This snapshot draft is one of the deliverables of the AVI pilot and expands on the concepts introduced in the original AVI Proposal (Apr’24), leading to the Venture Catalyst Investment Vehicle presented at GovHack Brussels and subsequent AVI Pilot https://link.farstar.co/avi-deck. The nature of the DAO and the markets have required consistent iteration since the inception of the working group. This document represents our latest work and includes insights gathered during the pilot phase. We welcome your feedback towards refining it ahead of the anticipated Tally vote.
We are proposing the execution plan for the setup of Arbitrum Ventures, a Multistrategy Evergreen Ecosystem Investment Fund with an operational budget of $1m - $1.5m. This includes the setup costs and management of Arbitrum Ventures during a 1-year period starting on 1st of January 2025. The budget supports full-time working group efforts to conduct the phased rollout of the AVI vehicle, ensuring timely investment execution and a robust foundation for the DAO’s future capital strategies.
This plan is designed to be iterative and collaborative, adapting to the DAO’s needs through active engagement with key stakeholders and workstreams. By utilizing phased development and integrated governance, it aims to produce a scalable foundation for future investment strategies while maintaining alignment with DAO priorities.
The mandates key objectives include:
1. Infrastructure Development:
2. Initial Investments and Deal Warehousing:
3. Integration with Existing DAO Operations:
4. Scale up Arbitrum Ventures:
The goal of this proposal is to secure funding for the set-up and phased roll-out of Arbitrum Ventures - an evergreen ecosystem fund, including all its relevant legal, strategic, governance, and operational structures necessary for large-scale investments throughout a 6-year deployment mandate. Our vision is to foster continuous ecosystem growth and extend Arbitrum’s reach through strategic investments into highly targeted venture initiatives and external venture funds. During the first year Farstar will take care of the fund set-up and will further work on a number of strategic deals and the design of the relevant processes for the selection of management teams alongside an Interim Expert Council.
The full sustainability plan for the Arbitrum Evergreen Ecosystem Fund involves deploying significant investment capital broken down in various mandates over six years. With these funds, we will develop proprietary pipelines, produce investment capital to support projects on Arbitrum, and align 1B+ in available market capital.
Venture capital is a driver of innovation and adoption. By creating the capability to invest into the ecosystem, the DAO will unlock value on multiple levels:

Despite investing millions in incentive programs, Arbitrum has seen overall low retention rates from these initiatives. Currently, the DAO has paused to re-evaluate our incentive programs, following the recent Short-Term Incentive Program (STIP) which saw a net loss of $60M, with around 35% of all recipients failing to post a final report. As the community discusses ways to improve these programs, we aim to enrich the dialogue by identifying additional investment opportunities that will establish Arbitrum as an innovator in the Ethereum ecosystem. Currently, there is an opportunity gap in capital allocation that Arbitrum can leverage. Concentrating on highly targeted investment programs will create a better environment for Arbitrum-native projects, while still supporting cross-chain products and attracting external capital. This approach positions Arbitrum to lead the multichain future.
We propose an evergreen investment vehicle with a multifaceted strategy featuring a portfolio of captive and non-captive investment programs. The captive side entails a more direct approach to driving strategic benefits, akin economic development programs, sovereign wealth, or Corporate VC. This includes programs designed to boost founder engagement with Arbitrum, thereby strengthening our position as L2 leader. The non-captive side features a Fund of Funds approach for investing in venture and liquid funds as an LP extending Arbitrum’s reach to new founders, use cases, and markets. The evergreen approach enhances the portfolio by facilitating uninterrupted and long-term execution of investment strategies, while providing the DAO with the flexibility to reinvest profits, or dissolve the fund as deemed necessary.

Examples of key strategic initiatives can be found here (slides 10-20).
Phase 1: Pilot [In final stages of completion] During Phase 1, we have been exploring how Arbitrum Ventures fits into the broader Web3 ecosystem and how it can best deliver value. We engaged with key ecosystem players, including delegates, members of the foundation, and key stakeholders. We conducted market research with builders and investors, tested market hypotheses, and fine-tuned strategic recommendations for building a solid investment framework.
Phase 2: What’s Next [This proposal] Now, it’s time to act. With the groundwork laid, the focus shifts to building the essential legal, governance, and operational structures for Arbitrum Ventures. This phase focuses on building Arbitrum Ventures, establishing the legal, governance, and operational frameworks to enable its success.
Supported and overseen by the Interim Expert Council, Farstar will drive efforts to:
Phase 3: Evergreen Fund This is where the vision really takes off. Over a six year mandate, Arbitrum Ventures will roll out a multifaceted investment strategy, deploying significant capital across targeted projects and programs. By aligning over $1B+ in market capital, we’ll build and co-invest in high-value initiatives, grow our deal pipeline, and support the ecosystem in ways that matter most.
We envision Arbitrum Ventures as a self-sustaining, scalable investment framework and a flywheel propelling the Arbitrum ecosystem to the next stage of maturity.

The Arbitrum Ventures Investment Vehicle (AV) should strike a careful balance between its roles as an independent entity with a long-term mandate and its close integration with the DAO. Externally, it should function and appear as a stable, reliable investment fund and its policies should be designed to make it a nimble, high-agency, performance-driven entity, appealing to top-tier market participants.
From the DAO’s perspective, AV should be easy to understand, aligned with DAO goals, connected to key initiatives, and maintain the integrity of the positive narrative around it by the time it takes for measurable results to be observed. Its initiatives should leverage DAO resources, for example, by using DAO contributors as scouts for investment opportunities. Within the broader crypto market, AV should be seen as a respected, competent entity, adding assets to the DAO's balance sheet and thus accruing value in the token, rather than diluting it.
Initially, AV should focus on immediate strategic goals, such as building a stronghold around DeFi by aligning with key technology providers. Over time, it should expand to open new markets and Web3 use cases, drawing in users, data, and capital from outside the ecosystem. Some funding should replace or supplement grants with investment programs that may yield a loss but are designed to create higher-impact outcomes or drive pipeline opportunities captured elsewhere.
The AV operational team or management should have long-term appointments under a high-commitment expert oversight structure, subject to DAO elections. This structure should be established with a series of DAO votes, mandating funds sufficient for 5-6 years, aiming to make AV an evergreen vehicle. Further governance involvement by the DAO should happen through the elected oversight roles. The mandate should be structured to discourage deviations, ensuring that any change aligns with industry standards and commitments to investees or managers. This ensures orderly decision-making that avoids unexpected actions and limits uncertainty, while retaining meaningful DAO oversight. Otherwise, the DAO should have limited day to day influence on AV operations.
Exclusivity: Farstar agrees to 1-year exclusivity with Arbitrum upon passing this proposal. During this time Farstar will not work with other clients in the Web3 space. The partnership will begin on the first working day of the month after the proposal passes.
Interim Expert Council: 3 to 5 member council including investors in Arbitrum, key delegates with venture experience, stakeholders with experience of the oversight of GCP to advise and assist in the set-up of the fund and further development of the thesis.
The proposed roadmap to allocate, staff and deploy Arbitrum Ventures Ecosystem Fund:
A budget of $1.5M* for the year paid in quarterly installments and stored with the Foundation for DAO-clawback capabilities, along with an optional up to 1 million ARB for performance-based bonuses voted on by the DAO near the end of the term and put in a 3-year vesting contract to ensure long-term alignment.
To get to a final amount by the Tally proposal we are:
Current Estimate: Up to 750k for working group compensation (incl. oversight) Up to 750k for direct costs such as legal, incorporations, events, etc
Cost optimisation measures will be practiced and any remaining funds will be returned to the DAO.
At the end of each fiscal quarter, we will publish a transparency report that goes over our activities and total spending. Information included will be what we have done, an analysis of impact, and the total cost associated with operating.
The following FAQ is a living document that will continue to evolve over time: [details= Who is Farstar?] Farstar was established in 2008 as a platform that mobilizes teams around venture development opportunities in various (emergent) startup ecosystems. To date, over 100 vetted contributors have been involved in its programs, spanning over 25 countries and working with startups in Enterprise Software, Fintech, Financial Services, DeFi, Telcos, Cleantech, Cybersecurity, Health tech, Loyalty Programs, Pharma, Biotech, Consumer Internet Applications, Economic Development, Aerospace, DeSci, Fashion and Consumer.
More information about the team can be found in the team profile here. [/details]
[details= What’s the scope of Farstar’s exclusivity?] Exclusivity terms are solely for the benefit of Arbitrum DAO. Meaning Arbitrum DAO will be under no contractual limitation to work with other vendors. For the period under which Farstar is contracted to work on the setup of the CapCo, Farstar will not undertake other mandates with other stakeholders in the Web3 industry.
Furthermore, the exclusivity terms proposed as part of this temp check is only for the scope of engagement covered in it - AVI Phase 2. Structures created during this phase will remain DAO property. Further exclusivity agreement is assumed as part of a mandate as part of Phase 3, the terms of which are subject of the next agreement. If Farstar is to have an ongoing lead role in the management of the CapCo/AV exclusivity will be guaranteed. [/details] [details= Isn’t the investment thesis supposed to be part of the Pilot?] Yes, we’ve referred to this as the Ecosystem Investment Thesis to distinguish it from aspects outside this scope, such as detailed analyses of specific spaces and investment strategies, which fall under individual programs. The pilot focuses on demonstrating the case for ongoing development.
The plan for releasing deliverables, as well as all published works, can be found in the Deliverables Hub. [/details] [details= What does the thesis output include?]
The plan for releasing deliverables, as well as all published works, can be found in the Deliverables Hub. More about how specifically the thesis is being addressed can be found here. [/details] [details= What steps are being taken for transparency?]
More on governance and oversight staging can be found here. [/details] [details= How can the community be involved in AVI’s success?]
This will be covered in separate strategic recommendations or updates that are in the works. Namely the Community Engagement Report, which is a part of our next content roll-out. [/details] [details= What’s the plan for interim investments?] The interim facility supports short-term needs before mature mandates are ready. It will address gaps in ecosystem infrastructure with a flexible approach. More information can be found here. [/details] [details= What does the $1.5M budget cover?] This includes operational setup, team compensation, and legal costs. Specific details will be outlined in the upcoming Operational Plan. [/details]
This snapshot draft is one of the deliverables of the AVI pilot and expands on the concepts introduced in the original AVI Proposal (Apr’24), leading to the Venture Catalyst Investment Vehicle presented at GovHack Brussels and subsequent AVI Pilot https://link.farstar.co/avi-deck. The nature of the DAO and the markets have required consistent iteration since the inception of the working group. This document represents our latest work and includes insights gathered during the pilot phase. We welcome your feedback towards refining it ahead of the anticipated Tally vote.
We are proposing the execution plan for the setup of Arbitrum Ventures, a Multistrategy Evergreen Ecosystem Investment Fund with an operational budget of $1m - $1.5m. This includes the setup costs and management of Arbitrum Ventures during a 1-year period starting on 1st of January 2025. The budget supports full-time working group efforts to conduct the phased rollout of the AVI vehicle, ensuring timely investment execution and a robust foundation for the DAO’s future capital strategies.
This plan is designed to be iterative and collaborative, adapting to the DAO’s needs through active engagement with key stakeholders and workstreams. By utilizing phased development and integrated governance, it aims to produce a scalable foundation for future investment strategies while maintaining alignment with DAO priorities.
The mandates key objectives include:
1. Infrastructure Development:
2. Initial Investments and Deal Warehousing:
3. Integration with Existing DAO Operations:
4. Scale up Arbitrum Ventures:
The goal of this proposal is to secure funding for the set-up and phased roll-out of Arbitrum Ventures - an evergreen ecosystem fund, including all its relevant legal, strategic, governance, and operational structures necessary for large-scale investments throughout a 6-year deployment mandate. Our vision is to foster continuous ecosystem growth and extend Arbitrum’s reach through strategic investments into highly targeted venture initiatives and external venture funds. During the first year Farstar will take care of the fund set-up and will further work on a number of strategic deals and the design of the relevant processes for the selection of management teams alongside an Interim Expert Council.
The full sustainability plan for the Arbitrum Evergreen Ecosystem Fund involves deploying significant investment capital broken down in various mandates over six years. With these funds, we will develop proprietary pipelines, produce investment capital to support projects on Arbitrum, and align 1B+ in available market capital.
