issue I have isnt that this is a bad idea but that it is simply a massive proposal that coudl stand to be cut down either in scope, or split into milestones. In software development this is "waterfall" as opposed to agile or iterative development, and without a testing or prototype phase.
Feedback: I dont think the proposal is totally without merit, its true proejcts move faster with some centralization. But I would want to see an idea like this either proposed with an MVP first to validate the idea - and then scaled up,
or rolled out in phases with funding released upon successful completion of milestones.
Thank you for this proposal @Entropy. I am voting FOR it as I believe the Arbitrum DAO should be responsible for setting the Vision, while the OpCo should focus on executing it with clear roles and responsibilities. The DAO should not need to vote on minor tasks where the OpCo is accountable.
However, I share concerns regarding the budget, which I find oversized. Like many other Delegates, I would prefer to see it reviewed and reduced, particularly for the top positions within the OpCo. The proposed compensation for these roles appears misaligned with industry standards and seems excessively high.
Thank you for this proposal @Entropy. I am voting FOR it as I believe the Arbitrum DAO should be responsible for setting the Vision, while the OpCo should focus on executing it with clear roles and responsibilities. The DAO should not need to vote on minor tasks where the OpCo is accountable.
However, I share concerns regarding the budget, which I find oversized. Like many other Delegates, I would prefer to see it reviewed and reduced, particularly for the top positions within the OpCo. The proposed compensation for these roles appears misaligned with industry standards and seems excessively high.
I believe the OpCo should initially operate with a lean budget as a testing phase before gradually expanding its scope. Taking steps in this direction would strengthen my confidence and confirm my vote on Tally
Im totally in favor because It is true, it is of utmost importance that Arbitrum DAO maintains a decentralized, bottom-up system to promote new projects, DAO contributors, and establish strategies, including the creation and direction of the DAO's vision, mission, and purpose, as well as approaches to achieve objectives and decision-making... And we need the OpCo to work with the DAO...this will definitely save time and bring a lot of benefits
Thank you for the proposal, Entropy.
After carefully reviewing the proposal and the multiple revisions, I have decided to vote "FOR" the creation of the OpCo in snapshot. I am convinced that this initiative will bring significantly more benefits to the DAO than drawbacks.
I would like to go through some key points and share my thoughts on each:
Thank you for the proposal, Entropy.
After carefully reviewing the proposal and the multiple revisions, I have decided to vote "FOR" the creation of the OpCo in snapshot. I am convinced that this initiative will bring significantly more benefits to the DAO than drawbacks.
I would like to go through some key points and share my thoughts on each:
High Costs: From my perspective, the costs are negligible for a DAO of this size. Any company has operating expenses, and if we want ARB to continue thriving and moving forward rapidly, we must invest where it is necessary. Attracting and retaining top-tier talent is not cheap. I also want to thank Entropy for listening to the community and reducing the budget to 22M ARB.
Decentralization: While it is true that creating a traditional entity introduces a new attack vector, this is not the time to sacrifice efficiency for decentralization maximalism. We need to focus on growth, innovation, and ensuring adoption. After 30 months, we can always reassess and explore more distributed operations if needed.
Lastly, I want to emphasize the importance of ensuring that all three OAT members are completely free from any conflicts of interest as they will be crucial to maintain the correct balance.
We are voting for OpCo because it will help the DAO execute plans more effectively by creating a structured way to hire contributors and manage projects. This will reduce delays and make it easier to keep important programs running smoothly. OpCo will also give the DAO flexibility to address challenges and take advantage of opportunities as they arise.
I appreciate Entropy's efforts wranglign cats and advancing a detailed proposal.
I'm voting Against this proposal as: TLDR the purpose outlined seems to contradict the design (details to follow)
It is of utmost importance that Arbitrum DAO maintains a decentralized and bottoms-up system for bootstrapping new projects, DAO contributors, and setting strategies, including creating and steering the DAO’s vision, mission, and purpose, as well as approaches to achieve the goals and decision-making. As such, OpCo will be focused on the Ecosystem Support and Financial Management initiative categorie
I appreciate Entropy's efforts wranglign cats and advancing a detailed proposal.
I'm voting Against this proposal as: TLDR the purpose outlined seems to contradict the design (details to follow)
It is of utmost importance that Arbitrum DAO maintains a decentralized and bottoms-up system for bootstrapping new projects, DAO contributors, and setting strategies, including creating and steering the DAO’s vision, mission, and purpose, as well as approaches to achieve the goals and decision-making. As such, OpCo will be focused on the Ecosystem Support and Financial Management initiative categorie
We encourage Entropy to conside these points and revise the proposal before a Tally vote. We'll reconsider our position if reassurance can be provided towards making the OpCo an enabler for an open platform as opposed to a centralisation chockepoint.
Setting up multiple, lower cost and more targetted operational vehicles would be preferred IMO. These could have a single legal wraper and centralised compliance, etc. to reduce costs, but I don't see why we need such an expensive and top down centralised entity with such a broad mandate.
I don't think this is the right direction for the DAO. I really appreciate what the OpCo is trying to achieve and I agree with its aims, but there are leaner, more decentralized ways of achieving these objectives. I hope we continue to work on finding them, but this is a step in the wrong direction in my opinion.
I voted AGAINST the proposal in its present form.
I'm not the biggest fan of the DAO having fixed employees on hand who we always have to monitor to ensure they are doing productive work.
I voted AGAINST the proposal in its present form.
I'm not the biggest fan of the DAO having fixed employees on hand who we always have to monitor to ensure they are doing productive work.
I prefer the current setup where organizations like entropy, ARDC or APDC make proposals with discrete responsibilities. Otherwise we risk bloat and overhiring people who then need to find work to justify their continued employment.
I am also in favor of the Arbitrum Foundation expanding its ambit rather than setting up a new entity. For example, earmarking funds from any approved grant programs by the DAO for the AF to do M&E after its completion should become a standard.
As it stands, a dedicated OpCo has too high a risk of becoming a slush fund for those involved to have a good time with their friends. More targeted proposals over something as broad as OpCo is what i prefer.
I joined this discussion a bit late, but here are my key takeaways from the proposal:
On Centralization vs. Decentralization: One of the core strengths of DAOs is their ability to minimize gatekeepers and trusted intermediaries. As envisioned, OpCo could become a gatekeeper, interposing itself between the DAO’s broader community and potential contributors. While the DAO retains nominal authority, OpCo might end up influencing who gets contracts and which initiatives progress. This creates a power structure that’s less open, less trust-minimized, and potentially more susceptible to the sway of a few individuals.
I joined this discussion a bit late, but here are my key takeaways from the proposal:
On Centralization vs. Decentralization: One of the core strengths of DAOs is their ability to minimize gatekeepers and trusted intermediaries. As envisioned, OpCo could become a gatekeeper, interposing itself between the DAO’s broader community and potential contributors. While the DAO retains nominal authority, OpCo might end up influencing who gets contracts and which initiatives progress. This creates a power structure that’s less open, less trust-minimized, and potentially more susceptible to the sway of a few individuals.
Censorship Resistance and Legal Attack Vectors: Introducing a legal wrapper around DAO operations inherently broadens the attack surface. Under traditional legal pressures, OpCo could be compelled to censor initiatives, freeze funds, or discriminate against certain contributors. One of the great benefits of a permissionless DAO is its built-in resilience against such censorship. By contrast, a legal entity is susceptible to the full force of conventional legal and political pressure, undermining the censorship resistance and sovereignty that define the DAO ethos.
Innovation vs. Operational Efficiency: While supporters might argue that OpCo would bring streamlined operations, attract top talent, and ensure continuity, these benefits come at the cost of layering on a traditional corporate model. Although efficiency may improve in the short term, we risk sacrificing the long-term innovation and permissionless participation that are fundamental to the DAO’s identity. Encouraging everyone to pass through a single operational hub could stifle the very qualities that make DAOs so powerful.
Conclusion: As a lunarpunk and a staunch advocate for trust minimization and decentralization, I see this proposal as introducing considerable centralization risks and censorship vulnerabilities. Although there may be operational advantages, I believe the DAO should pursue solutions rooted in cryptographic guarantees and decentralized frameworks rather than reverting to the familiar (but ultimately restrictive) structures of traditional entities. For these reasons, I will be voting against this proposal on Snapshot.
This is a very detailed and comprehensive proposal, and I can feel the rigor and attention to detail. Like some others, I believe this is an ambitious goal that requires many full-time staff. I think the budget should be reduced, and the team should expand gradually to ensure smooth progress and minimize unnecessary waste.
To help Arbitrum DAO go further, I am inclined to support this proposal. I hope to see more mechanisms for employee evaluation to prevent internal misconduct and ensure greater transparency for everyone.
This is a very detailed and comprehensive proposal, and I can feel the rigor and attention to detail. Like some others, I believe this is an ambitious goal that requires many full-time staff. I think the budget should be reduced, and the team should expand gradually to ensure smooth progress and minimize unnecessary waste.
To help Arbitrum DAO go further, I am inclined to support this proposal. I hope to see more mechanisms for employee evaluation to prevent internal misconduct and ensure greater transparency for everyone.
Lastly, I remain concerned about salary expenditures. The team should expand gradually whenever possible; otherwise, it may lead to mismanagement. These are just some well-intentioned suggestions. Wishing us all continued success!
I am glad to see this proposal moving forward. I think this will help with the institutionalization of the DAO. The OpCo will provide a more formal operational structure and increase the strategic alignment across all the initiatives within the DAO. One of the end goals should be providing a more structural framework to coordinate the ecosystem' initiatives and proposals.
OpCo will change the manner in which the DAO operates right now substantially, I believe. We should approach its development with a flexible mindset. When I first read the proposal I saw centralization as something detrimental to the DAO's values but now I understand the need for it. Besides, I believe the checks and balances contemplated in its design will effectively limit any undue concentration of power, as the DAO retains the ability to adjust the scope of operations or even assume full control if needed.
Hello Entropy!
I did vote in favor, I support this proposal. It would be interesting to understand who are the candidates for the Chief Chaos Coordinator role before the Tally vote, do you think is doable? It would put a lot more trust in the community knowing that there are good candidates in the pipeline. My guess is it won't be possible by the way, but was worth asking.
I voted FOR on Snapshot to support the establishment of OpCo.
I have been following this proposal closely and believe it addresses a critical issue in Arbitrum’s organizational structure. This is a well-thought-out and significant proposal. Undoubtedly, the direction is clear and correct. With OpCo, responsibilities can be clarified more swiftly, resources can be better allocated, and complex projects can advance more efficiently.
I voted FOR on Snapshot to support the establishment of OpCo.
I have been following this proposal closely and believe it addresses a critical issue in Arbitrum’s organizational structure. This is a well-thought-out and significant proposal. Undoubtedly, the direction is clear and correct. With OpCo, responsibilities can be clarified more swiftly, resources can be better allocated, and complex projects can advance more efficiently.
While the budget seems transparent (though somewhat controversial), and detailed explanations have been provided, I personally find the costs to be on the high side. Therefore, it is essential to establish clear KPIs and oversight mechanisms to ensure OpCo delivers tangible results, such as:
• Can it attract and retain top talent?
• Can it genuinely improve project execution efficiency?
• Can it better drive ecosystem development?
Additionally, I strongly recommend implementing strict approval processes for significant expenditures (over 500K). It’s critical to ensure every dollar is spent effectively, with risk control as the top priority.
Thank you for this proposal. I generally agree with its framework and content. However, I still have some questions regarding financial and budget-related aspects, which might overlap with points discussed by other delegates:
Exciting to see this hit Snapshot! A lot of this is great, and very comprensive. Overall some thoughts we had for this/emphasis on comments/community's points:
I voted FOR on Snapshot to support the establishment of OpCo.
Voting Rationale:
OpCo represents a crucial step for Arbitrum DAO to enhance governance efficiency. It addresses many of the current challenges in governance and execution, drives efficiency, supports the ecosystem’s long-term growth, and upholds decentralization principles. My main reasons for supporting this proposal are as follows:
Hey all, just read through the OpCo proposal and wanted to share some thoughts.
We or better say Entropy is looking to solve some real pain points we've been struggling with - like how slow everything moves and how hard it is to actually execute on initiatives. The pitch is pretty straightforward: create a legal entity that can hire talent, manage complex projects, and cut through all the governance nonsense that typically kills momentum in DAOs. They're putting up 22M ARB to get this off the ground, which is no small chunk of change.
Hey all, just read through the OpCo proposal and wanted to share some thoughts.
We or better say Entropy is looking to solve some real pain points we've been struggling with - like how slow everything moves and how hard it is to actually execute on initiatives. The pitch is pretty straightforward: create a legal entity that can hire talent, manage complex projects, and cut through all the governance nonsense that typically kills momentum in DAOs. They're putting up 22M ARB to get this off the ground, which is no small chunk of change.
DAOs have so much potential, but right now they're like a bunch of brilliant people stuck in endless meetings or proposals. This could be a game-changer.
Sure, there are risks. Another governance layer could just add more complexity. But I'd rather see someone try something bold than keep doing the same ineffective stuff we currently have. What im still not sure about (maybe i simply haven't seen it or i do not understand) is, will OpCo basically be the controlling layer of governance? I have to admit im struggling to understand. Maybe someone can ELI5 this to me.
Im going to vote YES for snapshot and will re-read again to see if I fully got it.
Already gave plenty of feedbacks, here, here and here, plus some more scattered. And in general, as a judgment on specific topic, have engaged in this interesting convo.
To me situation is relative straight forward:
I definitely see the value in OpCo for Arbitrum – it will really help optimize management, finances, and strategy while bringing more professionalism and transparency to the DAO.
That being said, the 30-month timeline feels long for such a proposal, especially with a budget of 22M ARB (even after it was reduced from 35M ARB). That's a big sum, and if it's not managed properly, we could see financial inflation 🙂
I definitely see the value in OpCo for Arbitrum – it will really help optimize management, finances, and strategy while bringing more professionalism and transparency to the DAO.
That being said, the 30-month timeline feels long for such a proposal, especially with a budget of 22M ARB (even after it was reduced from 35M ARB). That's a big sum, and if it's not managed properly, we could see financial inflation 🙂
I’ve voted yes on Snapshot, but I’d love to know how we ensure the 22M ARB is spent effectively and doesn’t have unnecessary costs? Also, what’s the plan to protect the DAO if OpCo doesn’t meet their goals or fails to deliver on commitments?
I am glad to see this proposal moving forward. I think this will help with the institutionalization of the DAO. The OpCo will provide a more formal operational structure and increase the strategic alignment across all the initiatives within the DAO. One of the end goals should be providing a more structural framework to coordinate the ecosystem' initiatives and proposals.
OpCo will change the manner in which the DAO operates right now substantially, I believe. We should approach its development with a flexible mindset. When I first read the proposal I saw centralization as something detrimental to the DAO's values but now I understand the need for it. Besides, I believe the checks and balances contemplated in its design will effectively limit any undue concentration of power, as the DAO retains the ability to adjust the scope of operations or even assume full control if needed.
Its important to stress the involvement of the OAT and its role in functioning as a DAO-OpCo bridge. In fact, I view the OAT’s responsibility of maintaining a proper balance as even more critical than the CEO’s position. It should be in their scope of responsibilities to make sure the OpCo remains responsive, transparent, and accountable over the long term.
I am voting FOR this proposal in Snapshot, looking forward to its development and with the belief that this will help the DAO thrive in the always-evolving landscape we are all used to.
Exciting to see this hit Snapshot! A lot of this is great, and very comprensive. Overall some thoughts we had for this/emphasis on comments/community's points:
Main question we have is how does OpCo decide whether to manage a project directly or supervise an existing service provider?
I voted FOR on Snapshot to support the establishment of OpCo.
Voting Rationale:
OpCo represents a crucial step for Arbitrum DAO to enhance governance efficiency. It addresses many of the current challenges in governance and execution, drives efficiency, supports the ecosystem’s long-term growth, and upholds decentralization principles. My main reasons for supporting this proposal are as follows:
OpCo ensures the strategic execution of DAO initiatives, addressing issues like resource fragmentation and lack of accountability. It also prevents critical tasks from being disrupted due to contributor exits.
While OpCo is a centralized entity, the proposal clearly states that the DAO retains ultimate control. The establishment of the Oversight and Transparency Committee (OAT) ensures accountability and transparency for OpCo.
The proposal outlines OpCo’s budget and expense management processes in detail, ensuring clear and transparent fund usage while minimizing the risk of waste.
The DAO can adjust OpCo’s scope or terminate its operations through voting, ensuring it always aligns with the DAO’s goals. Beyond governance optimization, OpCo can also attract top contributors and service providers, laying a solid foundation for the DAO’s future development.
Concerns and Recommendations:
Establish clear Key Performance Indicators (KPIs) and provide regular performance updates to the community to ensure continuous improvement.
While OpCo enhances efficiency, it is essential to monitor its operations closely to prevent any deviation from the DAO’s decentralization principles.
Strictly enforce the budget during operations to avoid unnecessary expenses. High costs without results can backfire—starting with a lower baseline budget might be more practical.
Maintain open communication with the community during OpCo’s strategy execution to ensure broad support for initiatives.
Already gave plenty of feedbacks, here, here and here, plus some more scattered. And in general, as a judgment on specific topic, have engaged in this interesting convo.
To me situation is relative straight forward:
The points above to me are first, compatible with what most has judged as a too long of a mandate. De facto of the 30 months, we can consider the first 6 months burned between setting up the entity, source the ceo (and possibly the cfo), find the oat, negotiate first 2 salaries, get the operations up and running with a first few sets of people being the operational people alongside the 2 c-suite. Even just writing this down, 6 months could be optimistic considering the summer in between. That's why 30 months is the bare minimum here. On the capital, as stated previously, I prefer the OpCo having more than it needs and eventually give it back then the opposite situation; if I read the prospect above with the people + salaries, the 22M arb is compatible with a full fledged org, with again no obligation to spend it all (and here, spend = overhire = controlled by oats). I also think that salaries proposed are not that out of the world: remember, anybody in there won't be able to partake in any other initiative in this dao, or others dao, or protocols. This is quite big: the opportunities in the crypto space are quite abundant, having this exclusivity does bear a premium; and the bonus is necessary to align performances (otherwise you risk people doing the bare minimum, and we don't even want to have to tackle a situation like this, we want people that grind everyday).
The main risk of this proposal is finding the right CEO, this was discussed already, and will be one of the most important key success factor.
Not only i am voting in favor, I vote in favor with the hope that scope will be expanded by the dao overtime.
The authors of the proposal clearly live somewhere in the US, where such salaries are probably common, but in most countries even $100,000 per year is an unimaginable salary. Due to the fact that DAO is not limited to the US, I suggest not to burden DAO with such high costs, because I am sure that even for $30,000 per year there will be many willing to work at OpCo. And is the salary of the bosses at $900,000 per year normal? These costs can be reduced by at least three.
The authors of the proposal clearly live somewhere in the US, where such salaries are probably common, but in most countries even $100,000 per year is an unimaginable salary. Due to the fact that DAO is not limited to the US, I suggest not to burden DAO with such high costs, because I am sure that even for $30,000 per year there will be many willing to work at OpCo. And is the salary of the bosses at $900,000 per year normal? These costs can be reduced by at least three.
How many employees are needed is a moot point. I see that the organization’s tasks can be accomplished with a significantly smaller number of employees. 4 is quite enough.
As has been pointed out several times, the presented budget is exemplary, meaning that OpCo doesn’t have to hire exactly 12 internal employees at the assumed salaries that are driving the total Internal Employees line item. Since OpCo needs to be able to react to the DAO’s needs, which are volatile from time to time with new requirements occasionally emerging quickly, it’s difficult—if not impossible—to precisely estimate the entity’s exact expenses and required personnel for its first term. A buffer is required in the case the DAO decides to leverage the entity heavily. In other words, with the exception of setup and fixed costs such as the executive-equivalent employees’ salaries and offshore entity personnel, OpCo’s expenses will only scale when i) the DAO decides to utilize the entity more or ii) OpCo is instructed to take on more complex strategies that require employees/SPs with higher salaries.
Moreover, as pointed out by @backbone, competitive salaries will enable OpCo to go after top-tier talent necessary for the entity to maximize the value produced for the DAO. It’s well known that average compensation in crypto is on the higher side compared to other industries, with, e.g., VC-backed projects paying highly competitive salaries. What is more, for OpCo to be able to attract talent, the entity likely has to pay a risk premium. This is due to several factors, but the most notable ones are the fact that the DAO can defund the entity at any time and internal employees will be working in the open. Without an adequate budget, initializing OpCo likely doesn’t make sense due to the entity being subject to adverse selection.
The OAT will also be responsible for ensuring that overhiring doesn’t take place and the agreed-upon salaries and bonus structures are in line with market comparables and the required skills for a specific position, as well as reflect a hired candidate’s experience and competencies. Naturally, if OpCo has the opportunity to choose between hiring two identical candidates but the other one is 3x more expensive, the entity would go for the more cost-effective candidate. Some comments seem to be particularly fixated on the assumed compensation driving the Chief Chaos Coordinator’s salary. Again, this number is based on industry comparables as written in one of our previous thread responses, but this doesn’t mean that the OAT together with the Arbitrum Foundation has to exhaust all of the capital reserved in the model if a suitable candidate can be attracted with a lower salary.
At the end of the day, if the DAO thinks OpCo is overspending or overhiring, which will be visible through the bi-annual oversight and financial reports as well as the OAT’s quarterly updates to the community, it can always give feedback to the OAT, instruct OpCo to stop executing on a certain strategy, or even defund the entity completely. We’d also like to point out that funds requested for this initiative should be considered allocated and only spent (expense) once they are actually paid out from OpCo.
Moreover, there are no KPIs. Who will determine whether the employees are working well enough?
Establish clear Key Performance Indicators (KPIs) to measure OpCo’s success.
Align OAT compensation with measurable outcomes.
Answered here:
Ultimately, the OAT will be responsible for designing, finalizing, and implementing the relevant KPIs once OpCo is at a point where this can be sufficiently done. We envision that this will be a collaborative effort between the OAT and the DAO, with KPIs reviewed and adjusted periodically based on how OpCo evolves and the community’s feedback.
The call for clear KPIs in this thread is completely understandable considering the amount of money proposed to be deployed. As mentioned above a crucial part of the OAT initial setup deliverables is to develop meaningful KPIs under which the OpCo will be held accountable. As this is a new initiative and the exact activities are dependent on a lot of different, still developing factors, developing KPIs in the proposal stage is not practical in my opinion.
Since the OAT will be so community-facing, we feel as though the eligibility structure and vesting schedule that are currently in place are sufficient as it’ll be clear to delegates if the OAT isn’t performing on a high level. For OpCo’s executive-equivalent employees, we think it’s more suitable for the OAT to structure each position’s bonus payment as they will have direct visibility into how the aforementioned employees will be performing and what areas they should be focusing on. In terms of OpCo’s other internal employees, we envision the bonus structure being drafted by the executive-equivalent employees together with the OAT.
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The motivation says that there are some initiatives that OpCo can solve with legal assistance. But judging by the adopted initiatives, they are all in the blockchain zone, except for RWA, which are solved through intermediaries, but they will not be supported by OpCo, as written in the initiative.
So what initiatives require a lawyer? I do not see any need for one.
For OpCo to be able to, e.g., independently operate in a legally compliant manner, enter into contracts with service providers, and advise proposers on legal matters (these are often required on the backend for other verticals than just RWAs), it naturally requires legal capabilities. This question has been answered in more detail here:
The full-time, in-house legal counsel is included under the legal services line item. We arrived at this number and a full-time, in-house legal counsel following consultations with the Arbitrum Foundation as well as a few independent legal firms. As you point out, the figure also includes a buffer for any unanticipated incidents, and as such, we don’t expect the actual legal-related expenses to be as extensive. We’ve also been advised that some legal deliverables can quickly become quite notable based on immediate demands, such as drafting new contracts, ensuring compliance, and consultations on emergent matters (e.g., see legal-related comments within this thread to get a sense of some of the aspects that require focus). It’s crucial that OpCo has a budget to cover such activities without having to take shortcuts. Another notable legal-related deliverable is creating OpCo’s Bylaws and other legal documents. Underbudgeting on this front would be a major mistake in our minds.
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Threatens to exclude delegates from management
The long-term vision is as follows - implementation of DAO activities, i.e. all initiators of proposals will not be involved in operational activities. However, as far as I can see, almost every initiator gets a role in their proposal and gets some bonuses for it, and your vision will deprive initiators of bonuses, which may lead to the fact that initiatives will simply stop, since they do not give anything for them, and they take a lot of time.
All this leads us to a system where all initiatives will come from Entropy, and execution from OpCo (which is also an initiative of Entropy). Thus, delegates lose the roles of initiators and managers - this does not look much like decentralization, where the initiative and its execution are controlled by Entropy.
There seems to be a misunderstanding here. As mentioned in the proposal, “... anyone interested in facilitating a DAO initiative could propose themselves (or another party) for that.” and “If approved through governance, the facilitator would then be contracted by OpCo as a service provider for the DAO.” In other words, anyone interested in facilitating a strategy can still put up a proposal to do so and get paid for the work based on how compensation has been defined in the proposal. Moreover, nothing prevents a proposer from including a bonus for the creation process in an OpCo-related proposal.
The proposal also states, “Proposals and their execution can still be DAO-led end-to-end and outside of OpCo if delegates vote in this regard. OpCo is a tool for the DAO to leverage if needed.” What OpCo offers in addition to the current structure is that, if the DAO so chooses, the entity can procure or internalize roles for which there currently aren’t clear contributors within the DAO, and finding such contributors is difficult. We also feel as though one of the main benefits that OpCo would introduce is enabling delegates to focus on actual strategy creation instead of having to spend resources on all minor details related to overseeing execution.
It’s also important to point out that although this proposal has been created by Entropy, we would have no additional control over OpCo compared to any other delegates.
Why exactly 5 people are required in the OAT, if this is an oversight function? After all, all decisions are made either by OpCo with the permission of the DAO through voting.
I did not see any functions of the OAT that could maliciously spoil something. The main thing they vote for is hiring employees. The budget is formed in this proposal and is voted on by the Arbitrum community. Otherwise, OAT is a bridge between OpCo and Arbitrum
This is not fully in accordance with the proposal. The OAT’s responsibilities include things such as ensuring over-hiring doesn’t take place and is done per strategies approved by the DAO, firing internal staff if required, approving contracts with service providers, greenlighting salaries and larger spending, etc. The OAT also has several additional tasks related to guidance and ensuring information flow, with the responsibilities further described in the proposal under the “OpCo Accountability – The Oversight and Transparency Committee (OAT)” section. It’s also crucial to recognize that OpCo’s budget is not formed in this proposal, rather, this deliverable falls within the Chief of Coins’ duties and will be ratified by the OAT as well as the DAO later.
The number of OAT seats was decided based on several factors, including the required diversity of competencies and capabilities, not allowing votes to be split evenly between against/for, hindering the OAT’s ability to become corrupted, and the expected workload of the committee for OpCo’s first term.
bottleneck risks: a centralised entity without a proper org design will be seen as the go-to for all kind of topics. ArbitrumDAO already has a strong culture of reducing dependencies or even voting down based on perceived redundancies. Based on this trait, the OpCo can systematically kill everything related to financial management and ecosystem development i.e. most DAO activity. The OpCo needs more mechanisms to ensure it can enable other initiatives, acting like an open platform instead of centralised bottleneck. Borrowing DistuptionJoe’s analogy, we need a Phil Jackson OpCo, not a Micheal Jordan. Currently, I see no mechanisms in place to mitigate this risk.
When it comes to a well-functioning organizational structure, this is another great reason why a strong OAT as well as executive-equivalent employees are needed as they will be the main parties responsible for setting up the framework. OpCo has to be mandated to execute strategies within the verticals you mention, meaning that if the entity handles most activities in these areas, it would be a result of the DAO deciding this to be the best approach. Since the DAO can instruct OpCo to enter into a contract with any service provider, we believe that if a strong SP with deep expertise in an area where Arbitrum lacks sufficient capabilities submits a proposal to address a critical issue, they wouldn’t be shut down. Ultimately, the DAO will maintain its authority to decide what individuals, service providers, or other relevant entities are working on by defining/approving specific strategies. Although OpCo will be proactive, mainly when it observes inefficiencies that could be remedied, the DAO will always have the final say when it comes to these decisions. On a side note, we also don’t think reducing redundancies in the ecosystem is a negative thing, on the contrary.
Our Position: OpCo should only manage programs when no viable external provider exists, focusing primarily on facilitation and oversight.
Define responsibilities to prevent overlap with Entropy and other contributors.
Focus on addressing gaps in under-resourced areas rather than duplicating efforts.
How the OpCo will work with external service providers and researchers
OpCo’s responsibilities can be summarized as facilitating strategies within the ecosystem support and financial management focus areas, as well as any other areas that might be approved by the DAO in the future. Since OpCo additionally needs to be mandated by the DAO to execute a specific strategy and how this takes place (i.e., proposer/proposer-related party, internalize roles, or facilitate a procurement process), the only way OpCo’s efforts generally would begin overlapping with other contributors is if the DAO instructs OpCo to do so, or a stand-alone initiative outside of OpCo is passed that has similar responsibilities as the entity.
When it comes to Entropy’s relationship with OpCo, we are cognizant of the fact that the entity would likely assume many of the workflows we are currently facilitating. It’ll again be up to the DAO to decide whether this would be done by OpCo internalizing more roles, hiring us as a service provider, or the entity conducting a procurement process for similar service providers. The point is that when an external, high-quality SP exists within the ecosystem, they can be plugged into OpCo, which would function as a unified point of contact that would create a mesh layer for information, knowledge sharing, and other synergies. In short, the idea is similar to your point of view, but instead of supervising, OpCo’s focus should be on guiding contracted service providers and researchers.
A more concrete example of how this could function is given here:
The idea is not for OpCo to internalize everything, especially in situations where existing service providers are already performing to a high standard. Using the ARDC as an example, we envision that if the DAO is satisfied with version 2, these service providers are eventually contracted into OpCo once it has been operationalized and has adequate processes, capabilities, internal controls, and any other relevant functions in place for it to perform according to its complete mandate (or ARDC-related SPs could alternatively be whitelisted by OpCo and utilized when needed). The benefit of doing so is that the relevant internal OpCo employees can then coordinate across service providers and the DAO, so no operational roles have to be filled for such an initiative, and in the case that one service provider drops out, OpCo can ensure continuation by swiftly finding a replacement solution.
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If OpCo itself hires employees, and OAT confirms this hiring, then how does the first employee appear?
Who will it be, how to choose him, if the organization does not exist yet?
As stated in the proposal and further expanded in one of our previous responses:
The OAT, in collaboration with the Arbitrum Foundation, would hire the executive-equivalent personnel to the OpCo (the Chief Chaos Coordinator, the Chief of Coins, and any other positions of equivalent responsibility that may be introduced in the future) once the legal entity is established. The OAT will help onboard the executive-equivalent personnel and assist in the creation of a standardized onboarding process for future internal employees such that new hires’ expectations are managed properly.
After all OAT members are KYCd and the required NDAs have been signed, they will begin the recruitment process for the Chief Chaos Coordinator and Chief of Coins.
We’ve already identified a few potential candidates for the executive-equivalent positions and will be working closely with the OAT and the Foundation to facilitate the process. Ultimately, the OAT and the Foundation would be the decision-makers when it comes to setting up the official recruitment process as well as choosing the ideal candidates.
