Great feedback. One area that I would like you and other delegates to reconsider is NOT voting for at this stage.

The funding is intended to support operations in 2027; I do not believe is unreasonable to delay this proposal until July or August (30-60 days as you mentioned) to allow Arbitrum Foundation to provide clearer details around KPIs, ROI expectations, mid to long term ARB holder alignment. I would rather see the DAO take an additional one or two months than approve it now, and attempt to resolve fundamental questions afterward.

Given that this funding is for 2027, there does not appear to be an urgent need to rush the decision. Taking additional time to define expectations, measurable outcomes, and accountability mechanisms would ultimately benefit Arbitrum Foundation, $ARB token holders and the DAO.

Great feedback. One area that I would like you and other delegates to reconsider is NOT voting for at this stage.

The funding is intended to support operations in 2027; I do not believe is unreasonable to delay this proposal until July or August (30-60 days as you mentioned) to allow Arbitrum Foundation to provide clearer details around KPIs, ROI expectations, mid to long term ARB holder alignment. I would rather see the DAO take an additional one or two months than approve it now, and attempt to resolve fundamental questions afterward.

Given that this funding is for 2027, there does not appear to be an urgent need to rush the decision. Taking additional time to define expectations, measurable outcomes, and accountability mechanisms would ultimately benefit Arbitrum Foundation, $ARB token holders and the DAO.

We are abstaining with a few stipulations we'd like to see changed, and questions answered.

First, we are very grateful for the dedicated work the foundation has done and excited to see it continually powering Arbitrum and the Arbitrum ecosystem. We are generally in favor of using the DAO to fund them as well as Offchain Labs. That said, for such a large number of tokens being transferred, we'd like a little more clarity on how they are being spent:

Questions:

1. According to the foundation's 2025 transparency report, the foundation's treasury already holds 208 million ARB. This is almost as large as the 230m they are asking for. So it would be nice to get an explanation for how they plan to spend that, and why they need another 230 million ARB if they can dip into that.

2. We are curious about the Offchain Labs handoff. How much were they being paid previously and what is the projected amount they will ask for this year. This proposal quotes a 60% reduction in asked funds but is it possible this reduction is mainly coming from Offchain Labs' funding no longer getting included with the foundation's?

3. ARB sales: Since the token is already near the all-time low, nearly 3.7% of circulating supply represents significant potential sell pressure. Having limits or at least clarity on the foundation's ARB selling policy would be great to see.

We'd also like to second @paulofonseca, @cp0x and @griff's questions about runway, salary amounts/G&A spending breakdown, and Offchain Labs funding.

Things we'd like to see adjusted:

1. Phase the release of tokens with solid KPI's going forward. Anything from DAO revenue, Timeboost/AEP revenue, RWA and stablecoin growth, etc.

2. In the flywheel mentioned in the proposal, value to the ARB token is absent. This should definitely be considered when we are creating potential sell pressure on ARB.

I am seeing several comments indicating support for this proposal while requesting additional details and clarification later. Respectfully, I disagree with this approach.

The purpose of governance process is to evaluate a proposal based on clearly defined objectives, responsibilities, KPIs, and expected outcomes before funding is approved. The responses provided by the AF are high level in nature and do not provide sufficient details for delegates to accurately assess.

The AF has stated Offchain and other AAEs will request funding separately. If that is the case, delegates should understand exactly what the AF alone is responsible for delivering and how success will be measured. What assurances do delegates have that future funding requests from other AAEs will not offset the reductions? If multiple entities return to the DAO requesting substantial funding independently, the aggregate cost to DAO could be significantly higher.

Most importantly, there are still no clearly defined KPIs, milestone based funding triggers or measurable ROI targets that justify a request of this size. Approving funding first and seeking clarity later sets a concerning precedent as it effectively signals that large funding requests can be approved without defining expectations.

I support this proposal.

The Foundation has clearly become a critical operational layer for the Arbitrum ecosystem, coordinating ecosystem growth, infrastructure support, partnerships, governance execution, and strategic initiatives that would be difficult for a decentralized DAO alone to manage efficiently.

Importantly, the proposal provides concrete evidence that ecosystem growth has translated into measurable network expansion and DAO revenue growth over time. The increases in transaction activity, stablecoin supply, institutional adoption, and RWA presence demonstrate that the ecosystem has continued to evolve meaningfully since launch.

I also appreciate the effort to improve treasury management by requesting a mix of RWAs, ETH, and ARB rather than relying entirely on token sales for operational expenses.

That said, I believe future funding cycles should continue moving toward stronger KPI-driven accountability and clearer ROI evaluation for ecosystem programs and grants. The long-term objective should be a progressively more sustainable model where DAO revenues increasingly offset operational dependency on treasury allocations.

Overall, however, this proposal appears reasonable given the scale of the ecosystem, the technical responsibilities carried by the Foundation, and the strategic importance of maintaining Arbitrum's competitive position.

We are abstaining with a few stipulations we'd like to see changed, and questions answered.

First, we are very grateful for the dedicated work the foundation has done and excited to see it continually powering Arbitrum and the Arbitrum ecosystem. We are generally in favor of using the DAO to fund them as well as Offchain Labs. That said, for such a large number of tokens being transferred, we'd like a little more clarity on how they are being spent:

Questions:

1. According to the foundation's 2025 transparency report, the foundation's treasury already holds 208 million ARB. This is almost as large as the 230m they are asking for. So it would be nice to get an explanation for how they plan to spend that, and why they need another 230 million ARB if they can dip into that.

2. We are curious about the Offchain Labs handoff. How much were they being paid previously and what is the projected amount they will ask for this year. This proposal quotes a 60% reduction in asked funds but is it possible this reduction is mainly coming from Offchain Labs' funding no longer getting included with the foundation's?

3. ARB sales: Since the token is already near the all-time low, nearly 3.7% of circulating supply represents significant potential sell pressure. Having limits or at least clarity on the foundation's ARB selling policy would be great to see.

We'd also like to second @paulofonseca, @cp0x and @griff's questions about runway, salary amounts/G&A spending breakdown, and Offchain Labs funding.

