Changes made on Aug 2nd:
Added language about how we will facilitate the ability for the DAO to directly input into our workload.
In order to address our promise to give the DAO the ability to directly and openly provide input into the work we are facilitating, we will be posting monthly Short Term Deliverables similar to the ones included above in an "Entropy" category in the forum. We will call for feedback on our workload and goals, and ask for suggestions as to how to either add new initiatives or remove existing ones from our workload. We will additionally host an Entropy office hour biweekly open to all.
Non-material change clarifying that Entropy has the ability to claim/bill its monthly payments instead of the foundation transferring funds at a monthly cadence. The only alteration is in the verbiage from "draw" to "eligible to claim" with the addition that "Payments that have accrued can be claimed at any time.”
While the Entropy team scales, they will be eligible to claim a reduced $100,000 per month and after crossing the threshold of 7 employees dedicated to Arbitrum, will be eligible to claim regular monthly payments ($2,470,000/12 = $205,834) for the remainder of the 12 month term. Payments that have accrued can be claimed at any time.
Before:
While the Entropy team scales, they will draw a reduced $100,000 per month and after crossing the threshold of 7 employees dedicated to Arbitrum, will start receiving regular monthly payments ($2,470,000/12 = $205,834) for the remainder of the 12 month term.
Changes made on July 15th based upon community feedback:
Changes made on July 18th
This proposal aims to secure funding for Entropy Advisors to continue its work exclusively with the Arbitrum DAO for one year. During this period, we will deliver strategic proposals, guide key partners through the DAO processes, and align the priorities of essential stakeholders for the betterment of Arbitrum. We will also expand our efforts to include a small set of additional verticals by hiring skilled contributors in areas where the DAO needs support, such as data analytics, technical proposal creation, marketing, or any other needs that may arise.
With a budget of $2.47M for the year paid in monthly installments and stored with the Foundation for DAO-clawback capabilities, along with an optional up to 1.5 million ARB for performance-based bonuses voted on by the DAO near the end of the term and put in a 3-year vesting contact to ensure long-term alignment, we will continue to build a dedicated team focused solely on enhancing the Arbitrum DAO’s success. The primary goal of our work is to help Arbitrum DAO continue its path toward efficient and effective operations and execute its long-term vision of becoming a sustainable entity with diversified revenue streams. We believe that over the coming years, Arbitrum DAO has the potential to generate hundreds of millions of dollars per year while maintaining its status as the leading Ethereum scaling solution with an ever-growing base of users and developers. All of Entropy Advisors’ employees will work full-time towards achieving this goal.
Arbitrum DAO is set up to prosper with its cutting-edge technology stack that will soon support numerous coding languages, a vibrant community of users and developers, abundant resources in the DAO treasury, and the ecosystem’s commitment to scaling the most decentralized and secure L2 on Ethereum. Despite our belief that Arbitrum holds a strong position in the market today, there is a lot of work to be done over the next 3-5 years to ensure Arbitrum maintains and advances its position. We have diagnosed some key areas in need of improvement that we feel well suited to take on:
Today the Arbitrum DAO faces friction executing across all of the aforementioned tasks. Many times those creating proposals have known or unknown ulterior motives and incentives at play. It is difficult for aspiring contributors and partners to navigate the DAO. No one is incentivized to bolster RFP applicant pools. Communication is fragmented with no entity in place to tie perspectives together, and operations/goals often overlap across initiatives. There are numerous proposals that are consensus to move forward but do not progress because there is no financial incentive to do so. There is inadequate accountability over and transparency into DAO funded programs. The problems are ever-evolving and growing, and the Arbitrum DAO needs an entity that only has the DAO’s best interests in mind to fill the gaps.
Our team (@swmartin19, @mattonchain, and @pruitt) brings an extensive network as well as experience in research, governance, brand building, and project management to the Arbitrum DAO, having led well-known brands in the space such as Blockworks Research and 404 DAO. We have all been involved in the DAO since the beginning, starting with Blockworks Research’s entry into the DAO by highlighting flaws in the DAO’s very first proposal, AIP-1. We are not afraid to push against the status quo if we believe it helps Arbitrum achieve its goals.
Entropy Advisors was extremely fortunate to receive a grant from the Arbitrum Foundation. As such, we have been able to use the past few months contributing full-time to Arbitrum DAO to further showcase our value in the community. We have hosted bi-weekly 1-on-1 calls with a cohort of large delegates, with the foundation, and with OCL, and feel that we have a strong hold on various stakeholder’s interests, strategic goals for Arbitrum, working initiatives, etc. When paired with our experience and networks within the industry, we believe that we are uniquely positioned to help Arbitrum achieve its long-term goals with all stakeholder perspectives in mind. With exclusivity meaning no official or unofficial engagements with any other client, Entropy Advisors can serve Arbitrum DAO with no ulterior motives or conflicts of interest.
Today, virtually no money is spent on operations, while the DAO has spent almost 435M ARB in total with ~95% going towards investments, incentives, and grants (Source: Delphi & R3gen). We believe it is absolutely imperative for the DAO to make an investment in operations, simultaneously ensuring different initiatives across the ecosystem can be set in motion swiftly, fit together seamlessly, and can reach the best talent, while the DAO’s expenditures can be managed in a way that enables long-term sustainability. It is evident that this is becoming a wider-reaching theme within the DAO, but requires a heavy lift (see OpCo proposal from @dkpremia that asks for 25M ARB). We are NOT looking to replace OpCo, but rather drastically reduce the scope and funding request by helping formulate operational procedures until the OpCo is formally stood up. At that point, the DAO can decide what role Entropy Advisors plays as a service provider to the OpCo.
With the budget as outlined, Entropy will be able to hire up to 10 employees with a diverse range of skill sets including governance, data analytics, marketing, and development/engineering. We will be able to hire top talent in our industry who will dedicate their full-time bandwidth to Arbitrum DAO. Regardless of Arbitrum’s current strategic priorities, whether cutting costs or scaling strategies, our team will work to execute the goals of the DAO. Given Arbitrum’s dominance, size, and number of initiatives it is important that we build a well-rounded team at Entropy that can operate as the tip of the spear as a catalyst for change across the many sectors that the DAO operates.
At the beginning of May, we introduced Entropy Advisors to the Arbitrum DAO. We are a governance operations-focused business, working exclusively with Arbitrum. Our initial efforts have already driven several notable initiatives, demonstrating our capability and commitment to enhancing the Arbitrum DAO:
If this proposal passes, Entropy Advisors will sign a 1-year exclusivity agreement with the Arbitrum Foundation. The partnership will begin on the first of the month after this proposal passes. During this time, Entropy will service no other clients in any capacity. We will achieve the aforementioned goals through the following deliverables:
Data and Brand Building
Our vision for working with the Arbitrum DAO is structured in three key phases, each building upon the success of the previous one to ensure a thriving partnership.
In the initial phase, our focus was on establishing a solid foundation by identifying and addressing key pain points within the DAO. This involved acting as a neutral party to broker proposals, aligning stakeholders, attracting talent, and improving strategic partner onboarding and stakeholder relations. Our initial efforts have already demonstrated notable progress in a short time period, setting the stage for a more capable DAO.
During Phase 1 we identified how Entropy fits into the broader DAO, and how we can be most useful. This involved lessons learned in passing proposals, project management, and working with new and existing partners. Additionally, we took this time to start building relationships with all of the DAO’s most active stakeholders including many delegates, members of the foundation, protocol teams, and key individuals at Offchain Labs.
Over the next year, we will build on the foundations we have established, aiming to make the Arbitrum DAO an efficient and effective community dedicated to long-term sustainability through the points brought up in the Motivation & Rationale section.
We will enhance governance processes by ensuring the initiatives we develop and implement focus on accountability. By fostering stronger relationships between key stakeholders we will ensure more cohesive collaboration. Through data, quantitative, and qualitative analysis we will begin to analyze active initiatives and propose clawbacks and other mechanisms to decrease DAO spend to focus its budget on high ROI initiatives.
Leveraging our extensive network, we will secure partnerships that bring value to the DAO, enhancing the overall ecosystem. Additionally, we will pick up small lift brand and marketing campaigns to help bring awareness to DAO initiatives. We will continue to attract and retain high-quality contributors by offering competitive compensation, professional development opportunities, and a collaborative work environment.
Through strategic projects, such as well-thought-out economic stimulation, we will support the DAO in generating sustainable revenue streams. Our proposal includes an agreement with the Arbitrum Foundation so that if the OpCo is stood up in the next year, we can easily port our agreement to fall under its purview instead of the Foundation.
In Phase 3, we envision Entropy Advisors as a well-oiled machine, seamlessly servicing the Arbitrum DAO. Entropy will grow together with the ecosystem, continuing to perfect the deliverables mentioned earlier while looking for areas where we can add value. By this stage, we will have employed and retained top talent, creating an environment where the DAO operates at peak efficiency. Our efforts will help position Arbitrum as the clear-cut leader in the rollup ecosystem, driving innovation, growth, and success.
At this point OpCo should be well underway and Entropy Advisors will continue to serve as a service provider to OpCo, if viewed as beneficial. The DAO will be able to retain a second year of Entropy’s services under the same terms stipulated in this proposal, if it desires to do so. For this second-year engagement clause to be executed in the future, the DAO will also need to vote in favor of the future bonus proposal discussed below. If the OpCo is stood up, this entity can be responsible for the potential renewal in place of a DAO vote. This structure would come into effect at the end of our initial 1-year term.
We are committed to defining clear goals for the coming weeks and months, while also encouraging collaboration with other contributors. Our proposed initiatives include, but are not limited to:
We are committed to fostering an inclusive environment where multiple parties can work and provide input together to achieve these objectives.
In order to address our promise to give the DAO the ability to directly and openly provide input into the work we are facilitating, we will be posting monthly Short Term Deliverables similar to the ones included above in an "Entropy" category in the forum. We will call for feedback on our workload and goals, and ask for suggestions as to how to either add new initiatives or remove existing ones from our workload. We will additionally host an Entropy office hour biweekly open to all.
Salaries: $1.96M
Legal, Insurance, and Accounting: $90K
Conference Travel, Offsites, and Small Events: $105K
Assorted Software: $21K
Office / Misc: $70K
Operating Budget Subtotal: $2.246M
Margin / Contingency (~10%): $224K
While the Entropy team scales, they will be eligible to claim a reduced $100,000 per month and after crossing the threshold of 7 employees dedicated to Arbitrum, will be eligible to claim regular monthly payments ($2,470,000/12 = $205,834) for the remainder of the 12 month term. Payments that have accrued can be claimed at any time.
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.
The DAO may vote via Snapshot to terminate Arbitrum’s relationship with Entropy Advisors at any time. Quorum for this proposal will be set at the same level as ongoing non-constitutional onchain proposals, with quorum defined as total votes for termination+abstention, and the proposal must have more voting power in favor of termination than against or abstaining. 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 at that moment. In this scenario, all funds earmarked for Entropy Advisors will be returned to the DAO by the Foundation.
The Foundation will hold 1.5 million ARB allocated to potential performance bonuses. As the 1-year period comes to a close, Entropy will post a Snapshot vote so that the DAO may decide if the bonus should be distributed. 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 – which will depend on the spot price of ARB at the time of the snapshot’s passing. The amount of ARB distributed as a bonus cannot exceed the 1.5M ARB amount being escrowed by the Foundation. If the proposal passes, the Foundation will send the X (TBD number) ARB to a 3-year vesting smart contract that pays out to Entropy Advisors in monthly streams. This ensures Entropy Advisors remains aligned with the DAO and ARB token even after this agreement has expired and as we move into Phase 3 and onward.
The Foundation will send all funds in excess of – $2,470,000 + 1.5 million ARB – back to the DAO. At the end of the year, any additional dollars resulting from months where Entropy receives $100,000 instead of the full allocation, and remainder from 1.5M ARB if the full bonus is not allocated, will also be returned.
At the end of each fiscal quarter, we will publish a transparency report that goes over our activities and total spending. Information included will be what we have done, an analysis of impact, and the total cost associated with running the business.
Changes made on Aug 2nd:
Added language about how we will facilitate the ability for the DAO to directly input into our workload.
In order to address our promise to give the DAO the ability to directly and openly provide input into the work we are facilitating, we will be posting monthly Short Term Deliverables similar to the ones included above in an "Entropy" category in the forum. We will call for feedback on our workload and goals, and ask for suggestions as to how to either add new initiatives or remove existing ones from our workload. We will additionally host an Entropy office hour biweekly open to all.
Non-material change clarifying that Entropy has the ability to claim/bill its monthly payments instead of the foundation transferring funds at a monthly cadence. The only alteration is in the verbiage from "draw" to "eligible to claim" with the addition that "Payments that have accrued can be claimed at any time.”
While the Entropy team scales, they will be eligible to claim a reduced $100,000 per month and after crossing the threshold of 7 employees dedicated to Arbitrum, will be eligible to claim regular monthly payments ($2,470,000/12 = $205,834) for the remainder of the 12 month term. Payments that have accrued can be claimed at any time.
Before:
While the Entropy team scales, they will draw a reduced $100,000 per month and after crossing the threshold of 7 employees dedicated to Arbitrum, will start receiving regular monthly payments ($2,470,000/12 = $205,834) for the remainder of the 12 month term.
Changes made on July 15th based upon community feedback:
Changes made on July 18th
This proposal aims to secure funding for Entropy Advisors to continue its work exclusively with the Arbitrum DAO for one year. During this period, we will deliver strategic proposals, guide key partners through the DAO processes, and align the priorities of essential stakeholders for the betterment of Arbitrum. We will also expand our efforts to include a small set of additional verticals by hiring skilled contributors in areas where the DAO needs support, such as data analytics, technical proposal creation, marketing, or any other needs that may arise.
With a budget of $2.47M for the year paid in monthly installments and stored with the Foundation for DAO-clawback capabilities, along with an optional up to 1.5 million ARB for performance-based bonuses voted on by the DAO near the end of the term and put in a 3-year vesting contact to ensure long-term alignment, we will continue to build a dedicated team focused solely on enhancing the Arbitrum DAO’s success. The primary goal of our work is to help Arbitrum DAO continue its path toward efficient and effective operations and execute its long-term vision of becoming a sustainable entity with diversified revenue streams. We believe that over the coming years, Arbitrum DAO has the potential to generate hundreds of millions of dollars per year while maintaining its status as the leading Ethereum scaling solution with an ever-growing base of users and developers. All of Entropy Advisors’ employees will work full-time towards achieving this goal.