Who will it be, how to choose him, if the organization does not exist yet?
Who will it be, how to choose him, if the organization does not exist yet?
my understanding is that the ceo, and maybe the cfo or others, will be sourced by entropy. In the end most of the success of this initiative will come through the leaders. I see potentially entropy collaborating with the foundation and others to search in the network the key figure(s) that could lead this initiative. This btw has been a process similar to the gcp.
And one more question about hiring employees. If OpCo itself hires employees, and OAT confirms this hiring, then how does the first employee appear? Who will it be, how to choose him, if the organization does not exist yet?
Entropy, thank you so much for putting this together. It's a very well thought out initiative and it's been exciting following the discussions in the comment.
A lot of talking points have already been addressed but I still see some delegates sighting centralization risks. The million-dollar question should be: Does the potential benefit outweigh the risk? In my opinion, I say yes.
Entropy, thank you so much for putting this together. It's a very well thought out initiative and it's been exciting following the discussions in the comment.
A lot of talking points have already been addressed but I still see some delegates sighting centralization risks. The million-dollar question should be: Does the potential benefit outweigh the risk? In my opinion, I say yes.
In this space, there's a very thin line between efficiency and centralization. As a community, we have grown to that point where we need to ask ourselves if the potential for more efficiency and a more agile DAO is worth the risk of centralizing power and maybe even overspending. Don't get me wrong, I am not saying this proposal centralizes power to the OAT but I am just trying to paint a clearer picture on this tangent.
The way I see it, OpCo would be striking the balance between community control and the need to get things done. It answers the question "How do we empower individuals while also creating structures that allow for collective action?"
Interesting times ahead!
The OpCo proposal addresses key gaps in DAO strategy execution, but there are areas that require further clarification and improvement - some of our comments and suggestions can be found below:
The OpCo proposal addresses key gaps in DAO strategy execution, but there are areas that require further clarification and improvement - some of our comments and suggestions can be found below:
I understand that you want to hire the best, but does their salary match their tasks? You can hire a super-cool specialist and let him make simple tables, but since the specialist is cool, you need to pay him a lot. This is irrational.
Since I do not see the volume of work of specialists, I do not understand how their salary is chosen.
Reiterating here a discussion we had in telegram:
The proposal overal is taking shape nicely but i have two critical concerns that remain.
Reiterating here a discussion we had in telegram:
The proposal overal is taking shape nicely but i have two critical concerns that remain.
Suggestions: We can leverage the OpCo as a legal vehicle to effectuate change. We can alleviate congestion in the DAO and allow focused and fast decision making, but then let's think a bit more about how we can setup the OpCo as an open platform rather than choker. I'd suggest starting with a research/pilot type of thing during which these concerns are addressed, similar to how AVI and the M&A program operated. Otherwise it looks like we're voting for an undercover CEO for the DAO and I really struggle to see that working.
If you want to specifically attract good personell, having salary based on geography is often time detrimental: will introduce internal differences for people having same tasks and scope. Means tha,t if you tune it down to salaries that are, in this case, not usa based, you will necessarily exclude this people
If you want to specifically attract good personell, having salary based on geography is often time detrimental: will introduce internal differences for people having same tasks and scope. Means tha,t if you tune it down to salaries that are, in this case, not usa based, you will necessarily exclude this people
I don’t think setting up a company with 4 employee, again, is for the best
I also imagine this is for a 2 year mandate, so basically 1.5M for 20 people. Is not a huge amount considering the scope
It's not about whether it is a lot or a little. Although I think it is too much for a bonus. There are two questions here:
That said, yes we are introducing centralization in arbitrum with this company, and yes likely, if the opco is succesfull, we will have more initiative being created by the opco itself. Will that mean that the dao has no say on this, or that the dao has no power on creation of new initiative? I don’t think so. I just think we will raise the bar in quality terms
The main issue is that in most activity there has to a compliance and legal evaluation of course of action, both referred to the entity itself, to the specific situation of contributors and to arbitrum
but to the fact you want real oversight, and 3 persons means you effectively need to poach, if you want to act in a malicious way, only 2
Overall, as I said, the initiative is correct and necessary, but it seems to me that it has a significant drawback in terms of the huge budget.
I want to try and give an answer because, even if i didn't draft the proposal, I did spend a lot lot lot time to read it. And maybe my answer can help @Entropy have a perspective on how others are currently perceiving how this can go. So, feel free to correct me if this is not the right reading, in the and i am always only a cow.
The authors of the proposal clearly live somewhere in the US, where such salaries are probably common, but in most countries even $100,000 per year is an unimaginable salary. Due to the fact that DAO is not limited to the US, I suggest not to burden DAO with such high costs, because I am sure that even for $30,000 per year there will be many willing to work at OpCo. And is the salary of the bosses at $900,000 per year normal? These costs can be reduced by at least three.
I want to try and give an answer because, even if i didn't draft the proposal, I did spend a lot lot lot time to read it. And maybe my answer can help @Entropy have a perspective on how others are currently perceiving how this can go. So, feel free to correct me if this is not the right reading, in the and i am always only a cow.
The authors of the proposal clearly live somewhere in the US, where such salaries are probably common, but in most countries even $100,000 per year is an unimaginable salary. Due to the fact that DAO is not limited to the US, I suggest not to burden DAO with such high costs, because I am sure that even for $30,000 per year there will be many willing to work at OpCo. And is the salary of the bosses at $900,000 per year normal? These costs can be reduced by at least three.
I won't necessarily go into numbers, if the brackets are right or wrong, but would like to add a perspective here.
If you want to specifically attract good personell, having salary based on geography is often time detrimental: will introduce internal differences for people having same tasks and scope. Means tha,t if you tune it down to salaries that are, in this case, not usa based, you will necessarily exclude this people.
Let me also extend this way of thinking to other initiatives we have in the dao
In a post covid world, and in a crypto world, in which we all work outside timezones, outside barriers, and with (hopefully) a deliverable-set mindset and not an employee one, this way of thinking is not the way to setup for success.
How many employees are needed is a moot point. I see that the organization’s tasks can be accomplished with a significantly smaller number of employees. 4 is quite enough
I don't think setting up a company with 4 employee, again, is for the best. As every company, the amount of work will grow over time, and so the need of personnel. Likely, there will be a natural growth based on this. But I really can't imagine opco working with just 4 people.
Why do we need bonuses in the millions of dollars? Moreover, there are no KPIs. Who will determine whether the employees are working well enough?
For example, Lido creates an external company in the Caymans with operating expenses of 250,000 per year. At the same time, Lido’s DVF is 40 billion dollars. Why are the costs in Arbitrum ten times higher?
implementation of DAO activities, i.e. all initiators of proposals will not be involved in operational activities. However, as far as I can see, almost every initiator gets a role in their proposal and gets some bonuses for it, and your vision will deprive initiators of bonuses, which may lead to the fact that initiatives will simply stop, since they do not give anything for them, and they take a lot of time.
from what I read, the DAO can either specifically task the opco to execute on an "idea", or have the delegates/contributors create an initiative and, eventually, have the opco interact with this initiative by for example hiring that very contributor or others. I don't see the path you are saying in which the combo of entropy + opco will be a capture all. That said, yes we are introducing centralization in arbitrum with this company, and yes likely, if the opco is succesfull, we will have more initiative being created by the opco itself. Will that mean that the dao has no say on this, or that the dao has no power on creation of new initiative? I don't think so. I just think we will raise the bar in quality terms. This, to me, is a very good outcome.
So what initiatives require a lawyer? I do not see any need for one.
The main issue is that in most activity there has to a compliance and legal evaluation of course of action, both referred to the entity itself, to the specific situation of contributors and to arbitrum. The political landscape should likely become more permissive and clearer, but not all the clouds have been blown away.
Mine is an educated guess here: you want an odd number so if there is an internal vote it doesn't stall; and likely 3 people are not enough to have broad oversight. This is not only due to the amount of work, but to the fact you want real oversight, and 3 persons means you effectively need to poach, if you want to act in a malicious way, only 2 (well, likely you need to poach all the 3 to be honest). But this is just a guess on my side.
Initially, I want to say that this is a very well thought out proposal, but everything regarding the costs is too much, and the staff is unreasonably inflated.
The authors of the proposal clearly live somewhere in the US, where such salaries are probably common, but in most countries even $100,000 per year is an unimaginable salary. Due to the fact that DAO is not limited to the US, I suggest not to burden DAO with such high costs, because I am sure that even for $30,000 per year there will be many willing to work at OpCo. And is the salary of the bosses at $900,000 per year normal? These costs can be reduced by at least three.
Why do we need bonuses in the millions of dollars? Moreover, there are no KPIs. Who will determine whether the employees are working well enough?
How many employees are needed is a moot point. I see that the organization's tasks can be accomplished with a significantly smaller number of employees. 4 is quite enough.
The motivation says that there are some initiatives that OpCo can solve with legal assistance. But judging by the adopted initiatives, they are all in the blockchain zone, except for RWA, which are solved through intermediaries, but they will not be supported by OpCo, as written in the initiative. So what initiatives require a lawyer? I do not see any need for one.
For example, Lido creates an external company in the Caymans with operating expenses of 250,000 per year. At the same time, Lido's DVF is 40 billion dollars. Why are the costs in Arbitrum ten times higher?
Threatens to exclude delegates from management The long-term vision is as follows - implementation of DAO activities, i.e. all initiators of proposals will not be involved in operational activities. However, as far as I can see, almost every initiator gets a role in their proposal and gets some bonuses for it, and your vision will deprive initiators of bonuses, which may lead to the fact that initiatives will simply stop, since they do not give anything for them, and they take a lot of time. All this leads us to a system where all initiatives will come from Entropy, and execution from OpCo (which is also an initiative of Entropy). Thus, delegates lose the roles of initiators and managers - this does not look much like decentralization, where the initiative and its execution are controlled by Entropy.
Why exactly 5 people are required in the OAT, if this is an oversight function? After all, all decisions are made either by OpCo with the permission of the DAO through voting.
Thank you for the thoughtful update and the work you’ve put into addressing the community's concerns. We really appreciate the effort you've put into refining the proposal to ensure OpCo’s financial stability while balancing the DAO’s broader interests.
Allocating ARB to establish a stable cash position and returning unused tokens to the DAO treasury is a responsible and prudent strategy. We’re supportive of this direction and look forward to seeing how OpCo can drive meaningful contributions to the DAO’s strategic goals.
Thank you to everyone who contributed invaluable input on this proposal and for your patience during our extended response process. The timing with Devcon was somewhat unfortunate, but the team is now caught up with everything and eager to move this proposal forward. Let’s dive in!
Thank you to everyone who contributed invaluable input on this proposal and for your patience during our extended response process. The timing with Devcon was somewhat unfortunate, but the team is now caught up with everything and eager to move this proposal forward. Let’s dive in!
Many have expressed willingness to liquidate ARB into cash equivalents in advance to cover OpCo’s budget and provide the entity with financial stability even during market downturns. On the other hand, we’ve also recently seen some delegates being concerned over the DAO liquidating too much ARB in a short period of time. Our opinion is that it would be important to secure OpCo’s financial stability and the conditions to do so have now become more favorable with the recent market upswing. As such, contingent on community feedback, we’ll make the following further edits to the proposal:
If the feedback towards the above solution is negative, we’ll maintain the ask of 35M ARB to account for price and market volatility.
[quote="kuiclub, post:2, topic:27361"]
In addition to semi-annual reporting, is there more frequent reporting on the use of funds, or is real-time financial visualization provided?
[/quote]
[quote="duokongcrypto, post:11, topic:27361"]
OpCo has a high degree of independence, especially in recruitment and contracting, and it will be important for DAO to monitor and audit key positions. Need to have a system of rules
[/quote]
[quote="SEEDGov, post:19, topic:27361"]
Based on this example as a real scenario, monthly expenses per term are around $500,000 (approximately 1M ARB), while the monthly unlocks are 1M ARB (barely enough at current prices). We mention this because it may be worthwhile to review the unlocking rate to avoid situations like the one with AF, where the vesting unlocks were insufficient to cover committed expenses and/or support new initiatives. Our concern is that 1M ARB per month might restrict OpCo’s capacity to expand, creating an operational bottleneck. We understand that part of the initial 10M ARB disbursement could mitigate this situation during the first term and that costs are purposefully overestimated in this example (such as legal expenses, which considers the worst-case scenario), but we wanted to bring this up to avoid OpCo potentially being limited by a vesting scheme.
[/quote]
[quote="Euphoria, post:20, topic:27361"]
For budget allocations, flexibility is key. However, setting clear thresholds for reallocations or maximum variance limits in major categories could strengthen budget accountability.
[/quote]
[quote="Immutablelawyer, post:32, topic:27361"]
While bi-annual oversight and financial reports are mentioned, the significant funding involved warrants more frequent reporting calls, such as on a monthly basis or a dashboard updated in real-time. These could include, projections and any deviations (e.g., budget overruns, missed deadlines), explanations for variances and remedial actions being undertaken, among several others. Ideally the reports are published on a quarterly basis in our opinion to ensure that the DAO has sufficient oversight over financial standings (especially since a part of the funds may be off boarded and thus are off-chain w/the DAO not having the ability to track these). With the current proposed budget (which in our opinion is too high in and of itself, bi-annual reporting definitely does not cut it).
[/quote]
[quote="Immutablelawyer, post:32, topic:27361"]
Has any rationale been included regarding the decision to release 10M ARB upfront? Given that this was included at an average price of $0.54/ARB and this has now increased to c. $0.7/ARB, is the plan to still release 10M ARB upfront, even if the price of ARB increases further?
[/quote]
[quote="gauntlet, post:36, topic:27361"]
At Gauntlet, we envision a DAO future that relies on simplification and on-chain tooling to automate away bureaucracy. While this vision may not be realistic in the short term, we must admit that this proposal is a decided step in the opposite direction.
[/quote]
It’s possible that real-time financial/oversight dashboards and other onchain tooling are introduced in the future. The DAO can always instruct OpCo to explore the feasibility and benefits of adding such solutions through governance in the future. However, at this point, we feel as though this proposal is already getting quite detailed and we can’t capture everything at once, while there also are some operational structures and processes that need to be set in place before it’s feasible for real-time dashboards and other onchain tooling to be implemented.
We don’t expect OpCo to provide extensive monthly oversight reports as such updates are a time-intensive endeavor and would likely cause some friction for the entity’s operations. For OpCo to be successful, the community has to elect people to the OAT who are highly skilled and can be trusted to oversee the entity’s usage of funds and hiring processes. The OAT’s mandate already includes conducting oversight calls for OpCo, where community members can acquire relevant information about the entity’s developments. Following community feedback, we’ve expanded this mandate to include quarterly updates to the community as well as designing relevant KPIs for the entity once it is at a point where this can be sufficiently done. We’ve also changed the vesting mechanism, which has been replaced by an upfront capital commitment and includes something akin to a “capital call” structure.
[quote="duokongcrypto, post:11, topic:27361"]
contingency measures need to be put in place to protect resources from being wasted. the structure needs to be very simplified and clear. the DAO should need to have the ability and constraints of a veto, and have contingency plans in place at all times if it doesn’t do a good job.
[/quote]
This responsibility falls within the OAT’s mandate. One of the benefits that OpCo introduces is that it enables delegates to focus on actual strategy creation instead of having to spend resources on all minor details related to execution. Requiring delegates to monitor all of the actions taken by OpCo would, in our mind, be inefficient and remove some of the benefits that OpCo would bring about. With the combination of oversight from the OAT and bi-annual transparency and financial reports as well as quarterly updates, delegates ought to be able to trust that the entity is delivering value and that resources are not wasted while having the ability to shut the entity down if it isn’t performing.
[quote="Larva, post:3, topic:27361"]
So my question is, could the budget be reduced appropriately, or is there a contingency plan to prevent a negative impact on ARB’s price?
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[quote="Juanrah, post:8, topic:27361"]
Other things to consider and expand upon are the high operational costs, the complexity of the accountability process and the uncertainty of the ROI metrics for this investment.
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[quote="Argonaut, post:14, topic:27361"]
Finally, we share @Larva 's concerns about this specific part of the proposal: How do we know that making a movement of this kind will not generate a fluctuation of the ARB token when it occurs?
[/quote]
[quote="DisruptionJoe, post:21, topic:27361"]
I believe it could be done a lot more efficiently. 34 million ARB is a lot. Thank ARB got turned down for being able to allocate 30 million ARB to the community for a cost of 3 million in service fees. To date, it has delivered 5 million ARB to over 400 grants gaining well over 300 deployments on Arbitrum with hundreds of thousands of total users. It did this for service fees of just over $500k total.
[/quote]
Arbitrum DAO has historically not utilized notable capital to develop its operations, which could be argued to be the main reason why certain inefficiencies still exist within the system. The fact of the matter is that setting up and running operations in a high-quality manner isn’t free, and we (as well as many other delegates who served as inspiration for this proposal’s creation) feel as though this is a necessary and important area to invest in. Naturally, the entity’s costs scale only when its mandate is expanded through governance—the idea behind the budget structure is to enable OpCo to grow with the DAO’s needs. We also find it important to note that ROI probably isn’t the correct metric to look at here since, among other things, it omits intangibles and other secondary value additions that derive from enabling the DAO to perform strategy execution more seamlessly and efficiently.
[quote="jameskbh, post:6, topic:27361"]
In the Budget we have an estimation of the team size (10 FTE) and their salary range. Is there a proposed internal organizational chart, so we can see the distribution between the areas OpCo will take care of?
[/quote]
[quote="SEEDGov, post:19, topic:27361"]
Do you think it is possible to establish predefined salary ranges for the different roles? (beyond the chiefs). We understand that this isn’t easy, as the final salary for each position will depend on a variety of hard-to-predict factors, but it would be valuable for the DAO to have a sense of which roles warrant a $100k salary per year versus those that merit $200k (as an example).
[/quote]
We expect that an organizational structure will be set in place by executive-equivalent internal employees together with the OAT. This has to be done as things develop in our opinion, such that OpCo isn’t locked in a certain, pre-defined structure that isn’t optimal for the DAO’s needs as they arise. We’d also like to re-emphasize that the budget is exemplary, meaning that the team size and each employee’s salary will almost certainly be different as the entity actually begins hiring people. The purpose of the exemplary budget is to show that the ask isn’t arbitrary and what assumptions it is based on.
When it comes to predefined salary ranges, if there is a strong demand for this from delegates, we could do this. However, we think that there is a high likelihood that this would again restrict OpCo’s ability to operate since 1) it’s extremely difficult, if not impossible, to exactly predict what all of the roles will be during OpCo’s first term that it needs to hire for and 2) if OpCo finds a perfect candidate for a certain role but we’ve defined the salary range too low or too high, the entity will be disadvantaged, have to hire another candidate, or might even struggle to fill the role. As the OAT will be greenlighting OpCo’s hiring decisions, the most important aspect to focus on is attracting the correct individuals to the committee.
[quote="JoJo, post:7, topic:27361"]
While you explain the why of this narrowed choice, i honestly see opco being able to help in other sectors as well. Do you think it would be possible to insert some degree of flexibility for which, if the dao really wants it, OpCo would be able to tap and help/manage specific initiatives outside the 2 categories above?
[/quote]
Thank you for the great call out. We’ve added language to make it abundantly clear that this would be possible.
[quote="JoJo, post:7, topic:27361"]
Does this mean that OpCo will be responsible for the overviewing of this contracted sp/individual? If not I might have missed the main value point of this, beside coordination.
[/quote]
When it comes to the relationship between OpCo and service providers, the entity’s main value-add is its ability to function as an information-sharing layer and ensure that service providers are working in a synergistic way in the correct direction. A good theoretical example would be related to incentives. Let’s say OpCo is tasked to oversee such an initiative, and so contracts a data provider and a risk researcher to facilitate this. OpCo then acts as a project manager, receiving regular updates from the SPs while guiding and coordinating across them.
I am not sure how complex it would be for five persons to oversight every project and maintain a clear boundary between OpCo’s role and the DAO’s mission.
The OAT’s role isn’t directly to oversee or project manage every initiative facilitated through OpCo. This responsibility would instead fall to the entity’s internal employees. To give a high-level example, say the DAO wants OpCo to facilitate Developer Relations. The entity could then hire a person for a leadership role to oversee the initiative and act as a project manager for service providers and individual contributors contracted to enable the execution of the initiative. In contrast, the OAT’s responsibilities are more connected to holding internal employees accountable by, e.g., ensuring that OpCo isn’t overstepping its mandate or that over-hiring isn’t taking place.
I suggest refining the plan around staffing and with ROI-focused metrics. A clear outline on the number of hires and specific roles, with justifications for each, would help avoid over-hiring risks, maintain cost-efficiency and foster transparency which would reinforce trust and ensure the OpCo team remains accountable to the DAO’s mission.
With the exception of initial core positions (Chief Chaos Coordinator, Chief of Coins, OAT, and likely a full-time legal counsel), we feel as though tightly defining specific roles beforehand is risky and could cause more harm than good since we expect that emergent needs will arise as OpCo’s role within the DAO develops. Again, what is instead of great importance is that the OAT is resourced with highly skilled and trustworthy individuals since the committee is responsible for preventing the risks you mention and reporting all relevant aspects back to the DAO.
On legal guidance, I am unsure of the costs, but 1.2M seems a high number. You mention full-time in-house legal counsel and preparation for unforeseen events or worst-case scenarios, it would be useful to know more about this structure/functionality.
Regarding legal needs, is a full-time, in-house legal counsel necessary? Clarifying the specific responsibilities they would cover would help assess the need for a full-time position.
The proposal includes hiring a full-time, in-house legal counsel. If this is to count as one of the 10 employees, what do the Year 2 legal costs entail? Moreover, we feel that a retainer model for legal counsel might be more cost-effective and prevent under-utilisation in this regard. In the immediate, OpCo will definitely not need a full-time legal counsel and this would be something that’d be more ideal in Y2 when we have initiatives potentially plugging into OpCo
Legal Considerations: The proposers need to address legal issues, and while the Foundation has offered advice, we are not prepared to comment on this aspect. However, $2.2M to support entity setup, legal advisement, and insurance is still a large financial line item for an exciting but un-proven proposal.
The full-time, in-house legal counsel is included under the legal services line item. We arrived at this number and a full-time, in-house legal counsel following consultations with the Arbitrum Foundation as well as a few independent legal firms. As you point out, the figure also includes a buffer for any unanticipated incidents, and as such, we don’t expect the actual legal-related expenses to be as extensive. We’ve also been advised that some legal deliverables can quickly become quite notable based on immediate demands, such as drafting new contracts, ensuring compliance, and consultations on emergent matters (e.g., see legal-related comments within this thread to get a sense of some of the aspects that require focus). It’s crucial that OpCo has a budget to cover such activities without having to take shortcuts. Another notable legal-related deliverable is creating OpCo’s Bylaws and other legal documents. Underbudgeting on this front would be a major mistake in our minds. When this deliverable is done correctly, it will also address the concern raised here:
the DAO would always have ultimate authority over OpCo, with the entity purely being a helpful resource focused on streamlining wider-reaching and complex initiatives that require a more structured execution framework
It would be proper to expand on this assertion to make sure that it is kept that way. This is no easy task. It would need a very well-thought definition of the OpCos boundaries and their restrictions. It would also need frequent, profound reporting and transparent metrics for spending and audits.
Thank you @Pablo for the extensive comments on the legal design front! We’ll make sure that all of these points are taken into consideration by the relevant parties that are facilitating this process on the legal front.
If we are to expect people to submit themselves for these elections then I think it’s only fair for them to understand the legal nuances so that they may seek legal advice prior to participating (I think this is only fair and ethical).
As discussed async, this is not the case. OAT applicants would be the first individuals to get involved in this initiative. The OAT’s mandate includes providing assistance in the entity’s legal setup process, meaning that they wouldn’t blindly apply to a legal entity without knowing its structure and geographical location. When it comes time to hire the first executive-equivalent personnel, the entity’s structure and location will already be known. Having said that, based on preliminary conversations, the most likely legal structure that would be utilized for OpCo is the Cayman Islands Foundation Company.
What types of service providers are envisioned here if those related to audits (potentially also providers for events and RPC), as well as those for security, risk and research, are already covered by these entities?
Is the idea to absorb these responsibilities, or to wait until their mandate concludes?
The idea is that the DAO and OpCo converge on the most efficient solution. The idea is not for OpCo to internalize everything, especially in situations where existing service providers are already performing to a high standard. Using the ARDC as an example, we envision that if the DAO is satisfied with version 2, these service providers are eventually contracted into OpCo once it has been operationalized and has adequate processes, capabilities, internal controls, and any other relevant functions in place for it to perform according to its complete mandate (or ARDC-related SPs could alternatively be whitelisted by OpCo and utilized when needed). The benefit of doing so is that the relevant internal OpCo employees can then coordinate across service providers and the DAO, so no operational roles have to be filled for such an initiative, and in the case that one service provider drops out, OpCo can ensure continuation by swiftly finding a replacement solution.
It is of utmost importance that Arbitrum DAO maintains a decentralized and bottoms-up system for bootstrapping new projects, DAO contributors, and setting strategies, including creating and steering the DAO’s vision, mission, and purpose, as well as approaches to achieve the goals and decision-making. As such, these areas will fall outside of the OpCo’s central mandate.
I think this is very well-conceived but challenging to implement in practice. Take, for instance, the lessons from the ARDC by the DAO Advocate role L2BEAT, where they faced difficulties obtaining proactive engagement from the delegates, who where supposed to require work from the ARDC.
What you’re proposing here as a role for the DAO’s operations is even more abstract than what was required of the ARDC, and thus more complex.
I don’t have a clear solution because it is indeed challenging, but I’d like to see ideas on how this would be materialized in practice and how friction could be avoided to prevent paying for a large structure that, in practice, lacks concrete mandates.
In our mind, this will come down to electing highly skilled individuals into the OAT and the executive-equivalent roles within OpCo such that the entity will be able to operate with a wide mandate. One important difference between ARDC v1 and OpCo is that the latter is required to be proactive (we’ve added clearer language around this for the updated proposal), meaning that if delegates aren’t actively engaging the entity, it’ll have the ability to push the ecosystem forward by itself, given that the initiatives that come out of OpCo are accepted by the DAO. Similar concerns were raised in connection to Entropy’s proposal to enter into an exclusive deal with the DAO as the scope is somewhat wide, but we feel as though we’ve been able to produce quite a lot of value-add initiatives proactively (although, we might naturally be biased here).
I’m still not entirely clear on this structure—I need to digest the proposal a bit more to fully understand the concept. On one hand, I find the idea of an entity dedicated to the project management of the DAO’s initiatives valuable; on the other hand, doesn’t adding another layer of control over ecosystem actors already fulfilling this role (e.g., SEED Gov) somewhat defeat the purpose?
If the idea is for the OpCo to be the PM and facilitator of initiatives, I think it should replace entities like SEED rather than simply oversee them (although SEED, for example, could later be contracted as a service provider to carry out specific tasks within the program).
The idea is not to add a layer of control but instead a layer of information sharing and coordination which also secures the continuation of programs. Naturally, as mentioned in the proposal, some amount of administrative work which otherwise wouldn’t have arisen will emerge. However, the way we see it, this is something that all organizations require and only roles and areas that aren’t currently covered or aren’t done so to a satisfying degree would be internalized by OpCo if it is seen as the most effective solution by the DAO. For example, the CFO-type role—the Chief of Coins—would be spearheading financial management by, among other things, bringing together STEP and possibly the treasury management initiatives that just passed Snapshot to a cohesive strategy, facilitating the creation of a DAO-wide budget, and continuously monitoring Arbitrum’s financial performance and making recommendations to the DAO based on this. This is just one example of where the entity could be extremely useful by filling an operational gap the DAO currently faces.
That’s why we would like to know if the incorporation of Opco will be mandatory in all the processes mentioned, or if it could be optional?
As mentioned in the proposal:
It’s important to reiterate that proposals and their execution can still be DAO-led end-to-end and outside of OpCo if delegates vote in this regard.
On the other hand, , should’n we consider some kind of pilot before starting with this program for a total amount of 30 months? We know it’s been stated that 6 months will be for the setup and the next 24 for operations from the entity, but most of what we see here is an oficial launching for something that haven’t been tested yet and considering everything that implies and the funds it requires, Maybe 1 year which is not a long period of time but it is also not a short period as well, and 6 months for setting up while the next 6 for operations and then and only then if the OpCo demonstrates that it is really useful then require for an extension up to 20 more months
One aspect of the proposal that could benefit from further considearation is the 30-month initial term. While it provides operational stability, it may be worth exploring interim performance review mechanisms beyond the suggested bi-annual reports.
One last point from our end re. the Term is that we are of the opinion that this is too long for such a new initiative. If it doesn’t work, we want to avoid creating the bad optics of having to put up a proposal to wind it down following Y1 for example. Hence, same with industry precedents that have been set, we are of the opinion that the term should be that of 12 months, to be extensible by a 24-month period thereafter if it produces the corresponding benefit.
There are several reasons why the 30-month initial term was chosen:
would love as a standard practice to have members of the opCo to also be rewarded in ARB based on project related KPIs. Ex: hitting a milestone by a specific date. We should start to reward accountability in everything that we do as a DAO.
Despite the bonus, OAT members’ compensation seems low. This is a critical role for both the DAO and OpCo, effectively overseeing all operations and requiring candidates to forgo other jobs/positions for full-time commitment. The opportunity cost for joining the OAT is high, and we worry that a low base compensation might deter potential applicants (who must also have a seniority level commensurate with the role).
Indeed, within the provided budget example, the five OAT members would account for only 5.7% of the total excluding the optional bonus (almost 1.5% per member), while the employees they supervise might potentially earn more.
Considering this, I second the opinion that the proposed compensation of the OAT is below industry standard, considering the expected responsibility, seniority, opportunity cost, time commitment as well as the availability of talent.
The structure underlying the Oversight and Transparency Committee (OAT) is well thought out and naturally an integral part of this OpCo proposal. While some members have identified that the monthly contribution for these members is on the low side, we feel that is in part addressed by the bonus being proposed. We generally are in favour of this as it helps to align incentives and ensure long-term commitment and accountability. In this regard however, you should establish parameters of what factors would lead to these bonus payments being triggered in detail so that expectations are fully set.
This is exactly what the two bonus allocation pools are for. When it comes to the OAT, we’ve increased each member’s monthly base salary to $7.5K and included the 1M ARB subject to a vesting schedule in the proposal. Since the OAT will be so community-facing, we feel as though the eligibility structure and vesting schedule that are currently in place are sufficient as it’ll be clear to delegates if the OAT isn’t performing on a high level. For OpCo’s executive-equivalent employees, we think it’s more suitable for the OAT to structure each position’s bonus payment as they will have direct visibility into how the aforementioned employees will be performing and what areas they should be focusing on. In terms of OpCo’s other internal employees, we envision the bonus structure being drafted by the executive-equivalent employees together with the OAT. We’ve added text that clearly conveys that the bonus payments have to be made in ARB and with a vesting structure.
I think @jojo expressed this already: it’s not clear to me what the difference between ecosystem support and grants is. Ex shouldn’t Questbook fall under ecosystem support.