Venture capital is a driver of innovation and adoption. By creating the capability to invest into the ecosystem, the DAO will unlock value on multiple levels:

Despite investing millions in incentive programs, Arbitrum has seen overall low retention rates from these initiatives. Currently, the DAO has paused to re-evaluate our incentive programs, following the recent Short-Term Incentive Program (STIP) which saw a net loss of $60M, with around 35% of all recipients failing to post a final report. As the community discusses ways to improve these programs, we aim to enrich the dialogue by identifying additional investment opportunities that will establish Arbitrum as an innovator in the Ethereum ecosystem. Currently, there is an opportunity gap in capital allocation that Arbitrum can leverage. Concentrating on highly targeted investment programs will create a better environment for Arbitrum-native projects, while still supporting cross-chain products and attracting external capital. This approach positions Arbitrum to lead the multichain future.
We propose an evergreen investment vehicle with a multifaceted strategy featuring a portfolio of captive and non-captive investment programs. The captive side entails a more direct approach to driving strategic benefits, akin economic development programs, sovereign wealth, or Corporate VC. This includes programs designed to boost founder engagement with Arbitrum, thereby strengthening our position as L2 leader. The non-captive side features a Fund of Funds approach for investing in venture and liquid funds as an LP extending Arbitrum’s reach to new founders, use cases, and markets. The evergreen approach enhances the portfolio by facilitating uninterrupted and long-term execution of investment strategies, while providing the DAO with the flexibility to reinvest profits, or dissolve the fund as deemed necessary.

Examples of key strategic initiatives can be found here (slides 10-20).
Phase 1: Pilot [In final stages of completion] During Phase 1, we have been exploring how Arbitrum Ventures fits into the broader Web3 ecosystem and how it can best deliver value. We engaged with key ecosystem players, including delegates, members of the foundation, and key stakeholders. We conducted market research with builders and investors, tested market hypotheses, and fine-tuned strategic recommendations for building a solid investment framework.
Phase 2: What’s Next [This proposal] Now, it’s time to act. With the groundwork laid, the focus shifts to building the essential legal, governance, and operational structures for Arbitrum Ventures. This phase focuses on building Arbitrum Ventures, establishing the legal, governance, and operational frameworks to enable its success.
Supported and overseen by the Interim Expert Council, Farstar will drive efforts to:
Phase 3: Evergreen Fund This is where the vision really takes off. Over a six year mandate, Arbitrum Ventures will roll out a multifaceted investment strategy, deploying significant capital across targeted projects and programs. By aligning over $1B+ in market capital, we’ll build and co-invest in high-value initiatives, grow our deal pipeline, and support the ecosystem in ways that matter most.
We envision Arbitrum Ventures as a self-sustaining, scalable investment framework and a flywheel propelling the Arbitrum ecosystem to the next stage of maturity.

The Arbitrum Ventures Investment Vehicle (AV) should strike a careful balance between its roles as an independent entity with a long-term mandate and its close integration with the DAO. Externally, it should function and appear as a stable, reliable investment fund and its policies should be designed to make it a nimble, high-agency, performance-driven entity, appealing to top-tier market participants.
From the DAO’s perspective, AV should be easy to understand, aligned with DAO goals, connected to key initiatives, and maintain the integrity of the positive narrative around it by the time it takes for measurable results to be observed. Its initiatives should leverage DAO resources, for example, by using DAO contributors as scouts for investment opportunities. Within the broader crypto market, AV should be seen as a respected, competent entity, adding assets to the DAO's balance sheet and thus accruing value in the token, rather than diluting it.
Initially, AV should focus on immediate strategic goals, such as building a stronghold around DeFi by aligning with key technology providers. Over time, it should expand to open new markets and Web3 use cases, drawing in users, data, and capital from outside the ecosystem. Some funding should replace or supplement grants with investment programs that may yield a loss but are designed to create higher-impact outcomes or drive pipeline opportunities captured elsewhere.
The AV operational team or management should have long-term appointments under a high-commitment expert oversight structure, subject to DAO elections. This structure should be established with a series of DAO votes, mandating funds sufficient for 5-6 years, aiming to make AV an evergreen vehicle. Further governance involvement by the DAO should happen through the elected oversight roles. The mandate should be structured to discourage deviations, ensuring that any change aligns with industry standards and commitments to investees or managers. This ensures orderly decision-making that avoids unexpected actions and limits uncertainty, while retaining meaningful DAO oversight. Otherwise, the DAO should have limited day to day influence on AV operations.
Exclusivity: Farstar agrees to 1-year exclusivity with Arbitrum upon passing this proposal. During this time Farstar will not work with other clients in the Web3 space. The partnership will begin on the first working day of the month after the proposal passes.
Interim Expert Council: 3 to 5 member council including investors in Arbitrum, key delegates with venture experience, stakeholders with experience of the oversight of GCP to advise and assist in the set-up of the fund and further development of the thesis.
The proposed roadmap to allocate, staff and deploy Arbitrum Ventures Ecosystem Fund:
A budget of $1.5M* for the year paid in quarterly installments and stored with the Foundation for DAO-clawback capabilities, along with an optional up to 1 million ARB for performance-based bonuses voted on by the DAO near the end of the term and put in a 3-year vesting contract to ensure long-term alignment.
To get to a final amount by the Tally proposal we are:
Current Estimate: Up to 750k for working group compensation (incl. oversight) Up to 750k for direct costs such as legal, incorporations, events, etc
Cost optimisation measures will be practiced and any remaining funds will be returned to the DAO.
At the end of each fiscal quarter, we will publish a transparency report that goes over our activities and total spending. Information included will be what we have done, an analysis of impact, and the total cost associated with operating.
The following FAQ is a living document that will continue to evolve over time: [details= Who is Farstar?] Farstar was established in 2008 as a platform that mobilizes teams around venture development opportunities in various (emergent) startup ecosystems. To date, over 100 vetted contributors have been involved in its programs, spanning over 25 countries and working with startups in Enterprise Software, Fintech, Financial Services, DeFi, Telcos, Cleantech, Cybersecurity, Health tech, Loyalty Programs, Pharma, Biotech, Consumer Internet Applications, Economic Development, Aerospace, DeSci, Fashion and Consumer.
More information about the team can be found in the team profile here. [/details]
[details= What’s the scope of Farstar’s exclusivity?] Exclusivity terms are solely for the benefit of Arbitrum DAO. Meaning Arbitrum DAO will be under no contractual limitation to work with other vendors. For the period under which Farstar is contracted to work on the setup of the CapCo, Farstar will not undertake other mandates with other stakeholders in the Web3 industry.
Furthermore, the exclusivity terms proposed as part of this temp check is only for the scope of engagement covered in it - AVI Phase 2. Structures created during this phase will remain DAO property. Further exclusivity agreement is assumed as part of a mandate as part of Phase 3, the terms of which are subject of the next agreement. If Farstar is to have an ongoing lead role in the management of the CapCo/AV exclusivity will be guaranteed. [/details] [details= Isn’t the investment thesis supposed to be part of the Pilot?] Yes, we’ve referred to this as the Ecosystem Investment Thesis to distinguish it from aspects outside this scope, such as detailed analyses of specific spaces and investment strategies, which fall under individual programs. The pilot focuses on demonstrating the case for ongoing development.
The plan for releasing deliverables, as well as all published works, can be found in the Deliverables Hub. [/details] [details= What does the thesis output include?]
The plan for releasing deliverables, as well as all published works, can be found in the Deliverables Hub. More about how specifically the thesis is being addressed can be found here. [/details] [details= What steps are being taken for transparency?]
More on governance and oversight staging can be found here. [/details] [details= How can the community be involved in AVI’s success?]
This will be covered in separate strategic recommendations or updates that are in the works. Namely the Community Engagement Report, which is a part of our next content roll-out. [/details] [details= What’s the plan for interim investments?] The interim facility supports short-term needs before mature mandates are ready. It will address gaps in ecosystem infrastructure with a flexible approach. More information can be found here. [/details] [details= What does the $1.5M budget cover?] This includes operational setup, team compensation, and legal costs. Specific details will be outlined in the upcoming Operational Plan. [/details]
We have several comments with regard to this proposal:
We believe there is a need to leverage findings from the AVI pilot before moving forward with this directional snapshot. We’re not convinced about the timing of this temperature check and the push for secure funding, particularly since we still don’t have a concrete report or clear results from the AVI pilot program. The proposal lacks important details on several fronts: it doesn’t clearly explain the cost structure, the process for moving forward, or how the various councils will be chosen.
There is a need for more specific KPIs, both in the specific milestones for the initial year and a better overview of the whole 6-year length of this initiative. Also given this long program why have you decided to only be exclusive to Arbitrum for one year?
Agree with @JoJo here https://forum.arbitrum.foundation/t/directional-temperature-check-on-arbitrum-ventures-setup/27668/12?u=castlecapital
We also share the same concerns raised by others regarding potential conflicts of interest—having the same entity both propose and lead the initiative could be problematic. However, if no other parties are willing to step forward, then having that entity take the lead may still be beneficial. A fair compromise might be to open an election or request for proposals, allowing others to present their plans and budgets. If no suitable alternative emerges, the original proposer could proceed with a stronger mandate.
Additionally, more clarity is needed on risk management, the mechanics of the proposed $1 million performance bonus, and detailed operating costs. It would also be helpful to understand how ARB tokens will be utilized: Will ARB be allocated directly, or will it need to be liquidated first?
Regarding the proposed performance bonus: if Farstar stands to receive a 1 million ARB bonus, it would be sensible to tie this reward to a longer period of exclusivity, such as the full six-year term. This should include a clause allowing the DAO to revisit and potentially end exclusivity early if both parties agree or if a DAO vote deems it more beneficial. Such a structure ensures that Farstar remains committed to Arbitrum’s success over the long term, aligning incentives more closely with sustained ecosystem growth.
We have several comments with regard to this proposal:
We believe there is a need to leverage findings from the AVI pilot before moving forward with this directional snapshot. We’re not convinced about the timing of this temperature check and the push for secure funding, particularly since we still don’t have a concrete report or clear results from the AVI pilot program. The proposal lacks important details on several fronts: it doesn’t clearly explain the cost structure, the process for moving forward, or how the various councils will be chosen.
There is a need for more specific KPIs, both in the specific milestones for the initial year and a better overview of the whole 6-year length of this initiative. Also given this long program why have you decided to only be exclusive to Arbitrum for one year?
Agree with @JoJo here https://forum.arbitrum.foundation/t/directional-temperature-check-on-arbitrum-ventures-setup/27668/12?u=castlecapital
We also share the same concerns raised by others regarding potential conflicts of interest—having the same entity both propose and lead the initiative could be problematic. However, if no other parties are willing to step forward, then having that entity take the lead may still be beneficial. A fair compromise might be to open an election or request for proposals, allowing others to present their plans and budgets. If no suitable alternative emerges, the original proposer could proceed with a stronger mandate.
Additionally, more clarity is needed on risk management, the mechanics of the proposed $1 million performance bonus, and detailed operating costs. It would also be helpful to understand how ARB tokens will be utilized: Will ARB be allocated directly, or will it need to be liquidated first?
Regarding the proposed performance bonus: if Farstar stands to receive a 1 million ARB bonus, it would be sensible to tie this reward to a longer period of exclusivity, such as the full six-year term. This should include a clause allowing the DAO to revisit and potentially end exclusivity early if both parties agree or if a DAO vote deems it more beneficial. Such a structure ensures that Farstar remains committed to Arbitrum’s success over the long term, aligning incentives more closely with sustained ecosystem growth.
Overall, we would appreciate more transparency and a clearer rationale before fully supporting this initiative.
Feedback and Suggestions on the Arbitrum Ventures Proposal The proposal for establishing Arbitrum Ventures demonstrates a commendable strategic vision for creating a professional and scalable ecosystem investment fund. Lino’s efforts to incorporate feedback from the community and delegates during Devcon are evident, resulting in a more refined proposal. However, certain areas require further clarity and refinement to ensure transparency, accountability, and alignment with the DAO’s long-term goals. Key Observations
Roadmap and Scalability: ◦ The proposal outlines a clear roadmap for developing legal, compliance, and governance structures to ensure operational scalability. ◦ It emphasizes ecosystem growth through targeted investments, talent mobilization, and enhanced network effects.