Arbitrum DAO is set up to prosper with its cutting-edge technology stack that will soon support numerous coding languages, a vibrant community of users and developers, abundant resources in the DAO treasury, and the ecosystem’s commitment to scaling the most decentralized and secure L2 on Ethereum. Despite our belief that Arbitrum holds a strong position in the market today, there is a lot of work to be done over the next 3-5 years to ensure Arbitrum maintains and advances its position. We have diagnosed some key areas in need of improvement that we feel well suited to take on:
Today the Arbitrum DAO faces friction executing across all of the aforementioned tasks. Many times those creating proposals have known or unknown ulterior motives and incentives at play. It is difficult for aspiring contributors and partners to navigate the DAO. No one is incentivized to bolster RFP applicant pools. Communication is fragmented with no entity in place to tie perspectives together, and operations/goals often overlap across initiatives. There are numerous proposals that are consensus to move forward but do not progress because there is no financial incentive to do so. There is inadequate accountability over and transparency into DAO funded programs. The problems are ever-evolving and growing, and the Arbitrum DAO needs an entity that only has the DAO’s best interests in mind to fill the gaps.
Our team (@swmartin19, @mattonchain, and @pruitt) brings an extensive network as well as experience in research, governance, brand building, and project management to the Arbitrum DAO, having led well-known brands in the space such as Blockworks Research and 404 DAO. We have all been involved in the DAO since the beginning, starting with Blockworks Research’s entry into the DAO by highlighting flaws in the DAO’s very first proposal, AIP-1. We are not afraid to push against the status quo if we believe it helps Arbitrum achieve its goals.
Entropy Advisors was extremely fortunate to receive a grant from the Arbitrum Foundation. As such, we have been able to use the past few months contributing full-time to Arbitrum DAO to further showcase our value in the community. We have hosted bi-weekly 1-on-1 calls with a cohort of large delegates, with the foundation, and with OCL, and feel that we have a strong hold on various stakeholder’s interests, strategic goals for Arbitrum, working initiatives, etc. When paired with our experience and networks within the industry, we believe that we are uniquely positioned to help Arbitrum achieve its long-term goals with all stakeholder perspectives in mind. With exclusivity meaning no official or unofficial engagements with any other client, Entropy Advisors can serve Arbitrum DAO with no ulterior motives or conflicts of interest.
Today, virtually no money is spent on operations, while the DAO has spent almost 435M ARB in total with ~95% going towards investments, incentives, and grants (Source: Delphi & R3gen). We believe it is absolutely imperative for the DAO to make an investment in operations, simultaneously ensuring different initiatives across the ecosystem can be set in motion swiftly, fit together seamlessly, and can reach the best talent, while the DAO’s expenditures can be managed in a way that enables long-term sustainability. It is evident that this is becoming a wider-reaching theme within the DAO, but requires a heavy lift (see OpCo proposal from @dkpremia that asks for 25M ARB). We are NOT looking to replace OpCo, but rather drastically reduce the scope and funding request by helping formulate operational procedures until the OpCo is formally stood up. At that point, the DAO can decide what role Entropy Advisors plays as a service provider to the OpCo.
With the budget as outlined, Entropy will be able to hire up to 10 employees with a diverse range of skill sets including governance, data analytics, marketing, and development/engineering. We will be able to hire top talent in our industry who will dedicate their full-time bandwidth to Arbitrum DAO. Regardless of Arbitrum’s current strategic priorities, whether cutting costs or scaling strategies, our team will work to execute the goals of the DAO. Given Arbitrum’s dominance, size, and number of initiatives it is important that we build a well-rounded team at Entropy that can operate as the tip of the spear as a catalyst for change across the many sectors that the DAO operates.
At the beginning of May, we introduced Entropy Advisors to the Arbitrum DAO. We are a governance operations-focused business, working exclusively with Arbitrum. Our initial efforts have already driven several notable initiatives, demonstrating our capability and commitment to enhancing the Arbitrum DAO:
If this proposal passes, Entropy Advisors will sign a 1-year exclusivity agreement with the Arbitrum Foundation. The partnership will begin on the first of the month after this proposal passes. During this time, Entropy will service no other clients in any capacity. We will achieve the aforementioned goals through the following deliverables:
Data and Brand Building
Our vision for working with the Arbitrum DAO is structured in three key phases, each building upon the success of the previous one to ensure a thriving partnership.
In the initial phase, our focus was on establishing a solid foundation by identifying and addressing key pain points within the DAO. This involved acting as a neutral party to broker proposals, aligning stakeholders, attracting talent, and improving strategic partner onboarding and stakeholder relations. Our initial efforts have already demonstrated notable progress in a short time period, setting the stage for a more capable DAO.
During Phase 1 we identified how Entropy fits into the broader DAO, and how we can be most useful. This involved lessons learned in passing proposals, project management, and working with new and existing partners. Additionally, we took this time to start building relationships with all of the DAO’s most active stakeholders including many delegates, members of the foundation, protocol teams, and key individuals at Offchain Labs.
Over the next year, we will build on the foundations we have established, aiming to make the Arbitrum DAO an efficient and effective community dedicated to long-term sustainability through the points brought up in the Motivation & Rationale section.
We will enhance governance processes by ensuring the initiatives we develop and implement focus on accountability. By fostering stronger relationships between key stakeholders we will ensure more cohesive collaboration. Through data, quantitative, and qualitative analysis we will begin to analyze active initiatives and propose clawbacks and other mechanisms to decrease DAO spend to focus its budget on high ROI initiatives.
Leveraging our extensive network, we will secure partnerships that bring value to the DAO, enhancing the overall ecosystem. Additionally, we will pick up small lift brand and marketing campaigns to help bring awareness to DAO initiatives. We will continue to attract and retain high-quality contributors by offering competitive compensation, professional development opportunities, and a collaborative work environment.
Through strategic projects, such as well-thought-out economic stimulation, we will support the DAO in generating sustainable revenue streams. Our proposal includes an agreement with the Arbitrum Foundation so that if the OpCo is stood up in the next year, we can easily port our agreement to fall under its purview instead of the Foundation.
In Phase 3, we envision Entropy Advisors as a well-oiled machine, seamlessly servicing the Arbitrum DAO. Entropy will grow together with the ecosystem, continuing to perfect the deliverables mentioned earlier while looking for areas where we can add value. By this stage, we will have employed and retained top talent, creating an environment where the DAO operates at peak efficiency. Our efforts will help position Arbitrum as the clear-cut leader in the rollup ecosystem, driving innovation, growth, and success.
At this point OpCo should be well underway and Entropy Advisors will continue to serve as a service provider to OpCo, if viewed as beneficial. The DAO will be able to retain a second year of Entropy’s services under the same terms stipulated in this proposal, if it desires to do so. For this second-year engagement clause to be executed in the future, the DAO will also need to vote in favor of the future bonus proposal discussed below. If the OpCo is stood up, this entity can be responsible for the potential renewal in place of a DAO vote. This structure would come into effect at the end of our initial 1-year term.
We are committed to defining clear goals for the coming weeks and months, while also encouraging collaboration with other contributors. Our proposed initiatives include, but are not limited to:
We are committed to fostering an inclusive environment where multiple parties can work and provide input together to achieve these objectives.
In order to address our promise to give the DAO the ability to directly and openly provide input into the work we are facilitating, we will be posting monthly Short Term Deliverables similar to the ones included above in an "Entropy" category in the forum. We will call for feedback on our workload and goals, and ask for suggestions as to how to either add new initiatives or remove existing ones from our workload. We will additionally host an Entropy office hour biweekly open to all.
Salaries: $1.96M
Legal, Insurance, and Accounting: $90K
Conference Travel, Offsites, and Small Events: $105K
Assorted Software: $21K
Office / Misc: $70K
Operating Budget Subtotal: $2.246M
Margin / Contingency (~10%): $224K
While the Entropy team scales, they will be eligible to claim a reduced $100,000 per month and after crossing the threshold of 7 employees dedicated to Arbitrum, will be eligible to claim regular monthly payments ($2,470,000/12 = $205,834) for the remainder of the 12 month term. Payments that have accrued can be claimed at any time.
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.
The DAO may vote via Snapshot to terminate Arbitrum’s relationship with Entropy Advisors at any time. Quorum for this proposal will be set at the same level as ongoing non-constitutional onchain proposals, with quorum defined as total votes for termination+abstention, and the proposal must have more voting power in favor of termination than against or abstaining. 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 at that moment. In this scenario, all funds earmarked for Entropy Advisors will be returned to the DAO by the Foundation.
The Foundation will hold 1.5 million ARB allocated to potential performance bonuses. As the 1-year period comes to a close, Entropy will post a Snapshot vote so that the DAO may decide if the bonus should be distributed. 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 – which will depend on the spot price of ARB at the time of the snapshot’s passing. The amount of ARB distributed as a bonus cannot exceed the 1.5M ARB amount being escrowed by the Foundation. If the proposal passes, the Foundation will send the X (TBD number) ARB to a 3-year vesting smart contract that pays out to Entropy Advisors in monthly streams. This ensures Entropy Advisors remains aligned with the DAO and ARB token even after this agreement has expired and as we move into Phase 3 and onward.
The Foundation will send all funds in excess of – $2,470,000 + 1.5 million ARB – back to the DAO. At the end of the year, any additional dollars resulting from months where Entropy receives $100,000 instead of the full allocation, and remainder from 1.5M ARB if the full bonus is not allocated, will also be returned.
At the end of each fiscal quarter, we will publish a transparency report that goes over our activities and total spending. Information included will be what we have done, an analysis of impact, and the total cost associated with running the business.
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/85?u=krst
maintaining our vote from temp check
Conflict of interest - This is a proposal to fund ourselves so we will Abstain.
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/84?u=mcfly
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/85?u=krst
maintaining our vote from temp check
Conflict of interest - This is a proposal to fund ourselves so we will Abstain.
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/84?u=mcfly
The Event Horizon Community Voted to Support this Proposal ehARB-17: EventHorizon.vote/vote/arbitrum/ehARB-17
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/83?u=ocandocrypto
https://forum.arbitrum.foundation/t/griff-green-delegate-communication-thread/25040/14
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/58
As stated on the forum, we don’t feel the sizing of this expense is justified, and we also don’t see a need for the majority of the full-time positions Entropy plans on funding with this budget. The vote looks likely to pass overwhelmingly, though, and wish Entropy all the best in proving us wrong over the coming year.
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/80?u=ermia
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/79?u=blockworksresearch
https://forum.arbitrum.foundation/t/tekr0x-eth-delegate-communication-thread/24804
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/76?u=frisson
against this proposal is centered around concerns about potential centralization, the lack of competitive bidding, The fees proposed are truly frightening.
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/55?u=bob-rossi
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/73?u=0x_ultra
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/61?u=ezr3al
Professional consulting services are necessary to improve Arbitrum DAO's governance ability and decision-making process.
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/62?u=blockworksresearch
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/58?u=tane
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/55?u=bob-rossi
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/54?u=mcfly
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/53?u=ocandocrypto
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/51
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/43
https://forum.arbitrum.foundation/t/griff-green-delegate-communication-thread/25040/14?u=griff
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/48?u=0x_ultra
https://forum.arbitrum.foundation/t/gfx-labs-delegate-communication-thread/
Easiest yes I've ever voted for in my life
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/44?u=maxlomu
Still. we need more specific goals and quantitative KPI.
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/41?u=larva
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/37?u=jojo
Increases community governance power and decision-making transparency.
The Event Horizon Community Voted to Support this Proposal ehARB-17: EventHorizon.vote/vote/arbitrum/ehARB-17
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/83?u=ocandocrypto
https://forum.arbitrum.foundation/t/griff-green-delegate-communication-thread/25040/14
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/58
As stated on the forum, we don’t feel the sizing of this expense is justified, and we also don’t see a need for the majority of the full-time positions Entropy plans on funding with this budget. The vote looks likely to pass overwhelmingly, though, and wish Entropy all the best in proving us wrong over the coming year.
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/80?u=ermia
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/79?u=blockworksresearch
https://forum.arbitrum.foundation/t/tekr0x-eth-delegate-communication-thread/24804
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/76?u=frisson
against this proposal is centered around concerns about potential centralization, the lack of competitive bidding, The fees proposed are truly frightening.
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/55?u=bob-rossi
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/73?u=0x_ultra
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/61?u=ezr3al
Professional consulting services are necessary to improve Arbitrum DAO's governance ability and decision-making process.
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/62?u=blockworksresearch
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/58?u=tane
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/55?u=bob-rossi
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/54?u=mcfly
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/53?u=ocandocrypto
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/51
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/43
https://forum.arbitrum.foundation/t/griff-green-delegate-communication-thread/25040/14?u=griff
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/48?u=0x_ultra
https://forum.arbitrum.foundation/t/gfx-labs-delegate-communication-thread/
Easiest yes I've ever voted for in my life
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/44?u=maxlomu
Still. we need more specific goals and quantitative KPI.
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/41?u=larva
https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/37?u=jojo
Increases community governance power and decision-making transparency.
Hey! Noticed that Dashboards on Dune have all queries set to private mode.
Any specific reason for this?
Wouldn't it be better to keep them open for transparency or publish the methodology?
@Entropy
Hey! Noticed that Dashboards on Dune have all queries set to private mode.
Any specific reason for this?
Wouldn't it be better to keep them open for transparency or publish the methodology?
@Entropy
The Treasure ARC voted in favor of this proposal. This was reflected by Entropy's contribution to Arbitrum to date and aligned long term goals. As Pepperoni Joe put it Entropy we would like to see a future where Entropy is embedded in Arbitrum DAO and able to effect meaningful change, which we believe they have the ability to do.
We maintain concerns over the size and structure of the financial side however balancing that against having or not having Entropy, believe that it is best to have them on board. Regarding the scale of the agreement, as others have mentioned, there will be sizeable expectations on the Entropy team but we are quite confident that they can deliver.
The Treasure ARC voted in favor of this proposal. This was reflected by Entropy's contribution to Arbitrum to date and aligned long term goals. As Pepperoni Joe put it Entropy we would like to see a future where Entropy is embedded in Arbitrum DAO and able to effect meaningful change, which we believe they have the ability to do.
We maintain concerns over the size and structure of the financial side however balancing that against having or not having Entropy, believe that it is best to have them on board. Regarding the scale of the agreement, as others have mentioned, there will be sizeable expectations on the Entropy team but we are quite confident that they can deliver.
"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. "
There is no investment team in the proposal. This amount will significantly impact the market if managed poorly. I am not sure why 10 employees are needed for the proposed task.
