Entropy Advisors was started by Matt Fiebach and Sam Martin with the vision of turning DAOs into sustainable and efficient organizations, and was bootstrapped via an Arbitrum Foundation grant. As the first two employees at Blockworks Research, we felt the vision of what DAOs could deliver versus what they actually resembled in reality warranted more dedicated attention from a team passionate about the potential impact DAOs could have on an ecosystem. It has now been 14 months since Entropy Advisors was incorporated, and while we have accomplished a lot, there is a vast amount of work that remains.
As this term comes to a close on August 31st, we want to take the opportunity to say thank you to those in the Arbitrum community who have supported our team and given us a path to make an impact on such a large stage by funding us through our first DAO proposal. Without the Arbitrum DAO, Entropy Advisors would not have been possible.
This proposal is to extend our partnership with the DAO for two additional years. If passed, our second official engagement would go into effect on September 1, 2025, immediately following the conclusion of our first mandate. Entropy Advisors’ exclusive focus over the next two years is transforming Arbitrum into the most effective capital allocating DAO in crypto, leveraging treasury strategy, incentives design, data, and special projects to drive compounding, sustainable ecosystem growth
We invite everyone to review our initial proposal and reflect on our successes and failures, and to provide candid feedback to our team as we begin the process towards a second term.
Proposals-as-a-Service (PaaS)* Neutral Proposal Broker
- Hold introductory strategy meetings with key Arbitrum stakeholders and partners to help them navigate the DAO. Facilitate introductions between delegates, contributors, DAO leaders, and key strategic partners.
- Assist with drafting and delivering proposals from select third parties to the DAO.
- Proposal Incubation
- Facilitate the oversight and creation of neutral DAO frameworks and initiatives that do not benefit Entropy and only have the DAO’s best interests in mind.
- The idea behind Entropy is to assemble a team composed of highly capable DAO contributors with differing perspectives and expertises—we will use our collective brain power to create proposals that benefit Arbitrum over the long term and are aligned with community priorities.
- Enable the DAO to expedite and refine proposals more precisely, addressing the recurring issue of proposals being approved without sufficient details on execution and long-term planning.### Strategy and Ecosystem Alignment* Serve as the liaison between Arbitrum’s key stakeholders
- Host meetings with key stakeholders and report needs and updates between the relevant parties. Report notes to DAO when able.
- Turn conversations and takeaways into an actionable plan and begin executing.
- Product and Strategy
- Regularly discuss with application developers within the Arbitrum ecosystem, relay this information to development teams/the Foundation, and use the insights to create discussions with clear goals on the Arbitrum governance forum.
- Assist the key stakeholders on partnerships/integrations as needed. We will serve as an extra set of eyes to highlight emerging technologies and trends within crypto, aiding Arbitrum parties when we can be helpful.
- Generally speaking, ensure that the Arbitrum DAO is on track to becoming a sustainable entity with sensible spending and a focus on profit generation.
Full-time Arbitrum DAO: We grew the team from just Sam and Matt to 8 full-time and 1 intern, and we remain laser-focused on attracting the highest quality talent in the space to commit themselves exclusively to Arbitrum. While we believe that we have formed a very strong team thus far, the composition of our team will always be a top priority to ensure we have the tools at our disposal to serve the ecosystem with high-quality execution. In the coming year, we would like to continue growing as needs arise: more data analytics help, applied researchers, TradFi converts, and those with early-stage experience are at the top of mind, with a goal of scaling beyond 10 members on our team.
Beyond Proposals: Over the past year, Entropy has evolved beyond just a proposals shop and become a recognizable, consistent face of the Arbitrum DAO in the broader crypto community. From press to partnerships, conferences to committees, we’ve built a strong reputation for professionalism, reliability, and alignment. Our ability to foster trust across stakeholders from Offchain Labs and the Foundation to top investors, asset managers, and builders has been one of our most important assets, and something we intend to amplify in years 2 and 3. We recognize that this is where we have produced the most value throughout our first year and aim to continue to grow into our strengths. On countless occasions, we have joined Offchain Labs and Arbitrum Foundation’s partnerships teams in helping outline strategy and closing deals. With some blue-chip ecosystem partners, Entropy works as their main point of contact in Arbitrum. We have grown into a trusted tool augmenting existing AAEs.
Syncing Stakeholders: We are happy with our output over the past ~year in regards to the first two deliverables we outlined (see above). We hosted three (a fourth is planned for EthCC) “Delegate Days” in Brussels, Bangkok, and Denver over the past year, where we gathered large delegates, members from Offchain Labs and the Arbitrum Foundation, and other stakeholders to align on key objectives over the subsequent quarter(s). We also hosted key stakeholder calls with the same groups once per month in an effort to align on high-importance topics that require attention in the near term. Entropy has also been speaking with OCL, the AF, and key delegates and ecosystem contributors every two weeks to streamline communications across the ecosystem. These efforts are quite time-consuming, but have proven to lead to some of our most impactful work over the past year.
Strategic Proposals: We successfully passed a plethora of proposals authored internally, as well as assisted third parties in drafting proposals to the DAO or submitting applications to DAO-led programs. Some examples here include Govhack Brussels, the MSS, The Ethereum Attackathon Sponsorship, leading the ARB staking working group and bolstering the quality of contributors to the research (bringing in Vending Machine and ASXN to assist), the Delegate Code of Conduct, establishing an events budget, getting treasury management moving forward after a long stagnation through the v1.2 proposal, leading the STEP II committee, moving forward with the MVP exercise to align stakeholders, our DRIP proposal to reignite incentives/support for builders and users, the Stylus Sprint, assisting Max Lomu with his chain abstraction proposal, etc. We can’t touch on all of them here, but please refer to our forum profile for more information.
Importantly, in many cases, we evaluated whether supporting external contributors/committees or internalizing portions of execution made the most sense for the DAO. In some instances, we chose to execute internally, not because we wanted less external contribution, but because we deemed it the most efficient, high-context, and cost-effective way to get things done. Our north star has always been to make DAO execution smoother, more strategic, and resource-efficient. Sometimes that meant helping third parties structure their ideas, but other times it meant owning the process ourselves to ensure tighter execution, lower overhead, and greater accountability.
OpCo Groundwork: We also laid the groundwork for a more expedited proposal process by helping mold the new direction for the Arbitrum DAO, which was recently posted by the AF, and we also created the OpCo proposal that should make working with the DAO a much smoother process from the perspective of service providers.
We expect OpCo to pick up the portion of the aforementioned work that relates to key stakeholder alignment and coordination once it is fully operational. Aligning all the largest stakeholders in the ecosystem in order to allow for more effective operations was a massive undertaking and took a large amount of our bandwidth over the course of our first year. Despite the large investment of time and resources, we believe the groundwork has been laid for a more fruitful future for the Arbitrum DAO.
Learning from Mistakes: While we feel as though we did a great job on setting the DAO’s future, more efficient path, we certainly fell short on numerous occasions. For example, there were some instances in which we poorly communicated with certain ecosystem participants during application processes. As members of the GMC, many protocols that have sunk significant resources into the ecosystem felt overlooked and undercommunicated with. Our team has since shifted focus to improving our relationships with Arbitrum builders and to being more mindful in providing feedback to applicants by overcommunicating. We also realize that our scope of work was extremely wide in our first proposal, and our deliverables have evolved quite a lot since our engagement started, which might have led to some confusion in the wider community around what Entropy’s role actually is. Our wins have taught us a lot, but our mistakes even more, and we are committed to making corrections based on our learnings throughout our first year in our second engagement.
Data and Brand Building* Build up a high-value brand through various mediums, such as X/Twitter with educational content and research, YouTube/Apple/Spotify through a podcast, and email through weekly newsletters.
- Bring visibility into DAO initiatives and RFPs.
- Represent the DAO professionally and with a demeanor that the community can be proud of.
- Aid DAO-funded organizations like the ARDC and OBL in conducting research and analytics to inform proposal development.
- Utilize data analytics to help the DAO with accountability and transparency around its initiatives.
Arbitrum Analytics: In terms of data and brand building, we are very happy with our output over our first ~year. Our data team has created the go-to Dune catalog for those looking for greater insight into the Arbitrum ecosystem. It is worth noting that our data team did not begin work until around the end of December, so we have accomplished a lot here in very little time. We have had numerous investors not currently involved in the Arbitrum ecosystem reach out in admiration, which we believe will have a positive downstream impact that is not easily quantifiable. We have also seen our charts shared across dozens of large accounts on X, featured in blogs and news articles, and referred to during big moments for the ecosystem, such as the rollout of Timeboost. We have created a DAO financials dashboard to give delegates better insight into how the DAO spends/earns money, a dashboard that enables delegates to dissect various proposals at a granular level, an RWA case study, a DAO treasury dashboard showing all the assets it owns, and more.
Data as a Growth Support Mechanism: We also learned that data transparency can serve as a great tool for both increasing our reach across various crypto communities as well as improving relationships on the BD front with builders. This complements the goal stated in the previous section of helping to onboard 3rd parties into the ecosystem. For example, we created the most comprehensive data overview of Ethena, which caught the team’s attention. Members of Entropy then worked with OCL to coordinate a trip to the UK at the end of 2024 to meet the Ethena team as they were deciding which tech stack to deploy Converge on. In April 2025, we saw these efforts pay off with Ethena and Securitize choosing the Arbitrum stack.
We have ambitions to aid more builders within the Arbitrum ecosystem as a support mechanism, and to continue building resources that serve as both marketing material and a BD tool. Where we fell short on brand relative to our original proposal was podcast content/weekly newsletters. While we view this content as valuable, we simply did not have the bandwidth to prioritize these types of initiatives when considering the high-importance items we needed to facilitate. Additionally, we see room for growth as we expand our content outside of solely Arbitrum core and into the Arbitrum ecosystem. Over the next 2 years, we will create more dashboards that cover apps and infra that are well-positioned to support the expansion of the Arbitrum tech stack, with the goal of encouraging more partners to consider an Arbitrum deployment/support.
Recognition by News Outlets: We regularly post threads on X and LinkedIn that highlight important initiatives that are ongoing in the Arbitrum DAO, but we do know that we need to expand our reach to maximize our impact. Members of the Entropy team have been quoted in The Block, Blockworks, CoinDesk, Unchained, and Yahoo Finance about our work in Arbitrum on numerous occasions. Additionally, we have represented Arbitrum on a few podcasts. at multiple conferences, and even in an official Arbitrum marketing video. Although we have plenty of room to keep improving our public brand, we are happy with the growth in the first year.
Acknowledgment by Investors: Large ARB token holders have evidently taken notice of our ability to push forward initiatives, be more critical of each individual spending request, and our focus on ecosystem growth, long-term sustainability, and revenue diversification, which has manifested through our rise in voting power. Our ascension to the top of the ARB delegates by voting power is a responsibility we do not take lightly, and is something we are really proud of. In our opinion, this signals to us that we are prioritizing the right things and are in the early stages of helping steward the DAO’s path forward.
Now that it’s increasingly likely that the DAO’s operational structure will include officially recognized AAEs, the path has been paved for Entropy Advisors to shift our focus more fully toward growth, sustainability, and strategic execution. While the OpCo comes to fruition, Entropy will continue to support operations- and oversight-focused initiatives that require continuity. Topics like administering the ARB Staking Working Group, supporting ARDC v2, leading programs like Watchdog and MSS, and maintaining the Delegate Code of Conduct will likely transition over to OpCo, and we will be here to ensure a smooth handoff. We expect this transition to be ongoing throughout the entirety of 2025, with the operations-related workload easing on Entropy’s end by the beginning of 2026.
Entropy Advisors’ singular focus over the next two years is to help the Arbitrum DAO mature into a disciplined capital allocator. We will spearhead building an organization that drives compounding, sustainable ecosystem growth.
Arbitrum is now positioned to act more like a sovereign wealth fund: managing a composable treasury, deploying capital with strategic intent, and aligning incentives to deepen protocol adoption and ecosystem loyalty. Entropy’s work across treasury design and management, incentive architecture, data transparency, and ecosystem relationships will operate in tandem to realize this vision.
The strategy boils down to:
In short, we stop throwing darts at the wall and start designing growth: capital-efficient, data-informed, and strategically aligned.
Our high-level objectives to achieve the above strategy are as follows, with more details in each deliverable section below:
Ultimately, our primary goal through 2027 is to make Arbitrum the leading tech stack for builders, institutions, innovators, and users alike; powered by a sustainable flywheel of compounding growth leading to value generation.
Entropy will work closely with AAEs, vendors, and ecosystem teams to build out the DAO’s core financial infrastructure. We believe that the long-term viability of the Arbitrum DAO hinges on prudent asset management, disciplined budgeting, and strategic cash flow deployment to generate additional income, compound growth, and deepen our ecosystem’s liquidity while supporting integral builders. It’s worth emphasizing that while we work on financially sound structures, growth will always be at the forefront of our work in the ecosystem.
Our responsibilities here will include:
Ultimately, our goal is to provide the DAO with the tools, data, and guidance necessary to fund innovation responsibly, while positioning Arbitrum to be financially self-sustaining over the coming years.
We believe incentives will play a major role in Arbitrum’s next phase of growth, especially given the increased attention on dapp performance and ecosystem competitiveness. Our team will build upon the groundwork laid in the DRIP proposal to establish a long-term incentives strategy.
Key areas of focus:
Entropy’s goal is to bring structure and discipline to a chaotic incentives landscape. We see ourselves as the party relentlessly focused on continuous iteration, eliminating inefficiencies, and driving outcomes.
We plan to double down on our ecosystem data work, expanding the scope and sophistication of our analytics to support every aspect of DAO decision making, while also serving as a protocol support mechanism that endorses native builders and attracts new builders, with the added benefit of increasing the ecosystem’s social presence. Both of the prior-listed roles around treasury management and incentives include analytics, but the data team will have an expanded scope outside of these 2 already time-intensive categories.
Key priorities:
Based on our experience, utilizing data services as a BD and support tool is an extremely powerful way to attract and entrench new protocols into the Arbitrum ecosystem. Providing these types of services is a valuable opportunity for Arbitrum to expand its brand reach and, as we’ve observed, having the ability to offer white glove treatment increases the likelihood of capturing interest from top-tier institutions and builders. Having said that, these white glow services are highly time-consuming on average, and under no circumstances do we want to divert our teams’ capacity away from facilitating initiatives that directly benefit the DAO without the certainty of conversion. Given these circumstances, there may be certain projects that are complementary to Arbitrum and are deemed as high potential for the ecosystem. In these cases, it may make sense to ramp up project-specific capacity and thus support the ecosystem both directly through ecosystem-focused efforts and indirectly through BD-related data services. In these scenarios, the Arbitrum Foundation will have the ability to waive Entropy’s exclusivity on a case-by-case basis.
Entropy Data will be the connective tissue that powers smarter treasury decisions, sharper incentives, and more compelling narratives, while serving as a support mechanism for builders, institutions, and partners entering the Arbitrum ecosystem.
Entropy Advisors will continue to act as a neutral strategic arm and flexible generalist operator for the DAO, identifying high-impact and ad hoc initiatives that fall outside traditional workstreams or require a novel approach. These are the thorny, under-owned, cross-functional, and/or politically sensitive deliverables that the DAO may struggle to tackle without a coordinated, trusted group stepping in. In many cases, the OpCo will be best suited to pick up some of this work with regard to occasional operational requirements, but given Entropy’s team composition, we may be best positioned for certain tasks based on our existing skillsets and relationships.
Examples of special projects include:
We will remain flexible in this vertical, focusing on initiatives that drive high strategic value but may lack an existing home within the DAO’s organizational structure. It may be necessary to approve ideas that Entropy will take on via a DAO vote if these initiatives require excess budgets beyond what Entropy itself can afford.
The DAO naturally retains the option to terminate this agreement through a standard forum → Snapshot process, requiring 3% of the votable token supply to vote in favor of the termination. Quarterly transparency reports will be directly shared with the Arbitrum Foundation at their request, which will have the ability to move a forum post forward with the same structure for termination. If the Snapshot proposal passes, the DAO can terminate the agreement with Entropy Advisors, effective on the last day of the month in which the Snapshot passes, effectively stopping any future payment from accruing at that moment. In this scenario, all funds earmarked (but unearned) for Entropy Advisors’ future base payments and the remaining funds of the 10M ARB set aside for incentive alignment will be returned to the DAO by the Foundation.
Once the OpCo has been sufficiently operationalized, Entropy Advisors will operate under the assumption that OpCo will be Entropy’s counterparty that will represent the DAO and act as its proxy. Moreover, we will continue sharing monthly updates with the DAO.
After reaching out to some larger delegates and key stakeholders to get feedback on how Entropy Advisors should proceed forward, it has become clear that a 2-year term mandate is desired to ensure alignment over a sufficient period of time in order to accomplish the aforementioned goals. Therefore, we are proposing to work with the Arbitrum DAO for 2 years from September 1st 2025 through August 31st 2027. We propose a base pay of $3M per year, a ~$500k per year increase versus our first term, as we have ambitions to grow the team to internalize key functions related to data, incentives, and treasury management.
In addition to our base pay, and in an effort to achieve long-term alignment with the Arbitrum ecosystem, we propose a 5M ARB allocation to Entropy Advisors that will be locked in a vesting contract with a 1-year cliff and 3-year vest. In addition to the 5M ARB allocation, 10M ARB will be set aside for the OAT to negotiate directly with Entropy Advisors on establishing short, medium, and long-term incentive mechanisms. These mechanisms may include, but not be limited to, milestone-based payments, an equity investment into Entropy Advisors, bonuses related to Entropy exceeding expectations, etc. The Arbitrum Foundation will custody this 10M ARB, and must adhere to any agreement made between the OAT and Entropy Advisors. It is also worth noting that any terms related to an equity investment may fall under NDA. Our goal is to ensure the entire Entropy Advisors team has a large incentive to see Arbitrum win, and to ensure we remain committed to Arbitrum significantly into the future. It is also our goal to ensure the Arbitrum DAO can hedge its exposure to Entropy Advisors and enjoy the benefits of its future growth.
In total, we are requesting the transfer of $6M in ARB (covering 2 years) + a 100% buffer + 15M ARB to the Arbitrum Foundation. $6M worth of ARB will be liquidated immediately upon the passing of this proposal on Tally. 5M ARB will be put into a vesting contract by the Arbitrum Foundation in accordance with the vest above and 10M ARB to remain in custody of the Foundation for the OAT / Entropy alignment mechanisms. The remainder of the funds will be returned to the DAO treasury immediately thereafter. The vesting contract cliff will begin on September 1, 2025, regardless of the timing the actual vesting contract is launched (backdated if needed).
The Entropy Team will be eligible to claim regular monthly payments of $250,000 from the Arbitrum Foundation throughout the 24-month term. Payments that have accrued can be claimed at any time. If the DAO passes a Snapshot to end its engagement with Entropy Advisors, it will be considered binding on the final day of the same month it passes, and Entropy will be ineligible to accrue any further payments.
We are nullifying the terms in our Year 1 engagement proposal that stipulate the DAO will vote on a bonus for the first year of our services, and instead replace it with this structure. The ARB allocated as a potential bonus that is in the AF’s possession related to our first engagement should be repurposed at the Foundation’s discretion to cover this engagement proposal, or be returned to the DAO treasury if not required to do so. It is also important to note that Entropy Advisors did not claim the full $205,834 monthly allotments from the first engagement proposal for the first 4 months of service, so the Arbitrum Foundation should have ~$423,336 of additional funds slated to be returned to the DAO. However, we propose allowing the Arbitrum Foundation to use these additional funds to cover a portion of Entropy’s next 2 year engagement (assuming this proposal passes) to minimize ARB sales if it wishes to do so.
Entropy will be abstaining from voting on this proposal due to a clear COI. We look forward to the opportunity of continuing our work in the Arbitrum DAO over the coming years. Entropy Advisors is all-in on Arbitrum, and we look forward to winning together.
Entropy Advisors was started by Matt Fiebach and Sam Martin with the vision of turning DAOs into sustainable and efficient organizations, and was bootstrapped via an Arbitrum Foundation grant. As the first two employees at Blockworks Research, we felt the vision of what DAOs could deliver versus what they actually resembled in reality warranted more dedicated attention from a team passionate about the potential impact DAOs could have on an ecosystem. It has now been 14 months since Entropy Advisors was incorporated, and while we have accomplished a lot, there is a vast amount of work that remains.
As this term comes to a close on August 31st, we want to take the opportunity to say thank you to those in the Arbitrum community who have supported our team and given us a path to make an impact on such a large stage by funding us through our first DAO proposal. Without the Arbitrum DAO, Entropy Advisors would not have been possible.
This proposal is to extend our partnership with the DAO for two additional years. If passed, our second official engagement would go into effect on September 1, 2025, immediately following the conclusion of our first mandate. Entropy Advisors’ exclusive focus over the next two years is transforming Arbitrum into the most effective capital allocating DAO in crypto, leveraging treasury strategy, incentives design, data, and special projects to drive compounding, sustainable ecosystem growth
We invite everyone to review our initial proposal and reflect on our successes and failures, and to provide candid feedback to our team as we begin the process towards a second term.
Proposals-as-a-Service (PaaS)* Neutral Proposal Broker
- Hold introductory strategy meetings with key Arbitrum stakeholders and partners to help them navigate the DAO. Facilitate introductions between delegates, contributors, DAO leaders, and key strategic partners.
- Assist with drafting and delivering proposals from select third parties to the DAO.
- Proposal Incubation
- Facilitate the oversight and creation of neutral DAO frameworks and initiatives that do not benefit Entropy and only have the DAO’s best interests in mind.
- The idea behind Entropy is to assemble a team composed of highly capable DAO contributors with differing perspectives and expertises—we will use our collective brain power to create proposals that benefit Arbitrum over the long term and are aligned with community priorities.
- Enable the DAO to expedite and refine proposals more precisely, addressing the recurring issue of proposals being approved without sufficient details on execution and long-term planning.### Strategy and Ecosystem Alignment* Serve as the liaison between Arbitrum’s key stakeholders
- Host meetings with key stakeholders and report needs and updates between the relevant parties. Report notes to DAO when able.
- Turn conversations and takeaways into an actionable plan and begin executing.
- Product and Strategy
- Regularly discuss with application developers within the Arbitrum ecosystem, relay this information to development teams/the Foundation, and use the insights to create discussions with clear goals on the Arbitrum governance forum.
- Assist the key stakeholders on partnerships/integrations as needed. We will serve as an extra set of eyes to highlight emerging technologies and trends within crypto, aiding Arbitrum parties when we can be helpful.
- Generally speaking, ensure that the Arbitrum DAO is on track to becoming a sustainable entity with sensible spending and a focus on profit generation.
Full-time Arbitrum DAO: We grew the team from just Sam and Matt to 8 full-time and 1 intern, and we remain laser-focused on attracting the highest quality talent in the space to commit themselves exclusively to Arbitrum. While we believe that we have formed a very strong team thus far, the composition of our team will always be a top priority to ensure we have the tools at our disposal to serve the ecosystem with high-quality execution. In the coming year, we would like to continue growing as needs arise: more data analytics help, applied researchers, TradFi converts, and those with early-stage experience are at the top of mind, with a goal of scaling beyond 10 members on our team.
Beyond Proposals: Over the past year, Entropy has evolved beyond just a proposals shop and become a recognizable, consistent face of the Arbitrum DAO in the broader crypto community. From press to partnerships, conferences to committees, we’ve built a strong reputation for professionalism, reliability, and alignment. Our ability to foster trust across stakeholders from Offchain Labs and the Foundation to top investors, asset managers, and builders has been one of our most important assets, and something we intend to amplify in years 2 and 3. We recognize that this is where we have produced the most value throughout our first year and aim to continue to grow into our strengths. On countless occasions, we have joined Offchain Labs and Arbitrum Foundation’s partnerships teams in helping outline strategy and closing deals. With some blue-chip ecosystem partners, Entropy works as their main point of contact in Arbitrum. We have grown into a trusted tool augmenting existing AAEs.
Syncing Stakeholders: We are happy with our output over the past ~year in regards to the first two deliverables we outlined (see above). We hosted three (a fourth is planned for EthCC) “Delegate Days” in Brussels, Bangkok, and Denver over the past year, where we gathered large delegates, members from Offchain Labs and the Arbitrum Foundation, and other stakeholders to align on key objectives over the subsequent quarter(s). We also hosted key stakeholder calls with the same groups once per month in an effort to align on high-importance topics that require attention in the near term. Entropy has also been speaking with OCL, the AF, and key delegates and ecosystem contributors every two weeks to streamline communications across the ecosystem. These efforts are quite time-consuming, but have proven to lead to some of our most impactful work over the past year.
Strategic Proposals: We successfully passed a plethora of proposals authored internally, as well as assisted third parties in drafting proposals to the DAO or submitting applications to DAO-led programs. Some examples here include Govhack Brussels, the MSS, The Ethereum Attackathon Sponsorship, leading the ARB staking working group and bolstering the quality of contributors to the research (bringing in Vending Machine and ASXN to assist), the Delegate Code of Conduct, establishing an events budget, getting treasury management moving forward after a long stagnation through the v1.2 proposal, leading the STEP II committee, moving forward with the MVP exercise to align stakeholders, our DRIP proposal to reignite incentives/support for builders and users, the Stylus Sprint, assisting Max Lomu with his chain abstraction proposal, etc. We can’t touch on all of them here, but please refer to our forum profile for more information.
Importantly, in many cases, we evaluated whether supporting external contributors/committees or internalizing portions of execution made the most sense for the DAO. In some instances, we chose to execute internally, not because we wanted less external contribution, but because we deemed it the most efficient, high-context, and cost-effective way to get things done. Our north star has always been to make DAO execution smoother, more strategic, and resource-efficient. Sometimes that meant helping third parties structure their ideas, but other times it meant owning the process ourselves to ensure tighter execution, lower overhead, and greater accountability.
OpCo Groundwork: We also laid the groundwork for a more expedited proposal process by helping mold the new direction for the Arbitrum DAO, which was recently posted by the AF, and we also created the OpCo proposal that should make working with the DAO a much smoother process from the perspective of service providers.
We expect OpCo to pick up the portion of the aforementioned work that relates to key stakeholder alignment and coordination once it is fully operational. Aligning all the largest stakeholders in the ecosystem in order to allow for more effective operations was a massive undertaking and took a large amount of our bandwidth over the course of our first year. Despite the large investment of time and resources, we believe the groundwork has been laid for a more fruitful future for the Arbitrum DAO.
Learning from Mistakes: While we feel as though we did a great job on setting the DAO’s future, more efficient path, we certainly fell short on numerous occasions. For example, there were some instances in which we poorly communicated with certain ecosystem participants during application processes. As members of the GMC, many protocols that have sunk significant resources into the ecosystem felt overlooked and undercommunicated with. Our team has since shifted focus to improving our relationships with Arbitrum builders and to being more mindful in providing feedback to applicants by overcommunicating. We also realize that our scope of work was extremely wide in our first proposal, and our deliverables have evolved quite a lot since our engagement started, which might have led to some confusion in the wider community around what Entropy’s role actually is. Our wins have taught us a lot, but our mistakes even more, and we are committed to making corrections based on our learnings throughout our first year in our second engagement.
Data and Brand Building* Build up a high-value brand through various mediums, such as X/Twitter with educational content and research, YouTube/Apple/Spotify through a podcast, and email through weekly newsletters.
- Bring visibility into DAO initiatives and RFPs.
- Represent the DAO professionally and with a demeanor that the community can be proud of.
- Aid DAO-funded organizations like the ARDC and OBL in conducting research and analytics to inform proposal development.
- Utilize data analytics to help the DAO with accountability and transparency around its initiatives.
Arbitrum Analytics: In terms of data and brand building, we are very happy with our output over our first ~year. Our data team has created the go-to Dune catalog for those looking for greater insight into the Arbitrum ecosystem. It is worth noting that our data team did not begin work until around the end of December, so we have accomplished a lot here in very little time. We have had numerous investors not currently involved in the Arbitrum ecosystem reach out in admiration, which we believe will have a positive downstream impact that is not easily quantifiable. We have also seen our charts shared across dozens of large accounts on X, featured in blogs and news articles, and referred to during big moments for the ecosystem, such as the rollout of Timeboost. We have created a DAO financials dashboard to give delegates better insight into how the DAO spends/earns money, a dashboard that enables delegates to dissect various proposals at a granular level, an RWA case study, a DAO treasury dashboard showing all the assets it owns, and more.
Data as a Growth Support Mechanism: We also learned that data transparency can serve as a great tool for both increasing our reach across various crypto communities as well as improving relationships on the BD front with builders. This complements the goal stated in the previous section of helping to onboard 3rd parties into the ecosystem. For example, we created the most comprehensive data overview of Ethena, which caught the team’s attention. Members of Entropy then worked with OCL to coordinate a trip to the UK at the end of 2024 to meet the Ethena team as they were deciding which tech stack to deploy Converge on. In April 2025, we saw these efforts pay off with Ethena and Securitize choosing the Arbitrum stack.
We have ambitions to aid more builders within the Arbitrum ecosystem as a support mechanism, and to continue building resources that serve as both marketing material and a BD tool. Where we fell short on brand relative to our original proposal was podcast content/weekly newsletters. While we view this content as valuable, we simply did not have the bandwidth to prioritize these types of initiatives when considering the high-importance items we needed to facilitate. Additionally, we see room for growth as we expand our content outside of solely Arbitrum core and into the Arbitrum ecosystem. Over the next 2 years, we will create more dashboards that cover apps and infra that are well-positioned to support the expansion of the Arbitrum tech stack, with the goal of encouraging more partners to consider an Arbitrum deployment/support.
Recognition by News Outlets: We regularly post threads on X and LinkedIn that highlight important initiatives that are ongoing in the Arbitrum DAO, but we do know that we need to expand our reach to maximize our impact. Members of the Entropy team have been quoted in The Block, Blockworks, CoinDesk, Unchained, and Yahoo Finance about our work in Arbitrum on numerous occasions. Additionally, we have represented Arbitrum on a few podcasts. at multiple conferences, and even in an official Arbitrum marketing video. Although we have plenty of room to keep improving our public brand, we are happy with the growth in the first year.
Acknowledgment by Investors: Large ARB token holders have evidently taken notice of our ability to push forward initiatives, be more critical of each individual spending request, and our focus on ecosystem growth, long-term sustainability, and revenue diversification, which has manifested through our rise in voting power. Our ascension to the top of the ARB delegates by voting power is a responsibility we do not take lightly, and is something we are really proud of. In our opinion, this signals to us that we are prioritizing the right things and are in the early stages of helping steward the DAO’s path forward.
Now that it’s increasingly likely that the DAO’s operational structure will include officially recognized AAEs, the path has been paved for Entropy Advisors to shift our focus more fully toward growth, sustainability, and strategic execution. While the OpCo comes to fruition, Entropy will continue to support operations- and oversight-focused initiatives that require continuity. Topics like administering the ARB Staking Working Group, supporting ARDC v2, leading programs like Watchdog and MSS, and maintaining the Delegate Code of Conduct will likely transition over to OpCo, and we will be here to ensure a smooth handoff. We expect this transition to be ongoing throughout the entirety of 2025, with the operations-related workload easing on Entropy’s end by the beginning of 2026.
Entropy Advisors’ singular focus over the next two years is to help the Arbitrum DAO mature into a disciplined capital allocator. We will spearhead building an organization that drives compounding, sustainable ecosystem growth.
Arbitrum is now positioned to act more like a sovereign wealth fund: managing a composable treasury, deploying capital with strategic intent, and aligning incentives to deepen protocol adoption and ecosystem loyalty. Entropy’s work across treasury design and management, incentive architecture, data transparency, and ecosystem relationships will operate in tandem to realize this vision.
The strategy boils down to:
In short, we stop throwing darts at the wall and start designing growth: capital-efficient, data-informed, and strategically aligned.
Our high-level objectives to achieve the above strategy are as follows, with more details in each deliverable section below:
Ultimately, our primary goal through 2027 is to make Arbitrum the leading tech stack for builders, institutions, innovators, and users alike; powered by a sustainable flywheel of compounding growth leading to value generation.
Entropy will work closely with AAEs, vendors, and ecosystem teams to build out the DAO’s core financial infrastructure. We believe that the long-term viability of the Arbitrum DAO hinges on prudent asset management, disciplined budgeting, and strategic cash flow deployment to generate additional income, compound growth, and deepen our ecosystem’s liquidity while supporting integral builders. It’s worth emphasizing that while we work on financially sound structures, growth will always be at the forefront of our work in the ecosystem.
Our responsibilities here will include:
Ultimately, our goal is to provide the DAO with the tools, data, and guidance necessary to fund innovation responsibly, while positioning Arbitrum to be financially self-sustaining over the coming years.
We believe incentives will play a major role in Arbitrum’s next phase of growth, especially given the increased attention on dapp performance and ecosystem competitiveness. Our team will build upon the groundwork laid in the DRIP proposal to establish a long-term incentives strategy.
Key areas of focus:
Entropy’s goal is to bring structure and discipline to a chaotic incentives landscape. We see ourselves as the party relentlessly focused on continuous iteration, eliminating inefficiencies, and driving outcomes.
We plan to double down on our ecosystem data work, expanding the scope and sophistication of our analytics to support every aspect of DAO decision making, while also serving as a protocol support mechanism that endorses native builders and attracts new builders, with the added benefit of increasing the ecosystem’s social presence. Both of the prior-listed roles around treasury management and incentives include analytics, but the data team will have an expanded scope outside of these 2 already time-intensive categories.
Key priorities:
Based on our experience, utilizing data services as a BD and support tool is an extremely powerful way to attract and entrench new protocols into the Arbitrum ecosystem. Providing these types of services is a valuable opportunity for Arbitrum to expand its brand reach and, as we’ve observed, having the ability to offer white glove treatment increases the likelihood of capturing interest from top-tier institutions and builders. Having said that, these white glow services are highly time-consuming on average, and under no circumstances do we want to divert our teams’ capacity away from facilitating initiatives that directly benefit the DAO without the certainty of conversion. Given these circumstances, there may be certain projects that are complementary to Arbitrum and are deemed as high potential for the ecosystem. In these cases, it may make sense to ramp up project-specific capacity and thus support the ecosystem both directly through ecosystem-focused efforts and indirectly through BD-related data services. In these scenarios, the Arbitrum Foundation will have the ability to waive Entropy’s exclusivity on a case-by-case basis.