Although undeniably similar, we’ve defined grants as initiatives where the recipient is receiving capital directly in exchange for building out technology solutions as well as one-off, retroactive capital allocations to recipients for strengthening and protecting the community, while the ecosystem support category comprises structured programs that are more operational in nature. We made this distinction since in our opinion, it’s of utmost importance that the DAO maintains a decentralized and bottoms-up system for bootstrapping new projects and DAO contributors. Having said that, based on community feedback, we’ve included text that conveys that OpCo can expand into focus categories outside of its core areas (excluding investments) if the DAO so wishes.
We are slightly concerned that this option might create an incentive for “lazy” proposals that rely on OpCo to fill in the details. Don’t get us wrong—we understand the rationale behind including this option. However, it might be better to establish clearer boundaries on what can be requested from OpCo. To better illustrate our point, let’s take an example:
Suppose the DAO seeks a new long-term incentive program. With OpCo established, a delegate could propose a Snapshot vote stating, “Should OpCo work on a new incentive program for protocols?” without providing any notion of the execution strategy.
How can we be confident that OpCo would be able to facilitate such a proposal, with all it entails?
What if the DAO passes 20 such Snapshot proposals (i.e., mandating OpCo to facilitate an idea from scratch)?
Where is the limit to OpCo’s operational capacity?
This is great feedback—thank you! We think that one of the benefits that OpCo would offer is that it could seamlessly be instructed to perform a strategy that the DAO wants to see implemented. If a key objective is introduced but the roadmap to achieve that objective is unclear, i.e., the actual execution strategy is undefined, the DAO must first instruct OpCo to define the strategy and any additional funds that are required to potentially hire service providers. However, we completely agree with your concern about OpCo reaching its operational capacity. As such, we’ve added language that the OAT together with OpCo will be responsible for keeping the DAO informed of how much bandwidth the entity has and when current projects are expected to end such that if there suddenly is a spike of new proposals, delegates will be able to prioritize and vote on the ones they find the most important. Additionally, if a proposal introduces a new key objective with a clear roadmap but that roadmap is ambitious, the OAT together with OpCo should signal how feasible it is for the entity to execute the proposal. If it’s determined that such a roadmap is feasible, the OAT together with OpCo would also communicate whether or not the entity needs more internal resources to do so. Lastly, we anticipate that if a proposal is posted that is too high-level or ambitious for the entity, such as simply stating that OpCo must onboard 10 million new developers within 12 months, delegates would vote against such a proposal, which is why governance will continue being a highly important part of the ecosystem.
Furthermore, if OpCo has bandwidth and recognizes an area within its mandated verticals that isn’t currently addressed, there is no clear owner for that area, and addressing that area would be beneficial for the DAO
While this statement partially addresses the above concern, the point is that OpCo’s assessment of whether an area is beneficial for the DAO may differ from the DAO’s own perspective as expressed through Snapshot.
This part of the text deals with a slightly different angle. Instead of this being about OpCo/the OAT signaling to a proposer how feasible a proposed initiative is, it’s supposed to convey that OpCo will be required to be proactive when it has the bandwidth to do so and notices an area that should be addressed, creating a proposal itself that defines the strategy through which the identified problems can be addressed.
Once fully operational, OpCo will have the capacity to project manage and oversee these initiatives according to its complete mandate. The long-term vision for this process is as follows:
Does this mean that once fully operational, OpCo will act as the PM for all initiatives, effectively replacing current SPs?
This part of the text is supposed to convey that even after OpCo has operationalized, it’ll likely take some time to set up the proper checks and balances as well as internal capabilities to enter into service provider contracts and act as a counterparty to service providers. We indeed envision that OpCo would act as a PM for service providers that are rolled into OpCo, but this doesn’t mean that these roles would be internalized unless the DAO chooses so. Instead, in this case, OpCo’s role would be acting as an information layer between SPs, ensuring, among other things, that no redundant work is being performed and SPs across different initiatives are synergistic. In other words, the idea is exactly what you wrote here, although instead of supervising we hope it would be more about information sharing and potentially guiding:
That said, and while we acknowledge our position may be biased since we are currently Service Providers for the DAO, we believe OpCo should only manage programs when no viable service provider or clear ownership exists and it should supervise those that do.
We believe that roles within the OAT should be more clearly defined to avoid having all members with similar backgrounds, ensuring sufficient diversity to cover all possible verticals (e.g., limiting members by field).
As for the general election to be held for the three OAT members, will a single Snapshot be held or will there be three snapshot in order to ensure that complementary applicants are attracted? Given the OAT’s critical role in ensuring OpCo is run effectively, attracting a diverse and skilled team is essential.
We agree with this and that is why we introduced a structure where the DAO would choose 3 members through a single Snapshot vote, with the elected members then choosing 2 additional members that would be accepted optimistically by the DAO to ensure a well-diversified committee. Entropy will be posting a more detailed application template once the Snapshot to signal approval/disapproval of OpCo is underway and if the vote passes.
Having said that, we don’t have a strong opinion on whether one or three separate Snapshot votes should be held, and are more than happy to change the structure based on community feedback.
We also found the titles and responsibilities of internal executive-equivalent employees innovative. Are there any specific qualifications or skills listed for these roles, or candidates under consideration who fit the requirements?
Most importantly, we would like more insight into Opco’s recruitment strategy, particularly regarding the selection of the two-person executive team (Chief of Coins and Chief Chaos Coordinator) and the 10 internal employees. Given the centralization risks posed by Opco, it’s essential that the executive team not only has strong operational expertise but is also well-versed in DAOs. Since this skill set is unique, we’re curious about the specific approach to recruiting such candidates.
Monthly salaries for the other 10 employees ($9,000–$16,000), combined with an annual bonus pool of $810,000, seem substantial. While it is acknowledged that this is a preliminary budget i.e. “this is not an official budget, meaning that capital may be budgeted and allocated differently once the entity is stood up”, has there been any effort to identify the roles being considered or benchmark salaries against similar DAO initiatives? If so, a high-level overview of this would be appreciated.
The proficiency and expertise levels should be similar to those expected of C-suite executives at major international companies. The skill sets should naturally be such that these executive-equivalent employees can fulfill and exceed expectations in the duties listed in the description given in the proposal. We’ve already identified a few potential candidates for the executive-equivalent positions and will be working closely with the OAT and the Foundation to facilitate the process. Ultimately, the OAT and the Foundation would be the decision-makers when it comes to setting up the official recruitment process as well as choosing the ideal candidates.
When it comes to the executive-equivalent employees’ salaries, it’s important to reiterate that the laid-out budget is exemplary, meaning that, e.g., the Chief Chaos Coordinator’s salary will not necessarily be $75K per month once hired. The purpose of the exemplary budget is to showcase that this proposal’s ask isn’t arbitrary and to show how it has been derived. Nevertheless, assuming the Chaos Coordinator would be hired at $75K per month, the rate would still be on the lower side compared to positions that require a similar skill set and experience. To give an example, the pure cash compensation for Coinbase’s executive officers in 2023 ranged between $730K and $1M, while all officers naturally also have bonus structures in place that are significantly larger than the base salaries. This data can be found here. It’s also important to remember that working for OpCo could be seen as much riskier than for a more traditional company, which should naturally also be reflected in the salaries that employees at OpCo receive.
The number of people who can be hired should really be explicit. For example, you could say that a new strategy would require a paid steward, but no more than one without the DAO explicitly voting to add another role.
Only things that the private market won’t provide should be handled by the government. This proposal is officially creating a government entity. What are the functions that our market won’t provide?
I’d like to know what the limit for growing this government is? What measurement will we use to say “ok, this thing is getting too big”? I’m less concerned about the number, and more interested in seeing that thought has been directed towards this problem.
To us, OpCo should be viewed more akin to a DAO-owned and controlled company. One of the key things DAOs seem to struggle with is hiring high-quality contributors in a frictionless manner. There are several reasons for this but probably most notably because of the process SPs and individual contributors generally have to go through with DAOs, which often isn’t worth it because of the high opportunity cost, as well as because DAOs generally aren’t able to hire full-time contributors. One of the main benefits that OpCo offers is to remedy the aforementioned frictions as well as having the ability to quickly adapt to the DAO’s needs, which is why we believe that we shouldn’t restrict the number of contributors OpCo will have the ability to hire. To prevent the risk of the entity over-hiring for approved initiatives, it’s of great importance that the correct contributors are elected into the OAT. Combining efficient oversight, extremely high-quality executive-equivalent internal employees, and the DAO’s ability to decide which initiatives the entity executes and when it should halt execution on a specific initiative should in our mind cover the rest of the concerns you’ve raised here.
What is the entity’s mandate? This mandate is referred to a lot here, but I can’t find it clearly stated.
The entity’s main mandate is to facilitate DAO-approved strategies mainly within the ecosystem support and financial management focus areas, but based on most recent edits, we’ve made it clear that the entity can also expand into other focus areas with the exception of investments if the DAO so wishes. OpCo should also be proactive, meaning that if it has the bandwidth and recognizes an area where improvements could be made, the entity will create a proposal containing the strategy through which the improvements will be materialized.
However, if the proposed scope of work falls within OpCo’s mandate, it is expected that delegates vote against such a proposal if it can be better executed via OpCo’s involvement. Proposers will be encouraged to engage with OpCo before posting a proposal to the forum to align with the DAO-adjacent entity’s internal employees.
Would this be enforceable by the code of conduct? Could a delegate lose payment based on voting for things they believe are needed?
We don’t think this should be a hard enforcement. The point of the quoted text is to signify that delegates shouldn’t be afraid of utilizing OpCo as a helpful tool when initiatives that would benefit from being attached to OpCo are being proposed outside of the entity’s scope. However, we think that it’s important that if delegates feel as though an initiative would benefit from being in a standalone structure even when falling within OpCo’s focus areas, they can vote accordingly.
Why is this design decision being suggested?
This decision was made based on initial feedback we received from certain key stakeholders and delegates, but we don’t have a strong opinion on this front. The main argument is that the applicant pool for ideal candidates is likely to be quite limited, so excluding individuals after, e.g., one term could create some friction when a new cohort is to be chosen. When it comes to term limits, we consider the Security Council a comparable structure, which similarly doesn’t have term limits in place.
It’s good to see projects learning from other projects mistakes, but if we know the cost in USD (or atleast, some of the expected costs) is there a reason to not just sell to USD right away to ensure funding? I say that fully understanding that a) 1m of it will be incentive based, so it makes sense to keep it in ARB and b) some costs aren’t fully know yet… but I think that sitting in ARB brings on market risks to a project that has a long runway. For example, if we know the oversight council will be $25,000 a month, why not just sell the $600,000 USD worth of ARB at the start?
Also, apologies if I missed it but I didn’t see any note on additional ARB going back to the DAO. Can you confirm if that will be the case?
We fully agree with the upfront liquidation approach but decided not to initially go with this structure as many delegates have recently been concerned about large ARB sales taking place. Having said that, given some delegates have responded positively to such a structure, and if the wider community agrees, we’ll change the structure as described at the beginning of this forum response. We’ve also included text to clearly indicate that residual ARB (as well as capital in other denominations) will be sent back to the DAO treasury at the end of OpCo’s first term if the initiative isn’t renewed.
Furthermore, what happens if the DAO cannot secure the ideal candidates? Specifically, for the executive roles, will the Opco’s initiation be delayed, or will the OAT step in to manage executive responsibilities temporarily if these positions are unfilled?
We feel as though it’s of high importance that the executive-equivalent employees are involved in setting up OpCo’s internal processes and operational models given that they are also required to then lead the entity. In the unfortunate case that the ideal candidates cannot be secured swiftly, we think that OpCo’s initiation should be delayed given the entity’s importance, and it doesn’t make sense to rush the process as potential mistakes could compound in the future and have to be fixed later on.
Regarding the 10 employees mentioned in the sample budget, we’re wondering if this setup resembles a “bench” model, similar to consulting firms, where the DAO would have access to resources on demand for various initiatives. If that’s the case, we’re concerned about potential underutilization, a common challenge in consulting and agency models, where resources are hired without clear expectations around the scope or duration of their projects.
The budget shown is exemplary and its purpose is to show that the ask hasn’t been derived arbitrarily. OpCo would only hire internal employees for initiatives where capacity is needed, not immediately go out and employ, e.g., 10 people because its capital allocation would allow for it. Another way to think about this is that the initial allocation would support up to 10 internal employees (excluding the OAT, executive-equivalent employees, etc.) at the salary levels shown.
Will the Chief of Chaos oversee existing working groups that fall under the Opco’s mandate (Ecosystem Support & Financial Management). What exactly will their role be? Will it be to improve processes or something else?
The Chief of Chaos Coordinator’s high-level responsibilities are listed in the “Establishing OpCo” section. Whether or not the person would oversee existing working groups that would roll up to OpCo would be up to the Coordinator. We foresee that OpCo hires a project manager for such responsibilities as the Coordinator is already tasked with, e.g., strategic leadership, stakeholder management, operational development, etc., and likely won’t have time to take on further tasks.
Additionally, what checks and balances, if any, will be created for the Chief of Coins and Chief Chaos Coordinator? For example, will the DAO be able to veto initiatives proposed by these individuals?
The OAT will have the authority to veto decisions made by the executive-equivalent employees. The OAT’s decisions will be guided by the DAO’s will. For example, let’s say the Chaos Coordinator tries to hire a marketing specialist into the entity but the DAO has not approved such an initiative through a vote. In that case, the OAT would intervene and veto the Coordinator’s decision.
The call for clear KPIs in this thread is completely understandable considering the amount of money proposed to be deployed. As mentioned above a crucial part of the OAT initial setup deliverables is to develop meaningful KPIs under which the OpCo will be held accountable. As this is a new initiative and the exact activities are dependent on a lot of different, still developing factors, developing KPIs in the proposal stage is not practical in my opinion.
Hey Valentin, thank you very much for the insightful feedback! We’ve updated the proposal to clearly indicate that the OAT’s mandate includes developing KPIs for OpCo once the entity is at a point where this can be sufficiently done.
Are there any plans to further scope out the mandate of OpCo? As is, the entity seems to be a catch-all of sorts aimed at taking up grass-roots initiatives within the Ecosystem. Naturally, we do see the element of centralisation that this could cause and also the chance of eliminating grass-roots initiatives and deterring smaller contributors w/various initiatives.
The decision to give OpCo a wide scope was deliberate to enable it to mold into the DAO’s needs as they arise and evolve, as well as allow internal employees to proactively suggest new strategies within areas where they identify inefficiencies. We started by restricting OpCo’s mandate to the ecosystem support and financial management focus areas to prevent the risk of the DAO’s bottoms-up system for bootstrapping new projects, DAO contributors, strategies, etc., eroding, but following delegate feedback, decided to enable the entity to further expand into the other areas (excluding investments) as well if the DAO so chooses. Based on conversations we had at Devcon, most delegates and key stakeholders prefer a structure of intent execution with decentralized decision-making, which this proposal strives to achieve.
To this point, it would be worth adjusting OpCo’s KPIs for the first few months toward specific critical deliverables rather than broadly aiming to get established and optimize itself for time/agility. Examples include:
Hiring a specified number of employees for defined positions.
Designing and implementing a financial reporting structure for all DAO grant programs.
Approving a target compensation range for DAO council positions.
Signing a long-term contract with a vendor for DAO communications.
Establishing regular touch-points with Arbitrum Stakeholders (Delegates, OCL, AF, Entropy, GCP, etc.)
As pointed out by @backbone, establishing KPIs at the proposal stage might not be feasible, and there is a risk that the DAO’s priorities will change between now and when the entity is operationalized, meaning that it would be somewhat forced to execute in areas that aren’t as relevant for the DAO anymore. Having said that, most of the points you bring up perfectly encompass the building blocks for a proposal we would consider ideal for the DAO to instruct OpCo to begin executing once the entity is at a point where its foundational components have been established and it’s ready to kick off its operations.
Ok this is awesome. Let's first start with the green edits of the initial proposal.
OpCo is also required to be proactive, meaning that if the entity has the bandwidth and recognizes a potential advancement that could be made within its mandated focus areas, it can work on and propose a strategy through which the entity would address the identified frictions.
Thank you, @Entropy, for this much-needed initiative. We fully agree that Arbitrum DAO needs to take a more structured approach to operations execution and project management, especially in coordination with third parties like service providers and builders.
We believe the proposal is a great start, but we believe additional clarifications are needed in the following areas:
Thank you, @Entropy, for this much-needed initiative. We fully agree that Arbitrum DAO needs to take a more structured approach to operations execution and project management, especially in coordination with third parties like service providers and builders.
We believe the proposal is a great start, but we believe additional clarifications are needed in the following areas:
Gauntlet provided in-depth feedback on this significant proposal during DevCon. The proposed OpCo presents an opportunity to address critical gaps in Arbitrum DAO governance, including horizontal and vertical organization, financial planning and budgeting, and program management resources to ensure that DAO initiatives are aligned, accountable, and efficient.
However, there are valid concerns regarding the execution of the proposal:
Gauntlet provided in-depth feedback on this significant proposal during DevCon. The proposed OpCo presents an opportunity to address critical gaps in Arbitrum DAO governance, including horizontal and vertical organization, financial planning and budgeting, and program management resources to ensure that DAO initiatives are aligned, accountable, and efficient.
However, there are valid concerns regarding the execution of the proposal:
To this point, it would be worth adjusting OpCo's KPIs for the first few months toward specific critical deliverables rather than broadly aiming to get established and optimize itself for time/agility. Examples include:
Ultimately, Arbitrum is currently on its heels to defend its market position in a quickly growing L2 landscape. There is a time to place big bets, and we appreciate OpCo's potential to help jumpstart the DAO toward making more definitive and efficient moves. We prefer the DAO to measure twice and cut once if it proceeds with OpCo.
I'm stepping into the conversation just now, but I’d like to share my thoughts on this before it moves on to Snapshot. First, I’m really excited about this proposal. I think it can really make a difference in defining an efficient strategy, allowing the DAO to make efforts in the right direction.
I echo some concerns that have already been mentioned by other delegates by highlighting the potential consequences linked to the deployment of the funds in terms of price fluctuations.
如果 OpCo 受命推动的 DAO 批准的战略或战略目标没有具体的结束日期，则 DAO 相邻实体将继续执行，直到该实体认为相关目标已经实现，或者 DAO 通过快照投票（简单多数，至少 3% 的可投票代币投票“赞成”或“弃权”）指示该实体停止执行。如果预计这项工作将是长期的，OpCo 将负责确保工作能够继续进行，并在其预算延期请求中核算相关成本。
Gmgm!
The following reflects our current thoughts on this proposal (which I hope will not be going to Snapshot prior to replied-to comments and sufficient time for contributors to evaluate replies).
Gmgm!
The following reflects our current thoughts on this proposal (which I hope will not be going to Snapshot prior to replied-to comments and sufficient time for contributors to evaluate replies).
Firstly, thanks for preparing this detailed proposal, there's some great work here! Will be posting our reflections hereunder based on our experience running identical structures in a private capacity for our clients on our legal & corporate service-lines, and in our public capacity at the dYdX Operations subDAO together w/ @backbone:
Firstly, we're happy with the fact the OpCo proposal helps address the challenge relating to continuity. This mirrors practices in the public sector, where continuity is maintained by involving multiple individuals in processes and ensuring seamless transitions through comprehensive documentation. In our opinion, and based on the current proposal structure, OpCo is well-positioned to facilitate this. Additionally, it has the potential to conduct post-mortems for programs, enabling the DAO to systematically analyze both successes and failures.
The structure underlying the Oversight and Transparency Committee (OAT) is well thought out and naturally an integral part of this OpCo proposal. While some members have identified that the monthly contribution for these members is on the low side, we feel that is in part addressed by the bonus being proposed. We generally are in favour of this as it helps to align incentives and ensure long-term commitment and accountability. In this regard however, you should establish parameters of what factors would lead to these bonus payments being triggered in detail so that expectations are fully set.
As for the general election to be held for the three OAT members, will a single Snapshot be held or will there be three snapshot in order to ensure that complementary applicants are attracted? Given the OAT’s critical role in ensuring OpCo is run effectively, attracting a diverse and skilled team is essential.
While bi-annual oversight and financial reports are mentioned, the significant funding involved warrants more frequent reporting calls, such as on a monthly basis or a dashboard updated in real-time. These could include, projections and any deviations (e.g., budget overruns, missed deadlines), explanations for variances and remedial actions being undertaken, among several others. Ideally the reports are published on a quarterly basis in our opinion to ensure that the DAO has sufficient oversight over financial standings (especially since a part of the funds may be off boarded and thus are off-chain w/the DAO not having the ability to track these). With the current proposed budget (which in our opinion is too high in and of itself, bi-annual reporting definitely does not cut it).
The proposal includes hiring a full-time, in-house legal counsel. If this is to count as one of the 10 employees, what do the Year 2 legal costs entail? Moreover, we feel that a retainer model for legal counsel might be more cost-effective and prevent under-utilisation in this regard. In the immediate, OpCo will definitely not need a full-time legal counsel and this would be something that'd be more ideal in Y2 when we have initiatives potentially plugging into OpCo (although the 'Why?' of Why should initiatives even plug-in to OpCo is still very much up in the air).
Reference is made towards the budget provided:
Has any rationale been included regarding the decision to release 10M ARB upfront? Given that this was included at an average price of $0.54/ARB and this has now increased to c. $0.7/ARB, is the plan to still release 10M ARB upfront, even if the price of ARB increases further?
Are there any plans to further scope out the mandate of OpCo? As is, the entity seems to be a catch-all of sorts aimed at taking up grass-roots initiatives within the Ecosystem. Naturally, we do see the element of centralisation that this could cause and also the chance of eliminating grass-roots initiatives and deterring smaller contributors w/various initiatives. Legal decentralisation is welcome, yet it could easily lead to progressive centralisation if the entities that are being spun up are not scoped out well. In this regard, reference is made to the recent Lido Alliance OpCo which was set up recently that was scoped out well by the proposers https://research.lido.fi/t/organize-the-lido-alliance-program-as-a-lido-dao-adjacent-borg/8173
Since employees will be employed on a full-time basis can we assume that none of these employees will have any involvement in other DAOs? Also, will these be employees or just full time independent contractors? Best to delineate to (1) set expectations and (2) avoid employment reclassification risk (Employees = OpsCo would need to register as an employer and also offer employee-equivalent benefits such as paid leave, maternity leave etc.)
Re. the request for community feedback on KPIs some additional metrics that could be considered include (i) budget variance i.e. deviation between projected and actual expenditures, (ii) % of funds returned to the DAO (iii) runway project accuracy (iv) attrition rate analysis i.e. reasons for internal employees hired or service provider departing… Moreover, KPIs could be reviewed and adjusted periodically (ex: every 6 months) based on feedback from the DAO to ensure alignment with evolving priorities.
One last point from our end re. the Term is that we are of the opinion that this is too long for such a new initiative. If it doesn't work, we want to avoid creating the bad optics of having to put up a proposal to wind it down following Y1 for example. Hence, same with industry precedents that have been set, we are of the opinion that the term should be that of 12 months, to be extensible by a 24-month period thereafter if it produces the corresponding benefit. Naturally, should the term be reduced (which we are of the strong opinion that it should, the budget requested should be reflective of this).
That's all for now, great job on getting this proposal together and happy to chat on some of the above points a-sync!
Kind regards, Immutablelawyer Axis Advisory
I am glad to see this proposal moving forward. I think this will help with the institutionalization of the DAO. The OpCo will provide a more formal operational structure and increase the strategic alignment across all the initiatives within the DAO. One of the end goals should be providing a more structural framework to coordinate the ecosystem' initiatives and proposals.
OpCo will change the manner in which the DAO operates right now substantially, I believe. We should approach its development with a flexible mindset. When I first read the proposal I saw centralization as something detrimental to the DAO's values but now I understand the need for it. Besides, I believe the checks and balances contemplated in its design will effectively limit any undue concentration of power, as the DAO retains the ability to adjust the scope of operations or even assume full control if needed.
Its important to stress the involvement of the OAT and its role in functioning as a DAO-OpCo bridge. In fact, I view the OAT’s responsibility of maintaining a proper balance as even more critical than the CEO’s position. It should be in their scope of responsibilities to make sure the OpCo remains responsive, transparent, and accountable over the long term.
I am voting FOR this proposal in Snapshot, looking forward to its development and with the belief that this will help the DAO thrive in the always-evolving landscape we are all used to.
Exciting to see this hit Snapshot! A lot of this is great, and very comprensive. Overall some thoughts we had for this/emphasis on comments/community's points:
Main question we have is how does OpCo decide whether to manage a project directly or supervise an existing service provider?
I voted FOR on Snapshot to support the establishment of OpCo.
Voting Rationale:
OpCo represents a crucial step for Arbitrum DAO to enhance governance efficiency. It addresses many of the current challenges in governance and execution, drives efficiency, supports the ecosystem’s long-term growth, and upholds decentralization principles. My main reasons for supporting this proposal are as follows:
OpCo ensures the strategic execution of DAO initiatives, addressing issues like resource fragmentation and lack of accountability. It also prevents critical tasks from being disrupted due to contributor exits.
While OpCo is a centralized entity, the proposal clearly states that the DAO retains ultimate control. The establishment of the Oversight and Transparency Committee (OAT) ensures accountability and transparency for OpCo.
The proposal outlines OpCo’s budget and expense management processes in detail, ensuring clear and transparent fund usage while minimizing the risk of waste.
The DAO can adjust OpCo’s scope or terminate its operations through voting, ensuring it always aligns with the DAO’s goals. Beyond governance optimization, OpCo can also attract top contributors and service providers, laying a solid foundation for the DAO’s future development.
Concerns and Recommendations:
Establish clear Key Performance Indicators (KPIs) and provide regular performance updates to the community to ensure continuous improvement.
While OpCo enhances efficiency, it is essential to monitor its operations closely to prevent any deviation from the DAO’s decentralization principles.
Strictly enforce the budget during operations to avoid unnecessary expenses. High costs without results can backfire—starting with a lower baseline budget might be more practical.
Maintain open communication with the community during OpCo’s strategy execution to ensure broad support for initiatives.
Already gave plenty of feedbacks, here, here and here, plus some more scattered. And in general, as a judgment on specific topic, have engaged in this interesting convo.
To me situation is relative straight forward:
The points above to me are first, compatible with what most has judged as a too long of a mandate. De facto of the 30 months, we can consider the first 6 months burned between setting up the entity, source the ceo (and possibly the cfo), find the oat, negotiate first 2 salaries, get the operations up and running with a first few sets of people being the operational people alongside the 2 c-suite. Even just writing this down, 6 months could be optimistic considering the summer in between. That's why 30 months is the bare minimum here. On the capital, as stated previously, I prefer the OpCo having more than it needs and eventually give it back then the opposite situation; if I read the prospect above with the people + salaries, the 22M arb is compatible with a full fledged org, with again no obligation to spend it all (and here, spend = overhire = controlled by oats). I also think that salaries proposed are not that out of the world: remember, anybody in there won't be able to partake in any other initiative in this dao, or others dao, or protocols. This is quite big: the opportunities in the crypto space are quite abundant, having this exclusivity does bear a premium; and the bonus is necessary to align performances (otherwise you risk people doing the bare minimum, and we don't even want to have to tackle a situation like this, we want people that grind everyday).
The main risk of this proposal is finding the right CEO, this was discussed already, and will be one of the most important key success factor.
Not only i am voting in favor, I vote in favor with the hope that scope will be expanded by the dao overtime.
The authors of the proposal clearly live somewhere in the US, where such salaries are probably common, but in most countries even $100,000 per year is an unimaginable salary. Due to the fact that DAO is not limited to the US, I suggest not to burden DAO with such high costs, because I am sure that even for $30,000 per year there will be many willing to work at OpCo. And is the salary of the bosses at $900,000 per year normal? These costs can be reduced by at least three.
The authors of the proposal clearly live somewhere in the US, where such salaries are probably common, but in most countries even $100,000 per year is an unimaginable salary. Due to the fact that DAO is not limited to the US, I suggest not to burden DAO with such high costs, because I am sure that even for $30,000 per year there will be many willing to work at OpCo. And is the salary of the bosses at $900,000 per year normal? These costs can be reduced by at least three.
How many employees are needed is a moot point. I see that the organization’s tasks can be accomplished with a significantly smaller number of employees. 4 is quite enough.
As has been pointed out several times, the presented budget is exemplary, meaning that OpCo doesn’t have to hire exactly 12 internal employees at the assumed salaries that are driving the total Internal Employees line item. Since OpCo needs to be able to react to the DAO’s needs, which are volatile from time to time with new requirements occasionally emerging quickly, it’s difficult—if not impossible—to precisely estimate the entity’s exact expenses and required personnel for its first term. A buffer is required in the case the DAO decides to leverage the entity heavily. In other words, with the exception of setup and fixed costs such as the executive-equivalent employees’ salaries and offshore entity personnel, OpCo’s expenses will only scale when i) the DAO decides to utilize the entity more or ii) OpCo is instructed to take on more complex strategies that require employees/SPs with higher salaries.
Moreover, as pointed out by @backbone, competitive salaries will enable OpCo to go after top-tier talent necessary for the entity to maximize the value produced for the DAO. It’s well known that average compensation in crypto is on the higher side compared to other industries, with, e.g., VC-backed projects paying highly competitive salaries. What is more, for OpCo to be able to attract talent, the entity likely has to pay a risk premium. This is due to several factors, but the most notable ones are the fact that the DAO can defund the entity at any time and internal employees will be working in the open. Without an adequate budget, initializing OpCo likely doesn’t make sense due to the entity being subject to adverse selection.
The OAT will also be responsible for ensuring that overhiring doesn’t take place and the agreed-upon salaries and bonus structures are in line with market comparables and the required skills for a specific position, as well as reflect a hired candidate’s experience and competencies. Naturally, if OpCo has the opportunity to choose between hiring two identical candidates but the other one is 3x more expensive, the entity would go for the more cost-effective candidate. Some comments seem to be particularly fixated on the assumed compensation driving the Chief Chaos Coordinator’s salary. Again, this number is based on industry comparables as written in one of our previous thread responses, but this doesn’t mean that the OAT together with the Arbitrum Foundation has to exhaust all of the capital reserved in the model if a suitable candidate can be attracted with a lower salary.
At the end of the day, if the DAO thinks OpCo is overspending or overhiring, which will be visible through the bi-annual oversight and financial reports as well as the OAT’s quarterly updates to the community, it can always give feedback to the OAT, instruct OpCo to stop executing on a certain strategy, or even defund the entity completely. We’d also like to point out that funds requested for this initiative should be considered allocated and only spent (expense) once they are actually paid out from OpCo.
Moreover, there are no KPIs. Who will determine whether the employees are working well enough?
Establish clear Key Performance Indicators (KPIs) to measure OpCo’s success.
Align OAT compensation with measurable outcomes.
Answered here:
Ultimately, the OAT will be responsible for designing, finalizing, and implementing the relevant KPIs once OpCo is at a point where this can be sufficiently done. We envision that this will be a collaborative effort between the OAT and the DAO, with KPIs reviewed and adjusted periodically based on how OpCo evolves and the community’s feedback.
The call for clear KPIs in this thread is completely understandable considering the amount of money proposed to be deployed. As mentioned above a crucial part of the OAT initial setup deliverables is to develop meaningful KPIs under which the OpCo will be held accountable. As this is a new initiative and the exact activities are dependent on a lot of different, still developing factors, developing KPIs in the proposal stage is not practical in my opinion.