Quarterly Transparency Reports: ◦ Regular reporting will build trust and keep DAO members informed about progress and spending. Concerns and Recommendations Accountability and Oversight • Ongoing Accountability: How will the DAO ensure ongoing accountability for Farstar and the Interim Expert Council during the 1-year setup phase? • KPIs and Metrics:
◦ Define specific KPIs to assess the success of initial investments in driving ecosystem growth, adoption, and ROI. ◦ Clearly outline how the performance-based bonus of up to 1 million ARB will be calculated and distributed. Budget and Costs • Setup Costs: Are there contingency plans in case the projected setup costs exceed the allocated budget? • Legal Budget: The allocated legal budget appears disproportionately high and could benefit from further breakdown and justification. Timing of Directional Snapshot • The snapshot vote feels premature without results or insights from the AVI pilot, especially regarding budget breakdowns and feasibility. Delaying this vote until more data is available could strengthen community confidence. Exclusivity Period • A one-year exclusivity period seems insufficient for a six-year initiative. Consider extending this period or including clauses for adjustments based on DAO vote or mutual agreement. Conflict of Interest • Having the same entity propose and lead the initiative could raise concerns about transparency. An RFP process or an election for leadership might enhance transparency and ensure a broader mandate. Suggested Improvements • Enhanced Clarity: Provide a more detailed breakdown of projected costs and their allocation. • Defined Metrics: Outline measurable metrics to evaluate the success of the fund, including benchmarks for ecosystem growth and ROI. • Governance Structure: Build mechanisms for regular DAO oversight to monitor the Interim Expert Council and Farstar’s performance. • Flexibility in Exclusivity: Adjust the exclusivity period to reflect the long-term nature of the initiative while allowing flexibility through DAO approval. By addressing these areas, the proposal can foster greater confidence and alignment among DAO members, ensuring Arbitrum Ventures becomes a cornerstone for ecosystem growth and innovation.
Well overdue. A $10M fund is a great starting place if we have pro fund managers. It should be as utilitarian as possible with a strong DeFi focus since that is what has worked. even small angel checks in the top 10 defi protocols that have been the biggest success in arbitrum would have each returned millions.
Why has this evolved from something closer to a fund of funds and now sounds more like a generalist VC with a yearly ops budget of 10-30% AUM (1.5mn for 5-15mn).
I imagine there is a rationale for this so this is not a direct critique, but I'm quite lost as to how this got here. So more of a point of clarification around the design choices
Suggestions:
Allocate a smaller budget and investment fund initially, and run a 6-month pilot program. Based on the pilot’s results, decide on further expansion. While you’ve provided an excellent perspective, the current retention and conversion rates are not meeting expectations.
Provide monthly briefs and detailed quarterly reports. Allow community members to participate in oversight to ensure alignment between fund usage and goals, avoiding issues of “lack of visibility.”
Beyond relying solely on the professional team, consider activating community resources through a reward mechanism. For example, encourage active users to recommend investment channels and reward contributors with NFTs or small incentives.
Take inspiration from Coinbase Ventures’ strategic model. Their investments brought numerous protocols into the Base ecosystem, generating user traction and creating an economic flywheel effect.
The framing that we’ve seen come from Base is that they’re creating a trifecta of a technology platform, capital ecosystem, and applications marketplace. The second pillar is where their venture investment activities fit.
We have read many comments with which we fully agree, so to avoid being redundant, we would like to focus on the phases mentioned in the proposal and the voting options.
We understand that we are currently in Phase 2, as you mentioned. However, the timelines for this phase are not entirely clear to us. When does Phase 2 end, and when does Phase 3 begin?
We have read many comments with which we fully agree, so to avoid being redundant, we would like to focus on the phases mentioned in the proposal and the voting options.
We understand that we are currently in Phase 2, as you mentioned. However, the timelines for this phase are not entirely clear to us. When does Phase 2 end, and when does Phase 3 begin?
If Phase 3 is scheduled to start six years after a mandate, it would be important to clarify how this timeframe was determined.
Regarding the voting options, we notice that the main goal seems to be assessing whether there is sufficient support for the Fund Farstar. However, we find little information about it in the proposal. It would be helpful to elaborate on the key points that could justify the community's support for this engagement.
We have several comments with regard to this proposal:
We believe there is a need to leverage findings from the AVI pilot before moving forward with this directional snapshot. We’re not convinced about the timing of this temperature check and the push for secure funding, particularly since we still don’t have a concrete report or clear results from the AVI pilot program. The proposal lacks important details on several fronts: it doesn’t clearly explain the cost structure, the process for moving forward, or how the various councils will be chosen.
There is a need for more specific KPIs, both in the specific milestones for the initial year and a better overview of the whole 6-year length of this initiative. Also given this long program why have you decided to only be exclusive to Arbitrum for one year?
Agree with @JoJo here https://forum.arbitrum.foundation/t/directional-temperature-check-on-arbitrum-ventures-setup/27668/12?u=castlecapital
We also share the same concerns raised by others regarding potential conflicts of interest—having the same entity both propose and lead the initiative could be problematic. However, if no other parties are willing to step forward, then having that entity take the lead may still be beneficial. A fair compromise might be to open an election or request for proposals, allowing others to present their plans and budgets. If no suitable alternative emerges, the original proposer could proceed with a stronger mandate.
Additionally, more clarity is needed on risk management, the mechanics of the proposed $1 million performance bonus, and detailed operating costs. It would also be helpful to understand how ARB tokens will be utilized: Will ARB be allocated directly, or will it need to be liquidated first?
Regarding the proposed performance bonus: if Farstar stands to receive a 1 million ARB bonus, it would be sensible to tie this reward to a longer period of exclusivity, such as the full six-year term. This should include a clause allowing the DAO to revisit and potentially end exclusivity early if both parties agree or if a DAO vote deems it more beneficial. Such a structure ensures that Farstar remains committed to Arbitrum’s success over the long term, aligning incentives more closely with sustained ecosystem growth.
We have several comments with regard to this proposal:
We believe there is a need to leverage findings from the AVI pilot before moving forward with this directional snapshot. We’re not convinced about the timing of this temperature check and the push for secure funding, particularly since we still don’t have a concrete report or clear results from the AVI pilot program. The proposal lacks important details on several fronts: it doesn’t clearly explain the cost structure, the process for moving forward, or how the various councils will be chosen.
There is a need for more specific KPIs, both in the specific milestones for the initial year and a better overview of the whole 6-year length of this initiative. Also given this long program why have you decided to only be exclusive to Arbitrum for one year?
Agree with @JoJo here https://forum.arbitrum.foundation/t/directional-temperature-check-on-arbitrum-ventures-setup/27668/12?u=castlecapital
We also share the same concerns raised by others regarding potential conflicts of interest—having the same entity both propose and lead the initiative could be problematic. However, if no other parties are willing to step forward, then having that entity take the lead may still be beneficial. A fair compromise might be to open an election or request for proposals, allowing others to present their plans and budgets. If no suitable alternative emerges, the original proposer could proceed with a stronger mandate.
Additionally, more clarity is needed on risk management, the mechanics of the proposed $1 million performance bonus, and detailed operating costs. It would also be helpful to understand how ARB tokens will be utilized: Will ARB be allocated directly, or will it need to be liquidated first?
Regarding the proposed performance bonus: if Farstar stands to receive a 1 million ARB bonus, it would be sensible to tie this reward to a longer period of exclusivity, such as the full six-year term. This should include a clause allowing the DAO to revisit and potentially end exclusivity early if both parties agree or if a DAO vote deems it more beneficial. Such a structure ensures that Farstar remains committed to Arbitrum’s success over the long term, aligning incentives more closely with sustained ecosystem growth.
Overall, we would appreciate more transparency and a clearer rationale before fully supporting this initiative.
Feedback and Suggestions on the Arbitrum Ventures Proposal The proposal for establishing Arbitrum Ventures demonstrates a commendable strategic vision for creating a professional and scalable ecosystem investment fund. Lino’s efforts to incorporate feedback from the community and delegates during Devcon are evident, resulting in a more refined proposal. However, certain areas require further clarity and refinement to ensure transparency, accountability, and alignment with the DAO’s long-term goals. Key Observations
Roadmap and Scalability: ◦ The proposal outlines a clear roadmap for developing legal, compliance, and governance structures to ensure operational scalability. ◦ It emphasizes ecosystem growth through targeted investments, talent mobilization, and enhanced network effects.
Quarterly Transparency Reports: ◦ Regular reporting will build trust and keep DAO members informed about progress and spending. Concerns and Recommendations Accountability and Oversight • Ongoing Accountability: How will the DAO ensure ongoing accountability for Farstar and the Interim Expert Council during the 1-year setup phase? • KPIs and Metrics:
◦ Define specific KPIs to assess the success of initial investments in driving ecosystem growth, adoption, and ROI. ◦ Clearly outline how the performance-based bonus of up to 1 million ARB will be calculated and distributed. Budget and Costs • Setup Costs: Are there contingency plans in case the projected setup costs exceed the allocated budget? • Legal Budget: The allocated legal budget appears disproportionately high and could benefit from further breakdown and justification. Timing of Directional Snapshot • The snapshot vote feels premature without results or insights from the AVI pilot, especially regarding budget breakdowns and feasibility. Delaying this vote until more data is available could strengthen community confidence. Exclusivity Period • A one-year exclusivity period seems insufficient for a six-year initiative. Consider extending this period or including clauses for adjustments based on DAO vote or mutual agreement. Conflict of Interest • Having the same entity propose and lead the initiative could raise concerns about transparency. An RFP process or an election for leadership might enhance transparency and ensure a broader mandate. Suggested Improvements • Enhanced Clarity: Provide a more detailed breakdown of projected costs and their allocation. • Defined Metrics: Outline measurable metrics to evaluate the success of the fund, including benchmarks for ecosystem growth and ROI. • Governance Structure: Build mechanisms for regular DAO oversight to monitor the Interim Expert Council and Farstar’s performance. • Flexibility in Exclusivity: Adjust the exclusivity period to reflect the long-term nature of the initiative while allowing flexibility through DAO approval. By addressing these areas, the proposal can foster greater confidence and alignment among DAO members, ensuring Arbitrum Ventures becomes a cornerstone for ecosystem growth and innovation.
Well overdue. A $10M fund is a great starting place if we have pro fund managers. It should be as utilitarian as possible with a strong DeFi focus since that is what has worked. even small angel checks in the top 10 defi protocols that have been the biggest success in arbitrum would have each returned millions.
Why has this evolved from something closer to a fund of funds and now sounds more like a generalist VC with a yearly ops budget of 10-30% AUM (1.5mn for 5-15mn).
I imagine there is a rationale for this so this is not a direct critique, but I'm quite lost as to how this got here. So more of a point of clarification around the design choices
Suggestions:
Allocate a smaller budget and investment fund initially, and run a 6-month pilot program. Based on the pilot’s results, decide on further expansion. While you’ve provided an excellent perspective, the current retention and conversion rates are not meeting expectations.
Provide monthly briefs and detailed quarterly reports. Allow community members to participate in oversight to ensure alignment between fund usage and goals, avoiding issues of “lack of visibility.”
Beyond relying solely on the professional team, consider activating community resources through a reward mechanism. For example, encourage active users to recommend investment channels and reward contributors with NFTs or small incentives.
Take inspiration from Coinbase Ventures’ strategic model. Their investments brought numerous protocols into the Base ecosystem, generating user traction and creating an economic flywheel effect.
The framing that we’ve seen come from Base is that they’re creating a trifecta of a technology platform, capital ecosystem, and applications marketplace. The second pillar is where their venture investment activities fit.
We have read many comments with which we fully agree, so to avoid being redundant, we would like to focus on the phases mentioned in the proposal and the voting options.
We understand that we are currently in Phase 2, as you mentioned. However, the timelines for this phase are not entirely clear to us. When does Phase 2 end, and when does Phase 3 begin?
We have read many comments with which we fully agree, so to avoid being redundant, we would like to focus on the phases mentioned in the proposal and the voting options.
We understand that we are currently in Phase 2, as you mentioned. However, the timelines for this phase are not entirely clear to us. When does Phase 2 end, and when does Phase 3 begin?
If Phase 3 is scheduled to start six years after a mandate, it would be important to clarify how this timeframe was determined.
Regarding the voting options, we notice that the main goal seems to be assessing whether there is sufficient support for the Fund Farstar. However, we find little information about it in the proposal. It would be helpful to elaborate on the key points that could justify the community's support for this engagement.
The framing that we’ve seen come from Base is that they’re creating a trifecta of a technology platform, capital ecosystem, and applications marketplace. The second pillar is where their venture investment activities fit.
The proposal mentions the balance between internal and external investments, and both strategies are great. However, how do you plan to allocate the proportion between the two? For example, at this stage, will you focus more on supporting the internal Arbitrum ecosystem or leverage external LP investments to attract more capital?
Haha, also, I’d like to ask if delegates will have the opportunity to participate in the investments together?
An investment thesis (wasn’t this supposed to be part of the Pilot?