Entropy Data will be the connective tissue that powers smarter treasury decisions, sharper incentives, and more compelling narratives, while serving as a support mechanism for builders, institutions, and partners entering the Arbitrum ecosystem.
Entropy Advisors will continue to act as a neutral strategic arm and flexible generalist operator for the DAO, identifying high-impact and ad hoc initiatives that fall outside traditional workstreams or require a novel approach. These are the thorny, under-owned, cross-functional, and/or politically sensitive deliverables that the DAO may struggle to tackle without a coordinated, trusted group stepping in. In many cases, the OpCo will be best suited to pick up some of this work with regard to occasional operational requirements, but given Entropy’s team composition, we may be best positioned for certain tasks based on our existing skillsets and relationships.
Examples of special projects include:
We will remain flexible in this vertical, focusing on initiatives that drive high strategic value but may lack an existing home within the DAO’s organizational structure. It may be necessary to approve ideas that Entropy will take on via a DAO vote if these initiatives require excess budgets beyond what Entropy itself can afford.
The DAO naturally retains the option to terminate this agreement through a standard forum → Snapshot process, requiring 3% of the votable token supply to vote in favor of the termination. Quarterly transparency reports will be directly shared with the Arbitrum Foundation at their request, which will have the ability to move a forum post forward with the same structure for termination. If the Snapshot proposal passes, the DAO can terminate the agreement with Entropy Advisors, effective on the last day of the month in which the Snapshot passes, effectively stopping any future payment from accruing at that moment. In this scenario, all funds earmarked (but unearned) for Entropy Advisors’ future base payments and the remaining funds of the 10M ARB set aside for incentive alignment will be returned to the DAO by the Foundation.
Once the OpCo has been sufficiently operationalized, Entropy Advisors will operate under the assumption that OpCo will be Entropy’s counterparty that will represent the DAO and act as its proxy. Moreover, we will continue sharing monthly updates with the DAO.
After reaching out to some larger delegates and key stakeholders to get feedback on how Entropy Advisors should proceed forward, it has become clear that a 2-year term mandate is desired to ensure alignment over a sufficient period of time in order to accomplish the aforementioned goals. Therefore, we are proposing to work with the Arbitrum DAO for 2 years from September 1st 2025 through August 31st 2027. We propose a base pay of $3M per year, a ~$500k per year increase versus our first term, as we have ambitions to grow the team to internalize key functions related to data, incentives, and treasury management.
In addition to our base pay, and in an effort to achieve long-term alignment with the Arbitrum ecosystem, we propose a 5M ARB allocation to Entropy Advisors that will be locked in a vesting contract with a 1-year cliff and 3-year vest. In addition to the 5M ARB allocation, 10M ARB will be set aside for the OAT to negotiate directly with Entropy Advisors on establishing short, medium, and long-term incentive mechanisms. These mechanisms may include, but not be limited to, milestone-based payments, an equity investment into Entropy Advisors, bonuses related to Entropy exceeding expectations, etc. The Arbitrum Foundation will custody this 10M ARB, and must adhere to any agreement made between the OAT and Entropy Advisors. It is also worth noting that any terms related to an equity investment may fall under NDA. Our goal is to ensure the entire Entropy Advisors team has a large incentive to see Arbitrum win, and to ensure we remain committed to Arbitrum significantly into the future. It is also our goal to ensure the Arbitrum DAO can hedge its exposure to Entropy Advisors and enjoy the benefits of its future growth.
In total, we are requesting the transfer of $6M in ARB (covering 2 years) + a 100% buffer + 15M ARB to the Arbitrum Foundation. $6M worth of ARB will be liquidated immediately upon the passing of this proposal on Tally. 5M ARB will be put into a vesting contract by the Arbitrum Foundation in accordance with the vest above and 10M ARB to remain in custody of the Foundation for the OAT / Entropy alignment mechanisms. The remainder of the funds will be returned to the DAO treasury immediately thereafter. The vesting contract cliff will begin on September 1, 2025, regardless of the timing the actual vesting contract is launched (backdated if needed).
The Entropy Team will be eligible to claim regular monthly payments of $250,000 from the Arbitrum Foundation throughout the 24-month term. Payments that have accrued can be claimed at any time. If the DAO passes a Snapshot to end its engagement with Entropy Advisors, it will be considered binding on the final day of the same month it passes, and Entropy will be ineligible to accrue any further payments.
We are nullifying the terms in our Year 1 engagement proposal that stipulate the DAO will vote on a bonus for the first year of our services, and instead replace it with this structure. The ARB allocated as a potential bonus that is in the AF’s possession related to our first engagement should be repurposed at the Foundation’s discretion to cover this engagement proposal, or be returned to the DAO treasury if not required to do so. It is also important to note that Entropy Advisors did not claim the full $205,834 monthly allotments from the first engagement proposal for the first 4 months of service, so the Arbitrum Foundation should have ~$423,336 of additional funds slated to be returned to the DAO. However, we propose allowing the Arbitrum Foundation to use these additional funds to cover a portion of Entropy’s next 2 year engagement (assuming this proposal passes) to minimize ARB sales if it wishes to do so.
Entropy will be abstaining from voting on this proposal due to a clear COI. We look forward to the opportunity of continuing our work in the Arbitrum DAO over the coming years. Entropy Advisors is all-in on Arbitrum, and we look forward to winning together.
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/59
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/58?u=ocandocrypto
Democratising lobbyism, on-chain. Check out lobbyfi.xyz
Really excited to have seen this natively incubated effort from within the DAO, now grow to become an AAE entity that can become a pillar to help support the growth of Arbitrum
The Event Horizon Community voted FOR on this Proposal (ehARB-122): EventHorizon.vote/vote/arbitrum/ehARB-122
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/57?u=blockful
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/59
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/58?u=ocandocrypto
Democratising lobbyism, on-chain. Check out lobbyfi.xyz
Really excited to have seen this natively incubated effort from within the DAO, now grow to become an AAE entity that can become a pillar to help support the growth of Arbitrum
The Event Horizon Community voted FOR on this Proposal (ehARB-122): EventHorizon.vote/vote/arbitrum/ehARB-122
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/57?u=blockful
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/37?u=castlecapital
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/56?u=euphoria
https://forum.arbitrum.foundation/t/tekr0x-eth-delegate-communication-thread/24804/21?u=tekr0x.eth
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/41?u=bob-rossi
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/54?u=griff
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/34
https://forum.arbitrum.foundation/t/gfx-labs-delegate-communication-thread/13794
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/52?u=0xalex
it's way too much money for the value it actually brings to the DAO.
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/41
Democratising lobbyism, on-chain. Check out lobbyfi.xyz
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/44
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/43?u=euphoria
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/40?u=danielm
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/39?u=winverse
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/37?u=castlecapital
The Event Horizon Community voted on this proposal (ehARB-118): EventHorizon.vote/vote/arbitrum/ehARB-118
https://forum.arbitrum.foundation/t/tekr0x-eth-delegate-communication-thread/24804/20?u=tekr0x.eth
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/36?u=griff
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/34
Entropy Advisors has become an integral part of Arbitrum governance. For operational efficiency and to minimize conflicts of interest having them work exclusively with Arbitrum is the best path forward.
https://forum.arbitrum.foundation/t/gfx-labs-delegate-communication-thread/13794
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/29?u=hawheik
this is too much money for the value it brings.
Entropy is good for Arbitrum. Best regards, Cow
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/37?u=castlecapital
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/56?u=euphoria
https://forum.arbitrum.foundation/t/tekr0x-eth-delegate-communication-thread/24804/21?u=tekr0x.eth
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/41?u=bob-rossi
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/54?u=griff
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/34
https://forum.arbitrum.foundation/t/gfx-labs-delegate-communication-thread/13794
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/52?u=0xalex
it's way too much money for the value it actually brings to the DAO.
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/41
Democratising lobbyism, on-chain. Check out lobbyfi.xyz
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/44
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/43?u=euphoria
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/40?u=danielm
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/39?u=winverse
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/37?u=castlecapital
The Event Horizon Community voted on this proposal (ehARB-118): EventHorizon.vote/vote/arbitrum/ehARB-118
https://forum.arbitrum.foundation/t/tekr0x-eth-delegate-communication-thread/24804/20?u=tekr0x.eth
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/36?u=griff
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/34
Entropy Advisors has become an integral part of Arbitrum governance. For operational efficiency and to minimize conflicts of interest having them work exclusively with Arbitrum is the best path forward.
https://forum.arbitrum.foundation/t/gfx-labs-delegate-communication-thread/13794
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-the-arbitrum-dao-y2-y3/29458/29?u=hawheik
this is too much money for the value it brings.
Entropy is good for Arbitrum. Best regards, Cow
ABSTAIN — I appreciate the momentum Entropy has built around STEP II, the data dashboards, and those delegate-day sessions; that work clearly moved the DAO forward. Still, locking in $6 M cash plus 15 M ARB before we have hard KPIs feels risky. I’d prefer to see the ARB vest or unlock only as specific treasury-strategy, DRIP, and OpCo-handoff milestones are hit. A quarterly KPI scorecard tied to cash flow would also give delegates firmer oversight. I’m abstaining now and will happily vote FOR once those milestone safeguards are baked in.
ABSTAIN — I appreciate the momentum Entropy has built around STEP II, the data dashboards, and those delegate-day sessions; that work clearly moved the DAO forward. Still, locking in $6 M cash plus 15 M ARB before we have hard KPIs feels risky. I’d prefer to see the ARB vest or unlock only as specific treasury-strategy, DRIP, and OpCo-handoff milestones are hit. A quarterly KPI scorecard tied to cash flow would also give delegates firmer oversight. I’m abstaining now and will happily vote FOR once those milestone safeguards are baked in.
Hello Everyone - the OAT has been monitoring the ongoing conversations between Entropy and the DAO with respect to their renewal of support for the Arbitrum ecosystem. With the Snapshot vote completed, subject to an approved onchain vote, we are excited by the prospect of Entropy continuing its exclusive work for the Arbitrum ecosystem.
As a part of that, we will be conducting our diligence on Entropy's contributions to Arbitrum historically, the strengths of the organization and will be working through structures that we think are most beneficial to Arbitrum. That could take the form of investment, compensation bonus components, a combination of both or other creative structures that we iterate on through the negotiation process.
Hello Everyone - the OAT has been monitoring the ongoing conversations between Entropy and the DAO with respect to their renewal of support for the Arbitrum ecosystem. With the Snapshot vote completed, subject to an approved onchain vote, we are excited by the prospect of Entropy continuing its exclusive work for the Arbitrum ecosystem.
As a part of that, we will be conducting our diligence on Entropy's contributions to Arbitrum historically, the strengths of the organization and will be working through structures that we think are most beneficial to Arbitrum. That could take the form of investment, compensation bonus components, a combination of both or other creative structures that we iterate on through the negotiation process.
We are not in a position at the moment, nor do we think it is appropriate for us, to be publicly delineating what our negotiation strategy will be. The OAT is tasked with representing the Arbitrum community to the best of our abilities and you should be sure that we intend to do that. That being said, our negotiations will certainly factor in the proposed scope of work that Entropy will be tasked with doing over the course of the contract.
Once the deal has been finalized, we intend to publicly relate to the community our rationale for the deal structure and the factors that were considered for us to pursue the path that we did. However, to do that prior to that, would be both premature and also only limiting our ability to have maximum creativity for the benefit of Arbitrum.
To the extent that there are components of the final negotiated structure that are appropriate to share, we will work with Entropy to share those components publicly. As for components that are likely to be confidential information, the intention of creating the OpCo structure was to ensure that the DAO is able to benefit from any type of deal structure and there is a conduit that is responsible to the DAO that can also maintain confidentiality provisions in the agreed upon deal.
We would recommend that the community vote with this perspective in mind. Entropy's term with Arbitrum is due to be up for renewal shortly and it would be best for the vote to occur with the understanding that the OAT will maintain control of 10m $ARB of consideration to accomplish its objectives. As unlikely as the case may be, if a deal with Entropy is unable to be finalized, those funds will be returned to the DAO and should not be considered a blocker for voting on the current proposal.
Note: I am writing the above response in my capacity as a member of the OAT
Hello Everyone - the OAT has been monitoring the ongoing conversations between Entropy and the DAO with respect to their renewal of support for the Arbitrum ecosystem. With the Snapshot vote completed, subject to an approved onchain vote, we are excited by the prospect of Entropy continuing its exclusive work for the Arbitrum ecosystem.
As a part of that, we will be conducting our diligence on Entropy's contributions to Arbitrum historically, the strengths of the organization and will be working through structures that we think are most beneficial to Arbitrum. That could take the form of investment, compensation bonus components, a combination of both or other creative structures that we iterate on through the negotiation process.
Hello Everyone - the OAT has been monitoring the ongoing conversations between Entropy and the DAO with respect to their renewal of support for the Arbitrum ecosystem. With the Snapshot vote completed, subject to an approved onchain vote, we are excited by the prospect of Entropy continuing its exclusive work for the Arbitrum ecosystem.
As a part of that, we will be conducting our diligence on Entropy's contributions to Arbitrum historically, the strengths of the organization and will be working through structures that we think are most beneficial to Arbitrum. That could take the form of investment, compensation bonus components, a combination of both or other creative structures that we iterate on through the negotiation process.
We are not in a position at the moment, nor do we think it is appropriate for us, to be publicly delineating what our negotiation strategy will be. The OAT is tasked with representing the Arbitrum community to the best of our abilities and you should be sure that we intend to do that. That being said, our negotiations will certainly factor in the proposed scope of work that Entropy will be tasked with doing over the course of the contract.
Once the deal has been finalized, we intend to publicly relate to the community our rationale for the deal structure and the factors that were considered for us to pursue the path that we did. However, to do that prior to that, would be both premature and also only limiting our ability to have maximum creativity for the benefit of Arbitrum.
To the extent that there are components of the final negotiated structure that are appropriate to share, we will work with Entropy to share those components publicly. As for components that are likely to be confidential information, the intention of creating the OpCo structure was to ensure that the DAO is able to benefit from any type of deal structure and there is a conduit that is responsible to the DAO that can also maintain confidentiality provisions in the agreed upon deal.
We would recommend that the community vote with this perspective in mind. Entropy's term with Arbitrum is due to be up for renewal shortly and it would be best for the vote to occur with the understanding that the OAT will maintain control of 10m $ARB of consideration to accomplish its objectives. As unlikely as the case may be, if a deal with Entropy is unable to be finalized, those funds will be returned to the DAO and should not be considered a blocker for voting on the current proposal.
Note: I am writing the above response in my capacity as a member of the OAT
Chris, from Sherlock, here. I'll refrain from opining on the structure or other details of this proposal, but I do want to chime in here with my opinion and experience with Entropy. This team has been terrific to work with, is a genuinely positive force for the DAO, and seems to focus heavily on building goodwill the right way - by being a truly aligned stakeholder and trying to do what's best for the DAO as a whole. And a specific shout-out to Pruitt from the Entropy team, who has been responsive, thoughtful, and creative in how he thinks about the DAOs future.
Chris, from Sherlock, here. I'll refrain from opining on the structure or other details of this proposal, but I do want to chime in here with my opinion and experience with Entropy. This team has been terrific to work with, is a genuinely positive force for the DAO, and seems to focus heavily on building goodwill the right way - by being a truly aligned stakeholder and trying to do what's best for the DAO as a whole. And a specific shout-out to Pruitt from the Entropy team, who has been responsive, thoughtful, and creative in how he thinks about the DAOs future.
Hi all,
Confirming the AF address as 0x08cc5726b84863aB502541E39E3255Bab0413441 for receiving the funds.
Hi all,
Confirming the AF address as 0x08cc5726b84863aB502541E39E3255Bab0413441 for receiving the funds.
I’m voting YES because Entropy Advisors has consistently added real value to Arbitrum governance. From improving treasury transparency to supporting initiatives like DRIP and STEP, they’ve proven they can execute and contribute strategically. Their dashboards have also helped improve data access and reporting. While the budget is sizable, I see it as an investment in a capable, aligned team that’s already delivering results. Let’s build on that momentum.
I’m voting YES because Entropy Advisors has consistently added real value to Arbitrum governance. From improving treasury transparency to supporting initiatives like DRIP and STEP, they’ve proven they can execute and contribute strategically. Their dashboards have also helped improve data access and reporting. While the budget is sizable, I see it as an investment in a capable, aligned team that’s already delivering results. Let’s build on that momentum.
This is one of the most difficult votes I’ve had to cast. In this case, I’m not just thankful for the proposal itself but also to Entropy as a team. They’ve consistently contributed to making the DAO stronger, and I genuinely respect their presence and energy in the ecosystem.
Though I am going to vote ABSTAIN. My ideas are very similar to those of L2Beat and travelcore567. I would not vote against, since I do realize their importance for the DAO, but these facts stop me from being completely in favor. My intention in voting to abstain is Entropy to observe these votes and take action in certain areas that will make their coexistence with the DAO even more effective for both sides.
The following reflects the views of L2BEAT’s governance team, composed of @krst, @Sinkas, and @Manugotsuka, and is based on our combined research, fact-checking, and discussion.
We voted ABSTAIN.
The following reflects the views of L2BEAT’s governance team, composed of @krst, @Sinkas, and @Manugotsuka, and is based on our combined research, fact-checking, and discussion.
We voted ABSTAIN.
Back in the temp-check, we cautiously supported Entropy’s term renewal because we are convinced of their potential value-add to the DAO. While we liked the idea of OpCo and OAT guiding Entropy’s next phase, we clarified in our comment that we expected the OAT to engage in discussion with the delegates about their role.
We envisioned the OAT and OpCo as a DAO proxy and a single counterparty for Entropy, not as the sole owner of their mandate. After all, we already have a mechanism in the DAO to engage in partnerships in a fully discretionary manner, without DAO delegates' direct oversight and input, through the 1B ARB budget delegated to the Arbitrum Foundation. With the funds allocated directly from the DAO and its treasury, we feel that delegates are responsible (and therefore should be allowed) to monitor and ensure that they are well spent.
Since then, we have been waiting for an outline or high-level vision of how that oversight will work, specifically when it comes to the KPIs and milestones that would govern the 10M ARB incentive pool. However, the OAT members have clarified that they do not plan to engage in a discussion with delegates. They understand their role in the proposal to be taking full responsibility for that aspect, and they are not planning to take input from delegates on that front. While we understand and respect their position, we no longer trust that this is the appropriate setup for that engagement.
Rather than let this block an initiative we broadly regard as positive, we prefer to abstain and let it pass despite our concerns.
While we fully trust that this relationship will be constructive, we think it’s reasonable to expect OAT to present ... their view on how they plan to assess Entropy’s performance and how they want to structure the 10M ARB incentive pool.
voted Against on this onchain vote because it's way too much money for the value it actually brings to the DAO.
voted Against on the past offchain vote because this is too much money for the value it brings.
This is one of the most difficult votes I’ve had to cast. In this case, I’m not just thankful for the proposal itself but also to Entropy as a team. They’ve consistently contributed to making the DAO stronger, and I genuinely respect their presence and energy in the ecosystem.
Though I am going to vote ABSTAIN. My ideas are very similar to those of L2Beat and travelcore567. I would not vote against, since I do realize their importance for the DAO, but these facts stop me from being completely in favor. My intention in voting to abstain is Entropy to observe these votes and take action in certain areas that will make their coexistence with the DAO even more effective for both sides.
The following reflects the views of L2BEAT’s governance team, composed of @krst, @Sinkas, and @Manugotsuka, and is based on our combined research, fact-checking, and discussion.
We voted ABSTAIN.
The following reflects the views of L2BEAT’s governance team, composed of @krst, @Sinkas, and @Manugotsuka, and is based on our combined research, fact-checking, and discussion.
We voted ABSTAIN.
Back in the temp-check, we cautiously supported Entropy’s term renewal because we are convinced of their potential value-add to the DAO. While we liked the idea of OpCo and OAT guiding Entropy’s next phase, we clarified in our comment that we expected the OAT to engage in discussion with the delegates about their role.
We envisioned the OAT and OpCo as a DAO proxy and a single counterparty for Entropy, not as the sole owner of their mandate. After all, we already have a mechanism in the DAO to engage in partnerships in a fully discretionary manner, without DAO delegates' direct oversight and input, through the 1B ARB budget delegated to the Arbitrum Foundation. With the funds allocated directly from the DAO and its treasury, we feel that delegates are responsible (and therefore should be allowed) to monitor and ensure that they are well spent.
Since then, we have been waiting for an outline or high-level vision of how that oversight will work, specifically when it comes to the KPIs and milestones that would govern the 10M ARB incentive pool. However, the OAT members have clarified that they do not plan to engage in a discussion with delegates. They understand their role in the proposal to be taking full responsibility for that aspect, and they are not planning to take input from delegates on that front. While we understand and respect their position, we no longer trust that this is the appropriate setup for that engagement.
Rather than let this block an initiative we broadly regard as positive, we prefer to abstain and let it pass despite our concerns.
While we fully trust that this relationship will be constructive, we think it’s reasonable to expect OAT to present ... their view on how they plan to assess Entropy’s performance and how they want to structure the 10M ARB incentive pool.
voted Against on this onchain vote because it's way too much money for the value it actually brings to the DAO.
voted Against on the past offchain vote because this is too much money for the value it brings.
While we fully trust that this relationship will be constructive, we think it’s reasonable to expect OAT to present ... their view on how they plan to assess Entropy’s performance and how they want to structure the 10M ARB incentive pool.
I’d like to point out that it’s been over 13 weeks - more than three months - since we raised this question. Yet, to my knowledge, there has still been no information shared, nor any visible signs of a consultation process regarding the “milestone-based incentives (KPIs), equity investment, time-based bonuses, or other short/medium/long-term alignment mechanisms” governing the 10M ARB bonus pool.
To be clear, I’m not commenting to blame anyone or call for action. My intention is simply to note that our initial concerns were valid and to keep this comment on record for future reference. I believe that, as a DAO, we should exercise greater prudence in the future when approving large budgets based on assurances that the details will be worked out later.
As in @web3citizenxyz representation, voting for. Below the rationale:
Blockworks Advisory will vote FOR this proposal on its onchain stage.
Entropy has demonstrated its value over this year, and we believe them to be a net positive for the DAO.
Blockworks Advisory will vote FOR this proposal on its onchain stage.
Entropy has demonstrated its value over this year, and we believe them to be a net positive for the DAO.
We would like to note on the topic of investment, it seems a bit circular to invest in Entropy as its current services (and its future services) are limited to Arbitrum DAO. It would make more sense to consider this as an investment if Entropy was considering a non-exclusive relationship with Arbitrum moving forward. Thus, we would like some additional clarity from other delegates on what this investment means in the future. Nevertheless, this doesn't change or retract from our decision to support this proposal onchain.
We are voting FOR the proposal.
Entropy Advisors has delivered a lot of value to Arbitrum DAO and has become an important part of its governance. Working solely for the DAO will help it focus all its efforts on organizing all stakeholders and continuing the good work done in the organization.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb) and @Euphoria, based on our combined research, analysis, and ideation.
We are voting FOR this proposal in the Tally voting.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb) and @Euphoria, based on our combined research, analysis, and ideation.
We are voting FOR this proposal in the Tally voting.
The role of long-term contributors in a DAO is evolving, and this proposal is part of that shift. We see Entropy stepping into a more formal, structured role, not just supporting specific proposals, but helping the DAO plan and adapt across multiple workstreams.
What matters to us is that this isn’t a passive renewal. The scope is bigger, expectations are higher, and Entropy will now operate alongside a growing execution layer through OpCo. That raises the bar for coordination, clarity, and delivery, and we think that’s a good thing.
We’ve had a chance to observe Entropy’s approach over the past year, being in touch wherever required, and what stands out is their consistency. Even in areas where outcomes were uncertain, they’ve stayed engaged, taken feedback, and helped push things forward. That level of reliability is rare in decentralized environments.
We’re supporting this proposal with a few expectations in mind. First, we believe it’s important that a clear division of responsibilities between Entropy and OpCo is established early to avoid confusion. Second, the value delivered should be regularly communicated in plain terms so delegates can stay informed. And third, incentive structures should remain tied to meaningful output, rather than just time spent or general presence.
We wish the Entropy team the best as they step into this next phase, and we look forward to seeing the DAO continue to evolve with stronger long-term contributors in place.
I have voted in favour. Best of luck to this team, I agree work has been valuable to the DAO and a net positive. Betting on continuity.
Same thoughts for the Tally vote.
While we fully trust that this relationship will be constructive, we think it’s reasonable to expect OAT to present ... their view on how they plan to assess Entropy’s performance and how they want to structure the 10M ARB incentive pool.
I’d like to point out that it’s been over 13 weeks - more than three months - since we raised this question. Yet, to my knowledge, there has still been no information shared, nor any visible signs of a consultation process regarding the “milestone-based incentives (KPIs), equity investment, time-based bonuses, or other short/medium/long-term alignment mechanisms” governing the 10M ARB bonus pool.
To be clear, I’m not commenting to blame anyone or call for action. My intention is simply to note that our initial concerns were valid and to keep this comment on record for future reference. I believe that, as a DAO, we should exercise greater prudence in the future when approving large budgets based on assurances that the details will be worked out later.
As in @web3citizenxyz representation, voting for. Below the rationale:
Blockworks Advisory will vote FOR this proposal on its onchain stage.
Entropy has demonstrated its value over this year, and we believe them to be a net positive for the DAO.
Blockworks Advisory will vote FOR this proposal on its onchain stage.
Entropy has demonstrated its value over this year, and we believe them to be a net positive for the DAO.
We would like to note on the topic of investment, it seems a bit circular to invest in Entropy as its current services (and its future services) are limited to Arbitrum DAO. It would make more sense to consider this as an investment if Entropy was considering a non-exclusive relationship with Arbitrum moving forward. Thus, we would like some additional clarity from other delegates on what this investment means in the future. Nevertheless, this doesn't change or retract from our decision to support this proposal onchain.
We are voting FOR the proposal.
Entropy Advisors has delivered a lot of value to Arbitrum DAO and has become an important part of its governance. Working solely for the DAO will help it focus all its efforts on organizing all stakeholders and continuing the good work done in the organization.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb) and @Euphoria, based on our combined research, analysis, and ideation.
We are voting FOR this proposal in the Tally voting.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb) and @Euphoria, based on our combined research, analysis, and ideation.
We are voting FOR this proposal in the Tally voting.
The role of long-term contributors in a DAO is evolving, and this proposal is part of that shift. We see Entropy stepping into a more formal, structured role, not just supporting specific proposals, but helping the DAO plan and adapt across multiple workstreams.
What matters to us is that this isn’t a passive renewal. The scope is bigger, expectations are higher, and Entropy will now operate alongside a growing execution layer through OpCo. That raises the bar for coordination, clarity, and delivery, and we think that’s a good thing.
We’ve had a chance to observe Entropy’s approach over the past year, being in touch wherever required, and what stands out is their consistency. Even in areas where outcomes were uncertain, they’ve stayed engaged, taken feedback, and helped push things forward. That level of reliability is rare in decentralized environments.
We’re supporting this proposal with a few expectations in mind. First, we believe it’s important that a clear division of responsibilities between Entropy and OpCo is established early to avoid confusion. Second, the value delivered should be regularly communicated in plain terms so delegates can stay informed. And third, incentive structures should remain tied to meaningful output, rather than just time spent or general presence.
We wish the Entropy team the best as they step into this next phase, and we look forward to seeing the DAO continue to evolve with stronger long-term contributors in place.
I have voted in favour. Best of luck to this team, I agree work has been valuable to the DAO and a net positive. Betting on continuity.
Same thoughts for the Tally vote.
Voting FOR on Tally
I support continuing the engagement and giving the team room to grow, especially given how much coordination work Entropy has carried behind the scenes. With this kind of long-term commitment, I wish that it was clearer in the proposal what exactly success looks like… but I fully trust the Entropy crew to kick ass.
I have voted FOR this proposal. After a year of work, Entropy has brought significant value to the Arbitrum DAO, and I greatly appreciate their commitment to maintaining an exclusive relationship.
I support @krst’s suggestion for oversight from OAT over Entropy and welcome @ajwarner90 ’s comments in this regard.
I have voted FOR this proposal. After a year of work, Entropy has brought significant value to the Arbitrum DAO, and I greatly appreciate their commitment to maintaining an exclusive relationship.
I support @krst’s suggestion for oversight from OAT over Entropy and welcome @ajwarner90 ’s comments in this regard.
However, I would appreciate as much transparency as possiblefrom all the parties involved. I also agree with @404DAO’s comment that the governance process should ensure in the future the DAO is not left with only a 'nuclear option' available.
Voting FOR on Tally
I support continuing the engagement and giving the team room to grow, especially given how much coordination work Entropy has carried behind the scenes. With this kind of long-term commitment, I wish that it was clearer in the proposal what exactly success looks like… but I fully trust the Entropy crew to kick ass.
I have voted FOR this proposal. After a year of work, Entropy has brought significant value to the Arbitrum DAO, and I greatly appreciate their commitment to maintaining an exclusive relationship.
I support @krst’s suggestion for oversight from OAT over Entropy and welcome @ajwarner90 ’s comments in this regard.
I have voted FOR this proposal. After a year of work, Entropy has brought significant value to the Arbitrum DAO, and I greatly appreciate their commitment to maintaining an exclusive relationship.
I support @krst’s suggestion for oversight from OAT over Entropy and welcome @ajwarner90 ’s comments in this regard.
However, I would appreciate as much transparency as possiblefrom all the parties involved. I also agree with @404DAO’s comment that the governance process should ensure in the future the DAO is not left with only a 'nuclear option' available.
We maintain the same view as we did during the Snapshot vote and have voted in favor of this proposal.
However, as we reiterated in our previous comments, we believe that the ability of the DAO to properly exercise decision-making authority over critical matters is a fundamental principle of DAO governance.
We maintain the same view as we did during the Snapshot vote and have voted in favor of this proposal.
However, as we reiterated in our previous comments, we believe that the ability of the DAO to properly exercise decision-making authority over critical matters is a fundamental principle of DAO governance.
Although we recognize that OAT’s role was always intended to evolve with the DAO’s needs, it is problematic when their mandate continues to expand and grow without any guardrails and without a way for the DAO to formally reject (i.e, veto) a critical decision made by OAT. Under this proposal’s additional mandate, the only power that the DAO has is a binary, nuclear option where it can do nothing, or end Entropy’s engagement and/or remove a member of OAT.
Although we do not question the renewal of Entropy or the existence of OAT itself, as @404DAO has pointed out, we do recognize the potential risk of management over Entropy’s activities being excessively delegated to OAT.
We believe that it is possible to build a governance model for Arbitrum DAO that allows for flexible and inclusive decision-making involving the DAO, AAE, and other stakeholders, without compromising the agility that keeps this project moving. This is an area that should continue to be improved going forward.
We would like to thank @krst from L2Beat, members of OAT, @Entropy, and other delegates for engaging in discussions with us in DMs and in the delegate telegram chat around this proposal, specifically OAT's new mandate of acting as a counterparty in Entropy's ARB bonus negotiations.
Although we are confident in OAT to represent the DAO’s best interests in negotiations, we would like to call out that OAT’s scope has grown beyond its original mandate, and under the additional mandate for the Entropy renewal, the DAO would have to accept the terms of the bonus negotiation regardless of its final opinion on the matter.
We would like to thank @krst from L2Beat, members of OAT, @Entropy, and other delegates for engaging in discussions with us in DMs and in the delegate telegram chat around this proposal, specifically OAT's new mandate of acting as a counterparty in Entropy's ARB bonus negotiations.
Although we are confident in OAT to represent the DAO’s best interests in negotiations, we would like to call out that OAT’s scope has grown beyond its original mandate, and under the additional mandate for the Entropy renewal, the DAO would have to accept the terms of the bonus negotiation regardless of its final opinion on the matter.
Although we recognize that OAT's role was always intended to evolve with the DAO's needs, it is problematic when their mandate continues to expand and grow without any guardrails and without a way for the DAO to formally reject (i.e, veto) a critical decision made by OAT. Under this proposal's additional mandate, the only power that the DAO has is a binary, nuclear option where it can do nothing, or end Entropy's engagement and/or remove a member of OAT.
This leaves the DAO with no middleground, and less optionality than seen in traditional corp governance structures. For example, in a corporate environment, shareholders have the ability to vote on major corporate actions/decisions made by the board of directors. We feel strongly that a nuclear option should not be the DAO's only option, as having to use it would be unnecessarily aggressive, potentially creating a rift between OAT and the DAO. While we trust OAT and are confident they will represent the DAO well, we believe this is a governance blindspot and would be irresponsible for the DAO to not address in the near future.
In closing, this doesn’t change our position of supporting Entropy’s renewal and OAT representing the DAO. However, we would like to see delegates explore how to structure guardrails that preserve OAT's operational capabilities while protecting the DAO’s governance integrity.
The Foundation has pointed out that it did not convert the full ARB allocation from our initial tally proposal into 2.47M USDC. Instead, they converted approximately $2.33M worth of ARB, as it was clear we wouldn’t require the full amount allocated for Year 1. This leaves an unclaimed balance of ~$287k, rather than the ~$423k noted in the current proposal, as well as the 1.5M ARB Bonus and a remaining 250k ARB. In line with the proposal on Tally, the Arbitrum Foundation will be eligible to use these funds as they see fit to pay for Entropy's year 2&3 engagement to help minimize ARB sales, with excess funds returned to the treasury.
We view this as a minor discrepancy that doesn’t materially affect the structure of the proposal or the intended Year 2–3 adjustments. It will not be a blocker to moving forward, but we wanted to make the community aware.