Since the OAT will be so community-facing, we feel as though the eligibility structure and vesting schedule that are currently in place are sufficient as it’ll be clear to delegates if the OAT isn’t performing on a high level. For OpCo’s executive-equivalent employees, we think it’s more suitable for the OAT to structure each position’s bonus payment as they will have direct visibility into how the aforementioned employees will be performing and what areas they should be focusing on. In terms of OpCo’s other internal employees, we envision the bonus structure being drafted by the executive-equivalent employees together with the OAT.
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The motivation says that there are some initiatives that OpCo can solve with legal assistance. But judging by the adopted initiatives, they are all in the blockchain zone, except for RWA, which are solved through intermediaries, but they will not be supported by OpCo, as written in the initiative.
So what initiatives require a lawyer? I do not see any need for one.
For OpCo to be able to, e.g., independently operate in a legally compliant manner, enter into contracts with service providers, and advise proposers on legal matters (these are often required on the backend for other verticals than just RWAs), it naturally requires legal capabilities. This question has been answered in more detail here:
The full-time, in-house legal counsel is included under the legal services line item. We arrived at this number and a full-time, in-house legal counsel following consultations with the Arbitrum Foundation as well as a few independent legal firms. As you point out, the figure also includes a buffer for any unanticipated incidents, and as such, we don’t expect the actual legal-related expenses to be as extensive. We’ve also been advised that some legal deliverables can quickly become quite notable based on immediate demands, such as drafting new contracts, ensuring compliance, and consultations on emergent matters (e.g., see legal-related comments within this thread to get a sense of some of the aspects that require focus). It’s crucial that OpCo has a budget to cover such activities without having to take shortcuts. Another notable legal-related deliverable is creating OpCo’s Bylaws and other legal documents. Underbudgeting on this front would be a major mistake in our minds.
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Threatens to exclude delegates from management
The long-term vision is as follows - implementation of DAO activities, i.e. all initiators of proposals will not be involved in operational activities. However, as far as I can see, almost every initiator gets a role in their proposal and gets some bonuses for it, and your vision will deprive initiators of bonuses, which may lead to the fact that initiatives will simply stop, since they do not give anything for them, and they take a lot of time.
All this leads us to a system where all initiatives will come from Entropy, and execution from OpCo (which is also an initiative of Entropy). Thus, delegates lose the roles of initiators and managers - this does not look much like decentralization, where the initiative and its execution are controlled by Entropy.
There seems to be a misunderstanding here. As mentioned in the proposal, “... anyone interested in facilitating a DAO initiative could propose themselves (or another party) for that.” and “If approved through governance, the facilitator would then be contracted by OpCo as a service provider for the DAO.” In other words, anyone interested in facilitating a strategy can still put up a proposal to do so and get paid for the work based on how compensation has been defined in the proposal. Moreover, nothing prevents a proposer from including a bonus for the creation process in an OpCo-related proposal.
The proposal also states, “Proposals and their execution can still be DAO-led end-to-end and outside of OpCo if delegates vote in this regard. OpCo is a tool for the DAO to leverage if needed.” What OpCo offers in addition to the current structure is that, if the DAO so chooses, the entity can procure or internalize roles for which there currently aren’t clear contributors within the DAO, and finding such contributors is difficult. We also feel as though one of the main benefits that OpCo would introduce is enabling delegates to focus on actual strategy creation instead of having to spend resources on all minor details related to overseeing execution.
It’s also important to point out that although this proposal has been created by Entropy, we would have no additional control over OpCo compared to any other delegates.
Why exactly 5 people are required in the OAT, if this is an oversight function? After all, all decisions are made either by OpCo with the permission of the DAO through voting.
I did not see any functions of the OAT that could maliciously spoil something. The main thing they vote for is hiring employees. The budget is formed in this proposal and is voted on by the Arbitrum community. Otherwise, OAT is a bridge between OpCo and Arbitrum
This is not fully in accordance with the proposal. The OAT’s responsibilities include things such as ensuring over-hiring doesn’t take place and is done per strategies approved by the DAO, firing internal staff if required, approving contracts with service providers, greenlighting salaries and larger spending, etc. The OAT also has several additional tasks related to guidance and ensuring information flow, with the responsibilities further described in the proposal under the “OpCo Accountability – The Oversight and Transparency Committee (OAT)” section. It’s also crucial to recognize that OpCo’s budget is not formed in this proposal, rather, this deliverable falls within the Chief of Coins’ duties and will be ratified by the OAT as well as the DAO later.
The number of OAT seats was decided based on several factors, including the required diversity of competencies and capabilities, not allowing votes to be split evenly between against/for, hindering the OAT’s ability to become corrupted, and the expected workload of the committee for OpCo’s first term.
bottleneck risks: a centralised entity without a proper org design will be seen as the go-to for all kind of topics. ArbitrumDAO already has a strong culture of reducing dependencies or even voting down based on perceived redundancies. Based on this trait, the OpCo can systematically kill everything related to financial management and ecosystem development i.e. most DAO activity. The OpCo needs more mechanisms to ensure it can enable other initiatives, acting like an open platform instead of centralised bottleneck. Borrowing DistuptionJoe’s analogy, we need a Phil Jackson OpCo, not a Micheal Jordan. Currently, I see no mechanisms in place to mitigate this risk.
When it comes to a well-functioning organizational structure, this is another great reason why a strong OAT as well as executive-equivalent employees are needed as they will be the main parties responsible for setting up the framework. OpCo has to be mandated to execute strategies within the verticals you mention, meaning that if the entity handles most activities in these areas, it would be a result of the DAO deciding this to be the best approach. Since the DAO can instruct OpCo to enter into a contract with any service provider, we believe that if a strong SP with deep expertise in an area where Arbitrum lacks sufficient capabilities submits a proposal to address a critical issue, they wouldn’t be shut down. Ultimately, the DAO will maintain its authority to decide what individuals, service providers, or other relevant entities are working on by defining/approving specific strategies. Although OpCo will be proactive, mainly when it observes inefficiencies that could be remedied, the DAO will always have the final say when it comes to these decisions. On a side note, we also don’t think reducing redundancies in the ecosystem is a negative thing, on the contrary.
Our Position: OpCo should only manage programs when no viable external provider exists, focusing primarily on facilitation and oversight.
Define responsibilities to prevent overlap with Entropy and other contributors.
Focus on addressing gaps in under-resourced areas rather than duplicating efforts.
How the OpCo will work with external service providers and researchers
OpCo’s responsibilities can be summarized as facilitating strategies within the ecosystem support and financial management focus areas, as well as any other areas that might be approved by the DAO in the future. Since OpCo additionally needs to be mandated by the DAO to execute a specific strategy and how this takes place (i.e., proposer/proposer-related party, internalize roles, or facilitate a procurement process), the only way OpCo’s efforts generally would begin overlapping with other contributors is if the DAO instructs OpCo to do so, or a stand-alone initiative outside of OpCo is passed that has similar responsibilities as the entity.
When it comes to Entropy’s relationship with OpCo, we are cognizant of the fact that the entity would likely assume many of the workflows we are currently facilitating. It’ll again be up to the DAO to decide whether this would be done by OpCo internalizing more roles, hiring us as a service provider, or the entity conducting a procurement process for similar service providers. The point is that when an external, high-quality SP exists within the ecosystem, they can be plugged into OpCo, which would function as a unified point of contact that would create a mesh layer for information, knowledge sharing, and other synergies. In short, the idea is similar to your point of view, but instead of supervising, OpCo’s focus should be on guiding contracted service providers and researchers.
A more concrete example of how this could function is given here:
The idea is not for OpCo to internalize everything, especially in situations where existing service providers are already performing to a high standard. Using the ARDC as an example, we envision that if the DAO is satisfied with version 2, these service providers are eventually contracted into OpCo once it has been operationalized and has adequate processes, capabilities, internal controls, and any other relevant functions in place for it to perform according to its complete mandate (or ARDC-related SPs could alternatively be whitelisted by OpCo and utilized when needed). The benefit of doing so is that the relevant internal OpCo employees can then coordinate across service providers and the DAO, so no operational roles have to be filled for such an initiative, and in the case that one service provider drops out, OpCo can ensure continuation by swiftly finding a replacement solution.
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If OpCo itself hires employees, and OAT confirms this hiring, then how does the first employee appear?
Who will it be, how to choose him, if the organization does not exist yet?
As stated in the proposal and further expanded in one of our previous responses:
The OAT, in collaboration with the Arbitrum Foundation, would hire the executive-equivalent personnel to the OpCo (the Chief Chaos Coordinator, the Chief of Coins, and any other positions of equivalent responsibility that may be introduced in the future) once the legal entity is established. The OAT will help onboard the executive-equivalent personnel and assist in the creation of a standardized onboarding process for future internal employees such that new hires’ expectations are managed properly.
After all OAT members are KYCd and the required NDAs have been signed, they will begin the recruitment process for the Chief Chaos Coordinator and Chief of Coins.
We’ve already identified a few potential candidates for the executive-equivalent positions and will be working closely with the OAT and the Foundation to facilitate the process. Ultimately, the OAT and the Foundation would be the decision-makers when it comes to setting up the official recruitment process as well as choosing the ideal candidates.
Who will it be, how to choose him, if the organization does not exist yet?
Who will it be, how to choose him, if the organization does not exist yet?
my understanding is that the ceo, and maybe the cfo or others, will be sourced by entropy. In the end most of the success of this initiative will come through the leaders. I see potentially entropy collaborating with the foundation and others to search in the network the key figure(s) that could lead this initiative. This btw has been a process similar to the gcp.
And one more question about hiring employees. If OpCo itself hires employees, and OAT confirms this hiring, then how does the first employee appear? Who will it be, how to choose him, if the organization does not exist yet?
Entropy, thank you so much for putting this together. It's a very well thought out initiative and it's been exciting following the discussions in the comment.
A lot of talking points have already been addressed but I still see some delegates sighting centralization risks. The million-dollar question should be: Does the potential benefit outweigh the risk? In my opinion, I say yes.
Entropy, thank you so much for putting this together. It's a very well thought out initiative and it's been exciting following the discussions in the comment.
A lot of talking points have already been addressed but I still see some delegates sighting centralization risks. The million-dollar question should be: Does the potential benefit outweigh the risk? In my opinion, I say yes.
In this space, there's a very thin line between efficiency and centralization. As a community, we have grown to that point where we need to ask ourselves if the potential for more efficiency and a more agile DAO is worth the risk of centralizing power and maybe even overspending. Don't get me wrong, I am not saying this proposal centralizes power to the OAT but I am just trying to paint a clearer picture on this tangent.
The way I see it, OpCo would be striking the balance between community control and the need to get things done. It answers the question "How do we empower individuals while also creating structures that allow for collective action?"
Interesting times ahead!
The OpCo proposal addresses key gaps in DAO strategy execution, but there are areas that require further clarification and improvement - some of our comments and suggestions can be found below:
The OpCo proposal addresses key gaps in DAO strategy execution, but there are areas that require further clarification and improvement - some of our comments and suggestions can be found below:
I understand that you want to hire the best, but does their salary match their tasks? You can hire a super-cool specialist and let him make simple tables, but since the specialist is cool, you need to pay him a lot. This is irrational.
Since I do not see the volume of work of specialists, I do not understand how their salary is chosen.
Reiterating here a discussion we had in telegram:
The proposal overal is taking shape nicely but i have two critical concerns that remain.
Reiterating here a discussion we had in telegram:
The proposal overal is taking shape nicely but i have two critical concerns that remain.
Suggestions: We can leverage the OpCo as a legal vehicle to effectuate change. We can alleviate congestion in the DAO and allow focused and fast decision making, but then let's think a bit more about how we can setup the OpCo as an open platform rather than choker. I'd suggest starting with a research/pilot type of thing during which these concerns are addressed, similar to how AVI and the M&A program operated. Otherwise it looks like we're voting for an undercover CEO for the DAO and I really struggle to see that working.
If you want to specifically attract good personell, having salary based on geography is often time detrimental: will introduce internal differences for people having same tasks and scope. Means tha,t if you tune it down to salaries that are, in this case, not usa based, you will necessarily exclude this people
If you want to specifically attract good personell, having salary based on geography is often time detrimental: will introduce internal differences for people having same tasks and scope. Means tha,t if you tune it down to salaries that are, in this case, not usa based, you will necessarily exclude this people
I don’t think setting up a company with 4 employee, again, is for the best
I also imagine this is for a 2 year mandate, so basically 1.5M for 20 people. Is not a huge amount considering the scope
It's not about whether it is a lot or a little. Although I think it is too much for a bonus. There are two questions here:
That said, yes we are introducing centralization in arbitrum with this company, and yes likely, if the opco is succesfull, we will have more initiative being created by the opco itself. Will that mean that the dao has no say on this, or that the dao has no power on creation of new initiative? I don’t think so. I just think we will raise the bar in quality terms
The main issue is that in most activity there has to a compliance and legal evaluation of course of action, both referred to the entity itself, to the specific situation of contributors and to arbitrum
but to the fact you want real oversight, and 3 persons means you effectively need to poach, if you want to act in a malicious way, only 2
Overall, as I said, the initiative is correct and necessary, but it seems to me that it has a significant drawback in terms of the huge budget.
I want to try and give an answer because, even if i didn't draft the proposal, I did spend a lot lot lot time to read it. And maybe my answer can help @Entropy have a perspective on how others are currently perceiving how this can go. So, feel free to correct me if this is not the right reading, in the and i am always only a cow.
The authors of the proposal clearly live somewhere in the US, where such salaries are probably common, but in most countries even $100,000 per year is an unimaginable salary. Due to the fact that DAO is not limited to the US, I suggest not to burden DAO with such high costs, because I am sure that even for $30,000 per year there will be many willing to work at OpCo. And is the salary of the bosses at $900,000 per year normal? These costs can be reduced by at least three.
I want to try and give an answer because, even if i didn't draft the proposal, I did spend a lot lot lot time to read it. And maybe my answer can help @Entropy have a perspective on how others are currently perceiving how this can go. So, feel free to correct me if this is not the right reading, in the and i am always only a cow.
The authors of the proposal clearly live somewhere in the US, where such salaries are probably common, but in most countries even $100,000 per year is an unimaginable salary. Due to the fact that DAO is not limited to the US, I suggest not to burden DAO with such high costs, because I am sure that even for $30,000 per year there will be many willing to work at OpCo. And is the salary of the bosses at $900,000 per year normal? These costs can be reduced by at least three.
I won't necessarily go into numbers, if the brackets are right or wrong, but would like to add a perspective here.
If you want to specifically attract good personell, having salary based on geography is often time detrimental: will introduce internal differences for people having same tasks and scope. Means tha,t if you tune it down to salaries that are, in this case, not usa based, you will necessarily exclude this people.
Let me also extend this way of thinking to other initiatives we have in the dao
In a post covid world, and in a crypto world, in which we all work outside timezones, outside barriers, and with (hopefully) a deliverable-set mindset and not an employee one, this way of thinking is not the way to setup for success.
How many employees are needed is a moot point. I see that the organization’s tasks can be accomplished with a significantly smaller number of employees. 4 is quite enough
I don't think setting up a company with 4 employee, again, is for the best. As every company, the amount of work will grow over time, and so the need of personnel. Likely, there will be a natural growth based on this. But I really can't imagine opco working with just 4 people.
Why do we need bonuses in the millions of dollars? Moreover, there are no KPIs. Who will determine whether the employees are working well enough?
For example, Lido creates an external company in the Caymans with operating expenses of 250,000 per year. At the same time, Lido’s DVF is 40 billion dollars. Why are the costs in Arbitrum ten times higher?
implementation of DAO activities, i.e. all initiators of proposals will not be involved in operational activities. However, as far as I can see, almost every initiator gets a role in their proposal and gets some bonuses for it, and your vision will deprive initiators of bonuses, which may lead to the fact that initiatives will simply stop, since they do not give anything for them, and they take a lot of time.
from what I read, the DAO can either specifically task the opco to execute on an "idea", or have the delegates/contributors create an initiative and, eventually, have the opco interact with this initiative by for example hiring that very contributor or others. I don't see the path you are saying in which the combo of entropy + opco will be a capture all. That said, yes we are introducing centralization in arbitrum with this company, and yes likely, if the opco is succesfull, we will have more initiative being created by the opco itself. Will that mean that the dao has no say on this, or that the dao has no power on creation of new initiative? I don't think so. I just think we will raise the bar in quality terms. This, to me, is a very good outcome.
So what initiatives require a lawyer? I do not see any need for one.
The main issue is that in most activity there has to a compliance and legal evaluation of course of action, both referred to the entity itself, to the specific situation of contributors and to arbitrum. The political landscape should likely become more permissive and clearer, but not all the clouds have been blown away.
Mine is an educated guess here: you want an odd number so if there is an internal vote it doesn't stall; and likely 3 people are not enough to have broad oversight. This is not only due to the amount of work, but to the fact you want real oversight, and 3 persons means you effectively need to poach, if you want to act in a malicious way, only 2 (well, likely you need to poach all the 3 to be honest). But this is just a guess on my side.
Initially, I want to say that this is a very well thought out proposal, but everything regarding the costs is too much, and the staff is unreasonably inflated.
The authors of the proposal clearly live somewhere in the US, where such salaries are probably common, but in most countries even $100,000 per year is an unimaginable salary. Due to the fact that DAO is not limited to the US, I suggest not to burden DAO with such high costs, because I am sure that even for $30,000 per year there will be many willing to work at OpCo. And is the salary of the bosses at $900,000 per year normal? These costs can be reduced by at least three.
Why do we need bonuses in the millions of dollars? Moreover, there are no KPIs. Who will determine whether the employees are working well enough?
How many employees are needed is a moot point. I see that the organization's tasks can be accomplished with a significantly smaller number of employees. 4 is quite enough.
The motivation says that there are some initiatives that OpCo can solve with legal assistance. But judging by the adopted initiatives, they are all in the blockchain zone, except for RWA, which are solved through intermediaries, but they will not be supported by OpCo, as written in the initiative. So what initiatives require a lawyer? I do not see any need for one.
For example, Lido creates an external company in the Caymans with operating expenses of 250,000 per year. At the same time, Lido's DVF is 40 billion dollars. Why are the costs in Arbitrum ten times higher?
Threatens to exclude delegates from management The long-term vision is as follows - implementation of DAO activities, i.e. all initiators of proposals will not be involved in operational activities. However, as far as I can see, almost every initiator gets a role in their proposal and gets some bonuses for it, and your vision will deprive initiators of bonuses, which may lead to the fact that initiatives will simply stop, since they do not give anything for them, and they take a lot of time. All this leads us to a system where all initiatives will come from Entropy, and execution from OpCo (which is also an initiative of Entropy). Thus, delegates lose the roles of initiators and managers - this does not look much like decentralization, where the initiative and its execution are controlled by Entropy.
Why exactly 5 people are required in the OAT, if this is an oversight function? After all, all decisions are made either by OpCo with the permission of the DAO through voting.
Thank you for the thoughtful update and the work you’ve put into addressing the community's concerns. We really appreciate the effort you've put into refining the proposal to ensure OpCo’s financial stability while balancing the DAO’s broader interests.
Allocating ARB to establish a stable cash position and returning unused tokens to the DAO treasury is a responsible and prudent strategy. We’re supportive of this direction and look forward to seeing how OpCo can drive meaningful contributions to the DAO’s strategic goals.
Thank you to everyone who contributed invaluable input on this proposal and for your patience during our extended response process. The timing with Devcon was somewhat unfortunate, but the team is now caught up with everything and eager to move this proposal forward. Let’s dive in!
Thank you to everyone who contributed invaluable input on this proposal and for your patience during our extended response process. The timing with Devcon was somewhat unfortunate, but the team is now caught up with everything and eager to move this proposal forward. Let’s dive in!
Many have expressed willingness to liquidate ARB into cash equivalents in advance to cover OpCo’s budget and provide the entity with financial stability even during market downturns. On the other hand, we’ve also recently seen some delegates being concerned over the DAO liquidating too much ARB in a short period of time. Our opinion is that it would be important to secure OpCo’s financial stability and the conditions to do so have now become more favorable with the recent market upswing. As such, contingent on community feedback, we’ll make the following further edits to the proposal:
If the feedback towards the above solution is negative, we’ll maintain the ask of 35M ARB to account for price and market volatility.
[quote="kuiclub, post:2, topic:27361"]
In addition to semi-annual reporting, is there more frequent reporting on the use of funds, or is real-time financial visualization provided?
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[quote="duokongcrypto, post:11, topic:27361"]
OpCo has a high degree of independence, especially in recruitment and contracting, and it will be important for DAO to monitor and audit key positions. Need to have a system of rules
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[quote="SEEDGov, post:19, topic:27361"]
Based on this example as a real scenario, monthly expenses per term are around $500,000 (approximately 1M ARB), while the monthly unlocks are 1M ARB (barely enough at current prices). We mention this because it may be worthwhile to review the unlocking rate to avoid situations like the one with AF, where the vesting unlocks were insufficient to cover committed expenses and/or support new initiatives. Our concern is that 1M ARB per month might restrict OpCo’s capacity to expand, creating an operational bottleneck. We understand that part of the initial 10M ARB disbursement could mitigate this situation during the first term and that costs are purposefully overestimated in this example (such as legal expenses, which considers the worst-case scenario), but we wanted to bring this up to avoid OpCo potentially being limited by a vesting scheme.
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[quote="Euphoria, post:20, topic:27361"]
For budget allocations, flexibility is key. However, setting clear thresholds for reallocations or maximum variance limits in major categories could strengthen budget accountability.
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[quote="Immutablelawyer, post:32, topic:27361"]
While bi-annual oversight and financial reports are mentioned, the significant funding involved warrants more frequent reporting calls, such as on a monthly basis or a dashboard updated in real-time. These could include, projections and any deviations (e.g., budget overruns, missed deadlines), explanations for variances and remedial actions being undertaken, among several others. Ideally the reports are published on a quarterly basis in our opinion to ensure that the DAO has sufficient oversight over financial standings (especially since a part of the funds may be off boarded and thus are off-chain w/the DAO not having the ability to track these). With the current proposed budget (which in our opinion is too high in and of itself, bi-annual reporting definitely does not cut it).
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[quote="Immutablelawyer, post:32, topic:27361"]
Has any rationale been included regarding the decision to release 10M ARB upfront? Given that this was included at an average price of $0.54/ARB and this has now increased to c. $0.7/ARB, is the plan to still release 10M ARB upfront, even if the price of ARB increases further?
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[quote="gauntlet, post:36, topic:27361"]
At Gauntlet, we envision a DAO future that relies on simplification and on-chain tooling to automate away bureaucracy. While this vision may not be realistic in the short term, we must admit that this proposal is a decided step in the opposite direction.
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It’s possible that real-time financial/oversight dashboards and other onchain tooling are introduced in the future. The DAO can always instruct OpCo to explore the feasibility and benefits of adding such solutions through governance in the future. However, at this point, we feel as though this proposal is already getting quite detailed and we can’t capture everything at once, while there also are some operational structures and processes that need to be set in place before it’s feasible for real-time dashboards and other onchain tooling to be implemented.
We don’t expect OpCo to provide extensive monthly oversight reports as such updates are a time-intensive endeavor and would likely cause some friction for the entity’s operations. For OpCo to be successful, the community has to elect people to the OAT who are highly skilled and can be trusted to oversee the entity’s usage of funds and hiring processes. The OAT’s mandate already includes conducting oversight calls for OpCo, where community members can acquire relevant information about the entity’s developments. Following community feedback, we’ve expanded this mandate to include quarterly updates to the community as well as designing relevant KPIs for the entity once it is at a point where this can be sufficiently done. We’ve also changed the vesting mechanism, which has been replaced by an upfront capital commitment and includes something akin to a “capital call” structure.
[quote="duokongcrypto, post:11, topic:27361"]
contingency measures need to be put in place to protect resources from being wasted. the structure needs to be very simplified and clear. the DAO should need to have the ability and constraints of a veto, and have contingency plans in place at all times if it doesn’t do a good job.
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This responsibility falls within the OAT’s mandate. One of the benefits that OpCo introduces is that it enables delegates to focus on actual strategy creation instead of having to spend resources on all minor details related to execution. Requiring delegates to monitor all of the actions taken by OpCo would, in our mind, be inefficient and remove some of the benefits that OpCo would bring about. With the combination of oversight from the OAT and bi-annual transparency and financial reports as well as quarterly updates, delegates ought to be able to trust that the entity is delivering value and that resources are not wasted while having the ability to shut the entity down if it isn’t performing.
[quote="Larva, post:3, topic:27361"]
So my question is, could the budget be reduced appropriately, or is there a contingency plan to prevent a negative impact on ARB’s price?
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[quote="Juanrah, post:8, topic:27361"]
Other things to consider and expand upon are the high operational costs, the complexity of the accountability process and the uncertainty of the ROI metrics for this investment.
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[quote="Argonaut, post:14, topic:27361"]
Finally, we share @Larva 's concerns about this specific part of the proposal: How do we know that making a movement of this kind will not generate a fluctuation of the ARB token when it occurs?
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[quote="DisruptionJoe, post:21, topic:27361"]
I believe it could be done a lot more efficiently. 34 million ARB is a lot. Thank ARB got turned down for being able to allocate 30 million ARB to the community for a cost of 3 million in service fees. To date, it has delivered 5 million ARB to over 400 grants gaining well over 300 deployments on Arbitrum with hundreds of thousands of total users. It did this for service fees of just over $500k total.
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Arbitrum DAO has historically not utilized notable capital to develop its operations, which could be argued to be the main reason why certain inefficiencies still exist within the system. The fact of the matter is that setting up and running operations in a high-quality manner isn’t free, and we (as well as many other delegates who served as inspiration for this proposal’s creation) feel as though this is a necessary and important area to invest in. Naturally, the entity’s costs scale only when its mandate is expanded through governance—the idea behind the budget structure is to enable OpCo to grow with the DAO’s needs. We also find it important to note that ROI probably isn’t the correct metric to look at here since, among other things, it omits intangibles and other secondary value additions that derive from enabling the DAO to perform strategy execution more seamlessly and efficiently.
[quote="jameskbh, post:6, topic:27361"]
In the Budget we have an estimation of the team size (10 FTE) and their salary range. Is there a proposed internal organizational chart, so we can see the distribution between the areas OpCo will take care of?
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[quote="SEEDGov, post:19, topic:27361"]
Do you think it is possible to establish predefined salary ranges for the different roles? (beyond the chiefs). We understand that this isn’t easy, as the final salary for each position will depend on a variety of hard-to-predict factors, but it would be valuable for the DAO to have a sense of which roles warrant a $100k salary per year versus those that merit $200k (as an example).
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We expect that an organizational structure will be set in place by executive-equivalent internal employees together with the OAT. This has to be done as things develop in our opinion, such that OpCo isn’t locked in a certain, pre-defined structure that isn’t optimal for the DAO’s needs as they arise. We’d also like to re-emphasize that the budget is exemplary, meaning that the team size and each employee’s salary will almost certainly be different as the entity actually begins hiring people. The purpose of the exemplary budget is to show that the ask isn’t arbitrary and what assumptions it is based on.
When it comes to predefined salary ranges, if there is a strong demand for this from delegates, we could do this. However, we think that there is a high likelihood that this would again restrict OpCo’s ability to operate since 1) it’s extremely difficult, if not impossible, to exactly predict what all of the roles will be during OpCo’s first term that it needs to hire for and 2) if OpCo finds a perfect candidate for a certain role but we’ve defined the salary range too low or too high, the entity will be disadvantaged, have to hire another candidate, or might even struggle to fill the role. As the OAT will be greenlighting OpCo’s hiring decisions, the most important aspect to focus on is attracting the correct individuals to the committee.
[quote="JoJo, post:7, topic:27361"]
While you explain the why of this narrowed choice, i honestly see opco being able to help in other sectors as well. Do you think it would be possible to insert some degree of flexibility for which, if the dao really wants it, OpCo would be able to tap and help/manage specific initiatives outside the 2 categories above?
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Thank you for the great call out. We’ve added language to make it abundantly clear that this would be possible.
[quote="JoJo, post:7, topic:27361"]
Does this mean that OpCo will be responsible for the overviewing of this contracted sp/individual? If not I might have missed the main value point of this, beside coordination.
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When it comes to the relationship between OpCo and service providers, the entity’s main value-add is its ability to function as an information-sharing layer and ensure that service providers are working in a synergistic way in the correct direction. A good theoretical example would be related to incentives. Let’s say OpCo is tasked to oversee such an initiative, and so contracts a data provider and a risk researcher to facilitate this. OpCo then acts as a project manager, receiving regular updates from the SPs while guiding and coordinating across them.
I am not sure how complex it would be for five persons to oversight every project and maintain a clear boundary between OpCo’s role and the DAO’s mission.
The OAT’s role isn’t directly to oversee or project manage every initiative facilitated through OpCo. This responsibility would instead fall to the entity’s internal employees. To give a high-level example, say the DAO wants OpCo to facilitate Developer Relations. The entity could then hire a person for a leadership role to oversee the initiative and act as a project manager for service providers and individual contributors contracted to enable the execution of the initiative. In contrast, the OAT’s responsibilities are more connected to holding internal employees accountable by, e.g., ensuring that OpCo isn’t overstepping its mandate or that over-hiring isn’t taking place.
I suggest refining the plan around staffing and with ROI-focused metrics. A clear outline on the number of hires and specific roles, with justifications for each, would help avoid over-hiring risks, maintain cost-efficiency and foster transparency which would reinforce trust and ensure the OpCo team remains accountable to the DAO’s mission.
With the exception of initial core positions (Chief Chaos Coordinator, Chief of Coins, OAT, and likely a full-time legal counsel), we feel as though tightly defining specific roles beforehand is risky and could cause more harm than good since we expect that emergent needs will arise as OpCo’s role within the DAO develops. Again, what is instead of great importance is that the OAT is resourced with highly skilled and trustworthy individuals since the committee is responsible for preventing the risks you mention and reporting all relevant aspects back to the DAO.
On legal guidance, I am unsure of the costs, but 1.2M seems a high number. You mention full-time in-house legal counsel and preparation for unforeseen events or worst-case scenarios, it would be useful to know more about this structure/functionality.
Regarding legal needs, is a full-time, in-house legal counsel necessary? Clarifying the specific responsibilities they would cover would help assess the need for a full-time position.
The proposal includes hiring a full-time, in-house legal counsel. If this is to count as one of the 10 employees, what do the Year 2 legal costs entail? Moreover, we feel that a retainer model for legal counsel might be more cost-effective and prevent under-utilisation in this regard. In the immediate, OpCo will definitely not need a full-time legal counsel and this would be something that’d be more ideal in Y2 when we have initiatives potentially plugging into OpCo
Legal Considerations: The proposers need to address legal issues, and while the Foundation has offered advice, we are not prepared to comment on this aspect. However, $2.2M to support entity setup, legal advisement, and insurance is still a large financial line item for an exciting but un-proven proposal.