Yes, it’s in the works. An important clarification here is that we’ve referred to this as the Ecosystem Investment Thesis, so we can differentiate from some of the aspects of an investment thesis that’re outside the scope of this work. Namely, deeper analysis of specific spaces and how to be effective and profitable in them lies within the individual investment programs. Not the overall FoF one especially on the pilot phase, which we are focused on here.
Examples of what the output would show are:
Furthermore we’ve communicated constantly that this would be a pilot version of this effort, demonstrating the case for continuing to develop on it, rather than something that by itself would be sufficient for us to potentially deploy 10s or 100s of million $.
We are spending the funds on the basis of the submitted budget and have currently spent about 80% of them.
While we believe that given the small size of the budget more detailed reporting is disproportionate overhead on this particular proposal, we would also like to use it as an opportunity to develop mature reporting practices to be applied in future work.
To that end we’ve discussed the matter with a number of delegates and with R3gen Finance who offered to take a role in analysing our financial activities and including them in the token flow reports. Particularly to cover any “audit like” activities up to the point where licensed auditors would be involved, which is an anticipated part of the setup and operations of the CapCo.
To help us move in that direction could you share what would be important for Gauntlet in terms of transparency and access to information up to now and going forward?
Beyond relying solely on the professional team, consider activating community resources through a reward mechanism. For example, encourage active users to recommend investment channels and reward contributors with NFTs or small incentives.
Within the Farstar team we have actually done deep work on this particular topic on a number of occasions in the last decade. Including:
One of the topics we are most excited about is innovating on how such incentives can be created to mobilize and reward the DAO and the whole Arbitrum community. That includes the exploration of creating a token backed by the carry of the fund of funds, which is part of the mechanism design for orchestrating ecosystem benefit optimisation via a portfolio of profit optimised investment programs.
Stay tuned for a separate strategic recommendation post on the topic. Note that this is not planned as a mandatory part of the future development of AVI as we need to manage the complexity of the initiative, however it’s something we are long term committed to explore as a team regardless. If the DAO demonstrates desire for AVI to go in that direction we can certainly prioritise it.
Allocate a smaller budget and investment fund initially, and run a 6-month pilot program. Based on the pilot’s results, decide on further expansion. While you’ve provided an excellent perspective, the current retention and conversion rates are not meeting expectations.
We are all for being lean and doing quick iterations, while learning. However one of the highest drivers of complexity and thus costs and uncertainty is going to the DAO, where you don’t necessarily even have the available capacity to evaluate the results of an experiment in a timely manner.
In your mind what would you hope to learn after 6 months of a pilot investment program that would help drive the next batch of decisions and approvals?
Provide monthly briefs and detailed quarterly reports. Allow community members to participate in oversight to ensure alignment between fund usage and goals, avoiding issues of “lack of visibility.”
Our key objective here is the design of an interim experts committee that’s representative of the DAO and community and also has the deep expertise, availability and commitment to take care of this need among others. That’s not to say that we won’t do community engagement beyond that. In fact it’s one of our key objectives to figure out the optimal model for doing that. Quarterly transparency reporting, participating in GRC monthly and monthly office hours are a given.
Are there any more specific requirements you’d like to see on the topic of transparency and visibility met?
Take inspiration from Coinbase Ventures’ strategic model. Their investments brought numerous protocols into the Base ecosystem, generating user traction and creating an economic flywheel effect.
This is absolutely right! And it’s not just Coinbase, a number of other ecosystems like Solana have been getting ahead on this topic and we believe it is becoming table stakes. Base just happens to be executing well compared to the other players in the Ethereum ecosystem and we need to do better too.
The framing that we’ve seen come from Base is that they’re creating a trifecta of a technology platform, capital ecosystem, and applications marketplace. The second pillar is where their venture investment activities fit.
Why has this evolved from something closer to a fund of funds and now sounds more like a generalist VC with a yearly ops budget of 10-30% AUM (1.5mn for 5-15mn).
I imagine there is a rationale for this so this is not a direct critique, but I’m quite lost as to how this got here. So more of a point of clarification around the design choices
It is still FoF, which has the capacity to also do strategic direct investments as it was stated in the original proposal. That capacity is particularly important during the setup stage while captive programs are still being set up.
What you are referring to above is not the actual investment mandates, but 2 preceding components, which are the opex for the setup in year 1 and an interim investment facility (which might not even be deployed in full).
The purpose of this facility's existence is to be able to offer solutions to a situation where for example RnDAO needs more funding and the DAO feels that this should happen sooner than when an appropriate relevant investment mandate might be kicked off. This is one example of such a need, but more often then not they might emerge in different ways and we want to have the executive power to evaluate and act professionally without necessarily going to the DAO. How this should work in practice is the subject of another upcoming Snapshot vote pending the approval of this one.
Thank you all for the thoughtful questions and comments! I'm grouping them by topic as follows:
Thank you all for the thoughtful questions and comments! I'm grouping them by topic as follows:
But the risk for the dao to have the company created by the same party that should also be one of the main service provider is just too high. Really, as much as in the opco, we need a ceo with a vision and capable of dripping it top down into the rest of the org, which would likely include both you, maybe other SP, some folks from the dao and some external folks.
Jojo, I really understand and appreciate what you are saying. In many ways the CEO approach is not too different in the sense that someone should be able to frame the CEOs mandate and objectives, and they need to be kept accountable and supported. The CEO doing that directly to the DAO, without a commissioned high context and accountability stakeholder group might not produce the best results.
This is what the Expect Council is meant to address and I think it’s the key enabler we should put the priority on.
What will be the criteria for choosing the members of the Interim Expert Council? How will their experience guide the setup and growth of the fund?
That’s a good question and is still open for discussion with stakeholders in the DAO. Our thinking so far:
The initial investment direction is also unclear: what fields or projects are the $5 million to $15 million in initial investments targeting? Are there clear priorities? I suggest listing a detailed framework or breakdown for better understanding.
Like other delegates, I’d love to see clear KPIs, both for the selected projects and especially for Farstar’s performance. How will this help grow and generate value for the DAO?
Moreover, if some investments don’t pan out, what’s the plan to protect the DAO’s finances and minimize losses?
The $5–$15M range seems quite broad. How will the team decide how much to allocate, and is there a backup plan if some of the investments don’t bring the expected results? Additionally, what process will be used to decide which projects to fund and which ones not to? Will there be clear criteria or community involvement in the decision-making?
It’s important to differentiate between the fully fledged long term investment mandates and the interim capacity.
The former is the commitment to make certain investments with a well considered financial return thesis, fund model, etc, where the latter is not. Just the capability to do so if really necessary before the long term mandates are set up.
The former will have very clear KPIs with a systematic portfolio approach, where the latter might not, or not in the same sense.
It could take the form of investments that may end up incongruent from some points of view, but address the relevant concerns about balancing long-term ambition with short-term pragmatism—focusing on smaller, quicker wins to complement goals with longer-term payoff. You can think of that as a short term mechanism comparable to what might otherwise be structured as grant financing, but providing more control and stake for the DAO. E.g. it may be a way to enable a very critical technology infrastructure provider, while the DAO manages the risk via participating in the governance of said provider and makes an ultimately more fair deal.
All of this still needs to be fleshed out a lot more, which will be a subject of a separate Snapshot before it goes into the same or separate Tally as the proposal described in this post.
Like other delegates, I’d love to see clear KPIs, both for the selected projects and especially for Farstar’s performance. How will this help grow and generate value for the DAO?
I understand that you will be rebuilding the Farstar website, but I also believe it is important to see their portfolio of work before making a decision. For now, I will wait to meet the key people and learn about the company’s history.
A track record of FarStar’s successful investments and/or programs.
Thank you for bringing this up. We’ll prioritize bringing this information forward and will make a separate post on that. Stay tuned.
To give a taste Farstar was set up about 7 years ago by me as a wrapper to amalgamate a number of initiatives and a collective of contributors that have been doing similar work together since as early as 2008.
We are mostly builders and investors who got involved with startup ecosystem development efforts mostly out of passion, but later got into various official advisory and capital management roles on behalf of governments, corporations, major institutions, or private investors.
It’s important to note that Farstar hasn’t been set up to have ongoing operations, but rather as a platform to mobilise teams around specific opportunities we care about. Such as the one with Arbitrum here, around which we see great potential for impact that we still need to elaborate more on. Under the current structure we've had over 100 vetted contributors formally engaged in our programs, giving us a very deep pool of talent to tap into to meet emerging challenges. We'll highlight the backgrounds of the ones so far involved with AVI, as well as relevant previous work in the upcoming post.
However, I think the budget could be optimized. The current proposal’s budget is quite high and somewhat abstract: $1.5 million plus an additional $1 million in ARB bonuses. What are the expected returns for such a large amount? How is the ROI calculated? These details need to be clarified to gain broader support.
Why does just the creation of the fund and its maintenance cost 1-1.5 million dollars? How many employees are planned and with what tasks, what salaries?
It would also be good to have an understanding of what $750,000 will be spent on - why exactly this cost?
Working Group members, organizational, and compensation structure (and rationale for why is this run by a working group?)
These will be detailed in the upcoming Budget and Operational Plan deliverable of the AVI pilot. Thank you for raising these questions as it helps us respond more clearly to the various considerations. If there are more specific ones, please share them as well.
You are talking about managing capital from the treasury, but we have another initiative for this, which has already been voted for in Snapshot. How will you separate the functions and will you then have funds?
Treasury management and AVI have distinctly different objectives. One is related to putting the capital to work in a relatively safe way towards generating positive cashflow and growth of the balance sheet. AVI has to do with supporting builders and ecosystem development, while at the same time doing that in a financially sustainable way. Not necessarily bringing the proceeds in the treasury, but recycling them towards ecosystem growth.
I do not quite understand why a startup is asking for an exclusive contract in Arbitrum. This project has only recently been created and has not yet proven anything, how it can do anything.
It’s also not clear why, with a six-year mandate, in which the first year will mostly be setup, Farstar will only have a 1-year exclusivity deal.
cp0x, the contractual exclusivity terms proposed are one directional for the benefit of Arbitrum DAO, not the other way around.
This should have been expressed more clearly as it looks like it didn’t come across for multiple people. If the contract gets continued in some way after Phase 2, we are committed to offer an option exclusivity terms going forward too. There can be a right of first refusal agreement embedded at this stage as well.
If the DAO is going to invest in such critical investment infrastructure, we would prefer the vendor provide higher exclusivity, be produced in-house under OpCo, CapCo, or the Foundation, or simply fund a team that has demonstrated a deeper understanding of investment in the web3 space and has a portfolio and track record that delegates can evaluate.
We recognize this concern and it is the reason we set up AVI as a DAO originating initiative open to other contributors besides the people around Farstar. We’ve put a lot of thought in the direction of how to facilitate a genuine effective in-house solution for the creation of the CapCo (which is what this proposal is about). That being said there is a lot of nuance and need for getting in the details and we need to get the right stakeholder group engaged to delve in.
Has this been documented with both parties signing? Also, is there a plan to manage any disagreement that may arise between stakeholders and the Farstar team during the one-year partnership period?
Could you explain more about how the captive and non-captive programs will balance short-term needs with long-term goals? Is there a chance that focusing too much on one type could affect the other?
Managing such considerations on an ongoing basis will be the core function of the management team on FoF. We have some of our thoughts about the complimentary nature of the two articulated in a forum post that can be found here.
Lastly, the GCP, while not an outright failure, has not yet been proven successful. It feels somewhat premature to pursue both recommendations from their team when they are far from operational and for the DAO to pursue a similar structure at this time.
When we refer to the GCP we mean something very specific. Namely there is a lot of uncharted territory in terms of how to implement investments out of a DAO with an onchain treasury. After 6 months of work from the team there, AF, council to set up the legal structure and bylaws, it gives AVI a flying start by building on top of it.
Thanks for posting this and really love the ongoing discussions.
Few questions from this end:
Thanks for posting this and really love the ongoing discussions.
Few questions from this end:
Also, regarding Farstar:
Farstar agrees to 1-year exclusivity with Arbitrum upon passing this proposal. During this time Farstar will not work with other clients in the Web3 space.
While in general I do think this is a great idea I do think the DAO currents cost don't allow for this. The GCP hasn't brought any significant impact yet and yes its quite fresh but still needs to prove itself.
In my opinion the DAO should focus on other topics rather then investments. We are simply not there yet.
We appreciate all the work the team did to put together the report. While we align with the vision of managing partners incentivized to make long-term investments in Arbitrum's growth, and many of the "vehicles" appear to serve meaningful functions, there is insufficient detail on the operational budget, the expert council, the managing team, and investment strategy to support this proposal. There is also no convincing vision for ROI beyond vague mentions; understanding this early in the process, we'd prefer that delegates have a more concrete understanding of potential deliverables and returns (i.e., KPIs) given the size of the program and its ambition.