The following reflects the views of L2BEAT’s governance team, composed of @krst, @Sinkas, and @Manugotsuka, and it’s based on their combined research, fact-checking, and ideation.
We voted FOR.
The following reflects the views of L2BEAT’s governance team, composed of @krst, @Sinkas, and @Manugotsuka, and it’s based on their combined research, fact-checking, and ideation.
We voted FOR.
We spent a significant amount of time analyzing past Entropy performance and what they delivered, as well as discussing this current proposal with Entropy and other stakeholders in the Arbitrum ecosystem, including other delegates. We provided Entropy with feedback on the first version of the proposal, and we are satisfied with the changes included in the final version.
Although the first Entropy mandate hasn’t been perfect, the overall trajectory is positive. Their data dashboards have become a popular and reliable source of data about the Arbitrum ecosystem, and they have transformed complex draft ideas into practical proposals.
With OpCo about to come to life, we have high hopes for OpCo acting as the counterparty and accountability layer. We trust that this relationship will help Entropy deliver even better results on what they do best - treasury strategy, incentive design, and ecosystem growth support.
The revised compensation package, which pairs time-based vesting with performance-based ARB, keeps incentives aligned without new upfront outlays. We don’t see another team with comparable context or momentum, and we believe there’s still untapped value in Entropy’s skill set once OpCo is in place.
I am voting yes because Entropy Advisors has done good work helping the Arbitrum DAO grow and stay organized. They are focused on long-term success, and I believe they will continue to bring value to the ecosystem. I support giving them more time and resources to keep building.
Voting “For”
Entropy has proven they provided value over their 1st year of work and it makes sense to extend two more years. The visions laid out in this proposal I think will add value to the ARB DAO so I see no reason not to extend.
Voting “For”
Entropy has proven they provided value over their 1st year of work and it makes sense to extend two more years. The visions laid out in this proposal I think will add value to the ARB DAO so I see no reason not to extend.
Edit 7.31 to save forum space: My opinion above has not materially changed between the Snapshot and Tally vote, so editing here to save forum space. I will maintain my “For” vote
The following reflects the views of GMX’s Governance Committee, and is based on the combined research, evaluation, consensus, and ideation of various committee members.
Entropy has done an outstanding job and has played a significant role in reshaping Arbitrum governance. They've introduced several key systems and processes that have brought more structure and direction to Arbitrum governance.
The following reflects the views of GMX’s Governance Committee, and is based on the combined research, evaluation, consensus, and ideation of various committee members.
Entropy has done an outstanding job and has played a significant role in reshaping Arbitrum governance. They've introduced several key systems and processes that have brought more structure and direction to Arbitrum governance.
With the introduction of the new incentive structure, we believe the costs are justified especially as the $10M ARB bonus is contingent on Entropy meeting the KPIs and it will be monitored by OAT. In this context, it would be ideal for Entropy to publish a roadmap that outlines their ongoing and upcoming initiatives. While we understand that Arbitrum governance moves quickly and priorities may shift, a roadmap would still provide helpful context and direction.
We also request Entropy to have access to an updated visual outlining the Arbitrum DAO’s governance structure, with all the involved key delegates, entities, connections, and who supervises whom. I think this could be very helpful for many users with an interest in the Arbitrum DAO, but who do not have day-to-day involvement.
We have voted in support of the proposal!
We’ve worked closely with Entropy over the past year and have seen firsthand the impact they’ve had across Arbitrum.
From unblocking proposal pipelines to coordinating across the Foundation, Offchain Labs, and delegates, Entropy has consistently shown up in moments where high-context, fast execution was needed. Having a fully dedicated team focused solely on Arbitrum has been invaluable, especially in a space where most contributors are spread thin. Their data work, in particular, stands out, not just for quality, but for how it’s shaped conversations and helped improve decision-making at all levels of the DAO, and Arbitrum as a whole.
We’ve worked closely with Entropy over the past year and have seen firsthand the impact they’ve had across Arbitrum.
From unblocking proposal pipelines to coordinating across the Foundation, Offchain Labs, and delegates, Entropy has consistently shown up in moments where high-context, fast execution was needed. Having a fully dedicated team focused solely on Arbitrum has been invaluable, especially in a space where most contributors are spread thin. Their data work, in particular, stands out, not just for quality, but for how it’s shaped conversations and helped improve decision-making at all levels of the DAO, and Arbitrum as a whole.
We recognise that the cost of this engagement is relatively high, and it would be entirely reasonable to request more granular visibility into how that budget is allocated. But in our view, the value Entropy brings outweighs the need for that level of financial transparency at this time. The team has built trust through execution, and with OpCo acting as a formal counterparty going forward, we’re confident in the mechanisms being put in place to ensure proper oversight.
That said, it’s worth acknowledging that the DAO is effectively funding the growth of a private organisation without direct ownership or deep insight into its internal operations. While that’s not inherently problematic, it does reinforce the need for strong alignment mechanisms.
We appreciate the recent revision to the ARB alignment structure, particularly the shift of the majority of tokens into a milestone-based pool overseen by OAT. As @Juanrah aptly put it:
“A purely time-based vesting schedule doesn’t fully align incentives with the DAO’s strategic goals… we should link the vesting... to the successful achievement of key outcomes.”
We think the updated approach strikes a much better balance between trust and accountability.
Looking ahead, we still believe there’s room for light structure especially over a two-year term. As @TodayInDeFi noted:
“We can’t rely purely on narrative or vibes... interim milestone check-ins are critical for mid-course correction and accountability.”
We expect that with OpCo operationalising oversight and reporting standards, this kind of structured feedback loop will become standard practice.
All in all, we believe Entropy has proven themselves as a trusted, high-value contributor to the Arbitrum ecosystem. We’re voting FOR this proposal on Snapshot and look forward to seeing the team continue to support the DAO in its next phase of growth.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb) and @Euphoria, based on our combined research, analysis, and ideation.
We are voting FOR this proposal in the Snapshot voting.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb) and @Euphoria, based on our combined research, analysis, and ideation.
We are voting FOR this proposal in the Snapshot voting.
Entropy has made valuable contributions across multiple areas during their first year, participating in key initiatives such as DRIP, Treasury Management, and Data Analytics. They consistently handle work that demands both strategic insight and hands-on execution.
From our experience, the Entropy team is accessible and collaborative, responding promptly whenever questions arise or input is needed.
As OpCo assumes more day-to-day operational responsibilities in future, Entropy’s role as a dedicated strategy and ecosystem partner becomes even more crucial. Success will depend on effective communication and clearly defined responsibilities between the two teams.
While we support this proposal, we emphasize the need for clear, measurable milestone criteria tied to the 10M ARB reserved for incentive alignment. Early transparency around KPIs will help ensure Entropy remains aligned and accountable. Additionally, ongoing openness about team growth and resource allocation is vital to maintain community confidence in spending efficiency. We also encourage a close, well-defined collaboration between Entropy and OpCo to prevent misunderstandings as their roles evolve.
Overall, we strongly support continuing Entropy Advisor's engagement. They have demonstrated commitment to Arbitrum’s success, responded well to feedback, and with community oversight, this will be a good investment for the DAO’s next phase.
After posting our rationale, we had several delegates ask us for some clarification on our point of view here, so I think it makes sense to add it here as well.
We value Entropy’s work, and we are fully supportive of the continuation of their work in the DAO. However, we are not 100% satisfied with their past performance, especially given the objectively high price tag. We conducted an internal assessment of the past term and shared it with Entropy. We believe that having a single counterparty to report to will likely help alleviate concerns about future underperformance.
We maintain the same view as we did during the Snapshot vote and have voted in favor of this proposal.
However, as we reiterated in our previous comments, we believe that the ability of the DAO to properly exercise decision-making authority over critical matters is a fundamental principle of DAO governance.
We maintain the same view as we did during the Snapshot vote and have voted in favor of this proposal.
However, as we reiterated in our previous comments, we believe that the ability of the DAO to properly exercise decision-making authority over critical matters is a fundamental principle of DAO governance.
Although we recognize that OAT’s role was always intended to evolve with the DAO’s needs, it is problematic when their mandate continues to expand and grow without any guardrails and without a way for the DAO to formally reject (i.e, veto) a critical decision made by OAT. Under this proposal’s additional mandate, the only power that the DAO has is a binary, nuclear option where it can do nothing, or end Entropy’s engagement and/or remove a member of OAT.
Although we do not question the renewal of Entropy or the existence of OAT itself, as @404DAO has pointed out, we do recognize the potential risk of management over Entropy’s activities being excessively delegated to OAT.
We believe that it is possible to build a governance model for Arbitrum DAO that allows for flexible and inclusive decision-making involving the DAO, AAE, and other stakeholders, without compromising the agility that keeps this project moving. This is an area that should continue to be improved going forward.
We would like to thank @krst from L2Beat, members of OAT, @Entropy, and other delegates for engaging in discussions with us in DMs and in the delegate telegram chat around this proposal, specifically OAT's new mandate of acting as a counterparty in Entropy's ARB bonus negotiations.
Although we are confident in OAT to represent the DAO’s best interests in negotiations, we would like to call out that OAT’s scope has grown beyond its original mandate, and under the additional mandate for the Entropy renewal, the DAO would have to accept the terms of the bonus negotiation regardless of its final opinion on the matter.
We would like to thank @krst from L2Beat, members of OAT, @Entropy, and other delegates for engaging in discussions with us in DMs and in the delegate telegram chat around this proposal, specifically OAT's new mandate of acting as a counterparty in Entropy's ARB bonus negotiations.
Although we are confident in OAT to represent the DAO’s best interests in negotiations, we would like to call out that OAT’s scope has grown beyond its original mandate, and under the additional mandate for the Entropy renewal, the DAO would have to accept the terms of the bonus negotiation regardless of its final opinion on the matter.
Although we recognize that OAT's role was always intended to evolve with the DAO's needs, it is problematic when their mandate continues to expand and grow without any guardrails and without a way for the DAO to formally reject (i.e, veto) a critical decision made by OAT. Under this proposal's additional mandate, the only power that the DAO has is a binary, nuclear option where it can do nothing, or end Entropy's engagement and/or remove a member of OAT.
This leaves the DAO with no middleground, and less optionality than seen in traditional corp governance structures. For example, in a corporate environment, shareholders have the ability to vote on major corporate actions/decisions made by the board of directors. We feel strongly that a nuclear option should not be the DAO's only option, as having to use it would be unnecessarily aggressive, potentially creating a rift between OAT and the DAO. While we trust OAT and are confident they will represent the DAO well, we believe this is a governance blindspot and would be irresponsible for the DAO to not address in the near future.
In closing, this doesn’t change our position of supporting Entropy’s renewal and OAT representing the DAO. However, we would like to see delegates explore how to structure guardrails that preserve OAT's operational capabilities while protecting the DAO’s governance integrity.
The Foundation has pointed out that it did not convert the full ARB allocation from our initial tally proposal into 2.47M USDC. Instead, they converted approximately $2.33M worth of ARB, as it was clear we wouldn’t require the full amount allocated for Year 1. This leaves an unclaimed balance of ~$287k, rather than the ~$423k noted in the current proposal, as well as the 1.5M ARB Bonus and a remaining 250k ARB. In line with the proposal on Tally, the Arbitrum Foundation will be eligible to use these funds as they see fit to pay for Entropy's year 2&3 engagement to help minimize ARB sales, with excess funds returned to the treasury.
We view this as a minor discrepancy that doesn’t materially affect the structure of the proposal or the intended Year 2–3 adjustments. It will not be a blocker to moving forward, but we wanted to make the community aware.
The following reflects the views of L2BEAT’s governance team, composed of @krst, @Sinkas, and @Manugotsuka, and it’s based on their combined research, fact-checking, and ideation.
We voted FOR.
The following reflects the views of L2BEAT’s governance team, composed of @krst, @Sinkas, and @Manugotsuka, and it’s based on their combined research, fact-checking, and ideation.
We voted FOR.
We spent a significant amount of time analyzing past Entropy performance and what they delivered, as well as discussing this current proposal with Entropy and other stakeholders in the Arbitrum ecosystem, including other delegates. We provided Entropy with feedback on the first version of the proposal, and we are satisfied with the changes included in the final version.
Although the first Entropy mandate hasn’t been perfect, the overall trajectory is positive. Their data dashboards have become a popular and reliable source of data about the Arbitrum ecosystem, and they have transformed complex draft ideas into practical proposals.
With OpCo about to come to life, we have high hopes for OpCo acting as the counterparty and accountability layer. We trust that this relationship will help Entropy deliver even better results on what they do best - treasury strategy, incentive design, and ecosystem growth support.
The revised compensation package, which pairs time-based vesting with performance-based ARB, keeps incentives aligned without new upfront outlays. We don’t see another team with comparable context or momentum, and we believe there’s still untapped value in Entropy’s skill set once OpCo is in place.
I am voting yes because Entropy Advisors has done good work helping the Arbitrum DAO grow and stay organized. They are focused on long-term success, and I believe they will continue to bring value to the ecosystem. I support giving them more time and resources to keep building.
Voting “For”
Entropy has proven they provided value over their 1st year of work and it makes sense to extend two more years. The visions laid out in this proposal I think will add value to the ARB DAO so I see no reason not to extend.
Voting “For”
Entropy has proven they provided value over their 1st year of work and it makes sense to extend two more years. The visions laid out in this proposal I think will add value to the ARB DAO so I see no reason not to extend.
Edit 7.31 to save forum space: My opinion above has not materially changed between the Snapshot and Tally vote, so editing here to save forum space. I will maintain my “For” vote
The following reflects the views of GMX’s Governance Committee, and is based on the combined research, evaluation, consensus, and ideation of various committee members.
Entropy has done an outstanding job and has played a significant role in reshaping Arbitrum governance. They've introduced several key systems and processes that have brought more structure and direction to Arbitrum governance.
The following reflects the views of GMX’s Governance Committee, and is based on the combined research, evaluation, consensus, and ideation of various committee members.
Entropy has done an outstanding job and has played a significant role in reshaping Arbitrum governance. They've introduced several key systems and processes that have brought more structure and direction to Arbitrum governance.
With the introduction of the new incentive structure, we believe the costs are justified especially as the $10M ARB bonus is contingent on Entropy meeting the KPIs and it will be monitored by OAT. In this context, it would be ideal for Entropy to publish a roadmap that outlines their ongoing and upcoming initiatives. While we understand that Arbitrum governance moves quickly and priorities may shift, a roadmap would still provide helpful context and direction.
We also request Entropy to have access to an updated visual outlining the Arbitrum DAO’s governance structure, with all the involved key delegates, entities, connections, and who supervises whom. I think this could be very helpful for many users with an interest in the Arbitrum DAO, but who do not have day-to-day involvement.
We have voted in support of the proposal!
We’ve worked closely with Entropy over the past year and have seen firsthand the impact they’ve had across Arbitrum.
From unblocking proposal pipelines to coordinating across the Foundation, Offchain Labs, and delegates, Entropy has consistently shown up in moments where high-context, fast execution was needed. Having a fully dedicated team focused solely on Arbitrum has been invaluable, especially in a space where most contributors are spread thin. Their data work, in particular, stands out, not just for quality, but for how it’s shaped conversations and helped improve decision-making at all levels of the DAO, and Arbitrum as a whole.
We’ve worked closely with Entropy over the past year and have seen firsthand the impact they’ve had across Arbitrum.
From unblocking proposal pipelines to coordinating across the Foundation, Offchain Labs, and delegates, Entropy has consistently shown up in moments where high-context, fast execution was needed. Having a fully dedicated team focused solely on Arbitrum has been invaluable, especially in a space where most contributors are spread thin. Their data work, in particular, stands out, not just for quality, but for how it’s shaped conversations and helped improve decision-making at all levels of the DAO, and Arbitrum as a whole.
We recognise that the cost of this engagement is relatively high, and it would be entirely reasonable to request more granular visibility into how that budget is allocated. But in our view, the value Entropy brings outweighs the need for that level of financial transparency at this time. The team has built trust through execution, and with OpCo acting as a formal counterparty going forward, we’re confident in the mechanisms being put in place to ensure proper oversight.
That said, it’s worth acknowledging that the DAO is effectively funding the growth of a private organisation without direct ownership or deep insight into its internal operations. While that’s not inherently problematic, it does reinforce the need for strong alignment mechanisms.
We appreciate the recent revision to the ARB alignment structure, particularly the shift of the majority of tokens into a milestone-based pool overseen by OAT. As @Juanrah aptly put it:
“A purely time-based vesting schedule doesn’t fully align incentives with the DAO’s strategic goals… we should link the vesting... to the successful achievement of key outcomes.”
We think the updated approach strikes a much better balance between trust and accountability.
Looking ahead, we still believe there’s room for light structure especially over a two-year term. As @TodayInDeFi noted:
“We can’t rely purely on narrative or vibes... interim milestone check-ins are critical for mid-course correction and accountability.”
We expect that with OpCo operationalising oversight and reporting standards, this kind of structured feedback loop will become standard practice.
All in all, we believe Entropy has proven themselves as a trusted, high-value contributor to the Arbitrum ecosystem. We’re voting FOR this proposal on Snapshot and look forward to seeing the team continue to support the DAO in its next phase of growth.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb) and @Euphoria, based on our combined research, analysis, and ideation.
We are voting FOR this proposal in the Snapshot voting.
The following reflects the views of the Lampros DAO governance team, composed of Chain_L (@Blueweb) and @Euphoria, based on our combined research, analysis, and ideation.
We are voting FOR this proposal in the Snapshot voting.
Entropy has made valuable contributions across multiple areas during their first year, participating in key initiatives such as DRIP, Treasury Management, and Data Analytics. They consistently handle work that demands both strategic insight and hands-on execution.
From our experience, the Entropy team is accessible and collaborative, responding promptly whenever questions arise or input is needed.
As OpCo assumes more day-to-day operational responsibilities in future, Entropy’s role as a dedicated strategy and ecosystem partner becomes even more crucial. Success will depend on effective communication and clearly defined responsibilities between the two teams.
While we support this proposal, we emphasize the need for clear, measurable milestone criteria tied to the 10M ARB reserved for incentive alignment. Early transparency around KPIs will help ensure Entropy remains aligned and accountable. Additionally, ongoing openness about team growth and resource allocation is vital to maintain community confidence in spending efficiency. We also encourage a close, well-defined collaboration between Entropy and OpCo to prevent misunderstandings as their roles evolve.
Overall, we strongly support continuing Entropy Advisor's engagement. They have demonstrated commitment to Arbitrum’s success, responded well to feedback, and with community oversight, this will be a good investment for the DAO’s next phase.
After posting our rationale, we had several delegates ask us for some clarification on our point of view here, so I think it makes sense to add it here as well.
We value Entropy’s work, and we are fully supportive of the continuation of their work in the DAO. However, we are not 100% satisfied with their past performance, especially given the objectively high price tag. We conducted an internal assessment of the past term and shared it with Entropy. We believe that having a single counterparty to report to will likely help alleviate concerns about future underperformance.
After posting our rationale, we had several delegates ask us for some clarification on our point of view here, so I think it makes sense to add it here as well.
We value Entropy’s work, and we are fully supportive of the continuation of their work in the DAO. However, we are not 100% satisfied with their past performance, especially given the objectively high price tag. We conducted an internal assessment of the past term and shared it with Entropy. We believe that having a single counterparty to report to will likely help alleviate concerns about future underperformance.
Of course, we place a lot of trust in the non-existent yet OpCo and the OAT. The success of this proposal, or lack thereof, highly depends on the OAT and OpCo working closely with both delegates and Entropy.
While we fully trust that this relationship will be constructive, we think it’s reasonable to expect OAT to present (ahead of the onchain vote and movement of funds) their view on how they plan to assess Entropy’s performance and how they want to structure the 10M ARB incentive pool. For example, OAT can perform a similar exercise to the one we did — conduct an objective assessment of Entropy’s first term. It doesn’t have to be very deep; it’s doable in a couple of hours and would help a lot with understanding how they think about this task in the future.
From our side, we expressed in private conversations with both Entropy and OAT members that we expect the majority of this budget to be structured as an investment from the DAO into Entropy. We already have past experience with this being done by the Arbitrum Foundation (within RnDAO’s Hackathon Continuation Program), which strongly supports a similar request from @tamara and some other delegates. We believe this will help align Entropy and the DAO on their future success. While we agree that such a deal needs to be negotiated privately, it should be finalized before we are asked to commit funds onchain.
DAOplomats is voting FOR this proposal on Snapshot.
Entropy did a pretty solid job in Y1. They put good structures in place and a very good job organizing and aligning with the Foundation.
DAOplomats is voting FOR this proposal on Snapshot.
Entropy did a pretty solid job in Y1. They put good structures in place and a very good job organizing and aligning with the Foundation.
Our major concern with the Y2-Y3 plan was in the area of compensation and the vesting schedule. However, with better alignment on how the 15M ARB will be used, we are comfortable supporting this proposal during the temp check.
Gauntlet supports this proposal based on Entropy's notable and continued contributions to the Arbitrum DAO.
One piece we'd like to expand upon following discussions at EthCC is updating the Ecosystem Data section to explicitly describe the data pipeline and queries as open-source/public goods, making this valuable resource accessible to all DAO contributors and stakeholders and avoiding vendor lock-in of the data pipeline.
Camelot is casting the vote in favor on the Entropy Advisors proposal for Years 2 and 3. We do appreciate the foundational work Entropy Advisors has delivered over the past year. As a key contributor to the Arbitrum ecosystem, we’ve seen how they’ve started the process of professionallization of the DAO’s operations, and we think a prime example is their role in the creation of the OpCo, which promises to streamline execution and reduce governance bottlenecks.
That said, it’s clear this was the inaugural big year for both the Arbitrum DAO and Entropy, and not everything landed perfectly. Initiatives like the GMC/TMC proposal fell short in properly allocating resources to protocols, leading to missed opportunities for ecosystem growth. While we are obviously biased being a protocol, and while we were the only native Arbitrum one getting an allocation, we do aim for an higher tide that lifts all the boats to grow the ecosystem. The proposal does request an important monetary commitment, totalling $6M plus 15M ARB as bonuses over two years. This is not insignificant, looking at it also in the optic of general treasury management discussion. We don’t view this as a dealbreaker. If Entropy delivers on their commitments, the ROI will far exceed the costs through tangible ecosystem expansion in the form of treasury strategies and better incentives programs.
Camelot is casting the vote in favor on the Entropy Advisors proposal for Years 2 and 3. We do appreciate the foundational work Entropy Advisors has delivered over the past year. As a key contributor to the Arbitrum ecosystem, we’ve seen how they’ve started the process of professionallization of the DAO’s operations, and we think a prime example is their role in the creation of the OpCo, which promises to streamline execution and reduce governance bottlenecks.
That said, it’s clear this was the inaugural big year for both the Arbitrum DAO and Entropy, and not everything landed perfectly. Initiatives like the GMC/TMC proposal fell short in properly allocating resources to protocols, leading to missed opportunities for ecosystem growth. While we are obviously biased being a protocol, and while we were the only native Arbitrum one getting an allocation, we do aim for an higher tide that lifts all the boats to grow the ecosystem. The proposal does request an important monetary commitment, totalling $6M plus 15M ARB as bonuses over two years. This is not insignificant, looking at it also in the optic of general treasury management discussion. We don’t view this as a dealbreaker. If Entropy delivers on their commitments, the ROI will far exceed the costs through tangible ecosystem expansion in the form of treasury strategies and better incentives programs.
To us the key point is that this extension positions Entropy just slightly below entities like Offchain Labs and the Arbitrum Foundation in terms of expectations and accountability. We now have narrower, clearer goals outlined for years 2 and 3 compared to the first year, and for this reason we expect Entropy to step up and produce measurable, tangible value for the DAO. Passing this proposal raises the bar significantly. As the Arbitrum’s native DEX, we’re particularly keen on seeing Entropy prioritize the utilization of the DAO’s liquid treasury assets within onchain Arbitrum protocols. This means actively demonstrating how the DAO can push for sustainable growth by acting as the “first customer” for builders. We’ve built Camelot to power real yield and liquidity for the ecosystem; we strongly believe Arbitrum is the home of DeFi; we believe Entropy’s efforts here could amplify Camelot’s flywheel and the whole ecosystem growth.
Overall, our expectations are high. We are entrusting Entropy in having a key role in the future of our ecosystem, and we are committed to support them in their work to reach the results we all expect them to achieve.
Entropy has done important work building out the DAO’s governance infrastructure and the coordination of all these proposals and stakeholder alignment has helped keep things running smoothly.
Given their performance so far, doubling down makes sense!
Entropy has done important work building out the DAO’s governance infrastructure and the coordination of all these proposals and stakeholder alignment has helped keep things running smoothly.
Given their performance so far, doubling down makes sense!
We need a clear plan to maintain Arbitrum’s governance effectiveness over time, it is important to ensure continued success, I am hopeful Entropy can be a big part of managing that.
I voted FOR this proposal, as the 15M ARB allocation was reworked to include a milestone-based component. Thanks, Entropy, for listening to the delegates' feedback regarding this matter.
We support the renewal of Entropy Advisors’ mandate based on their demonstrated contributions to the Arbitrum DAO and their role in driving strategic initiatives, improving coordination, and enhancing DAO professionalism. However, we believe the proposal can be strengthened with clearer articulation of outcomes, defined KPIs, and a roadmap aligned with DAO priorities such as the SOS framework. A two-year term offers operational stability, but it’s important to pair that with transparent performance metrics, budget clarity, and alignment incentives to ensure continued accountability and value delivery. With these additions, we view this proposal as a strong step toward maturing the DAO’s execution capacity and long-term sustainability.
We vote for this proposal.
Several critical improvements were seen to address concerns raised during the discussion. While we still see some unresolved issues, such as whether the compensation is fully justified or whether a two-year term is strictly necessary, we believe the revised incentive structure, which ties a significant portion of ARB allocation to milestone-based alignment, represents a material step forward in accountability and DAO alignment. Most importantly, Entropy Advisors has already become an indispensable contributor to the Arbitrum DAO, consistently delivering high-value work and helping professionalize the ecosystem. With this extension, we expect their impact to grow even further in the coming term.
Entropy Advisors has proven their value in Year 1 by driving execution, improving treasury transparency, and supporting key Arbitrum initiatives like DRIP, STEP, and data reporting.
Their focus on capital efficiency, incentive design, and strategic alignment is exactly what Arbitrum needs to scale as a sustainable, growth focused DAO.
Entropy Advisors has proven their value in Year 1 by driving execution, improving treasury transparency, and supporting key Arbitrum initiatives like DRIP, STEP, and data reporting.
Their focus on capital efficiency, incentive design, and strategic alignment is exactly what Arbitrum needs to scale as a sustainable, growth focused DAO.
Although the budget is quite large and reflects a ~20% increase from the previous term, the long term value and alignment justify the cost.
I support renewing their mandate to keep building momentum.
I voted AGAINST this proposal
I saw no real effort to reduce Arbitrum’s spending on Entropy, nor did I receive answers to many of the concerns I previously raised. In addition to those earlier points, I’d like to highlight a few key reasons why I oppose the proposal:
I voted AGAINST this proposal
I saw no real effort to reduce Arbitrum’s spending on Entropy, nor did I receive answers to many of the concerns I previously raised. In addition to those earlier points, I’d like to highlight a few key reasons why I oppose the proposal:
Staff increase to 14 people Entropy plans to significantly expand its team, but the proposal lacks clarity on why such a large headcount is necessary. They set their own direction without detailing the specific tasks that justify this growth. Basing the budget on team size instead of actual deliverables is problematic. Even last year’s report doesn’t clearly outline expenses or workload.
Delegation of responsibilities to OpCo Entropy itself played a key role in creating OpCo, which now handles implementation and operations — and has a $12 million budget over 2.5 years. That should mean fewer responsibilities for Entropy, not more. Yet they continue growing their team. This contradiction remains unexplained.
DAO spending continues to grow Entropy’s compensation should be tied to the actual economic value it brings to Arbitrum. What we’re seeing instead is a steady increase in budget and operating costs, with limited transparency. Budget decisions should be based on clear objectives — not headcount — before this spending trend becomes unsustainable
After consideration, the @SEEDgov delegation decided to vote FOR on this proposal at the Snapshot Vote.
Rationale
First and foremost, SEEDGov would like to thank Entropy for the work delivered so far. While there are areas for improvement — as already mentioned in this discussion — we believe their presence in Arbitrum has been and continues to be a positive force for the DAO.
I would like some additional clarity on salary/workload expectations. For example..
I would like some additional clarity on salary/workload expectations. For example..
I understand that talent is hard to find and sometimes compromises have to be made, but when it seems that the truth has been bent to give a better appearance in one part of the proposal, I immediately now have to assume that is true for the rest of the proposal as well.
It's reasonable that salary asks and figures are not completely transparent and cannot be set in stone ahead of time. The right talent might take negotiation, could come cheaper than one assumed or might cost more than one had hoped, this is understandable. However part of the additional requested amount could be set aside as a show of good faith. Alternately, an external party, perhaps an appropriate individual from an AAE or a few trusted Arbitrum Aligned Individuals, could be given insight into the salary spend and negotiation process, to reassure..or some entirely different solution that I haven't thought of.
As things stand right now with this proposal, as much as I would like for it to be otherwise I would only feel comfortable voting "Against".
After posting our rationale, we had several delegates ask us for some clarification on our point of view here, so I think it makes sense to add it here as well.
We value Entropy’s work, and we are fully supportive of the continuation of their work in the DAO. However, we are not 100% satisfied with their past performance, especially given the objectively high price tag. We conducted an internal assessment of the past term and shared it with Entropy. We believe that having a single counterparty to report to will likely help alleviate concerns about future underperformance.
Of course, we place a lot of trust in the non-existent yet OpCo and the OAT. The success of this proposal, or lack thereof, highly depends on the OAT and OpCo working closely with both delegates and Entropy.
While we fully trust that this relationship will be constructive, we think it’s reasonable to expect OAT to present (ahead of the onchain vote and movement of funds) their view on how they plan to assess Entropy’s performance and how they want to structure the 10M ARB incentive pool. For example, OAT can perform a similar exercise to the one we did — conduct an objective assessment of Entropy’s first term. It doesn’t have to be very deep; it’s doable in a couple of hours and would help a lot with understanding how they think about this task in the future.
From our side, we expressed in private conversations with both Entropy and OAT members that we expect the majority of this budget to be structured as an investment from the DAO into Entropy. We already have past experience with this being done by the Arbitrum Foundation (within RnDAO’s Hackathon Continuation Program), which strongly supports a similar request from @tamara and some other delegates. We believe this will help align Entropy and the DAO on their future success. While we agree that such a deal needs to be negotiated privately, it should be finalized before we are asked to commit funds onchain.
DAOplomats is voting FOR this proposal on Snapshot.
Entropy did a pretty solid job in Y1. They put good structures in place and a very good job organizing and aligning with the Foundation.
DAOplomats is voting FOR this proposal on Snapshot.
Entropy did a pretty solid job in Y1. They put good structures in place and a very good job organizing and aligning with the Foundation.
Our major concern with the Y2-Y3 plan was in the area of compensation and the vesting schedule. However, with better alignment on how the 15M ARB will be used, we are comfortable supporting this proposal during the temp check.
Gauntlet supports this proposal based on Entropy's notable and continued contributions to the Arbitrum DAO.
One piece we'd like to expand upon following discussions at EthCC is updating the Ecosystem Data section to explicitly describe the data pipeline and queries as open-source/public goods, making this valuable resource accessible to all DAO contributors and stakeholders and avoiding vendor lock-in of the data pipeline.
Camelot is casting the vote in favor on the Entropy Advisors proposal for Years 2 and 3. We do appreciate the foundational work Entropy Advisors has delivered over the past year. As a key contributor to the Arbitrum ecosystem, we’ve seen how they’ve started the process of professionallization of the DAO’s operations, and we think a prime example is their role in the creation of the OpCo, which promises to streamline execution and reduce governance bottlenecks.
That said, it’s clear this was the inaugural big year for both the Arbitrum DAO and Entropy, and not everything landed perfectly. Initiatives like the GMC/TMC proposal fell short in properly allocating resources to protocols, leading to missed opportunities for ecosystem growth. While we are obviously biased being a protocol, and while we were the only native Arbitrum one getting an allocation, we do aim for an higher tide that lifts all the boats to grow the ecosystem. The proposal does request an important monetary commitment, totalling $6M plus 15M ARB as bonuses over two years. This is not insignificant, looking at it also in the optic of general treasury management discussion. We don’t view this as a dealbreaker. If Entropy delivers on their commitments, the ROI will far exceed the costs through tangible ecosystem expansion in the form of treasury strategies and better incentives programs.
Camelot is casting the vote in favor on the Entropy Advisors proposal for Years 2 and 3. We do appreciate the foundational work Entropy Advisors has delivered over the past year. As a key contributor to the Arbitrum ecosystem, we’ve seen how they’ve started the process of professionallization of the DAO’s operations, and we think a prime example is their role in the creation of the OpCo, which promises to streamline execution and reduce governance bottlenecks.
That said, it’s clear this was the inaugural big year for both the Arbitrum DAO and Entropy, and not everything landed perfectly. Initiatives like the GMC/TMC proposal fell short in properly allocating resources to protocols, leading to missed opportunities for ecosystem growth. While we are obviously biased being a protocol, and while we were the only native Arbitrum one getting an allocation, we do aim for an higher tide that lifts all the boats to grow the ecosystem. The proposal does request an important monetary commitment, totalling $6M plus 15M ARB as bonuses over two years. This is not insignificant, looking at it also in the optic of general treasury management discussion. We don’t view this as a dealbreaker. If Entropy delivers on their commitments, the ROI will far exceed the costs through tangible ecosystem expansion in the form of treasury strategies and better incentives programs.