The full-time, in-house legal counsel is included under the legal services line item. We arrived at this number and a full-time, in-house legal counsel following consultations with the Arbitrum Foundation as well as a few independent legal firms. As you point out, the figure also includes a buffer for any unanticipated incidents, and as such, we don’t expect the actual legal-related expenses to be as extensive. We’ve also been advised that some legal deliverables can quickly become quite notable based on immediate demands, such as drafting new contracts, ensuring compliance, and consultations on emergent matters (e.g., see legal-related comments within this thread to get a sense of some of the aspects that require focus). It’s crucial that OpCo has a budget to cover such activities without having to take shortcuts. Another notable legal-related deliverable is creating OpCo’s Bylaws and other legal documents. Underbudgeting on this front would be a major mistake in our minds. When this deliverable is done correctly, it will also address the concern raised here:
the DAO would always have ultimate authority over OpCo, with the entity purely being a helpful resource focused on streamlining wider-reaching and complex initiatives that require a more structured execution framework
It would be proper to expand on this assertion to make sure that it is kept that way. This is no easy task. It would need a very well-thought definition of the OpCos boundaries and their restrictions. It would also need frequent, profound reporting and transparent metrics for spending and audits.
Thank you @Pablo for the extensive comments on the legal design front! We’ll make sure that all of these points are taken into consideration by the relevant parties that are facilitating this process on the legal front.
If we are to expect people to submit themselves for these elections then I think it’s only fair for them to understand the legal nuances so that they may seek legal advice prior to participating (I think this is only fair and ethical).
As discussed async, this is not the case. OAT applicants would be the first individuals to get involved in this initiative. The OAT’s mandate includes providing assistance in the entity’s legal setup process, meaning that they wouldn’t blindly apply to a legal entity without knowing its structure and geographical location. When it comes time to hire the first executive-equivalent personnel, the entity’s structure and location will already be known. Having said that, based on preliminary conversations, the most likely legal structure that would be utilized for OpCo is the Cayman Islands Foundation Company.
What types of service providers are envisioned here if those related to audits (potentially also providers for events and RPC), as well as those for security, risk and research, are already covered by these entities?
Is the idea to absorb these responsibilities, or to wait until their mandate concludes?
The idea is that the DAO and OpCo converge on the most efficient solution. The idea is not for OpCo to internalize everything, especially in situations where existing service providers are already performing to a high standard. Using the ARDC as an example, we envision that if the DAO is satisfied with version 2, these service providers are eventually contracted into OpCo once it has been operationalized and has adequate processes, capabilities, internal controls, and any other relevant functions in place for it to perform according to its complete mandate (or ARDC-related SPs could alternatively be whitelisted by OpCo and utilized when needed). The benefit of doing so is that the relevant internal OpCo employees can then coordinate across service providers and the DAO, so no operational roles have to be filled for such an initiative, and in the case that one service provider drops out, OpCo can ensure continuation by swiftly finding a replacement solution.
It is of utmost importance that Arbitrum DAO maintains a decentralized and bottoms-up system for bootstrapping new projects, DAO contributors, and setting strategies, including creating and steering the DAO’s vision, mission, and purpose, as well as approaches to achieve the goals and decision-making. As such, these areas will fall outside of the OpCo’s central mandate.
I think this is very well-conceived but challenging to implement in practice. Take, for instance, the lessons from the ARDC by the DAO Advocate role L2BEAT, where they faced difficulties obtaining proactive engagement from the delegates, who where supposed to require work from the ARDC.
What you’re proposing here as a role for the DAO’s operations is even more abstract than what was required of the ARDC, and thus more complex.
I don’t have a clear solution because it is indeed challenging, but I’d like to see ideas on how this would be materialized in practice and how friction could be avoided to prevent paying for a large structure that, in practice, lacks concrete mandates.
In our mind, this will come down to electing highly skilled individuals into the OAT and the executive-equivalent roles within OpCo such that the entity will be able to operate with a wide mandate. One important difference between ARDC v1 and OpCo is that the latter is required to be proactive (we’ve added clearer language around this for the updated proposal), meaning that if delegates aren’t actively engaging the entity, it’ll have the ability to push the ecosystem forward by itself, given that the initiatives that come out of OpCo are accepted by the DAO. Similar concerns were raised in connection to Entropy’s proposal to enter into an exclusive deal with the DAO as the scope is somewhat wide, but we feel as though we’ve been able to produce quite a lot of value-add initiatives proactively (although, we might naturally be biased here).
I’m still not entirely clear on this structure—I need to digest the proposal a bit more to fully understand the concept. On one hand, I find the idea of an entity dedicated to the project management of the DAO’s initiatives valuable; on the other hand, doesn’t adding another layer of control over ecosystem actors already fulfilling this role (e.g., SEED Gov) somewhat defeat the purpose?
If the idea is for the OpCo to be the PM and facilitator of initiatives, I think it should replace entities like SEED rather than simply oversee them (although SEED, for example, could later be contracted as a service provider to carry out specific tasks within the program).
The idea is not to add a layer of control but instead a layer of information sharing and coordination which also secures the continuation of programs. Naturally, as mentioned in the proposal, some amount of administrative work which otherwise wouldn’t have arisen will emerge. However, the way we see it, this is something that all organizations require and only roles and areas that aren’t currently covered or aren’t done so to a satisfying degree would be internalized by OpCo if it is seen as the most effective solution by the DAO. For example, the CFO-type role—the Chief of Coins—would be spearheading financial management by, among other things, bringing together STEP and possibly the treasury management initiatives that just passed Snapshot to a cohesive strategy, facilitating the creation of a DAO-wide budget, and continuously monitoring Arbitrum’s financial performance and making recommendations to the DAO based on this. This is just one example of where the entity could be extremely useful by filling an operational gap the DAO currently faces.
That’s why we would like to know if the incorporation of Opco will be mandatory in all the processes mentioned, or if it could be optional?
As mentioned in the proposal:
It’s important to reiterate that proposals and their execution can still be DAO-led end-to-end and outside of OpCo if delegates vote in this regard.
On the other hand, , should’n we consider some kind of pilot before starting with this program for a total amount of 30 months? We know it’s been stated that 6 months will be for the setup and the next 24 for operations from the entity, but most of what we see here is an oficial launching for something that haven’t been tested yet and considering everything that implies and the funds it requires, Maybe 1 year which is not a long period of time but it is also not a short period as well, and 6 months for setting up while the next 6 for operations and then and only then if the OpCo demonstrates that it is really useful then require for an extension up to 20 more months
One aspect of the proposal that could benefit from further considearation is the 30-month initial term. While it provides operational stability, it may be worth exploring interim performance review mechanisms beyond the suggested bi-annual reports.
One last point from our end re. the Term is that we are of the opinion that this is too long for such a new initiative. If it doesn’t work, we want to avoid creating the bad optics of having to put up a proposal to wind it down following Y1 for example. Hence, same with industry precedents that have been set, we are of the opinion that the term should be that of 12 months, to be extensible by a 24-month period thereafter if it produces the corresponding benefit.
There are several reasons why the 30-month initial term was chosen:
would love as a standard practice to have members of the opCo to also be rewarded in ARB based on project related KPIs. Ex: hitting a milestone by a specific date. We should start to reward accountability in everything that we do as a DAO.
Despite the bonus, OAT members’ compensation seems low. This is a critical role for both the DAO and OpCo, effectively overseeing all operations and requiring candidates to forgo other jobs/positions for full-time commitment. The opportunity cost for joining the OAT is high, and we worry that a low base compensation might deter potential applicants (who must also have a seniority level commensurate with the role).
Indeed, within the provided budget example, the five OAT members would account for only 5.7% of the total excluding the optional bonus (almost 1.5% per member), while the employees they supervise might potentially earn more.
Considering this, I second the opinion that the proposed compensation of the OAT is below industry standard, considering the expected responsibility, seniority, opportunity cost, time commitment as well as the availability of talent.
The structure underlying the Oversight and Transparency Committee (OAT) is well thought out and naturally an integral part of this OpCo proposal. While some members have identified that the monthly contribution for these members is on the low side, we feel that is in part addressed by the bonus being proposed. We generally are in favour of this as it helps to align incentives and ensure long-term commitment and accountability. In this regard however, you should establish parameters of what factors would lead to these bonus payments being triggered in detail so that expectations are fully set.
This is exactly what the two bonus allocation pools are for. When it comes to the OAT, we’ve increased each member’s monthly base salary to $7.5K and included the 1M ARB subject to a vesting schedule in the proposal. Since the OAT will be so community-facing, we feel as though the eligibility structure and vesting schedule that are currently in place are sufficient as it’ll be clear to delegates if the OAT isn’t performing on a high level. For OpCo’s executive-equivalent employees, we think it’s more suitable for the OAT to structure each position’s bonus payment as they will have direct visibility into how the aforementioned employees will be performing and what areas they should be focusing on. In terms of OpCo’s other internal employees, we envision the bonus structure being drafted by the executive-equivalent employees together with the OAT. We’ve added text that clearly conveys that the bonus payments have to be made in ARB and with a vesting structure.
I think @jojo expressed this already: it’s not clear to me what the difference between ecosystem support and grants is. Ex shouldn’t Questbook fall under ecosystem support.
Although undeniably similar, we’ve defined grants as initiatives where the recipient is receiving capital directly in exchange for building out technology solutions as well as one-off, retroactive capital allocations to recipients for strengthening and protecting the community, while the ecosystem support category comprises structured programs that are more operational in nature. We made this distinction since in our opinion, it’s of utmost importance that the DAO maintains a decentralized and bottoms-up system for bootstrapping new projects and DAO contributors. Having said that, based on community feedback, we’ve included text that conveys that OpCo can expand into focus categories outside of its core areas (excluding investments) if the DAO so wishes.
We are slightly concerned that this option might create an incentive for “lazy” proposals that rely on OpCo to fill in the details. Don’t get us wrong—we understand the rationale behind including this option. However, it might be better to establish clearer boundaries on what can be requested from OpCo. To better illustrate our point, let’s take an example:
Suppose the DAO seeks a new long-term incentive program. With OpCo established, a delegate could propose a Snapshot vote stating, “Should OpCo work on a new incentive program for protocols?” without providing any notion of the execution strategy.
How can we be confident that OpCo would be able to facilitate such a proposal, with all it entails?
What if the DAO passes 20 such Snapshot proposals (i.e., mandating OpCo to facilitate an idea from scratch)?
Where is the limit to OpCo’s operational capacity?
This is great feedback—thank you! We think that one of the benefits that OpCo would offer is that it could seamlessly be instructed to perform a strategy that the DAO wants to see implemented. If a key objective is introduced but the roadmap to achieve that objective is unclear, i.e., the actual execution strategy is undefined, the DAO must first instruct OpCo to define the strategy and any additional funds that are required to potentially hire service providers. However, we completely agree with your concern about OpCo reaching its operational capacity. As such, we’ve added language that the OAT together with OpCo will be responsible for keeping the DAO informed of how much bandwidth the entity has and when current projects are expected to end such that if there suddenly is a spike of new proposals, delegates will be able to prioritize and vote on the ones they find the most important. Additionally, if a proposal introduces a new key objective with a clear roadmap but that roadmap is ambitious, the OAT together with OpCo should signal how feasible it is for the entity to execute the proposal. If it’s determined that such a roadmap is feasible, the OAT together with OpCo would also communicate whether or not the entity needs more internal resources to do so. Lastly, we anticipate that if a proposal is posted that is too high-level or ambitious for the entity, such as simply stating that OpCo must onboard 10 million new developers within 12 months, delegates would vote against such a proposal, which is why governance will continue being a highly important part of the ecosystem.
Furthermore, if OpCo has bandwidth and recognizes an area within its mandated verticals that isn’t currently addressed, there is no clear owner for that area, and addressing that area would be beneficial for the DAO
While this statement partially addresses the above concern, the point is that OpCo’s assessment of whether an area is beneficial for the DAO may differ from the DAO’s own perspective as expressed through Snapshot.
This part of the text deals with a slightly different angle. Instead of this being about OpCo/the OAT signaling to a proposer how feasible a proposed initiative is, it’s supposed to convey that OpCo will be required to be proactive when it has the bandwidth to do so and notices an area that should be addressed, creating a proposal itself that defines the strategy through which the identified problems can be addressed.
Once fully operational, OpCo will have the capacity to project manage and oversee these initiatives according to its complete mandate. The long-term vision for this process is as follows:
Does this mean that once fully operational, OpCo will act as the PM for all initiatives, effectively replacing current SPs?
This part of the text is supposed to convey that even after OpCo has operationalized, it’ll likely take some time to set up the proper checks and balances as well as internal capabilities to enter into service provider contracts and act as a counterparty to service providers. We indeed envision that OpCo would act as a PM for service providers that are rolled into OpCo, but this doesn’t mean that these roles would be internalized unless the DAO chooses so. Instead, in this case, OpCo’s role would be acting as an information layer between SPs, ensuring, among other things, that no redundant work is being performed and SPs across different initiatives are synergistic. In other words, the idea is exactly what you wrote here, although instead of supervising we hope it would be more about information sharing and potentially guiding:
That said, and while we acknowledge our position may be biased since we are currently Service Providers for the DAO, we believe OpCo should only manage programs when no viable service provider or clear ownership exists and it should supervise those that do.
We believe that roles within the OAT should be more clearly defined to avoid having all members with similar backgrounds, ensuring sufficient diversity to cover all possible verticals (e.g., limiting members by field).
As for the general election to be held for the three OAT members, will a single Snapshot be held or will there be three snapshot in order to ensure that complementary applicants are attracted? Given the OAT’s critical role in ensuring OpCo is run effectively, attracting a diverse and skilled team is essential.
We agree with this and that is why we introduced a structure where the DAO would choose 3 members through a single Snapshot vote, with the elected members then choosing 2 additional members that would be accepted optimistically by the DAO to ensure a well-diversified committee. Entropy will be posting a more detailed application template once the Snapshot to signal approval/disapproval of OpCo is underway and if the vote passes.
Having said that, we don’t have a strong opinion on whether one or three separate Snapshot votes should be held, and are more than happy to change the structure based on community feedback.
We also found the titles and responsibilities of internal executive-equivalent employees innovative. Are there any specific qualifications or skills listed for these roles, or candidates under consideration who fit the requirements?
Most importantly, we would like more insight into Opco’s recruitment strategy, particularly regarding the selection of the two-person executive team (Chief of Coins and Chief Chaos Coordinator) and the 10 internal employees. Given the centralization risks posed by Opco, it’s essential that the executive team not only has strong operational expertise but is also well-versed in DAOs. Since this skill set is unique, we’re curious about the specific approach to recruiting such candidates.
Monthly salaries for the other 10 employees ($9,000–$16,000), combined with an annual bonus pool of $810,000, seem substantial. While it is acknowledged that this is a preliminary budget i.e. “this is not an official budget, meaning that capital may be budgeted and allocated differently once the entity is stood up”, has there been any effort to identify the roles being considered or benchmark salaries against similar DAO initiatives? If so, a high-level overview of this would be appreciated.
The proficiency and expertise levels should be similar to those expected of C-suite executives at major international companies. The skill sets should naturally be such that these executive-equivalent employees can fulfill and exceed expectations in the duties listed in the description given in the proposal. We’ve already identified a few potential candidates for the executive-equivalent positions and will be working closely with the OAT and the Foundation to facilitate the process. Ultimately, the OAT and the Foundation would be the decision-makers when it comes to setting up the official recruitment process as well as choosing the ideal candidates.
When it comes to the executive-equivalent employees’ salaries, it’s important to reiterate that the laid-out budget is exemplary, meaning that, e.g., the Chief Chaos Coordinator’s salary will not necessarily be $75K per month once hired. The purpose of the exemplary budget is to showcase that this proposal’s ask isn’t arbitrary and to show how it has been derived. Nevertheless, assuming the Chaos Coordinator would be hired at $75K per month, the rate would still be on the lower side compared to positions that require a similar skill set and experience. To give an example, the pure cash compensation for Coinbase’s executive officers in 2023 ranged between $730K and $1M, while all officers naturally also have bonus structures in place that are significantly larger than the base salaries. This data can be found here. It’s also important to remember that working for OpCo could be seen as much riskier than for a more traditional company, which should naturally also be reflected in the salaries that employees at OpCo receive.
The number of people who can be hired should really be explicit. For example, you could say that a new strategy would require a paid steward, but no more than one without the DAO explicitly voting to add another role.
Only things that the private market won’t provide should be handled by the government. This proposal is officially creating a government entity. What are the functions that our market won’t provide?
I’d like to know what the limit for growing this government is? What measurement will we use to say “ok, this thing is getting too big”? I’m less concerned about the number, and more interested in seeing that thought has been directed towards this problem.
To us, OpCo should be viewed more akin to a DAO-owned and controlled company. One of the key things DAOs seem to struggle with is hiring high-quality contributors in a frictionless manner. There are several reasons for this but probably most notably because of the process SPs and individual contributors generally have to go through with DAOs, which often isn’t worth it because of the high opportunity cost, as well as because DAOs generally aren’t able to hire full-time contributors. One of the main benefits that OpCo offers is to remedy the aforementioned frictions as well as having the ability to quickly adapt to the DAO’s needs, which is why we believe that we shouldn’t restrict the number of contributors OpCo will have the ability to hire. To prevent the risk of the entity over-hiring for approved initiatives, it’s of great importance that the correct contributors are elected into the OAT. Combining efficient oversight, extremely high-quality executive-equivalent internal employees, and the DAO’s ability to decide which initiatives the entity executes and when it should halt execution on a specific initiative should in our mind cover the rest of the concerns you’ve raised here.
What is the entity’s mandate? This mandate is referred to a lot here, but I can’t find it clearly stated.
The entity’s main mandate is to facilitate DAO-approved strategies mainly within the ecosystem support and financial management focus areas, but based on most recent edits, we’ve made it clear that the entity can also expand into other focus areas with the exception of investments if the DAO so wishes. OpCo should also be proactive, meaning that if it has the bandwidth and recognizes an area where improvements could be made, the entity will create a proposal containing the strategy through which the improvements will be materialized.
However, if the proposed scope of work falls within OpCo’s mandate, it is expected that delegates vote against such a proposal if it can be better executed via OpCo’s involvement. Proposers will be encouraged to engage with OpCo before posting a proposal to the forum to align with the DAO-adjacent entity’s internal employees.
Would this be enforceable by the code of conduct? Could a delegate lose payment based on voting for things they believe are needed?
We don’t think this should be a hard enforcement. The point of the quoted text is to signify that delegates shouldn’t be afraid of utilizing OpCo as a helpful tool when initiatives that would benefit from being attached to OpCo are being proposed outside of the entity’s scope. However, we think that it’s important that if delegates feel as though an initiative would benefit from being in a standalone structure even when falling within OpCo’s focus areas, they can vote accordingly.
Why is this design decision being suggested?
This decision was made based on initial feedback we received from certain key stakeholders and delegates, but we don’t have a strong opinion on this front. The main argument is that the applicant pool for ideal candidates is likely to be quite limited, so excluding individuals after, e.g., one term could create some friction when a new cohort is to be chosen. When it comes to term limits, we consider the Security Council a comparable structure, which similarly doesn’t have term limits in place.
It’s good to see projects learning from other projects mistakes, but if we know the cost in USD (or atleast, some of the expected costs) is there a reason to not just sell to USD right away to ensure funding? I say that fully understanding that a) 1m of it will be incentive based, so it makes sense to keep it in ARB and b) some costs aren’t fully know yet… but I think that sitting in ARB brings on market risks to a project that has a long runway. For example, if we know the oversight council will be $25,000 a month, why not just sell the $600,000 USD worth of ARB at the start?
Also, apologies if I missed it but I didn’t see any note on additional ARB going back to the DAO. Can you confirm if that will be the case?
We fully agree with the upfront liquidation approach but decided not to initially go with this structure as many delegates have recently been concerned about large ARB sales taking place. Having said that, given some delegates have responded positively to such a structure, and if the wider community agrees, we’ll change the structure as described at the beginning of this forum response. We’ve also included text to clearly indicate that residual ARB (as well as capital in other denominations) will be sent back to the DAO treasury at the end of OpCo’s first term if the initiative isn’t renewed.
Furthermore, what happens if the DAO cannot secure the ideal candidates? Specifically, for the executive roles, will the Opco’s initiation be delayed, or will the OAT step in to manage executive responsibilities temporarily if these positions are unfilled?
We feel as though it’s of high importance that the executive-equivalent employees are involved in setting up OpCo’s internal processes and operational models given that they are also required to then lead the entity. In the unfortunate case that the ideal candidates cannot be secured swiftly, we think that OpCo’s initiation should be delayed given the entity’s importance, and it doesn’t make sense to rush the process as potential mistakes could compound in the future and have to be fixed later on.
Regarding the 10 employees mentioned in the sample budget, we’re wondering if this setup resembles a “bench” model, similar to consulting firms, where the DAO would have access to resources on demand for various initiatives. If that’s the case, we’re concerned about potential underutilization, a common challenge in consulting and agency models, where resources are hired without clear expectations around the scope or duration of their projects.
The budget shown is exemplary and its purpose is to show that the ask hasn’t been derived arbitrarily. OpCo would only hire internal employees for initiatives where capacity is needed, not immediately go out and employ, e.g., 10 people because its capital allocation would allow for it. Another way to think about this is that the initial allocation would support up to 10 internal employees (excluding the OAT, executive-equivalent employees, etc.) at the salary levels shown.
Will the Chief of Chaos oversee existing working groups that fall under the Opco’s mandate (Ecosystem Support & Financial Management). What exactly will their role be? Will it be to improve processes or something else?
The Chief of Chaos Coordinator’s high-level responsibilities are listed in the “Establishing OpCo” section. Whether or not the person would oversee existing working groups that would roll up to OpCo would be up to the Coordinator. We foresee that OpCo hires a project manager for such responsibilities as the Coordinator is already tasked with, e.g., strategic leadership, stakeholder management, operational development, etc., and likely won’t have time to take on further tasks.
Additionally, what checks and balances, if any, will be created for the Chief of Coins and Chief Chaos Coordinator? For example, will the DAO be able to veto initiatives proposed by these individuals?
The OAT will have the authority to veto decisions made by the executive-equivalent employees. The OAT’s decisions will be guided by the DAO’s will. For example, let’s say the Chaos Coordinator tries to hire a marketing specialist into the entity but the DAO has not approved such an initiative through a vote. In that case, the OAT would intervene and veto the Coordinator’s decision.
The call for clear KPIs in this thread is completely understandable considering the amount of money proposed to be deployed. As mentioned above a crucial part of the OAT initial setup deliverables is to develop meaningful KPIs under which the OpCo will be held accountable. As this is a new initiative and the exact activities are dependent on a lot of different, still developing factors, developing KPIs in the proposal stage is not practical in my opinion.
Hey Valentin, thank you very much for the insightful feedback! We’ve updated the proposal to clearly indicate that the OAT’s mandate includes developing KPIs for OpCo once the entity is at a point where this can be sufficiently done.
Are there any plans to further scope out the mandate of OpCo? As is, the entity seems to be a catch-all of sorts aimed at taking up grass-roots initiatives within the Ecosystem. Naturally, we do see the element of centralisation that this could cause and also the chance of eliminating grass-roots initiatives and deterring smaller contributors w/various initiatives.
The decision to give OpCo a wide scope was deliberate to enable it to mold into the DAO’s needs as they arise and evolve, as well as allow internal employees to proactively suggest new strategies within areas where they identify inefficiencies. We started by restricting OpCo’s mandate to the ecosystem support and financial management focus areas to prevent the risk of the DAO’s bottoms-up system for bootstrapping new projects, DAO contributors, strategies, etc., eroding, but following delegate feedback, decided to enable the entity to further expand into the other areas (excluding investments) as well if the DAO so chooses. Based on conversations we had at Devcon, most delegates and key stakeholders prefer a structure of intent execution with decentralized decision-making, which this proposal strives to achieve.
To this point, it would be worth adjusting OpCo’s KPIs for the first few months toward specific critical deliverables rather than broadly aiming to get established and optimize itself for time/agility. Examples include:
Hiring a specified number of employees for defined positions.
Designing and implementing a financial reporting structure for all DAO grant programs.
Approving a target compensation range for DAO council positions.
Signing a long-term contract with a vendor for DAO communications.
Establishing regular touch-points with Arbitrum Stakeholders (Delegates, OCL, AF, Entropy, GCP, etc.)
As pointed out by @backbone, establishing KPIs at the proposal stage might not be feasible, and there is a risk that the DAO’s priorities will change between now and when the entity is operationalized, meaning that it would be somewhat forced to execute in areas that aren’t as relevant for the DAO anymore. Having said that, most of the points you bring up perfectly encompass the building blocks for a proposal we would consider ideal for the DAO to instruct OpCo to begin executing once the entity is at a point where its foundational components have been established and it’s ready to kick off its operations.
Ok this is awesome. Let's first start with the green edits of the initial proposal.
OpCo is also required to be proactive, meaning that if the entity has the bandwidth and recognizes a potential advancement that could be made within its mandated focus areas, it can work on and propose a strategy through which the entity would address the identified frictions.
Thank you, @Entropy, for this much-needed initiative. We fully agree that Arbitrum DAO needs to take a more structured approach to operations execution and project management, especially in coordination with third parties like service providers and builders.
We believe the proposal is a great start, but we believe additional clarifications are needed in the following areas:
Thank you, @Entropy, for this much-needed initiative. We fully agree that Arbitrum DAO needs to take a more structured approach to operations execution and project management, especially in coordination with third parties like service providers and builders.
We believe the proposal is a great start, but we believe additional clarifications are needed in the following areas:
Gauntlet provided in-depth feedback on this significant proposal during DevCon. The proposed OpCo presents an opportunity to address critical gaps in Arbitrum DAO governance, including horizontal and vertical organization, financial planning and budgeting, and program management resources to ensure that DAO initiatives are aligned, accountable, and efficient.
However, there are valid concerns regarding the execution of the proposal:
Gauntlet provided in-depth feedback on this significant proposal during DevCon. The proposed OpCo presents an opportunity to address critical gaps in Arbitrum DAO governance, including horizontal and vertical organization, financial planning and budgeting, and program management resources to ensure that DAO initiatives are aligned, accountable, and efficient.
However, there are valid concerns regarding the execution of the proposal:
To this point, it would be worth adjusting OpCo's KPIs for the first few months toward specific critical deliverables rather than broadly aiming to get established and optimize itself for time/agility. Examples include:
Ultimately, Arbitrum is currently on its heels to defend its market position in a quickly growing L2 landscape. There is a time to place big bets, and we appreciate OpCo's potential to help jumpstart the DAO toward making more definitive and efficient moves. We prefer the DAO to measure twice and cut once if it proceeds with OpCo.
I'm stepping into the conversation just now, but I’d like to share my thoughts on this before it moves on to Snapshot. First, I’m really excited about this proposal. I think it can really make a difference in defining an efficient strategy, allowing the DAO to make efforts in the right direction.
I echo some concerns that have already been mentioned by other delegates by highlighting the potential consequences linked to the deployment of the funds in terms of price fluctuations.
如果 OpCo 受命推动的 DAO 批准的战略或战略目标没有具体的结束日期，则 DAO 相邻实体将继续执行，直到该实体认为相关目标已经实现，或者 DAO 通过快照投票（简单多数，至少 3% 的可投票代币投票“赞成”或“弃权”）指示该实体停止执行。如果预计这项工作将是长期的，OpCo 将负责确保工作能够继续进行，并在其预算延期请求中核算相关成本。
Gmgm!
The following reflects our current thoughts on this proposal (which I hope will not be going to Snapshot prior to replied-to comments and sufficient time for contributors to evaluate replies).
Gmgm!
The following reflects our current thoughts on this proposal (which I hope will not be going to Snapshot prior to replied-to comments and sufficient time for contributors to evaluate replies).
Firstly, thanks for preparing this detailed proposal, there's some great work here! Will be posting our reflections hereunder based on our experience running identical structures in a private capacity for our clients on our legal & corporate service-lines, and in our public capacity at the dYdX Operations subDAO together w/ @backbone:
Firstly, we're happy with the fact the OpCo proposal helps address the challenge relating to continuity. This mirrors practices in the public sector, where continuity is maintained by involving multiple individuals in processes and ensuring seamless transitions through comprehensive documentation. In our opinion, and based on the current proposal structure, OpCo is well-positioned to facilitate this. Additionally, it has the potential to conduct post-mortems for programs, enabling the DAO to systematically analyze both successes and failures.
The structure underlying the Oversight and Transparency Committee (OAT) is well thought out and naturally an integral part of this OpCo proposal. While some members have identified that the monthly contribution for these members is on the low side, we feel that is in part addressed by the bonus being proposed. We generally are in favour of this as it helps to align incentives and ensure long-term commitment and accountability. In this regard however, you should establish parameters of what factors would lead to these bonus payments being triggered in detail so that expectations are fully set.
As for the general election to be held for the three OAT members, will a single Snapshot be held or will there be three snapshot in order to ensure that complementary applicants are attracted? Given the OAT’s critical role in ensuring OpCo is run effectively, attracting a diverse and skilled team is essential.
While bi-annual oversight and financial reports are mentioned, the significant funding involved warrants more frequent reporting calls, such as on a monthly basis or a dashboard updated in real-time. These could include, projections and any deviations (e.g., budget overruns, missed deadlines), explanations for variances and remedial actions being undertaken, among several others. Ideally the reports are published on a quarterly basis in our opinion to ensure that the DAO has sufficient oversight over financial standings (especially since a part of the funds may be off boarded and thus are off-chain w/the DAO not having the ability to track these). With the current proposed budget (which in our opinion is too high in and of itself, bi-annual reporting definitely does not cut it).
The proposal includes hiring a full-time, in-house legal counsel. If this is to count as one of the 10 employees, what do the Year 2 legal costs entail? Moreover, we feel that a retainer model for legal counsel might be more cost-effective and prevent under-utilisation in this regard. In the immediate, OpCo will definitely not need a full-time legal counsel and this would be something that'd be more ideal in Y2 when we have initiatives potentially plugging into OpCo (although the 'Why?' of Why should initiatives even plug-in to OpCo is still very much up in the air).
Reference is made towards the budget provided:
Has any rationale been included regarding the decision to release 10M ARB upfront? Given that this was included at an average price of $0.54/ARB and this has now increased to c. $0.7/ARB, is the plan to still release 10M ARB upfront, even if the price of ARB increases further?
Are there any plans to further scope out the mandate of OpCo? As is, the entity seems to be a catch-all of sorts aimed at taking up grass-roots initiatives within the Ecosystem. Naturally, we do see the element of centralisation that this could cause and also the chance of eliminating grass-roots initiatives and deterring smaller contributors w/various initiatives. Legal decentralisation is welcome, yet it could easily lead to progressive centralisation if the entities that are being spun up are not scoped out well. In this regard, reference is made to the recent Lido Alliance OpCo which was set up recently that was scoped out well by the proposers https://research.lido.fi/t/organize-the-lido-alliance-program-as-a-lido-dao-adjacent-borg/8173
Since employees will be employed on a full-time basis can we assume that none of these employees will have any involvement in other DAOs? Also, will these be employees or just full time independent contractors? Best to delineate to (1) set expectations and (2) avoid employment reclassification risk (Employees = OpsCo would need to register as an employer and also offer employee-equivalent benefits such as paid leave, maternity leave etc.)
Re. the request for community feedback on KPIs some additional metrics that could be considered include (i) budget variance i.e. deviation between projected and actual expenditures, (ii) % of funds returned to the DAO (iii) runway project accuracy (iv) attrition rate analysis i.e. reasons for internal employees hired or service provider departing… Moreover, KPIs could be reviewed and adjusted periodically (ex: every 6 months) based on feedback from the DAO to ensure alignment with evolving priorities.