Without the following details, it's difficult to be optimistic about the Arbitrum Venture setup as proposed:
We appreciate all the work the team did to put together the report. While we align with the vision of managing partners incentivized to make long-term investments in Arbitrum's growth, and many of the "vehicles" appear to serve meaningful functions, there is insufficient detail on the operational budget, the expert council, the managing team, and investment strategy to support this proposal. There is also no convincing vision for ROI beyond vague mentions; understanding this early in the process, we'd prefer that delegates have a more concrete understanding of potential deliverables and returns (i.e., KPIs) given the size of the program and its ambition.
Without the following details, it's difficult to be optimistic about the Arbitrum Venture setup as proposed:
It's also not clear why, with a six-year mandate, in which the first year will mostly be setup, Farstar will only have a 1-year exclusivity deal. If the DAO is going to invest in such critical investment infrastructure, we would prefer the vendor provide higher exclusivity, be produced in-house under OpCo, CapCo, or the Foundation, or simply fund a team that has demonstrated a deeper understanding of investment in the web3 space and has a portfolio and track record that delegates can evaluate.
Lastly, the GCP, while not an outright failure, has not yet been proven successful. It feels somewhat premature to pursue both recommendations from their team when they are far from operational and for the DAO to pursue a similar structure at this time.
Thank you for the high-quality proposal report. The proposal, through the evergreen fund and multi-strategy approach, provides a stable investment framework for the development of Arbitrum’s ecosystem. This framework is promising for attracting more developers, projects, and capital over the next six years, driving long-term sustainable growth.
However, I think the budget could be optimized. The current proposal’s budget is quite high and somewhat abstract: $1.5 million plus an additional $1 million in ARB bonuses. What are the expected returns for such a large amount? How is the ROI calculated? These details need to be clarified to gain broader support.
Thank you for the high-quality proposal report. The proposal, through the evergreen fund and multi-strategy approach, provides a stable investment framework for the development of Arbitrum’s ecosystem. This framework is promising for attracting more developers, projects, and capital over the next six years, driving long-term sustainable growth.
However, I think the budget could be optimized. The current proposal’s budget is quite high and somewhat abstract: $1.5 million plus an additional $1 million in ARB bonuses. What are the expected returns for such a large amount? How is the ROI calculated? These details need to be clarified to gain broader support.
The initial investment direction is also unclear: what fields or projects are the $5 million to $15 million in initial investments targeting? Are there clear priorities? I suggest listing a detailed framework or breakdown for better understanding.
Lastly, more detailed planning for execution is crucial. Effective implementation is the most important aspect.
Regarding structure and governance, I would like to know more about the experienced team that will be managing investments and business development. It is crucial to know the background of these individuals before approving such a significant funding. I understand that you will be rebuilding the Farstar website, but I also believe it is important to see their portfolio of work before making a decision. For now, I will wait to meet the key people and learn about the company's history. Overall, I think a more transparent structure is needed regarding who will be responsible for activities that have not yet been mentioned. The uncertainty about the return on investment makes me inclined to abstain from voting or lean towards voting against the proposal.
I think this is a good proposal to discuss. We all understand how a venture fund can impact the long-term growth and reputation of an organization.
Like other delegates, I’d love to see clear KPIs, both for the selected projects and especially for Farstar’s performance. How will this help grow and generate value for the DAO?
I think this is a good proposal to discuss. We all understand how a venture fund can impact the long-term growth and reputation of an organization.
Like other delegates, I’d love to see clear KPIs, both for the selected projects and especially for Farstar’s performance. How will this help grow and generate value for the DAO?
Moreover, if some investments don’t pan out, what’s the plan to protect the DAO’s finances and minimize losses?
It seems like more discussion is needed before making a final decision.
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.
Thank you for sharing this detailed proposal. The idea of creating Arbitrum Ventures as a Multistrategy Evergreen Ecosystem Investment Fund is impressive and shows a thoughtful approach to growing the ecosystem.
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.
Thank you for sharing this detailed proposal. The idea of creating Arbitrum Ventures as a Multistrategy Evergreen Ecosystem Investment Fund is impressive and shows a thoughtful approach to growing the ecosystem.
We do have a few questions about some parts of the proposal:
Deploy $5–15M during the interim phase to fund strategic projects, while refining governance processes for long-term capital management.
The $5–$15M range seems quite broad. How will the team decide how much to allocate, and is there a backup plan if some of the investments don’t bring the expected results? Additionally, what process will be used to decide which projects to fund and which ones not to? Will there be clear criteria or community involvement in the decision-making?
We propose an evergreen investment vehicle with a multifaceted strategy featuring a portfolio of captive and non-captive investment programs.
Could you explain more about how the captive and non-captive programs will balance short-term needs with long-term goals? Is there a chance that focusing too much on one type could affect the other?
What will be the criteria for choosing the members of the Interim Expert Council? How will their experience guide the setup and growth of the fund?
Overall, this proposal shows great potential to help the Arbitrum ecosystem grow sustainably.
Hello! Thank you for the very detailed proposal.
I have many questions:
Hello! Thank you for the very detailed proposal.
I have many questions:
In general, I have already voiced my opinion on this issue, namely that best practices should be used, and this means using investment funds that already exist and can ensure proper management of funds. Creating a fund from scratch is a very interesting project, but expensive and without guarantees to even start investing, since only the organization of the structure is planned within a year, with a team that is a startup. I'm a big skeptic about this.
Hello! Thanks for putting this forward and for all the research being conducted in this topic.
I have one question at this point:
interesting proposal.
Let's fly over for now on the mention of the stip results which, to me, seems like not that relevant in here as introduction.
interesting proposal.
Let's fly over for now on the mention of the stip results which, to me, seems like not that relevant in here as introduction.
Idea here from what i read is to setup the basis, through a potential 15M initial capital + 1.5M opex + 1M arb in bonus, to create basically create the capco we have been speaking about for the last 6 months here and in other meetings. Executor would be farstar. It would include the legal setup of the entity, the comp of the team including bonuses. The long term plan is to have this consolidated toward a span of 6 years, with up to 1B in capitalization. All of this should come under the oversight umbrella of the DAO, through a committee/council/etc. Posting this to first have a sense check if i got the high level idea.
Assuming I did, few consideration on my side, totally personal.
In this proposal, I think there are several gaps.
To sum up: i am not against the initiative per se. I think it could be better aligned with the direction the DAO is taking (see opco, gcp, in which we basically source ceo/general partners/etc and then plug in people and service providers) and be more robust. In an extreme example, what would it happen for example if farstart, after 1y, decides to not renew the deal because another dao comes and wants to effectively have the exclusivity? Also, knowing that we are currently figuring out incentives and setting up the opco, is it the exact time to set capco up? Likely is worth starting to talk about this in a broader way. But the way this temp check is posed, it feels like we want to push it right out of the gate, assign a mandate and start scoping the initiative. I am not totally sure this is the exact time to do so, and maybe i am obviously wrong here.
In general I might be just jumping the gun here, not understanding that you indeed want a structure similar to OpCo in which you are service provider. And I might have been jumping the gun on a lot of things, so please let me know if i misinterpreted anything here. Remember as usual, I am just a cow.
Hi, thanks for submitting this proposal! To start, could you clarify who Farstar is? I’ve looked for information but haven’t been able to find anything substantial. It’s important to know who’s behind this proposal and if they have relevant experience in this area. Transparency about your background and expertise would help the community understand your qualifications to execute such an ambitious project.
Regarding the proposed one-year exclusivity with Arbitrum, I find this term unreasonable given the scale of the investment you're requesting. If Arbitrum DAO is committing millions to set up AVI from scratch, I would expect perpetual exclusivity to the Arbitrum ecosystem, not just a single year. One year feels like we’d be funding the foundation for you to potentially take elsewhere after a short period.
you’re raising a very valid point here! To be clear what you’re suggesting is very aligned with how we’re thinking about it, but perhaps some of the details need to be coined out. That’s why we’re quite focused on creating the Interim Experts Council from the DAO that would also have to work in managing these checks and balances. We’ll flesh out more details on how we envision the steps towards creating a fund and management structure, which is ultimately fully owned and controlled by the DAO in the Operational Plan and Budget deliverable from the AVI Pilot.
Thank you all for the questions and engagements!
Starting the responses with the questions from our resident cow @JoJo as they're quite spot on.
Let’s fly over for now on the mention of the stip results which, to me, seems like not that relevant in here as introduction.
Nice! Thanks for the clarification. I’m looking forward to the Phase 2!
I personally consider three points: budget allocation, the final outcomes of the proposal, and its risks.
“The proposal mentions an annual budget of $1.5 million, plus up to $1 million in performance-based ARB bonuses. This amount seems quite substantial. Could you provide a more detailed breakdown of how these funds will be allocated? For example, why does the ‘legal, corporate registration, and activity-related direct costs’ category require $750,000? What specific projects or activities are included in this? Additionally, the compensation for the expert committee is mentioned, but how much will it actually cost? Is there a more cost-efficient plan available?”
I like the overall idea, but I would like more information on several points, such as how the team will be formed, who the team members will be, what the investment mandate will be, how this will overlap with the Gaming Program, and what you estimate the yearly operating expenses (opex) to deploy the investments will be.
Thank you for the proposal Temp check
Thank you for your proposal! This is an excellent idea. It’s essential for Arbitrum DAO to establish a venture. Not only can it support high-quality projects within the ecosystem, but it can also attract outstanding external projects to migrate to Arbitrum.
I have a few questions:
Thank you for your proposal! This is an excellent idea. It’s essential for Arbitrum DAO to establish a venture. Not only can it support high-quality projects within the ecosystem, but it can also attract outstanding external projects to migrate to Arbitrum.
I have a few questions:
The framing that we’ve seen come from Base is that they’re creating a trifecta of a technology platform, capital ecosystem, and applications marketplace. The second pillar is where their venture investment activities fit.
The proposal mentions the balance between internal and external investments, and both strategies are great. However, how do you plan to allocate the proportion between the two? For example, at this stage, will you focus more on supporting the internal Arbitrum ecosystem or leverage external LP investments to attract more capital?
Haha, also, I’d like to ask if delegates will have the opportunity to participate in the investments together?
An investment thesis (wasn’t this supposed to be part of the Pilot?
Yes, it’s in the works. An important clarification here is that we’ve referred to this as the Ecosystem Investment Thesis, so we can differentiate from some of the aspects of an investment thesis that’re outside the scope of this work. Namely, deeper analysis of specific spaces and how to be effective and profitable in them lies within the individual investment programs. Not the overall FoF one especially on the pilot phase, which we are focused on here.
Examples of what the output would show are:
Furthermore we’ve communicated constantly that this would be a pilot version of this effort, demonstrating the case for continuing to develop on it, rather than something that by itself would be sufficient for us to potentially deploy 10s or 100s of million $.
We are spending the funds on the basis of the submitted budget and have currently spent about 80% of them.
While we believe that given the small size of the budget more detailed reporting is disproportionate overhead on this particular proposal, we would also like to use it as an opportunity to develop mature reporting practices to be applied in future work.
To that end we’ve discussed the matter with a number of delegates and with R3gen Finance who offered to take a role in analysing our financial activities and including them in the token flow reports. Particularly to cover any “audit like” activities up to the point where licensed auditors would be involved, which is an anticipated part of the setup and operations of the CapCo.
To help us move in that direction could you share what would be important for Gauntlet in terms of transparency and access to information up to now and going forward?
Beyond relying solely on the professional team, consider activating community resources through a reward mechanism. For example, encourage active users to recommend investment channels and reward contributors with NFTs or small incentives.
Within the Farstar team we have actually done deep work on this particular topic on a number of occasions in the last decade. Including:
One of the topics we are most excited about is innovating on how such incentives can be created to mobilize and reward the DAO and the whole Arbitrum community. That includes the exploration of creating a token backed by the carry of the fund of funds, which is part of the mechanism design for orchestrating ecosystem benefit optimisation via a portfolio of profit optimised investment programs.
Stay tuned for a separate strategic recommendation post on the topic. Note that this is not planned as a mandatory part of the future development of AVI as we need to manage the complexity of the initiative, however it’s something we are long term committed to explore as a team regardless. If the DAO demonstrates desire for AVI to go in that direction we can certainly prioritise it.
Allocate a smaller budget and investment fund initially, and run a 6-month pilot program. Based on the pilot’s results, decide on further expansion. While you’ve provided an excellent perspective, the current retention and conversion rates are not meeting expectations.