To us the key point is that this extension positions Entropy just slightly below entities like Offchain Labs and the Arbitrum Foundation in terms of expectations and accountability. We now have narrower, clearer goals outlined for years 2 and 3 compared to the first year, and for this reason we expect Entropy to step up and produce measurable, tangible value for the DAO. Passing this proposal raises the bar significantly. As the Arbitrum’s native DEX, we’re particularly keen on seeing Entropy prioritize the utilization of the DAO’s liquid treasury assets within onchain Arbitrum protocols. This means actively demonstrating how the DAO can push for sustainable growth by acting as the “first customer” for builders. We’ve built Camelot to power real yield and liquidity for the ecosystem; we strongly believe Arbitrum is the home of DeFi; we believe Entropy’s efforts here could amplify Camelot’s flywheel and the whole ecosystem growth.
Overall, our expectations are high. We are entrusting Entropy in having a key role in the future of our ecosystem, and we are committed to support them in their work to reach the results we all expect them to achieve.
Entropy has done important work building out the DAO’s governance infrastructure and the coordination of all these proposals and stakeholder alignment has helped keep things running smoothly.
Given their performance so far, doubling down makes sense!
Entropy has done important work building out the DAO’s governance infrastructure and the coordination of all these proposals and stakeholder alignment has helped keep things running smoothly.
Given their performance so far, doubling down makes sense!
We need a clear plan to maintain Arbitrum’s governance effectiveness over time, it is important to ensure continued success, I am hopeful Entropy can be a big part of managing that.
I voted FOR this proposal, as the 15M ARB allocation was reworked to include a milestone-based component. Thanks, Entropy, for listening to the delegates' feedback regarding this matter.
We support the renewal of Entropy Advisors’ mandate based on their demonstrated contributions to the Arbitrum DAO and their role in driving strategic initiatives, improving coordination, and enhancing DAO professionalism. However, we believe the proposal can be strengthened with clearer articulation of outcomes, defined KPIs, and a roadmap aligned with DAO priorities such as the SOS framework. A two-year term offers operational stability, but it’s important to pair that with transparent performance metrics, budget clarity, and alignment incentives to ensure continued accountability and value delivery. With these additions, we view this proposal as a strong step toward maturing the DAO’s execution capacity and long-term sustainability.
We vote for this proposal.
Several critical improvements were seen to address concerns raised during the discussion. While we still see some unresolved issues, such as whether the compensation is fully justified or whether a two-year term is strictly necessary, we believe the revised incentive structure, which ties a significant portion of ARB allocation to milestone-based alignment, represents a material step forward in accountability and DAO alignment. Most importantly, Entropy Advisors has already become an indispensable contributor to the Arbitrum DAO, consistently delivering high-value work and helping professionalize the ecosystem. With this extension, we expect their impact to grow even further in the coming term.
Entropy Advisors has proven their value in Year 1 by driving execution, improving treasury transparency, and supporting key Arbitrum initiatives like DRIP, STEP, and data reporting.
Their focus on capital efficiency, incentive design, and strategic alignment is exactly what Arbitrum needs to scale as a sustainable, growth focused DAO.
Entropy Advisors has proven their value in Year 1 by driving execution, improving treasury transparency, and supporting key Arbitrum initiatives like DRIP, STEP, and data reporting.
Their focus on capital efficiency, incentive design, and strategic alignment is exactly what Arbitrum needs to scale as a sustainable, growth focused DAO.
Although the budget is quite large and reflects a ~20% increase from the previous term, the long term value and alignment justify the cost.
I support renewing their mandate to keep building momentum.
I voted AGAINST this proposal
I saw no real effort to reduce Arbitrum’s spending on Entropy, nor did I receive answers to many of the concerns I previously raised. In addition to those earlier points, I’d like to highlight a few key reasons why I oppose the proposal:
I voted AGAINST this proposal
I saw no real effort to reduce Arbitrum’s spending on Entropy, nor did I receive answers to many of the concerns I previously raised. In addition to those earlier points, I’d like to highlight a few key reasons why I oppose the proposal:
Staff increase to 14 people Entropy plans to significantly expand its team, but the proposal lacks clarity on why such a large headcount is necessary. They set their own direction without detailing the specific tasks that justify this growth. Basing the budget on team size instead of actual deliverables is problematic. Even last year’s report doesn’t clearly outline expenses or workload.
Delegation of responsibilities to OpCo Entropy itself played a key role in creating OpCo, which now handles implementation and operations — and has a $12 million budget over 2.5 years. That should mean fewer responsibilities for Entropy, not more. Yet they continue growing their team. This contradiction remains unexplained.
DAO spending continues to grow Entropy’s compensation should be tied to the actual economic value it brings to Arbitrum. What we’re seeing instead is a steady increase in budget and operating costs, with limited transparency. Budget decisions should be based on clear objectives — not headcount — before this spending trend becomes unsustainable
After consideration, the @SEEDgov delegation decided to vote FOR on this proposal at the Snapshot Vote.
Rationale
First and foremost, SEEDGov would like to thank Entropy for the work delivered so far. While there are areas for improvement — as already mentioned in this discussion — we believe their presence in Arbitrum has been and continues to be a positive force for the DAO.
I would like some additional clarity on salary/workload expectations. For example..
I would like some additional clarity on salary/workload expectations. For example..
I understand that talent is hard to find and sometimes compromises have to be made, but when it seems that the truth has been bent to give a better appearance in one part of the proposal, I immediately now have to assume that is true for the rest of the proposal as well.
It's reasonable that salary asks and figures are not completely transparent and cannot be set in stone ahead of time. The right talent might take negotiation, could come cheaper than one assumed or might cost more than one had hoped, this is understandable. However part of the additional requested amount could be set aside as a show of good faith. Alternately, an external party, perhaps an appropriate individual from an AAE or a few trusted Arbitrum Aligned Individuals, could be given insight into the salary spend and negotiation process, to reassure..or some entirely different solution that I haven't thought of.
As things stand right now with this proposal, as much as I would like for it to be otherwise I would only feel comfortable voting "Against".
I voted FOR this proposal, as the 15M ARB allocation was reworked to include a milestone-based component. Thanks, Entropy, for listening to the delegates' feedback regarding this matter.
After consideration, the @SEEDgov delegation decided to vote FOR on this proposal at the Snapshot Vote.
Rationale
First and foremost, SEEDGov would like to thank Entropy for the work delivered so far. While there are areas for improvement — as already mentioned in this discussion — we believe their presence in Arbitrum has been and continues to be a positive force for the DAO.
Over the past year, we’ve built a sustained relationship through joint work on various initiatives such as the Staking Working Group and the Stylus Sprint, as well as through ongoing mutual consultation between Entropy and SEEDGov.
These interactions have given us the opportunity to witness firsthand their professionalism and working methodology. Moreover, we’ve been able to lean on their support, which has had a meaningful impact on the quality of what the DAO is delivering to the protocol.
If we want to make Arbitrum win, we need more teams whose success is directly tied to Arbitrum’s success.
We would also like to highlight the Dune dashboards — a vertical that Entropy has focused on in recent months. This effort fills a crucial gap, and we must say that, as Program Managers of the DIP, these dashboards have been valuable tools for conducting internal analysis as well as for preparing the Mid-Term Report shared a few weeks ago.
Regarding the proposal itself, we support allocating 10M ARB to milestones to be negotiated with the OAT.
We understand the requested amount is significant, but it is also true that Entropy has consistently delivered value to Arbitrum's operations and ecosystem-wide initiatives. This value is often difficult to quantify, which is why we believe it would be unfair to focus solely on the cost Entropy represents — instead, we should view it as an investment.
LobbyFi’s rationale on the price and making the voting power available for sale for this proposal. The auction will be turned off since only party has direct financial interest in that proposal.
The cumulated program costs $9,6M (0,36 (ARB/USD now) * 5M + 0,36 * 10M * 0,5 (50% factor for future allocation) + 6M = 9,6 M). The instant buy price will be set at 1% of that, at 34,5 ETH for on-chain and 3,45 ETH for off-chain vote.
LobbyFi’s rationale on the price and making the voting power available for sale for this proposal. The auction will be turned off since only party has direct financial interest in that proposal.
The cumulated program costs $9,6M (0,36 (ARB/USD now) * 5M + 0,36 * 10M * 0,5 (50% factor for future allocation) + 6M = 9,6 M). The instant buy price will be set at 1% of that, at 34,5 ETH for on-chain and 3,45 ETH for off-chain vote.
Update: the price will be set at 10 ETH for the on-chain vote after analysing the snapshot votes.
Thank you for clarifying that the team consists of 14 people.
Thank you for clarifying that the team consists of 14 people.
I urge everyone to evaluate the budget based on objectives, not on the number of people planning to work on them. We don’t even know how much the individual team members are actually paid or how effective they are. What I do see is that the DAO’s spending is increasing at an unsustainable pace year after year — and we need to pay attention to this before we find ourselves with an empty treasury
First, we want to recognise the excellent work Entropy Advisors has delivered so far for the Arbitrum DAO. They have proved to be highly effective contributors in their first year of operations. Their efforts around cost optimisations, improved stakeholder communication, and the coordination of diverse initiatives have meaningfully strengthened the Arbitrum ecosystem.
Given this strong track record, we strongly support Entropy’s renewed commitment to the DAO.
First, we want to recognise the excellent work Entropy Advisors has delivered so far for the Arbitrum DAO. They have proved to be highly effective contributors in their first year of operations. Their efforts around cost optimisations, improved stakeholder communication, and the coordination of diverse initiatives have meaningfully strengthened the Arbitrum ecosystem.
Given this strong track record, we strongly support Entropy’s renewed commitment to the DAO.
Below, our thoughts on the current proposal:
In their own retrospective on the ARDC, Entropy wisely noted that fixed-term research commitments can create pressure to “create work.” That insight is valuable here as well. A one-year term gives the DAO the agility to reassess performance and adapt to changing needs, ensuring long-term relationships are continually earned through merit.
We believe that a two-year timeframe is sensible. This aligns with similar structures in other ecosystems (for example, the Uniswap Foundation recently secured a two-year mandate and funding from the Uniswap DAO). A multi-year horizon allows Entropy to plan and execute initiatives with sufficient depth and long-term impact rather than being constrained by shorter, reactive cycles.
That said, we would encourage the proposal to include clear one-year goals. We understand that specific KPIs will be negotiated with the OAT and tied to the proposed 10M ARB performance bonus, which is a sound mechanism. However, defining simple success criteria for each area of focus—and communicating those to the community—would significantly enhance transparency and accountability.
For example:
These types of measurable objectives would help clarify priorities for Entropy and the DAO, provide concrete milestones to evaluate progress, and build greater stakeholder confidence regarding the impact of this budget allocation.
1. Financial Planning, Analysis, and Guiding Capital Deployment We appreciate the effort to reduce fragmentation across the DAO’s various treasury management initiatives. While we believe directly engaging a dedicated treasury manager—either an external service provider or an internal team—is often the most effective solution (and is being adopted by a variety of DAOs), it has become clear over the past two years that the Arbitrum DAO is not currently comfortable with this option.
Given this context, finding the right balance between execution and DAO-driven decision-making is critical to the success of any treasury initiative. Based on this premise, we believe Entropy is an excellent candidate to cover this role. They have demonstrated a strong commitment to the ecosystem, responsible management, and transparency. We are strongly supportive of their decision to consolidate efforts, and it’s encouraging to see a shift from experimentation toward a more strategic and unified approach to asset management.
2. Incentives We think the DAO's decision to step away from the LTIPP and STIP programs was wise, helping to cut back on programs that were either ineffective or inefficiently managed. The newly approved DRIP program appears promising and reflects a more sustainable and thoughtful structure. Based on this, we are confident that Entropy can effectively lead this effort to deploy incentives that meaningfully grow the Arbitrum ecosystem strategically.
3. Ecosystem Data This is one of Entropy’s main strengths. We deeply appreciate the insights their Dune dashboards have provided to the community, significantly improving both transparent communication and data-driven decision-making. We are strongly supportive of Entropy continuing this work. Data will also be a crucial input for informed decisions in both treasury management and ecosystem incentives.
4. Special Projects While this area is more loosely defined than the previous sections, we support granting Entropy discretion to pursue initiatives they deem valuable for Arbitrum. The team has a deep understanding of both the Arbitrum ecosystem and the broader crypto industry. We are confident they have the skills and perspective to identify opportunities or challenges early and propose effective paths forward.
But it’s still unclear to me why a bonus is necessary if you’re already planning to receive extremely high salaries — around $30,000/month — which is excessive even by the standards of an overvalued crypto market. Isn’t that already sufficient compensation for exclusive work?
We believe it’s important to clarify the numbers. Our understanding is that Entropy plans to expand its team from the current 9 members to approximately 14 members. Assuming the entire $3 million annual budget was allocated purely to salaries, this would average closer to ~$18,000 per month per person, not $30,000. In practice, however, a significant portion of the budget will likely go toward other operating costs, including legal expenses, accounting, infrastructure and tools, and travel and community engagement. And, to events such as Arbitrum Delegates Day, which we understand Entropy plans to continue hosting.
Considering these expenses, we believe the overall budget request appears reasonable, especially given the value Entropy demonstrated in its first year.
Regarding bonuses, we are supportive of the team receiving ARB incentives. We believe aligning Entropy’s long-term incentives with the success of the Arbitrum ecosystem is both logical and beneficial. Equity-style vesting in ARB encourages sustained commitment and performance, provided clear KPIs and accountability measures are in place.
Thank you to those who shared feedback on our renewal proposal. We have updated the draft to reflect community input and provide greater alignment with Arbitrum DAO. We plan to move this proposal to Snapshot Thursday.
Changes on 7/7/25:
Revised 15M ARB Alignment Structure
Thank you to those who shared feedback on our renewal proposal. We have updated the draft to reflect community input and provide greater alignment with Arbitrum DAO. We plan to move this proposal to Snapshot Thursday.
Changes on 7/7/25:
Revised 15M ARB Alignment Structure
OpCo as Entropy’s Counterparty
Other Minor Changes
(ii) adoption of quarterly key performance indicators that track treasury yield targets, incentive-program retention, integration numbers, and dashboard usage, linked to a binding confidence Snapshot at month twelve with payments and vesting paused if goals are missed;
(iii) explicit confirmation that any unvested ARB returns to the treasury if the engagement ends early;
1. Tie the 15M ARB Allocation to High-Level, Strategic Milestones.
We believe that Version 2 directly addresses these concerns and really appreciate all the feedback:
This structure provides the DAO with more flexibility while ensuring KPIs, stronger accountability, and clear levers to ensure Entropy’s work continues to deliver measurable impact.
(iv) a clear description of Entropy’s responsibilities relative to the future OpCo to avoid overlap.
We have added language that clearly shows OpCo as our counterparty which will further enable us to work effectively with them. Additionally, from our perspective, the OpCo functions as a "Quarterback" in the DAO to ensure AAEs function as a cohesive, effective team rather than necessarily doing a lot of the execution work themselves. That said, we are aware that OpCo’s role could be fluid and changing based on who is appointed to its leadership, and are committed to working closely with them to make sure we continue alignment.
That starts with full transparency: a breakdown of costs (team roles, salary ranges, travel, etc.) would go a long way in helping the community understand where the money is going and how it ties back to outcomes.
(i) publication of a detailed budget covering headcount, salary bands, infrastructure, and reserves;
We understand the call for transparency but don’t believe publishing granular budgets or salary bands is the right mechanism. Our focus is on delivering outcomes, not micromanaging inputs. Highly detailed cost disclosures risk shifting the conversation away from measurable results. This level of transparency could also compromise our ability to attract and retain top-tier talent in highly specialized roles (applied research, fund management, etc), where public salary disclosure would undermine competitive hiring negotiations and create poaching risks.
Version 2 addresses alignment and accountability through milestone-based incentives (10M ARB reserved for OAT negotiation), a termination clause that returns unvested ARB, and robust reporting tied to deliverables. This gives the DAO real oversight while allowing us to focus on execution.
We considered this but believe a 2-year mandate is critical for the type of multi-year ecosystem growth initiatives outlined (treasury management, iterative incentive programs, etc). The updated structure with milestone-based rewards via the OAT provides sufficient performance-based accountability while giving Entropy and the DAO the runway needed to execute at scale. Additionally, the DAO always maintains the ability to end the engagement as it sees fit. Overall, we are ok with making this change, but it has been requested by multiple stakeholders at this point to do a minimum of 2-years so we believe this change would need broader support to do so.
We fully support RFPs and broader calls for contributions across the DAO. We appreciate this comment and will always welcome collaboration and remain committed to building frameworks that enable more high-quality contributors to participate effectively in the DAO.
Thank you for taking the community's feedback into account. You've conducted a thorough analysis, but I still have some financial concerns:
Thanks for making the adjustments, Entropy.
On this,
10M ARB reserved for the OAT to negotiate milestone-based incentives (KPIs), equity investment, time-based bonuses, or other short/medium/long-term alignment mechanisms.
Thanks for making the adjustments, Entropy.
On this,
10M ARB reserved for the OAT to negotiate milestone-based incentives (KPIs), equity investment, time-based bonuses, or other short/medium/long-term alignment mechanisms.
We just want to confirm that these negotiations will be concluded with final agreements shared with the community before this proposal moves to at least an onchain vote.
OpCo as Entropy’s Counterparty
While we understand the reasoning, this seems like it risks Entropy becoming answerable to the Foundation + OCL, given they hold two of the seats on the OpCo oversight board.
We would be more comfortable with Entropy remaining unambiguously answerable to governance and governance only. With AF and OCL holding seats on the OpCo oversight group, Entropy is really the only entity currently positioned to represent the DAO should there be a disagreement between the DAO and AF/OCL.
This isn't just hypothetical. Remember the initial AIP-1 situation. It would be cleaner to have Entropy negotiating with a governance-only counterparty.
Hi this is Brook from TiD Research. Entropy’s contributions to the Arbitrum DAO have been meaningful and wide-ranging, and I support the idea of renewing the relationship. That said, I think there’s still room to improve how we structure long-term engagements — especially in terms of flexibility, accountability, and contributor alignment.
Hi this is Brook from TiD Research. Entropy’s contributions to the Arbitrum DAO have been meaningful and wide-ranging, and I support the idea of renewing the relationship. That said, I think there’s still room to improve how we structure long-term engagements — especially in terms of flexibility, accountability, and contributor alignment.
Entrusting pivotal functions such as proposal incubation, treasury design, and incentive architecture to a single provider can streamline operations, yet it risks creating lock-in and suppressing healthy competition. How will Entropy ensure that its exclusive mandate does not crowd out alternative contributors or foster dependency if priorities shift or performance falters? Please outline review gates or competitive checkpoints that allow the DAO to reassess exclusivity at regular intervals.
While Entropy’s context-rich involvement is valuable, there's a legitimate concern that its role across multiple verticals (treasury, incentives, strategy) could create friction for new contributors, even unintentionally. We should ensure the DAO stays open and pluralistic — especially in domains where experimentation and specialization thrive.
Two ideas to help:
.These wouldn’t limit Entropy’s execution ability, but would keep pathways open for others — especially newer or domain-specific teams.
Instead of granular operational metrics, we should tie vesting tranches to the successful achievement of major, DAO-ratified strategic outcomes that arise from Entropy’s new mandates. Examples of this could be a successful DRIP Season Performance or achieving the Treasury Management Targets as well as launching a New Strategic Framework like a DAO-wide annual budget process or a new model for RWA partnerships.
Entropy rightly pointed out that hardcoded KPIs could be limiting in a fast-changing ecosystem. Still, from a DAO operations perspective, we can’t rely purely on narrative or vibes. Some interim milestone check-ins are critical for:
Even high-level quarterly indicators — like dashboards shipped, % of DRIP budget utilized, or DAO financial reports delivered — would go a long way in helping the DAO track progress without boxing Entropy into inflexible deliverables.
Entropy currently holds a large ARB voting stake while also being a core service provider. While this has been handled responsibly so far, it creates a concentration of influence that the DAO should proactively account for.
One safeguard might be:
In their own retrospective on the ARDC, Entropy wisely noted that fixed-term research commitments can create pressure to “create work.” That insight is valuable here as well. A one-year term gives the DAO the agility to reassess performance and adapt to changing needs, ensuring long-term relationships are continually earned through merit.
The idea of suggesting these elements is to build a more accountable and resilient DAO and give the OAT and OpCo the tools they need to succeed in their oversight role, which I believe is essential for the health of the ecosystem.
This separates performance assessment from informal forum commentary and helps ensure any future issues are surfaced objectively.
To directly address the themes above — especially long-term alignment, performance-driven rewards, and mitigating exclusivity — not sure if it's appropriate but might be worth exploring the option of converting $1M/year of Entropy’s base compensation into ARB options.
Our success is very clearly tied to the success of Arbitrum at this point - everyone in the industry knows Entropy as a team “committed to Arbitrum”. If Arbitrum does not succeed, it is very unlikely that Entropy would be able to win business elsewhere. We view our 2-year commitment and a significant portion of our upside in vesting ARB as sufficient means to guarantee our AAE status.
At the same time since the DAO is funding a company & its growth I believe it would be reasonable to ask in return a stake of said company
Unfortunately, this would create some weird dynamics. The equity would, in practice, have to sit with OpCo or AF. It’s already the case that two of the main entities in the Arbitrum ecosystem are in a service provider relationship – it would make conflicts of interest even more pronounced to have one entity own part of the equity of the other.
Good idea, directionally. It just seems too hard to do in this case.
| Component | Details |
|---|---|
| Monthly Option Grant | Each month, Entropy receives ~$83,333 worth of ARB options (equivalent to $1M/year) |
| Strike Price | Based on ARB’s market price at time of issuance (or a 30-day rolling average) |
| Vesting | Each month’s options vest over 12 months (rolling) |
| Termination Clause | If the DAO ends the engagement, all unvested options are cancelled immediately |
| Lock-up (optional) | ARB acquired through exercise can have a 6–12 month lock to prevent early sell-off |
| Transparency | Option grants, strike prices, and vesting can be publicly tracked (e.g., via Dune dashboard) |
This structure maintains Entropy’s full $3M/year package, but shifts part of it from guaranteed cash to performance-sensitive equity-style rewards.
I continue to support Entropy’s role and see the renewal as a positive step. These suggestions aren’t meant to challenge their contributions — they’re about maturing how we structure high-trust relationships within the DAO. Open to feedback on the options mechanism — and curious whether others see this as a replicable model for similar future engagements.
Acknowledgement of Contributions
Acknowledgement of Contributions
I acknowledge that Entropy Advisors has undoubtedly done substantial work for the Arbitrum DAO. However, as with most delegates, I believe Arbitrum’s top priorities should be ecosystem growth and profitability. While progress has been made on the growth side, the profitability and growth aspect remains a serious concern.
This level of compensation appears significantly inflated and disproportionate. Even compared to the OpCo budget — which many delegates already questioned due to high salaries — Entropy’s budget is higher.
If we compare Entropy’s compensation with what all active delegates receive combined, Entropy is asking for almost double (based on recent data). Are these costs truly reasonable and justified?
Many responsibilities currently handled by Entropy are expected to be transferred to OpCo. In that case, why is there no corresponding reduction in Entropy’s budget?
Without clear budget separation, we are risking duplicate funding for overlapping workstreams.
Entropy often highlights their strong working relationships with the Foundation and Offchain Labs as a success. While understandable from an operational perspective, this approach risks replacing decentralized DAO processes with centralized coordination.
Instead of separating roles, Entropy’s increasing involvement risks merging execution and governance, making it increasingly difficult for the DAO to later unwind this dependency. We may soon find ourselves in a position where Entropy can dictate its own terms due to lock-in and lack of alternatives.
This proposal does not present any real choice.
I’m confident there are other capable organizations in the market that could offer similar services (possibly at a lower cost, who knows). Yet, no competitive process or open call for applications has been made. We are being presented with a binary option: "Entropy or nothing", which undermines healthy DAO governance. Any proposal of this scale should come with alternative options.
The summary of past results is extremely limited and vague, referring readers to a forum summary rather than offering transparent reporting.
While Entropy contributed to important initiatives such as OpCo formation, these are internal infrastructure projects that do not generate profit for Arbitrum users or the treasury.
Just look at the decline in ARB’s market value over the past year: this is how the market evaluates Arbitrum’s current strategy and future prospects. I see little from Entropy that directly addresses ecosystem profitability or token value.
Entropy is backed by only 64 delegates, most of whom are “whales”.
This does not reflect widespread community support. In contrast, other top delegates receive broader backing from everyday users. Voting power alone should not be interpreted as a proxy for grassroots trust.
Entropy’s work has value — but:
The budget must be significantly reduced to reflect realistic compensation and avoid centralization and inefficiency
Hello everyone,
As a member of the ARDC Supervisory Council, I’ve had the opportunity to work closely with the Entropy Advisors team over the past several months. I believe Entropy's strategic vision to professionalize the treasury and incentive structures is the right direction for the DAO. As we transition to the new operational model, we should construct our foundational partnerships with as much accountability possible.
Hello everyone,
As a member of the ARDC Supervisory Council, I’ve had the opportunity to work closely with the Entropy Advisors team over the past several months. I believe Entropy's strategic vision to professionalize the treasury and incentive structures is the right direction for the DAO. As we transition to the new operational model, we should construct our foundational partnerships with as much accountability possible.
To that end, I think this proposal should not be seen as just a renewal but as an opportunity to define an accountability framework that the new OpCo can use as a blueprint for all AAEs. By making a few constructive amendments, we can ensure this partnership model is built on a foundation of trust, transparency, and clear alignment.
With that in mind, I'd like to make the following suggestions:
1. Tie the 15M ARB Allocation to High-Level, Strategic Milestones.
From my point of view, a purely time-based vesting schedule doesn't fully align incentives with the DAO's strategic goals.I understand and appreciate the concern Entropy raised that narrowly defined KPIs can create perverse incentives, like optimizing for quantity over quality. However, accountability to the DAO's strategic goals is still paramount. These goals include achieving long-term financial sustainability and driving compounding ecosystem growth.
I agree with other delegates that we should link the vesting of the 15M ARB to the successful achievement of key outcomes.
Instead of granular operational metrics, we should tie vesting tranches to the successful achievement of major, DAO-ratified strategic outcomes that arise from Entropy's new mandates. Examples of this could be a successful DRIP Season Performance or achieving the Treasury Management Targets as well as launching a New Strategic Framework like a DAO-wide annual budget process or a new model for RWA partnerships.
This creates alignment and gives the community a clear measure of success while at the same time giving Entropy the operational flexibility they need.
2. Provide a More Granular Budget.
For the DAO to mature, so must our fiduciary practices. Several delegates have raised valid concerns about the budget, and I believe that asking Entropy to provide a more detailed breakdown is a reasonable request and it will set a positive precedent. I agree that we shouldn't miss the forest for the trees and that attracting top-tier talent requires competitive compensation. A clear, structured budget will help establish a precedent of financial transparency that eventually the OpCo will need to effectively oversee in the entire ecosystem.
3. Move to a 1-Year Term with a Performance-Based Renewal.
In their own retrospective on the ARDC, Entropy wisely noted that fixed-term research commitments can create pressure to "create work." That insight is valuable here as well. A one-year term gives the DAO the agility to reassess performance and adapt to changing needs, ensuring long-term relationships are continually earned through merit.
The idea of suggesting these elements is to build a more accountable and resilient DAO and give the OAT and OpCo the tools they need to succeed in their oversight role, which I believe is essential for the health of the ecosystem.
I'm optimistic about what comes next for the DAO and look forward to continue collaborating.
Disclaimer: The views expressed in this post are my own and do not represent the official position of SEEDGov.
We agree with your assessment that taking on all of this work would be overkill, and is not at all what we intended to propose. In other words, we do aim to support builders through our workstreams, but do not believe that solely treasury management, incentives, and data analytics cover the majority of work associated with everything Arbitrum needs in order to support builders. We hope that helps answer your question/clear up any confusion on the builder support front.
At the same time since the DAO is funding a company & its growth I believe it would be reasonable to ask in return a stake of said company
AranaDigital acknowledges Entropy Advisors’ successful Year 1 record, including neutral proposal facilitation, widely used analytics dashboards, and useful stakeholder-alignment work, we praise as helpful for the DAO. The requested two-year renewal, together with a fifteen-million-ARB grant that vests over three years after a one-year cliff and a termination rule that three percent of the votable supply can trigger, provides long-term incentive alignment while keeping community control. However, we agree with @Tane on this point
The proposal requests $6M in ARB for payroll plus a 15M ARB vested allocation, more than doubling the cash component of the first term. A granular cost breakdown—headcount by role, salary bands, data-infrastructure spending, travel, and contingency—will help delegates judge whether the budget matches market rates and expected value delivered.
Thank you for putting this up, Entropy.
Just to touch on a couple of things from the proposal.
Thank you for putting this up, Entropy.
Just to touch on a couple of things from the proposal.
The updated ask — $3M/year plus 15M ARB (1-year cliff, 3-year vest) — is a big jump from the first term, which came in at $2.47M plus up to 1.5M ARB in bonuses. We need to make sure this kind of scale-up is backed by clear, tangible results. That starts with full transparency: a breakdown of costs (team roles, salary ranges, travel, etc.) would go a long way in helping the community understand where the money is going and how it ties back to outcomes.
We also note Entropy’s ARB-based incentive is meant to align your interests with ours, which is positive, but a large bonus pool should be tied to concrete milestones.
The DAO will have the options of no bonus, 10% bonus, 25% bonus, or a 40% bonus. The bonus will be denominated in the dollar equivalent of ARB in relation to the initial funding amount ($2.47M) requested in this proposal. For example, if the DAO is only slightly pleased with the amount of work we conduct and the 10% bonus is voted for, Entropy will receive $247K of ARB tokens
The community agreed to this segment of the Y1 proposal. However, it is evident that the community cannot directly tie the percentages provided to the work actually done. This is exactly why we feel the 15M ARB allocation needs closer attention.
Time-based vesting assumes consistent value add just by being present, which is risky in DAOs. We totally understand skin in the game but in this space where one year can be considered a lot of time, we would feel more confident if there was accountability built in beyond just time.
On this
We addressed this point above, but want to double down here to provide tangible reasons for why KPI-based vesting doesn’t make the most sense. If we tie our vest to the number of dashboards to be delivered, we are incentivized to launch quantity over quality.
We have put a vast amount of thought into this proposal’s structure, and are certainly open to other ideas
We suggest implementing a hybrid milestone model.
This will keep the time-vested structure but layer in high-level outcome gates (not granular counts). For instance:
Gate 1 (Year 1 unlock): Launch one new sustainable revenue stream. For example, onboard a non-native asset into yield-generating DeFi.
Gate 2 (Year 2 unlock): Show ≥ X% growth in a core financial metric (e.g. treasury income YOY or total TVL) by Q3 2026.
And if any gate fails, add a clawback clause that pauses future vesting until a corrective plan is brought forward and approved by the DAO.
This way, rewards are still time-based but clearly tied to meaningful progress, and we avoid a situation where tokens accumulate just by default.
Y1 saw some strong contributions. Your dashboards became go-to resources, and the public Dune catalog has come in pretty handy. You’ve also played a key role in initiatives like OpCo and helped host events that improved delegate alignment and governance. These are wins.
That said, this proposal could do a better job of quantifying the value in certain areas.
This feels like a tangent that could benefit from more clarity.
We do not aim to take on all of the things mentioned above, we simply want to support Arbitrum builders through thoughtfully designed incentives, treasury management/POL to deepen Arbitrum liquidity, data analytics to improve dapp level transparency, and “special projects” as they arise
We suggest you introduce a sort of Builder Map where Entropy produces a one-pager each quarter. This will be a brief report aligning each of the four workstreams (treasury, incentives, data, special projects) to specific builder-support needs.
Then, if a gap appears (e.g. DevRel, accelerators), the DAO can fast-track a separate RFP rather than assume Entropy will cover it, protecting the “early-stage support funnel.”
Overall, it’s clear you’ve put a lot of thought into incentive design and keeping things running smoothly. To address concerns on both sides — yours about KPI bloat, and ours about accountability — we’d suggest a balance: use time-based vesting, but pair it with big-picture goals and a fallback clawback mechanism. Also, let’s define the builder support scope more clearly.
Thanks again for the thoughtful proposal and your openness to feedback.
Thanks to the Entropy team for this engagment renewal proposal, indicating their willingness to continue serving exclusively to the Arbitrum DAO.
We acknowledge the significant contributions made by Entropy Advisors during their first term and recognize the substantial operational lift they provided across DAO coordination, governance design, proposal execution, and data tooling. The direction outlined for Years 2 and 3 is ambitious and reflects a maturing vision aligned with Arbitrum’s long-term trajectory. That said, we believe several aspects of the proposal would benefit from further clarification and refinement before advancing to a vote.
First, thank you to everyone who has already provided feedback on our second engagement proposal. It is of utmost importance to our team that the entire Arbitrum community is behind us, as unification will yield the best results for Arbitrum over the long-term.
With that being said, we want to address some of the early feedback below.
First, thank you to everyone who has already provided feedback on our second engagement proposal. It is of utmost importance to our team that the entire Arbitrum community is behind us, as unification will yield the best results for Arbitrum over the long-term.
With that being said, we want to address some of the early feedback below.
Entrusting pivotal functions such as proposal incubation, treasury design, and incentive architecture to a single provider can streamline operations, yet it risks creating lock-in and suppressing healthy competition. How will Entropy ensure that its exclusive mandate does not crowd out alternative contributors or foster dependency if priorities shift or performance falters?
As an AAE (Arbitrum Aligned Entity), Entropy offers a clear accountability and continuity layer for our work, even when (often) working with other vendors and contributors. The scope we’ve proposed is intentionally designed to be synergistic: treasury management, incentive design, data analytics, and special projects are deeply interconnected. Splitting them across multiple providers risks duplicative work, misaligned incentives, and slower execution. The work as outlined largely requires an Arbitrum aligned entity at the helm, even though we may look to service providers for specific workstreams.
Entropy’s role is not about accumulating power, it’s about consolidating responsibility and being directly accountable for outcomes. The DAO has already seen how fragmented ownership leads to confusion and inertia. We want to help correct that by serving as a coherent, transparent executor for the DAO’s most strategic financial and growth functions while still being subject to community input.