"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. "
There is no investment team in the proposal. This amount will significantly impact the market if managed poorly. I am not sure why 10 employees are needed for the proposed task.
Appreciate the thoughtful reply, @Entropy.
I would note that what was proposed balanced the rigidity of KPIs against the dynamic needs of the ArbDAO while also helping improve transparency of spend and DAO alignment. This could be done by asking for an additional implementation budget per management domain once it becomes clear what is to be done, a per project or per domain budget. For example, when working on operational process design. A project would be scoped, requirements set, and entropy selects a contractor they would manage.
Appreciate the thoughtful reply, @Entropy.
I would note that what was proposed balanced the rigidity of KPIs against the dynamic needs of the ArbDAO while also helping improve transparency of spend and DAO alignment. This could be done by asking for an additional implementation budget per management domain once it becomes clear what is to be done, a per project or per domain budget. For example, when working on operational process design. A project would be scoped, requirements set, and entropy selects a contractor they would manage.
This path is not mutually exclusive to retaining Entropy as a management team as per this proposal. Rather, it would enhance Entropy and provide the DAO leverage on the management team spend. Please do consider such a structure as you look to design an implementation structure. This proposed path delivers on spend, benchmarks, and transparency. It is good for Entropy and good for Arb -- win win.
Also @GFXlabs is charitable in their analysis and suggesting you under-promise and over-deliver. As written, reads vice versa. @yoan has gone ahead and done solid work for you in structuring a fair deal that is risk-mitigated.
IF we can find an agreement , base on the concerns raised by @GFXlabs and the need for a more focused, cost-effective approach,
Team Structure:
Duration:
IF we can find an agreement , base on the concerns raised by @GFXlabs and the need for a more focused, cost-effective approach,
Team Structure:
Duration:
Key Objectives: a) Increase on-chain volume by 25% within 6 months b) Attract 100,000 new active users to Arbitrum ecosystem c) Facilitate onboarding of at least 5 high-impact projects to Arbitrum d) Improve governance efficiency by reducing proposal processing time by 30%
Deliverables:
Performance-Based Compensation:
Transparency and Accountability:
Non-Exclusivity:
Pilot Program:
Integration with DAO Structure: - Clear delineation of responsibilities to avoid overlap with existing or planned DAO functions - Regular coordination with other DAO entities (e.g., OpCo, if implemented)
This revised proposal addresses the main concerns by: Significantly reducing the budget Focusing on a smaller, more specialized team Implementing clear, measurable KPIs tied to ecosystem growth Introducing a performance-based compensation structure Ensuring transparency and accountability Allowing for a trial period before long-term commitment Removing exclusivity to reduce costs and increase flexibility
This structure provides a balanced approach that allows Entropy to demonstrate value while addressing the DAO's concerns about resource allocation and accountability. I m in favor for @Entropy. More capital can be deploy later when goals are reach.
This is a good proposal with the experience and expertise of the team. Also clarification on conflict and KPIs makes it good to go.
Entropy has experience and expertise to execute this well. I only suggest to keep the team lean and multi skilled as a lean team with focus approach work in achievement and execution.
Had the same thoughts.
Thanks for the detailed proposal.
IMO, the action points listed in here have an overlap with the ARDC and ADPC. Can you detail a plan to avoid conflicts or inefficiencies?
Also it would be great to see the KPI for success indicators to understand the structure, goals and quantitative and qualitative KPI
Appreciate the thoughtful reply, @Entropy.
I would note that what was proposed balanced the rigidity of KPIs against the dynamic needs of the ArbDAO while also helping improve transparency of spend and DAO alignment. This could be done by asking for an additional implementation budget per management domain once it becomes clear what is to be done, a per project or per domain budget. For example, when working on operational process design. A project would be scoped, requirements set, and entropy selects a contractor they would manage.
Appreciate the thoughtful reply, @Entropy.
I would note that what was proposed balanced the rigidity of KPIs against the dynamic needs of the ArbDAO while also helping improve transparency of spend and DAO alignment. This could be done by asking for an additional implementation budget per management domain once it becomes clear what is to be done, a per project or per domain budget. For example, when working on operational process design. A project would be scoped, requirements set, and entropy selects a contractor they would manage.
This path is not mutually exclusive to retaining Entropy as a management team as per this proposal. Rather, it would enhance Entropy and provide the DAO leverage on the management team spend. Please do consider such a structure as you look to design an implementation structure. This proposed path delivers on spend, benchmarks, and transparency. It is good for Entropy and good for Arb -- win win.
Also @GFXlabs is charitable in their analysis and suggesting you under-promise and over-deliver. As written, reads vice versa. @yoan has gone ahead and done solid work for you in structuring a fair deal that is risk-mitigated.
IF we can find an agreement , base on the concerns raised by @GFXlabs and the need for a more focused, cost-effective approach,
Team Structure:
Duration:
IF we can find an agreement , base on the concerns raised by @GFXlabs and the need for a more focused, cost-effective approach,
Team Structure:
Duration:
Key Objectives: a) Increase on-chain volume by 25% within 6 months b) Attract 100,000 new active users to Arbitrum ecosystem c) Facilitate onboarding of at least 5 high-impact projects to Arbitrum d) Improve governance efficiency by reducing proposal processing time by 30%
Deliverables:
Performance-Based Compensation:
Transparency and Accountability:
Non-Exclusivity:
Pilot Program:
Integration with DAO Structure: - Clear delineation of responsibilities to avoid overlap with existing or planned DAO functions - Regular coordination with other DAO entities (e.g., OpCo, if implemented)
This revised proposal addresses the main concerns by: Significantly reducing the budget Focusing on a smaller, more specialized team Implementing clear, measurable KPIs tied to ecosystem growth Introducing a performance-based compensation structure Ensuring transparency and accountability Allowing for a trial period before long-term commitment Removing exclusivity to reduce costs and increase flexibility
This structure provides a balanced approach that allows Entropy to demonstrate value while addressing the DAO's concerns about resource allocation and accountability. I m in favor for @Entropy. More capital can be deploy later when goals are reach.
This is a good proposal with the experience and expertise of the team. Also clarification on conflict and KPIs makes it good to go.
Entropy has experience and expertise to execute this well. I only suggest to keep the team lean and multi skilled as a lean team with focus approach work in achievement and execution.
Had the same thoughts.
Thanks for the detailed proposal.
IMO, the action points listed in here have an overlap with the ARDC and ADPC. Can you detail a plan to avoid conflicts or inefficiencies?
Also it would be great to see the KPI for success indicators to understand the structure, goals and quantitative and qualitative KPI
Would be great to see some substantive analysis by the delegates and some form of negotiation/due diligence.
500k contingency? I would hope an "ops" team could do basic financial planning.
How do you know by the end of this if they have done their job?
Delegates are going to be the ones evaluating their bonus.
Are we voting on good feelings or objective metrics?
Feelings change. Facts don't.
Would be great to see some substantive analysis by the delegates and some form of negotiation/due diligence.
500k contingency? I would hope an "ops" team could do basic financial planning.
How do you know by the end of this if they have done their job?
Delegates are going to be the ones evaluating their bonus.
Are we voting on good feelings or objective metrics?
Feelings change. Facts don't.
Would be great to see something with legs before we bet the farm...
Could be an avoidable mess coming soon ...
Summary The proposal is well intentioned but appears to have significant flaws as written. First, it lacks the substance to provide confidence in the budget justification. Next, it lacks operational structure and definition, while the proposal itself promises to manage operations for the DAO.
It may make more sense to scale the team and responsibilities at a slower pace (5 FTE) to grow more naturally than forcing an excessively large commitment without first knowing the operational requirements.
Summary The proposal is well intentioned but appears to have significant flaws as written. First, it lacks the substance to provide confidence in the budget justification. Next, it lacks operational structure and definition, while the proposal itself promises to manage operations for the DAO.
It may make more sense to scale the team and responsibilities at a slower pace (5 FTE) to grow more naturally than forcing an excessively large commitment without first knowing the operational requirements.
The team has demonstrated a handful of promising efforts in the past three months, but this work at Arbitrum does not yet indicate a commitment of 10 FTE @ $279,100.00/FTE/year is prudent at this time.
Centralization This proposal centralizes all interim ops with no checks and balances, means to scale beyond one team, or path to easily remove the central dependency when transition time comes. It provides foot in the door that would grandfather a services team indefinitely. Removing the team requires outright termination, which would be impossible if the team performs a majority of DAO operations.
Proposal Work Breakdown I did not see any clear roadmap with deliverables. Is there a work breakdown with linear dependencies? (ie. a gantt)
No Deliverables Without roadmap and deliverables, it is impossible to see what will be done and by whom.
No Headcount Projections Without understanding the requirements and work anticipated, there can be no concrete headcount projections. The proposal therefore lacks how hiring is connected to any particular objectives. Specifically, there are no anticipated roles and responsibilities, proposed comp, or other standard elements in any business plan. The argument against disclosing market comparables in the proposal is fundamentally flawed. In many US states now, role compensation is required to be disclosed, and using information asymmetry across employees in the same org to achieve "efficiency" is an ethically dubious practice that ultimately fails. The answer here is to provide a headcount breakdown with compensation ranges.
The absence of these two necessary components are concerning as the group promises to perform operations for the entire DAO. Yet, they themselves have yet to define their own operations to a point that instills the confidence in a high fee.
No KPIs
Without deliverables, the proposal contains no measures of success to agree upon in advance. Without prior agreement, conflict is much more likely. The author has posted a "picture" of what success would look like. In order to command a fee in excess of 2mm, the author would to best to translate these ideas into a concrete SOW that defines the deliverables and means to measure said performance.
Deferred Compensation Structure Flawed Without agreeing upon measures of success in advance, and putting compensation to a vote after performance, the proposal sets up the significant likelihood of mismet expectations and conflict. The deferred compensation is also high and has no method to account for the volatility of ARB.
Core Fee Structure is Flawed The cost structure of 100k until "scaled" to 7, creates an adverse incentive toward growing the team. Generally, the fee is high, considering the absence of defined work to calibrate the fee against. Without knowing what will be done, it is impossible to price the work. We would suggest providing the clear work breakdown and allow this to drive costs and headcount.
The justification of the spend on DAO operations versus ARB incentives is interesting, but is a straw man argument when applied to this proposal as drafted.
No Financial Transparency or Reporting Structure
The team has requested compensation akin to an employee (with a contingency buffer). The team does not propose how they will provide financial transparency and a financial operations structure that provides transparency to the DAO as if they were employees.
No Transition or Unwind Term The proposal defines a termination and clawback, but does not define in advance, agreed upon transition terms for work handoff.
I am in favor of @Entropy for Working With Arbitrum DAO" proposal. After meticulous review and analysis, I'm convinced that supporting Entropy Advisors is the optimal decision for the DAO's future success. Here's why:Strategic Alignment: Entropy Advisors' primary objective is to help Arbitrum DAO achieve its long-term vision of becoming a sustainable entity with diversified revenue streams. Their focus on strategic proposals, governance processes, and stakeholder alignment is perfectly aligned with the DAO's goals, ensuring a harmonious and efficient collaboration.Unparalleled Expertise: The Entropy Advisors team, consisting of @swmartin19, @mattonchain, and @pruitt, boasts an impressive array of skills and experience in research, governance, brand building, and project management. Their extensive network and connections within the industry will be instrumental in attracting high-quality partners and talent to the DAO, further solidifying Arbitrum's position as a leading Ethereum scaling solution.Proven Track Record: Entropy Advisors has already demonstrated their capabilities by driving several notable initiatives, including the Multisig Support Service proposal, which is expected to save the DAO almost $400,000 per year. They've also conducted research into Arbitrum DAO's sequencer margin/transaction fee mechanism, which could bring an extra $5-15M per year in profit. These achievements showcase their ability to deliver tangible results and create value for the DAO.Operational Efficiency: The DAO currently allocates a staggering 95% of its budget to investments, incentives, and grants, with virtually no money dedicated to operations. Entropy Advisors will help the DAO invest in operations, ensuring that initiatives can be executed swiftly and efficiently, while also attracting top talent to work full-time on behalf of the DAO. This strategic investment will yield significant returns, enabling the DAO to achieve its goals more effectively.Exclusivity and Accountability: By committing to work exclusively with Arbitrum DAO, Entropy Advisors eliminates any potential conflicts of interest, ensuring that their sole focus is on the DAO's success. The 1-year exclusivity agreement with the Arbitrum Foundation provides an added layer of accountability, guaranteeing that Entropy Advisors will be fully dedicated to the DAO's goals.Budget and Bonuses: The proposed budget of $2.791M for the year, with optional performance-based bonuses, is a prudent investment considering the potential returns. The 3-year vesting contract for bonuses ensures long-term alignment with the DAO's goals, incentivizing Entropy Advisors to deliver exceptional results.Complementary to OpCo: Entropy Advisors is not looking to replace OpCo, but rather to support the DAO's operational needs until OpCo is formally established. This collaborative approach will enable the DAO to make informed decisions about Entropy Advisors' role as a service provider to OpCo in the future, ensuring a seamless integration and maximum value creation.Risk Management: By supporting Entropy Advisors, the DAO mitigates the risk of operational inefficiencies, ensuring that initiatives are executed effectively and efficiently. This proactive approach will help the DAO avoid potential pitfalls and capitalize on opportunities, ultimately leading to increased success and growth.In conclusion, I firmly believe that supporting Entropy Advisors is the optimal decision for the Arbitrum DAO's continued success. Their expertise, network, proven track record, and commitment to exclusivity and accountability make them an ideal partner to help the DAO achieve its long-term goals. I urge you all to vote in favor of this proposal and secure the future of Arbitrum DAO.
TLDR: The below defines a process for Entropy to draft a superior operations proposal that will allow Governance to scale operations teams while mitigating financial risk, and providing significant performance-based upside to these operations teams. The process below addresses all material criticism of the proposal to date, and would retain @Entropy and other Operations teams in a sustainable manner. If the goal is to bootstrap DAO operations, Entropy should work with other operations providers in the ecosystem to provide a consolidated proposal that will scale and work across the multiple teams. The process below also meets this requirement.
in the real world
TLDR: The below defines a process for Entropy to draft a superior operations proposal that will allow Governance to scale operations teams while mitigating financial risk, and providing significant performance-based upside to these operations teams. The process below addresses all material criticism of the proposal to date, and would retain @Entropy and other Operations teams in a sustainable manner. If the goal is to bootstrap DAO operations, Entropy should work with other operations providers in the ecosystem to provide a consolidated proposal that will scale and work across the multiple teams. The process below also meets this requirement.