One last point from our end re. the Term is that we are of the opinion that this is too long for such a new initiative. If it doesn't work, we want to avoid creating the bad optics of having to put up a proposal to wind it down following Y1 for example. Hence, same with industry precedents that have been set, we are of the opinion that the term should be that of 12 months, to be extensible by a 24-month period thereafter if it produces the corresponding benefit. Naturally, should the term be reduced (which we are of the strong opinion that it should, the budget requested should be reflective of this).
That's all for now, great job on getting this proposal together and happy to chat on some of the above points a-sync!
Kind regards, Immutablelawyer Axis Advisory
Internal full-time employees (not OAT members): these individuals, as well as any companies and analogous entities with which these individuals maintain a professional or financial relationship, are forbidden from participating in Arbitrum DAO governance votes.
OpCo in its capacity as a legal entity: the entity is prohibited from becoming a delegate and cannot assume token delegations.
We’ve added text to clarify that OpCo will not have the authority to enter into contracts with service providers or individual contributors for strategies not approved by the DAO through governance, unless directly related to its operational needs (e.g., hiring an accounting firm).
Ok this is awesome. Let's first start with the green edits of the initial proposal.
OpCo is also required to be proactive, meaning that if the entity has the bandwidth and recognizes a potential advancement that could be made within its mandated focus areas, it can work on and propose a strategy through which the entity would address the identified frictions.
This is a key unlock and the key thing we needed more than anything else. We can go as much into granular details as we want, but the high level goal is this: an entity that can be proactive.
OpCo will be focused on the Ecosystem Support and Financial Management initiative categories, but note that the mandate can be expanded into Grants and Governance Frameworks if the DAO so chooses through a Snapshot vote
Would it make sense to say "expanded into other verticals such as Grants and Governance Frameworks?" Two things to me here could be a potential improved area:
Having said that, if the DAO wishes to, it can expand OpCo’s mandate to include grants in the future through a Snapshot vote.
So as direct consequences this would be "it can expand OpCo’s mandate to include specific grants intiatives in the future through a Snapshot vote."
OpCo internal full-time employees cannot be contributors to DAO initiatives as individuals (they need to do so through OpCo) and are strictly prohibited from entering into employment engagements with other DAOs, organizations, entities, or comparable affiliations,
Internal full-time employees [...] are required to abstain from Arbitrum DAO governance votes that are directly related to OpCo and its operations.
Now, on the open question.
Liquidate ARB into $12M worth of cash-equivalent assets (at ARB’s current price of 0.80$, this would require 15M ARB) over a time period of up to 6 months
I'll be honest this strategy only make sense if we have a "relative" swift timing. We can see how market is appreciating, and should keep appreciating. Cyclicality suggest that we could have upt to Q3 2025 in this. But here, we are not in the business of forecasting market, while we could indeed take that in account. With a very gentle and educated guess, i would say that the proposed liquidation, in 6 months, to get $12M worth of cash equivalent, can be effective if we respect the timeline proposed. Which means: if tally is approved, we need to start the process right away. My question is: can we do it, or do we need to wait for the legal entity to be setup? If the former could be done, maybe through AF as custodian, fine, if not, there is a risk in which the plan won't work as intended. This risk should be relative small, but will indeed exists. In general, for a project of this size, we shouldn't be in a situation that we start with the wrong foot (in this case, either we don't have a good chaos coordinator OR we don't have the forecasted budget). Understanding that we have an asset that is volatile and that this risk can only be mitigated but not eliminated, I don't honestly see a mix of the strategy above + using the initial amount (35M) as allocated budget as being bad, knowing that the difference can and will go back to the DAO.
Finally, a smol note. This proposal has been so far gargantuan. Probably one of the most ambitious in a DAO. Kudos for the amount of granularity into incorporating feedbacks, it's been impressive.
I'm stepping into the conversation just now, but I’d like to share my thoughts on this before it moves on to Snapshot. First, I’m really excited about this proposal. I think it can really make a difference in defining an efficient strategy, allowing the DAO to make efforts in the right direction.
I echo some concerns that have already been mentioned by other delegates by highlighting the potential consequences linked to the deployment of the funds in terms of price fluctuations.
Apart from this, I feel like the major debate is around defining a perimeter in which the OpCo can act. IMO, it’s always hard to find a balance between giving flexibility and autonomy and still keeping everything decentralized. I think that clear boundaries have to be defined - I don’t know if prior to moving to the following steps or during the process according to the specific context. Giving autonomy is a good thing just at one condition: if transparency is guaranteed. I personally think that the balance can be found by working hand-in-hand towards the common goal. If flexibility is given, transparency reports have to be constant in order for the DAO to keep track of its performances and activities. Plus, as a general norm, feedbacks should be integrated into the workflow, and veto power should always be an option if the OpCo risks moving too far from the DAO’s interest. I honestly think that on an ‘institutional’ point of view, the existence of the OAT can exactly provide this balance between autonomy and overview. But on the practical side of things, I believe that we still have to define some boundaries.
如果 OpCo 受命推动的 DAO 批准的战略或战略目标没有具体的结束日期，则 DAO 相邻实体将继续执行，直到该实体认为相关目标已经实现，或者 DAO 通过快照投票（简单多数，至少 3% 的可投票代币投票“赞成”或“弃权”）指示该实体停止执行。如果预计这项工作将是长期的，OpCo 将负责确保工作能够继续进行，并在其预算延期请求中核算相关成本。
The proposal mentions that OpCo's responsibilities cover a wide range of areas such as operational support, program management and resource allocation. So how can OpCo clearly differentiate its functions from other independent organizations within the existing ecosystem (e.g. foundations, existing DAO programs)? How can overlapping responsibilities or inefficiencies be avoided? Suggestion: 1、For OAT members and the OpCo core team, regular public meetings and reports could be set up to show progress to the community and to receive questions and feedback. 2、 Set up a conflict resolution mechanism: If OpCo disagrees with other entities in the ecosystem (e.g., foundations) on resource allocation or decision-making, is there a need to set up a clear conflict resolution process?
This is a well structured proposal. That being said, I'm seriously concerned that it comes without a previous reflection on Arbitrum's strategy and organisation design.
Yhis is a VERY impactful decision that will lead to vested interest from all kind of actors in preserving the specific design that is picked. Change management is pure pain, and the only reason organisations do it is because having the wrong design for a strategy makes it almost impossible to succeed. Let me try to illustrate the point:
This is a well structured proposal. That being said, I'm seriously concerned that it comes without a previous reflection on Arbitrum's strategy and organisation design.
Yhis is a VERY impactful decision that will lead to vested interest from all kind of actors in preserving the specific design that is picked. Change management is pure pain, and the only reason organisations do it is because having the wrong design for a strategy makes it almost impossible to succeed. Let me try to illustrate the point:
let's assume the functional-division is implemented, and we have grants on one Unit, investments on the Unit, and operations all housed under different Units. If say we wanted to coordinate a strategy that focuses on REWA (or CollabTech or DePin, or whichever) we would then need to coordinate changes to the work across 4 different Units, each with different priorities, mandates, and KPIs. It would likely take months to coordinate and launch a cohesive REWA strategy. On the other hand, an organisation design that is focused on customer-segments as the key success driver would create Units around each customer segment (like the Gaming Catalyst), and each Unit would then structure ecosystem support, investments, grants, etc as needed for that specific vertical. If Arbiturm wanted to tackle a new vertical (e.g. REWA, DePin, dAI, etc.) it would be more effective to give agency to a group that can define the right mix of strategies for said segment than try to coordinate 3-4 Units that operate across multiple segments to prioritise the new initiative. Low speed of coordination is what makes corporations unable to do innovation and leads to their demise.
So I invite the DAO to explore a bit deeper whether a functional-division design is the right one before putting this proposal to a vote. A couple of weeks here could save months or even years of pure pain and operational ineffectiveness for Arbitrum.
Copying the functional-division structure suggested in the OpCo proposal for reference:
Happy to see this type of project gaining steam, as a lot of good points about inefficiencies in the DAO (especially on silo'd efforts with little to no cross-project collaboration). So I hope this type of project can resolve a lot of that.
The post and other comments address a lot of questions I would otherwise have, but I wanted to ask about one item:
Happy to see this type of project gaining steam, as a lot of good points about inefficiencies in the DAO (especially on silo'd efforts with little to no cross-project collaboration). So I hope this type of project can resolve a lot of that.
The post and other comments address a lot of questions I would otherwise have, but I wanted to ask about one item:
It’s also important to note that several line items, such as entity setup and legal services are notably larger than what the actual expenses are expected to be. This was done to account for any unforeseen events or worst-case scenarios which could require notable capital commitments. Moreover, several buffers have been applied to the 35/34M ARB figure to account for the risk of a decreasing ARB price, with the purpose of securing OpCo’s continuous operations even if notable market downturns materialize.
Funds will be transferred to an Arbitrum Foundation-controlled address and 10M ARB will be liquid immediately. Once OpCo’s legal setup and related aspects are finalized, 24M ARB will begin vesting to an OpCo-connected multisig(s), with 1M ARB vested every 30 days over 24 months. Some of the ARB connected to the vesting structure might be converted into stablecoins before being put in a vesting contract to ensure that OpCo can operate in case of large market downturns. The Chief of Coins, together with relevant parties, will be responsible for maintaining an adequate runway for covering USD-denominated expenses while accounting for market volatility, as well as establishing a low-risk management strategy for idle capital to enhance the impact of the allocated funds.
It's good to see projects learning from other projects mistakes, but if we know the cost in USD (or atleast, some of the expected costs) is there a reason to not just sell to USD right away to ensure funding? I say that fully understanding that a) 1m of it will be incentive based, so it makes sense to keep it in ARB and b) some costs aren't fully know yet... but I think that sitting in ARB brings on market risks to a project that has a long runway. For example, if we know the oversight council will be $25,000 a month, why not just sell the $600,000 USD worth of ARB at the start?
Also, apologies if I missed it but I didn't see any note on additional ARB going back to the DAO. Can you confirm if that will be the case?
Edit: Voting "For" on Tally as I believe issues have been addressed. The willingness to adjust to feedback is appreciated.
Our team is generally pleased with the overall design of Opco. While we recognize that it introduces some centralization risk for the DAO, we believe the resulting improvements in execution and efficiency will bring benefits that outweigh the risk. We’re also glad to see that the model preserves a decentralized, bottoms-up approach to working group creation, continuing to empower individuals.
Our team is generally pleased with the overall design of Opco. While we recognize that it introduces some centralization risk for the DAO, we believe the resulting improvements in execution and efficiency will bring benefits that outweigh the risk. We’re also glad to see that the model preserves a decentralized, bottoms-up approach to working group creation, continuing to empower individuals.
There are, however, several important areas that need further clarification. For instance, the legal entity structure, as raised by @Immutablelawyer and @Pablo, and clearer detail around all checks and balances. We’re also interested in understanding why there are no term limits for the OAT, as raised by @DisruptionJoe.
Most importantly, we would like more insight into Opco’s recruitment strategy, particularly regarding the selection of the two-person executive team (Chief of Coins and Chief Chaos Coordinator) and the 10 internal employees. Given the centralization risks posed by Opco, it’s essential that the executive team not only has strong operational expertise but is also well-versed in DAOs. Since this skill set is unique, we’re curious about the specific approach to recruiting such candidates.
Furthermore, what happens if the DAO cannot secure the ideal candidates? Specifically, for the executive roles, will the Opco’s initiation be delayed, or will the OAT step in to manage executive responsibilities temporarily if these positions are unfilled?
Regarding the 10 employees mentioned in the sample budget, we’re wondering if this setup resembles a “bench” model, similar to consulting firms, where the DAO would have access to resources on demand for various initiatives. If that’s the case, we’re concerned about potential underutilization, a common challenge in consulting and agency models, where resources are hired without clear expectations around the scope or duration of their projects.
Will the Chief of Chaos oversee existing working groups that fall under the Opco’s mandate (Ecosystem Support & Financial Management). What exactly will their role be? Will it be to improve processes or something else?
Additionally, what checks and balances, if any, will be created for the Chief of Coins and Chief Chaos Coordinator? For example, will the DAO be able to veto initiatives proposed by these individuals?
Lastly, the proposal states, “The OpCo is a legal entity that delegates and key stakeholders can leverage to achieve DAO-defined goals.” Is it correct to assume that these goals have not been started yet but will be worked on in phase 1, as per the the mission, vision, and purpose post?
The following reflects the views of the Lampros Labs DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
This proposal is essential for the DAO, as it presents many possible changes, most of which would likely be beneficial.
The following reflects the views of the Lampros Labs DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
This proposal is essential for the DAO, as it presents many possible changes, most of which would likely be beneficial.
But is a mammoth task that is undertaken. Our concern is whether it should be broken down into separate proposals to make it more effective and accountable?
We appreciate the thorough work that went into creating the current structure of Initiatives, which was much needed given the many programs running simultaneously.
We are looking for community feedback on this front, but some potential, apparent KPIs for OpCo (h/t @dk3 for most of these) include:
While the proposed KPIs include operational metrics, we suggest adding specific outcome-based KPIs that capture the value OpCo brings to the DAO, such as ROI on OpCo-managed initiatives or the speed of implementing strategies compared to previous methods.
OpCo is expected to work closely with Offchain Labs as well as the Arbitrum Foundation to ensure that scopes of work do not overlap.
On coordination with Offchain Labs and the Arbitrum Foundation, it might be useful to discuss role definitions before finalizing the OpCo committee. Clear role allocation upfront would help prevent overlaps and keep the community informed about the distinct responsibilities of each entity.
This is not an official budget, meaning that capital may be budgeted and allocated differently once the entity is stood up.
For budget allocations, flexibility is key. However, setting clear thresholds for reallocations or maximum variance limits in major categories could strengthen budget accountability.
To determine “product-market fit” for OpCo, establishing a set of measurable criteria could provide consistency in evaluating success. Without clear benchmarks, perspectives may vary widely across stakeholders.
We also found the titles and responsibilities of internal executive-equivalent employees innovative. Are there any specific qualifications or skills listed for these roles, or candidates under consideration who fit the requirements?
Regarding legal needs, is a full-time, in-house legal counsel necessary? Clarifying the specific responsibilities they would cover would help assess the need for a full-time position.
In general, we acknowledge the work done for drafting this proposal and support the direction of this initiative, as it aims to build a more structured and operational approach for the DAO.
It is great to see such a high level of engagement and conversation on the OpCo proposal. With it being a little over a week since it was posted, we'd like to just update delegates that our team is working on responses to the questions and suggestions presented. This will be posted in the coming days and we appreciate everyone's patience.
OpCo 法律结构的探索工作已经开始，但需要进一步努力并与主要利益相关者、代表和 Arbitrum 基金会协商，才能确定确切的结构。如果该提案获得通过，基金会为建立法律结构而产生的任何费用将从分配给该计划的资本中偿还。
OpCo 法律结构的探索工作已经开始，但需要进一步努力并与主要利益相关者、代表和 Arbitrum 基金会协商，才能确定确切的结构。如果该提案获得通过，基金会为建立法律结构而产生的任何费用将从分配给该计划的资本中偿还。
OpCo 的初始期限暂定为 30 个月（从实体正式成立之日起，大约 6 个月用于设立，24 个月用于运营）。初始期限的长度选择为在建立法人实体、加快和稳定运营方面出现任何不可预见的延误留出充足的时间，并将使 OpCo 能够专注于更复杂和长期的战略并内部吸纳顶尖人才，因为较长的初始期限为员工提供了可预测性/工作保障。一旦第一个任期即将结束，高管级别的内部人员将与 OpCo 的监督委员会（下文介绍的监督和透明度委员会 (OAT)）合作，为 DAO 相邻实体制定延续提案。预计这将涵盖 OpCo 第二个任期的长度、所需预算以及应进行的任何更改或改进等内容。值得注意的是，如果 OpCo 需要在 DAO 范围的预算到位之前内部化大量的协调员角色，那么 OpCo 可能必须制定一项提案来分配额外资金，因为其最初的示例预算已经制定为覆盖最多 12 名不同薪水的内部全职员工。
Questions: 1. Oversight and boundaries of authority and responsibility: - Are the responsibilities of OpCo with the DAO, OAT and the Arbitrum Foundation clearly defined and how can conflicts of authority and responsibility be avoided? - If OpCo's proposed implementation program is rejected by DAO, is there a mechanism in place to ensure that subsequent adjustments are made? 2. Is the high initial budget too aggressive? - Although the OpCo proposal includes a buffer, the high budget may lead to excessive initial expenditure, can more funds be released in stages?
Suggestion to optimize budget transparency: disclose the “buffer” portion of the budget in more detail, including the specific scope of use and the ceiling, to avoid the community's perception that the allocation of funds is not sufficiently transparent.
Supporting this makes sense because the OpCo, if implemented correctly, could enhance the DAO's operational efficiency by providing structure and oversigh. However, to protect decentralization, transparency mechanisms must be robust to prevent power consolidation.
Supporting this makes sense because the OpCo, if implemented correctly, could enhance the DAO's operational efficiency by providing structure and oversigh. However, to protect decentralization, transparency mechanisms must be robust to prevent power consolidation.
Applicants must be individuals, not entities, and should possess familiarity with the Arbitrum DAO, governance processes, multisig operations, and a strong industry reputation. Additionally, candidates should demonstrate substantial experience and expertise in one or more of the following fields:
Thanks for all the work put into this... it is a lot! Here are some comments
Thanks for all the work put into this... it is a lot! Here are some comments
Moreover, many initiatives, especially more complex and wider-reaching ones, lack clear owners in charge of ensuring a holistic approach to execution and initiatives’ continuation, meaning that in the unfortunate case that a service provider decides/is forced to disengage from its duties, there aren’t always accountable individuals or entities that would push the initiatives forward.
We've had many initiatives approved, which didn't belong to an overarching strategy & budget. For example, liquidity incentives with no funding or driving expert able to allocate funds or request work like marketing support and data analysis.
This statement here is the crux of the problem imho:
lack clear owners in charge of ensuring a holistic approach to execution and initiatives’ continuation
It's really about creating a structure which solves the "holistic approach" to delivering outcomes problem. I believe workstreams with repeatable governance processes and a few key governance principles could do this as well as the OpCo. I do think we need an entity though to hire the people in and supporting the neccessary roles.
For example, delegates could define a high-level events strategy by deciding the number of events the Arbitrum DAO should be represented at in 2025, whether the strategy facilitator is the proposer, a proposer-related party, an OpCo internal employee, or someone who is chosen through a procurement process, and approving the strategy’s costs that are not covered by OpCo’s budget (i.e., salaries if the facilitators are not full-time staff appointed internally, booking event venues, catering, etc.) through the typical governance process, after which OpCo plans the exact events to participate in, contracts the required service providers or operationalizes internal employees, and manages all involved stakeholders and other related aspects throughout the process.
The number of people who can be hired should really be explicit. For example, you could say that a new strategy would require a paid steward, but no more than one without the DAO explicitly voting to add another role.
Only things that the private market won't provide should be handled by the government. This proposal is officially creating a government entity. What are the functions that our market won't provide?
I believe it is only "Governance Operations" which requires people dedicated to Arbitrum. This is not just operations, but includes:
I'd much prefer not creating a government entity that is designed to bloat from the start. A good first step is clarifying roles and responsibilities. Then clarifying the processes that can legitimately add more roles, change responibilities, and update legacy processes when the environment changes.
Something needs to prevent this organization from becoming as effective as the DMV. This isn't trivial - its a organizational design pattern that has repeated itself every single time forever.
The pattern is:
I'm here to get rid of most government and replace it with better onchain systems. What impetus will we have to drive DAO towards continued decentralization? How will the CEO of OpCo be more incentivized to ensure that a cartel cannot rug builders than they are to follow the normal path which pressures government entities?
How do you envision that the OpCo will expand the number of ecosystem contributors outside of OpCo? Would you accept people buying ARB to use in governance as a KPI? Maybe a gini co-efficient? Maybe a ratio of ARB spent on government vs the economy?
In the Viable Systems Model, OpCo should really stick to facilitating the DAO through processes to accomplish level 4 and conduct most activities at level 3. It should only sign paychecks to level 2 and be the counterparty for continuation if needed at level 1.
This image may not be perfect and we may use different language. Where I'm saying "pillar opportunity" you might say "strategy", but the connection of the meta-system to the operational system is critical.
OpCo demonstrates product-market fit (i.e., the DAO is satisfied with the entity’s output) and that it has adequate processes, capabilities, and any other relevant functions to execute according to its complete mandate;
What is the entity's mandate? This mandate is referred to a lot here, but I can't find it clearly stated.
However, if the proposed scope of work falls within OpCo’s mandate, it is expected that delegates vote against such a proposal if it can be better executed via OpCo’s involvement. Proposers will be encouraged to engage with OpCo before posting a proposal to the forum to align with the DAO-adjacent entity’s internal employees.
Would this be enforceable by the code of conduct? Could a delegate lose payment based on voting for things they believe are needed?
Why is this design decision being suggested?
Here are the core issues I have with this as it stands.
This government will cost 10 million ARB to setup and 24 million ARB to run for 2 years and doesn't include any funds going to the builders in the ecosystem.
I'd like to see the exact mandate.
I'd like to know what the limit for growing this government is? What measurement will we use to say "ok, this thing is getting too big"? I'm less concerned about the number, and more interested in seeing that thought has been directed towards this problem.
Questions from above:
Overall, thanks for your time. I know my comments may be tough, but they are good hearted. If we can answer those questions, I am supportive. I'm also willing to commit to the success of OpCo if the DAO votes for it, even if I do not.
We appreciate this OpCo tool finally being pushed forward since counting on a legal entity is quite valuable for the DAO and something we consider should have been part of the DAO for a while as to prevent us all from legal issues tha may arise. We like to see that the OpCo also intends to fill gaps after proposals are passed and executed, nevertheless we have certain reservations about what it seems to be a centralization of proposals if they fall under an OpCo’s mandate scope (Financial Management and Ecosystem Support). We see some other delegates have also shared this concern and so we line-up with them to manifest our preoccupation about this.
It is true that the structure Arbitrum DAO currently has leads to so much friction and this needs to be addressed, yet we believe that we should avoid centralization when it comes to proposal of this kind. We do recognize the OpCo comes to help and facilitate the solving of these issues, but under the new structure we see a potential centralization that at least every single proposal that has to fall under OpCo’s scope should have OpCo’s members in between the proposer and the proposal itself. That’s why we would like to know if the incorporation of Opco will be mandatory in all the processes mentioned, or if it could be optional?
We appreciate this OpCo tool finally being pushed forward since counting on a legal entity is quite valuable for the DAO and something we consider should have been part of the DAO for a while as to prevent us all from legal issues tha may arise. We like to see that the OpCo also intends to fill gaps after proposals are passed and executed, nevertheless we have certain reservations about what it seems to be a centralization of proposals if they fall under an OpCo’s mandate scope (Financial Management and Ecosystem Support). We see some other delegates have also shared this concern and so we line-up with them to manifest our preoccupation about this.
It is true that the structure Arbitrum DAO currently has leads to so much friction and this needs to be addressed, yet we believe that we should avoid centralization when it comes to proposal of this kind. We do recognize the OpCo comes to help and facilitate the solving of these issues, but under the new structure we see a potential centralization that at least every single proposal that has to fall under OpCo’s scope should have OpCo’s members in between the proposer and the proposal itself. That’s why we would like to know if the incorporation of Opco will be mandatory in all the processes mentioned, or if it could be optional?
On the other hand, , should’n we consider some kind of pilot before starting with this program for a total amount of 30 months? We know it’s been stated that 6 months will be for the setup and the next 24 for operations from the entity, but most of what we see here is an oficial launching for something that haven’t been tested yet and considering everything that implies and the funds it requires, Maybe 1 year which is not a long period of time but it is also not a short period as well, and 6 months for setting up while the next 6 for operations and then and only then if the OpCo demonstrates that it is really useful then require for an extension up to 20 more months
My only concern is that 34M ARB is not a small amount—even unlocking just 10M initially could create significant selling pressure in today’s low-liquidity market. Ethereum Foundation has faced heavy criticism for continuous ETH sales, even in smaller amounts, which have still impacted the market. I believe it’s essential to consider ARB’s liquidity and potential price fluctuations before deploying these funds; otherwise, ARB holders may end up suffering the most.
Finally, we share @Larva 's concerns about this specific part of the proposal: How do we know that making a movement of this kind will not generate a fluctuation of the ARB token when it occurs?
Hi! Thank you for the detailed proposal. I like the ambitious plan of an OpCo for project management of the DAO’s initiatives.
I have some initial questions and comments.
Among other things, the DAO may choose to leverage OpCo to manage:
Hi! Thank you for the detailed proposal. I like the ambitious plan of an OpCo for project management of the DAO’s initiatives.
I have some initial questions and comments.
Among other things, the DAO may choose to leverage OpCo to manage:
Operational support & project planning,
Project management of DAO initiatives,
Negotiations with service providers,
Allocation of resources across contributors & DAO-approved projects.
At times, it seems the work overlaps with what’s expected of the ADPC and ARDC.
In the case of the ADPC, its focus is on establishing agreements with specific providers through the development of RFPs and budget approvals.
The ARDC has a defined selection of service providers for certain tasks.
What types of service providers are envisioned here if those related to audits (potentially also providers for events and RPC), as well as those for security, risk and research, are already covered by these entities?
Is the idea to absorb these responsibilities, or to wait until their mandate concludes?
Presently, most DAO programs operate in silos, leading to, among other things, redundant efforts and non-existing cross-initiative resources.
I think this is a key issue to address. I'm thrilled with the idea of an organization that coordinates the DAO’s initiatives to promote efficiency in resource management and align initiatives towards consolidating the DAO’s mission, vision, and objectives.
It is of utmost importance that Arbitrum DAO maintains a decentralized and bottoms-up system for bootstrapping new projects, DAO contributors, and setting strategies, including creating and steering the DAO’s vision, mission, and purpose, as well as approaches to achieve the goals and decision-making. As such, these areas will fall outside of the OpCo’s central mandate.
I think this is very well-conceived but challenging to implement in practice. Take, for instance, the lessons from the ARDC by the DAO Advocate role L2BEAT, where they faced difficulties obtaining proactive engagement from the delegates, who where supposed to require work from the ARDC.
What you're proposing here as a role for the DAO’s operations is even more abstract than what was required of the ARDC, and thus more complex.
I don’t have a clear solution because it is indeed challenging, but I’d like to see ideas on how this would be materialized in practice and how friction could be avoided to prevent paying for a large structure that, in practice, lacks concrete mandates.
OpCo’s main mandate is to enable the execution of DAO-defined strategies within the Financial Management and Ecosystem Support categories when requested by delegates.
This is exactly what I mean: if tasks are only initiated upon request from delegates, you’ll likely encounter friction and a lack of clarity regarding which tasks to execute. Perhaps it would be useful to predefine some tasks to get started.
It’s important to reiterate that proposals and their execution can still be DAO-led end-to-end and outside of OpCo if delegates vote in this regard. OpCo is a tool for the DAO to leverage if needed.
Especially considering this point. It’s not clear when the OpCo should be involved and when it shouldn’t, leaving it up to the discretion of the delegates. Ideally, this should be more clearly defined, in my opinion, to prevent a repeat of what happened with the ARDC (which led the DAO Advocate to proactively make decisions on resource usage).
I’m still not entirely clear on this structure—I need to digest the proposal a bit more to fully understand the concept. On one hand, I find the idea of an entity dedicated to the project management of the DAO’s initiatives valuable; on the other hand, doesn’t adding another layer of control over ecosystem actors already fulfilling this role (e.g., SEED Gov) somewhat defeat the purpose?
If the idea is for the OpCo to be the PM and facilitator of initiatives, I think it should replace entities like SEED rather than simply oversee them (although SEED, for example, could later be contracted as a service provider to carry out specific tasks within the program).
It’s important to note that OpCo will not have the authority to enter into contracts with service providers or individual contributors for strategies not approved by the DAO through governance.
This is good, but I’d frame it positively and clarify the requirements:
“The OpCo will only enter into legal agreements with service providers for strategies approved by the DAO, provided the following requirements (insert requirements) are met.”
Given the amounts requested, I think the KPIs need to be even more detailed. I'll work on this over the next few days to try to propose some specific points.
The OAT is a group of five individuals with the primary mandate to oversee OpCo’s operations,
I think incorporating the Oversight Committee is a great idea. My only comment pertains to the following:
Hiring, Termination, & Authorization: The OAT, in collaboration with the Arbitrum Foundation, would hire the executive-equivalent personnel to the OpCo (the Chief Chaos Coordinator, the Chief of Coins, and any other positions of equivalent responsibility that may be introduced in the future) once the legal entity is established.
I believe we should separate the individuals who will select such important roles as the exclusive-equivalents from those who will execute the oversight.
I propose that a committee be formed solely for the purpose of selecting those roles, which would then be replaced by the Oversight Committee. This way, you can ensure neutrality and independence.
Beyond economic substance, intellectual property deserves its own focus.
This extends beyond code copyright to encompass domain names, trademarks, patents, internal tools, processes, and innovations. All these elements need a permanent home with proper succession planning—thinking with a “what if we get hit by a bus” mindset is essential, especially early on.
Consider the full scope of assets, from email templates to password management tools, all of which require clear, long-term ownership and maintenance plans.
If you recall the WordPress litigation, you’ll understand the importance of covering all bases. Don’t be WordPress.
I’m an IP lawyer, so I’m happy to help with any of the issues outlined here if needed.
Also, one area where the OpCO could also contribute is in the active management of the DAO’s IP. I can elaborate further on this point if needed.
Thank you very much for the proposal!
Hello @Entropy! It’s a pleasure to finally see the much-needed proposal for OpCo for Arbitrum DAO. Thank you so much for all the hard work you’ve put into it; we know it hasn’t been easy.
would love as a standard practice to have members of the opCo to also be rewarded in ARB based on project related KPIs. Ex: hitting a milestone by a specific date. We should start to reward accountability in everything that we do as a DAO.
gm, generally in support of the initiative as we try to create a more operational structure.
A couple of comments:
gm, generally in support of the initiative as we try to create a more operational structure.
A couple of comments:
would love as a standard practice to have members of the opCo to also be rewarded in ARB based on project related KPIs. Ex: hitting a milestone by a specific date. We should start to reward accountability in everything that we do as a DAO.
I think @jojo expressed this already: it’s not clear to me what the difference between ecosystem support and grants is. Ex shouldn’t Questbook fall under ecosystem support.
Would also love @SEEDGov feedback as they have been running a similar initiative for the Everclear DAO and I’m sure they learned a lot from it
Maybe 1 year which is not a long period of time but it is also not a short period as well, and 6 months for setting up while the next 6 for operations and then and only then if the OpCo demonstrates that it is really useful then require for an extension up to 20 more months
This proposal would be very important for the DAO. It would potentially change its dynamics in a variety of ways, mostly I think for the better. While reading the proposal some things crossed my mind which I believe are important to discuss.
Decentralization
This proposal would be very important for the DAO. It would potentially change its dynamics in a variety of ways, mostly I think for the better. While reading the proposal some things crossed my mind which I believe are important to discuss.