Arbitrum has no shortage of need for high-context, high-quality executors in areas that require dedicated ownership. In the event our scope narrows in one area, we’re confident we can reallocate top talent to emerging priorities. Continuity and context are Entropy’s core strengths, and we’ll remain flexible to where the DAO needs us most.
Arbitrum already coordinates Offchain Labs, the Foundation, and the emerging OpCo, so overlapping mandates can easily turn into a bureaucratic cost center without contributing to the actual project’s progress. We therefore ask for a detailed list of deliverables and its outcomes, each paired with clear KPIs or some other measurable things, and expected ecosystem impact.
We believe that our success will be clearly reflected in the success of Arbitrum’s treasury management, incentive design, data infrastructure, and special projects. That said, we’re cautious about rigid KPIs that can unintentionally create perverse incentives or steer us away from the highest-leverage work.
Instead, we’ve outlined clear workstreams and objectives in the proposal, and we’ll report progress transparently across each. Where impact is more qualitative, we’ll ensure visibility into the reasoning and results.
Ultimately, our accountability comes from the clarity of our scope, the transparency of our reporting within each vertical, and our willingness to adjust based on DAO feedback.
The proposal requests $6M in ARB for payroll plus a 15M ARB vested allocation, more than doubling the cash component of the first term. A granular cost breakdown—headcount by role, salary bands, data-infrastructure spending, travel, and contingency—will help delegates judge whether the budget matches market rates and expected value delivered.
The main line item driving the increased base is salaries/related expenses. In Years 2 and 3, we will attract top-tier talent in highly specialized fields such as economic modeling, treasury management, and data analysis; fields where capable contributors are in extremely short supply. As a result, other spending buckets (legal, infrastructure, tooling, travel, etc) will rise modestly as well. In particular, our vision for Entropy Data goes far beyond basic dashboards; delivering a robust, composable data layer for Arbitrum will require significant infrastructure investment well beyond what off-the-shelf tools like Dune can support.
For more granular information related to the spending throughout our first term, we highly recommend checking out our quarterly transparency reports here.
My 2cents on this proposal:
Eventually the DAO is/and has been bootstrapping a Web3 consultancy (currently exclusive to Arbitrum)
At the same time since the DAO is funding a company & its growth I believe it would be reasonable to ask in return a stake of said company
The DAO having a stake in Entropy would
ensure upside even if in the future Entropy were to engage with other protocols (which I am not opposed to because I believe there is a lot to learn/leverage when working with non-competing protocols)
truly be an AAE because it gives the DAO skin in the game
Our team has discussed this idea internally, as well as with some large delegates, the AF, and OCL at various moments in the past. However, the intricacies associated with executing this in practice has made us reluctant to pursue this approach. We think it makes more sense to make a proposal in the future if there is a potential client that approaches us that would require Entropy to break its exclusivity, and to empower the DAO to make this decision at that time. We do not want to create a distraction around our reengagement that would draw attention away from the core content within our proposal, and we believe an equity stake discussion would do exactly that.
Our success is very clearly tied to the success of Arbitrum at this point - everyone in the industry knows Entropy as a team “committed to Arbitrum”. If Arbitrum does not succeed, it is very unlikely that Entropy would be able to win business elsewhere. We view our 2-year commitment and a significant portion of our upside in vesting ARB as sufficient means to guarantee our AAE status.
We are not completely against the idea if the DAO has the structure where a direct counterparty can negotiate this type of arrangement in the future, but we do not think the timing is right at this moment in time.
While on this first pass, I don’t have much to say about the proposed work scope and the base pay related to that, but I believe the extra 15m ARB allocation deserves clear milestones to make sense, and/or should have a similar structure of the first proposal (a separeted Snapshot vote). IMO, it is expected that, as a “contractor” working for a single client, the team’s commitment to deliver the items defined above and the incentive for this sole client to be successful, are part of the base pay (that already has a bonus for the exclusivity/market we are inserted).
The ARB portion of the payment isn’t about compensation as much as it is about alignment. Through the admittedly large-scale vesting ARB allocation, Entropy Advisors will always do what we think is best for Arbitrum no matter the scenario. Our goal is to lock in this alignment in a way that makes us immune to other parties' external interest, and aligns us with one thing, Arbitrum. We think it's a perfect combination where the DAO can always fire us, but the ARB means we never stop working for Arbitrum. From our perspective, on rare occasions, Arbitrum and large delegates can have different interests.
It’s also about retaining top-tier talent. The best people in the industry are drawn to projects where they have ownership and upside, especially in pre-TGE environments. We want to create that same level of ownership for contributors to Entropy: the freedom to build, the mandate to think long-term, and the ability to share in the success they help create.
When it comes to defining KPIs, please see the response above to Tane’s comment.
I understand from the above that Entropy plans to lead the DAO efforts in addressing talent attraction and early-stage support for projects in Arbitrum ecosystem - an area we typically call Builder Support. Is this interpretation correct?
If yes, I do wonder if this is an area where Entropy is best positioned to lead compared to the other areas proposed, both from a capability and organizationally. I don’t have a definitive opinion, but I do have some concerns, as the key expertise related are roughly:
building (entrepreneurial experience)
talent attraction (growth, marketing, high-level HR)
investment (angel, pre-seed, CVC)
incubation (venture studios, accelerators, incubators)
R&D (applied research, commercialising technologies)
DevRel (tech support, community building, education programs, hackathons, etc.)
Those are not expertise that the Entropy team has (to the best of my knowledge, please correct me if I’m wrong). I do not question their drive to grow, and they can expand the team, but building these multiple capabilities from 0 or even assessing who has them to recruit is tricky.
Please correct my understanding of what this scope means if I’m misguided!
We do not aim to take on all of the things mentioned above, we simply want to support Arbitrum builders through thoughtfully designed incentives, treasury management/POL to deepen Arbitrum liquidity, data analytics to improve dapp level transparency, and “special projects” as they arise (the Converge example being the most apt in this context).
We agree with your assessment that taking on all of this work would be overkill, and is not at all what we intended to propose. In other words, we do aim to support builders through our workstreams, but do not believe that solely treasury management, incentives, and data analytics cover the majority of work associated with everything Arbitrum needs in order to support builders. We hope that helps answer your question/clear up any confusion on the builder support front.
Finally, if this proposal does not move forward, it would be useful to know what happens to the ongoing work. Are there plans to wind things down, transition responsibilities, or maintain certain operations? Clarity here would support better planning and help set expectations across the DAO.
We are of course hopeful that our proposal moves forward successfully, but are happy to transition all of our work over to the party (or parties) deemed appropriate by the DAO if our proposal fails. If we were to just drop all of our responsibilities without first helping with the transition, the Entropy Advisors brand/reputation would take a huge hit. We have also invested a significant amount of time and effort into the Arbitrum ecosystem at this point, so we would never want to leave the DAO in a bad spot in the case Entropy were not to be renewed.
Additionally, with the OpCo moving forward at a reasonable pace, we could work with their lead to hand over any necessary roles in a much more streamlined fashion.
In terms of your other feedback, we believe that we have addressed that in the replies above. Please feel free to double down on any questions you think we may have missed here, and we will reply in a timely manner.
The proposed 15M ARB long-term alignment incentive is material. We echo the replies from other delegates (@jameskbh, @Tane) seeking to better align these vested allocations with measurable positive outcomes for the DAO. To ensure this aligns with DAO expectations, we suggest:
Tying the ARB vesting unlocks to performance milestones, rather than just time. For example: number of dashboards delivered, DRIP program KPIs met, treasury % deployed, etc.
Including clawback or partial-vesting clauses in case of early termination or failure to meet key deliverables.
We addressed this point above, but want to double down here to provide tangible reasons for why KPI-based vesting doesn’t make the most sense. If we tie our vest to the number of dashboards to be delivered, we are incentivized to launch quantity over quality. OCL asked our data team to create a Timeboost dashboard (which has provided a ton of decision-making value and value on the marketing front on social media / news outlets), but this dashboard took a very extensive amount of resources from our team. If we had a KPI-based milestone attached to the number of dashboards, our incentive would have been to avoid this work, so the DAO may have received less value. If we tied our vest to % of the treasury deployed, we wouldn’t of had a proper incentive to leave 2,500+ ETH in the treasury in the Treasury Management v1.2 proposal for safety reasons related to the BoLD fraud proof protocol in case of an emergency. Another example of a bad incentive would be to liquidate more ARB at a less-than-ideal price simply because of KPIs, rather than optimizing ARB spend/conversion with broader market conditions. DRIP program KPIs, like TVL, sequencer revenue, or any other metric you can come up with, could ultimately become the only thing we would optimize for, as it would be our incentive to do so. Rather than trying to attract sustainable activity or bootstrapping new/promising markets, we would be more likely to optimize for mercenary activity that aligns with our “KPI” rather than doing what is best for Arbitrum over the long haul.
We have put a vast amount of thought into this proposal’s structure, and are certainly open to other ideas, but at the end of the day, we believe that nothing aligns incentives better than long-term ARB exposure.
As Entropy scales its team to over 10 members and internalizes key functions across data, incentives, and treasury strategy, we recognize the goal of improving execution quality and accountability. However, we believe this growth also introduces a latent risk of mission monopolization.
Without clear checks and balances, there is a risk that Entropy, whether consciously or unconsciously, becomes disincentivized to support or mentor initiatives proposed by external service providers, particularly if those initiatives overlap with its own expanding scope. This could lead to:
Favoring internal execution over supporting third-party contributors;
Reduced diversity of thought and experimentation in DAO service delivery;
External teams shifting attention elsewhere, shrinking the contributor ecosystem.
While internalizing key capabilities can improve delivery in the short term, overconsolidation may dampen the DAO’s resilience and long-term efficiency by undermining healthy competition and substitutability.
We recommend introducing guardrails that ensure Entropy continues to support and elevate external contributors wherever possible and the DAO maintains pathways for independent proposals to receive mentorship, feedback, and a fair review, regardless of who executes them.
The checks and balances are, in our view, in place already. The DAO will have the ability to fire us at any point, and each initiative that we spearhead has its own set of checks and balances baked into the proposals the DAO approves. For example, the most recent Treasury Management Consolidation Proposal requires that all of our allocations and associated risk monitoring are baked into recommendations that must be passed by the OAT, and the DAO can always claw back those funds via vote. For DRIP, the DAO can claw back those funds at any time if it believes we are doing a poor job of executing the program and we have Offchain Labs and the Arbitrum Foundation as our counterparts on the committee.
As the responsible “owners” of these verticals, Entropy essentially lays its own sword to fall on. If we spend too little on evaluation and distribution partners for a DRIP season, the DAO isn’t going to blame the service providers we hired to help us execute. Instead, they will look to Entropy to point the blame. We believe the important “checks and balances” to ensure service provider diversity, inclusion, and long-term resilience really come down to defining a responsible party for a program’s success. Our only incentives are to do what is best for Arbitrum long-term (through our vesting ARB allocation), and the success of each program we administer as the responsible party who will get to celebrate the wins, but also bear the burden of any losses.
Thanks a lot for the thoughtful response I do appreciate :) Want to answer one more time and then just leave it there cause I don't want to monopolize the discussion
When a service provider also controls a large delegate stake, the DAO’s “customer” and “vendor” become the same party. This concentration can create a latent COI: in edge cases, Entropy could benefit more from blocking an external provider than from maximizing DAO value. Entropy itself acknowledged this COI during the OpCo debate. Their earlier opposition to OpCo, even if well-intentioned, shows the theoretical risk: had the rest of the DAO not overruled that vote, a new organization might never have launched. In other words, vendor lock-in can make it harder for the DAO to explore, more effective alternatives.
We appreciate @Entropy commitment to the Arbitrum DAO and acknowledge the breadth of work delivered over the past year. The team has clearly become an integral part of DAO operations and has brought professionalism, energy, and valuable structure to many complex initiatives. As we consider a significant two-year renewal with an increased budget and a long-term ARB token alignment, we would like to raise several areas where the proposal could be strengthened.
As we review this proposal for a multi-year engagement with an expanded scope, we believe there are a few areas where additional clarity would help the DAO make a more informed decision. One of our main areas of feedback relates to the balance between execution and outcomes. While Entropy has helped ship many proposals and workstreams, we would appreciate a better understanding of the tangible results these efforts have produced. For example, the staking working group and STEP were thoughtfully designed, but how have they performed so far? What impact have they had on ecosystem growth, retention, or capital efficiency? What lessons have been learned? Sharing reflections like these would strengthen the proposal and build further trust in Entropy’s approach.
Overall I agree with the proposal and believe Entropy have been diligent and very positive for the DAO.
A few comments given the significant scale and commitment the proposal requests:
Disclaimer: I have worked with Entropy as part of the ARDC, I believe they are strong in certain areas and less so in others (Ops & Processes being one of them). Nevertheless the DAO wouldn’t be where it is right now without Entropy and a laser focused, strong driving force is definitely needed.
My 2cents on this proposal:
Disclaimer: I have worked with Entropy as part of the ARDC, I believe they are strong in certain areas and less so in others (Ops & Processes being one of them). Nevertheless the DAO wouldn’t be where it is right now without Entropy and a laser focused, strong driving force is definitely needed.
My 2cents on this proposal:
The DAO having a stake in Entropy would
I voted FOR this proposal, as the 15M ARB allocation was reworked to include a milestone-based component. Thanks, Entropy, for listening to the delegates' feedback regarding this matter.
After consideration, the @SEEDgov delegation decided to vote FOR on this proposal at the Snapshot Vote.
Rationale
First and foremost, SEEDGov would like to thank Entropy for the work delivered so far. While there are areas for improvement — as already mentioned in this discussion — we believe their presence in Arbitrum has been and continues to be a positive force for the DAO.
Over the past year, we’ve built a sustained relationship through joint work on various initiatives such as the Staking Working Group and the Stylus Sprint, as well as through ongoing mutual consultation between Entropy and SEEDGov.
These interactions have given us the opportunity to witness firsthand their professionalism and working methodology. Moreover, we’ve been able to lean on their support, which has had a meaningful impact on the quality of what the DAO is delivering to the protocol.
If we want to make Arbitrum win, we need more teams whose success is directly tied to Arbitrum’s success.
We would also like to highlight the Dune dashboards — a vertical that Entropy has focused on in recent months. This effort fills a crucial gap, and we must say that, as Program Managers of the DIP, these dashboards have been valuable tools for conducting internal analysis as well as for preparing the Mid-Term Report shared a few weeks ago.
Regarding the proposal itself, we support allocating 10M ARB to milestones to be negotiated with the OAT.
We understand the requested amount is significant, but it is also true that Entropy has consistently delivered value to Arbitrum's operations and ecosystem-wide initiatives. This value is often difficult to quantify, which is why we believe it would be unfair to focus solely on the cost Entropy represents — instead, we should view it as an investment.
LobbyFi’s rationale on the price and making the voting power available for sale for this proposal. The auction will be turned off since only party has direct financial interest in that proposal.
The cumulated program costs $9,6M (0,36 (ARB/USD now) * 5M + 0,36 * 10M * 0,5 (50% factor for future allocation) + 6M = 9,6 M). The instant buy price will be set at 1% of that, at 34,5 ETH for on-chain and 3,45 ETH for off-chain vote.
LobbyFi’s rationale on the price and making the voting power available for sale for this proposal. The auction will be turned off since only party has direct financial interest in that proposal.
The cumulated program costs $9,6M (0,36 (ARB/USD now) * 5M + 0,36 * 10M * 0,5 (50% factor for future allocation) + 6M = 9,6 M). The instant buy price will be set at 1% of that, at 34,5 ETH for on-chain and 3,45 ETH for off-chain vote.
Update: the price will be set at 10 ETH for the on-chain vote after analysing the snapshot votes.
Thank you for clarifying that the team consists of 14 people.
Thank you for clarifying that the team consists of 14 people.
I urge everyone to evaluate the budget based on objectives, not on the number of people planning to work on them. We don’t even know how much the individual team members are actually paid or how effective they are. What I do see is that the DAO’s spending is increasing at an unsustainable pace year after year — and we need to pay attention to this before we find ourselves with an empty treasury
First, we want to recognise the excellent work Entropy Advisors has delivered so far for the Arbitrum DAO. They have proved to be highly effective contributors in their first year of operations. Their efforts around cost optimisations, improved stakeholder communication, and the coordination of diverse initiatives have meaningfully strengthened the Arbitrum ecosystem.
Given this strong track record, we strongly support Entropy’s renewed commitment to the DAO.
First, we want to recognise the excellent work Entropy Advisors has delivered so far for the Arbitrum DAO. They have proved to be highly effective contributors in their first year of operations. Their efforts around cost optimisations, improved stakeholder communication, and the coordination of diverse initiatives have meaningfully strengthened the Arbitrum ecosystem.
Given this strong track record, we strongly support Entropy’s renewed commitment to the DAO.
Below, our thoughts on the current proposal:
In their own retrospective on the ARDC, Entropy wisely noted that fixed-term research commitments can create pressure to “create work.” That insight is valuable here as well. A one-year term gives the DAO the agility to reassess performance and adapt to changing needs, ensuring long-term relationships are continually earned through merit.
We believe that a two-year timeframe is sensible. This aligns with similar structures in other ecosystems (for example, the Uniswap Foundation recently secured a two-year mandate and funding from the Uniswap DAO). A multi-year horizon allows Entropy to plan and execute initiatives with sufficient depth and long-term impact rather than being constrained by shorter, reactive cycles.
That said, we would encourage the proposal to include clear one-year goals. We understand that specific KPIs will be negotiated with the OAT and tied to the proposed 10M ARB performance bonus, which is a sound mechanism. However, defining simple success criteria for each area of focus—and communicating those to the community—would significantly enhance transparency and accountability.
For example:
These types of measurable objectives would help clarify priorities for Entropy and the DAO, provide concrete milestones to evaluate progress, and build greater stakeholder confidence regarding the impact of this budget allocation.
1. Financial Planning, Analysis, and Guiding Capital Deployment We appreciate the effort to reduce fragmentation across the DAO’s various treasury management initiatives. While we believe directly engaging a dedicated treasury manager—either an external service provider or an internal team—is often the most effective solution (and is being adopted by a variety of DAOs), it has become clear over the past two years that the Arbitrum DAO is not currently comfortable with this option.
Given this context, finding the right balance between execution and DAO-driven decision-making is critical to the success of any treasury initiative. Based on this premise, we believe Entropy is an excellent candidate to cover this role. They have demonstrated a strong commitment to the ecosystem, responsible management, and transparency. We are strongly supportive of their decision to consolidate efforts, and it’s encouraging to see a shift from experimentation toward a more strategic and unified approach to asset management.
2. Incentives We think the DAO's decision to step away from the LTIPP and STIP programs was wise, helping to cut back on programs that were either ineffective or inefficiently managed. The newly approved DRIP program appears promising and reflects a more sustainable and thoughtful structure. Based on this, we are confident that Entropy can effectively lead this effort to deploy incentives that meaningfully grow the Arbitrum ecosystem strategically.
3. Ecosystem Data This is one of Entropy’s main strengths. We deeply appreciate the insights their Dune dashboards have provided to the community, significantly improving both transparent communication and data-driven decision-making. We are strongly supportive of Entropy continuing this work. Data will also be a crucial input for informed decisions in both treasury management and ecosystem incentives.
4. Special Projects While this area is more loosely defined than the previous sections, we support granting Entropy discretion to pursue initiatives they deem valuable for Arbitrum. The team has a deep understanding of both the Arbitrum ecosystem and the broader crypto industry. We are confident they have the skills and perspective to identify opportunities or challenges early and propose effective paths forward.
But it’s still unclear to me why a bonus is necessary if you’re already planning to receive extremely high salaries — around $30,000/month — which is excessive even by the standards of an overvalued crypto market. Isn’t that already sufficient compensation for exclusive work?
We believe it’s important to clarify the numbers. Our understanding is that Entropy plans to expand its team from the current 9 members to approximately 14 members. Assuming the entire $3 million annual budget was allocated purely to salaries, this would average closer to ~$18,000 per month per person, not $30,000. In practice, however, a significant portion of the budget will likely go toward other operating costs, including legal expenses, accounting, infrastructure and tools, and travel and community engagement. And, to events such as Arbitrum Delegates Day, which we understand Entropy plans to continue hosting.
Considering these expenses, we believe the overall budget request appears reasonable, especially given the value Entropy demonstrated in its first year.
Regarding bonuses, we are supportive of the team receiving ARB incentives. We believe aligning Entropy’s long-term incentives with the success of the Arbitrum ecosystem is both logical and beneficial. Equity-style vesting in ARB encourages sustained commitment and performance, provided clear KPIs and accountability measures are in place.
Thank you to those who shared feedback on our renewal proposal. We have updated the draft to reflect community input and provide greater alignment with Arbitrum DAO. We plan to move this proposal to Snapshot Thursday.
Changes on 7/7/25:
Revised 15M ARB Alignment Structure
Thank you to those who shared feedback on our renewal proposal. We have updated the draft to reflect community input and provide greater alignment with Arbitrum DAO. We plan to move this proposal to Snapshot Thursday.
Changes on 7/7/25:
Revised 15M ARB Alignment Structure
OpCo as Entropy’s Counterparty
Other Minor Changes
(ii) adoption of quarterly key performance indicators that track treasury yield targets, incentive-program retention, integration numbers, and dashboard usage, linked to a binding confidence Snapshot at month twelve with payments and vesting paused if goals are missed;
(iii) explicit confirmation that any unvested ARB returns to the treasury if the engagement ends early;
1. Tie the 15M ARB Allocation to High-Level, Strategic Milestones.
We believe that Version 2 directly addresses these concerns and really appreciate all the feedback:
This structure provides the DAO with more flexibility while ensuring KPIs, stronger accountability, and clear levers to ensure Entropy’s work continues to deliver measurable impact.
(iv) a clear description of Entropy’s responsibilities relative to the future OpCo to avoid overlap.
We have added language that clearly shows OpCo as our counterparty which will further enable us to work effectively with them. Additionally, from our perspective, the OpCo functions as a "Quarterback" in the DAO to ensure AAEs function as a cohesive, effective team rather than necessarily doing a lot of the execution work themselves. That said, we are aware that OpCo’s role could be fluid and changing based on who is appointed to its leadership, and are committed to working closely with them to make sure we continue alignment.
That starts with full transparency: a breakdown of costs (team roles, salary ranges, travel, etc.) would go a long way in helping the community understand where the money is going and how it ties back to outcomes.
(i) publication of a detailed budget covering headcount, salary bands, infrastructure, and reserves;
We understand the call for transparency but don’t believe publishing granular budgets or salary bands is the right mechanism. Our focus is on delivering outcomes, not micromanaging inputs. Highly detailed cost disclosures risk shifting the conversation away from measurable results. This level of transparency could also compromise our ability to attract and retain top-tier talent in highly specialized roles (applied research, fund management, etc), where public salary disclosure would undermine competitive hiring negotiations and create poaching risks.
Version 2 addresses alignment and accountability through milestone-based incentives (10M ARB reserved for OAT negotiation), a termination clause that returns unvested ARB, and robust reporting tied to deliverables. This gives the DAO real oversight while allowing us to focus on execution.
We considered this but believe a 2-year mandate is critical for the type of multi-year ecosystem growth initiatives outlined (treasury management, iterative incentive programs, etc). The updated structure with milestone-based rewards via the OAT provides sufficient performance-based accountability while giving Entropy and the DAO the runway needed to execute at scale. Additionally, the DAO always maintains the ability to end the engagement as it sees fit. Overall, we are ok with making this change, but it has been requested by multiple stakeholders at this point to do a minimum of 2-years so we believe this change would need broader support to do so.
We fully support RFPs and broader calls for contributions across the DAO. We appreciate this comment and will always welcome collaboration and remain committed to building frameworks that enable more high-quality contributors to participate effectively in the DAO.
Thank you for taking the community's feedback into account. You've conducted a thorough analysis, but I still have some financial concerns:
Thanks for making the adjustments, Entropy.
On this,
10M ARB reserved for the OAT to negotiate milestone-based incentives (KPIs), equity investment, time-based bonuses, or other short/medium/long-term alignment mechanisms.
Thanks for making the adjustments, Entropy.
On this,
10M ARB reserved for the OAT to negotiate milestone-based incentives (KPIs), equity investment, time-based bonuses, or other short/medium/long-term alignment mechanisms.
We just want to confirm that these negotiations will be concluded with final agreements shared with the community before this proposal moves to at least an onchain vote.
OpCo as Entropy’s Counterparty
While we understand the reasoning, this seems like it risks Entropy becoming answerable to the Foundation + OCL, given they hold two of the seats on the OpCo oversight board.
We would be more comfortable with Entropy remaining unambiguously answerable to governance and governance only. With AF and OCL holding seats on the OpCo oversight group, Entropy is really the only entity currently positioned to represent the DAO should there be a disagreement between the DAO and AF/OCL.
This isn't just hypothetical. Remember the initial AIP-1 situation. It would be cleaner to have Entropy negotiating with a governance-only counterparty.
Hi this is Brook from TiD Research. Entropy’s contributions to the Arbitrum DAO have been meaningful and wide-ranging, and I support the idea of renewing the relationship. That said, I think there’s still room to improve how we structure long-term engagements — especially in terms of flexibility, accountability, and contributor alignment.
Hi this is Brook from TiD Research. Entropy’s contributions to the Arbitrum DAO have been meaningful and wide-ranging, and I support the idea of renewing the relationship. That said, I think there’s still room to improve how we structure long-term engagements — especially in terms of flexibility, accountability, and contributor alignment.
Entrusting pivotal functions such as proposal incubation, treasury design, and incentive architecture to a single provider can streamline operations, yet it risks creating lock-in and suppressing healthy competition. How will Entropy ensure that its exclusive mandate does not crowd out alternative contributors or foster dependency if priorities shift or performance falters? Please outline review gates or competitive checkpoints that allow the DAO to reassess exclusivity at regular intervals.
While Entropy’s context-rich involvement is valuable, there's a legitimate concern that its role across multiple verticals (treasury, incentives, strategy) could create friction for new contributors, even unintentionally. We should ensure the DAO stays open and pluralistic — especially in domains where experimentation and specialization thrive.
Two ideas to help:
.These wouldn’t limit Entropy’s execution ability, but would keep pathways open for others — especially newer or domain-specific teams.
Instead of granular operational metrics, we should tie vesting tranches to the successful achievement of major, DAO-ratified strategic outcomes that arise from Entropy’s new mandates. Examples of this could be a successful DRIP Season Performance or achieving the Treasury Management Targets as well as launching a New Strategic Framework like a DAO-wide annual budget process or a new model for RWA partnerships.
Entropy rightly pointed out that hardcoded KPIs could be limiting in a fast-changing ecosystem. Still, from a DAO operations perspective, we can’t rely purely on narrative or vibes. Some interim milestone check-ins are critical for:
Even high-level quarterly indicators — like dashboards shipped, % of DRIP budget utilized, or DAO financial reports delivered — would go a long way in helping the DAO track progress without boxing Entropy into inflexible deliverables.
Entropy currently holds a large ARB voting stake while also being a core service provider. While this has been handled responsibly so far, it creates a concentration of influence that the DAO should proactively account for.
One safeguard might be:
In their own retrospective on the ARDC, Entropy wisely noted that fixed-term research commitments can create pressure to “create work.” That insight is valuable here as well. A one-year term gives the DAO the agility to reassess performance and adapt to changing needs, ensuring long-term relationships are continually earned through merit.
The idea of suggesting these elements is to build a more accountable and resilient DAO and give the OAT and OpCo the tools they need to succeed in their oversight role, which I believe is essential for the health of the ecosystem.
This separates performance assessment from informal forum commentary and helps ensure any future issues are surfaced objectively.
To directly address the themes above — especially long-term alignment, performance-driven rewards, and mitigating exclusivity — not sure if it's appropriate but might be worth exploring the option of converting $1M/year of Entropy’s base compensation into ARB options.
Our success is very clearly tied to the success of Arbitrum at this point - everyone in the industry knows Entropy as a team “committed to Arbitrum”. If Arbitrum does not succeed, it is very unlikely that Entropy would be able to win business elsewhere. We view our 2-year commitment and a significant portion of our upside in vesting ARB as sufficient means to guarantee our AAE status.
At the same time since the DAO is funding a company & its growth I believe it would be reasonable to ask in return a stake of said company
Unfortunately, this would create some weird dynamics. The equity would, in practice, have to sit with OpCo or AF. It’s already the case that two of the main entities in the Arbitrum ecosystem are in a service provider relationship – it would make conflicts of interest even more pronounced to have one entity own part of the equity of the other.
Good idea, directionally. It just seems too hard to do in this case.
| Component | Details |
|---|---|
| Monthly Option Grant | Each month, Entropy receives ~$83,333 worth of ARB options (equivalent to $1M/year) |
| Strike Price | Based on ARB’s market price at time of issuance (or a 30-day rolling average) |
| Vesting | Each month’s options vest over 12 months (rolling) |
| Termination Clause | If the DAO ends the engagement, all unvested options are cancelled immediately |
| Lock-up (optional) | ARB acquired through exercise can have a 6–12 month lock to prevent early sell-off |
| Transparency | Option grants, strike prices, and vesting can be publicly tracked (e.g., via Dune dashboard) |
This structure maintains Entropy’s full $3M/year package, but shifts part of it from guaranteed cash to performance-sensitive equity-style rewards.
I continue to support Entropy’s role and see the renewal as a positive step. These suggestions aren’t meant to challenge their contributions — they’re about maturing how we structure high-trust relationships within the DAO. Open to feedback on the options mechanism — and curious whether others see this as a replicable model for similar future engagements.
Acknowledgement of Contributions
Acknowledgement of Contributions
I acknowledge that Entropy Advisors has undoubtedly done substantial work for the Arbitrum DAO. However, as with most delegates, I believe Arbitrum’s top priorities should be ecosystem growth and profitability. While progress has been made on the growth side, the profitability and growth aspect remains a serious concern.
This level of compensation appears significantly inflated and disproportionate. Even compared to the OpCo budget — which many delegates already questioned due to high salaries — Entropy’s budget is higher.
If we compare Entropy’s compensation with what all active delegates receive combined, Entropy is asking for almost double (based on recent data). Are these costs truly reasonable and justified?
Many responsibilities currently handled by Entropy are expected to be transferred to OpCo. In that case, why is there no corresponding reduction in Entropy’s budget?
Without clear budget separation, we are risking duplicate funding for overlapping workstreams.
Entropy often highlights their strong working relationships with the Foundation and Offchain Labs as a success. While understandable from an operational perspective, this approach risks replacing decentralized DAO processes with centralized coordination.
Instead of separating roles, Entropy’s increasing involvement risks merging execution and governance, making it increasingly difficult for the DAO to later unwind this dependency. We may soon find ourselves in a position where Entropy can dictate its own terms due to lock-in and lack of alternatives.
This proposal does not present any real choice.
I’m confident there are other capable organizations in the market that could offer similar services (possibly at a lower cost, who knows). Yet, no competitive process or open call for applications has been made. We are being presented with a binary option: "Entropy or nothing", which undermines healthy DAO governance. Any proposal of this scale should come with alternative options.
The summary of past results is extremely limited and vague, referring readers to a forum summary rather than offering transparent reporting.
While Entropy contributed to important initiatives such as OpCo formation, these are internal infrastructure projects that do not generate profit for Arbitrum users or the treasury.
Just look at the decline in ARB’s market value over the past year: this is how the market evaluates Arbitrum’s current strategy and future prospects. I see little from Entropy that directly addresses ecosystem profitability or token value.
Entropy is backed by only 64 delegates, most of whom are “whales”.
This does not reflect widespread community support. In contrast, other top delegates receive broader backing from everyday users. Voting power alone should not be interpreted as a proxy for grassroots trust.
Entropy’s work has value — but:
The budget must be significantly reduced to reflect realistic compensation and avoid centralization and inefficiency
Hello everyone,
As a member of the ARDC Supervisory Council, I’ve had the opportunity to work closely with the Entropy Advisors team over the past several months. I believe Entropy's strategic vision to professionalize the treasury and incentive structures is the right direction for the DAO. As we transition to the new operational model, we should construct our foundational partnerships with as much accountability possible.
Hello everyone,
As a member of the ARDC Supervisory Council, I’ve had the opportunity to work closely with the Entropy Advisors team over the past several months. I believe Entropy's strategic vision to professionalize the treasury and incentive structures is the right direction for the DAO. As we transition to the new operational model, we should construct our foundational partnerships with as much accountability possible.
To that end, I think this proposal should not be seen as just a renewal but as an opportunity to define an accountability framework that the new OpCo can use as a blueprint for all AAEs. By making a few constructive amendments, we can ensure this partnership model is built on a foundation of trust, transparency, and clear alignment.
With that in mind, I'd like to make the following suggestions:
1. Tie the 15M ARB Allocation to High-Level, Strategic Milestones.
From my point of view, a purely time-based vesting schedule doesn't fully align incentives with the DAO's strategic goals.I understand and appreciate the concern Entropy raised that narrowly defined KPIs can create perverse incentives, like optimizing for quantity over quality. However, accountability to the DAO's strategic goals is still paramount. These goals include achieving long-term financial sustainability and driving compounding ecosystem growth.
I agree with other delegates that we should link the vesting of the 15M ARB to the successful achievement of key outcomes.
Instead of granular operational metrics, we should tie vesting tranches to the successful achievement of major, DAO-ratified strategic outcomes that arise from Entropy's new mandates. Examples of this could be a successful DRIP Season Performance or achieving the Treasury Management Targets as well as launching a New Strategic Framework like a DAO-wide annual budget process or a new model for RWA partnerships.
This creates alignment and gives the community a clear measure of success while at the same time giving Entropy the operational flexibility they need.
2. Provide a More Granular Budget.
For the DAO to mature, so must our fiduciary practices. Several delegates have raised valid concerns about the budget, and I believe that asking Entropy to provide a more detailed breakdown is a reasonable request and it will set a positive precedent. I agree that we shouldn't miss the forest for the trees and that attracting top-tier talent requires competitive compensation. A clear, structured budget will help establish a precedent of financial transparency that eventually the OpCo will need to effectively oversee in the entire ecosystem.