In the real world, a director would first establish OKRs and KPIs in advance of requesting funds. This request would include a roadmap and headcount projections. They would then deploy these funds to achieve the defined objectives and be held accountable at the end of said term. This renewal would happen quarterly, such that while a budget commitment may be made annually, evaluation is made on a quarterly basis.
This proposal is not in accord with even the most modest accountability structures of large organizations or corporations, FAANG, etc.
The authors are good at drafting proposals and coordinating, but they are not yet qualified to perform the implementation on their own, nor do they have the expertise to do so. That is a gross oversight of this proposal as composed that requires correction. The proposal itself lacks implementation details and evidences this point.
Therefore, the budget for the "operations team" should be broken out from the implementation of the work. The "operations team" is presently helping to onramp and draft proposals/ perform management. This is separate from the implementation budget, which has gone to support additional contractors (e.g. Chaos Labs). The budget for an ops program should continue to be segmented in this manner.
A Potentially Superior Alternative to Consider
A structured governance process should be established for managing operation team assignments, covering onboarding, offboarding, and unwinding/termination. This framework should support the formation and growth of multiple teams, align with specific KPIs, and allow for gradual team size scaling. Multiple teams should be added prior to any single team reaching 10FTE (To address @DisruptionJoe's point).
Additionally, financial transparency should be a key component. This would involve a counterparty holding funds for the DAO and making monthly payments based on the actual headcount utilized. Similar to the MSS proposal @Entropy already authored, but with an operational process.
A more effective structure would cover actual monthly headcount costs (e.g., $1,000,000 per annum for five headcount and ops) and require DAO approval for additional project-specific budgets. A blank check approach without a clear roadmap is ineffective and establishes the wrong expectations.
The team would just need to do the following:
Governance
Financial Operations and Oversight
Executive Management
Implementation and Contracting
@Entropy would be responsible to draft the proposals, source the necessary vendors/contractors. These individual large 7 figure proposals would go to a DAO vote after the oversight committeee reviews. Each proposal would include clear OKRs and KPIs, along with the particular budget ask.
@Entropy is responsible to deliver the results defined in the proposal, which support their high level domain objectives.
Post-Performance Compensation
Risk-Adjusted Operations
In a worst case, Entropy fails to get any approval for their project budgets, and fail at management. The DAO is only out the OPEX.
In the best case, Entropy over-performs, delivers ton of leverage on their 5 FTE by finding the right counter-parties and managing them well. Entropy gets a nice fat bonus and the DAO wins too.
Regardless, a sustainable process is in place to hire and fire Ops Teams, and the OPs Co can adopt it or deprecate it as they see fit down the line.
What this does is two fold. First, it retains the team at a reasonable budget, but accounts for the uncertainty in project execution. It also allows @Entropy the ability to create ideas, draft proposals and manage external teams (their strengths) and gain leverage on their 5 headcount. Second, it also allows the DAO an opportunity to approve and agree on these large operational projects and expenditures. This structure provides a means to accountability and transparency, while still allowing @Entropy a significant upside through a bonus, but only once they make it happen.
The previous proposal gives entropy a budget to hire a small team, but no means to actually deliver on their promises. This sets them up for failure in a year.
We can do better, but it will take some work upfront.
The results are in for the Entropy Advisors: Exclusively Working With Arbitrum DAO on-chain proposal.
See how the community voted and more Arbitrum stats: https://dhive.io/proposal/703
Would be great to see some substantive analysis by the delegates and some form of negotiation/due diligence.
500k contingency? I would hope an "ops" team could do basic financial planning.
How do you know by the end of this if they have done their job?
Delegates are going to be the ones evaluating their bonus.
Are we voting on good feelings or objective metrics?
Feelings change. Facts don't.
Would be great to see some substantive analysis by the delegates and some form of negotiation/due diligence.
500k contingency? I would hope an "ops" team could do basic financial planning.
How do you know by the end of this if they have done their job?
Delegates are going to be the ones evaluating their bonus.
Are we voting on good feelings or objective metrics?
Feelings change. Facts don't.
Would be great to see something with legs before we bet the farm...
Could be an avoidable mess coming soon ...
Summary The proposal is well intentioned but appears to have significant flaws as written. First, it lacks the substance to provide confidence in the budget justification. Next, it lacks operational structure and definition, while the proposal itself promises to manage operations for the DAO.
It may make more sense to scale the team and responsibilities at a slower pace (5 FTE) to grow more naturally than forcing an excessively large commitment without first knowing the operational requirements.
Summary The proposal is well intentioned but appears to have significant flaws as written. First, it lacks the substance to provide confidence in the budget justification. Next, it lacks operational structure and definition, while the proposal itself promises to manage operations for the DAO.
It may make more sense to scale the team and responsibilities at a slower pace (5 FTE) to grow more naturally than forcing an excessively large commitment without first knowing the operational requirements.
The team has demonstrated a handful of promising efforts in the past three months, but this work at Arbitrum does not yet indicate a commitment of 10 FTE @ $279,100.00/FTE/year is prudent at this time.
Centralization This proposal centralizes all interim ops with no checks and balances, means to scale beyond one team, or path to easily remove the central dependency when transition time comes. It provides foot in the door that would grandfather a services team indefinitely. Removing the team requires outright termination, which would be impossible if the team performs a majority of DAO operations.
Proposal Work Breakdown I did not see any clear roadmap with deliverables. Is there a work breakdown with linear dependencies? (ie. a gantt)
No Deliverables Without roadmap and deliverables, it is impossible to see what will be done and by whom.
No Headcount Projections Without understanding the requirements and work anticipated, there can be no concrete headcount projections. The proposal therefore lacks how hiring is connected to any particular objectives. Specifically, there are no anticipated roles and responsibilities, proposed comp, or other standard elements in any business plan. The argument against disclosing market comparables in the proposal is fundamentally flawed. In many US states now, role compensation is required to be disclosed, and using information asymmetry across employees in the same org to achieve "efficiency" is an ethically dubious practice that ultimately fails. The answer here is to provide a headcount breakdown with compensation ranges.
The absence of these two necessary components are concerning as the group promises to perform operations for the entire DAO. Yet, they themselves have yet to define their own operations to a point that instills the confidence in a high fee.
No KPIs
Without deliverables, the proposal contains no measures of success to agree upon in advance. Without prior agreement, conflict is much more likely. The author has posted a "picture" of what success would look like. In order to command a fee in excess of 2mm, the author would to best to translate these ideas into a concrete SOW that defines the deliverables and means to measure said performance.
Deferred Compensation Structure Flawed Without agreeing upon measures of success in advance, and putting compensation to a vote after performance, the proposal sets up the significant likelihood of mismet expectations and conflict. The deferred compensation is also high and has no method to account for the volatility of ARB.
Core Fee Structure is Flawed The cost structure of 100k until "scaled" to 7, creates an adverse incentive toward growing the team. Generally, the fee is high, considering the absence of defined work to calibrate the fee against. Without knowing what will be done, it is impossible to price the work. We would suggest providing the clear work breakdown and allow this to drive costs and headcount.
The justification of the spend on DAO operations versus ARB incentives is interesting, but is a straw man argument when applied to this proposal as drafted.
No Financial Transparency or Reporting Structure
The team has requested compensation akin to an employee (with a contingency buffer). The team does not propose how they will provide financial transparency and a financial operations structure that provides transparency to the DAO as if they were employees.
No Transition or Unwind Term The proposal defines a termination and clawback, but does not define in advance, agreed upon transition terms for work handoff.
I am in favor of @Entropy for Working With Arbitrum DAO" proposal. After meticulous review and analysis, I'm convinced that supporting Entropy Advisors is the optimal decision for the DAO's future success. Here's why:Strategic Alignment: Entropy Advisors' primary objective is to help Arbitrum DAO achieve its long-term vision of becoming a sustainable entity with diversified revenue streams. Their focus on strategic proposals, governance processes, and stakeholder alignment is perfectly aligned with the DAO's goals, ensuring a harmonious and efficient collaboration.Unparalleled Expertise: The Entropy Advisors team, consisting of @swmartin19, @mattonchain, and @pruitt, boasts an impressive array of skills and experience in research, governance, brand building, and project management. Their extensive network and connections within the industry will be instrumental in attracting high-quality partners and talent to the DAO, further solidifying Arbitrum's position as a leading Ethereum scaling solution.Proven Track Record: Entropy Advisors has already demonstrated their capabilities by driving several notable initiatives, including the Multisig Support Service proposal, which is expected to save the DAO almost $400,000 per year. They've also conducted research into Arbitrum DAO's sequencer margin/transaction fee mechanism, which could bring an extra $5-15M per year in profit. These achievements showcase their ability to deliver tangible results and create value for the DAO.Operational Efficiency: The DAO currently allocates a staggering 95% of its budget to investments, incentives, and grants, with virtually no money dedicated to operations. Entropy Advisors will help the DAO invest in operations, ensuring that initiatives can be executed swiftly and efficiently, while also attracting top talent to work full-time on behalf of the DAO. This strategic investment will yield significant returns, enabling the DAO to achieve its goals more effectively.Exclusivity and Accountability: By committing to work exclusively with Arbitrum DAO, Entropy Advisors eliminates any potential conflicts of interest, ensuring that their sole focus is on the DAO's success. The 1-year exclusivity agreement with the Arbitrum Foundation provides an added layer of accountability, guaranteeing that Entropy Advisors will be fully dedicated to the DAO's goals.Budget and Bonuses: The proposed budget of $2.791M for the year, with optional performance-based bonuses, is a prudent investment considering the potential returns. The 3-year vesting contract for bonuses ensures long-term alignment with the DAO's goals, incentivizing Entropy Advisors to deliver exceptional results.Complementary to OpCo: Entropy Advisors is not looking to replace OpCo, but rather to support the DAO's operational needs until OpCo is formally established. This collaborative approach will enable the DAO to make informed decisions about Entropy Advisors' role as a service provider to OpCo in the future, ensuring a seamless integration and maximum value creation.Risk Management: By supporting Entropy Advisors, the DAO mitigates the risk of operational inefficiencies, ensuring that initiatives are executed effectively and efficiently. This proactive approach will help the DAO avoid potential pitfalls and capitalize on opportunities, ultimately leading to increased success and growth.In conclusion, I firmly believe that supporting Entropy Advisors is the optimal decision for the Arbitrum DAO's continued success. Their expertise, network, proven track record, and commitment to exclusivity and accountability make them an ideal partner to help the DAO achieve its long-term goals. I urge you all to vote in favor of this proposal and secure the future of Arbitrum DAO.
TLDR: The below defines a process for Entropy to draft a superior operations proposal that will allow Governance to scale operations teams while mitigating financial risk, and providing significant performance-based upside to these operations teams. The process below addresses all material criticism of the proposal to date, and would retain @Entropy and other Operations teams in a sustainable manner. If the goal is to bootstrap DAO operations, Entropy should work with other operations providers in the ecosystem to provide a consolidated proposal that will scale and work across the multiple teams. The process below also meets this requirement.
in the real world
TLDR: The below defines a process for Entropy to draft a superior operations proposal that will allow Governance to scale operations teams while mitigating financial risk, and providing significant performance-based upside to these operations teams. The process below addresses all material criticism of the proposal to date, and would retain @Entropy and other Operations teams in a sustainable manner. If the goal is to bootstrap DAO operations, Entropy should work with other operations providers in the ecosystem to provide a consolidated proposal that will scale and work across the multiple teams. The process below also meets this requirement.
In the real world, a director would first establish OKRs and KPIs in advance of requesting funds. This request would include a roadmap and headcount projections. They would then deploy these funds to achieve the defined objectives and be held accountable at the end of said term. This renewal would happen quarterly, such that while a budget commitment may be made annually, evaluation is made on a quarterly basis.
This proposal is not in accord with even the most modest accountability structures of large organizations or corporations, FAANG, etc.
The authors are good at drafting proposals and coordinating, but they are not yet qualified to perform the implementation on their own, nor do they have the expertise to do so. That is a gross oversight of this proposal as composed that requires correction. The proposal itself lacks implementation details and evidences this point.
Therefore, the budget for the "operations team" should be broken out from the implementation of the work. The "operations team" is presently helping to onramp and draft proposals/ perform management. This is separate from the implementation budget, which has gone to support additional contractors (e.g. Chaos Labs). The budget for an ops program should continue to be segmented in this manner.
A Potentially Superior Alternative to Consider
A structured governance process should be established for managing operation team assignments, covering onboarding, offboarding, and unwinding/termination. This framework should support the formation and growth of multiple teams, align with specific KPIs, and allow for gradual team size scaling. Multiple teams should be added prior to any single team reaching 10FTE (To address @DisruptionJoe's point).
Additionally, financial transparency should be a key component. This would involve a counterparty holding funds for the DAO and making monthly payments based on the actual headcount utilized. Similar to the MSS proposal @Entropy already authored, but with an operational process.
A more effective structure would cover actual monthly headcount costs (e.g., $1,000,000 per annum for five headcount and ops) and require DAO approval for additional project-specific budgets. A blank check approach without a clear roadmap is ineffective and establishes the wrong expectations.
The team would just need to do the following:
Governance
Financial Operations and Oversight
Executive Management
Implementation and Contracting
@Entropy would be responsible to draft the proposals, source the necessary vendors/contractors. These individual large 7 figure proposals would go to a DAO vote after the oversight committeee reviews. Each proposal would include clear OKRs and KPIs, along with the particular budget ask.
@Entropy is responsible to deliver the results defined in the proposal, which support their high level domain objectives.
Post-Performance Compensation
Risk-Adjusted Operations
In a worst case, Entropy fails to get any approval for their project budgets, and fail at management. The DAO is only out the OPEX.
In the best case, Entropy over-performs, delivers ton of leverage on their 5 FTE by finding the right counter-parties and managing them well. Entropy gets a nice fat bonus and the DAO wins too.
Regardless, a sustainable process is in place to hire and fire Ops Teams, and the OPs Co can adopt it or deprecate it as they see fit down the line.
What this does is two fold. First, it retains the team at a reasonable budget, but accounts for the uncertainty in project execution. It also allows @Entropy the ability to create ideas, draft proposals and manage external teams (their strengths) and gain leverage on their 5 headcount. Second, it also allows the DAO an opportunity to approve and agree on these large operational projects and expenditures. This structure provides a means to accountability and transparency, while still allowing @Entropy a significant upside through a bonus, but only once they make it happen.
The previous proposal gives entropy a budget to hire a small team, but no means to actually deliver on their promises. This sets them up for failure in a year.
We can do better, but it will take some work upfront.