Things we'd like to see adjusted:

1. Phase the release of tokens with solid KPI's going forward. Anything from DAO revenue, Timeboost/AEP revenue, RWA and stablecoin growth, etc.

2. In the flywheel mentioned in the proposal, value to the ARB token is absent. This should definitely be considered when we are creating potential sell pressure on ARB.

I am seeing several comments indicating support for this proposal while requesting additional details and clarification later. Respectfully, I disagree with this approach.

The purpose of governance process is to evaluate a proposal based on clearly defined objectives, responsibilities, KPIs, and expected outcomes before funding is approved. The responses provided by the AF are high level in nature and do not provide sufficient details for delegates to accurately assess.

The AF has stated Offchain and other AAEs will request funding separately. If that is the case, delegates should understand exactly what the AF alone is responsible for delivering and how success will be measured. What assurances do delegates have that future funding requests from other AAEs will not offset the reductions? If multiple entities return to the DAO requesting substantial funding independently, the aggregate cost to DAO could be significantly higher.

Most importantly, there are still no clearly defined KPIs, milestone based funding triggers or measurable ROI targets that justify a request of this size. Approving funding first and seeking clarity later sets a concerning precedent as it effectively signals that large funding requests can be approved without defining expectations.

I support this proposal.

The Foundation has clearly become a critical operational layer for the Arbitrum ecosystem, coordinating ecosystem growth, infrastructure support, partnerships, governance execution, and strategic initiatives that would be difficult for a decentralized DAO alone to manage efficiently.

Importantly, the proposal provides concrete evidence that ecosystem growth has translated into measurable network expansion and DAO revenue growth over time. The increases in transaction activity, stablecoin supply, institutional adoption, and RWA presence demonstrate that the ecosystem has continued to evolve meaningfully since launch.

I also appreciate the effort to improve treasury management by requesting a mix of RWAs, ETH, and ARB rather than relying entirely on token sales for operational expenses.

That said, I believe future funding cycles should continue moving toward stronger KPI-driven accountability and clearer ROI evaluation for ecosystem programs and grants. The long-term objective should be a progressively more sustainable model where DAO revenues increasingly offset operational dependency on treasury allocations.

Overall, however, this proposal appears reasonable given the scale of the ecosystem, the technical responsibilities carried by the Foundation, and the strategic importance of maintaining Arbitrum's competitive position.

I appreciate the detailed proposal and I agree that the Foundation plays an important role as the DAO’s legal wrapper, ecosystem coordinator, and operational backbone. The growth in transactions, stablecoins, RWAs, and DAO revenue is meaningful, and I do not think the question should be whether the Foundation should continue to exist or be funded.

However, given the size of this ask, I do not think the current structure is sufficiently accountable to the DAO and ARB holders.

The proposal requests $16M in RWAs/stablecoins, 1,740 ETH, and 230M ARB. At current prices, this is roughly a $40M+ funding package, and the 230M ARB alone represents about 2.3% of total ARB supply. This is a very large authorization to be released upon passage.

My main concerns are:

1. Funding should be milestone-based rather than released entirely upfront. A 3-6 month initial runway plus quarterly releases based on public reporting would be more appropriate for an ask of this scale.

2. The proposal needs more concrete KPIs. Examples could include DAO revenue growth, Timeboost/AEP revenue, gross profit, stablecoin and RWA growth, ecosystem grant ROI, strategic partner conversion, and cost efficiency targets.

3. ARB holder alignment remains unclear. The model appears to be: the DAO funds growth, the ecosystem expands, DAO revenue grows, and the Foundation returns for more funding. But there is still no clear mechanism by which ARB holders benefit directly from this flywheel. Ecosystem growth and DAO treasury growth should not automatically be treated as tokenholder value accrual.

4. The 230M ARB allocation needs a more detailed breakdown. How much is for existing commitments vs new ecosystem growth? How much may be sold for operating expenses? What are the sale/treasury management policies? Will unused ARB be returned to the DAO? Will recipient wallets and grant outcomes be disclosed?

5. The relationship between Foundation technical expenses and any future Offchain Labs funding request should be clarified. If OCL may approach the DAO separately after January 2027, the DAO needs to understand whether technical costs are additive or whether the Foundation budget would be adjusted accordingly.

I would be much more supportive of this proposal if it were revised to include:

• phased funding releases;
• quarterly reporting against concrete KPIs;
• a detailed ARB allocation and treasury management policy;
• clawback or return provisions for unused funds;
• clearer linkage between DAO revenue growth and ARB holder value capture.

In short, I support continued Foundation funding, but I believe the current proposal should be strengthened before moving forward.

I appreciate the progress made growing the Arbitrum ecosystem.

That said, given the size of this ask, I believe stronger tokenholder alignment and accountability are needed.

My biggest concern is that while ecosystem growth is emphasized, direct value accrual to ARB holders remains unclear. The current model appears to be: 1) Foundation funds growth, 2) ecosystem expands, 3) DAO revenue grows, 4) Foundation returns for more funding.

But ARB holders continue funding expansion without a clear mechanism to benefit directly. Ecosystem growth alone should not automatically be treated as tokenholder value.

A few suggestions:

1. Milestone-based funding instead of full upfront release, tied to measurable KPIs such as DAO revenue growth, institutional onboarding, RWA expansion, or ecosystem ROI. A request of this size should not be necessarily be released entirely upfront especially when is being requested it upon vote passage (seemse to quick of a turnaround with no clear KPIs.)
2. Stronger ARB holder alignment, including utility that directly benefits ARB (staking, fee participation, revenue-linked mechanisms, etc.).
3. Consider making a portion of the ARB allocation performance-based, released ONLY if meaningful ARB utility/value capture milestones are achieved.

I appreciate the work being done, but at this scale, funding should be more tightly aligned with accountability and measurable tokenholder outcomes as well.