3. Move to a 1-Year Term with a Performance-Based Renewal.
In their own retrospective on the ARDC, Entropy wisely noted that fixed-term research commitments can create pressure to "create work." That insight is valuable here as well. A one-year term gives the DAO the agility to reassess performance and adapt to changing needs, ensuring long-term relationships are continually earned through merit.
The idea of suggesting these elements is to build a more accountable and resilient DAO and give the OAT and OpCo the tools they need to succeed in their oversight role, which I believe is essential for the health of the ecosystem.
I'm optimistic about what comes next for the DAO and look forward to continue collaborating.
Disclaimer: The views expressed in this post are my own and do not represent the official position of SEEDGov.
We agree with your assessment that taking on all of this work would be overkill, and is not at all what we intended to propose. In other words, we do aim to support builders through our workstreams, but do not believe that solely treasury management, incentives, and data analytics cover the majority of work associated with everything Arbitrum needs in order to support builders. We hope that helps answer your question/clear up any confusion on the builder support front.
At the same time since the DAO is funding a company & its growth I believe it would be reasonable to ask in return a stake of said company
AranaDigital acknowledges Entropy Advisors’ successful Year 1 record, including neutral proposal facilitation, widely used analytics dashboards, and useful stakeholder-alignment work, we praise as helpful for the DAO. The requested two-year renewal, together with a fifteen-million-ARB grant that vests over three years after a one-year cliff and a termination rule that three percent of the votable supply can trigger, provides long-term incentive alignment while keeping community control. However, we agree with @Tane on this point
The proposal requests $6M in ARB for payroll plus a 15M ARB vested allocation, more than doubling the cash component of the first term. A granular cost breakdown—headcount by role, salary bands, data-infrastructure spending, travel, and contingency—will help delegates judge whether the budget matches market rates and expected value delivered.
Thank you for putting this up, Entropy.
Just to touch on a couple of things from the proposal.
Thank you for putting this up, Entropy.
Just to touch on a couple of things from the proposal.
The updated ask — $3M/year plus 15M ARB (1-year cliff, 3-year vest) — is a big jump from the first term, which came in at $2.47M plus up to 1.5M ARB in bonuses. We need to make sure this kind of scale-up is backed by clear, tangible results. That starts with full transparency: a breakdown of costs (team roles, salary ranges, travel, etc.) would go a long way in helping the community understand where the money is going and how it ties back to outcomes.
We also note Entropy’s ARB-based incentive is meant to align your interests with ours, which is positive, but a large bonus pool should be tied to concrete milestones.
The DAO will have the options of no bonus, 10% bonus, 25% bonus, or a 40% bonus. The bonus will be denominated in the dollar equivalent of ARB in relation to the initial funding amount ($2.47M) requested in this proposal. For example, if the DAO is only slightly pleased with the amount of work we conduct and the 10% bonus is voted for, Entropy will receive $247K of ARB tokens
The community agreed to this segment of the Y1 proposal. However, it is evident that the community cannot directly tie the percentages provided to the work actually done. This is exactly why we feel the 15M ARB allocation needs closer attention.
Time-based vesting assumes consistent value add just by being present, which is risky in DAOs. We totally understand skin in the game but in this space where one year can be considered a lot of time, we would feel more confident if there was accountability built in beyond just time.
On this
We addressed this point above, but want to double down here to provide tangible reasons for why KPI-based vesting doesn’t make the most sense. If we tie our vest to the number of dashboards to be delivered, we are incentivized to launch quantity over quality.
We have put a vast amount of thought into this proposal’s structure, and are certainly open to other ideas
We suggest implementing a hybrid milestone model.
This will keep the time-vested structure but layer in high-level outcome gates (not granular counts). For instance:
Gate 1 (Year 1 unlock): Launch one new sustainable revenue stream. For example, onboard a non-native asset into yield-generating DeFi.
Gate 2 (Year 2 unlock): Show ≥ X% growth in a core financial metric (e.g. treasury income YOY or total TVL) by Q3 2026.
And if any gate fails, add a clawback clause that pauses future vesting until a corrective plan is brought forward and approved by the DAO.
This way, rewards are still time-based but clearly tied to meaningful progress, and we avoid a situation where tokens accumulate just by default.
Y1 saw some strong contributions. Your dashboards became go-to resources, and the public Dune catalog has come in pretty handy. You’ve also played a key role in initiatives like OpCo and helped host events that improved delegate alignment and governance. These are wins.
That said, this proposal could do a better job of quantifying the value in certain areas.
This feels like a tangent that could benefit from more clarity.
We do not aim to take on all of the things mentioned above, we simply want to support Arbitrum builders through thoughtfully designed incentives, treasury management/POL to deepen Arbitrum liquidity, data analytics to improve dapp level transparency, and “special projects” as they arise
We suggest you introduce a sort of Builder Map where Entropy produces a one-pager each quarter. This will be a brief report aligning each of the four workstreams (treasury, incentives, data, special projects) to specific builder-support needs.
Then, if a gap appears (e.g. DevRel, accelerators), the DAO can fast-track a separate RFP rather than assume Entropy will cover it, protecting the “early-stage support funnel.”
Overall, it’s clear you’ve put a lot of thought into incentive design and keeping things running smoothly. To address concerns on both sides — yours about KPI bloat, and ours about accountability — we’d suggest a balance: use time-based vesting, but pair it with big-picture goals and a fallback clawback mechanism. Also, let’s define the builder support scope more clearly.
Thanks again for the thoughtful proposal and your openness to feedback.
Thanks to the Entropy team for this engagment renewal proposal, indicating their willingness to continue serving exclusively to the Arbitrum DAO.
We acknowledge the significant contributions made by Entropy Advisors during their first term and recognize the substantial operational lift they provided across DAO coordination, governance design, proposal execution, and data tooling. The direction outlined for Years 2 and 3 is ambitious and reflects a maturing vision aligned with Arbitrum’s long-term trajectory. That said, we believe several aspects of the proposal would benefit from further clarification and refinement before advancing to a vote.
First, thank you to everyone who has already provided feedback on our second engagement proposal. It is of utmost importance to our team that the entire Arbitrum community is behind us, as unification will yield the best results for Arbitrum over the long-term.
With that being said, we want to address some of the early feedback below.
First, thank you to everyone who has already provided feedback on our second engagement proposal. It is of utmost importance to our team that the entire Arbitrum community is behind us, as unification will yield the best results for Arbitrum over the long-term.
With that being said, we want to address some of the early feedback below.
Entrusting pivotal functions such as proposal incubation, treasury design, and incentive architecture to a single provider can streamline operations, yet it risks creating lock-in and suppressing healthy competition. How will Entropy ensure that its exclusive mandate does not crowd out alternative contributors or foster dependency if priorities shift or performance falters?
As an AAE (Arbitrum Aligned Entity), Entropy offers a clear accountability and continuity layer for our work, even when (often) working with other vendors and contributors. The scope we’ve proposed is intentionally designed to be synergistic: treasury management, incentive design, data analytics, and special projects are deeply interconnected. Splitting them across multiple providers risks duplicative work, misaligned incentives, and slower execution. The work as outlined largely requires an Arbitrum aligned entity at the helm, even though we may look to service providers for specific workstreams.
Entropy’s role is not about accumulating power, it’s about consolidating responsibility and being directly accountable for outcomes. The DAO has already seen how fragmented ownership leads to confusion and inertia. We want to help correct that by serving as a coherent, transparent executor for the DAO’s most strategic financial and growth functions while still being subject to community input.
Arbitrum has no shortage of need for high-context, high-quality executors in areas that require dedicated ownership. In the event our scope narrows in one area, we’re confident we can reallocate top talent to emerging priorities. Continuity and context are Entropy’s core strengths, and we’ll remain flexible to where the DAO needs us most.
Arbitrum already coordinates Offchain Labs, the Foundation, and the emerging OpCo, so overlapping mandates can easily turn into a bureaucratic cost center without contributing to the actual project’s progress. We therefore ask for a detailed list of deliverables and its outcomes, each paired with clear KPIs or some other measurable things, and expected ecosystem impact.
We believe that our success will be clearly reflected in the success of Arbitrum’s treasury management, incentive design, data infrastructure, and special projects. That said, we’re cautious about rigid KPIs that can unintentionally create perverse incentives or steer us away from the highest-leverage work.
Instead, we’ve outlined clear workstreams and objectives in the proposal, and we’ll report progress transparently across each. Where impact is more qualitative, we’ll ensure visibility into the reasoning and results.
Ultimately, our accountability comes from the clarity of our scope, the transparency of our reporting within each vertical, and our willingness to adjust based on DAO feedback.
The proposal requests $6M in ARB for payroll plus a 15M ARB vested allocation, more than doubling the cash component of the first term. A granular cost breakdown—headcount by role, salary bands, data-infrastructure spending, travel, and contingency—will help delegates judge whether the budget matches market rates and expected value delivered.
The main line item driving the increased base is salaries/related expenses. In Years 2 and 3, we will attract top-tier talent in highly specialized fields such as economic modeling, treasury management, and data analysis; fields where capable contributors are in extremely short supply. As a result, other spending buckets (legal, infrastructure, tooling, travel, etc) will rise modestly as well. In particular, our vision for Entropy Data goes far beyond basic dashboards; delivering a robust, composable data layer for Arbitrum will require significant infrastructure investment well beyond what off-the-shelf tools like Dune can support.
For more granular information related to the spending throughout our first term, we highly recommend checking out our quarterly transparency reports here.
My 2cents on this proposal:
Eventually the DAO is/and has been bootstrapping a Web3 consultancy (currently exclusive to Arbitrum)
At the same time since the DAO is funding a company & its growth I believe it would be reasonable to ask in return a stake of said company
The DAO having a stake in Entropy would
ensure upside even if in the future Entropy were to engage with other protocols (which I am not opposed to because I believe there is a lot to learn/leverage when working with non-competing protocols)
truly be an AAE because it gives the DAO skin in the game
Our team has discussed this idea internally, as well as with some large delegates, the AF, and OCL at various moments in the past. However, the intricacies associated with executing this in practice has made us reluctant to pursue this approach. We think it makes more sense to make a proposal in the future if there is a potential client that approaches us that would require Entropy to break its exclusivity, and to empower the DAO to make this decision at that time. We do not want to create a distraction around our reengagement that would draw attention away from the core content within our proposal, and we believe an equity stake discussion would do exactly that.
Our success is very clearly tied to the success of Arbitrum at this point - everyone in the industry knows Entropy as a team “committed to Arbitrum”. If Arbitrum does not succeed, it is very unlikely that Entropy would be able to win business elsewhere. We view our 2-year commitment and a significant portion of our upside in vesting ARB as sufficient means to guarantee our AAE status.
We are not completely against the idea if the DAO has the structure where a direct counterparty can negotiate this type of arrangement in the future, but we do not think the timing is right at this moment in time.
While on this first pass, I don’t have much to say about the proposed work scope and the base pay related to that, but I believe the extra 15m ARB allocation deserves clear milestones to make sense, and/or should have a similar structure of the first proposal (a separeted Snapshot vote). IMO, it is expected that, as a “contractor” working for a single client, the team’s commitment to deliver the items defined above and the incentive for this sole client to be successful, are part of the base pay (that already has a bonus for the exclusivity/market we are inserted).
The ARB portion of the payment isn’t about compensation as much as it is about alignment. Through the admittedly large-scale vesting ARB allocation, Entropy Advisors will always do what we think is best for Arbitrum no matter the scenario. Our goal is to lock in this alignment in a way that makes us immune to other parties' external interest, and aligns us with one thing, Arbitrum. We think it's a perfect combination where the DAO can always fire us, but the ARB means we never stop working for Arbitrum. From our perspective, on rare occasions, Arbitrum and large delegates can have different interests.
It’s also about retaining top-tier talent. The best people in the industry are drawn to projects where they have ownership and upside, especially in pre-TGE environments. We want to create that same level of ownership for contributors to Entropy: the freedom to build, the mandate to think long-term, and the ability to share in the success they help create.
When it comes to defining KPIs, please see the response above to Tane’s comment.
I understand from the above that Entropy plans to lead the DAO efforts in addressing talent attraction and early-stage support for projects in Arbitrum ecosystem - an area we typically call Builder Support. Is this interpretation correct?
If yes, I do wonder if this is an area where Entropy is best positioned to lead compared to the other areas proposed, both from a capability and organizationally. I don’t have a definitive opinion, but I do have some concerns, as the key expertise related are roughly:
building (entrepreneurial experience)
talent attraction (growth, marketing, high-level HR)
investment (angel, pre-seed, CVC)
incubation (venture studios, accelerators, incubators)
R&D (applied research, commercialising technologies)
DevRel (tech support, community building, education programs, hackathons, etc.)
Those are not expertise that the Entropy team has (to the best of my knowledge, please correct me if I’m wrong). I do not question their drive to grow, and they can expand the team, but building these multiple capabilities from 0 or even assessing who has them to recruit is tricky.
Please correct my understanding of what this scope means if I’m misguided!
We do not aim to take on all of the things mentioned above, we simply want to support Arbitrum builders through thoughtfully designed incentives, treasury management/POL to deepen Arbitrum liquidity, data analytics to improve dapp level transparency, and “special projects” as they arise (the Converge example being the most apt in this context).
We agree with your assessment that taking on all of this work would be overkill, and is not at all what we intended to propose. In other words, we do aim to support builders through our workstreams, but do not believe that solely treasury management, incentives, and data analytics cover the majority of work associated with everything Arbitrum needs in order to support builders. We hope that helps answer your question/clear up any confusion on the builder support front.
Finally, if this proposal does not move forward, it would be useful to know what happens to the ongoing work. Are there plans to wind things down, transition responsibilities, or maintain certain operations? Clarity here would support better planning and help set expectations across the DAO.
We are of course hopeful that our proposal moves forward successfully, but are happy to transition all of our work over to the party (or parties) deemed appropriate by the DAO if our proposal fails. If we were to just drop all of our responsibilities without first helping with the transition, the Entropy Advisors brand/reputation would take a huge hit. We have also invested a significant amount of time and effort into the Arbitrum ecosystem at this point, so we would never want to leave the DAO in a bad spot in the case Entropy were not to be renewed.
Additionally, with the OpCo moving forward at a reasonable pace, we could work with their lead to hand over any necessary roles in a much more streamlined fashion.
In terms of your other feedback, we believe that we have addressed that in the replies above. Please feel free to double down on any questions you think we may have missed here, and we will reply in a timely manner.
The proposed 15M ARB long-term alignment incentive is material. We echo the replies from other delegates (@jameskbh, @Tane) seeking to better align these vested allocations with measurable positive outcomes for the DAO. To ensure this aligns with DAO expectations, we suggest:
Tying the ARB vesting unlocks to performance milestones, rather than just time. For example: number of dashboards delivered, DRIP program KPIs met, treasury % deployed, etc.
Including clawback or partial-vesting clauses in case of early termination or failure to meet key deliverables.
We addressed this point above, but want to double down here to provide tangible reasons for why KPI-based vesting doesn’t make the most sense. If we tie our vest to the number of dashboards to be delivered, we are incentivized to launch quantity over quality. OCL asked our data team to create a Timeboost dashboard (which has provided a ton of decision-making value and value on the marketing front on social media / news outlets), but this dashboard took a very extensive amount of resources from our team. If we had a KPI-based milestone attached to the number of dashboards, our incentive would have been to avoid this work, so the DAO may have received less value. If we tied our vest to % of the treasury deployed, we wouldn’t of had a proper incentive to leave 2,500+ ETH in the treasury in the Treasury Management v1.2 proposal for safety reasons related to the BoLD fraud proof protocol in case of an emergency. Another example of a bad incentive would be to liquidate more ARB at a less-than-ideal price simply because of KPIs, rather than optimizing ARB spend/conversion with broader market conditions. DRIP program KPIs, like TVL, sequencer revenue, or any other metric you can come up with, could ultimately become the only thing we would optimize for, as it would be our incentive to do so. Rather than trying to attract sustainable activity or bootstrapping new/promising markets, we would be more likely to optimize for mercenary activity that aligns with our “KPI” rather than doing what is best for Arbitrum over the long haul.
We have put a vast amount of thought into this proposal’s structure, and are certainly open to other ideas, but at the end of the day, we believe that nothing aligns incentives better than long-term ARB exposure.
As Entropy scales its team to over 10 members and internalizes key functions across data, incentives, and treasury strategy, we recognize the goal of improving execution quality and accountability. However, we believe this growth also introduces a latent risk of mission monopolization.
Without clear checks and balances, there is a risk that Entropy, whether consciously or unconsciously, becomes disincentivized to support or mentor initiatives proposed by external service providers, particularly if those initiatives overlap with its own expanding scope. This could lead to:
Favoring internal execution over supporting third-party contributors;
Reduced diversity of thought and experimentation in DAO service delivery;
External teams shifting attention elsewhere, shrinking the contributor ecosystem.
While internalizing key capabilities can improve delivery in the short term, overconsolidation may dampen the DAO’s resilience and long-term efficiency by undermining healthy competition and substitutability.
We recommend introducing guardrails that ensure Entropy continues to support and elevate external contributors wherever possible and the DAO maintains pathways for independent proposals to receive mentorship, feedback, and a fair review, regardless of who executes them.
The checks and balances are, in our view, in place already. The DAO will have the ability to fire us at any point, and each initiative that we spearhead has its own set of checks and balances baked into the proposals the DAO approves. For example, the most recent Treasury Management Consolidation Proposal requires that all of our allocations and associated risk monitoring are baked into recommendations that must be passed by the OAT, and the DAO can always claw back those funds via vote. For DRIP, the DAO can claw back those funds at any time if it believes we are doing a poor job of executing the program and we have Offchain Labs and the Arbitrum Foundation as our counterparts on the committee.
As the responsible “owners” of these verticals, Entropy essentially lays its own sword to fall on. If we spend too little on evaluation and distribution partners for a DRIP season, the DAO isn’t going to blame the service providers we hired to help us execute. Instead, they will look to Entropy to point the blame. We believe the important “checks and balances” to ensure service provider diversity, inclusion, and long-term resilience really come down to defining a responsible party for a program’s success. Our only incentives are to do what is best for Arbitrum long-term (through our vesting ARB allocation), and the success of each program we administer as the responsible party who will get to celebrate the wins, but also bear the burden of any losses.
Thanks a lot for the thoughtful response I do appreciate :) Want to answer one more time and then just leave it there cause I don't want to monopolize the discussion
When a service provider also controls a large delegate stake, the DAO’s “customer” and “vendor” become the same party. This concentration can create a latent COI: in edge cases, Entropy could benefit more from blocking an external provider than from maximizing DAO value. Entropy itself acknowledged this COI during the OpCo debate. Their earlier opposition to OpCo, even if well-intentioned, shows the theoretical risk: had the rest of the DAO not overruled that vote, a new organization might never have launched. In other words, vendor lock-in can make it harder for the DAO to explore, more effective alternatives.
We appreciate @Entropy commitment to the Arbitrum DAO and acknowledge the breadth of work delivered over the past year. The team has clearly become an integral part of DAO operations and has brought professionalism, energy, and valuable structure to many complex initiatives. As we consider a significant two-year renewal with an increased budget and a long-term ARB token alignment, we would like to raise several areas where the proposal could be strengthened.
As we review this proposal for a multi-year engagement with an expanded scope, we believe there are a few areas where additional clarity would help the DAO make a more informed decision. One of our main areas of feedback relates to the balance between execution and outcomes. While Entropy has helped ship many proposals and workstreams, we would appreciate a better understanding of the tangible results these efforts have produced. For example, the staking working group and STEP were thoughtfully designed, but how have they performed so far? What impact have they had on ecosystem growth, retention, or capital efficiency? What lessons have been learned? Sharing reflections like these would strengthen the proposal and build further trust in Entropy’s approach.
Overall I agree with the proposal and believe Entropy have been diligent and very positive for the DAO.
A few comments given the significant scale and commitment the proposal requests:
Disclaimer: I have worked with Entropy as part of the ARDC, I believe they are strong in certain areas and less so in others (Ops & Processes being one of them). Nevertheless the DAO wouldn’t be where it is right now without Entropy and a laser focused, strong driving force is definitely needed.
My 2cents on this proposal:
Disclaimer: I have worked with Entropy as part of the ARDC, I believe they are strong in certain areas and less so in others (Ops & Processes being one of them). Nevertheless the DAO wouldn’t be where it is right now without Entropy and a laser focused, strong driving force is definitely needed.
My 2cents on this proposal:
The DAO having a stake in Entropy would
We agree with your assessment that taking on all of this work would be overkill, and is not at all what we intended to propose. In other words, we do aim to support builders through our workstreams, but do not believe that solely treasury management, incentives, and data analytics cover the majority of work associated with everything Arbitrum needs in order to support builders. We hope that helps answer your question/clear up any confusion on the builder support front.
Much appreciate the clarification. The scope around incentives, data, institutional, and treasury makes a lot of sense to me as a cohesive package (with some special projects as needed).
May I suggest rewording the proposal slightly to make this dummy-proof clear? (The 3 snippets I quoted in my first reply had led me to misunderstand the scope thinking it was geared towards also including the early stage builder support as a domain you'd largely have ownership over)
Our success is very clearly tied to the success of Arbitrum at this point - everyone in the industry knows Entropy as a team “committed to Arbitrum”. If Arbitrum does not succeed, it is very unlikely that Entropy would be able to win business elsewhere. We view our 2-year commitment and a significant portion of our upside in vesting ARB as sufficient means to guarantee our AAE status.
We are not completely against the idea if the DAO has the structure where a direct counterparty can negotiate this type of arrangement in the future, but we do not think the timing is right at this moment in time.
At the same time since the DAO is funding a company & its growth I believe it would be reasonable to ask in return a stake of said company
Unfortunately, this would create some weird dynamics. The equity would, in practice, have to sit with OpCo or AF. It's already the case that two of the main entities in the Arbitrum ecosystem are in a service provider relationship -- it would make conflicts of interest even more pronounced to have one entity own part of the equity of the other.
Good idea, directionally. It just seems too hard to do in this case.
AranaDigital acknowledges Entropy Advisors’ successful Year 1 record, including neutral proposal facilitation, widely used analytics dashboards, and useful stakeholder-alignment work, we praise as helpful for the DAO. The requested two-year renewal, together with a fifteen-million-ARB grant that vests over three years after a one-year cliff and a termination rule that three percent of the votable supply can trigger, provides long-term incentive alignment while keeping community control. However, we agree with @Tane on this point
The proposal requests $6M in ARB for payroll plus a 15M ARB vested allocation, more than doubling the cash component of the first term. A granular cost breakdown—headcount by role, salary bands, data-infrastructure spending, travel, and contingency—will help delegates judge whether the budget matches market rates and expected value delivered.
that the proposed six-million-dollar cash budget and the equity-style token grant more than double last year’s package and are not yet backed by a detailed cost breakdown, milestone-based vesting, or clear performance measures. AranaDigital will vote FOR the proposal if four conditions are met before Snapshot: (i) publication of a detailed budget covering headcount, salary bands, infrastructure, and reserves; (ii) adoption of quarterly key performance indicators that track treasury yield targets, incentive-program retention, integration numbers, and dashboard usage, linked to a binding confidence Snapshot at month twelve with payments and vesting paused if goals are missed; (iii) explicit confirmation that any unvested ARB returns to the treasury if the engagement ends early; and (iv) a clear description of Entropy’s responsibilities relative to the future OpCo to avoid overlap. Finally, we ask Entropy to address @Tamara’s suggestion that the DAO receive a minority equity stake in Entropy as an additional alignment tool.
Thanks to the Entropy team for this engagment renewal proposal, indicating their willingness to continue serving exclusively to the Arbitrum DAO.
We acknowledge the significant contributions made by Entropy Advisors during their first term and recognize the substantial operational lift they provided across DAO coordination, governance design, proposal execution, and data tooling. The direction outlined for Years 2 and 3 is ambitious and reflects a maturing vision aligned with Arbitrum’s long-term trajectory. That said, we believe several aspects of the proposal would benefit from further clarification and refinement before advancing to a vote.
The proposed 15M ARB long-term alignment incentive is material. We echo the replies from other delegates (@jameskbh, @Tane) seeking to better align these vested allocations with measurable positive outcomes for the DAO. To ensure this aligns with DAO expectations, we suggest:
As Entropy scales its team to over 10 members and internalizes key functions across data, incentives, and treasury strategy, we recognize the goal of improving execution quality and accountability. However, we believe this growth also introduces a latent risk of mission monopolization.
Without clear checks and balances, there is a risk that Entropy, whether consciously or unconsciously, becomes disincentivized to support or mentor initiatives proposed by external service providers, particularly if those initiatives overlap with its own expanding scope. This could lead to:
While internalizing key capabilities can improve delivery in the short term, overconsolidation may dampen the DAO’s resilience and long-term efficiency by undermining healthy competition and substitutability.
We recommend introducing guardrails that ensure Entropy continues to support and elevate external contributors wherever possible and the DAO maintains pathways for independent proposals to receive mentorship, feedback, and a fair review, regardless of who executes them.
This could include clearer conflict of interest declarations when declining to support overlapping external proposals, as well as metrics on external proposal support or mentorship provided over the mandate term.
We’re overall encouraged by the level of depth and reflection in this proposal. Entropy’s commitment to learning from Year 1 and adapting accordingly is evident, and we’re aligned with the broader vision of enabling Arbitrum to evolve into a capital-efficient, strategically guided DAO. With a few structural improvements, we believe this proposal can set a new standard for DAO service engagement.
We look forward to continued iteration ahead of the final vote.
Thanks a lot for the thoughtful response I do appreciate :) Want to answer one more time and then just leave it there cause I don't want to monopolize the discussion
When a service provider also controls a large delegate stake, the DAO’s “customer” and “vendor” become the same party. This concentration can create a latent COI: in edge cases, Entropy could benefit more from blocking an external provider than from maximizing DAO value. Entropy itself acknowledged this COI during the OpCo debate. Their earlier opposition to OpCo, even if well-intentioned, shows the theoretical risk: had the rest of the DAO not overruled that vote, a new organization might never have launched. In other words, vendor lock-in can make it harder for the DAO to explore, more effective alternatives.
The first question can be a bit hard to answer for a reason. As far as i can tell entropy operates both at strategic and tactical level, often times being both the executor and the ideator of the initiatives. It could be argued that, using "normal" kpi, would be easy for them (and anibody in their shoes) to set ones that are easy to achieve. At the same time, measuring strategic initiatives can instead be argued because there are first and second order effect that often times are not manifested right away. To make two stupid example, how do you evaluate with a kpi the code of conduct? and how do we evaluate the voting calendar? these are small and superficial example, and definitely not the most important at alls, but can be seen as a piece of a puzzle that is the dao professionalization (and removing friction for other professional parties to be created and operate smoothly) alongside "fancier" initiative like treasury management that could be, indeed, measured in a more robust way. All to say that I do find hard to apply normale framework in this situation. You would think that you could apply the same logic for a c-suite in a traditional corporation; at the same time, while entropy is the biggest delegate out there, it encompasses 10% of the active votes give or take, does not control the lab unit, does not control the other AAEs. So that framework is also off the table.
it is about situations where Entropy, in practice, becomes the exclusive provider for a specific line of work. We should articulate in advance when that de-facto exclusivity is acceptable, when it should trigger competitive sourcing.
Again, you really make a logic point here ser. Feels like is more of a case by case situation honestly, with the extreme consciousness that everything can change, rapidly, in our dao (check opco mandate 1 year ago vs what we just voted last week). Thiking about treasury for example, to me it makes totaly sense to have a central decisional body, but service provider for execution; as long as the dao is able to analyse the outcome and be satisfied, I don't see the necessity of having a second manager. If instead the outcome is not what we want, then we try to understand if it's entropy to be liable or the sp that were hired (which would also mean understand this hiring process and if it had any gap), and eventually act on information discovered. All of this to say that, to me, is a "show and tell" type of situation. The dao always has the ability to revoke a mandate. If we want to vote for a new treasury manager, we can. I think that as long as Entropy set clear expectations, and we as a dao have logic requests (ie: we can't ask a 100% return on a treasury that is actively managed while preserving most of it being in arb to name one), we can move toward a result oriented analysis, knowing also that market forces are uncontrollabe for entropy, the dao, vitalik and most of the universe.
So all of the long useless paragraph above to create a practical example on how imho we should approach exclusivity vs avoiding lockin vs evaluating operations vs allowing a paid third party operate for us.
For example, regarding treasury management, we observe substantial overlap between the domains described by Entropy and those covered by OpCo (though OpCo might be interpreted as having a bit more operational focus).
It might be a personal interpretation, but to me seems quite clear that opco is going in a direction that is quite different from what we initially thought. A unit that was mostly financially related and partially growth related seems like is standing up instead as a coordinator of all AAEs and one of the center of the growth of the ecosystem. I do see how you would want clarity in scope; at the same time is maybe difficult to find clarity in a time in which opco still has to find a ceo, and then the operational people. Capability in task X or Y comes after you onboard the right people and we are not there; at the same time we have a gap now in what we need. Realistically opco will be full operational imho not before Q4 and even there it might take a bit of more time.
More broadly, we think the DAO should cultivate sharper cost discipline. We agree that Entropy has done good work. Nonetheless, it is our fiduciary duty to keep asking whether the same objectives could be achieved more cheaply or more efficiently. Continual cost-effectiveness checks are simply part of protecting token-holder value.
I won't specifically spell out why I do think their price tag and model can be right. To me it boils down to a certain amount of people (8, now 9, probably in 6 months 12-15), plus responsabilities (in this case: treasury, drip, and we could reference the past ones as proxy of future ones like creating opco to name one) and understand the cost per employe annualized vs value accrued. If I do napkin math, it feels the numbers are right. That said, there are infinite models that could be applied, of which a subset can likely accrue value to Entropy in the same amount they are seeking with different ways of doing so I guess. i don't honestly have an hard opinion on this; but i do like simple stuff when possible, that's why i don't mind the current proposal.
If a one-year cadence would meaningfully disrupt execution, then a two-year contract is justified. If not, a one-year term should be adequate.
Personal take here: when I was a DA of the season 1 and 2, after 3 months out of 6 it was the time of starting to think "ok, I do I renew this initiative in a way that makes sense for the dao for value accrual". This is not a bad problem to have. But is indeed something that takes focus away from real operations.
At the same time, I can tell you that now that I operate the D.A.O. grant program on a 1y horizon, I do have the ability to build over time and analyse results as they come in and eventually adapt.
Could I run the program in 6 months like we did in previous seasons? Yes Could Entropy run on a 1y contract like the previous one? Likely yes Do both the situations above allow for better project exploration, data analysis and adaptation, as well as potentially gunning for bigger goals due to continuity vs running for half term? Likely yes as well.
Again, my personal opinion drawn from a different but similar initiative. Would also like to tag @Curia in this final piece of answer since they asked as well the rationality of the 2 years.
As stated above, I want to give to others enough time and space to ask questions and provide their opinions. Still wanted to thank both @Tane and @Curia for offering what I think is an extremely valuable perspectives, in a way that is both constructive and non disruptive, of entities operating in several DAOs and also not only very tied to Arbitrum, but always extremely thoughtful with their contributions in here.
We appreciate @Entropy commitment to the Arbitrum DAO and acknowledge the breadth of work delivered over the past year. The team has clearly become an integral part of DAO operations and has brought professionalism, energy, and valuable structure to many complex initiatives. As we consider a significant two-year renewal with an increased budget and a long-term ARB token alignment, we would like to raise several areas where the proposal could be strengthened.
As we review this proposal for a multi-year engagement with an expanded scope, we believe there are a few areas where additional clarity would help the DAO make a more informed decision. One of our main areas of feedback relates to the balance between execution and outcomes. While Entropy has helped ship many proposals and workstreams, we would appreciate a better understanding of the tangible results these efforts have produced. For example, the staking working group and STEP were thoughtfully designed, but how have they performed so far? What impact have they had on ecosystem growth, retention, or capital efficiency? What lessons have been learned? Sharing reflections like these would strengthen the proposal and build further trust in Entropy’s approach.
Looking ahead, we also note that DRIP represents a new direction for how the DAO approaches incentive design. While the program has not launched yet, it would be helpful to understand what indicators or metrics Entropy intends to track once it goes live, and what a successful outcome might look like. Planning ahead for evaluation can help ensure that we not only launch good programs but also learn and iterate based on results.
In that spirit, we would appreciate the inclusion of more clearly defined KPIs and reporting structures across Entropy’s scope. These tools would help the DAO assess performance more objectively and provide context around which initiatives have delivered the most value. Even a high-level roadmap or set of milestones for the next two years would help the community understand what success looks like. In addition, it would be valuable to know where Entropy believes its work has saved the DAO time, avoided inefficiencies, or unlocked growth. These kinds of outcomes are worth highlighting and, where possible, quantifying.
I think this is quite logical. In the program I run, the D.A.O. grant program, I moved the terms from 6 months to 1 year. I think initiatives that have a broad consensus and are perceived as important need to extend over time the time term because is the easiest way to allow the team to operate focusing on the mission, and not on the fact that in 12 months they will have to go all over this again. Managing an initiative that moved from 6 months to 1 year, the above explains why having a longer term would be preferred. I also don’t see this as a deal breaker: either we renew entropy or we don’t, and them running for 1 or 2 years is less important than the DAO accepting them.
Regarding the proposed two-year term, we recognize the point made @JoJo , that longer terms can allow teams to focus more fully on their mission. At the same time, we would appreciate more context on why two years is specifically necessary in this case. Are there particular initiatives that require a full two-year cycle to complete? Is there a long-term strategy that maps to this timeline? Including examples or a roadmap that shows how the work unfolds over time would help make this decision easier for the community.
Additionally, we’d appreciate a clearer explanation of how Entropy’s mission aligns with the broader objectives of the ArbitrumDAO, particularly in relation to the SOS framework proposed by delegates. Could you elaborate on how your proposed workstreams support the key pillars of this framework? Drawing a more direct connection between Entropy’s role and the DAO’s strategic priorities would help contextualize the proposal within the larger ecosystem goals.