The results are in for the Entropy Advisors: Exclusively Working With Arbitrum DAO on-chain proposal.
See how the community voted and more Arbitrum stats: https://dhive.io/proposal/703
We have created a multisig to receive the funds and perform our duty as outlined in the proposal: https://app.safe.global/home?safe=arb1:0xAc20CD734C65Baf48a1476447af7D3E3165DC739
Copying from our delegate thread for visibility:
We voted for this at the temp check stage but would like to see some more discussion and possible changes made to the proposal before it’s posted to Tally. We think the Entropy team is doing good work, and that retaining their services would be beneficial to the DAO. However, there are aspects of this proposal that we would like to see tweaked slightly. As other delegates have mentioned, we’re not sure that a full team of 10 people will be necessary. We don’t think Entropy will hire for the sake of it, but we think it could be good to have some lightweight mechanism for expansions to the team to be approved by the DAO. One possible option is to have a quick report from Entropy when they want to expand the team beyond specific breakpoints. Reports could be as simple as explaining what work the team is not able to do with their current capacity, and what they’re trying to get out of the next hire. These can be approved optimistically to allow Entropy the space to expand into roles that are clearly necessary, while still allowing the DAO a chance to evaluate whether the scope of Entropy’s work is appropriate and if additional members are truly needed.
Gm Arbinauts! :sunny:
The results are in for the https://dhive.io/proposal/292 proposal.
See how the community voted and view the detailed analytics on ⬡ Dhive.Io .
We have created a multisig to receive the funds and perform our duty as outlined in the proposal: https://app.safe.global/home?safe=arb1:0xAc20CD734C65Baf48a1476447af7D3E3165DC739
Copying from our delegate thread for visibility:
We voted for this at the temp check stage but would like to see some more discussion and possible changes made to the proposal before it’s posted to Tally. We think the Entropy team is doing good work, and that retaining their services would be beneficial to the DAO. However, there are aspects of this proposal that we would like to see tweaked slightly. As other delegates have mentioned, we’re not sure that a full team of 10 people will be necessary. We don’t think Entropy will hire for the sake of it, but we think it could be good to have some lightweight mechanism for expansions to the team to be approved by the DAO. One possible option is to have a quick report from Entropy when they want to expand the team beyond specific breakpoints. Reports could be as simple as explaining what work the team is not able to do with their current capacity, and what they’re trying to get out of the next hire. These can be approved optimistically to allow Entropy the space to expand into roles that are clearly necessary, while still allowing the DAO a chance to evaluate whether the scope of Entropy’s work is appropriate and if additional members are truly needed.
Gm Arbinauts! :sunny:
The results are in for the https://dhive.io/proposal/292 proposal.
See how the community voted and view the detailed analytics on ⬡ Dhive.Io .
While we are not familiar with Entropy Advisors, its members and have not engaged with them in a direct or indirect capacity, we cannot opine on the quality of the team and their ability to deliver, we can chime in on the recurring discussion theme pertaining to the proposed budget.
It is understandable why individuals or teams that are not closely entrenched and do not have extensive exposure to growth, strategy and operations-related roles and engagements may be taken aback by the proposed budget at first.
While we are not familiar with Entropy Advisors, its members and have not engaged with them in a direct or indirect capacity, we cannot opine on the quality of the team and their ability to deliver, we can chime in on the recurring discussion theme pertaining to the proposed budget.
It is understandable why individuals or teams that are not closely entrenched and do not have extensive exposure to growth, strategy and operations-related roles and engagements may be taken aback by the proposed budget at first.
Some of the bonus contingencies put forward by the members of the discussion were clearly defined by individuals unfamiliar with the industry's norms, standards and conduct. An example of this would be a 25% performance bonus of $100,000 for an acquisition target of 100,000 users. That effectively translates to $0.25 per user, which is unheard of in this space, prolific for its tremendously high $ value per user (e.g., the lowest seen over 3+ years has been $2 per user).
Given our exposure to the space spanning across various ecosystems and initiatives for more than 3+ years and having provided similar services to other ecosystems, we can confidently say that the proposed budget is reasonable and below to in line with the current industry standards.
Growth, strategy and operations are essential components of any crypto-related venture. This is especially true in the early stages, where ensuring success across the aforementioned verticals is vital and demands a committed, devoted and proactive approach that is simply incomparable with other industry standards pertaining to one's allocation of time, energy and resources. This space is extremely nuanced, technical, sensitive, highly contextual and often requires extremely fast, yet thought-through responses and decisions to mitigate potentially value-destructive events.
These types of high-level growth, strategic and operational roles and services are typically provided and retained in a private capacity. Hence, it can be difficult to find public, relevant data and accurate comparables without direct knowledge and involvement. That being said, these engagements typically unfold in a "retainer + % of supply" or "% of supply" capacity, which is often reflected by the project's tokenomics. The reason for this conduct is that it effectively aligns incentives with the service provider(s) and the project's / ecosystem's long-term prospects, success and well-being. Understandably, the remuneration is then highly dependent on the size and success of the project.
In the context of Arbitrum's size, position on the market (market cap, TVL, user base, treasury) and overall ecosystem complexity, the proposed budget is warranted and could be considered to be on the lower end of the remuneration spectrum.
Furthermore, in the context of Arbitrum's other, recent expenditures and their respective size, we find this expenditure in particular to be more than reasonable, given the outcomes and value that it can garner and deliver for the ecosystem.
While we are not familiar with Entropy Advisors, its members and have not engaged with them in a direct or indirect capacity, we cannot opine on the quality of the team and their ability to deliver, we can chime in on the recurring discussion theme pertaining to the proposed budget.
It is understandable why individuals or teams that are not closely entrenched and do not have extensive exposure to growth, strategy and operations-related roles and engagements may be taken aback by the proposed budget at first.
While we are not familiar with Entropy Advisors, its members and have not engaged with them in a direct or indirect capacity, we cannot opine on the quality of the team and their ability to deliver, we can chime in on the recurring discussion theme pertaining to the proposed budget.
It is understandable why individuals or teams that are not closely entrenched and do not have extensive exposure to growth, strategy and operations-related roles and engagements may be taken aback by the proposed budget at first.
Some of the bonus contingencies put forward by the members of the discussion were clearly defined by individuals unfamiliar with the industry's norms, standards and conduct. An example of this would be a 25% performance bonus of $100,000 for an acquisition target of 100,000 users. That effectively translates to $0.25 per user, which is unheard of in this space, prolific for its tremendously high $ value per user (e.g., the lowest seen over 3+ years has been $2 per user).
Given our exposure to the space spanning across various ecosystems and initiatives for more than 3+ years and having provided similar services to other ecosystems, we can confidently say that the proposed budget is reasonable and below to in line with the current industry standards.
Growth, strategy and operations are essential components of any crypto-related venture. This is especially true in the early stages, where ensuring success across the aforementioned verticals is vital and demands a committed, devoted and proactive approach that is simply incomparable with other industry standards pertaining to one's allocation of time, energy and resources. This space is extremely nuanced, technical, sensitive, highly contextual and often requires extremely fast, yet thought-through responses and decisions to mitigate potentially value-destructive events.
These types of high-level growth, strategic and operational roles and services are typically provided and retained in a private capacity. Hence, it can be difficult to find public, relevant data and accurate comparables without direct knowledge and involvement. That being said, these engagements typically unfold in a "retainer + % of supply" or "% of supply" capacity, which is often reflected by the project's tokenomics. The reason for this conduct is that it effectively aligns incentives with the service provider(s) and the project's / ecosystem's long-term prospects, success and well-being. Understandably, the remuneration is then highly dependent on the size and success of the project.
In the context of Arbitrum's size, position on the market (market cap, TVL, user base, treasury) and overall ecosystem complexity, the proposed budget is warranted and could be considered to be on the lower end of the remuneration spectrum.
Furthermore, in the context of Arbitrum's other, recent expenditures and their respective size, we find this expenditure in particular to be more than reasonable, given the outcomes and value that it can garner and deliver for the ecosystem.
Hey @paulofonseca —thanks for reaching out!
Our exclusive engagement with Arbitrum officially started at the beginning of September. We plan to publish our first report in early December, covering September – November 2024.
Hope this helps!
Hey @paulofonseca —thanks for reaching out!
Our exclusive engagement with Arbitrum officially started at the beginning of September. We plan to publish our first report in early December, covering September – November 2024.
Hope this helps!
I've decided to confirm my vote in favor of the Entropy proposal, but my support comes with a vision for the future. Here's my thinking:
Short-term benefits:
I've decided to confirm my vote in favor of the Entropy proposal, but my support comes with a vision for the future. Here's my thinking:
Short-term benefits:
Long-term vision: I see this as a stepping stone towards a more democratic structure, like a senate that would:
Long-term concerns:
By supporting Entropy now, we're getting short-term help while investing in our future. But we need to actively work on transitioning to a more democratic system during this period.
I expect to see concrete steps towards this goal during Entropy's engagement, and offer my help to make it a reality. After a year, we should be ready to evolve our governance to address these long-term concerns.
Let's use this opportunity wisely to build a stronger, more decentralized Arbitrum DAO for the future.
I had initially voted for the proposal on snapshot but after a second thought and considering the cost on DAO I'll vote against it on Tally. This is not underestimating the great contributions Entropy has made for the DAO. I'd be happy to support the proposal with a more conservative budget.
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking, and ideation of the two.
Following our support for this proposal during the temperature check we’ll vote FOR this proposal in the onchain vote.
I decided to vote "For" this proposal.
I decided to vote "For" this proposal.
As I mentioned in my previous comment on the forum, I strongly believe in the value of their work and find it important to continue having them work exclusively with Arbitrum DAO. They have also been responsive to questions and have improved the proposal based on the feedback they received in the Governance forum.
This for me is a clear demonstration of their commitment to the DAO.
Hey @Entropy!
Yesterday was the 3 months mark after your onchain proposal has passed.
When are you planning to publish the promised quarterly transparency report? Can you provide specific dates for it?
I voted in favor of the proposal, although the budget is high.
First, I appreciate all of Entropy’s contributions to the DAO so far. The thing is, Arbitrum DAO has spent millions of dollars on ecosystem incentives, diversifying the treasury through investments, approving various grants, etc. However, the operational efficiency budget has been inadequate relative to the size of the DAO. For that reason, until the execution of OpEx, I find Entropy's exclusive services neutral, helpful, and irreplaceable.
I voted in favor of the proposal, although the budget is high.
First, I appreciate all of Entropy’s contributions to the DAO so far. The thing is, Arbitrum DAO has spent millions of dollars on ecosystem incentives, diversifying the treasury through investments, approving various grants, etc. However, the operational efficiency budget has been inadequate relative to the size of the DAO. For that reason, until the execution of OpEx, I find Entropy's exclusive services neutral, helpful, and irreplaceable.
Given the high budget and the continuation of working with Entropy tied to paying a performance bonus, I will be closely monitoring their work and will be more stringent in approving further budgets.
gm, I decided to vote FOR this initiative on Tally. While I remain skeptical on the urgency to scale the Entropy team before seeing further results, I want to show support for a more structured and coordinate approach towards the DAO, and Entropy is the entity that has shown the right drive and mindset.
Also appreciated a further breakdown of KPIs and costs on the Tally version.
Blockworks Research will be voting to ABSTAIN on this proposal on Tally.
As stated earlier in this thread, Entropy Advisors is formed in part by former Blockworks Research folks, and thus to prevent conflict of interest, we will be abstaining.
I voted FOR this proposal as it strategically empowers Arbitrum DAO by securing a dedicated team focused solely on enhancing governance and operational efficiency. Entropy Advisors have demonstrated their value through impactful initiatives. With a proven track record and a clear vision for long-term success, Entropy Advisors are poised to drive Arbitrum’s evolution as a leading scaling solution.
The 3-year vesting period is designed to ensure that our interests are closely aligned with those of the DAO and the ARB token holders over the long-term. This alignment helps to foster a shared commitment to the success of the Arbitrum ecosystem, ensuring that our incentives are tied to long-term value creation for the DAO.
The primary reason we structured the payment plan as $100k initially, increasing to $200k as we scale, is to allow us the flexibility to grow as the DAO’s needs us to evolve. While we’re not in a rush to scale the team, this approach ensures we have the capacity to expand as necessary. We've observed that with other initiatives, the demand for work can quickly exceed capacity, which is a situation we’d prefer to avoid. As already stated we will not be scaling for the sake of scaling which would be to the detriment of Entropy as well.
The work the Entropy team has done to-date on sequencer fee settings, DAO budget, DAO ops and more is highly valuable. There is no one else taking ownership of and moving forward on these key strategic issues.
I am voting AGAINST on tally.
I think the Entropy team is great, and overall, the proposal looks good. However, I cannot vote for a deal where the high price paid for exclusivity is not equally balanced with fair renewal terms.
I am voting AGAINST on tally.
I think the Entropy team is great, and overall, the proposal looks good. However, I cannot vote for a deal where the high price paid for exclusivity is not equally balanced with fair renewal terms.
However, I would like to reiterate my concern about the renewal terms. In my opinion, the high price being paid for exclusivity also requires a commitment from Entropy not to condition the renewal option on the DAO agreeing to pay a bonus. I would like to see these terms modified in the tally vote.
Entropy Advisors is a non-profit company that has been part of Arbitrum DAO for a long time and has consistently worked for the benefit of the DAO. They have identified the problems Arbitrum is facing and have already started working to solve them. In particular, they aim to facilitate communication between active delegates, contributors, and DAO leaders, and they are currently holding meetings for this purpose. Additionally, their plans to significantly reduce the scope and funding demand by helping to formulate operational procedures until the OpCo is realized will also benefit Arbitrum DAO. Their research to enhance the value of the treasury, their plans to develop the DAO ecosystem, and their ability to stay connected with developers and review new technologies are among the reasons we support Entropy Advisors.
Considering their contributions to Arbitrum, along with their goals and plans, we, as the ITU Blockchain Delegation Team, voted to fund them.
We vote FOR the proposal on Tally.
We maintain the rationale made for its Snapshot voting and continue to support the proposal as it is.
DAOplomats voted Against this proposal on Snapshot.
We are very pleased with the work Entropy does and we see the ripples across the DAO. However, we had concerns with the cost --- we believe it is too much of an ask. We don't support the goal of hiring 10 employees which in turn justifies the ask.
DAOplomats voted Against this proposal on Snapshot.
We are very pleased with the work Entropy does and we see the ripples across the DAO. However, we had concerns with the cost --- we believe it is too much of an ask. We don't support the goal of hiring 10 employees which in turn justifies the ask.