We are all for being lean and doing quick iterations, while learning. However one of the highest drivers of complexity and thus costs and uncertainty is going to the DAO, where you don’t necessarily even have the available capacity to evaluate the results of an experiment in a timely manner.
In your mind what would you hope to learn after 6 months of a pilot investment program that would help drive the next batch of decisions and approvals?
Provide monthly briefs and detailed quarterly reports. Allow community members to participate in oversight to ensure alignment between fund usage and goals, avoiding issues of “lack of visibility.”
Our key objective here is the design of an interim experts committee that’s representative of the DAO and community and also has the deep expertise, availability and commitment to take care of this need among others. That’s not to say that we won’t do community engagement beyond that. In fact it’s one of our key objectives to figure out the optimal model for doing that. Quarterly transparency reporting, participating in GRC monthly and monthly office hours are a given.
Are there any more specific requirements you’d like to see on the topic of transparency and visibility met?
Take inspiration from Coinbase Ventures’ strategic model. Their investments brought numerous protocols into the Base ecosystem, generating user traction and creating an economic flywheel effect.
This is absolutely right! And it’s not just Coinbase, a number of other ecosystems like Solana have been getting ahead on this topic and we believe it is becoming table stakes. Base just happens to be executing well compared to the other players in the Ethereum ecosystem and we need to do better too.
The framing that we’ve seen come from Base is that they’re creating a trifecta of a technology platform, capital ecosystem, and applications marketplace. The second pillar is where their venture investment activities fit.
Why has this evolved from something closer to a fund of funds and now sounds more like a generalist VC with a yearly ops budget of 10-30% AUM (1.5mn for 5-15mn).
I imagine there is a rationale for this so this is not a direct critique, but I’m quite lost as to how this got here. So more of a point of clarification around the design choices
It is still FoF, which has the capacity to also do strategic direct investments as it was stated in the original proposal. That capacity is particularly important during the setup stage while captive programs are still being set up.
What you are referring to above is not the actual investment mandates, but 2 preceding components, which are the opex for the setup in year 1 and an interim investment facility (which might not even be deployed in full).
The purpose of this facility's existence is to be able to offer solutions to a situation where for example RnDAO needs more funding and the DAO feels that this should happen sooner than when an appropriate relevant investment mandate might be kicked off. This is one example of such a need, but more often then not they might emerge in different ways and we want to have the executive power to evaluate and act professionally without necessarily going to the DAO. How this should work in practice is the subject of another upcoming Snapshot vote pending the approval of this one.
Thank you all for the thoughtful questions and comments! I'm grouping them by topic as follows:
Thank you all for the thoughtful questions and comments! I'm grouping them by topic as follows:
But the risk for the dao to have the company created by the same party that should also be one of the main service provider is just too high. Really, as much as in the opco, we need a ceo with a vision and capable of dripping it top down into the rest of the org, which would likely include both you, maybe other SP, some folks from the dao and some external folks.
Jojo, I really understand and appreciate what you are saying. In many ways the CEO approach is not too different in the sense that someone should be able to frame the CEOs mandate and objectives, and they need to be kept accountable and supported. The CEO doing that directly to the DAO, without a commissioned high context and accountability stakeholder group might not produce the best results.
This is what the Expect Council is meant to address and I think it’s the key enabler we should put the priority on.
What will be the criteria for choosing the members of the Interim Expert Council? How will their experience guide the setup and growth of the fund?
That’s a good question and is still open for discussion with stakeholders in the DAO. Our thinking so far:
The initial investment direction is also unclear: what fields or projects are the $5 million to $15 million in initial investments targeting? Are there clear priorities? I suggest listing a detailed framework or breakdown for better understanding.
Like other delegates, I’d love to see clear KPIs, both for the selected projects and especially for Farstar’s performance. How will this help grow and generate value for the DAO?
Moreover, if some investments don’t pan out, what’s the plan to protect the DAO’s finances and minimize losses?
The $5–$15M range seems quite broad. How will the team decide how much to allocate, and is there a backup plan if some of the investments don’t bring the expected results? Additionally, what process will be used to decide which projects to fund and which ones not to? Will there be clear criteria or community involvement in the decision-making?
It’s important to differentiate between the fully fledged long term investment mandates and the interim capacity.
The former is the commitment to make certain investments with a well considered financial return thesis, fund model, etc, where the latter is not. Just the capability to do so if really necessary before the long term mandates are set up.
The former will have very clear KPIs with a systematic portfolio approach, where the latter might not, or not in the same sense.
It could take the form of investments that may end up incongruent from some points of view, but address the relevant concerns about balancing long-term ambition with short-term pragmatism—focusing on smaller, quicker wins to complement goals with longer-term payoff. You can think of that as a short term mechanism comparable to what might otherwise be structured as grant financing, but providing more control and stake for the DAO. E.g. it may be a way to enable a very critical technology infrastructure provider, while the DAO manages the risk via participating in the governance of said provider and makes an ultimately more fair deal.
All of this still needs to be fleshed out a lot more, which will be a subject of a separate Snapshot before it goes into the same or separate Tally as the proposal described in this post.
Like other delegates, I’d love to see clear KPIs, both for the selected projects and especially for Farstar’s performance. How will this help grow and generate value for the DAO?
I understand that you will be rebuilding the Farstar website, but I also believe it is important to see their portfolio of work before making a decision. For now, I will wait to meet the key people and learn about the company’s history.
A track record of FarStar’s successful investments and/or programs.
Thank you for bringing this up. We’ll prioritize bringing this information forward and will make a separate post on that. Stay tuned.
To give a taste Farstar was set up about 7 years ago by me as a wrapper to amalgamate a number of initiatives and a collective of contributors that have been doing similar work together since as early as 2008.
We are mostly builders and investors who got involved with startup ecosystem development efforts mostly out of passion, but later got into various official advisory and capital management roles on behalf of governments, corporations, major institutions, or private investors.
It’s important to note that Farstar hasn’t been set up to have ongoing operations, but rather as a platform to mobilise teams around specific opportunities we care about. Such as the one with Arbitrum here, around which we see great potential for impact that we still need to elaborate more on. Under the current structure we've had over 100 vetted contributors formally engaged in our programs, giving us a very deep pool of talent to tap into to meet emerging challenges. We'll highlight the backgrounds of the ones so far involved with AVI, as well as relevant previous work in the upcoming post.
However, I think the budget could be optimized. The current proposal’s budget is quite high and somewhat abstract: $1.5 million plus an additional $1 million in ARB bonuses. What are the expected returns for such a large amount? How is the ROI calculated? These details need to be clarified to gain broader support.
Why does just the creation of the fund and its maintenance cost 1-1.5 million dollars? How many employees are planned and with what tasks, what salaries?
It would also be good to have an understanding of what $750,000 will be spent on - why exactly this cost?
Working Group members, organizational, and compensation structure (and rationale for why is this run by a working group?)
These will be detailed in the upcoming Budget and Operational Plan deliverable of the AVI pilot. Thank you for raising these questions as it helps us respond more clearly to the various considerations. If there are more specific ones, please share them as well.
You are talking about managing capital from the treasury, but we have another initiative for this, which has already been voted for in Snapshot. How will you separate the functions and will you then have funds?
Treasury management and AVI have distinctly different objectives. One is related to putting the capital to work in a relatively safe way towards generating positive cashflow and growth of the balance sheet. AVI has to do with supporting builders and ecosystem development, while at the same time doing that in a financially sustainable way. Not necessarily bringing the proceeds in the treasury, but recycling them towards ecosystem growth.
I do not quite understand why a startup is asking for an exclusive contract in Arbitrum. This project has only recently been created and has not yet proven anything, how it can do anything.
It’s also not clear why, with a six-year mandate, in which the first year will mostly be setup, Farstar will only have a 1-year exclusivity deal.
cp0x, the contractual exclusivity terms proposed are one directional for the benefit of Arbitrum DAO, not the other way around.
This should have been expressed more clearly as it looks like it didn’t come across for multiple people. If the contract gets continued in some way after Phase 2, we are committed to offer an option exclusivity terms going forward too. There can be a right of first refusal agreement embedded at this stage as well.
If the DAO is going to invest in such critical investment infrastructure, we would prefer the vendor provide higher exclusivity, be produced in-house under OpCo, CapCo, or the Foundation, or simply fund a team that has demonstrated a deeper understanding of investment in the web3 space and has a portfolio and track record that delegates can evaluate.
We recognize this concern and it is the reason we set up AVI as a DAO originating initiative open to other contributors besides the people around Farstar. We’ve put a lot of thought in the direction of how to facilitate a genuine effective in-house solution for the creation of the CapCo (which is what this proposal is about). That being said there is a lot of nuance and need for getting in the details and we need to get the right stakeholder group engaged to delve in.
Has this been documented with both parties signing? Also, is there a plan to manage any disagreement that may arise between stakeholders and the Farstar team during the one-year partnership period?
Could you explain more about how the captive and non-captive programs will balance short-term needs with long-term goals? Is there a chance that focusing too much on one type could affect the other?
Managing such considerations on an ongoing basis will be the core function of the management team on FoF. We have some of our thoughts about the complimentary nature of the two articulated in a forum post that can be found here.
Lastly, the GCP, while not an outright failure, has not yet been proven successful. It feels somewhat premature to pursue both recommendations from their team when they are far from operational and for the DAO to pursue a similar structure at this time.
When we refer to the GCP we mean something very specific. Namely there is a lot of uncharted territory in terms of how to implement investments out of a DAO with an onchain treasury. After 6 months of work from the team there, AF, council to set up the legal structure and bylaws, it gives AVI a flying start by building on top of it.
Thanks for posting this and really love the ongoing discussions.
Few questions from this end:
Thanks for posting this and really love the ongoing discussions.
Few questions from this end:
Also, regarding Farstar:
Farstar agrees to 1-year exclusivity with Arbitrum upon passing this proposal. During this time Farstar will not work with other clients in the Web3 space.
While in general I do think this is a great idea I do think the DAO currents cost don't allow for this. The GCP hasn't brought any significant impact yet and yes its quite fresh but still needs to prove itself.
In my opinion the DAO should focus on other topics rather then investments. We are simply not there yet.
We appreciate all the work the team did to put together the report. While we align with the vision of managing partners incentivized to make long-term investments in Arbitrum's growth, and many of the "vehicles" appear to serve meaningful functions, there is insufficient detail on the operational budget, the expert council, the managing team, and investment strategy to support this proposal. There is also no convincing vision for ROI beyond vague mentions; understanding this early in the process, we'd prefer that delegates have a more concrete understanding of potential deliverables and returns (i.e., KPIs) given the size of the program and its ambition.
Without the following details, it's difficult to be optimistic about the Arbitrum Venture setup as proposed:
We appreciate all the work the team did to put together the report. While we align with the vision of managing partners incentivized to make long-term investments in Arbitrum's growth, and many of the "vehicles" appear to serve meaningful functions, there is insufficient detail on the operational budget, the expert council, the managing team, and investment strategy to support this proposal. There is also no convincing vision for ROI beyond vague mentions; understanding this early in the process, we'd prefer that delegates have a more concrete understanding of potential deliverables and returns (i.e., KPIs) given the size of the program and its ambition.
Without the following details, it's difficult to be optimistic about the Arbitrum Venture setup as proposed:
It's also not clear why, with a six-year mandate, in which the first year will mostly be setup, Farstar will only have a 1-year exclusivity deal. If the DAO is going to invest in such critical investment infrastructure, we would prefer the vendor provide higher exclusivity, be produced in-house under OpCo, CapCo, or the Foundation, or simply fund a team that has demonstrated a deeper understanding of investment in the web3 space and has a portfolio and track record that delegates can evaluate.
Lastly, the GCP, while not an outright failure, has not yet been proven successful. It feels somewhat premature to pursue both recommendations from their team when they are far from operational and for the DAO to pursue a similar structure at this time.
Thank you for the high-quality proposal report. The proposal, through the evergreen fund and multi-strategy approach, provides a stable investment framework for the development of Arbitrum’s ecosystem. This framework is promising for attracting more developers, projects, and capital over the next six years, driving long-term sustainable growth.
However, I think the budget could be optimized. The current proposal’s budget is quite high and somewhat abstract: $1.5 million plus an additional $1 million in ARB bonuses. What are the expected returns for such a large amount? How is the ROI calculated? These details need to be clarified to gain broader support.
Thank you for the high-quality proposal report. The proposal, through the evergreen fund and multi-strategy approach, provides a stable investment framework for the development of Arbitrum’s ecosystem. This framework is promising for attracting more developers, projects, and capital over the next six years, driving long-term sustainable growth.