We would also like to see more detail on the proposed budget. A simple breakdown of how the three million dollars per year will be allocated, such as staffing, infrastructure, and other operational costs, would provide useful clarity. Similarly, the fifteen million ARB vesting package is substantial. We believe it would help to explain how this will be distributed within the team, whether there are clawback protections, and how the vesting contract will be managed. This ensures that incentives are well aligned with long-term performance.
We also welcome a brief discussion on the topic of exclusivity. We understand the benefits of having a high-context team dedicated to critical DAO functions, and Entropy has clearly served that role well. At the same time, we believe it remains healthy for the DAO to encourage complementary contributors across workstreams such as data, treasury, and incentive design. This supports a resilient contributor ecosystem as Arbitrum continues to evolve.
It would also be helpful to understand how Entropy plans to navigate its role as both a delegate and a service provider. We recognize the value of having context as a delegate and the positive impact that involvement can have, but outlining how potential conflicts are managed would help address recurring questions from the community.
Finally, if this proposal does not move forward, it would be useful to know what happens to the ongoing work. Are there plans to wind things down, transition responsibilities, or maintain certain operations? Clarity here would support better planning and help set expectations across the DAO.
Overall, we want to thank the Entropy team for all of the contributions made so far and for submitting this thoughtful proposal. With a few additional details, especially around outcomes, roadmap, DAO alignment, and transparency, we believe this can serve as a strong foundation for the next phase of your engagement. We look forward to further discussion and continued collaboration.
Overall I agree with the proposal and believe Entropy have been diligent and very positive for the DAO.
A few comments given the significant scale and commitment the proposal requests:
I have called a few times (e.g. here) for AAEs to have more granular mandates to avoid crowding out vendors and other ecosystem partners. I'm glad to see Entropy making significant improvements with this new proposal! I still think Entropy could do more to socialise their vision and overall strategy. I have found them to be responsive and very willing to answer questions, even from a small delegate like myself, so this is not a critique of them but simply something that can benefit the DAO overall.
Generally, I have seen a high quality of delivery from Entropy, with one learning opportunity being recognised (the stakeholders' comms during the GMC) but a second one not: IMO, the facilitation during the SOS was insufficient and I heard similar comments from other stakeholders. The SOS did have significant delegate engagement, but this didn't seem to have been facilitated by Entropy who was leading the initiative and instead prompted L2Beat to step up and fill some gaps, with the initiative ultimately not (yet?) achieving its goals. Facilitating collective alignment processes between a group that's part-time, has different weights, and operates across time zones is HARD. However, I believe we could have had a better outcome if Entropy bolstered its facilitation capabilities (or otherwise delegated/contracted some of that work to facilitators more experienced in these types of collective processes).
I strongly agree with Tamara message here:
The DAO having a stake in Entropy would
My own research in organisation design strongly supports having Arbitrum receive a significant but minority ownership stake in Entropy's operating company. Without said stake, the DAO risks increasing reliance on consultants who, with every passing year, are in a stronger negotiation position and could be tempted to exploit it. For clarity, this in not a critique of Entropy's character, but a matter of principled org design and good governance. Setting up a precedent of the DAO incubating service providers with only time-limited exclusivity is not in the best interest of Arbitrum. While having said ownership provides longterm alignment and sets a wonderful precedent for future AAEs. There's no reason for this partnership to not continue and for Arbitrum not to benefit from having a DAO operations partner that can become a revenue centre as opposed to a cost centre. This also removes a duplication of incentives, whereby Arbitrum is giving a very significant success bonus AND also has incubated Entropy from 0 (starting with an AF grant). Ownership in Entropy might lead or not to dividends or even an exit event in the future, but having Arbitrum with a minority stake ensures everyone wins. Haier is an example of a company that systematically incubates teams and retains partial ownership in them, which has been key to sustaining both entrepreneurial incentives and alignment, allowing Haier to grow into a Fortune 500.
In the proposal, Entropy mentions
Professionalize and iterate on various areas within the Arbitrum DAO, such as the early-stage support funnel
Maximize the number of dapps and RWAs that “call Arbitrum Home” by designing treasury management and incentive programs that support BD efforts.
Iterate on Arbitrum DAO’s early-stage support structure by bringing in talent and making it a more professional and cohesive experience that affords the DAO upside in the projects it helps get off the ground.
If yes, I do wonder if this is an area where Entropy is best positioned to lead compared to the other areas proposed, both from a capability and organizationally. I don't have a definitive opinion, but I do have some concerns, as the key expertise related are roughly:
Those are not expertise that the Entropy team has (to the best of my knowledge, please correct me if I'm wrong). I do not question their drive to grow, and they can expand the team, but building these multiple capabilities from 0 or even assessing who has them to recruit is tricky.
Please correct my understanding of what this scope means if I'm misguided!
Overall I thank Entropy for this proposal and they count with my support, I hope after addressing the concerns :)
I want to start by saying that I believe Entropy is a net positive for Arbitrum DAO and is doing amazing work. Period.
And to say that this is a renewal negotiation, so it is expectable that, while understanding the deep level of the partnership (and that the draft for this proposal was circulated around to gather earlier feedback/support), 2 different entities, with their best interest in mind, will work to get what is the best value for it.
I want to start by saying that I believe Entropy is a net positive for Arbitrum DAO and is doing amazing work. Period.
And to say that this is a renewal negotiation, so it is expectable that, while understanding the deep level of the partnership (and that the draft for this proposal was circulated around to gather earlier feedback/support), 2 different entities, with their best interest in mind, will work to get what is the best value for it.
I have a particular view of the proposed AAE setup, and that will drive my comment. You can check the full text here, but for the sake of clarity, I will paste a section down below.
Arbitrum DAO, as an entity, outsources certain functions to external partners. There is nothing wrong with that, as we should rely on the best expertise available. But, IMO, the DAO should wear these lenses when evaluating the current proposal.
In addition to our base pay, and in an effort to achieve long-term alignment with the Arbitrum ecosystem, we propose a 15M ARB allocation to Entropy Advisors that will be locked in a vesting contract with a 1-year cliff and 3-year vest. Our goal is to ensure the entire Entropy Advisors team has a large incentive to see Arbitrum win, and to ensure we remain committed to Arbitrum significantly into the future.
While on this first pass, I don't have much to say about the proposed work scope and the base pay related to that, but I believe the extra 15m ARB allocation deserves clear milestones to make sense, and/or should have a similar structure of the first proposal (a separeted Snapshot vote). IMO, it is expected that, as a "contractor" working for a single client, the team's commitment to deliver the items defined above and the incentive for this sole client to be successful, are part of the base pay (that already has a bonus for the exclusivity/market we are inserted).
While I acknowledge the points raised by @JoJo, it is a common practice to tie extra pay to deliverables not associated with the "regular commitment/tasks".
Thanks @JoJo for your detailed follow-ups!
As a general premise, we would like to emphasize that our comments do not indicate opposition; rather, they reflect our consideration on how to make this proposal more agreeable.
Thanks @JoJo for your detailed follow-ups!
As a general premise, we would like to emphasize that our comments do not indicate opposition; rather, they reflect our consideration on how to make this proposal more agreeable.
Fundamentally, we acknowledge and fully agree that Entropy has made significant contributions to the Arbitrum DAO! We witnessed how Matt and Sam bootstrapped the team, hired a group of high-context and capable members and continued to spearhead the Arbitrum DAO governance.
At the same time, we also recognize the delicate and complex nature of the relationship between service providers and the DAO, and we believe it is necessary to establish sufficient safeguards to properly align with token holders' interests.
How will Entropy ensure that its exclusive mandate does not crowd out alternative contributors or foster dependency if priorities shift or performance falters?
OpCo is a good testimonial on how Entropy did facilitate other entities to rise in Arbitrum. They literally voted against because they thought: we, alongside foundation and OCL, can do enough here. And their opinion in this sense was overturned by the overall DAO vote despite them being the biggest delegate.
When a service provider also controls a large delegate stake, the DAO’s “customer” and “vendor” become the same party. This concentration can create a latent COI: in edge cases, Entropy could benefit more from blocking an external provider than from maximizing DAO value. Entropy itself acknowledged this COI during the OpCo debate. Their earlier opposition to OpCo, even if well-intentioned, shows the theoretical risk: had the rest of the DAO not overruled that vote, a new organization might never have launched. In other words, vendor lock-in can make it harder for the DAO to explore, more effective alternatives.
We therefore believe the question is not whether Entropy currently acts in good faith, which we believe they do, but whether the DAO can still pivot priorities quickly if a future initiative lies outside Entropy’s core strengths and it could potentially cause a loss to Entropy. We recognize that this is an inherently sensitive matter, but we believe the DAO should at least discuss what safeguard options the DAO should have.
Please outline review gates or competitive checkpoints that allow the DAO to reassess exclusivity at regular intervals.
I am a bit puzzled by this point honestly. Having a provider working exclusively for us is something positive, not negative. It means that they will focus 100% of their energy toward our goal, and that we can align the outcomes in an easier way (re: 15M arb bonus for example). Should we for example in 8 months just vote and say “no, entropy should not be exclusive anymore”? I don’t think so. If we come to that point, the question is likely “should entropy still operate for the arbitrum dao”.
We may have phrased our second point imprecisely. What we actually want to solve for is this:
The first question calls for clear, objective measure so that underperformance is recognized early and dealt with fairly. The second question is not about Entropy’s promise to work exclusively for Arbitrum; it is about situations where Entropy, in practice, becomes the exclusive provider for a specific line of work. We should articulate in advance when that de-facto exclusivity is acceptable, when it should trigger competitive sourcing. The termination clause is clearly stated, but our question is about under what circumstances the invocation of this clause should be discussed, and how we should detect whether those circumstances have actually been met.
The DAO naturally retains the option to terminate this agreement through a standard forum → Snapshot process, requiring 3% of the votable token supply to vote in favor of the termination. Transparency reports will be directly shared with the Arbitrum Foundation, which will have the ability to move a forum post forward with the same structure for termination. If the Snapshot proposal passes, the DAO can terminate the agreement with Entropy Advisors, effective on the last day of the month in which the Snapshot passes, effectively stopping any future payment from accruing at that moment. In this scenario, all funds earmarked for Entropy Advisors future base payments will be returned to the DAO by the Foundation.
Arbitrum already coordinates Offchain Labs, the Foundation, and the emerging OpCo, so overlapping mandates can easily turn into a bureaucratic cost center without contributing to the actual project’s progress.
Unsure what you mean when you say “Arbitrum coordinates” but will just assume you mean the DAO. The DAO so far has not specifically coordinated OCL; on the contrary, OCL has posted to us their work and we have validated it from time to time. Same with the foundation, up to a lesser degree because the dialague is way more open (and both should improve over time).
We agree with the perspective quoted below, but we think the primary issue here might be the relationship with OpCo.
On the overlap: it has been clear now that we are really segmenting operations over time. Entropy is posting about treasury, incentives, data just to name three. None of these 3 are verticals that, so far, were managed by the foundation or ocl, nor by the dao independently
For example, regarding treasury management, we observe substantial overlap between the domains described by Entropy and those covered by OpCo (though OpCo might be interpreted as having a bit more operational focus). In this context, it remains unclear which entity ultimately holds accountability for the overall treasury strategy of the DAO, to whom responsibility should be assigned in the event of an issue, or to whom this DAO pays for what. While we highlight treasury management as a clear example, similar overlaps might exist in other areas as well.
Entropy will work closely with AAEs, vendors, and ecosystem teams to build out the DAO’s core financial infrastructure. We believe that the long-term viability of the Arbitrum DAO hinges on prudent asset management, disciplined budgeting, and strategic cash flow deployment to generate additional income, compound growth, and deepen our ecosystem’s liquidity while supporting integral builders. It’s worth emphasizing that while we work on financially sound structures, growth will always be at the forefront of our work in the ecosystem.
A granular cost breakdown—headcount by role, salary bands, data-infrastructure spending, travel, and contingency—will help delegates judge whether the budget matches market rates and expected value delivered.
The cost breakdown (without going into the single salary numbers) has always been outlined afaik in their quarterly reports here: Entropy Advisors Updates - Arbitrum. The headcount, is literally in the slides presented above, with 7 full time members, one part time, and further hires ahead. Knowing that the budget has been increased by 20% with a 100% increase of people, is easy to have the granular breakdown because it will be very close to what we have today already.
We are aware that a high-level cost breakdown has been shared, but we do not believe it is sufficient for proper oversight.
To be clear, we are not asking Entropy to open its entire P&L. In a classic output-based model, where each deliverable carries a discrete fee, the DAO could set compensation solely by the value it receives, regardless of Entropy’s internal costs. However, much of Entropy’s mandate sits in higher-level advisory and strategic work, where outputs are less concrete and value attribution is harder. In that context, the DAO must verify that the underlying labour and overhead costs are, in fact, reasonable.
More broadly, we think the DAO should cultivate sharper cost discipline. We agree that Entropy has done good work. Nonetheless, it is our fiduciary duty to keep asking whether the same objectives could be achieved more cheaply or more efficiently. Continual cost-effectiveness checks are simply part of protecting token-holder value.
A two-year mandate brings welcome continuity, yet it may also reduce flexibility. Why is a single two-year tranche preferable to a one-year renewal structure tied to performance milestones?
I personally answered in length on the above. But the point is that to build fundamentally strong initiatives we need to start thinking on the long term. Arbitrum as a DAO has had 2 years now to figure out his identity. We have tested a lot of things in a lot of ways and I am glad we did, it really helped us understand what worked for us. We are now at a point in which we need to double down on
We understand the potential advantages of locking the engagement into a single two-year term. What we do not yet see is clear evidence that moving to an annual renewal would impose significant costs or operational friction. If a one-year cadence would meaningfully disrupt execution, then a two-year contract is justified. If not, a one-year term should be adequate. All we ask is a more detailed explanation of what concrete drawbacks the DAO would face under a one-year structure versus the proposed two-year tranche.
More than discussing “guardrails, kpis, etc” which are fine but also details in the grand scheme of things, to me we should instead answer the following questions: did entropy do a good job in the past 12 months? Was the job worth the price tag? if the answers to the previous questions are both positive, is the new proposal something that puts them in condition to do a work that is at least of the same quality if not above? This is not because KPIs are not important. But they can be a way to make us feel like we are doing proper DD, make us feel “good” about our “data driven” decision, while instead we miss the forest for the tree.
We agree entirely that the key test is whether the DAO receives value commensurate with what it pays, and we also believe Entropy has been a great partner of the Arbitrum DAO. Our point is that this test should rely on more than what major delegates perceive. Wherever results can be measured objectively, they should be. We should also ask in advance how the DAO will protect itself if events deviate from plan. This is a basic responsibility to token-holders and to the DAO’s long-term health. Given the wide range of stakeholders in a DAO, treating this rigorously is even more important than in a conventional startup.
Thanks for the proposal, was about time.
First, a small premise. I have had the pleasure to work with Entropy in different degrees through different initiatives, either with an official role like in the Stylus program, or in a non official role/capacity as a delegate that just tries to chime into initiatives that I deem important. I specifically worked with Pruitt (even before in LTIPP), i have always found in Brick a counterparty willing to explain his vision, even when very different than mine and during weekends. I have spoke extensively with both Sam and Matt. And also clashed, privately, with Matt, more than I would like to admit cause we both have a certain personality, but is the type of clashes that comes from having strong opinions driven by a vision. Is the good type of clashes. I have also grown appreciating the work of the Data team (Tom, Ali) that have always been open to suggestions. All to say: i have confidence in my judgments, which are both related to Entropy, the entity, and the people working in Entropy. And that is why I see myself supporting them in this renewal.
Thanks for the proposal, was about time.
First, a small premise. I have had the pleasure to work with Entropy in different degrees through different initiatives, either with an official role like in the Stylus program, or in a non official role/capacity as a delegate that just tries to chime into initiatives that I deem important. I specifically worked with Pruitt (even before in LTIPP), i have always found in Brick a counterparty willing to explain his vision, even when very different than mine and during weekends. I have spoke extensively with both Sam and Matt. And also clashed, privately, with Matt, more than I would like to admit cause we both have a certain personality, but is the type of clashes that comes from having strong opinions driven by a vision. Is the good type of clashes. I have also grown appreciating the work of the Data team (Tom, Ali) that have always been open to suggestions. All to say: i have confidence in my judgments, which are both related to Entropy, the entity, and the people working in Entropy. And that is why I see myself supporting them in this renewal.
I want to loosely comment on a few things. I am going to focus on what might be deemed by some controversial, and analyze past initiatives that might have not created the outcome the DAO wanted, and show why these imho have no material weight in the renewal.
I think this is quite logical. In the program I run, the D.A.O. grant program, I moved the terms from 6 months to 1 year. I think initiatives that have a broad consensus and are perceived as important need to extend over time the time term because is the easiest way to allow the team to operate focusing on the mission, and not on the fact that in 12 months they will have to go all over this again. Managing an initiative that moved from 6 months to 1 year, the above explains why having a longer term would be preferred. I also don't see this as a deal breaker: either we renew entropy or we don't, and them running for 1 or 2 years is less important than the DAO accepting them.
This is a bump on base cost of 20%. 1 year ago, in Bruxelles, the team was made by Matt, Sam, Pruitt, and if I recall Brick was recently onboarded or soon to be. Unsure if Tom was already there. We now have double the personnel and a clear stated goals of hiring more people, accordingly to the infochart with one that is basically here and another 5 that are planned and might come. Knowing how consultancy work, and even more how it works in crypto, I think the budget is extremely lean, even underpriced. But is partially compensated by the vesting bonus (see below). I won't for sure push Entropy to ask for more capital, but I think they could have easily asked for $3.5M seeing how they are scaling.
I have never been a fun of the DAO voting on bonuses on people (not only on entropy). Yes, the DAO can evaluate if someone did the work it was supposed to do up to some degree. But voting on assigning/non assigning a bonus is tricky because it becomes an issue about quality of the job, if the people involved pushed into the last mile and more vs doing just the homework etc. I don't think the DAO is well equipped to do this because is extremely difficult to be able to see the outcome as a function of the work behind, just like for an iceberg is easy to see the tip but you can only imagine the size of the submerged part. All of this to say: I think is fair to move to a bonus that is vested. On the amount. This is quite difficult for me to asses. As it is today, the bonus corresponds to around $4.5M so 1.5 times the yearly budget. But this will be all available in 4 years, and in 2 years from now the amount of unlocked supply of arb should be 50% more than what it is now excluding DAO spending, with around 30M arb unlocked per month. It's a fool's game to try and project the notional dollar value. But let's assume we have 15 people in entropy: it would basically mean an average of 1M bonus each after 4 years; of this, 333k would be unlocked in 2 years. Comparing the numbers to OpCo, and knowing that Entropy has still a private nature so it can justify a premium to have them around exclusively for further 2 years, I don't think the number is unreasonable. I will also let other speak on this number.
This is explicitely mentioned by Entropy itself in the list of things from which there are mistakes from which they can learn from. Of the last proposals we have had, one of the biggest critique has been around the lack of flexibility and allocation in these proposals, and how protocols could have benefit from a broader framework. I have been the first one expressing loudly this point. Was there margin for a better execution? Yes. Could Entropy have had this broader vision at day one and be put in the condition of executing this vision right away? Yes and no. The main problem was tied to not only a conservative vision (which is not necessarily a problem honestly, more like a different angle), but mostly on the outreach terms for protocol. If protocols have to take the time to create proposals, explain their strategy and then they get rejected, there is inevitably a bitter feeling as a consequence which also increases the negative sentiments. Entropy would have benefit from better communication with stakeholders like OCL that could have suggested (and I am not sure if this happened or not) allocations that were more oriented toward growth; they would have also benefit from the contributions of very entrenched, defi native people able to contribute to their team and program. All of this is likely solvable in the next iterations: we do have a lot of ETH to spend and this was the first programmatic initiative that weaponized our treasury and opened the path to several other in future. Expecting the first iteration to be already perfected and tailored to our collective needs is a bit unrealistic; plus, the other side of the coin is that our DAO has been live for 2 years (with the chain been live for 3.5 years) and there has been no other party trying to spin up an initiative such as this one. TLDR: can we have objective critiques on the expectation vs actual outcome of the GMC proposal? Yes. At the same time, we should recognize how this initiative would have not even existed in the first place, how is a first 6 months iteration, and how it made us learn a lot on what we can do and in what areas we can improve.
Of the above mentioned, I think none is material through a renewal that takes in account the following points:
These are the material results; is a bit subjective and in general hard to understand the immaterial results and second order effect that Entropy manifested in the DAO. Two are worth mentioning:
The question becomes: were the $2.5M we paid a good price tag for what we obtained in the last 12 months? My answer as of today is a big yes.
I also don't want to sound like a cheerleader. Everybody has margin of improvement here and Entropy is not an exception. Specifically, it can benefit by a lot of things. One of the pitfall we likely had, and is quite common in crypto, is a team that is not only extremely motivated, but also quite young. This is not necessarily a bad thing, but the lack of experience can sometimes create shortfalls that could have been easily avoided. This was noticeable, for example, in certain occasion, during communications with the rest of the DAO or some protocols. As of today, not only Entropy operated for 1 year in crypto (which, like dogs' years, is equivalent to 7 years of professional life somewhere else), but they will now have a series of other counterparties, either new (opco) or new in term of willing to be more active (ocl), that will make their life probably easier due to their scope being now narrower compared to the initial mandate. Entropy would also benefit by diversifying a bit their team through hiring people that are "closer to the trenches" to put it bluntly, and the list of future hires does indeed indicate that. Entropy is growing in the DAO alongside all of us, this is clear to me.
Since we are here I want to also give my educated opinion on the above post from @Tane, not because his opinion is wrong but because the approach/angle should be a bit different imho.
How will Entropy ensure that its exclusive mandate does not crowd out alternative contributors or foster dependency if priorities shift or performance falters?
Please outline review gates or competitive checkpoints that allow the DAO to reassess exclusivity at regular intervals.
Arbitrum already coordinates Offchain Labs, the Foundation, and the emerging OpCo, so overlapping mandates can easily turn into a bureaucratic cost center without contributing to the actual project’s progress.
A granular cost breakdown—headcount by role, salary bands, data-infrastructure spending, travel, and contingency—will help delegates judge whether the budget matches market rates and expected value delivered.
The cost breakdown (without going into the single salary numbers) has always been outlined afaik in their quarterly reports here: https://forum.arbitrum.foundation/c/dao-grant-programs/entropy-advisors-updates/50. The headcount, is literally in the slides presented above, with 7 full time members, one part time, and further hires ahead. Knowing that the budget has been increased by 20% with a 100% increase of people, is easy to have the granular breakdown because it will be very close to what we have today already.
A two-year mandate brings welcome continuity, yet it may also reduce flexibility. Why is a single two-year tranche preferable to a one-year renewal structure tied to performance milestones?
I personally answered in length on the above. But the point is that to build fundamentally strong initiatives we need to start thinking on the long term. Arbitrum as a DAO has had 2 years now to figure out his identity. We have tested a lot of things in a lot of ways and I am glad we did, it really helped us understand what worked for us. We are now at a point in which we need to double down on
EDIT rereading i realized my point toward Tane is not clear. More than discussing "guardrails, kpis, etc" which are fine but also details in the grand scheme of things, to me we should instead answer the following questions: did entropy do a good job in the past 12 months? Was the job worth the price tag? if the answers to the previous questions are both positive, is the new proposal something that puts them in condition to do a work that is at least of the same quality if not above? This is not because KPIs are not important. But they can be a way to make us feel like we are doing proper DD, make us feel "good" about our "data driven" decision, while instead we miss the forest for the tree. We can discuss a lot if the price tag is correct, if the term is correct, if the bonus is correct, what kpi to add. To me this is secondary to the most important questions highlighted above. And as I showed (fwiw, i am just a single cow delegate), the attached numbers feels correct, but that is also a personal take.
We appreciate the comprehensive proposal and the dedication Entropy Advisors has shown to the Arbitrum DAO over the past year. The ambition to transform Arbitrum into the most effective capital allocator in crypto is compelling, and the focus on neutral proposal facilitation and strategic advisory is well aligned with the DAO’s needs. That said, several points call for deeper clarification before we can give full support:
Entrusting pivotal functions such as proposal incubation, treasury design, and incentive architecture to a single provider can streamline operations, yet it risks creating lock-in and suppressing healthy competition. How will Entropy ensure that its exclusive mandate does not crowd out alternative contributors or foster dependency if priorities shift or performance falters? Please outline review gates or competitive checkpoints that allow the DAO to reassess exclusivity at regular intervals.
Arbitrum already coordinates Offchain Labs, the Foundation, and the emerging OpCo, so overlapping mandates can easily turn into a bureaucratic cost center without contributing to the actual project's progress. We therefore ask for a detailed list of deliverables and its outcomes, each paired with clear KPIs or some other measurable things, and expected ecosystem impact. Publishing these metrics up front will let the community evaluate progress without ambiguity. We are aware that some tasks or responsibilities are outlined like the one quoted below from "Financial Planning, Analysis, and Guiding Capital Deployment" section, but we'd like to have impact of Entropy itself measurable.
The proposal requests $6M in ARB for payroll plus a 15M ARB vested allocation, more than doubling the cash component of the first term. A granular cost breakdown—headcount by role, salary bands, data-infrastructure spending, travel, and contingency—will help delegates judge whether the budget matches market rates and expected value delivered.
A total of 6 million ARB will be sent to the Foundation, for them to monetize at their discretion to secure at least $2,470,000. Any Excess ARB not monetized (or stored for the potential bonus below) and excess stables from lower payments during the initial scaling of Entropy will be sent back to the DAO by the Foundation.
We propose a base pay of $3M per year, a ~$500k per year increase versus our first term, as we have ambitions to grow the team to internalize key functions related to data, incentives, and treasury management. In addition to our base pay, and in an effort to achieve long-term alignment with the Arbitrum ecosystem, we propose a 15M ARB allocation to Entropy Advisors that will be locked in a vesting contract with a 1-year cliff and 3-year vest.
A two-year mandate brings welcome continuity, yet it may also reduce flexibility. Why is a single two-year tranche preferable to a one-year renewal structure tied to performance milestones? Detailing how the extended term improves execution, and why a shorter checkpoint would materially hinder the work, would strengthen the case.
Although some rationale for this is explained in the proposal, we do not believe that is sufficient enough to justify this length, considering the amount of budget.
After reaching out to some larger delegates and key stakeholders to get feedback on how Entropy Advisors should proceed forward, it has become clear that a 2-year term mandate is desired to ensure alignment over a sufficient period of time in order to accomplish the aforementioned goals. Therefore, we are proposing to work with the Arbitrum DAO for 2 years from September 1st 2025 through August 31st 2027.
We recommend adding mid-term reporting cycles with pass-fail criteria, milestone-based vesting for the 15M ARB allocation, and the option to reduce or halt monthly payments if agreed KPIs slip. Clear escalation paths protect both the DAO and Entropy from misaligned expectations.
By addressing these points—exclusivity guardrails, deliverable-level KPIs, transparent budgeting, explicit term rationale, and robust performance safeguards—Entropy can reinforce community trust and demonstrate that this sizeable investment directly accelerates Arbitrum’s long-term growth.
We agree with your assessment that taking on all of this work would be overkill, and is not at all what we intended to propose. In other words, we do aim to support builders through our workstreams, but do not believe that solely treasury management, incentives, and data analytics cover the majority of work associated with everything Arbitrum needs in order to support builders. We hope that helps answer your question/clear up any confusion on the builder support front.
Much appreciate the clarification. The scope around incentives, data, institutional, and treasury makes a lot of sense to me as a cohesive package (with some special projects as needed).
May I suggest rewording the proposal slightly to make this dummy-proof clear? (The 3 snippets I quoted in my first reply had led me to misunderstand the scope thinking it was geared towards also including the early stage builder support as a domain you'd largely have ownership over)
Our success is very clearly tied to the success of Arbitrum at this point - everyone in the industry knows Entropy as a team “committed to Arbitrum”. If Arbitrum does not succeed, it is very unlikely that Entropy would be able to win business elsewhere. We view our 2-year commitment and a significant portion of our upside in vesting ARB as sufficient means to guarantee our AAE status.
We are not completely against the idea if the DAO has the structure where a direct counterparty can negotiate this type of arrangement in the future, but we do not think the timing is right at this moment in time.
At the same time since the DAO is funding a company & its growth I believe it would be reasonable to ask in return a stake of said company
Unfortunately, this would create some weird dynamics. The equity would, in practice, have to sit with OpCo or AF. It's already the case that two of the main entities in the Arbitrum ecosystem are in a service provider relationship -- it would make conflicts of interest even more pronounced to have one entity own part of the equity of the other.
Good idea, directionally. It just seems too hard to do in this case.
AranaDigital acknowledges Entropy Advisors’ successful Year 1 record, including neutral proposal facilitation, widely used analytics dashboards, and useful stakeholder-alignment work, we praise as helpful for the DAO. The requested two-year renewal, together with a fifteen-million-ARB grant that vests over three years after a one-year cliff and a termination rule that three percent of the votable supply can trigger, provides long-term incentive alignment while keeping community control. However, we agree with @Tane on this point
The proposal requests $6M in ARB for payroll plus a 15M ARB vested allocation, more than doubling the cash component of the first term. A granular cost breakdown—headcount by role, salary bands, data-infrastructure spending, travel, and contingency—will help delegates judge whether the budget matches market rates and expected value delivered.
that the proposed six-million-dollar cash budget and the equity-style token grant more than double last year’s package and are not yet backed by a detailed cost breakdown, milestone-based vesting, or clear performance measures. AranaDigital will vote FOR the proposal if four conditions are met before Snapshot: (i) publication of a detailed budget covering headcount, salary bands, infrastructure, and reserves; (ii) adoption of quarterly key performance indicators that track treasury yield targets, incentive-program retention, integration numbers, and dashboard usage, linked to a binding confidence Snapshot at month twelve with payments and vesting paused if goals are missed; (iii) explicit confirmation that any unvested ARB returns to the treasury if the engagement ends early; and (iv) a clear description of Entropy’s responsibilities relative to the future OpCo to avoid overlap. Finally, we ask Entropy to address @Tamara’s suggestion that the DAO receive a minority equity stake in Entropy as an additional alignment tool.
Thanks to the Entropy team for this engagment renewal proposal, indicating their willingness to continue serving exclusively to the Arbitrum DAO.
We acknowledge the significant contributions made by Entropy Advisors during their first term and recognize the substantial operational lift they provided across DAO coordination, governance design, proposal execution, and data tooling. The direction outlined for Years 2 and 3 is ambitious and reflects a maturing vision aligned with Arbitrum’s long-term trajectory. That said, we believe several aspects of the proposal would benefit from further clarification and refinement before advancing to a vote.
The proposed 15M ARB long-term alignment incentive is material. We echo the replies from other delegates (@jameskbh, @Tane) seeking to better align these vested allocations with measurable positive outcomes for the DAO. To ensure this aligns with DAO expectations, we suggest:
As Entropy scales its team to over 10 members and internalizes key functions across data, incentives, and treasury strategy, we recognize the goal of improving execution quality and accountability. However, we believe this growth also introduces a latent risk of mission monopolization.
Without clear checks and balances, there is a risk that Entropy, whether consciously or unconsciously, becomes disincentivized to support or mentor initiatives proposed by external service providers, particularly if those initiatives overlap with its own expanding scope. This could lead to:
While internalizing key capabilities can improve delivery in the short term, overconsolidation may dampen the DAO’s resilience and long-term efficiency by undermining healthy competition and substitutability.
We recommend introducing guardrails that ensure Entropy continues to support and elevate external contributors wherever possible and the DAO maintains pathways for independent proposals to receive mentorship, feedback, and a fair review, regardless of who executes them.
This could include clearer conflict of interest declarations when declining to support overlapping external proposals, as well as metrics on external proposal support or mentorship provided over the mandate term.
We’re overall encouraged by the level of depth and reflection in this proposal. Entropy’s commitment to learning from Year 1 and adapting accordingly is evident, and we’re aligned with the broader vision of enabling Arbitrum to evolve into a capital-efficient, strategically guided DAO. With a few structural improvements, we believe this proposal can set a new standard for DAO service engagement.
We look forward to continued iteration ahead of the final vote.
Thanks a lot for the thoughtful response I do appreciate :) Want to answer one more time and then just leave it there cause I don't want to monopolize the discussion
When a service provider also controls a large delegate stake, the DAO’s “customer” and “vendor” become the same party. This concentration can create a latent COI: in edge cases, Entropy could benefit more from blocking an external provider than from maximizing DAO value. Entropy itself acknowledged this COI during the OpCo debate. Their earlier opposition to OpCo, even if well-intentioned, shows the theoretical risk: had the rest of the DAO not overruled that vote, a new organization might never have launched. In other words, vendor lock-in can make it harder for the DAO to explore, more effective alternatives.
The first question can be a bit hard to answer for a reason. As far as i can tell entropy operates both at strategic and tactical level, often times being both the executor and the ideator of the initiatives. It could be argued that, using "normal" kpi, would be easy for them (and anibody in their shoes) to set ones that are easy to achieve. At the same time, measuring strategic initiatives can instead be argued because there are first and second order effect that often times are not manifested right away. To make two stupid example, how do you evaluate with a kpi the code of conduct? and how do we evaluate the voting calendar? these are small and superficial example, and definitely not the most important at alls, but can be seen as a piece of a puzzle that is the dao professionalization (and removing friction for other professional parties to be created and operate smoothly) alongside "fancier" initiative like treasury management that could be, indeed, measured in a more robust way. All to say that I do find hard to apply normale framework in this situation. You would think that you could apply the same logic for a c-suite in a traditional corporation; at the same time, while entropy is the biggest delegate out there, it encompasses 10% of the active votes give or take, does not control the lab unit, does not control the other AAEs. So that framework is also off the table.
it is about situations where Entropy, in practice, becomes the exclusive provider for a specific line of work. We should articulate in advance when that de-facto exclusivity is acceptable, when it should trigger competitive sourcing.