With the proposal passing regardless, we are happy to see your commitment to not hiring just for its sake and looking forward to the quarterly reports.
To address some contributors concerns around team scaling - We commit to not aggressively hire for the sake of hiring. We will only grow as our workload outpaces our bandwidth, and have a pipeline of the highest tier of talent available on the market who we can pull in to work on Arbitrum full-time. Throughout our conversations with some of the delegates who had minor concerns, it became apparent that the Snapshot vote’s overwhelming support made it illogical to make any large structural changes to our proposal. We wanted to share this information on the forum so others could have visibility into our decision to proceed to Tally with minimal alterations.
We did make 2 small non-structural changes after the Snapshot vote passed (on Aug 2nd), please see the below, which is quoted from the top of our forum post for optimal transparency.
I've decided to confirm my vote in favor of the Entropy proposal, but my support comes with a vision for the future. Here's my thinking:
Short-term benefits:
I've decided to confirm my vote in favor of the Entropy proposal, but my support comes with a vision for the future. Here's my thinking:
Short-term benefits:
Long-term vision: I see this as a stepping stone towards a more democratic structure, like a senate that would:
Long-term concerns:
By supporting Entropy now, we're getting short-term help while investing in our future. But we need to actively work on transitioning to a more democratic system during this period.
I expect to see concrete steps towards this goal during Entropy's engagement, and offer my help to make it a reality. After a year, we should be ready to evolve our governance to address these long-term concerns.
Let's use this opportunity wisely to build a stronger, more decentralized Arbitrum DAO for the future.
I had initially voted for the proposal on snapshot but after a second thought and considering the cost on DAO I'll vote against it on Tally. This is not underestimating the great contributions Entropy has made for the DAO. I'd be happy to support the proposal with a more conservative budget.
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking, and ideation of the two.
Following our support for this proposal during the temperature check we’ll vote FOR this proposal in the onchain vote.
I decided to vote "For" this proposal.
I decided to vote "For" this proposal.
As I mentioned in my previous comment on the forum, I strongly believe in the value of their work and find it important to continue having them work exclusively with Arbitrum DAO. They have also been responsive to questions and have improved the proposal based on the feedback they received in the Governance forum.
This for me is a clear demonstration of their commitment to the DAO.
Hey @Entropy!
Yesterday was the 3 months mark after your onchain proposal has passed.
When are you planning to publish the promised quarterly transparency report? Can you provide specific dates for it?
I voted in favor of the proposal, although the budget is high.
First, I appreciate all of Entropy’s contributions to the DAO so far. The thing is, Arbitrum DAO has spent millions of dollars on ecosystem incentives, diversifying the treasury through investments, approving various grants, etc. However, the operational efficiency budget has been inadequate relative to the size of the DAO. For that reason, until the execution of OpEx, I find Entropy's exclusive services neutral, helpful, and irreplaceable.
I voted in favor of the proposal, although the budget is high.
First, I appreciate all of Entropy’s contributions to the DAO so far. The thing is, Arbitrum DAO has spent millions of dollars on ecosystem incentives, diversifying the treasury through investments, approving various grants, etc. However, the operational efficiency budget has been inadequate relative to the size of the DAO. For that reason, until the execution of OpEx, I find Entropy's exclusive services neutral, helpful, and irreplaceable.
Given the high budget and the continuation of working with Entropy tied to paying a performance bonus, I will be closely monitoring their work and will be more stringent in approving further budgets.
gm, I decided to vote FOR this initiative on Tally. While I remain skeptical on the urgency to scale the Entropy team before seeing further results, I want to show support for a more structured and coordinate approach towards the DAO, and Entropy is the entity that has shown the right drive and mindset.
Also appreciated a further breakdown of KPIs and costs on the Tally version.
Blockworks Research will be voting to ABSTAIN on this proposal on Tally.
As stated earlier in this thread, Entropy Advisors is formed in part by former Blockworks Research folks, and thus to prevent conflict of interest, we will be abstaining.
I voted FOR this proposal as it strategically empowers Arbitrum DAO by securing a dedicated team focused solely on enhancing governance and operational efficiency. Entropy Advisors have demonstrated their value through impactful initiatives. With a proven track record and a clear vision for long-term success, Entropy Advisors are poised to drive Arbitrum’s evolution as a leading scaling solution.
The 3-year vesting period is designed to ensure that our interests are closely aligned with those of the DAO and the ARB token holders over the long-term. This alignment helps to foster a shared commitment to the success of the Arbitrum ecosystem, ensuring that our incentives are tied to long-term value creation for the DAO.
The primary reason we structured the payment plan as $100k initially, increasing to $200k as we scale, is to allow us the flexibility to grow as the DAO’s needs us to evolve. While we’re not in a rush to scale the team, this approach ensures we have the capacity to expand as necessary. We've observed that with other initiatives, the demand for work can quickly exceed capacity, which is a situation we’d prefer to avoid. As already stated we will not be scaling for the sake of scaling which would be to the detriment of Entropy as well.
The work the Entropy team has done to-date on sequencer fee settings, DAO budget, DAO ops and more is highly valuable. There is no one else taking ownership of and moving forward on these key strategic issues.
I am voting AGAINST on tally.
I think the Entropy team is great, and overall, the proposal looks good. However, I cannot vote for a deal where the high price paid for exclusivity is not equally balanced with fair renewal terms.
I am voting AGAINST on tally.
I think the Entropy team is great, and overall, the proposal looks good. However, I cannot vote for a deal where the high price paid for exclusivity is not equally balanced with fair renewal terms.
However, I would like to reiterate my concern about the renewal terms. In my opinion, the high price being paid for exclusivity also requires a commitment from Entropy not to condition the renewal option on the DAO agreeing to pay a bonus. I would like to see these terms modified in the tally vote.
Entropy Advisors is a non-profit company that has been part of Arbitrum DAO for a long time and has consistently worked for the benefit of the DAO. They have identified the problems Arbitrum is facing and have already started working to solve them. In particular, they aim to facilitate communication between active delegates, contributors, and DAO leaders, and they are currently holding meetings for this purpose. Additionally, their plans to significantly reduce the scope and funding demand by helping to formulate operational procedures until the OpCo is realized will also benefit Arbitrum DAO. Their research to enhance the value of the treasury, their plans to develop the DAO ecosystem, and their ability to stay connected with developers and review new technologies are among the reasons we support Entropy Advisors.
Considering their contributions to Arbitrum, along with their goals and plans, we, as the ITU Blockchain Delegation Team, voted to fund them.
We vote FOR the proposal on Tally.
We maintain the rationale made for its Snapshot voting and continue to support the proposal as it is.
DAOplomats voted Against this proposal on Snapshot.
We are very pleased with the work Entropy does and we see the ripples across the DAO. However, we had concerns with the cost --- we believe it is too much of an ask. We don't support the goal of hiring 10 employees which in turn justifies the ask.
DAOplomats voted Against this proposal on Snapshot.
We are very pleased with the work Entropy does and we see the ripples across the DAO. However, we had concerns with the cost --- we believe it is too much of an ask. We don't support the goal of hiring 10 employees which in turn justifies the ask.
With the proposal passing regardless, we are happy to see your commitment to not hiring just for its sake and looking forward to the quarterly reports.
To address some contributors concerns around team scaling - We commit to not aggressively hire for the sake of hiring. We will only grow as our workload outpaces our bandwidth, and have a pipeline of the highest tier of talent available on the market who we can pull in to work on Arbitrum full-time. Throughout our conversations with some of the delegates who had minor concerns, it became apparent that the Snapshot vote’s overwhelming support made it illogical to make any large structural changes to our proposal. We wanted to share this information on the forum so others could have visibility into our decision to proceed to Tally with minimal alterations.
We did make 2 small non-structural changes after the Snapshot vote passed (on Aug 2nd), please see the below, which is quoted from the top of our forum post for optimal transparency.
The 3-year vesting period is designed to ensure that our interests are closely aligned with those of the DAO and the ARB token holders over the long-term. This alignment helps to foster a shared commitment to the success of the Arbitrum ecosystem, ensuring that our incentives are tied to long-term value creation for the DAO.
The primary reason we structured the payment plan as $100k initially, increasing to $200k as we scale, is to allow us the flexibility to grow as the DAO’s needs us to evolve. While we’re not in a rush to scale the team, this approach ensures we have the capacity to expand as necessary. We've observed that with other initiatives, the demand for work can quickly exceed capacity, which is a situation we’d prefer to avoid. As already stated we will not be scaling for the sake of scaling which would be to the detriment of Entropy as well.
Another important consideration, which is a bit delicate to discuss openly, is the opportunity cost associated with our exclusivity. Committing to two years of exclusive work with capped growth could be challenging from a business perspective, as it of course nullifies our ability to take on other opportunities. While our desire is to remain with Arbitrum for as long as the community will have us, we believe continued exclusivity should come with the long-term alignment described above and that the bonus structure is quite fair with all things considered.
The work the Entropy team has done to-date on sequencer fee settings, DAO budget, DAO ops and more is highly valuable. There is no one else taking ownership of and moving forward on these key strategic issues.
It’s important to consider not just the direct cost, but also the opportunity cost of a team like Entropy committing full-time to Arbitrum. Matt, Sam, Pruitt and team are strong operators. The incentive in this case is to spread out across many ecosystems to maximize negotiating power and funding opportunities. I think having a small (yes, 10 is small in the real world) team of top-tier folks focused exclusively on the success of the Arbitrum DAO is worth it.
I voted FOR this proposal on Tally for the reasons outlined here
To address some contributors concerns around team scaling - We commit to not aggressively hire for the sake of hiring. We will only grow as our workload outpaces our bandwidth, and have a pipeline of the highest tier of talent available on the market who we can pull in to work on Arbitrum full-time. Throughout our conversations with some of the delegates who had minor concerns, it became apparent that the Snapshot vote’s overwhelming support made it illogical to make any large structural changes to our proposal. We wanted to share this information on the forum so others could have visibility into our decision to proceed to Tally with minimal alterations.
We did make 2 small non-structural changes after the Snapshot vote passed (on Aug 2nd), please see the below, which is quoted from the top of our forum post for optimal transparency.
In order to address our promise to give the DAO the ability to directly and openly provide input into the work we are facilitating, we will be posting monthly Short Term Deliverables similar to the ones included above in an “Entropy” category in the forum. We will call for feedback on our workload and goals, and ask for suggestions as to how to either add new initiatives or remove existing ones from our workload. We will additionally host an Entropy office hour biweekly open to all.
Non-material change clarifying that Entropy has the ability to claim/bill its monthly payments instead of the foundation transferring funds at a monthly cadence. The only alteration is in the verbiage from “draw” to “eligible to claim” with the addition that "Payments that have accrued can be claimed at any time.”
While the Entropy team scales, they will be eligible to claim a reduced $100,000 per month and after crossing the threshold of 7 employees dedicated to Arbitrum, will be eligible to claim regular monthly payments ($2,470,000/12 = $205,834) for the remainder of the 12 month term. Payments that have accrued can be claimed at any time.
Before:
While the Entropy team scales, they will draw a reduced $100,000 per month and after crossing the threshold of 7 employees dedicated to Arbitrum, will start receiving regular monthly payments ($2,470,000/12 = $205,834) for the remainder of the 12 month term.
DAOplomats voted AGAINST this proposal on Tally.
We weren't supportive of this initiative originally so we maintained our stance during the onchain vote.
I'm voting FOR on Tally. The Entropy Advisors team has already provided a valuable contribution in the past and I believe that their role is essential for the DAO. The requested amount is high and not all of the feedback raised around pricing has been incorporated into the final proposal, but I am sure that we will be repaid with quality and good performance.
Snapshot vote comment: https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/48?u=0x_ultra
Blockworks Research will be abstaining on this proposal on Snapshot.
We cannot participate in this vote due to a conflict of interest as several of the members of Entropy were previously at Blockworks Research. As such, we will be abstaining; however, we would like to note a few things about this proposal that we would like to see changed going forward. Similar to what other delegates have outlined, we want to see an explicit outline about what Entropy will provide so that there is a clear distinction between Entropy’s position and other committees like the ADPC, ARDC, etc. Additionally, given the quality of work that Entropy has proposed prior, we see value in the hiring scheme, but would recommend to slow the hiring process so that funds are used properly.
I will vote in favor of this proposal during this initial temperature check.
The Entropy team is highly skilled, and the DAO needs them to focus on Arbitrum's success.
I will vote in favor of this proposal during this initial temperature check.
The Entropy team is highly skilled, and the DAO needs them to focus on Arbitrum's success.
However, I would like to reiterate my concern about the renewal terms. In my opinion, the high price being paid for exclusivity also requires a commitment from Entropy not to condition the renewal option on the DAO agreeing to pay a bonus. I would like to see these terms modified in the tally vote.
@Entropy Are there any updates on the concerns raised above?
also, really interesting and understand your perspective and point of you.
Voted For this proposal on Snapshot.
The Team at Entropy Advisors is clearly capable. While the budget is on the high side, I see listening and adaptation to feedback being provided here. In addition the opportunity cost of not making this investment is high, in a highly competitive industry, if we want top talent to devote to the DAO we need to reciprocate that with compelling compensation.
Voted For this proposal on Snapshot.
The Team at Entropy Advisors is clearly capable. While the budget is on the high side, I see listening and adaptation to feedback being provided here. In addition the opportunity cost of not making this investment is high, in a highly competitive industry, if we want top talent to devote to the DAO we need to reciprocate that with compelling compensation.
The DAO is placing a lot of trust in Entropy and I want to encourage a key operating principle of collaboration, interim centralisation and progressive decentralisation for DAO ops functions.
To that end I'd like to see:
a more explicit scope of services: functions that Entropy does, and more importantly functions Entropy explicitly does not do such that Entropy occurs as friendly and collaborative to other service providers, not in a privileged position as catch-all for everything. A clear anti-pattern for the DAO would be all new and fast needed capability for the DAO centralises intro Entropy and stays there.
Entropy adopt an operating principle of interim centralisation in the name of speed i.e to interim hire and fill a void in DAO's capacity and that should always be paired with a view and second step to then source/develop a proposal that effectively "fires itself" from that role, and spreads capability and responsibility to many actors by bringing in a service provider, a technology, structure or process that then obviates the need for Entropy to hold that function internally and indefinitely.
In this way, Entropy functions as a catalyst and agent that temporarily concentrates and centralises needed capability for a period and then oscillates that out through decentralised handover and setting up others to share the load thereby ensuring the DAO is a horizontally aligned cohort of collaborative partners acting with collective capability and responsibility.