I appreciate the detailed proposal and I agree that the Foundation plays an important role as the DAO’s legal wrapper, ecosystem coordinator, and operational backbone. The growth in transactions, stablecoins, RWAs, and DAO revenue is meaningful, and I do not think the question should be whether the Foundation should continue to exist or be funded.

However, given the size of this ask, I do not think the current structure is sufficiently accountable to the DAO and ARB holders.

The proposal requests $16M in RWAs/stablecoins, 1,740 ETH, and 230M ARB. At current prices, this is roughly a $40M+ funding package, and the 230M ARB alone represents about 2.3% of total ARB supply. This is a very large authorization to be released upon passage.

My main concerns are:

1. Funding should be milestone-based rather than released entirely upfront. A 3-6 month initial runway plus quarterly releases based on public reporting would be more appropriate for an ask of this scale.

2. The proposal needs more concrete KPIs. Examples could include DAO revenue growth, Timeboost/AEP revenue, gross profit, stablecoin and RWA growth, ecosystem grant ROI, strategic partner conversion, and cost efficiency targets.

3. ARB holder alignment remains unclear. The model appears to be: the DAO funds growth, the ecosystem expands, DAO revenue grows, and the Foundation returns for more funding. But there is still no clear mechanism by which ARB holders benefit directly from this flywheel. Ecosystem growth and DAO treasury growth should not automatically be treated as tokenholder value accrual.

4. The 230M ARB allocation needs a more detailed breakdown. How much is for existing commitments vs new ecosystem growth? How much may be sold for operating expenses? What are the sale/treasury management policies? Will unused ARB be returned to the DAO? Will recipient wallets and grant outcomes be disclosed?

5. The relationship between Foundation technical expenses and any future Offchain Labs funding request should be clarified. If OCL may approach the DAO separately after January 2027, the DAO needs to understand whether technical costs are additive or whether the Foundation budget would be adjusted accordingly.

I would be much more supportive of this proposal if it were revised to include:

• phased funding releases;
• quarterly reporting against concrete KPIs;
• a detailed ARB allocation and treasury management policy;
• clawback or return provisions for unused funds;
• clearer linkage between DAO revenue growth and ARB holder value capture.

In short, I support continued Foundation funding, but I believe the current proposal should be strengthened before moving forward.

I appreciate the progress made growing the Arbitrum ecosystem.

That said, given the size of this ask, I believe stronger tokenholder alignment and accountability are needed.

My biggest concern is that while ecosystem growth is emphasized, direct value accrual to ARB holders remains unclear. The current model appears to be: 1) Foundation funds growth, 2) ecosystem expands, 3) DAO revenue grows, 4) Foundation returns for more funding.

But ARB holders continue funding expansion without a clear mechanism to benefit directly. Ecosystem growth alone should not automatically be treated as tokenholder value.

A few suggestions:

1. Milestone-based funding instead of full upfront release, tied to measurable KPIs such as DAO revenue growth, institutional onboarding, RWA expansion, or ecosystem ROI. A request of this size should not be necessarily be released entirely upfront especially when is being requested it upon vote passage (seemse to quick of a turnaround with no clear KPIs.)
2. Stronger ARB holder alignment, including utility that directly benefits ARB (staking, fee participation, revenue-linked mechanisms, etc.).
3. Consider making a portion of the ARB allocation performance-based, released ONLY if meaningful ARB utility/value capture milestones are achieved.

I appreciate the work being done, but at this scale, funding should be more tightly aligned with accountability and measurable tokenholder outcomes as well.

Hi all,

Please find below the AF’s answers to the latest questions in this thread.

We’re unable to discuss the details of the Offchain agreement publicly. It is best for them (and other AAEs) to answer questions about their own funding requests. To the best of our knowledge, they may come to the DAO for funding next year.

Dividing the total G&A budget by 44 does not accurately estimate personnel costs, as G&A encompasses a range of non-personnel expenses that would distort the calculation. We’ve explicitly laid this out previously in the proposal and transparency reports, i.e. that G&A includes costs related to contractors, external service providers, legal and insurance, as well as other operating expenses. The calculation also fails to account for the fully loaded cost of an employee, including taxes, benefits, and other statutory costs associated with personnel.

All of the above includes server costs (like AWS) to ensure the Arbitrum One network is running reliably; security costs to ensure the technology stack remains secure, which becomes increasingly more important in the age of AI’s ability to find bugs; and third party tooling that is not only necessary for developers to build on Arbitrum, but for users to reliably access the network and send transactions. All of those cover RPCs, node infrastructure providers, software subscriptions, the Security Council, and other associated expenditures.

Lastly, it’s worth clarifying that the Arbitrum Audit Program is a separate DAO- approved and funded initiative and as such is outside the scope of this request.

About 54% of the funds this proposal is requesting is solely focused on technical costs for running the network and funding tooling.

For the rest of the funding, the AF has a track record over the past 3 years for onboarding partners and growing relevant network usage metrics. Additionally, we publish bi-annual transparency reports and update the DAO on workstreams every month via the public Governance Reporting Calls and on the forum.

Regarding capital allocation and KPIs, many of the opportunities (especially institutional and enterprise) we expect to pursue over the coming years are difficult to quantify in advance. Importantly, the AF builds growth milestones tied to KPIs into almost all of its partnership agreements, ensuring that funding is released against those milestones. This keeps ecosystem spend tied to growth. The AF remains committed to maintaining transparency around how funds are used and keeping the DAO informed of progress through our existing reporting processes.

The Arbitrum Foundation’s work is highly collaborative. This is why many of the items you have listed such as treasury initiatives, technical upgrades, ecosystem expansion, RWA growth, and Timeboost, are all areas that the AF has either led or been actively involved in.

With the above in mind, and as mentioned in the proposal, the Arbitrum Foundation is ultimately responsible for vertical marketing through developer engagement, in-person initiatives, and coordinated media distribution, education, ecosystem growth, funding and working with technical contributors, infrastructure maintenance, tokenholder relations, governance, absorbing the cost to run the Arbitrum network and acting as the DAO’s legal wrapper.