Decentralization
The proposal specifies that the OpCo would only affect operational efficiency, not the strategic goals of the DAO; however, there is a risk of centralizing decision-making if not enough transparency is given. I believe that the OAT role would be key to make this function properly so there would need to be adequate mechanisms for it to be transparent, accountable and with well-defined roles and responsibilities. It should also be subject to checks and balances, with clear guidelines, so that there is no concentration of authority that could potentially undermine the DAO’s decentralization focus. If I understood correctly, the OAT will be responsible for the OpCo to operate with adequate checks on spending, staffing, and project prioritization so it will become a major position within the DAO structure. I am not sure how complex it would be for five persons to oversight every project and maintain a clear boundary between OpCo’s role and the DAO’s mission.
Costs and sustainability
I suggest refining the plan around staffing and with ROI-focused metrics. A clear outline on the number of hires and specific roles, with justifications for each, would help avoid over-hiring risks, maintain cost-efficiency and foster transparency which would reinforce trust and ensure the OpCo team remains accountable to the DAO’s mission.
A structured approach to measuring the ROI on the 34M ARB allocation is fundamental. Tracking detailed KPIs on hiring, employee productivity, project completion rates, and cost savings is a good start, but direct value-driven metrics will be key (ecosystem expansion, contributor retention, efficiency improvements).
On legal guidance, I am unsure of the costs, but 1.2M seems a high number. You mention full-time in-house legal counsel and preparation for unforeseen events or worst-case scenarios, it would be useful to know more about this structure/functionality.
To conclude
On a positive manner, I would like to add that this is overall a good proposal as it would make strategy execution more efficient and it would also likely attract enhanced talent to improve contributor quality.
On the other hand, we need to consider the risk of centralization decision-making which could potentially influence strategy rather than just execution.
the DAO would always have ultimate authority over OpCo, with the entity purely being a helpful resource focused on streamlining wider-reaching and complex initiatives that require a more structured execution framework
It would be proper to expand on this assertion to make sure that it is kept that way. This is no easy task. It would need a very well-thought definition of the OpCos boundaries and their restrictions. It would also need frequent, profound reporting and transparent metrics for spending and audits.
Other things to consider and expand upon are the high operational costs, the complexity of the accountability process and the uncertainty of the ROI metrics for this investment.
I would like to add that this proposal is a way of institutionalizing work that is already being done by entities such as Entropy and others. By institutionalizing, could there be a risk of creating a pseudo-centralized structure, undermining Arbitrum’s decentralization?
Also, are we monopolizing operations? Could this limit competitive bidding?
Maybe I’m overanalyzing, or there are just too many things to consider, but these are the things that come to mind.
Cheers to all.
Overall, I agree with the proposal and am inclined to vote in favor. However, I would prefer to see something smaller that can grow over time in terms of responsibilities, budget, and team members. I don't think starting with such a large setup and expense from the beginning is the best approach.
Thanks for the proposal!!
Naturally, agreed w/Paul's comments above and I think this is a good overview of what to look out for.
In response to @raam 's comment as well I do not agree that legal should not be a main focus here. In this regard, my concern is that we're falling behind industry-standard when it comes to spinning up DAO-adjacent entities via governance. In most if not all cases where this is done, the proposer (in the proposal) always gives sufficient clarity on the underlying legal structure to be used (Ref. dYdX Ops, MakerDAO, Lido Finance, Cosmos, ZKSync etc. - I can probably name 10+ others).
This proposal is a good idea, through the creation of a company called OpCo, to solve some of the “stuck points” in the implementation of the DAO, such as the lack of a clear person in charge, the decision-making chain is too long, and it is difficult for external contributors to join in a timely manner, etc. OpCo's role is to make these processes smoother, so that the DAO can be more efficient in the implementation, negotiation, contracting, etc., to ensure the smooth implementation of the strategy. The role of OpCo is to make these processes smoother, so that DAOs can be more efficient in execution, negotiation, contracting, etc., and ensure the smooth implementation of strategies. From this, we can see that the proposal is well-intentioned, aiming to improve the operational efficiency of DAOs and enhance their attractiveness and competitiveness. However, in actual operation, if the management of OpCo is not in place or the use of funds is not transparent, resources may be wasted. Seeing the above comments, people are most concerned about the management of OpCo's funds. The proposal plans to allocate 34 million ARBs to OpCo, of which 10 million ARBs will be released first and the remaining 24 million will be distributed gradually over the next 24 months. While the DAO can oversee OpCo, OpCo has a high degree of autonomy, particularly in recruiting and contracting personnel. This raises concerns as to whether OpCo will be able to use the funds efficiently and transparently. If the market fluctuates, will OpCo be able to operate in a stable manner? The DAO community needs to keep a watchful eye on OpCo's operations to ensure that it is delivering the value it is intended to deliver, rather than becoming a “black hole” for funds. Personally, I have some suggestions to improve the proposal
Thanks for the proposal. The opCo is a very important topic! While I'm still digesting the concept, I would like to ask:
Hey lads,
Still have to read through the proposal - however, I noticed that the term DAO-Adjacent legal entity was used yet no clarity on the entity-type and jurisdiction was provided. Since you mentioned that this is already in process (which to be honest [I'm gonna be pedantic here] I do not like since the proposal first has to pass), can we get some clarity on this?
Internal full-time employees (not OAT members): these individuals, as well as any companies and analogous entities with which these individuals maintain a professional or financial relationship, are forbidden from participating in Arbitrum DAO governance votes.
OpCo in its capacity as a legal entity: the entity is prohibited from becoming a delegate and cannot assume token delegations.
We’ve added text to clarify that OpCo will not have the authority to enter into contracts with service providers or individual contributors for strategies not approved by the DAO through governance, unless directly related to its operational needs (e.g., hiring an accounting firm).
Ok this is awesome. Let's first start with the green edits of the initial proposal.
OpCo is also required to be proactive, meaning that if the entity has the bandwidth and recognizes a potential advancement that could be made within its mandated focus areas, it can work on and propose a strategy through which the entity would address the identified frictions.
This is a key unlock and the key thing we needed more than anything else. We can go as much into granular details as we want, but the high level goal is this: an entity that can be proactive.
OpCo will be focused on the Ecosystem Support and Financial Management initiative categories, but note that the mandate can be expanded into Grants and Governance Frameworks if the DAO so chooses through a Snapshot vote
Would it make sense to say "expanded into other verticals such as Grants and Governance Frameworks?" Two things to me here could be a potential improved area:
Having said that, if the DAO wishes to, it can expand OpCo’s mandate to include grants in the future through a Snapshot vote.
So as direct consequences this would be "it can expand OpCo’s mandate to include specific grants intiatives in the future through a Snapshot vote."
OpCo internal full-time employees cannot be contributors to DAO initiatives as individuals (they need to do so through OpCo) and are strictly prohibited from entering into employment engagements with other DAOs, organizations, entities, or comparable affiliations,
Internal full-time employees [...] are required to abstain from Arbitrum DAO governance votes that are directly related to OpCo and its operations.
Now, on the open question.
Liquidate ARB into $12M worth of cash-equivalent assets (at ARB’s current price of 0.80$, this would require 15M ARB) over a time period of up to 6 months
I'll be honest this strategy only make sense if we have a "relative" swift timing. We can see how market is appreciating, and should keep appreciating. Cyclicality suggest that we could have upt to Q3 2025 in this. But here, we are not in the business of forecasting market, while we could indeed take that in account. With a very gentle and educated guess, i would say that the proposed liquidation, in 6 months, to get $12M worth of cash equivalent, can be effective if we respect the timeline proposed. Which means: if tally is approved, we need to start the process right away. My question is: can we do it, or do we need to wait for the legal entity to be setup? If the former could be done, maybe through AF as custodian, fine, if not, there is a risk in which the plan won't work as intended. This risk should be relative small, but will indeed exists. In general, for a project of this size, we shouldn't be in a situation that we start with the wrong foot (in this case, either we don't have a good chaos coordinator OR we don't have the forecasted budget). Understanding that we have an asset that is volatile and that this risk can only be mitigated but not eliminated, I don't honestly see a mix of the strategy above + using the initial amount (35M) as allocated budget as being bad, knowing that the difference can and will go back to the DAO.
Finally, a smol note. This proposal has been so far gargantuan. Probably one of the most ambitious in a DAO. Kudos for the amount of granularity into incorporating feedbacks, it's been impressive.
I'm stepping into the conversation just now, but I’d like to share my thoughts on this before it moves on to Snapshot. First, I’m really excited about this proposal. I think it can really make a difference in defining an efficient strategy, allowing the DAO to make efforts in the right direction.
I echo some concerns that have already been mentioned by other delegates by highlighting the potential consequences linked to the deployment of the funds in terms of price fluctuations.
Apart from this, I feel like the major debate is around defining a perimeter in which the OpCo can act. IMO, it’s always hard to find a balance between giving flexibility and autonomy and still keeping everything decentralized. I think that clear boundaries have to be defined - I don’t know if prior to moving to the following steps or during the process according to the specific context. Giving autonomy is a good thing just at one condition: if transparency is guaranteed. I personally think that the balance can be found by working hand-in-hand towards the common goal. If flexibility is given, transparency reports have to be constant in order for the DAO to keep track of its performances and activities. Plus, as a general norm, feedbacks should be integrated into the workflow, and veto power should always be an option if the OpCo risks moving too far from the DAO’s interest. I honestly think that on an ‘institutional’ point of view, the existence of the OAT can exactly provide this balance between autonomy and overview. But on the practical side of things, I believe that we still have to define some boundaries.
如果 OpCo 受命推动的 DAO 批准的战略或战略目标没有具体的结束日期，则 DAO 相邻实体将继续执行，直到该实体认为相关目标已经实现，或者 DAO 通过快照投票（简单多数，至少 3% 的可投票代币投票“赞成”或“弃权”）指示该实体停止执行。如果预计这项工作将是长期的，OpCo 将负责确保工作能够继续进行，并在其预算延期请求中核算相关成本。
The proposal mentions that OpCo's responsibilities cover a wide range of areas such as operational support, program management and resource allocation. So how can OpCo clearly differentiate its functions from other independent organizations within the existing ecosystem (e.g. foundations, existing DAO programs)? How can overlapping responsibilities or inefficiencies be avoided? Suggestion: 1、For OAT members and the OpCo core team, regular public meetings and reports could be set up to show progress to the community and to receive questions and feedback. 2、 Set up a conflict resolution mechanism: If OpCo disagrees with other entities in the ecosystem (e.g., foundations) on resource allocation or decision-making, is there a need to set up a clear conflict resolution process?
This is a well structured proposal. That being said, I'm seriously concerned that it comes without a previous reflection on Arbitrum's strategy and organisation design.
Yhis is a VERY impactful decision that will lead to vested interest from all kind of actors in preserving the specific design that is picked. Change management is pure pain, and the only reason organisations do it is because having the wrong design for a strategy makes it almost impossible to succeed. Let me try to illustrate the point:
This is a well structured proposal. That being said, I'm seriously concerned that it comes without a previous reflection on Arbitrum's strategy and organisation design.
Yhis is a VERY impactful decision that will lead to vested interest from all kind of actors in preserving the specific design that is picked. Change management is pure pain, and the only reason organisations do it is because having the wrong design for a strategy makes it almost impossible to succeed. Let me try to illustrate the point:
let's assume the functional-division is implemented, and we have grants on one Unit, investments on the Unit, and operations all housed under different Units. If say we wanted to coordinate a strategy that focuses on REWA (or CollabTech or DePin, or whichever) we would then need to coordinate changes to the work across 4 different Units, each with different priorities, mandates, and KPIs. It would likely take months to coordinate and launch a cohesive REWA strategy. On the other hand, an organisation design that is focused on customer-segments as the key success driver would create Units around each customer segment (like the Gaming Catalyst), and each Unit would then structure ecosystem support, investments, grants, etc as needed for that specific vertical. If Arbiturm wanted to tackle a new vertical (e.g. REWA, DePin, dAI, etc.) it would be more effective to give agency to a group that can define the right mix of strategies for said segment than try to coordinate 3-4 Units that operate across multiple segments to prioritise the new initiative. Low speed of coordination is what makes corporations unable to do innovation and leads to their demise.
So I invite the DAO to explore a bit deeper whether a functional-division design is the right one before putting this proposal to a vote. A couple of weeks here could save months or even years of pure pain and operational ineffectiveness for Arbitrum.
Copying the functional-division structure suggested in the OpCo proposal for reference:
Happy to see this type of project gaining steam, as a lot of good points about inefficiencies in the DAO (especially on silo'd efforts with little to no cross-project collaboration). So I hope this type of project can resolve a lot of that.
The post and other comments address a lot of questions I would otherwise have, but I wanted to ask about one item:
Happy to see this type of project gaining steam, as a lot of good points about inefficiencies in the DAO (especially on silo'd efforts with little to no cross-project collaboration). So I hope this type of project can resolve a lot of that.
The post and other comments address a lot of questions I would otherwise have, but I wanted to ask about one item:
It’s also important to note that several line items, such as entity setup and legal services are notably larger than what the actual expenses are expected to be. This was done to account for any unforeseen events or worst-case scenarios which could require notable capital commitments. Moreover, several buffers have been applied to the 35/34M ARB figure to account for the risk of a decreasing ARB price, with the purpose of securing OpCo’s continuous operations even if notable market downturns materialize.
Funds will be transferred to an Arbitrum Foundation-controlled address and 10M ARB will be liquid immediately. Once OpCo’s legal setup and related aspects are finalized, 24M ARB will begin vesting to an OpCo-connected multisig(s), with 1M ARB vested every 30 days over 24 months. Some of the ARB connected to the vesting structure might be converted into stablecoins before being put in a vesting contract to ensure that OpCo can operate in case of large market downturns. The Chief of Coins, together with relevant parties, will be responsible for maintaining an adequate runway for covering USD-denominated expenses while accounting for market volatility, as well as establishing a low-risk management strategy for idle capital to enhance the impact of the allocated funds.
It's good to see projects learning from other projects mistakes, but if we know the cost in USD (or atleast, some of the expected costs) is there a reason to not just sell to USD right away to ensure funding? I say that fully understanding that a) 1m of it will be incentive based, so it makes sense to keep it in ARB and b) some costs aren't fully know yet... but I think that sitting in ARB brings on market risks to a project that has a long runway. For example, if we know the oversight council will be $25,000 a month, why not just sell the $600,000 USD worth of ARB at the start?
Also, apologies if I missed it but I didn't see any note on additional ARB going back to the DAO. Can you confirm if that will be the case?
Edit: Voting "For" on Tally as I believe issues have been addressed. The willingness to adjust to feedback is appreciated.
Our team is generally pleased with the overall design of Opco. While we recognize that it introduces some centralization risk for the DAO, we believe the resulting improvements in execution and efficiency will bring benefits that outweigh the risk. We’re also glad to see that the model preserves a decentralized, bottoms-up approach to working group creation, continuing to empower individuals.
Our team is generally pleased with the overall design of Opco. While we recognize that it introduces some centralization risk for the DAO, we believe the resulting improvements in execution and efficiency will bring benefits that outweigh the risk. We’re also glad to see that the model preserves a decentralized, bottoms-up approach to working group creation, continuing to empower individuals.
There are, however, several important areas that need further clarification. For instance, the legal entity structure, as raised by @Immutablelawyer and @Pablo, and clearer detail around all checks and balances. We’re also interested in understanding why there are no term limits for the OAT, as raised by @DisruptionJoe.
Most importantly, we would like more insight into Opco’s recruitment strategy, particularly regarding the selection of the two-person executive team (Chief of Coins and Chief Chaos Coordinator) and the 10 internal employees. Given the centralization risks posed by Opco, it’s essential that the executive team not only has strong operational expertise but is also well-versed in DAOs. Since this skill set is unique, we’re curious about the specific approach to recruiting such candidates.
Furthermore, what happens if the DAO cannot secure the ideal candidates? Specifically, for the executive roles, will the Opco’s initiation be delayed, or will the OAT step in to manage executive responsibilities temporarily if these positions are unfilled?
Regarding the 10 employees mentioned in the sample budget, we’re wondering if this setup resembles a “bench” model, similar to consulting firms, where the DAO would have access to resources on demand for various initiatives. If that’s the case, we’re concerned about potential underutilization, a common challenge in consulting and agency models, where resources are hired without clear expectations around the scope or duration of their projects.
Will the Chief of Chaos oversee existing working groups that fall under the Opco’s mandate (Ecosystem Support & Financial Management). What exactly will their role be? Will it be to improve processes or something else?
Additionally, what checks and balances, if any, will be created for the Chief of Coins and Chief Chaos Coordinator? For example, will the DAO be able to veto initiatives proposed by these individuals?
Lastly, the proposal states, “The OpCo is a legal entity that delegates and key stakeholders can leverage to achieve DAO-defined goals.” Is it correct to assume that these goals have not been started yet but will be worked on in phase 1, as per the the mission, vision, and purpose post?
The following reflects the views of the Lampros Labs DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
This proposal is essential for the DAO, as it presents many possible changes, most of which would likely be beneficial.
The following reflects the views of the Lampros Labs DAO governance team, composed of Chain_L (@Blueweb), @Euphoria, and Hirangi Pandya (@Nyx), based on our combined research, analysis, and ideation.
This proposal is essential for the DAO, as it presents many possible changes, most of which would likely be beneficial.
But is a mammoth task that is undertaken. Our concern is whether it should be broken down into separate proposals to make it more effective and accountable?
We appreciate the thorough work that went into creating the current structure of Initiatives, which was much needed given the many programs running simultaneously.
We are looking for community feedback on this front, but some potential, apparent KPIs for OpCo (h/t @dk3 for most of these) include:
While the proposed KPIs include operational metrics, we suggest adding specific outcome-based KPIs that capture the value OpCo brings to the DAO, such as ROI on OpCo-managed initiatives or the speed of implementing strategies compared to previous methods.
OpCo is expected to work closely with Offchain Labs as well as the Arbitrum Foundation to ensure that scopes of work do not overlap.
On coordination with Offchain Labs and the Arbitrum Foundation, it might be useful to discuss role definitions before finalizing the OpCo committee. Clear role allocation upfront would help prevent overlaps and keep the community informed about the distinct responsibilities of each entity.
This is not an official budget, meaning that capital may be budgeted and allocated differently once the entity is stood up.
For budget allocations, flexibility is key. However, setting clear thresholds for reallocations or maximum variance limits in major categories could strengthen budget accountability.
To determine “product-market fit” for OpCo, establishing a set of measurable criteria could provide consistency in evaluating success. Without clear benchmarks, perspectives may vary widely across stakeholders.
We also found the titles and responsibilities of internal executive-equivalent employees innovative. Are there any specific qualifications or skills listed for these roles, or candidates under consideration who fit the requirements?
Regarding legal needs, is a full-time, in-house legal counsel necessary? Clarifying the specific responsibilities they would cover would help assess the need for a full-time position.
In general, we acknowledge the work done for drafting this proposal and support the direction of this initiative, as it aims to build a more structured and operational approach for the DAO.
It is great to see such a high level of engagement and conversation on the OpCo proposal. With it being a little over a week since it was posted, we'd like to just update delegates that our team is working on responses to the questions and suggestions presented. This will be posted in the coming days and we appreciate everyone's patience.
OpCo 法律结构的探索工作已经开始，但需要进一步努力并与主要利益相关者、代表和 Arbitrum 基金会协商，才能确定确切的结构。如果该提案获得通过，基金会为建立法律结构而产生的任何费用将从分配给该计划的资本中偿还。
OpCo 法律结构的探索工作已经开始，但需要进一步努力并与主要利益相关者、代表和 Arbitrum 基金会协商，才能确定确切的结构。如果该提案获得通过，基金会为建立法律结构而产生的任何费用将从分配给该计划的资本中偿还。
OpCo 的初始期限暂定为 30 个月（从实体正式成立之日起，大约 6 个月用于设立，24 个月用于运营）。初始期限的长度选择为在建立法人实体、加快和稳定运营方面出现任何不可预见的延误留出充足的时间，并将使 OpCo 能够专注于更复杂和长期的战略并内部吸纳顶尖人才，因为较长的初始期限为员工提供了可预测性/工作保障。一旦第一个任期即将结束，高管级别的内部人员将与 OpCo 的监督委员会（下文介绍的监督和透明度委员会 (OAT)）合作，为 DAO 相邻实体制定延续提案。预计这将涵盖 OpCo 第二个任期的长度、所需预算以及应进行的任何更改或改进等内容。值得注意的是，如果 OpCo 需要在 DAO 范围的预算到位之前内部化大量的协调员角色，那么 OpCo 可能必须制定一项提案来分配额外资金，因为其最初的示例预算已经制定为覆盖最多 12 名不同薪水的内部全职员工。
Questions: 1. Oversight and boundaries of authority and responsibility: - Are the responsibilities of OpCo with the DAO, OAT and the Arbitrum Foundation clearly defined and how can conflicts of authority and responsibility be avoided? - If OpCo's proposed implementation program is rejected by DAO, is there a mechanism in place to ensure that subsequent adjustments are made? 2. Is the high initial budget too aggressive? - Although the OpCo proposal includes a buffer, the high budget may lead to excessive initial expenditure, can more funds be released in stages?
Suggestion to optimize budget transparency: disclose the “buffer” portion of the budget in more detail, including the specific scope of use and the ceiling, to avoid the community's perception that the allocation of funds is not sufficiently transparent.
Supporting this makes sense because the OpCo, if implemented correctly, could enhance the DAO's operational efficiency by providing structure and oversigh. However, to protect decentralization, transparency mechanisms must be robust to prevent power consolidation.
Supporting this makes sense because the OpCo, if implemented correctly, could enhance the DAO's operational efficiency by providing structure and oversigh. However, to protect decentralization, transparency mechanisms must be robust to prevent power consolidation.
Applicants must be individuals, not entities, and should possess familiarity with the Arbitrum DAO, governance processes, multisig operations, and a strong industry reputation. Additionally, candidates should demonstrate substantial experience and expertise in one or more of the following fields:
Thanks for all the work put into this... it is a lot! Here are some comments
Thanks for all the work put into this... it is a lot! Here are some comments
Moreover, many initiatives, especially more complex and wider-reaching ones, lack clear owners in charge of ensuring a holistic approach to execution and initiatives’ continuation, meaning that in the unfortunate case that a service provider decides/is forced to disengage from its duties, there aren’t always accountable individuals or entities that would push the initiatives forward.
We've had many initiatives approved, which didn't belong to an overarching strategy & budget. For example, liquidity incentives with no funding or driving expert able to allocate funds or request work like marketing support and data analysis.
This statement here is the crux of the problem imho:
lack clear owners in charge of ensuring a holistic approach to execution and initiatives’ continuation
It's really about creating a structure which solves the "holistic approach" to delivering outcomes problem. I believe workstreams with repeatable governance processes and a few key governance principles could do this as well as the OpCo. I do think we need an entity though to hire the people in and supporting the neccessary roles.
For example, delegates could define a high-level events strategy by deciding the number of events the Arbitrum DAO should be represented at in 2025, whether the strategy facilitator is the proposer, a proposer-related party, an OpCo internal employee, or someone who is chosen through a procurement process, and approving the strategy’s costs that are not covered by OpCo’s budget (i.e., salaries if the facilitators are not full-time staff appointed internally, booking event venues, catering, etc.) through the typical governance process, after which OpCo plans the exact events to participate in, contracts the required service providers or operationalizes internal employees, and manages all involved stakeholders and other related aspects throughout the process.
The number of people who can be hired should really be explicit. For example, you could say that a new strategy would require a paid steward, but no more than one without the DAO explicitly voting to add another role.
Only things that the private market won't provide should be handled by the government. This proposal is officially creating a government entity. What are the functions that our market won't provide?
I believe it is only "Governance Operations" which requires people dedicated to Arbitrum. This is not just operations, but includes:
I'd much prefer not creating a government entity that is designed to bloat from the start. A good first step is clarifying roles and responsibilities. Then clarifying the processes that can legitimately add more roles, change responibilities, and update legacy processes when the environment changes.
Something needs to prevent this organization from becoming as effective as the DMV. This isn't trivial - its a organizational design pattern that has repeated itself every single time forever.
The pattern is:
I'm here to get rid of most government and replace it with better onchain systems. What impetus will we have to drive DAO towards continued decentralization? How will the CEO of OpCo be more incentivized to ensure that a cartel cannot rug builders than they are to follow the normal path which pressures government entities?
How do you envision that the OpCo will expand the number of ecosystem contributors outside of OpCo? Would you accept people buying ARB to use in governance as a KPI? Maybe a gini co-efficient? Maybe a ratio of ARB spent on government vs the economy?
In the Viable Systems Model, OpCo should really stick to facilitating the DAO through processes to accomplish level 4 and conduct most activities at level 3. It should only sign paychecks to level 2 and be the counterparty for continuation if needed at level 1.
This image may not be perfect and we may use different language. Where I'm saying "pillar opportunity" you might say "strategy", but the connection of the meta-system to the operational system is critical.
OpCo demonstrates product-market fit (i.e., the DAO is satisfied with the entity’s output) and that it has adequate processes, capabilities, and any other relevant functions to execute according to its complete mandate;
What is the entity's mandate? This mandate is referred to a lot here, but I can't find it clearly stated.
However, if the proposed scope of work falls within OpCo’s mandate, it is expected that delegates vote against such a proposal if it can be better executed via OpCo’s involvement. Proposers will be encouraged to engage with OpCo before posting a proposal to the forum to align with the DAO-adjacent entity’s internal employees.
Would this be enforceable by the code of conduct? Could a delegate lose payment based on voting for things they believe are needed?
Why is this design decision being suggested?
Here are the core issues I have with this as it stands.
This government will cost 10 million ARB to setup and 24 million ARB to run for 2 years and doesn't include any funds going to the builders in the ecosystem.
I'd like to see the exact mandate.
I'd like to know what the limit for growing this government is? What measurement will we use to say "ok, this thing is getting too big"? I'm less concerned about the number, and more interested in seeing that thought has been directed towards this problem.
Questions from above:
Overall, thanks for your time. I know my comments may be tough, but they are good hearted. If we can answer those questions, I am supportive. I'm also willing to commit to the success of OpCo if the DAO votes for it, even if I do not.
We appreciate this OpCo tool finally being pushed forward since counting on a legal entity is quite valuable for the DAO and something we consider should have been part of the DAO for a while as to prevent us all from legal issues tha may arise. We like to see that the OpCo also intends to fill gaps after proposals are passed and executed, nevertheless we have certain reservations about what it seems to be a centralization of proposals if they fall under an OpCo’s mandate scope (Financial Management and Ecosystem Support). We see some other delegates have also shared this concern and so we line-up with them to manifest our preoccupation about this.
It is true that the structure Arbitrum DAO currently has leads to so much friction and this needs to be addressed, yet we believe that we should avoid centralization when it comes to proposal of this kind. We do recognize the OpCo comes to help and facilitate the solving of these issues, but under the new structure we see a potential centralization that at least every single proposal that has to fall under OpCo’s scope should have OpCo’s members in between the proposer and the proposal itself. That’s why we would like to know if the incorporation of Opco will be mandatory in all the processes mentioned, or if it could be optional?
We appreciate this OpCo tool finally being pushed forward since counting on a legal entity is quite valuable for the DAO and something we consider should have been part of the DAO for a while as to prevent us all from legal issues tha may arise. We like to see that the OpCo also intends to fill gaps after proposals are passed and executed, nevertheless we have certain reservations about what it seems to be a centralization of proposals if they fall under an OpCo’s mandate scope (Financial Management and Ecosystem Support). We see some other delegates have also shared this concern and so we line-up with them to manifest our preoccupation about this.
It is true that the structure Arbitrum DAO currently has leads to so much friction and this needs to be addressed, yet we believe that we should avoid centralization when it comes to proposal of this kind. We do recognize the OpCo comes to help and facilitate the solving of these issues, but under the new structure we see a potential centralization that at least every single proposal that has to fall under OpCo’s scope should have OpCo’s members in between the proposer and the proposal itself. That’s why we would like to know if the incorporation of Opco will be mandatory in all the processes mentioned, or if it could be optional?
On the other hand, , should’n we consider some kind of pilot before starting with this program for a total amount of 30 months? We know it’s been stated that 6 months will be for the setup and the next 24 for operations from the entity, but most of what we see here is an oficial launching for something that haven’t been tested yet and considering everything that implies and the funds it requires, Maybe 1 year which is not a long period of time but it is also not a short period as well, and 6 months for setting up while the next 6 for operations and then and only then if the OpCo demonstrates that it is really useful then require for an extension up to 20 more months
My only concern is that 34M ARB is not a small amount—even unlocking just 10M initially could create significant selling pressure in today’s low-liquidity market. Ethereum Foundation has faced heavy criticism for continuous ETH sales, even in smaller amounts, which have still impacted the market. I believe it’s essential to consider ARB’s liquidity and potential price fluctuations before deploying these funds; otherwise, ARB holders may end up suffering the most.
Finally, we share @Larva 's concerns about this specific part of the proposal: How do we know that making a movement of this kind will not generate a fluctuation of the ARB token when it occurs?
Hi! Thank you for the detailed proposal. I like the ambitious plan of an OpCo for project management of the DAO’s initiatives.
I have some initial questions and comments.
Among other things, the DAO may choose to leverage OpCo to manage:
Hi! Thank you for the detailed proposal. I like the ambitious plan of an OpCo for project management of the DAO’s initiatives.
I have some initial questions and comments.
Among other things, the DAO may choose to leverage OpCo to manage:
Operational support & project planning,
Project management of DAO initiatives,
Negotiations with service providers,
Allocation of resources across contributors & DAO-approved projects.
At times, it seems the work overlaps with what’s expected of the ADPC and ARDC.
In the case of the ADPC, its focus is on establishing agreements with specific providers through the development of RFPs and budget approvals.
The ARDC has a defined selection of service providers for certain tasks.
What types of service providers are envisioned here if those related to audits (potentially also providers for events and RPC), as well as those for security, risk and research, are already covered by these entities?
Is the idea to absorb these responsibilities, or to wait until their mandate concludes?
Presently, most DAO programs operate in silos, leading to, among other things, redundant efforts and non-existing cross-initiative resources.
I think this is a key issue to address. I'm thrilled with the idea of an organization that coordinates the DAO’s initiatives to promote efficiency in resource management and align initiatives towards consolidating the DAO’s mission, vision, and objectives.
It is of utmost importance that Arbitrum DAO maintains a decentralized and bottoms-up system for bootstrapping new projects, DAO contributors, and setting strategies, including creating and steering the DAO’s vision, mission, and purpose, as well as approaches to achieve the goals and decision-making. As such, these areas will fall outside of the OpCo’s central mandate.
I think this is very well-conceived but challenging to implement in practice. Take, for instance, the lessons from the ARDC by the DAO Advocate role L2BEAT, where they faced difficulties obtaining proactive engagement from the delegates, who where supposed to require work from the ARDC.
What you're proposing here as a role for the DAO’s operations is even more abstract than what was required of the ARDC, and thus more complex.
I don’t have a clear solution because it is indeed challenging, but I’d like to see ideas on how this would be materialized in practice and how friction could be avoided to prevent paying for a large structure that, in practice, lacks concrete mandates.
OpCo’s main mandate is to enable the execution of DAO-defined strategies within the Financial Management and Ecosystem Support categories when requested by delegates.
This is exactly what I mean: if tasks are only initiated upon request from delegates, you’ll likely encounter friction and a lack of clarity regarding which tasks to execute. Perhaps it would be useful to predefine some tasks to get started.