Again, you really make a logic point here ser. Feels like is more of a case by case situation honestly, with the extreme consciousness that everything can change, rapidly, in our dao (check opco mandate 1 year ago vs what we just voted last week). Thiking about treasury for example, to me it makes totaly sense to have a central decisional body, but service provider for execution; as long as the dao is able to analyse the outcome and be satisfied, I don't see the necessity of having a second manager. If instead the outcome is not what we want, then we try to understand if it's entropy to be liable or the sp that were hired (which would also mean understand this hiring process and if it had any gap), and eventually act on information discovered. All of this to say that, to me, is a "show and tell" type of situation. The dao always has the ability to revoke a mandate. If we want to vote for a new treasury manager, we can. I think that as long as Entropy set clear expectations, and we as a dao have logic requests (ie: we can't ask a 100% return on a treasury that is actively managed while preserving most of it being in arb to name one), we can move toward a result oriented analysis, knowing also that market forces are uncontrollabe for entropy, the dao, vitalik and most of the universe.
So all of the long useless paragraph above to create a practical example on how imho we should approach exclusivity vs avoiding lockin vs evaluating operations vs allowing a paid third party operate for us.
For example, regarding treasury management, we observe substantial overlap between the domains described by Entropy and those covered by OpCo (though OpCo might be interpreted as having a bit more operational focus).
It might be a personal interpretation, but to me seems quite clear that opco is going in a direction that is quite different from what we initially thought. A unit that was mostly financially related and partially growth related seems like is standing up instead as a coordinator of all AAEs and one of the center of the growth of the ecosystem. I do see how you would want clarity in scope; at the same time is maybe difficult to find clarity in a time in which opco still has to find a ceo, and then the operational people. Capability in task X or Y comes after you onboard the right people and we are not there; at the same time we have a gap now in what we need. Realistically opco will be full operational imho not before Q4 and even there it might take a bit of more time.
More broadly, we think the DAO should cultivate sharper cost discipline. We agree that Entropy has done good work. Nonetheless, it is our fiduciary duty to keep asking whether the same objectives could be achieved more cheaply or more efficiently. Continual cost-effectiveness checks are simply part of protecting token-holder value.
I won't specifically spell out why I do think their price tag and model can be right. To me it boils down to a certain amount of people (8, now 9, probably in 6 months 12-15), plus responsabilities (in this case: treasury, drip, and we could reference the past ones as proxy of future ones like creating opco to name one) and understand the cost per employe annualized vs value accrued. If I do napkin math, it feels the numbers are right. That said, there are infinite models that could be applied, of which a subset can likely accrue value to Entropy in the same amount they are seeking with different ways of doing so I guess. i don't honestly have an hard opinion on this; but i do like simple stuff when possible, that's why i don't mind the current proposal.
If a one-year cadence would meaningfully disrupt execution, then a two-year contract is justified. If not, a one-year term should be adequate.
Personal take here: when I was a DA of the season 1 and 2, after 3 months out of 6 it was the time of starting to think "ok, I do I renew this initiative in a way that makes sense for the dao for value accrual". This is not a bad problem to have. But is indeed something that takes focus away from real operations.
At the same time, I can tell you that now that I operate the D.A.O. grant program on a 1y horizon, I do have the ability to build over time and analyse results as they come in and eventually adapt.
Could I run the program in 6 months like we did in previous seasons? Yes Could Entropy run on a 1y contract like the previous one? Likely yes Do both the situations above allow for better project exploration, data analysis and adaptation, as well as potentially gunning for bigger goals due to continuity vs running for half term? Likely yes as well.
Again, my personal opinion drawn from a different but similar initiative. Would also like to tag @Curia in this final piece of answer since they asked as well the rationality of the 2 years.
As stated above, I want to give to others enough time and space to ask questions and provide their opinions. Still wanted to thank both @Tane and @Curia for offering what I think is an extremely valuable perspectives, in a way that is both constructive and non disruptive, of entities operating in several DAOs and also not only very tied to Arbitrum, but always extremely thoughtful with their contributions in here.
We appreciate @Entropy commitment to the Arbitrum DAO and acknowledge the breadth of work delivered over the past year. The team has clearly become an integral part of DAO operations and has brought professionalism, energy, and valuable structure to many complex initiatives. As we consider a significant two-year renewal with an increased budget and a long-term ARB token alignment, we would like to raise several areas where the proposal could be strengthened.
As we review this proposal for a multi-year engagement with an expanded scope, we believe there are a few areas where additional clarity would help the DAO make a more informed decision. One of our main areas of feedback relates to the balance between execution and outcomes. While Entropy has helped ship many proposals and workstreams, we would appreciate a better understanding of the tangible results these efforts have produced. For example, the staking working group and STEP were thoughtfully designed, but how have they performed so far? What impact have they had on ecosystem growth, retention, or capital efficiency? What lessons have been learned? Sharing reflections like these would strengthen the proposal and build further trust in Entropy’s approach.
Looking ahead, we also note that DRIP represents a new direction for how the DAO approaches incentive design. While the program has not launched yet, it would be helpful to understand what indicators or metrics Entropy intends to track once it goes live, and what a successful outcome might look like. Planning ahead for evaluation can help ensure that we not only launch good programs but also learn and iterate based on results.
In that spirit, we would appreciate the inclusion of more clearly defined KPIs and reporting structures across Entropy’s scope. These tools would help the DAO assess performance more objectively and provide context around which initiatives have delivered the most value. Even a high-level roadmap or set of milestones for the next two years would help the community understand what success looks like. In addition, it would be valuable to know where Entropy believes its work has saved the DAO time, avoided inefficiencies, or unlocked growth. These kinds of outcomes are worth highlighting and, where possible, quantifying.
I think this is quite logical. In the program I run, the D.A.O. grant program, I moved the terms from 6 months to 1 year. I think initiatives that have a broad consensus and are perceived as important need to extend over time the time term because is the easiest way to allow the team to operate focusing on the mission, and not on the fact that in 12 months they will have to go all over this again. Managing an initiative that moved from 6 months to 1 year, the above explains why having a longer term would be preferred. I also don’t see this as a deal breaker: either we renew entropy or we don’t, and them running for 1 or 2 years is less important than the DAO accepting them.
Regarding the proposed two-year term, we recognize the point made @JoJo , that longer terms can allow teams to focus more fully on their mission. At the same time, we would appreciate more context on why two years is specifically necessary in this case. Are there particular initiatives that require a full two-year cycle to complete? Is there a long-term strategy that maps to this timeline? Including examples or a roadmap that shows how the work unfolds over time would help make this decision easier for the community.
Additionally, we’d appreciate a clearer explanation of how Entropy’s mission aligns with the broader objectives of the ArbitrumDAO, particularly in relation to the SOS framework proposed by delegates. Could you elaborate on how your proposed workstreams support the key pillars of this framework? Drawing a more direct connection between Entropy’s role and the DAO’s strategic priorities would help contextualize the proposal within the larger ecosystem goals.
We would also like to see more detail on the proposed budget. A simple breakdown of how the three million dollars per year will be allocated, such as staffing, infrastructure, and other operational costs, would provide useful clarity. Similarly, the fifteen million ARB vesting package is substantial. We believe it would help to explain how this will be distributed within the team, whether there are clawback protections, and how the vesting contract will be managed. This ensures that incentives are well aligned with long-term performance.
We also welcome a brief discussion on the topic of exclusivity. We understand the benefits of having a high-context team dedicated to critical DAO functions, and Entropy has clearly served that role well. At the same time, we believe it remains healthy for the DAO to encourage complementary contributors across workstreams such as data, treasury, and incentive design. This supports a resilient contributor ecosystem as Arbitrum continues to evolve.
It would also be helpful to understand how Entropy plans to navigate its role as both a delegate and a service provider. We recognize the value of having context as a delegate and the positive impact that involvement can have, but outlining how potential conflicts are managed would help address recurring questions from the community.
Finally, if this proposal does not move forward, it would be useful to know what happens to the ongoing work. Are there plans to wind things down, transition responsibilities, or maintain certain operations? Clarity here would support better planning and help set expectations across the DAO.
Overall, we want to thank the Entropy team for all of the contributions made so far and for submitting this thoughtful proposal. With a few additional details, especially around outcomes, roadmap, DAO alignment, and transparency, we believe this can serve as a strong foundation for the next phase of your engagement. We look forward to further discussion and continued collaboration.
Overall I agree with the proposal and believe Entropy have been diligent and very positive for the DAO.
A few comments given the significant scale and commitment the proposal requests:
I have called a few times (e.g. here) for AAEs to have more granular mandates to avoid crowding out vendors and other ecosystem partners. I'm glad to see Entropy making significant improvements with this new proposal! I still think Entropy could do more to socialise their vision and overall strategy. I have found them to be responsive and very willing to answer questions, even from a small delegate like myself, so this is not a critique of them but simply something that can benefit the DAO overall.
Generally, I have seen a high quality of delivery from Entropy, with one learning opportunity being recognised (the stakeholders' comms during the GMC) but a second one not: IMO, the facilitation during the SOS was insufficient and I heard similar comments from other stakeholders. The SOS did have significant delegate engagement, but this didn't seem to have been facilitated by Entropy who was leading the initiative and instead prompted L2Beat to step up and fill some gaps, with the initiative ultimately not (yet?) achieving its goals. Facilitating collective alignment processes between a group that's part-time, has different weights, and operates across time zones is HARD. However, I believe we could have had a better outcome if Entropy bolstered its facilitation capabilities (or otherwise delegated/contracted some of that work to facilitators more experienced in these types of collective processes).
I strongly agree with Tamara message here:
The DAO having a stake in Entropy would
My own research in organisation design strongly supports having Arbitrum receive a significant but minority ownership stake in Entropy's operating company. Without said stake, the DAO risks increasing reliance on consultants who, with every passing year, are in a stronger negotiation position and could be tempted to exploit it. For clarity, this in not a critique of Entropy's character, but a matter of principled org design and good governance. Setting up a precedent of the DAO incubating service providers with only time-limited exclusivity is not in the best interest of Arbitrum. While having said ownership provides longterm alignment and sets a wonderful precedent for future AAEs. There's no reason for this partnership to not continue and for Arbitrum not to benefit from having a DAO operations partner that can become a revenue centre as opposed to a cost centre. This also removes a duplication of incentives, whereby Arbitrum is giving a very significant success bonus AND also has incubated Entropy from 0 (starting with an AF grant). Ownership in Entropy might lead or not to dividends or even an exit event in the future, but having Arbitrum with a minority stake ensures everyone wins. Haier is an example of a company that systematically incubates teams and retains partial ownership in them, which has been key to sustaining both entrepreneurial incentives and alignment, allowing Haier to grow into a Fortune 500.
In the proposal, Entropy mentions
Professionalize and iterate on various areas within the Arbitrum DAO, such as the early-stage support funnel
Maximize the number of dapps and RWAs that “call Arbitrum Home” by designing treasury management and incentive programs that support BD efforts.
Iterate on Arbitrum DAO’s early-stage support structure by bringing in talent and making it a more professional and cohesive experience that affords the DAO upside in the projects it helps get off the ground.
If yes, I do wonder if this is an area where Entropy is best positioned to lead compared to the other areas proposed, both from a capability and organizationally. I don't have a definitive opinion, but I do have some concerns, as the key expertise related are roughly:
Those are not expertise that the Entropy team has (to the best of my knowledge, please correct me if I'm wrong). I do not question their drive to grow, and they can expand the team, but building these multiple capabilities from 0 or even assessing who has them to recruit is tricky.
Please correct my understanding of what this scope means if I'm misguided!
Overall I thank Entropy for this proposal and they count with my support, I hope after addressing the concerns :)
I want to start by saying that I believe Entropy is a net positive for Arbitrum DAO and is doing amazing work. Period.
And to say that this is a renewal negotiation, so it is expectable that, while understanding the deep level of the partnership (and that the draft for this proposal was circulated around to gather earlier feedback/support), 2 different entities, with their best interest in mind, will work to get what is the best value for it.
I want to start by saying that I believe Entropy is a net positive for Arbitrum DAO and is doing amazing work. Period.
And to say that this is a renewal negotiation, so it is expectable that, while understanding the deep level of the partnership (and that the draft for this proposal was circulated around to gather earlier feedback/support), 2 different entities, with their best interest in mind, will work to get what is the best value for it.
I have a particular view of the proposed AAE setup, and that will drive my comment. You can check the full text here, but for the sake of clarity, I will paste a section down below.
Arbitrum DAO, as an entity, outsources certain functions to external partners. There is nothing wrong with that, as we should rely on the best expertise available. But, IMO, the DAO should wear these lenses when evaluating the current proposal.
In addition to our base pay, and in an effort to achieve long-term alignment with the Arbitrum ecosystem, we propose a 15M ARB allocation to Entropy Advisors that will be locked in a vesting contract with a 1-year cliff and 3-year vest. Our goal is to ensure the entire Entropy Advisors team has a large incentive to see Arbitrum win, and to ensure we remain committed to Arbitrum significantly into the future.
While on this first pass, I don't have much to say about the proposed work scope and the base pay related to that, but I believe the extra 15m ARB allocation deserves clear milestones to make sense, and/or should have a similar structure of the first proposal (a separeted Snapshot vote). IMO, it is expected that, as a "contractor" working for a single client, the team's commitment to deliver the items defined above and the incentive for this sole client to be successful, are part of the base pay (that already has a bonus for the exclusivity/market we are inserted).
While I acknowledge the points raised by @JoJo, it is a common practice to tie extra pay to deliverables not associated with the "regular commitment/tasks".
Thanks @JoJo for your detailed follow-ups!
As a general premise, we would like to emphasize that our comments do not indicate opposition; rather, they reflect our consideration on how to make this proposal more agreeable.
Thanks @JoJo for your detailed follow-ups!
As a general premise, we would like to emphasize that our comments do not indicate opposition; rather, they reflect our consideration on how to make this proposal more agreeable.
Fundamentally, we acknowledge and fully agree that Entropy has made significant contributions to the Arbitrum DAO! We witnessed how Matt and Sam bootstrapped the team, hired a group of high-context and capable members and continued to spearhead the Arbitrum DAO governance.
At the same time, we also recognize the delicate and complex nature of the relationship between service providers and the DAO, and we believe it is necessary to establish sufficient safeguards to properly align with token holders' interests.
How will Entropy ensure that its exclusive mandate does not crowd out alternative contributors or foster dependency if priorities shift or performance falters?
OpCo is a good testimonial on how Entropy did facilitate other entities to rise in Arbitrum. They literally voted against because they thought: we, alongside foundation and OCL, can do enough here. And their opinion in this sense was overturned by the overall DAO vote despite them being the biggest delegate.
When a service provider also controls a large delegate stake, the DAO’s “customer” and “vendor” become the same party. This concentration can create a latent COI: in edge cases, Entropy could benefit more from blocking an external provider than from maximizing DAO value. Entropy itself acknowledged this COI during the OpCo debate. Their earlier opposition to OpCo, even if well-intentioned, shows the theoretical risk: had the rest of the DAO not overruled that vote, a new organization might never have launched. In other words, vendor lock-in can make it harder for the DAO to explore, more effective alternatives.
We therefore believe the question is not whether Entropy currently acts in good faith, which we believe they do, but whether the DAO can still pivot priorities quickly if a future initiative lies outside Entropy’s core strengths and it could potentially cause a loss to Entropy. We recognize that this is an inherently sensitive matter, but we believe the DAO should at least discuss what safeguard options the DAO should have.
Please outline review gates or competitive checkpoints that allow the DAO to reassess exclusivity at regular intervals.
I am a bit puzzled by this point honestly. Having a provider working exclusively for us is something positive, not negative. It means that they will focus 100% of their energy toward our goal, and that we can align the outcomes in an easier way (re: 15M arb bonus for example). Should we for example in 8 months just vote and say “no, entropy should not be exclusive anymore”? I don’t think so. If we come to that point, the question is likely “should entropy still operate for the arbitrum dao”.
We may have phrased our second point imprecisely. What we actually want to solve for is this:
The first question calls for clear, objective measure so that underperformance is recognized early and dealt with fairly. The second question is not about Entropy’s promise to work exclusively for Arbitrum; it is about situations where Entropy, in practice, becomes the exclusive provider for a specific line of work. We should articulate in advance when that de-facto exclusivity is acceptable, when it should trigger competitive sourcing. The termination clause is clearly stated, but our question is about under what circumstances the invocation of this clause should be discussed, and how we should detect whether those circumstances have actually been met.
The DAO naturally retains the option to terminate this agreement through a standard forum → Snapshot process, requiring 3% of the votable token supply to vote in favor of the termination. Transparency reports will be directly shared with the Arbitrum Foundation, which will have the ability to move a forum post forward with the same structure for termination. If the Snapshot proposal passes, the DAO can terminate the agreement with Entropy Advisors, effective on the last day of the month in which the Snapshot passes, effectively stopping any future payment from accruing at that moment. In this scenario, all funds earmarked for Entropy Advisors future base payments will be returned to the DAO by the Foundation.
Arbitrum already coordinates Offchain Labs, the Foundation, and the emerging OpCo, so overlapping mandates can easily turn into a bureaucratic cost center without contributing to the actual project’s progress.
Unsure what you mean when you say “Arbitrum coordinates” but will just assume you mean the DAO. The DAO so far has not specifically coordinated OCL; on the contrary, OCL has posted to us their work and we have validated it from time to time. Same with the foundation, up to a lesser degree because the dialague is way more open (and both should improve over time).
We agree with the perspective quoted below, but we think the primary issue here might be the relationship with OpCo.
On the overlap: it has been clear now that we are really segmenting operations over time. Entropy is posting about treasury, incentives, data just to name three. None of these 3 are verticals that, so far, were managed by the foundation or ocl, nor by the dao independently
For example, regarding treasury management, we observe substantial overlap between the domains described by Entropy and those covered by OpCo (though OpCo might be interpreted as having a bit more operational focus). In this context, it remains unclear which entity ultimately holds accountability for the overall treasury strategy of the DAO, to whom responsibility should be assigned in the event of an issue, or to whom this DAO pays for what. While we highlight treasury management as a clear example, similar overlaps might exist in other areas as well.
Entropy will work closely with AAEs, vendors, and ecosystem teams to build out the DAO’s core financial infrastructure. We believe that the long-term viability of the Arbitrum DAO hinges on prudent asset management, disciplined budgeting, and strategic cash flow deployment to generate additional income, compound growth, and deepen our ecosystem’s liquidity while supporting integral builders. It’s worth emphasizing that while we work on financially sound structures, growth will always be at the forefront of our work in the ecosystem.
A granular cost breakdown—headcount by role, salary bands, data-infrastructure spending, travel, and contingency—will help delegates judge whether the budget matches market rates and expected value delivered.
The cost breakdown (without going into the single salary numbers) has always been outlined afaik in their quarterly reports here: Entropy Advisors Updates - Arbitrum. The headcount, is literally in the slides presented above, with 7 full time members, one part time, and further hires ahead. Knowing that the budget has been increased by 20% with a 100% increase of people, is easy to have the granular breakdown because it will be very close to what we have today already.
We are aware that a high-level cost breakdown has been shared, but we do not believe it is sufficient for proper oversight.
To be clear, we are not asking Entropy to open its entire P&L. In a classic output-based model, where each deliverable carries a discrete fee, the DAO could set compensation solely by the value it receives, regardless of Entropy’s internal costs. However, much of Entropy’s mandate sits in higher-level advisory and strategic work, where outputs are less concrete and value attribution is harder. In that context, the DAO must verify that the underlying labour and overhead costs are, in fact, reasonable.
More broadly, we think the DAO should cultivate sharper cost discipline. We agree that Entropy has done good work. Nonetheless, it is our fiduciary duty to keep asking whether the same objectives could be achieved more cheaply or more efficiently. Continual cost-effectiveness checks are simply part of protecting token-holder value.
A two-year mandate brings welcome continuity, yet it may also reduce flexibility. Why is a single two-year tranche preferable to a one-year renewal structure tied to performance milestones?
I personally answered in length on the above. But the point is that to build fundamentally strong initiatives we need to start thinking on the long term. Arbitrum as a DAO has had 2 years now to figure out his identity. We have tested a lot of things in a lot of ways and I am glad we did, it really helped us understand what worked for us. We are now at a point in which we need to double down on
We understand the potential advantages of locking the engagement into a single two-year term. What we do not yet see is clear evidence that moving to an annual renewal would impose significant costs or operational friction. If a one-year cadence would meaningfully disrupt execution, then a two-year contract is justified. If not, a one-year term should be adequate. All we ask is a more detailed explanation of what concrete drawbacks the DAO would face under a one-year structure versus the proposed two-year tranche.
More than discussing “guardrails, kpis, etc” which are fine but also details in the grand scheme of things, to me we should instead answer the following questions: did entropy do a good job in the past 12 months? Was the job worth the price tag? if the answers to the previous questions are both positive, is the new proposal something that puts them in condition to do a work that is at least of the same quality if not above? This is not because KPIs are not important. But they can be a way to make us feel like we are doing proper DD, make us feel “good” about our “data driven” decision, while instead we miss the forest for the tree.
We agree entirely that the key test is whether the DAO receives value commensurate with what it pays, and we also believe Entropy has been a great partner of the Arbitrum DAO. Our point is that this test should rely on more than what major delegates perceive. Wherever results can be measured objectively, they should be. We should also ask in advance how the DAO will protect itself if events deviate from plan. This is a basic responsibility to token-holders and to the DAO’s long-term health. Given the wide range of stakeholders in a DAO, treating this rigorously is even more important than in a conventional startup.
Thanks for the proposal, was about time.
First, a small premise. I have had the pleasure to work with Entropy in different degrees through different initiatives, either with an official role like in the Stylus program, or in a non official role/capacity as a delegate that just tries to chime into initiatives that I deem important. I specifically worked with Pruitt (even before in LTIPP), i have always found in Brick a counterparty willing to explain his vision, even when very different than mine and during weekends. I have spoke extensively with both Sam and Matt. And also clashed, privately, with Matt, more than I would like to admit cause we both have a certain personality, but is the type of clashes that comes from having strong opinions driven by a vision. Is the good type of clashes. I have also grown appreciating the work of the Data team (Tom, Ali) that have always been open to suggestions. All to say: i have confidence in my judgments, which are both related to Entropy, the entity, and the people working in Entropy. And that is why I see myself supporting them in this renewal.
Thanks for the proposal, was about time.
First, a small premise. I have had the pleasure to work with Entropy in different degrees through different initiatives, either with an official role like in the Stylus program, or in a non official role/capacity as a delegate that just tries to chime into initiatives that I deem important. I specifically worked with Pruitt (even before in LTIPP), i have always found in Brick a counterparty willing to explain his vision, even when very different than mine and during weekends. I have spoke extensively with both Sam and Matt. And also clashed, privately, with Matt, more than I would like to admit cause we both have a certain personality, but is the type of clashes that comes from having strong opinions driven by a vision. Is the good type of clashes. I have also grown appreciating the work of the Data team (Tom, Ali) that have always been open to suggestions. All to say: i have confidence in my judgments, which are both related to Entropy, the entity, and the people working in Entropy. And that is why I see myself supporting them in this renewal.
I want to loosely comment on a few things. I am going to focus on what might be deemed by some controversial, and analyze past initiatives that might have not created the outcome the DAO wanted, and show why these imho have no material weight in the renewal.
I think this is quite logical. In the program I run, the D.A.O. grant program, I moved the terms from 6 months to 1 year. I think initiatives that have a broad consensus and are perceived as important need to extend over time the time term because is the easiest way to allow the team to operate focusing on the mission, and not on the fact that in 12 months they will have to go all over this again. Managing an initiative that moved from 6 months to 1 year, the above explains why having a longer term would be preferred. I also don't see this as a deal breaker: either we renew entropy or we don't, and them running for 1 or 2 years is less important than the DAO accepting them.
This is a bump on base cost of 20%. 1 year ago, in Bruxelles, the team was made by Matt, Sam, Pruitt, and if I recall Brick was recently onboarded or soon to be. Unsure if Tom was already there. We now have double the personnel and a clear stated goals of hiring more people, accordingly to the infochart with one that is basically here and another 5 that are planned and might come. Knowing how consultancy work, and even more how it works in crypto, I think the budget is extremely lean, even underpriced. But is partially compensated by the vesting bonus (see below). I won't for sure push Entropy to ask for more capital, but I think they could have easily asked for $3.5M seeing how they are scaling.
I have never been a fun of the DAO voting on bonuses on people (not only on entropy). Yes, the DAO can evaluate if someone did the work it was supposed to do up to some degree. But voting on assigning/non assigning a bonus is tricky because it becomes an issue about quality of the job, if the people involved pushed into the last mile and more vs doing just the homework etc. I don't think the DAO is well equipped to do this because is extremely difficult to be able to see the outcome as a function of the work behind, just like for an iceberg is easy to see the tip but you can only imagine the size of the submerged part. All of this to say: I think is fair to move to a bonus that is vested. On the amount. This is quite difficult for me to asses. As it is today, the bonus corresponds to around $4.5M so 1.5 times the yearly budget. But this will be all available in 4 years, and in 2 years from now the amount of unlocked supply of arb should be 50% more than what it is now excluding DAO spending, with around 30M arb unlocked per month. It's a fool's game to try and project the notional dollar value. But let's assume we have 15 people in entropy: it would basically mean an average of 1M bonus each after 4 years; of this, 333k would be unlocked in 2 years. Comparing the numbers to OpCo, and knowing that Entropy has still a private nature so it can justify a premium to have them around exclusively for further 2 years, I don't think the number is unreasonable. I will also let other speak on this number.
This is explicitely mentioned by Entropy itself in the list of things from which there are mistakes from which they can learn from. Of the last proposals we have had, one of the biggest critique has been around the lack of flexibility and allocation in these proposals, and how protocols could have benefit from a broader framework. I have been the first one expressing loudly this point. Was there margin for a better execution? Yes. Could Entropy have had this broader vision at day one and be put in the condition of executing this vision right away? Yes and no. The main problem was tied to not only a conservative vision (which is not necessarily a problem honestly, more like a different angle), but mostly on the outreach terms for protocol. If protocols have to take the time to create proposals, explain their strategy and then they get rejected, there is inevitably a bitter feeling as a consequence which also increases the negative sentiments. Entropy would have benefit from better communication with stakeholders like OCL that could have suggested (and I am not sure if this happened or not) allocations that were more oriented toward growth; they would have also benefit from the contributions of very entrenched, defi native people able to contribute to their team and program. All of this is likely solvable in the next iterations: we do have a lot of ETH to spend and this was the first programmatic initiative that weaponized our treasury and opened the path to several other in future. Expecting the first iteration to be already perfected and tailored to our collective needs is a bit unrealistic; plus, the other side of the coin is that our DAO has been live for 2 years (with the chain been live for 3.5 years) and there has been no other party trying to spin up an initiative such as this one. TLDR: can we have objective critiques on the expectation vs actual outcome of the GMC proposal? Yes. At the same time, we should recognize how this initiative would have not even existed in the first place, how is a first 6 months iteration, and how it made us learn a lot on what we can do and in what areas we can improve.
Of the above mentioned, I think none is material through a renewal that takes in account the following points:
These are the material results; is a bit subjective and in general hard to understand the immaterial results and second order effect that Entropy manifested in the DAO. Two are worth mentioning:
The question becomes: were the $2.5M we paid a good price tag for what we obtained in the last 12 months? My answer as of today is a big yes.
I also don't want to sound like a cheerleader. Everybody has margin of improvement here and Entropy is not an exception. Specifically, it can benefit by a lot of things. One of the pitfall we likely had, and is quite common in crypto, is a team that is not only extremely motivated, but also quite young. This is not necessarily a bad thing, but the lack of experience can sometimes create shortfalls that could have been easily avoided. This was noticeable, for example, in certain occasion, during communications with the rest of the DAO or some protocols. As of today, not only Entropy operated for 1 year in crypto (which, like dogs' years, is equivalent to 7 years of professional life somewhere else), but they will now have a series of other counterparties, either new (opco) or new in term of willing to be more active (ocl), that will make their life probably easier due to their scope being now narrower compared to the initial mandate. Entropy would also benefit by diversifying a bit their team through hiring people that are "closer to the trenches" to put it bluntly, and the list of future hires does indeed indicate that. Entropy is growing in the DAO alongside all of us, this is clear to me.
Since we are here I want to also give my educated opinion on the above post from @Tane, not because his opinion is wrong but because the approach/angle should be a bit different imho.
How will Entropy ensure that its exclusive mandate does not crowd out alternative contributors or foster dependency if priorities shift or performance falters?
Please outline review gates or competitive checkpoints that allow the DAO to reassess exclusivity at regular intervals.
Arbitrum already coordinates Offchain Labs, the Foundation, and the emerging OpCo, so overlapping mandates can easily turn into a bureaucratic cost center without contributing to the actual project’s progress.
A granular cost breakdown—headcount by role, salary bands, data-infrastructure spending, travel, and contingency—will help delegates judge whether the budget matches market rates and expected value delivered.
The cost breakdown (without going into the single salary numbers) has always been outlined afaik in their quarterly reports here: https://forum.arbitrum.foundation/c/dao-grant-programs/entropy-advisors-updates/50. The headcount, is literally in the slides presented above, with 7 full time members, one part time, and further hires ahead. Knowing that the budget has been increased by 20% with a 100% increase of people, is easy to have the granular breakdown because it will be very close to what we have today already.
A two-year mandate brings welcome continuity, yet it may also reduce flexibility. Why is a single two-year tranche preferable to a one-year renewal structure tied to performance milestones?
I personally answered in length on the above. But the point is that to build fundamentally strong initiatives we need to start thinking on the long term. Arbitrum as a DAO has had 2 years now to figure out his identity. We have tested a lot of things in a lot of ways and I am glad we did, it really helped us understand what worked for us. We are now at a point in which we need to double down on
EDIT rereading i realized my point toward Tane is not clear. More than discussing "guardrails, kpis, etc" which are fine but also details in the grand scheme of things, to me we should instead answer the following questions: did entropy do a good job in the past 12 months? Was the job worth the price tag? if the answers to the previous questions are both positive, is the new proposal something that puts them in condition to do a work that is at least of the same quality if not above? This is not because KPIs are not important. But they can be a way to make us feel like we are doing proper DD, make us feel "good" about our "data driven" decision, while instead we miss the forest for the tree. We can discuss a lot if the price tag is correct, if the term is correct, if the bonus is correct, what kpi to add. To me this is secondary to the most important questions highlighted above. And as I showed (fwiw, i am just a single cow delegate), the attached numbers feels correct, but that is also a personal take.
We appreciate the comprehensive proposal and the dedication Entropy Advisors has shown to the Arbitrum DAO over the past year. The ambition to transform Arbitrum into the most effective capital allocator in crypto is compelling, and the focus on neutral proposal facilitation and strategic advisory is well aligned with the DAO’s needs. That said, several points call for deeper clarification before we can give full support:
Entrusting pivotal functions such as proposal incubation, treasury design, and incentive architecture to a single provider can streamline operations, yet it risks creating lock-in and suppressing healthy competition. How will Entropy ensure that its exclusive mandate does not crowd out alternative contributors or foster dependency if priorities shift or performance falters? Please outline review gates or competitive checkpoints that allow the DAO to reassess exclusivity at regular intervals.
Arbitrum already coordinates Offchain Labs, the Foundation, and the emerging OpCo, so overlapping mandates can easily turn into a bureaucratic cost center without contributing to the actual project's progress. We therefore ask for a detailed list of deliverables and its outcomes, each paired with clear KPIs or some other measurable things, and expected ecosystem impact. Publishing these metrics up front will let the community evaluate progress without ambiguity. We are aware that some tasks or responsibilities are outlined like the one quoted below from "Financial Planning, Analysis, and Guiding Capital Deployment" section, but we'd like to have impact of Entropy itself measurable.
The proposal requests $6M in ARB for payroll plus a 15M ARB vested allocation, more than doubling the cash component of the first term. A granular cost breakdown—headcount by role, salary bands, data-infrastructure spending, travel, and contingency—will help delegates judge whether the budget matches market rates and expected value delivered.
A total of 6 million ARB will be sent to the Foundation, for them to monetize at their discretion to secure at least $2,470,000. Any Excess ARB not monetized (or stored for the potential bonus below) and excess stables from lower payments during the initial scaling of Entropy will be sent back to the DAO by the Foundation.
We propose a base pay of $3M per year, a ~$500k per year increase versus our first term, as we have ambitions to grow the team to internalize key functions related to data, incentives, and treasury management. In addition to our base pay, and in an effort to achieve long-term alignment with the Arbitrum ecosystem, we propose a 15M ARB allocation to Entropy Advisors that will be locked in a vesting contract with a 1-year cliff and 3-year vest.
A two-year mandate brings welcome continuity, yet it may also reduce flexibility. Why is a single two-year tranche preferable to a one-year renewal structure tied to performance milestones? Detailing how the extended term improves execution, and why a shorter checkpoint would materially hinder the work, would strengthen the case.
Although some rationale for this is explained in the proposal, we do not believe that is sufficient enough to justify this length, considering the amount of budget.
After reaching out to some larger delegates and key stakeholders to get feedback on how Entropy Advisors should proceed forward, it has become clear that a 2-year term mandate is desired to ensure alignment over a sufficient period of time in order to accomplish the aforementioned goals. Therefore, we are proposing to work with the Arbitrum DAO for 2 years from September 1st 2025 through August 31st 2027.
We recommend adding mid-term reporting cycles with pass-fail criteria, milestone-based vesting for the 15M ARB allocation, and the option to reduce or halt monthly payments if agreed KPIs slip. Clear escalation paths protect both the DAO and Entropy from misaligned expectations.
By addressing these points—exclusivity guardrails, deliverable-level KPIs, transparent budgeting, explicit term rationale, and robust performance safeguards—Entropy can reinforce community trust and demonstrate that this sizeable investment directly accelerates Arbitrum’s long-term growth.
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