On the ecosystem growth and partnership side, we work with Offchain and more recently Entropy, to onboard new partners. Onboarding ranges from building rapport, negotiating and agreeing terms of the deal that are in the DAO’s best interest, and ensuring the deal terms are adhered to by all parties. Many of the wins require extensive leg work by the Arbitrum Foundation to get it over the finish line, but the outcome is shared by everyone involved and rightly so.

The collaborative nature is what prevents the DAO funding overlapping initiatives as each AAE is playing their part where it’s necessary.

The ARB outlined in the 2025 transparency report is largely earmarked and allocated already for this year, including initiatives to support ecosystem growth. Additionally, as shared in the proposal, the funding request is intentionally lower than the full projected expenses for 2027 and our current balance sheet will be used to cover the short-fall for 2027. The 230m ARB requested will supplement the Foundation’s strategic ARB holdings and will largely be used to support new and existing ecosystem growth initiatives.

As mentioned in a previous answer, the AF can’t discuss details of the Offchain agreement publicly. Offchain’s funding does represent a significant portion of the reduction, but we are actively reducing costs across the board as well.

As was mentioned before, the 230m ARB requested will supplement the Foundation’s strategic ARB holdings. This is used to support new and existing ecosystem growth initiatives. For strategic partners and growth initiatives, the ARB is generally released against performance milestones and keeps ecosystem allocations tied to growth. In regards to sales, the Foundation is a long-term holder of the native asset, has a demonstrable track record of managing a large ARB treasury, and across the organization we are highly aligned with the token’s performance. As a result, the Foundation always seeks to minimize negative market impact on any actions involving ARB and has the capacity and relationships to work with financial counterparties and desks to this end, similar to the role of other Foundations in the market.

ArbitrumDAO, unlike many DAOs or ecosystems in the industry, accrues the benefits of economic activity directly. Growth in the Arbitrum ecosystem and network (including through transaction activity, onboarding top quality teams, and supporting the growth of ecosystem projects) expands the market share and overall size of the Arbitrum ecosystem. A larger ecosystem drives activity and usage across Arbitrum’s core resources and generates revenue over time. Revenue flows to the ArbitrumDAO and supports the growth of the DAO treasury, which is directly governed and controlled in the interests of ARB holders. The DAO treasury is ~$500M+ including with a substantial ($130M+) non-native asset balance, which provides strategic optionality for the DAO to invest in and/or explore opportunities for the benefit of the Arbitrum ecosystem and ARB holders over time.

We acknowledge that there might be confusion around ownership of work by AAEs and we should work with OpCo to better communicate the responsibilities for each Arbitrum Aligned Entity. The Arbitrum Foundation is ultimately responsible for vertical marketing through developer engagement, in-person initiatives, and coordinated media distribution, education, ecosystem growth, funding and working with technical contributors, infrastructure maintenance, tokenholder relations, governance, absorbing the cost to run the Arbitrum network and acting as the DAO’s legal wrapper.

Governance Call Recap (26 May 2026)

On Tuesday, the Arbitrum Foundation held a governance call to walk delegates through the proposal for continued Foundation funding through 2027. The session covered the Foundation's mandate, the flywheel connecting Foundation spending to DAO revenue, the 2027 budget and funding ask, the track record since inception and the timeline for the vote.

The slides are available here: https://docs.google.com/presentation/d/1eZSLLVR37oUkeT92zOjS9gI_S5qg2hoIlqPS95jXwXg/edit?usp=sharing

The recording of the call is available here: https://drive.google.com/file/d/1OkqCVMEDxAQPSoDN6F0FhY-vUMeYm9E9/view?usp=sharing

This post addresses the main themes raised both during and ahead of the call.

The choice of a one-year funding cycle rather than a multi-year ask has been a recurring point from delegates. The primary reason is to minimise the near-term draw on the DAO treasury during current market conditions. While a one-year cycle does limit the Foundation’s ability to commit to some longer-term arrangements, the Foundation considers this the appropriate balance given current market conditions.

The transition of Offchain away from Foundation funding has also been raised. All Arbitrum-Aligned Entities are separately funded. As Offchain becomes more active in DAO governance, it is moving to the same model. One transitional month of Offchain funding (January 2027) is included in this proposal. Offchain is not funded via the Foundation beyond that point.

Several delegates have asked about the size of the Foundation’s budget reduction, which is almost 60% below the 2025 run rate. It reflects three factors: changing marketing priorities, Offchain approaching the DAO for funding separately and cost efficiencies across the Foundation. These changes are expected to be sustainable and should not affect key initiatives or ecosystem growth.

A question deferred during the call concerned when DAO revenue will cover the Foundation’s operating costs. Any projection here would depend heavily on market conditions and the pace at which new DAO revenue sources scale. The medium to long-term goal of the Arbitrum Foundation, alongside all other AAEs, is to continue expanding the DAO's revenue across multiple sources, including Arbitrum One and AEP fees, Timeboost, the ATMC endowment and new business lines that are expected to emerge over the coming months and years, while also being cost-conscious and ROI-focused. The Foundation remains focused on building toward a sustainable model through DAO governance.

Finally, it is worth emphasizing again that only the RWAs, stablecoins and ETH requested will be used to fund operating expenses, which are USD-denominated. The latest transparency report sets out the detailed breakdown across G&A, technical and marketing: https://docs.arbitrum.foundation/assets/files/ArbitrumFoundationTransparencyReport2025-3ac117dd3203dbe7bca401cf951f0c14.pdf. The 230m ARB requested will supplement the Foundation’s strategic ARB holdings, which also enable its capacity to support new and existing ecosystem growth initiatives. Funding to strategic partners and growth initiatives is almost always released against performance milestones. This keeps ecosystem spend tied to growth.

Hi all,

Please find below the AF’s answers to the latest questions in this thread.

We’re unable to discuss the details of the Offchain agreement publicly. It is best for them (and other AAEs) to answer questions about their own funding requests. To the best of our knowledge, they may come to the DAO for funding next year.