However, I think the budget could be optimized. The current proposal’s budget is quite high and somewhat abstract: $1.5 million plus an additional $1 million in ARB bonuses. What are the expected returns for such a large amount? How is the ROI calculated? These details need to be clarified to gain broader support.
The initial investment direction is also unclear: what fields or projects are the $5 million to $15 million in initial investments targeting? Are there clear priorities? I suggest listing a detailed framework or breakdown for better understanding.
Lastly, more detailed planning for execution is crucial. Effective implementation is the most important aspect.
Regarding structure and governance, I would like to know more about the experienced team that will be managing investments and business development. It is crucial to know the background of these individuals before approving such a significant funding. I understand that you will be rebuilding the Farstar website, but I also believe it is important to see their portfolio of work before making a decision. For now, I will wait to meet the key people and learn about the company's history. Overall, I think a more transparent structure is needed regarding who will be responsible for activities that have not yet been mentioned. The uncertainty about the return on investment makes me inclined to abstain from voting or lean towards voting against the proposal.
I think this is a good proposal to discuss. We all understand how a venture fund can impact the long-term growth and reputation of an organization.
Like other delegates, I’d love to see clear KPIs, both for the selected projects and especially for Farstar’s performance. How will this help grow and generate value for the DAO?
I think this is a good proposal to discuss. We all understand how a venture fund can impact the long-term growth and reputation of an organization.
Like other delegates, I’d love to see clear KPIs, both for the selected projects and especially for Farstar’s performance. How will this help grow and generate value for the DAO?
Moreover, if some investments don’t pan out, what’s the plan to protect the DAO’s finances and minimize losses?
It seems like more discussion is needed before making a final decision.
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.
Thank you for sharing this detailed proposal. The idea of creating Arbitrum Ventures as a Multistrategy Evergreen Ecosystem Investment Fund is impressive and shows a thoughtful approach to growing the ecosystem.
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.
Thank you for sharing this detailed proposal. The idea of creating Arbitrum Ventures as a Multistrategy Evergreen Ecosystem Investment Fund is impressive and shows a thoughtful approach to growing the ecosystem.
We do have a few questions about some parts of the proposal:
Deploy $5–15M during the interim phase to fund strategic projects, while refining governance processes for long-term capital management.
The $5–$15M range seems quite broad. How will the team decide how much to allocate, and is there a backup plan if some of the investments don’t bring the expected results? Additionally, what process will be used to decide which projects to fund and which ones not to? Will there be clear criteria or community involvement in the decision-making?
We propose an evergreen investment vehicle with a multifaceted strategy featuring a portfolio of captive and non-captive investment programs.
Could you explain more about how the captive and non-captive programs will balance short-term needs with long-term goals? Is there a chance that focusing too much on one type could affect the other?
What will be the criteria for choosing the members of the Interim Expert Council? How will their experience guide the setup and growth of the fund?
Overall, this proposal shows great potential to help the Arbitrum ecosystem grow sustainably.
Hello! Thank you for the very detailed proposal.
I have many questions:
Hello! Thank you for the very detailed proposal.
I have many questions:
In general, I have already voiced my opinion on this issue, namely that best practices should be used, and this means using investment funds that already exist and can ensure proper management of funds. Creating a fund from scratch is a very interesting project, but expensive and without guarantees to even start investing, since only the organization of the structure is planned within a year, with a team that is a startup. I'm a big skeptic about this.
Hello! Thanks for putting this forward and for all the research being conducted in this topic.
I have one question at this point:
interesting proposal.
Let's fly over for now on the mention of the stip results which, to me, seems like not that relevant in here as introduction.
interesting proposal.
Let's fly over for now on the mention of the stip results which, to me, seems like not that relevant in here as introduction.
Idea here from what i read is to setup the basis, through a potential 15M initial capital + 1.5M opex + 1M arb in bonus, to create basically create the capco we have been speaking about for the last 6 months here and in other meetings. Executor would be farstar. It would include the legal setup of the entity, the comp of the team including bonuses. The long term plan is to have this consolidated toward a span of 6 years, with up to 1B in capitalization. All of this should come under the oversight umbrella of the DAO, through a committee/council/etc. Posting this to first have a sense check if i got the high level idea.
Assuming I did, few consideration on my side, totally personal.
In this proposal, I think there are several gaps.
To sum up: i am not against the initiative per se. I think it could be better aligned with the direction the DAO is taking (see opco, gcp, in which we basically source ceo/general partners/etc and then plug in people and service providers) and be more robust. In an extreme example, what would it happen for example if farstart, after 1y, decides to not renew the deal because another dao comes and wants to effectively have the exclusivity? Also, knowing that we are currently figuring out incentives and setting up the opco, is it the exact time to set capco up? Likely is worth starting to talk about this in a broader way. But the way this temp check is posed, it feels like we want to push it right out of the gate, assign a mandate and start scoping the initiative. I am not totally sure this is the exact time to do so, and maybe i am obviously wrong here.
In general I might be just jumping the gun here, not understanding that you indeed want a structure similar to OpCo in which you are service provider. And I might have been jumping the gun on a lot of things, so please let me know if i misinterpreted anything here. Remember as usual, I am just a cow.
Hi, thanks for submitting this proposal! To start, could you clarify who Farstar is? I’ve looked for information but haven’t been able to find anything substantial. It’s important to know who’s behind this proposal and if they have relevant experience in this area. Transparency about your background and expertise would help the community understand your qualifications to execute such an ambitious project.
Regarding the proposed one-year exclusivity with Arbitrum, I find this term unreasonable given the scale of the investment you're requesting. If Arbitrum DAO is committing millions to set up AVI from scratch, I would expect perpetual exclusivity to the Arbitrum ecosystem, not just a single year. One year feels like we’d be funding the foundation for you to potentially take elsewhere after a short period.
you’re raising a very valid point here! To be clear what you’re suggesting is very aligned with how we’re thinking about it, but perhaps some of the details need to be coined out. That’s why we’re quite focused on creating the Interim Experts Council from the DAO that would also have to work in managing these checks and balances. We’ll flesh out more details on how we envision the steps towards creating a fund and management structure, which is ultimately fully owned and controlled by the DAO in the Operational Plan and Budget deliverable from the AVI Pilot.
Thank you all for the questions and engagements!
Starting the responses with the questions from our resident cow @JoJo as they're quite spot on.
Let’s fly over for now on the mention of the stip results which, to me, seems like not that relevant in here as introduction.
Nice! Thanks for the clarification. I’m looking forward to the Phase 2!
I personally consider three points: budget allocation, the final outcomes of the proposal, and its risks.
“The proposal mentions an annual budget of $1.5 million, plus up to $1 million in performance-based ARB bonuses. This amount seems quite substantial. Could you provide a more detailed breakdown of how these funds will be allocated? For example, why does the ‘legal, corporate registration, and activity-related direct costs’ category require $750,000? What specific projects or activities are included in this? Additionally, the compensation for the expert committee is mentioned, but how much will it actually cost? Is there a more cost-efficient plan available?”
I like the overall idea, but I would like more information on several points, such as how the team will be formed, who the team members will be, what the investment mandate will be, how this will overlap with the Gaming Program, and what you estimate the yearly operating expenses (opex) to deploy the investments will be.
Thank you for the proposal Temp check
Thank you for your proposal! This is an excellent idea. It’s essential for Arbitrum DAO to establish a venture. Not only can it support high-quality projects within the ecosystem, but it can also attract outstanding external projects to migrate to Arbitrum.
I have a few questions:
Thank you for your proposal! This is an excellent idea. It’s essential for Arbitrum DAO to establish a venture. Not only can it support high-quality projects within the ecosystem, but it can also attract outstanding external projects to migrate to Arbitrum.
I have a few questions:
Hello! Thanks for putting this forward and for all the research being conducted in this topic.
I have one question at this point:
Thanks in advance!
Hi, thanks for submitting this proposal! To start, could you clarify who Farstar is? I’ve looked for information but haven’t been able to find anything substantial. It’s important to know who’s behind this proposal and if they have relevant experience in this area. Transparency about your background and expertise would help the community understand your qualifications to execute such an ambitious project.
Regarding the proposed one-year exclusivity with Arbitrum, I find this term unreasonable given the scale of the investment you're requesting. If Arbitrum DAO is committing millions to set up AVI from scratch, I would expect perpetual exclusivity to the Arbitrum ecosystem, not just a single year. One year feels like we’d be funding the foundation for you to potentially take elsewhere after a short period.
Finally, I want to echo Larva’s reply: Venture capital is fundamentally different from grants. The proposal should include clear KPIs to measure success. What is the expected minimum ROI for this initiative? Over what timeframe? And what benchmarks or similar initiatives would you compare your results to? These details are crucial for evaluating the proposal's feasibility and alignment with Arbitrum DAO’s goals.
Looking forward to your response!
you’re raising a very valid point here! To be clear what you’re suggesting is very aligned with how we’re thinking about it, but perhaps some of the details need to be coined out. That’s why we’re quite focused on creating the Interim Experts Council from the DAO that would also have to work in managing these checks and balances. We’ll flesh out more details on how we envision the steps towards creating a fund and management structure, which is ultimately fully owned and controlled by the DAO in the Operational Plan and Budget deliverable from the AVI Pilot.
this is likely the whole key point, beside amount of money, deal, exclusivity etc.
I will likely repeat myself here and be petulant.
While I think you can (and up to some degree should) advice on the creation of capco, you also likely should not manage directly this process. This is not due to mistrust on your team's skills or will; on the contrary, if there is anyone positioned to move forward the venture topic, is likely farstar. But the risk for the dao to have the company created by the same party that should also be one of the main service provider is just too high. Really, as much as in the opco, we need a ceo with a vision and capable of dripping it top down into the rest of the org, which would likely include both you, maybe other SP, some folks from the dao and some external folks. This is the only way we can build something resilient in time. 6 years is mid horizon in investment, and at the same time is several geological eras in crypto due to the speed of our industry, only way to execute is if we are able to plug in new pieces if old ones fall off over time.
Again, to reiterate and be crystal clear: is not about mistrust in you guys. Is about having something extremely robust.
And again sorry for being petulant. I just want to convey what to me would be the only deal breaker on an idea that, at high level, I support.
Thanks for setting up the discussion.
Thank you all for the questions and engagements!
Starting the responses with the questions from our resident cow @JoJo as they're quite spot on.
Let’s fly over for now on the mention of the stip results which, to me, seems like not that relevant in here as introduction.
Fair, we could have picked a different way to intro, the core argument is - if you develop a framework, which aims at returns and there are commercially and performance incentivised and accountable managers, it optimises the whole system for better outcomes. Including in some cases grants and incentive programs. This is the direction we want to bring forward, rather than criticise previous work.
Idea here from what i read is to setup the basis, through a potential 15M initial capital + 1.5M opex + 1M arb in bonus, to create basically create the capco we have been speaking about for the last 6 months here and in other meetings. Executor would be farstar. It would include the legal setup of the entity, the comp of the team including bonuses. The long term plan is to have this consolidated toward a span of 6 years, with up to 1B in capitalization. All of this should come under the oversight umbrella of the DAO, through a committee/council/etc. Posting this to first have a sense check if i got the high level idea.
Role of Farstar: Farstar will serve as the executor and principal facilitator in setting up the CapCo. This means we’ll collaborate with other contributors and groups within the DAO to determine the best structure for the CapCo and develop its investment strategy. The final budget being proposed is to provision for that. All of this will happen under the guidance and oversight of the Interim Expert Council, and we will begin these discussions once this council is established.
Long-Term Plan and Capitalization: While we have a six-year plan to reach an evergreen state, it doesn’t rely on the DAO investing $1 billion from the treasury. In fact the whole point of the current approach is, so we can be able to start a few very small investment programs, but be able to very rapidly scale them up within a robust framework. That being said we are stressing that we need to consider that the CapCo might end up with over $1B AUM, either because of more investment capital proposals being passed in the future, or because of recycling of returns from earlier ones, so we need to future proof accordingly.
Initial Capital and Short-Term Needs: The proposed $5-15 million isn’t an immediate commitment to deploy funds as we would with formal investment mandates. Instead, it’s intended to create a facility that addresses short-term needs while the mature CapCo structure is being established. In fact these funds might not be invested at all and we could end up with proper long term mandates directly. Setting up this facility might be part of the same or a separate Tally proposal. Since there are still open questions about how best to handle this, we’ll conduct a separate temperature check after this one covering the CapCo’s operational expenses and approach is solidified. This would make it easier to reason about these initial investments.