We vote FOR the proposal on Snapshot.
We believe the dedicated and capable actor that focuses on operations, strategy alignment and key coordinations is clearly demanded in the DAO governance, and Entropy has proven to be the one in Arbitrum. We are very excited to have them exclusively work with Arbitrum DAO.
We vote FOR the proposal on Snapshot.
We believe the dedicated and capable actor that focuses on operations, strategy alignment and key coordinations is clearly demanded in the DAO governance, and Entropy has proven to be the one in Arbitrum. We are very excited to have them exclusively work with Arbitrum DAO.
We have similar concerns about the hiring part, which is rare for this kind of proposals. We would ask them to consider a short-term pilot project with the currently hired or to-be-hired members to further prove the results that they can provide, but we would still vote for the proposal on Tally even as it is because we believe it's practically better to have Entropy with a little over-budget rather than losing them or delaying them to fully focus on their operations.
Voting 'FOR' this proposal
Support this unequivocally. We need to scale resources for operations, for the DAO and for Arbitrum. Entropy will be a force multiplier in us finally getting activities off the ground, and i'm really excited that we are building a group of Arbitrum aligned support structures.
Voted FOR as this is a special opportunity to lock in some great talent to focus on key DAO infrastructure.
Looking forward to seeing the contributions Entropy provides to Arbitrum!
but would recommend to slow the hiring process so that funds are used properly.
hey @BlockworksResearch what leads you to believe that... funds could be used non-properly?
We're voting FOR this proposal. Entropy has proven valuable, driving key initiatives for Arbitrum DAO. Their full-time dedication will professionalize operations, crucial for growth. The $2.47M budget, while substantial, aligns with industry standards. Performance-based bonuses and transparency reports mitigate risks. This investment should drive efficiencies and sustainability for Arbitrum DAO.
I’ve closely followed Entropy’s work over the past few months, and I’m impressed by their significant influence within the DAO and their strong commitment to execution.
Their full-time dedication to the DAO is particularly valuable, especially given the need for senior expertise in creating and managing initiatives of this scale. Entropy clearly possesses this experience.
I’ve closely followed Entropy’s work over the past few months, and I’m impressed by their significant influence within the DAO and their strong commitment to execution.
Their full-time dedication to the DAO is particularly valuable, especially given the need for senior expertise in creating and managing initiatives of this scale. Entropy clearly possesses this experience.
As part of the onboarding working group, we recognize this need and are exploring ways to support this initiative as we move forward.
For these reasons, I voted FOR this proposal.
I voted yes for this proposal. Entropy is clearly a net benefit for the DAO and strongly involved in basically every proposal and thread. As mentioned by others already, the budget may seem high. But I think the quality will speak for itself. I hope they are going to help to push the DAO and create a clear path.
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking, and ideation of the two.
We’ll be voting FOR this proposal.
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking, and ideation of the two.
We’ll be voting FOR this proposal.
First, we would like to state that we had a very good experience working with Entropy so far and that we believe their services are a value-added to the DAO. However, we were initially hesitant to vote in favor of the proposal as we found the requested amount to be fairly large and couldn’t see a reason for the 10-person team that was outlined.
To better assess their request, we looked for similar benchmarks in the industry to compare it to, and we concluded that it would be a good idea to compare Entropy’s proposal with Optimism’s Grants Council — an entity we have personal experience with. Although it's not a direct comparison since Optimism Grants Council (OGC) has a well-defined and narrow scope, while Entropy’s proposal is more open-ended, and its scope is rather loosely defined.
As things are, the OGC is running point on the operations of Optimism’s grant program, it’s writing mission requests, reviewing mission proposals, and assessing the results of the completed missions. While not exactly the same, we find the scope of work quite similar to that of Entropy’s work as outlined in the proposal.
OGC is now comprised of 12 mission reviewers, 3 milestone and metrics reviewers, 2 audit reviewers, and a lead, with a budget of 610,000 OP (~$1M) for 6 months. Given Entropy’s request is for more than double the duration, we find the amount requested reasonable by comparison. It’s important to note, though, that the comparison doesn’t guarantee that Entropy’s proposal and subsequent work will be successful. It simply goes to show that a similar structure proved to work well in a different ecosystem, and therefore, we’re willing to give it a chance.
With that in mind, we would like to make it clear that we still believe the amount requested is on the large side, and therefore, our expectations for Entropy’s performance are also high. The way the proposal is structured, Arbitrum’s DAO is basically bootstrapping Entropy’s company as an independent consulting agency, covering all costs and taking up all associated risk, while the ‘only’ benefit the DAO receives is 1-year exclusivity, with a possible extension to 2-years of exclusivity depending on the approval of the bonus and compensation structure.
Given the structure, we think it would be sensible for the DAO to perform a business justification check halfway through the engagement (6 months after an on-chain vote passes) to see whether Entropy is meeting the expectations.
After reviewing the proposal and comments from other delegates, we are in favor of this proposal. The Entropy Advisors team has shown valuable past contributions. We believe that Arbitrum DAO needs dedicated full-time members to tackle organizational challenges. The proposal's six core focus areas are essential for transformation. The exclusivity ensures focused efforts, and the budget plan ties payments to actual wages for transparency. Additionally, all the problems raised by JO regarding the DAO have been on point and need to be addressed. We believe this proposal will significantly benefit the DAO's long-term success. Therefore, we will be voting FOR the proposal.
I will hesitantly vote yes on this proposal.
The DAO needs them, and we want a future where Entropy is embedded and able to drive meaningful change within Arbitrum.
I couldn't agree more.
I’m voting in favor. First of all, I appreciate how the Entropy team has integrated some of the feedback over time, showing a real commitment in shaping a good quality proposal. I support this proposal because I think that more coordination should be a key component for the development of the DAO. More coordination means more efficiency and less waste of resources and this proposal would certainly make the difference.
However, I share the same doubts as @Pepperoni_Jo3 on the commercial structure. I hope that it will be revised before the vote on Tally.
After consideration, Treasure’s Arbitrum Representative Council (ARC) would like to share the following feedback on the proposal.
Vote: FOR
The ARC is firmly in support of Entropy Advisors, believing them to be a top-tier team that has a vital role to play in the DAOs future success. This is aligned with my personal perspective shared previously:
I will be voting "For" this proposal.
To put it simply, I think it's clear the DAO has needed something like this for a while. There have been numerous discussions / proposals / attempts at this, but nothing has materially improved. While I know that isn't a great sell for a project like this, but realistically we can't stop trying to fix this issue just because it hasn't been figured out yet.
I will be voting "For" this proposal.
To put it simply, I think it's clear the DAO has needed something like this for a while. There have been numerous discussions / proposals / attempts at this, but nothing has materially improved. While I know that isn't a great sell for a project like this, but realistically we can't stop trying to fix this issue just because it hasn't been figured out yet.
Editing my post here to save forum space: I will continue my support for this project on Tally by voting "For". My reasons have not changed since the Snapshot vote.
Hello @maxlomu - thank you so much for taking the time to make a comment and cast your vote.
We just want to make very clear that we are not seeking a $5m annual operating budget. We are requesting $2.47M for the year - with all additional ARB set aside as future incentives and to give the DAO the ability to retain us exclusively for an additional year. As mentioned in the proposal, the DAO spends a disproportional amount of ARB on grants and protocol incentives versus operations. We believe this needs to change.
Hello @maxlomu - thank you so much for taking the time to make a comment and cast your vote.
We just want to make very clear that we are not seeking a $5m annual operating budget. We are requesting $2.47M for the year - with all additional ARB set aside as future incentives and to give the DAO the ability to retain us exclusively for an additional year. As mentioned in the proposal, the DAO spends a disproportional amount of ARB on grants and protocol incentives versus operations. We believe this needs to change.
In reference to your other concerns, please refer to the other replies made above. We regreat not having the chance to speak with you prior to the casting of your vote, but we appreciate your feedback and are happy to hop on a call any time to discuss your concerns more deeply. Either way, we hope to change your opinion on us (or shall we say, our proposal) through actions taken by our team as we continue to serve the Arbitrum DAO.
The 3-year vesting period is designed to ensure that our interests are closely aligned with those of the DAO and the ARB token holders over the long-term. This alignment helps to foster a shared commitment to the success of the Arbitrum ecosystem, ensuring that our incentives are tied to long-term value creation for the DAO.
The primary reason we structured the payment plan as $100k initially, increasing to $200k as we scale, is to allow us the flexibility to grow as the DAO’s needs us to evolve. While we’re not in a rush to scale the team, this approach ensures we have the capacity to expand as necessary. We've observed that with other initiatives, the demand for work can quickly exceed capacity, which is a situation we’d prefer to avoid. As already stated we will not be scaling for the sake of scaling which would be to the detriment of Entropy as well.
Another important consideration, which is a bit delicate to discuss openly, is the opportunity cost associated with our exclusivity. Committing to two years of exclusive work with capped growth could be challenging from a business perspective, as it of course nullifies our ability to take on other opportunities. While our desire is to remain with Arbitrum for as long as the community will have us, we believe continued exclusivity should come with the long-term alignment described above and that the bonus structure is quite fair with all things considered.
The work the Entropy team has done to-date on sequencer fee settings, DAO budget, DAO ops and more is highly valuable. There is no one else taking ownership of and moving forward on these key strategic issues.
It’s important to consider not just the direct cost, but also the opportunity cost of a team like Entropy committing full-time to Arbitrum. Matt, Sam, Pruitt and team are strong operators. The incentive in this case is to spread out across many ecosystems to maximize negotiating power and funding opportunities. I think having a small (yes, 10 is small in the real world) team of top-tier folks focused exclusively on the success of the Arbitrum DAO is worth it.
I voted FOR this proposal on Tally for the reasons outlined here
To address some contributors concerns around team scaling - We commit to not aggressively hire for the sake of hiring. We will only grow as our workload outpaces our bandwidth, and have a pipeline of the highest tier of talent available on the market who we can pull in to work on Arbitrum full-time. Throughout our conversations with some of the delegates who had minor concerns, it became apparent that the Snapshot vote’s overwhelming support made it illogical to make any large structural changes to our proposal. We wanted to share this information on the forum so others could have visibility into our decision to proceed to Tally with minimal alterations.
We did make 2 small non-structural changes after the Snapshot vote passed (on Aug 2nd), please see the below, which is quoted from the top of our forum post for optimal transparency.
In order to address our promise to give the DAO the ability to directly and openly provide input into the work we are facilitating, we will be posting monthly Short Term Deliverables similar to the ones included above in an “Entropy” category in the forum. We will call for feedback on our workload and goals, and ask for suggestions as to how to either add new initiatives or remove existing ones from our workload. We will additionally host an Entropy office hour biweekly open to all.
Non-material change clarifying that Entropy has the ability to claim/bill its monthly payments instead of the foundation transferring funds at a monthly cadence. The only alteration is in the verbiage from “draw” to “eligible to claim” with the addition that "Payments that have accrued can be claimed at any time.”
While the Entropy team scales, they will be eligible to claim a reduced $100,000 per month and after crossing the threshold of 7 employees dedicated to Arbitrum, will be eligible to claim regular monthly payments ($2,470,000/12 = $205,834) for the remainder of the 12 month term. Payments that have accrued can be claimed at any time.
Before:
While the Entropy team scales, they will draw a reduced $100,000 per month and after crossing the threshold of 7 employees dedicated to Arbitrum, will start receiving regular monthly payments ($2,470,000/12 = $205,834) for the remainder of the 12 month term.
DAOplomats voted AGAINST this proposal on Tally.
We weren't supportive of this initiative originally so we maintained our stance during the onchain vote.
I'm voting FOR on Tally. The Entropy Advisors team has already provided a valuable contribution in the past and I believe that their role is essential for the DAO. The requested amount is high and not all of the feedback raised around pricing has been incorporated into the final proposal, but I am sure that we will be repaid with quality and good performance.
Snapshot vote comment: https://forum.arbitrum.foundation/t/entropy-advisors-exclusively-working-with-arbitrum-dao/25246/48?u=0x_ultra
Blockworks Research will be abstaining on this proposal on Snapshot.
We cannot participate in this vote due to a conflict of interest as several of the members of Entropy were previously at Blockworks Research. As such, we will be abstaining; however, we would like to note a few things about this proposal that we would like to see changed going forward. Similar to what other delegates have outlined, we want to see an explicit outline about what Entropy will provide so that there is a clear distinction between Entropy’s position and other committees like the ADPC, ARDC, etc. Additionally, given the quality of work that Entropy has proposed prior, we see value in the hiring scheme, but would recommend to slow the hiring process so that funds are used properly.
I will vote in favor of this proposal during this initial temperature check.
The Entropy team is highly skilled, and the DAO needs them to focus on Arbitrum's success.
I will vote in favor of this proposal during this initial temperature check.
The Entropy team is highly skilled, and the DAO needs them to focus on Arbitrum's success.
However, I would like to reiterate my concern about the renewal terms. In my opinion, the high price being paid for exclusivity also requires a commitment from Entropy not to condition the renewal option on the DAO agreeing to pay a bonus. I would like to see these terms modified in the tally vote.
@Entropy Are there any updates on the concerns raised above?
also, really interesting and understand your perspective and point of you.
Voted For this proposal on Snapshot.
The Team at Entropy Advisors is clearly capable. While the budget is on the high side, I see listening and adaptation to feedback being provided here. In addition the opportunity cost of not making this investment is high, in a highly competitive industry, if we want top talent to devote to the DAO we need to reciprocate that with compelling compensation.
Voted For this proposal on Snapshot.
The Team at Entropy Advisors is clearly capable. While the budget is on the high side, I see listening and adaptation to feedback being provided here. In addition the opportunity cost of not making this investment is high, in a highly competitive industry, if we want top talent to devote to the DAO we need to reciprocate that with compelling compensation.
The DAO is placing a lot of trust in Entropy and I want to encourage a key operating principle of collaboration, interim centralisation and progressive decentralisation for DAO ops functions.
To that end I'd like to see:
a more explicit scope of services: functions that Entropy does, and more importantly functions Entropy explicitly does not do such that Entropy occurs as friendly and collaborative to other service providers, not in a privileged position as catch-all for everything. A clear anti-pattern for the DAO would be all new and fast needed capability for the DAO centralises intro Entropy and stays there.
Entropy adopt an operating principle of interim centralisation in the name of speed i.e to interim hire and fill a void in DAO's capacity and that should always be paired with a view and second step to then source/develop a proposal that effectively "fires itself" from that role, and spreads capability and responsibility to many actors by bringing in a service provider, a technology, structure or process that then obviates the need for Entropy to hold that function internally and indefinitely.