Dividing the total G&A budget by 44 does not accurately estimate personnel costs, as G&A encompasses a range of non-personnel expenses that would distort the calculation. We’ve explicitly laid this out previously in the proposal and transparency reports, i.e. that G&A includes costs related to contractors, external service providers, legal and insurance, as well as other operating expenses. The calculation also fails to account for the fully loaded cost of an employee, including taxes, benefits, and other statutory costs associated with personnel.

All of the above includes server costs (like AWS) to ensure the Arbitrum One network is running reliably; security costs to ensure the technology stack remains secure, which becomes increasingly more important in the age of AI’s ability to find bugs; and third party tooling that is not only necessary for developers to build on Arbitrum, but for users to reliably access the network and send transactions. All of those cover RPCs, node infrastructure providers, software subscriptions, the Security Council, and other associated expenditures.

Lastly, it’s worth clarifying that the Arbitrum Audit Program is a separate DAO- approved and funded initiative and as such is outside the scope of this request.

About 54% of the funds this proposal is requesting is solely focused on technical costs for running the network and funding tooling.

For the rest of the funding, the AF has a track record over the past 3 years for onboarding partners and growing relevant network usage metrics. Additionally, we publish bi-annual transparency reports and update the DAO on workstreams every month via the public Governance Reporting Calls and on the forum.

Regarding capital allocation and KPIs, many of the opportunities (especially institutional and enterprise) we expect to pursue over the coming years are difficult to quantify in advance. Importantly, the AF builds growth milestones tied to KPIs into almost all of its partnership agreements, ensuring that funding is released against those milestones. This keeps ecosystem spend tied to growth. The AF remains committed to maintaining transparency around how funds are used and keeping the DAO informed of progress through our existing reporting processes.

The Arbitrum Foundation’s work is highly collaborative. This is why many of the items you have listed such as treasury initiatives, technical upgrades, ecosystem expansion, RWA growth, and Timeboost, are all areas that the AF has either led or been actively involved in.

With the above in mind, and as mentioned in the proposal, the Arbitrum Foundation is ultimately responsible for vertical marketing through developer engagement, in-person initiatives, and coordinated media distribution, education, ecosystem growth, funding and working with technical contributors, infrastructure maintenance, tokenholder relations, governance, absorbing the cost to run the Arbitrum network and acting as the DAO’s legal wrapper.

On the ecosystem growth and partnership side, we work with Offchain and more recently Entropy, to onboard new partners. Onboarding ranges from building rapport, negotiating and agreeing terms of the deal that are in the DAO’s best interest, and ensuring the deal terms are adhered to by all parties. Many of the wins require extensive leg work by the Arbitrum Foundation to get it over the finish line, but the outcome is shared by everyone involved and rightly so.

The collaborative nature is what prevents the DAO funding overlapping initiatives as each AAE is playing their part where it’s necessary.

The ARB outlined in the 2025 transparency report is largely earmarked and allocated already for this year, including initiatives to support ecosystem growth. Additionally, as shared in the proposal, the funding request is intentionally lower than the full projected expenses for 2027 and our current balance sheet will be used to cover the short-fall for 2027. The 230m ARB requested will supplement the Foundation’s strategic ARB holdings and will largely be used to support new and existing ecosystem growth initiatives.

As mentioned in a previous answer, the AF can’t discuss details of the Offchain agreement publicly. Offchain’s funding does represent a significant portion of the reduction, but we are actively reducing costs across the board as well.

As was mentioned before, the 230m ARB requested will supplement the Foundation’s strategic ARB holdings. This is used to support new and existing ecosystem growth initiatives. For strategic partners and growth initiatives, the ARB is generally released against performance milestones and keeps ecosystem allocations tied to growth. In regards to sales, the Foundation is a long-term holder of the native asset, has a demonstrable track record of managing a large ARB treasury, and across the organization we are highly aligned with the token’s performance. As a result, the Foundation always seeks to minimize negative market impact on any actions involving ARB and has the capacity and relationships to work with financial counterparties and desks to this end, similar to the role of other Foundations in the market.

ArbitrumDAO, unlike many DAOs or ecosystems in the industry, accrues the benefits of economic activity directly. Growth in the Arbitrum ecosystem and network (including through transaction activity, onboarding top quality teams, and supporting the growth of ecosystem projects) expands the market share and overall size of the Arbitrum ecosystem. A larger ecosystem drives activity and usage across Arbitrum’s core resources and generates revenue over time. Revenue flows to the ArbitrumDAO and supports the growth of the DAO treasury, which is directly governed and controlled in the interests of ARB holders. The DAO treasury is ~$500M+ including with a substantial ($130M+) non-native asset balance, which provides strategic optionality for the DAO to invest in and/or explore opportunities for the benefit of the Arbitrum ecosystem and ARB holders over time.

We acknowledge that there might be confusion around ownership of work by AAEs and we should work with OpCo to better communicate the responsibilities for each Arbitrum Aligned Entity. The Arbitrum Foundation is ultimately responsible for vertical marketing through developer engagement, in-person initiatives, and coordinated media distribution, education, ecosystem growth, funding and working with technical contributors, infrastructure maintenance, tokenholder relations, governance, absorbing the cost to run the Arbitrum network and acting as the DAO’s legal wrapper.

Governance Call Recap (26 May 2026)

On Tuesday, the Arbitrum Foundation held a governance call to walk delegates through the proposal for continued Foundation funding through 2027. The session covered the Foundation's mandate, the flywheel connecting Foundation spending to DAO revenue, the 2027 budget and funding ask, the track record since inception and the timeline for the vote.

The slides are available here: https://docs.google.com/presentation/d/1eZSLLVR37oUkeT92zOjS9gI_S5qg2hoIlqPS95jXwXg/edit?usp=sharing

The recording of the call is available here: https://drive.google.com/file/d/1OkqCVMEDxAQPSoDN6F0FhY-vUMeYm9E9/view?usp=sharing

This post addresses the main themes raised both during and ahead of the call.

The choice of a one-year funding cycle rather than a multi-year ask has been a recurring point from delegates. The primary reason is to minimise the near-term draw on the DAO treasury during current market conditions. While a one-year cycle does limit the Foundation’s ability to commit to some longer-term arrangements, the Foundation considers this the appropriate balance given current market conditions.