This is absolutely right. Stay tuned for an upcoming post on how we should think about investment thesis toward growing the ecosystem. This is part of the deliverables of the AVI Pilot.
2. The structure. This is the start of capco, which i am not against. I am actually in favor. But is following a different path from the opco. Specifically in here we will have farstar working on setting up the capco and signing a 1y exclusivity deal. I am not sure this is in the best interest of the DAO: is the DAO that would have to come up with the CapCo and potentially hire farstar as service provider. I also understand that this initiative should be spearheaded by someone and makes sense for you to come forward,
3. The timeline and deal. We have a 6y forecasted plan, but an initial 1y exclusivity clause. Not saying I am against, saying numbers feels wacky in this way, because you are proposing here a 1B+ capital in 6 year, but with a 1y exclusivity with 15M which is 1.5% of the sum planned.
@Larva, thank you for the comment and questions!
Will the projects you invest in be limited to the Arbitrum ecosystem, or will they include the broader Web3 space?
We'll elaborate on that in the full reports as well, as the answers are necessarily too in depth to place here. But generally speaking neither the council nor the DAO are to input in day to day investment decisions. Rather every program will have its own process and Investment Committee. In terms of KPIs they'd be financial and Strategic. The general thinking will be outlined in the Strategic Recommendations deliverable, but the details would be figured out during Phase 2 and the specific investment mandates.
Hi, thanks for submitting this proposal! To start, could you clarify who Farstar is? I’ve looked for information but haven’t been able to find anything substantial.
We dropped our previous website for the current pivot and haven't published a new one yet. However we're planning to do forum posts covering the key people and company background. Stay tuned.
Regarding the proposed one-year exclusivity with Arbitrum, I find this term unreasonable given the scale of the investment you’re requesting. If Arbitrum DAO is committing millions to set up AVI from scratch, I would expect perpetual exclusivity to the Arbitrum ecosystem, not just a single year. One year feels like we’d be funding the foundation for you to potentially take elsewhere after a short period.
“The proposal mentions an annual budget of $1.5 million, plus up to $1 million in performance-based ARB bonuses. This amount seems quite substantial. Could you provide a more detailed breakdown of how these funds will be allocated?
For example, why does the ‘legal, corporate registration, and activity-related direct costs’ category require $750,000? What specific projects or activities are included in this?
This is currently just a provision and we are working with Arbitrum Foundation to figure out the lessons learned from the GCP in order to plan more specifically, which will all happen before going to Tally as mentioned.
“You plan to deploy this investment initiative over six years, but could you first clarify the specific milestones or goals for the first year or the initial two years? For instance, how many investments are expected to be completed in the first year?
@Gabriel we'll expand on these points as well. As you asked fairly broad questions, some of which have already been discussed quite a bit, are you up for a call to go over and we can then bring back the key points to forum?
I personally consider three points: budget allocation, the final outcomes of the proposal, and its risks.
“The proposal mentions an annual budget of $1.5 million, plus up to $1 million in performance-based ARB bonuses. This amount seems quite substantial. Could you provide a more detailed breakdown of how these funds will be allocated? For example, why does the ‘legal, corporate registration, and activity-related direct costs’ category require $750,000? What specific projects or activities are included in this? Additionally, the compensation for the expert committee is mentioned, but how much will it actually cost? Is there a more cost-efficient plan available?”
“You plan to deploy this investment initiative over six years, but could you first clarify the specific milestones or goals for the first year or the initial two years? For instance, how many investments are expected to be completed in the first year? What are the objectives of these investments? Will there be measurable returns? Also, isn’t the $1.5 million budget for the first year overly focused on ‘building the framework’ rather than actual investment execution?”
“The fund aims to become an ‘evergreen’ investment tool, but have you assessed the potential risks of investment failures? For example, if some projects fail, how much impact would this have on the Arbitrum ecosystem? How can we ensure that this fund won’t turn into a ‘high-risk, high-spending, low-return’ experiment?”
Hello! Thanks for putting this forward and for all the research being conducted in this topic.
I have one question at this point:
Thanks in advance!
Hi, thanks for submitting this proposal! To start, could you clarify who Farstar is? I’ve looked for information but haven’t been able to find anything substantial. It’s important to know who’s behind this proposal and if they have relevant experience in this area. Transparency about your background and expertise would help the community understand your qualifications to execute such an ambitious project.
Regarding the proposed one-year exclusivity with Arbitrum, I find this term unreasonable given the scale of the investment you're requesting. If Arbitrum DAO is committing millions to set up AVI from scratch, I would expect perpetual exclusivity to the Arbitrum ecosystem, not just a single year. One year feels like we’d be funding the foundation for you to potentially take elsewhere after a short period.
Finally, I want to echo Larva’s reply: Venture capital is fundamentally different from grants. The proposal should include clear KPIs to measure success. What is the expected minimum ROI for this initiative? Over what timeframe? And what benchmarks or similar initiatives would you compare your results to? These details are crucial for evaluating the proposal's feasibility and alignment with Arbitrum DAO’s goals.
Looking forward to your response!
you’re raising a very valid point here! To be clear what you’re suggesting is very aligned with how we’re thinking about it, but perhaps some of the details need to be coined out. That’s why we’re quite focused on creating the Interim Experts Council from the DAO that would also have to work in managing these checks and balances. We’ll flesh out more details on how we envision the steps towards creating a fund and management structure, which is ultimately fully owned and controlled by the DAO in the Operational Plan and Budget deliverable from the AVI Pilot.
this is likely the whole key point, beside amount of money, deal, exclusivity etc.
I will likely repeat myself here and be petulant.
While I think you can (and up to some degree should) advice on the creation of capco, you also likely should not manage directly this process. This is not due to mistrust on your team's skills or will; on the contrary, if there is anyone positioned to move forward the venture topic, is likely farstar. But the risk for the dao to have the company created by the same party that should also be one of the main service provider is just too high. Really, as much as in the opco, we need a ceo with a vision and capable of dripping it top down into the rest of the org, which would likely include both you, maybe other SP, some folks from the dao and some external folks. This is the only way we can build something resilient in time. 6 years is mid horizon in investment, and at the same time is several geological eras in crypto due to the speed of our industry, only way to execute is if we are able to plug in new pieces if old ones fall off over time.
Again, to reiterate and be crystal clear: is not about mistrust in you guys. Is about having something extremely robust.
And again sorry for being petulant. I just want to convey what to me would be the only deal breaker on an idea that, at high level, I support.
Thanks for setting up the discussion.
Thank you all for the questions and engagements!
Starting the responses with the questions from our resident cow @JoJo as they're quite spot on.
Let’s fly over for now on the mention of the stip results which, to me, seems like not that relevant in here as introduction.
Fair, we could have picked a different way to intro, the core argument is - if you develop a framework, which aims at returns and there are commercially and performance incentivised and accountable managers, it optimises the whole system for better outcomes. Including in some cases grants and incentive programs. This is the direction we want to bring forward, rather than criticise previous work.
Idea here from what i read is to setup the basis, through a potential 15M initial capital + 1.5M opex + 1M arb in bonus, to create basically create the capco we have been speaking about for the last 6 months here and in other meetings. Executor would be farstar. It would include the legal setup of the entity, the comp of the team including bonuses. The long term plan is to have this consolidated toward a span of 6 years, with up to 1B in capitalization. All of this should come under the oversight umbrella of the DAO, through a committee/council/etc. Posting this to first have a sense check if i got the high level idea.
Role of Farstar: Farstar will serve as the executor and principal facilitator in setting up the CapCo. This means we’ll collaborate with other contributors and groups within the DAO to determine the best structure for the CapCo and develop its investment strategy. The final budget being proposed is to provision for that. All of this will happen under the guidance and oversight of the Interim Expert Council, and we will begin these discussions once this council is established.
Long-Term Plan and Capitalization: While we have a six-year plan to reach an evergreen state, it doesn’t rely on the DAO investing $1 billion from the treasury. In fact the whole point of the current approach is, so we can be able to start a few very small investment programs, but be able to very rapidly scale them up within a robust framework. That being said we are stressing that we need to consider that the CapCo might end up with over $1B AUM, either because of more investment capital proposals being passed in the future, or because of recycling of returns from earlier ones, so we need to future proof accordingly.
Initial Capital and Short-Term Needs: The proposed $5-15 million isn’t an immediate commitment to deploy funds as we would with formal investment mandates. Instead, it’s intended to create a facility that addresses short-term needs while the mature CapCo structure is being established. In fact these funds might not be invested at all and we could end up with proper long term mandates directly. Setting up this facility might be part of the same or a separate Tally proposal. Since there are still open questions about how best to handle this, we’ll conduct a separate temperature check after this one covering the CapCo’s operational expenses and approach is solidified. This would make it easier to reason about these initial investments.
This is absolutely right. Stay tuned for an upcoming post on how we should think about investment thesis toward growing the ecosystem. This is part of the deliverables of the AVI Pilot.
2. The structure. This is the start of capco, which i am not against. I am actually in favor. But is following a different path from the opco. Specifically in here we will have farstar working on setting up the capco and signing a 1y exclusivity deal. I am not sure this is in the best interest of the DAO: is the DAO that would have to come up with the CapCo and potentially hire farstar as service provider. I also understand that this initiative should be spearheaded by someone and makes sense for you to come forward,
3. The timeline and deal. We have a 6y forecasted plan, but an initial 1y exclusivity clause. Not saying I am against, saying numbers feels wacky in this way, because you are proposing here a 1B+ capital in 6 year, but with a 1y exclusivity with 15M which is 1.5% of the sum planned.
@Larva, thank you for the comment and questions!
Will the projects you invest in be limited to the Arbitrum ecosystem, or will they include the broader Web3 space?
We'll elaborate on that in the full reports as well, as the answers are necessarily too in depth to place here. But generally speaking neither the council nor the DAO are to input in day to day investment decisions. Rather every program will have its own process and Investment Committee. In terms of KPIs they'd be financial and Strategic. The general thinking will be outlined in the Strategic Recommendations deliverable, but the details would be figured out during Phase 2 and the specific investment mandates.
Hi, thanks for submitting this proposal! To start, could you clarify who Farstar is? I’ve looked for information but haven’t been able to find anything substantial.
We dropped our previous website for the current pivot and haven't published a new one yet. However we're planning to do forum posts covering the key people and company background. Stay tuned.
Regarding the proposed one-year exclusivity with Arbitrum, I find this term unreasonable given the scale of the investment you’re requesting. If Arbitrum DAO is committing millions to set up AVI from scratch, I would expect perpetual exclusivity to the Arbitrum ecosystem, not just a single year. One year feels like we’d be funding the foundation for you to potentially take elsewhere after a short period.
“The proposal mentions an annual budget of $1.5 million, plus up to $1 million in performance-based ARB bonuses. This amount seems quite substantial. Could you provide a more detailed breakdown of how these funds will be allocated?
For example, why does the ‘legal, corporate registration, and activity-related direct costs’ category require $750,000? What specific projects or activities are included in this?
This is currently just a provision and we are working with Arbitrum Foundation to figure out the lessons learned from the GCP in order to plan more specifically, which will all happen before going to Tally as mentioned.
“You plan to deploy this investment initiative over six years, but could you first clarify the specific milestones or goals for the first year or the initial two years? For instance, how many investments are expected to be completed in the first year?
@Gabriel we'll expand on these points as well. As you asked fairly broad questions, some of which have already been discussed quite a bit, are you up for a call to go over and we can then bring back the key points to forum?
I personally consider three points: budget allocation, the final outcomes of the proposal, and its risks.
“The proposal mentions an annual budget of $1.5 million, plus up to $1 million in performance-based ARB bonuses. This amount seems quite substantial. Could you provide a more detailed breakdown of how these funds will be allocated? For example, why does the ‘legal, corporate registration, and activity-related direct costs’ category require $750,000? What specific projects or activities are included in this? Additionally, the compensation for the expert committee is mentioned, but how much will it actually cost? Is there a more cost-efficient plan available?”
“You plan to deploy this investment initiative over six years, but could you first clarify the specific milestones or goals for the first year or the initial two years? For instance, how many investments are expected to be completed in the first year? What are the objectives of these investments? Will there be measurable returns? Also, isn’t the $1.5 million budget for the first year overly focused on ‘building the framework’ rather than actual investment execution?”
“The fund aims to become an ‘evergreen’ investment tool, but have you assessed the potential risks of investment failures? For example, if some projects fail, how much impact would this have on the Arbitrum ecosystem? How can we ensure that this fund won’t turn into a ‘high-risk, high-spending, low-return’ experiment?”