It’s important to reiterate that proposals and their execution can still be DAO-led end-to-end and outside of OpCo if delegates vote in this regard. OpCo is a tool for the DAO to leverage if needed.
Especially considering this point. It’s not clear when the OpCo should be involved and when it shouldn’t, leaving it up to the discretion of the delegates. Ideally, this should be more clearly defined, in my opinion, to prevent a repeat of what happened with the ARDC (which led the DAO Advocate to proactively make decisions on resource usage).
I’m still not entirely clear on this structure—I need to digest the proposal a bit more to fully understand the concept. On one hand, I find the idea of an entity dedicated to the project management of the DAO’s initiatives valuable; on the other hand, doesn’t adding another layer of control over ecosystem actors already fulfilling this role (e.g., SEED Gov) somewhat defeat the purpose?
If the idea is for the OpCo to be the PM and facilitator of initiatives, I think it should replace entities like SEED rather than simply oversee them (although SEED, for example, could later be contracted as a service provider to carry out specific tasks within the program).
It’s important to note that OpCo will not have the authority to enter into contracts with service providers or individual contributors for strategies not approved by the DAO through governance.
This is good, but I’d frame it positively and clarify the requirements:
“The OpCo will only enter into legal agreements with service providers for strategies approved by the DAO, provided the following requirements (insert requirements) are met.”
Given the amounts requested, I think the KPIs need to be even more detailed. I'll work on this over the next few days to try to propose some specific points.
The OAT is a group of five individuals with the primary mandate to oversee OpCo’s operations,
I think incorporating the Oversight Committee is a great idea. My only comment pertains to the following:
Hiring, Termination, & Authorization: The OAT, in collaboration with the Arbitrum Foundation, would hire the executive-equivalent personnel to the OpCo (the Chief Chaos Coordinator, the Chief of Coins, and any other positions of equivalent responsibility that may be introduced in the future) once the legal entity is established.
I believe we should separate the individuals who will select such important roles as the exclusive-equivalents from those who will execute the oversight.
I propose that a committee be formed solely for the purpose of selecting those roles, which would then be replaced by the Oversight Committee. This way, you can ensure neutrality and independence.
Beyond economic substance, intellectual property deserves its own focus.
This extends beyond code copyright to encompass domain names, trademarks, patents, internal tools, processes, and innovations. All these elements need a permanent home with proper succession planning—thinking with a “what if we get hit by a bus” mindset is essential, especially early on.
Consider the full scope of assets, from email templates to password management tools, all of which require clear, long-term ownership and maintenance plans.
If you recall the WordPress litigation, you’ll understand the importance of covering all bases. Don’t be WordPress.
I’m an IP lawyer, so I’m happy to help with any of the issues outlined here if needed.
Also, one area where the OpCO could also contribute is in the active management of the DAO’s IP. I can elaborate further on this point if needed.
Thank you very much for the proposal!
Hello @Entropy! It’s a pleasure to finally see the much-needed proposal for OpCo for Arbitrum DAO. Thank you so much for all the hard work you’ve put into it; we know it hasn’t been easy.
would love as a standard practice to have members of the opCo to also be rewarded in ARB based on project related KPIs. Ex: hitting a milestone by a specific date. We should start to reward accountability in everything that we do as a DAO.
gm, generally in support of the initiative as we try to create a more operational structure.
A couple of comments:
gm, generally in support of the initiative as we try to create a more operational structure.
A couple of comments:
would love as a standard practice to have members of the opCo to also be rewarded in ARB based on project related KPIs. Ex: hitting a milestone by a specific date. We should start to reward accountability in everything that we do as a DAO.
I think @jojo expressed this already: it’s not clear to me what the difference between ecosystem support and grants is. Ex shouldn’t Questbook fall under ecosystem support.
Would also love @SEEDGov feedback as they have been running a similar initiative for the Everclear DAO and I’m sure they learned a lot from it
Maybe 1 year which is not a long period of time but it is also not a short period as well, and 6 months for setting up while the next 6 for operations and then and only then if the OpCo demonstrates that it is really useful then require for an extension up to 20 more months
This proposal would be very important for the DAO. It would potentially change its dynamics in a variety of ways, mostly I think for the better. While reading the proposal some things crossed my mind which I believe are important to discuss.
Decentralization
This proposal would be very important for the DAO. It would potentially change its dynamics in a variety of ways, mostly I think for the better. While reading the proposal some things crossed my mind which I believe are important to discuss.
Decentralization
The proposal specifies that the OpCo would only affect operational efficiency, not the strategic goals of the DAO; however, there is a risk of centralizing decision-making if not enough transparency is given. I believe that the OAT role would be key to make this function properly so there would need to be adequate mechanisms for it to be transparent, accountable and with well-defined roles and responsibilities. It should also be subject to checks and balances, with clear guidelines, so that there is no concentration of authority that could potentially undermine the DAO’s decentralization focus. If I understood correctly, the OAT will be responsible for the OpCo to operate with adequate checks on spending, staffing, and project prioritization so it will become a major position within the DAO structure. I am not sure how complex it would be for five persons to oversight every project and maintain a clear boundary between OpCo’s role and the DAO’s mission.
Costs and sustainability
I suggest refining the plan around staffing and with ROI-focused metrics. A clear outline on the number of hires and specific roles, with justifications for each, would help avoid over-hiring risks, maintain cost-efficiency and foster transparency which would reinforce trust and ensure the OpCo team remains accountable to the DAO’s mission.
A structured approach to measuring the ROI on the 34M ARB allocation is fundamental. Tracking detailed KPIs on hiring, employee productivity, project completion rates, and cost savings is a good start, but direct value-driven metrics will be key (ecosystem expansion, contributor retention, efficiency improvements).
On legal guidance, I am unsure of the costs, but 1.2M seems a high number. You mention full-time in-house legal counsel and preparation for unforeseen events or worst-case scenarios, it would be useful to know more about this structure/functionality.
To conclude
On a positive manner, I would like to add that this is overall a good proposal as it would make strategy execution more efficient and it would also likely attract enhanced talent to improve contributor quality.
On the other hand, we need to consider the risk of centralization decision-making which could potentially influence strategy rather than just execution.
the DAO would always have ultimate authority over OpCo, with the entity purely being a helpful resource focused on streamlining wider-reaching and complex initiatives that require a more structured execution framework
It would be proper to expand on this assertion to make sure that it is kept that way. This is no easy task. It would need a very well-thought definition of the OpCos boundaries and their restrictions. It would also need frequent, profound reporting and transparent metrics for spending and audits.
Other things to consider and expand upon are the high operational costs, the complexity of the accountability process and the uncertainty of the ROI metrics for this investment.
I would like to add that this proposal is a way of institutionalizing work that is already being done by entities such as Entropy and others. By institutionalizing, could there be a risk of creating a pseudo-centralized structure, undermining Arbitrum’s decentralization?
Also, are we monopolizing operations? Could this limit competitive bidding?
Maybe I’m overanalyzing, or there are just too many things to consider, but these are the things that come to mind.
Cheers to all.
Overall, I agree with the proposal and am inclined to vote in favor. However, I would prefer to see something smaller that can grow over time in terms of responsibilities, budget, and team members. I don't think starting with such a large setup and expense from the beginning is the best approach.
Thanks for the proposal!!
Naturally, agreed w/Paul's comments above and I think this is a good overview of what to look out for.
In response to @raam 's comment as well I do not agree that legal should not be a main focus here. In this regard, my concern is that we're falling behind industry-standard when it comes to spinning up DAO-adjacent entities via governance. In most if not all cases where this is done, the proposer (in the proposal) always gives sufficient clarity on the underlying legal structure to be used (Ref. dYdX Ops, MakerDAO, Lido Finance, Cosmos, ZKSync etc. - I can probably name 10+ others).
This proposal is a good idea, through the creation of a company called OpCo, to solve some of the “stuck points” in the implementation of the DAO, such as the lack of a clear person in charge, the decision-making chain is too long, and it is difficult for external contributors to join in a timely manner, etc. OpCo's role is to make these processes smoother, so that the DAO can be more efficient in the implementation, negotiation, contracting, etc., to ensure the smooth implementation of the strategy. The role of OpCo is to make these processes smoother, so that DAOs can be more efficient in execution, negotiation, contracting, etc., and ensure the smooth implementation of strategies. From this, we can see that the proposal is well-intentioned, aiming to improve the operational efficiency of DAOs and enhance their attractiveness and competitiveness. However, in actual operation, if the management of OpCo is not in place or the use of funds is not transparent, resources may be wasted. Seeing the above comments, people are most concerned about the management of OpCo's funds. The proposal plans to allocate 34 million ARBs to OpCo, of which 10 million ARBs will be released first and the remaining 24 million will be distributed gradually over the next 24 months. While the DAO can oversee OpCo, OpCo has a high degree of autonomy, particularly in recruiting and contracting personnel. This raises concerns as to whether OpCo will be able to use the funds efficiently and transparently. If the market fluctuates, will OpCo be able to operate in a stable manner? The DAO community needs to keep a watchful eye on OpCo's operations to ensure that it is delivering the value it is intended to deliver, rather than becoming a “black hole” for funds. Personally, I have some suggestions to improve the proposal
Thanks for the proposal. The opCo is a very important topic! While I'm still digesting the concept, I would like to ask:
Hey lads,
Still have to read through the proposal - however, I noticed that the term DAO-Adjacent legal entity was used yet no clarity on the entity-type and jurisdiction was provided. Since you mentioned that this is already in process (which to be honest [I'm gonna be pedantic here] I do not like since the proposal first has to pass), can we get some clarity on this?
Hello @Entropy! It’s a pleasure to finally see the much-needed proposal for OpCo for Arbitrum DAO. Thank you so much for all the hard work you’ve put into it; we know it hasn’t been easy.
A new key objective is introduced, but the roadmap to achieve that objective is unclear: Delegates have the option to create a Snapshot proposal to direct OpCo to produce an onchain proposal that defines the strategy to achieve the key objective(s), whether the entity would procure a facilitator or hire/operationalize an internal employee, as well as any funds needed to cover the strategy’s expenses, excluding OpCo’s internal employee costs. If approved, OpCo would begin facilitating the proposal created by itself.
We are slightly concerned that this option might create an incentive for "lazy" proposals that rely on OpCo to fill in the details. Don’t get us wrong—we understand the rationale behind including this option. However, it might be better to establish clearer boundaries on what can be requested from OpCo. To better illustrate our point, let’s take an example:
Suppose the DAO seeks a new long-term incentive program. With OpCo established, a delegate could propose a Snapshot vote stating, "Should OpCo work on a new incentive program for protocols?" without providing any notion of the execution strategy.
Furthermore, if OpCo has bandwidth and recognizes an area within its mandated verticals that isn’t currently addressed, there is no clear owner for that area, and addressing that area would be beneficial for the DAO
While this statement partially addresses the above concern, the point is that OpCo’s assessment of whether an area is beneficial for the DAO may differ from the DAO's own perspective as expressed through Snapshot.
Once fully operational, OpCo will have the capacity to project manage and oversee these initiatives according to its complete mandate. The long-term vision for this process is as follows:
Does this mean that once fully operational, OpCo will act as the PM for all initiatives, effectively replacing current SPs?
If so, this objective conflicts with what is stated here:
Without Arbitrum DAO empowering its contributors and delegates, the DAO might sacrifice one of its core strengths, and we believe that entities such as SEEDGov, Entropy Advisors, Tally, etc., are present within the ecosystem exactly because of this empowerment.
and here:
As alluded to earlier, we also feel as though it’s crucial that the facilitation and implementation of governance frameworks continue being driven by decentralized actors, but these could be overseen by OpCo (e.g., OpCo could be the entity enforcing the code of conduct).
We agree that there are initiatives without a clear owner and that certain verticals have struggled to attract contributors with the required background. Additionally, even where ownership/SPs are clear, there is no established procedure to continue a program if the SP decides to step down or is forced out.
That said, and while we acknowledge our position may be biased since we are currently Service Providers for the DAO, we believe OpCo should only manage programs when no viable service provider or clear ownership exists and it should supervise those that do.
Applicants must be individuals, not entities, and should possess familiarity with the Arbitrum DAO, governance processes, multisig operations, and a strong industry reputation. Additionally, candidates should demonstrate substantial experience and expertise in one or more of the following fields:
Treasury Management
Finance / Accounting / Budgeting
(DAO) Operations / Business Development / Growth / Strategy
Procurement / HR / People
Crypto Law / Compliance
We believe that roles within the OAT should be more clearly defined to avoid having all members with similar backgrounds, ensuring sufficient diversity to cover all possible verticals (e.g., limiting members by field).
OAT members must be properly compensated, highly incentivized to commit their full attention to the outlined responsibilities, and aligned with Arbitrum DAO’s long-term success. OAT members’ base monthly payment is $5K
Despite the bonus, OAT members' compensation seems low. This is a critical role for both the DAO and OpCo, effectively overseeing all operations and requiring candidates to forgo other jobs/positions for full-time commitment. The opportunity cost for joining the OAT is high, and we worry that a low base compensation might deter potential applicants (who must also have a seniority level commensurate with the role).
Indeed, within the provided budget example, the five OAT members would account for only 5.7% of the total excluding the optional bonus (almost 1.5% per member), while the employees they supervise might potentially earn more.
Based on this example as a real scenario, monthly expenses per term are around $500,000 (approximately 1M ARB), while the monthly unlocks are 1M ARB (barely enough at current prices). We mention this because it may be worthwhile to review the unlocking rate to avoid situations like the one with AF, where the vesting unlocks were insufficient to cover committed expenses and/or support new initiatives. Our concern is that 1M ARB per month might restrict OpCo's capacity to expand, creating an operational bottleneck. We understand that part of the initial 10M ARB disbursement could mitigate this situation during the first term and that costs are purposefully overestimated in this example (such as legal expenses, which considers the worst-case scenario), but we wanted to bring this up to avoid OpCo potentially being limited by a vesting scheme.
Do you think it is possible to establish predefined salary ranges for the different roles? (beyond the chiefs). We understand that this isn’t easy, as the final salary for each position will depend on a variety of hard-to-predict factors, but it would be valuable for the DAO to have a sense of which roles warrant a $100k salary per year versus those that merit $200k (as an example).
would love as a standard practice to have members of the opCo to also be rewarded in ARB based on project related KPIs. Ex: hitting a milestone by a specific date. We should start to reward accountability in everything that we do as a DAO.
hey @maxlomu There is a budget for employee bonus! but its a great idea to have it payed in ARB so they also have skin in the game.
Maybe 1 year which is not a long period of time but it is also not a short period as well, and 6 months for setting up while the next 6 for operations and then and only then if the OpCo demonstrates that it is really useful then require for an extension up to 20 more months
if i can chim in, likely doesn't make sense from an operational standpoint. First, the 6 months to set it up while true are also potentially optimistic. We have becoming good in the dao in setting up legal entities (with the foundation first, gcp kinda replicated that, I assume up to some degree opco will have similar structure); at the same time you need to first find, and then hire, the key personnel. This means it could take more than 6 months, and so spending this much just to create something that might run for only a few months is a waste of money. Furthermore, i don't personally see in 6 months we will see the real effect. The new personnel will have to first get acquainted to the dao, ingrain in the mechanism, and then find synergies.
TLDR This is a long term play. I personally support gunning for 30 months right away.
Naturally, agreed w/Paul's comments above and I think this is a good overview of what to look out for.
In response to @raam 's comment as well I do not agree that legal should not be a main focus here. In this regard, my concern is that we're falling behind industry-standard when it comes to spinning up DAO-adjacent entities via governance. In most if not all cases where this is done, the proposer (in the proposal) always gives sufficient clarity on the underlying legal structure to be used (Ref. dYdX Ops, MakerDAO, Lido Finance, Cosmos, ZKSync etc. - I can probably name 10+ others).
If we are to expect people to submit themselves for these elections then I think it's only fair for them to understand the legal nuances so that they may seek legal advice prior to participating (I think this is only fair and ethical). This is not a GCP-like endeavour where I understood the need for non-disclosure, but a pure Ops-Related matters (similar to what the prev. ecosystems i have mentioned have done).
Axis Advisory actually recently drafted and published a summarial playbook on these matters for dYdX re. running DAO-Adjacent entities after helping run dYdX Operations for 1+ years so maybe you'll also find this of help as well!
Thanks!
Hey. Thanks for this great proposal.
I completely agree with the view that 'as it currently stands, the Arbitrum DAO is generally unable to move swiftly when it requires specialized contributors to execute a strategy, for which there isn’t a straightforward and low-friction approach, with these processes typically requiring a vast amount of effort from the supply side instead of being driven by the demand side.'
Hey. Thanks for this great proposal.
I completely agree with the view that 'as it currently stands, the Arbitrum DAO is generally unable to move swiftly when it requires specialized contributors to execute a strategy, for which there isn’t a straightforward and low-friction approach, with these processes typically requiring a vast amount of effort from the supply side instead of being driven by the demand side.'
I very hope OpCo can address this pain point.
My only concern is that 34M ARB is not a small amount—even unlocking just 10M initially could create significant selling pressure in today’s low-liquidity market. Ethereum Foundation has faced heavy criticism for continuous ETH sales, even in smaller amounts, which have still impacted the market. I believe it’s essential to consider ARB’s liquidity and potential price fluctuations before deploying these funds; otherwise, ARB holders may end up suffering the most.
So my question is, could the budget be reduced appropriately, or is there a contingency plan to prevent a negative impact on ARB’s price?
The advantage of this proposal is that it could help the Arbitrum DAO to deal more systematically with a number of important long-term projects, while avoiding the current fragmentation problem.OpCo provides a more structured framework for efficiently integrating and managing resources.
However, I personally feel that it is important to note that the creation of such an entity also brings certain administrative costs and risks, such as issues of trust in a small number of managers and whether it can be efficient in the long term, a point that has been echoed previously in the financial proposal 「https://forum.arbitrum.foundation/t/non-constitutional-treasury-management-v1-2/26967/20?u=kuiclub」
The advantage of this proposal is that it could help the Arbitrum DAO to deal more systematically with a number of important long-term projects, while avoiding the current fragmentation problem.OpCo provides a more structured framework for efficiently integrating and managing resources.
However, I personally feel that it is important to note that the creation of such an entity also brings certain administrative costs and risks, such as issues of trust in a small number of managers and whether it can be efficient in the long term, a point that has been echoed previously in the financial proposal 「https://forum.arbitrum.foundation/t/non-constitutional-treasury-management-v1-2/26967/20?u=kuiclub」
34m ARB is a significant amount of money, it is recommended that OpCo provide a detailed plan for the use of the funds after launch and set up stage by stage KPIs to ensure that the funds are used effectively, the budget includes a larger buffer, although this will allow for market volatility, how can we ensure that there is true transparency in the use of these funds? In addition to semi-annual reporting, is there more frequent reporting on the use of funds, or is real-time financial visualization provided?
Recommendation:
Gm Entropy. That took a long time to read it all. Only started scratching the surface and likely will go over it again with new observations and questions.
most DAO programs operate in silos, leading to, among other things, redundant efforts and non-existing cross-initiative resources
Gm Entropy. That took a long time to read it all. Only started scratching the surface and likely will go over it again with new observations and questions.
most DAO programs operate in silos, leading to, among other things, redundant efforts and non-existing cross-initiative resources
The DAO also generally depends on a single initiative leader for the continuation of a successful program, while some initiatives don’t even have clear owners
It is of utmost importance that Arbitrum DAO maintains a decentralized and bottoms-up system for bootstrapping new [...]. For the avoidance of doubt, the DAO would always have ultimate authority over OpCo.
it is expected that delegates vote against such a proposal if it can be better executed via OpCo’s involvement.
This will be quite tricky, initially, to evaluate from the DAO standpoint.
Could vote on the proposal just for this tbh
Now a few questions here
OpCo’s main mandate is to enable the execution of DAO-defined strategies within the Financial Management and Ecosystem Support categories when requested by delegates.
However, as mentioned earlier, the DAO can roll any service provider or individual contributor into OpCo by passing an onchain vote.
All in all i think the proposal is well thought. I am unsure about the categorization of grants outside of ecosystem growth, would dare to say it could fall into it, but maybe is just semantic.
It poses, tho, the question: if the dao feels like this type of internalization is the way forward, for grants or other operation outside the opco structure, what would be the way forward? Enlarge this structure, or create a parallel one?
As said will come back again to all of this. For now thank you for tackling a topic that is not only needed but also complex to address, in a way that seems reasonable (defining a specific scope of operations).
Hello @Entropy! It’s a pleasure to finally see the much-needed proposal for OpCo for Arbitrum DAO. Thank you so much for all the hard work you’ve put into it; we know it hasn’t been easy.
A new key objective is introduced, but the roadmap to achieve that objective is unclear: Delegates have the option to create a Snapshot proposal to direct OpCo to produce an onchain proposal that defines the strategy to achieve the key objective(s), whether the entity would procure a facilitator or hire/operationalize an internal employee, as well as any funds needed to cover the strategy’s expenses, excluding OpCo’s internal employee costs. If approved, OpCo would begin facilitating the proposal created by itself.
We are slightly concerned that this option might create an incentive for "lazy" proposals that rely on OpCo to fill in the details. Don’t get us wrong—we understand the rationale behind including this option. However, it might be better to establish clearer boundaries on what can be requested from OpCo. To better illustrate our point, let’s take an example:
Suppose the DAO seeks a new long-term incentive program. With OpCo established, a delegate could propose a Snapshot vote stating, "Should OpCo work on a new incentive program for protocols?" without providing any notion of the execution strategy.
Furthermore, if OpCo has bandwidth and recognizes an area within its mandated verticals that isn’t currently addressed, there is no clear owner for that area, and addressing that area would be beneficial for the DAO
While this statement partially addresses the above concern, the point is that OpCo’s assessment of whether an area is beneficial for the DAO may differ from the DAO's own perspective as expressed through Snapshot.
Once fully operational, OpCo will have the capacity to project manage and oversee these initiatives according to its complete mandate. The long-term vision for this process is as follows:
Does this mean that once fully operational, OpCo will act as the PM for all initiatives, effectively replacing current SPs?
If so, this objective conflicts with what is stated here:
Without Arbitrum DAO empowering its contributors and delegates, the DAO might sacrifice one of its core strengths, and we believe that entities such as SEEDGov, Entropy Advisors, Tally, etc., are present within the ecosystem exactly because of this empowerment.
and here:
As alluded to earlier, we also feel as though it’s crucial that the facilitation and implementation of governance frameworks continue being driven by decentralized actors, but these could be overseen by OpCo (e.g., OpCo could be the entity enforcing the code of conduct).
We agree that there are initiatives without a clear owner and that certain verticals have struggled to attract contributors with the required background. Additionally, even where ownership/SPs are clear, there is no established procedure to continue a program if the SP decides to step down or is forced out.
That said, and while we acknowledge our position may be biased since we are currently Service Providers for the DAO, we believe OpCo should only manage programs when no viable service provider or clear ownership exists and it should supervise those that do.
Applicants must be individuals, not entities, and should possess familiarity with the Arbitrum DAO, governance processes, multisig operations, and a strong industry reputation. Additionally, candidates should demonstrate substantial experience and expertise in one or more of the following fields:
Treasury Management
Finance / Accounting / Budgeting
(DAO) Operations / Business Development / Growth / Strategy
Procurement / HR / People
Crypto Law / Compliance
We believe that roles within the OAT should be more clearly defined to avoid having all members with similar backgrounds, ensuring sufficient diversity to cover all possible verticals (e.g., limiting members by field).
OAT members must be properly compensated, highly incentivized to commit their full attention to the outlined responsibilities, and aligned with Arbitrum DAO’s long-term success. OAT members’ base monthly payment is $5K
Despite the bonus, OAT members' compensation seems low. This is a critical role for both the DAO and OpCo, effectively overseeing all operations and requiring candidates to forgo other jobs/positions for full-time commitment. The opportunity cost for joining the OAT is high, and we worry that a low base compensation might deter potential applicants (who must also have a seniority level commensurate with the role).
Indeed, within the provided budget example, the five OAT members would account for only 5.7% of the total excluding the optional bonus (almost 1.5% per member), while the employees they supervise might potentially earn more.
Based on this example as a real scenario, monthly expenses per term are around $500,000 (approximately 1M ARB), while the monthly unlocks are 1M ARB (barely enough at current prices). We mention this because it may be worthwhile to review the unlocking rate to avoid situations like the one with AF, where the vesting unlocks were insufficient to cover committed expenses and/or support new initiatives. Our concern is that 1M ARB per month might restrict OpCo's capacity to expand, creating an operational bottleneck. We understand that part of the initial 10M ARB disbursement could mitigate this situation during the first term and that costs are purposefully overestimated in this example (such as legal expenses, which considers the worst-case scenario), but we wanted to bring this up to avoid OpCo potentially being limited by a vesting scheme.
Do you think it is possible to establish predefined salary ranges for the different roles? (beyond the chiefs). We understand that this isn’t easy, as the final salary for each position will depend on a variety of hard-to-predict factors, but it would be valuable for the DAO to have a sense of which roles warrant a $100k salary per year versus those that merit $200k (as an example).
would love as a standard practice to have members of the opCo to also be rewarded in ARB based on project related KPIs. Ex: hitting a milestone by a specific date. We should start to reward accountability in everything that we do as a DAO.
hey @maxlomu There is a budget for employee bonus! but its a great idea to have it payed in ARB so they also have skin in the game.
Maybe 1 year which is not a long period of time but it is also not a short period as well, and 6 months for setting up while the next 6 for operations and then and only then if the OpCo demonstrates that it is really useful then require for an extension up to 20 more months
if i can chim in, likely doesn't make sense from an operational standpoint. First, the 6 months to set it up while true are also potentially optimistic. We have becoming good in the dao in setting up legal entities (with the foundation first, gcp kinda replicated that, I assume up to some degree opco will have similar structure); at the same time you need to first find, and then hire, the key personnel. This means it could take more than 6 months, and so spending this much just to create something that might run for only a few months is a waste of money. Furthermore, i don't personally see in 6 months we will see the real effect. The new personnel will have to first get acquainted to the dao, ingrain in the mechanism, and then find synergies.
TLDR This is a long term play. I personally support gunning for 30 months right away.
Naturally, agreed w/Paul's comments above and I think this is a good overview of what to look out for.
In response to @raam 's comment as well I do not agree that legal should not be a main focus here. In this regard, my concern is that we're falling behind industry-standard when it comes to spinning up DAO-adjacent entities via governance. In most if not all cases where this is done, the proposer (in the proposal) always gives sufficient clarity on the underlying legal structure to be used (Ref. dYdX Ops, MakerDAO, Lido Finance, Cosmos, ZKSync etc. - I can probably name 10+ others).
If we are to expect people to submit themselves for these elections then I think it's only fair for them to understand the legal nuances so that they may seek legal advice prior to participating (I think this is only fair and ethical). This is not a GCP-like endeavour where I understood the need for non-disclosure, but a pure Ops-Related matters (similar to what the prev. ecosystems i have mentioned have done).
Axis Advisory actually recently drafted and published a summarial playbook on these matters for dYdX re. running DAO-Adjacent entities after helping run dYdX Operations for 1+ years so maybe you'll also find this of help as well!
Thanks!
Hey. Thanks for this great proposal.
I completely agree with the view that 'as it currently stands, the Arbitrum DAO is generally unable to move swiftly when it requires specialized contributors to execute a strategy, for which there isn’t a straightforward and low-friction approach, with these processes typically requiring a vast amount of effort from the supply side instead of being driven by the demand side.'
Hey. Thanks for this great proposal.
I completely agree with the view that 'as it currently stands, the Arbitrum DAO is generally unable to move swiftly when it requires specialized contributors to execute a strategy, for which there isn’t a straightforward and low-friction approach, with these processes typically requiring a vast amount of effort from the supply side instead of being driven by the demand side.'
I very hope OpCo can address this pain point.
My only concern is that 34M ARB is not a small amount—even unlocking just 10M initially could create significant selling pressure in today’s low-liquidity market. Ethereum Foundation has faced heavy criticism for continuous ETH sales, even in smaller amounts, which have still impacted the market. I believe it’s essential to consider ARB’s liquidity and potential price fluctuations before deploying these funds; otherwise, ARB holders may end up suffering the most.
So my question is, could the budget be reduced appropriately, or is there a contingency plan to prevent a negative impact on ARB’s price?
The advantage of this proposal is that it could help the Arbitrum DAO to deal more systematically with a number of important long-term projects, while avoiding the current fragmentation problem.OpCo provides a more structured framework for efficiently integrating and managing resources.
However, I personally feel that it is important to note that the creation of such an entity also brings certain administrative costs and risks, such as issues of trust in a small number of managers and whether it can be efficient in the long term, a point that has been echoed previously in the financial proposal 「https://forum.arbitrum.foundation/t/non-constitutional-treasury-management-v1-2/26967/20?u=kuiclub」
The advantage of this proposal is that it could help the Arbitrum DAO to deal more systematically with a number of important long-term projects, while avoiding the current fragmentation problem.OpCo provides a more structured framework for efficiently integrating and managing resources.
However, I personally feel that it is important to note that the creation of such an entity also brings certain administrative costs and risks, such as issues of trust in a small number of managers and whether it can be efficient in the long term, a point that has been echoed previously in the financial proposal 「https://forum.arbitrum.foundation/t/non-constitutional-treasury-management-v1-2/26967/20?u=kuiclub」
34m ARB is a significant amount of money, it is recommended that OpCo provide a detailed plan for the use of the funds after launch and set up stage by stage KPIs to ensure that the funds are used effectively, the budget includes a larger buffer, although this will allow for market volatility, how can we ensure that there is true transparency in the use of these funds? In addition to semi-annual reporting, is there more frequent reporting on the use of funds, or is real-time financial visualization provided?
Recommendation:
Gm Entropy. That took a long time to read it all. Only started scratching the surface and likely will go over it again with new observations and questions.
most DAO programs operate in silos, leading to, among other things, redundant efforts and non-existing cross-initiative resources
Gm Entropy. That took a long time to read it all. Only started scratching the surface and likely will go over it again with new observations and questions.
most DAO programs operate in silos, leading to, among other things, redundant efforts and non-existing cross-initiative resources
The DAO also generally depends on a single initiative leader for the continuation of a successful program, while some initiatives don’t even have clear owners
It is of utmost importance that Arbitrum DAO maintains a decentralized and bottoms-up system for bootstrapping new [...]. For the avoidance of doubt, the DAO would always have ultimate authority over OpCo.
it is expected that delegates vote against such a proposal if it can be better executed via OpCo’s involvement.
This will be quite tricky, initially, to evaluate from the DAO standpoint.
Could vote on the proposal just for this tbh
Now a few questions here
OpCo’s main mandate is to enable the execution of DAO-defined strategies within the Financial Management and Ecosystem Support categories when requested by delegates.
However, as mentioned earlier, the DAO can roll any service provider or individual contributor into OpCo by passing an onchain vote.
All in all i think the proposal is well thought. I am unsure about the categorization of grants outside of ecosystem growth, would dare to say it could fall into it, but maybe is just semantic.
It poses, tho, the question: if the dao feels like this type of internalization is the way forward, for grants or other operation outside the opco structure, what would be the way forward? Enlarge this structure, or create a parallel one?
As said will come back again to all of this. For now thank you for tackling a topic that is not only needed but also complex to address, in a way that seems reasonable (defining a specific scope of operations).