The transition of Offchain away from Foundation funding has also been raised. All Arbitrum-Aligned Entities are separately funded. As Offchain becomes more active in DAO governance, it is moving to the same model. One transitional month of Offchain funding (January 2027) is included in this proposal. Offchain is not funded via the Foundation beyond that point.

Several delegates have asked about the size of the Foundation’s budget reduction, which is almost 60% below the 2025 run rate. It reflects three factors: changing marketing priorities, Offchain approaching the DAO for funding separately and cost efficiencies across the Foundation. These changes are expected to be sustainable and should not affect key initiatives or ecosystem growth.

A question deferred during the call concerned when DAO revenue will cover the Foundation’s operating costs. Any projection here would depend heavily on market conditions and the pace at which new DAO revenue sources scale. The medium to long-term goal of the Arbitrum Foundation, alongside all other AAEs, is to continue expanding the DAO's revenue across multiple sources, including Arbitrum One and AEP fees, Timeboost, the ATMC endowment and new business lines that are expected to emerge over the coming months and years, while also being cost-conscious and ROI-focused. The Foundation remains focused on building toward a sustainable model through DAO governance.

Finally, it is worth emphasizing again that only the RWAs, stablecoins and ETH requested will be used to fund operating expenses, which are USD-denominated. The latest transparency report sets out the detailed breakdown across G&A, technical and marketing: https://docs.arbitrum.foundation/assets/files/ArbitrumFoundationTransparencyReport2025-3ac117dd3203dbe7bca401cf951f0c14.pdf. The 230m ARB requested will supplement the Foundation’s strategic ARB holdings, which also enable its capacity to support new and existing ecosystem growth initiatives. Funding to strategic partners and growth initiatives is almost always released against performance milestones. This keeps ecosystem spend tied to growth.

Voted FOR;

Although we have some reservations, the Foundation has demonstrated a strong track record of ecosystem growth, infrastructure support, and strategic execution over the past years, making a compelling case that continued funding is necessary to maintain and expand Arbitrum's momentum. We also appreciate the clarifications given by Foundation members and other AAEs regarding the proposal, which also shows a significant alignment with the rest of the ecosystem stakeholders.

At the same time, the size of the funding request, the limited granularity around certain budget categories, and, more than anything, the broad discretion granted over ecosystem growth allocations isn't something that leaves us 100% comfortable.

Future funding requests would benefit from clearer performance metrics, stronger accountability mechanisms, and more detailed reporting on capital deployment. With that said, we consider that these concerns are not sufficient to outweigh the importance of ensuring operational continuity.

This was an extremely conflicted vote for me.

I decided to vote in favour.

I can say that the feedback from @Entropy helped me shape my own view here.

I strongly agree with Matt, Sam & Co.: to be blunt, we can’t keep going as we are now. We are in a spending review period across the whole industry. In Arbitrum specifically, we have seen several initiatives not being renewed or being shut down, with potentially more to follow.

The Foundation’s request is somewhat of an outlier here. While I do see that the total amount requested, $45M, is below the $65M from the previous two years, we have:

• a request that is generally extremely high on an absolute basis, especially on the ARB side, and very heavy on the ATM side, basically cancelling out more than what we have earned so far since inception;
• a discount that, while I am sure reflects greater efficiency from the Foundation, does not take into account what AF has spent over the years as a cost related to OCL, which, as we see above, might potentially come to the DAO at a later stage for further funding.

Effectively, we cannot know whether this is simply a discount, or whether AF has renegotiated the deal with OCL in a way that means the cost will now be accrued directly by the DAO, with no intermediary.

I do think we need the Foundation today. I think about the scenario of not funding them now, having them devise a plan over the next 30 to 60 days, and then having them come back to us with a plan to further cut headcount, events, and partnerships, beyond what has already happened. I am unsure whether the following 12 months would be better or worse for Arbitrum in that scenario.

I do think we have to fight today to maintain the market share and mindshare we have, especially with new ecosystems emerging on top of us and absorbing liquidity, reputation, and opportunities, such as Hyperliquid.

This is why, like Entropy, I am in favour of this financing today. But I do expect the Foundation to spend the year:

• continuing to grow the pie for us;
• cutting spending that, one year from now, will be much more difficult to approve than it is today.

There would be a lot to say here. A lot to say about the amount of ARB currently held by the Foundation, how it has been spent in the past, and how we will see these 23M ARB being deployed. There would also be more to say about KPIs. I do agree that a good part of Arbitrum’s success is also due to the Foundation, but I am also mindful of the risk of falling into a “post hoc, propter hoc” mentality, especially with unclear transparency reports that should, in my opinion, be better addressed in the future.

All of this, though, is secondary to the overarching thesis / idea I mentioned above.

My expectation is that, one year from now, we will come back to a new request with:

• clearer transparency reports compared to what we have historically had;
• better disclosure of both successes and failures;
• better coordination with the different AAEs. We have started now, also thanks to OpCo and with AF/OCL members being involved, but it is a long road;
• a leaner budget, since what we are granting today likely cannot be granted again one year from now.

I am also expecting, hoping, and believing in a Foundation that will keep leading the ecosystem with even greater credibility, and that will continue to generate, in coordination with OCL, Entropy, and OpCo, success stories like Robinhood and others that are coming our way.

Onwards

Voted FOR;

Although we have some reservations, the Foundation has demonstrated a strong track record of ecosystem growth, infrastructure support, and strategic execution over the past years, making a compelling case that continued funding is necessary to maintain and expand Arbitrum's momentum. We also appreciate the clarifications given by Foundation members and other AAEs regarding the proposal, which also shows a significant alignment with the rest of the ecosystem stakeholders.

At the same time, the size of the funding request, the limited granularity around certain budget categories, and, more than anything, the broad discretion granted over ecosystem growth allocations isn't something that leaves us 100% comfortable.

Future funding requests would benefit from clearer performance metrics, stronger accountability mechanisms, and more detailed reporting on capital deployment. With that said, we consider that these concerns are not sufficient to outweigh the importance of ensuring operational continuity.

This was an extremely conflicted vote for me.

I decided to vote in favour.

I can say that the feedback from @Entropy helped me shape my own view here.

I strongly agree with Matt, Sam & Co.: to be blunt, we can’t keep going as we are now. We are in a spending review period across the whole industry. In Arbitrum specifically, we have seen several initiatives not being renewed or being shut down, with potentially more to follow.

The Foundation’s request is somewhat of an outlier here. While I do see that the total amount requested, $45M, is below the $65M from the previous two years, we have:

• a request that is generally extremely high on an absolute basis, especially on the ARB side, and very heavy on the ATM side, basically cancelling out more than what we have earned so far since inception;
• a discount that, while I am sure reflects greater efficiency from the Foundation, does not take into account what AF has spent over the years as a cost related to OCL, which, as we see above, might potentially come to the DAO at a later stage for further funding.

Effectively, we cannot know whether this is simply a discount, or whether AF has renegotiated the deal with OCL in a way that means the cost will now be accrued directly by the DAO, with no intermediary.

I do think we need the Foundation today. I think about the scenario of not funding them now, having them devise a plan over the next 30 to 60 days, and then having them come back to us with a plan to further cut headcount, events, and partnerships, beyond what has already happened. I am unsure whether the following 12 months would be better or worse for Arbitrum in that scenario.

I do think we have to fight today to maintain the market share and mindshare we have, especially with new ecosystems emerging on top of us and absorbing liquidity, reputation, and opportunities, such as Hyperliquid.

This is why, like Entropy, I am in favour of this financing today. But I do expect the Foundation to spend the year:

• continuing to grow the pie for us;
• cutting spending that, one year from now, will be much more difficult to approve than it is today.

There would be a lot to say here. A lot to say about the amount of ARB currently held by the Foundation, how it has been spent in the past, and how we will see these 23M ARB being deployed. There would also be more to say about KPIs. I do agree that a good part of Arbitrum’s success is also due to the Foundation, but I am also mindful of the risk of falling into a “post hoc, propter hoc” mentality, especially with unclear transparency reports that should, in my opinion, be better addressed in the future.

All of this, though, is secondary to the overarching thesis / idea I mentioned above.

My expectation is that, one year from now, we will come back to a new request with:

• clearer transparency reports compared to what we have historically had;
• better disclosure of both successes and failures;
• better coordination with the different AAEs. We have started now, also thanks to OpCo and with AF/OCL members being involved, but it is a long road;
• a leaner budget, since what we are granting today likely cannot be granted again one year from now.

I am also expecting, hoping, and believing in a Foundation that will keep leading the ecosystem with even greater credibility, and that will continue to generate, in coordination with OCL, Entropy, and OpCo, success stories like Robinhood and others that are coming our way.

Onwards

Voting FOR, with two improvements I'd like to see in the on-chain version.

AF's track record is strong --- 4.7M+ daily transactions, $8.6B in stablecoin supply, ~$800M in RWAs, and a serious institutional pipeline. The 60% reduction from the 2025 run rate, plus the willingness to absorb shortfall ($16M ask against $27.6M projected opex) from existing reserves, reflects good faith. Operational continuity shouldn't be gated.

That said, the ~29% Abstain block on this Snapshot is a meaningful signal from delegates representing a broad swath of ARB holders. Addressing two things would serve both the DAO and AF:

1. Budget and AAE transparency. The $10.4M G&A line implies ~$236k per employee at the rumored 44 headcount, and the $5.8M Hosting & Support line is unexplained. A short addendum with confirmed headcount, salary band ranges, and the prior Offchain Labs payment --- alongside a unified AAE budget dashboard --- would let ARB holders verify the 60% reduction claim and strengthen the case for AF's funding in future cycles.

2. Consideration of ARB holder value. AF would hold ~438M ARB (~3.5% of supply) after this allocation. An explicit framing or commitment to exploring how AF's mission can translates to ARB holder value would help alleviate concern here.

I'd welcome seeing these in the on-chain version or via a public commitment from AF during the on-chain period --- either would let me support the on-chain vote with full confidence

I want to share my perspective given that several delegates have raised concerns about the lack of clarity in the responsibilities of the various AAEs, particularly AF and OpCo.

I think that the main reason is that, to date, the OpCo is not yet 100% operational as originally designed. Fortunately, although not yet officially announced, the Head of OpCo is already part of the structure and is currently being onboarded.

So far, the absence of this figure, central to the entity and its role in inter-entity coordination, prevented the OpCo from advancing on a public strategy definition and the establishment of medium to long term objectives. With this key hire in place, both will take shape.

That said, the OpCo's current core mandate is to operationalize new initiatives coming from the DAO, the coordination across AAEs and to proactively develop new business lines that generate revenue for the DAO.

On the first and second point, significant progress has been made. As shared in the recent transparency report, the OpCo Team took over initiatives such as Firestarters, DAO Events, RAD, Watchdog, Code of Conduct, various DAO's Calls, and a number of other initiatives that are not visible on the forum, as they relate to coordination between AAEs and stakeholders. The OpCo Team also served as a receiving point for several new initiative proposals and delegate feedback, which were internally validated across the various AAEs teams. That coordination work does not always end up with a forum post but is heavily time consuming.

As for the Arbitrum Foundation, they detailed their responsibilities in their recent response:

Nowadays, with the DAO operations running much more smoothly thanks to the OpCo Team's efforts, the clearest expression of what sets the OpCo apart from the Arbitrum Foundation will come from the discovery and development of new business lines that generate revenue for the DAO treasury. That work is only now beginning, though with the Head of OpCo and a CFO recently onboard, I expect it to translate into concrete and measurable impact for the DAO.

Voting FOR, with two improvements I'd like to see in the on-chain version.

AF's track record is strong --- 4.7M+ daily transactions, $8.6B in stablecoin supply, ~$800M in RWAs, and a serious institutional pipeline. The 60% reduction from the 2025 run rate, plus the willingness to absorb shortfall ($16M ask against $27.6M projected opex) from existing reserves, reflects good faith. Operational continuity shouldn't be gated.

That said, the ~29% Abstain block on this Snapshot is a meaningful signal from delegates representing a broad swath of ARB holders. Addressing two things would serve both the DAO and AF:

1. Budget and AAE transparency. The $10.4M G&A line implies ~$236k per employee at the rumored 44 headcount, and the $5.8M Hosting & Support line is unexplained. A short addendum with confirmed headcount, salary band ranges, and the prior Offchain Labs payment --- alongside a unified AAE budget dashboard --- would let ARB holders verify the 60% reduction claim and strengthen the case for AF's funding in future cycles.

2. Consideration of ARB holder value. AF would hold ~438M ARB (~3.5% of supply) after this allocation. An explicit framing or commitment to exploring how AF's mission can translates to ARB holder value would help alleviate concern here.

I'd welcome seeing these in the on-chain version or via a public commitment from AF during the on-chain period --- either would let me support the on-chain vote with full confidence

I want to share my perspective given that several delegates have raised concerns about the lack of clarity in the responsibilities of the various AAEs, particularly AF and OpCo.

I think that the main reason is that, to date, the OpCo is not yet 100% operational as originally designed. Fortunately, although not yet officially announced, the Head of OpCo is already part of the structure and is currently being onboarded.

So far, the absence of this figure, central to the entity and its role in inter-entity coordination, prevented the OpCo from advancing on a public strategy definition and the establishment of medium to long term objectives. With this key hire in place, both will take shape.

That said, the OpCo's current core mandate is to operationalize new initiatives coming from the DAO, the coordination across AAEs and to proactively develop new business lines that generate revenue for the DAO.

On the first and second point, significant progress has been made. As shared in the recent transparency report, the OpCo Team took over initiatives such as Firestarters, DAO Events, RAD, Watchdog, Code of Conduct, various DAO's Calls, and a number of other initiatives that are not visible on the forum, as they relate to coordination between AAEs and stakeholders. The OpCo Team also served as a receiving point for several new initiative proposals and delegate feedback, which were internally validated across the various AAEs teams. That coordination work does not always end up with a forum post but is heavily time consuming.

As for the Arbitrum Foundation, they detailed their responsibilities in their recent response:

Nowadays, with the DAO operations running much more smoothly thanks to the OpCo Team's efforts, the clearest expression of what sets the OpCo apart from the Arbitrum Foundation will come from the discovery and development of new business lines that generate revenue for the DAO treasury. That work is only now beginning, though with the Head of OpCo and a CFO recently onboard, I expect it to translate into concrete and measurable impact for the DAO.

Surprisingly few questions regarding this relatively large funding.

I'll try to be brief:

1. As far as I understand, salaries are in G&A - $10.4 million, which, based on 44 employees, is $236,000 per person. I think this is too expensive, given the average salary in the crypto industry is up to 100,000. Either a more detailed salary request is needed, or these expenses need to be reduced. I'm even prepared for money to be spent on an audit of the Foundation from, say, KPMG, in order to optimize costs.
2. The next item is Security - if this includes a program to pay audit projects, then I'm against it. I don't see how this initiative brings any advantage to Arbitrum; it simply wastes DAO's money.
3. Hosting & Support - $5.8 million - the largest technical block. I'm completely unclear what costs such a large amount of money.
4. Infrastructure & Tooling - $4.38 million - I'm also unclear what this money is spent on; why does Foundation need it?

I assume that the main tasks for Foundation are technical support of the network, legal framework and marketing.

On behalf of OAT members A.J. Warner, Tyler Bench, Gavin Wang and myself, we support this proposal.

Over the past year, we had the opportunity to work closely with the Arbitrum Foundation on the structuring and spin up of the OpCo, as well as on operationalizing the entity to a point of self-sufficiency. Through our day to day work on the OAT, we have been firsthand witnesses to the enormous effort the Foundation puts into keeping Arbitrum at the forefront of the space and providing the support the ecosystem needs to grow.

It is also worth noting that the operational funding draws from revenue the DAO has generated over the years, reflecting a broader commitment to responsible ARB spending.

How much funding was OCL getting? How much funding will we have left to fund OCL? And will we have to fund other AAEs for 2027?

It feels weird to do one AAE at a time, it would be a lot easier to understand the impact of passing this proposal relative to the 2027 costs for all the other AAEs so we can have a clear perspective.

It's probably unreasonable... but a vibecoded dashboard of AAE budgets would help a lot.

Surprisingly few questions regarding this relatively large funding.

I'll try to be brief:

1. As far as I understand, salaries are in G&A - $10.4 million, which, based on 44 employees, is $236,000 per person. I think this is too expensive, given the average salary in the crypto industry is up to 100,000. Either a more detailed salary request is needed, or these expenses need to be reduced. I'm even prepared for money to be spent on an audit of the Foundation from, say, KPMG, in order to optimize costs.
2. The next item is Security - if this includes a program to pay audit projects, then I'm against it. I don't see how this initiative brings any advantage to Arbitrum; it simply wastes DAO's money.
3. Hosting & Support - $5.8 million - the largest technical block. I'm completely unclear what costs such a large amount of money.
4. Infrastructure & Tooling - $4.38 million - I'm also unclear what this money is spent on; why does Foundation need it?

I assume that the main tasks for Foundation are technical support of the network, legal framework and marketing.

On behalf of OAT members A.J. Warner, Tyler Bench, Gavin Wang and myself, we support this proposal.

Over the past year, we had the opportunity to work closely with the Arbitrum Foundation on the structuring and spin up of the OpCo, as well as on operationalizing the entity to a point of self-sufficiency. Through our day to day work on the OAT, we have been firsthand witnesses to the enormous effort the Foundation puts into keeping Arbitrum at the forefront of the space and providing the support the ecosystem needs to grow.

It is also worth noting that the operational funding draws from revenue the DAO has generated over the years, reflecting a broader commitment to responsible ARB spending.