In this way, Entropy functions as a catalyst and agent that temporarily concentrates and centralises needed capability for a period and then oscillates that out through decentralised handover and setting up others to share the load thereby ensuring the DAO is a horizontally aligned cohort of collaborative partners acting with collective capability and responsibility.
We vote FOR the proposal on Snapshot.
We believe the dedicated and capable actor that focuses on operations, strategy alignment and key coordinations is clearly demanded in the DAO governance, and Entropy has proven to be the one in Arbitrum. We are very excited to have them exclusively work with Arbitrum DAO.
We vote FOR the proposal on Snapshot.
We believe the dedicated and capable actor that focuses on operations, strategy alignment and key coordinations is clearly demanded in the DAO governance, and Entropy has proven to be the one in Arbitrum. We are very excited to have them exclusively work with Arbitrum DAO.
We have similar concerns about the hiring part, which is rare for this kind of proposals. We would ask them to consider a short-term pilot project with the currently hired or to-be-hired members to further prove the results that they can provide, but we would still vote for the proposal on Tally even as it is because we believe it's practically better to have Entropy with a little over-budget rather than losing them or delaying them to fully focus on their operations.
Voting 'FOR' this proposal
Support this unequivocally. We need to scale resources for operations, for the DAO and for Arbitrum. Entropy will be a force multiplier in us finally getting activities off the ground, and i'm really excited that we are building a group of Arbitrum aligned support structures.
Voted FOR as this is a special opportunity to lock in some great talent to focus on key DAO infrastructure.
Looking forward to seeing the contributions Entropy provides to Arbitrum!
but would recommend to slow the hiring process so that funds are used properly.
hey @BlockworksResearch what leads you to believe that... funds could be used non-properly?
We're voting FOR this proposal. Entropy has proven valuable, driving key initiatives for Arbitrum DAO. Their full-time dedication will professionalize operations, crucial for growth. The $2.47M budget, while substantial, aligns with industry standards. Performance-based bonuses and transparency reports mitigate risks. This investment should drive efficiencies and sustainability for Arbitrum DAO.
I’ve closely followed Entropy’s work over the past few months, and I’m impressed by their significant influence within the DAO and their strong commitment to execution.
Their full-time dedication to the DAO is particularly valuable, especially given the need for senior expertise in creating and managing initiatives of this scale. Entropy clearly possesses this experience.
I’ve closely followed Entropy’s work over the past few months, and I’m impressed by their significant influence within the DAO and their strong commitment to execution.
Their full-time dedication to the DAO is particularly valuable, especially given the need for senior expertise in creating and managing initiatives of this scale. Entropy clearly possesses this experience.
As part of the onboarding working group, we recognize this need and are exploring ways to support this initiative as we move forward.
For these reasons, I voted FOR this proposal.
I voted yes for this proposal. Entropy is clearly a net benefit for the DAO and strongly involved in basically every proposal and thread. As mentioned by others already, the budget may seem high. But I think the quality will speak for itself. I hope they are going to help to push the DAO and create a clear path.
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking, and ideation of the two.
We’ll be voting FOR this proposal.
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Sinkas, and it’s based on the combined research, fact-checking, and ideation of the two.
We’ll be voting FOR this proposal.
First, we would like to state that we had a very good experience working with Entropy so far and that we believe their services are a value-added to the DAO. However, we were initially hesitant to vote in favor of the proposal as we found the requested amount to be fairly large and couldn’t see a reason for the 10-person team that was outlined.
To better assess their request, we looked for similar benchmarks in the industry to compare it to, and we concluded that it would be a good idea to compare Entropy’s proposal with Optimism’s Grants Council — an entity we have personal experience with. Although it's not a direct comparison since Optimism Grants Council (OGC) has a well-defined and narrow scope, while Entropy’s proposal is more open-ended, and its scope is rather loosely defined.
As things are, the OGC is running point on the operations of Optimism’s grant program, it’s writing mission requests, reviewing mission proposals, and assessing the results of the completed missions. While not exactly the same, we find the scope of work quite similar to that of Entropy’s work as outlined in the proposal.
OGC is now comprised of 12 mission reviewers, 3 milestone and metrics reviewers, 2 audit reviewers, and a lead, with a budget of 610,000 OP (~$1M) for 6 months. Given Entropy’s request is for more than double the duration, we find the amount requested reasonable by comparison. It’s important to note, though, that the comparison doesn’t guarantee that Entropy’s proposal and subsequent work will be successful. It simply goes to show that a similar structure proved to work well in a different ecosystem, and therefore, we’re willing to give it a chance.
With that in mind, we would like to make it clear that we still believe the amount requested is on the large side, and therefore, our expectations for Entropy’s performance are also high. The way the proposal is structured, Arbitrum’s DAO is basically bootstrapping Entropy’s company as an independent consulting agency, covering all costs and taking up all associated risk, while the ‘only’ benefit the DAO receives is 1-year exclusivity, with a possible extension to 2-years of exclusivity depending on the approval of the bonus and compensation structure.
Given the structure, we think it would be sensible for the DAO to perform a business justification check halfway through the engagement (6 months after an on-chain vote passes) to see whether Entropy is meeting the expectations.
After reviewing the proposal and comments from other delegates, we are in favor of this proposal. The Entropy Advisors team has shown valuable past contributions. We believe that Arbitrum DAO needs dedicated full-time members to tackle organizational challenges. The proposal's six core focus areas are essential for transformation. The exclusivity ensures focused efforts, and the budget plan ties payments to actual wages for transparency. Additionally, all the problems raised by JO regarding the DAO have been on point and need to be addressed. We believe this proposal will significantly benefit the DAO's long-term success. Therefore, we will be voting FOR the proposal.
I will hesitantly vote yes on this proposal.
The DAO needs them, and we want a future where Entropy is embedded and able to drive meaningful change within Arbitrum.
I couldn't agree more.
I’m voting in favor. First of all, I appreciate how the Entropy team has integrated some of the feedback over time, showing a real commitment in shaping a good quality proposal. I support this proposal because I think that more coordination should be a key component for the development of the DAO. More coordination means more efficiency and less waste of resources and this proposal would certainly make the difference.
However, I share the same doubts as @Pepperoni_Jo3 on the commercial structure. I hope that it will be revised before the vote on Tally.
After consideration, Treasure’s Arbitrum Representative Council (ARC) would like to share the following feedback on the proposal.
Vote: FOR
The ARC is firmly in support of Entropy Advisors, believing them to be a top-tier team that has a vital role to play in the DAOs future success. This is aligned with my personal perspective shared previously:
I will be voting "For" this proposal.
To put it simply, I think it's clear the DAO has needed something like this for a while. There have been numerous discussions / proposals / attempts at this, but nothing has materially improved. While I know that isn't a great sell for a project like this, but realistically we can't stop trying to fix this issue just because it hasn't been figured out yet.
I will be voting "For" this proposal.
To put it simply, I think it's clear the DAO has needed something like this for a while. There have been numerous discussions / proposals / attempts at this, but nothing has materially improved. While I know that isn't a great sell for a project like this, but realistically we can't stop trying to fix this issue just because it hasn't been figured out yet.
Editing my post here to save forum space: I will continue my support for this project on Tally by voting "For". My reasons have not changed since the Snapshot vote.
Hello @maxlomu - thank you so much for taking the time to make a comment and cast your vote.
We just want to make very clear that we are not seeking a $5m annual operating budget. We are requesting $2.47M for the year - with all additional ARB set aside as future incentives and to give the DAO the ability to retain us exclusively for an additional year. As mentioned in the proposal, the DAO spends a disproportional amount of ARB on grants and protocol incentives versus operations. We believe this needs to change.
Hello @maxlomu - thank you so much for taking the time to make a comment and cast your vote.
We just want to make very clear that we are not seeking a $5m annual operating budget. We are requesting $2.47M for the year - with all additional ARB set aside as future incentives and to give the DAO the ability to retain us exclusively for an additional year. As mentioned in the proposal, the DAO spends a disproportional amount of ARB on grants and protocol incentives versus operations. We believe this needs to change.
In reference to your other concerns, please refer to the other replies made above. We regreat not having the chance to speak with you prior to the casting of your vote, but we appreciate your feedback and are happy to hop on a call any time to discuss your concerns more deeply. Either way, we hope to change your opinion on us (or shall we say, our proposal) through actions taken by our team as we continue to serve the Arbitrum DAO.
I will hesitantly vote yes on this proposal.
The DAO needs them, and we want a future where Entropy is embedded and able to drive meaningful change within Arbitrum.
I couldn't agree more.
I LOVE the Entropy team, they are doing GREAT work and I would love to see them well paid. I love working with them, and I fully trust them to do what is best for our DAO.
I especially love the vesting component for this proposal.
However, I hope they scale slowly... bringing on an admin person and maybe one or max two more leaders would make sense, because, just like my fears around the ARDC, we have to be careful not to create some sort of shadow government.
I think the 100k a month for their services is well worth it, even at the size they are now!
I hope they don't prioritize hiring too hard and stay small as long as they can, I don't think they need to be bigger than 6 people to be an incredible force for good inside our DAO.
After consideration, Treasure’s Arbitrum Representative Council (ARC) would like to share the following feedback on the proposal.
Vote: FOR
The ARC is firmly in support of Entropy Advisors, believing them to be a top-tier team that has a vital role to play in the DAOs future success. This is aligned with my personal perspective shared previously:
Despite the calibre of the Entropy Team, we have some reservations about the commercial structure and incentive alignment.
Our recommendation is to adjust the commercials as follows:
Despite these reservations, we acknowledge Entropy's crucial leadership role within this DAO and support advancing this proposal beyond Snapshot; and we hope the Entropy team considers these recommendations before the Tally vote.
The DAO needs them, and we want a future where Entropy is embedded and able to drive meaningful change within Arbitrum.
gm, I am voting AGAINST this proposal.
I think the size of the proposed team and the suggested tasks are inappropriate for our state as a DAO, and the proposed budget is not justified. I'll elaborate.
gm, I am voting AGAINST this proposal.
I think the size of the proposed team and the suggested tasks are inappropriate for our state as a DAO, and the proposed budget is not justified. I'll elaborate.
First, I believe an operational function within the DAO is absolutely needed for all the reasons mentioned above by others: lack of proactiveness and overall coordination, and information overload for DAO members.
However, I second the comments from @GFXlabs and @DisruptionJoe - It's not hard to see how many of the proposed tasks can be executed by other teams and create a more cooperative environment.
New proposals: I think this area should heavily lean on the Arbitrum Research & Development Collective [ARDC]. Identifying new initiatives need to come from people that are immersed into the DAO (where Entropy can shine) and then elaborated, analyzed by an entity we already fund
Attracting high-quality companies and individuals within the ecosystem: I believe this should be an independent entity that works mostly on bonuses, like a proper BD team. Not sure why we envision this function to be mixed with an operational arm.
Improving the ability of the DAO to spend money effectively: again, once specific needs are identified, we can leverage the ARDC and ARPC (which we already funded!).
We recommend scaling back this proposal to fewer positions, and forgoing exclusivity in exchange for a lower cost, since it’s not clear exclusivity is particularly valuable to either side of the proposed relationship, and shortening the engagement to less than a year to provide an opportunity to understand if the budget was correctly sized and if more concrete KPIs could be identified
I agree. I have not been in touch with the Entropy team, and I trust the judgement of others who did and have positive reviews.
What we need is a lean, small team able to proactively identify where improvements are and delegate the tasks to other sub teams. A $5m yearly budget is way too excessive for that - we only risk losing focus and operational efficiency.
Below are the opinions of the UADP:
We are voting For this proposal due to the need for DAOs, especially those behind an entire ecosystem of applications, to invest more time and capital in operations. Entropy’s leading team has a strong track record in working with DAOs and conducting intimate due diligence on various protocols. At the end of the day, if Entropy can help minimize net costs, including the costs paid out to Entropy, then this partnership is a net positive. Full-time contributions to a DAO are not very common, and there will likely be a need for more immersed individuals contributing to DAOs–especially if the DAO would like to over time become less reliant on a singular Foundation. We’re curious to see if this proposal prompts similar teams to apply for such partnerships. Exclusivity to a particular DAO is also uncommon. Many paid contributors aren’t able to run their businesses if they don't have diversity across numerous ecosystems–which could create incentive misalignment.
Below are the opinions of the UADP:
We are voting For this proposal due to the need for DAOs, especially those behind an entire ecosystem of applications, to invest more time and capital in operations. Entropy’s leading team has a strong track record in working with DAOs and conducting intimate due diligence on various protocols. At the end of the day, if Entropy can help minimize net costs, including the costs paid out to Entropy, then this partnership is a net positive. Full-time contributions to a DAO are not very common, and there will likely be a need for more immersed individuals contributing to DAOs–especially if the DAO would like to over time become less reliant on a singular Foundation. We’re curious to see if this proposal prompts similar teams to apply for such partnerships. Exclusivity to a particular DAO is also uncommon. Many paid contributors aren’t able to run their businesses if they don't have diversity across numerous ecosystems–which could create incentive misalignment.
There are aspects of the proposal that we have reservations regarding, however. The list of previous proposals that the team has proposed assumedly took three people maximum to conduct. A team of 10 people does sound a bit overkill. Employees are expensive to manage. Perhaps it's better to hire 2-3 new people, perhaps focused more on the technical and data analytics side. That would round out the team pretty well, while prioritizing quality over quantity. Specialized expertise can be consulted on an ad-hoc basis, and the Entropy team can always leverage the Arb community for attaining opinions and perspectives on certain proposals. This lean setup would potentially cut some of the overhead. The whole legal, tax, etc side of this proposal is currently one of the justifications for the large budget. It’s questionable if the DAO should be subsidizing these entity formation and overhead costs.
I have voted FOR the proposal as the team can help pluck several low hanging fruits that requires putting their shoulder to the wheel to get done. The consolidation of all the multi-sigs is one example, and I am keen to see others that the team comes up with. Specifically, matt's expertise in sequencers leads to some hope that over the year we will make progress on either staking the revenue earned or doing something productive. The base fee increase is a step in the right direction.
What I am not seeing in the proposal but would like included, is a plan for eventual offramping. We assume Entropy will not and should not be exclusive to Arbitrum forever. So at the end of the year, some assessment on whether the majority of low hanging fruits are realized in the DAO, or opening up the process to be more competitive, would be preferred. I am content with kicking this can down the road for now, so i have not stopped it from letting me support the proposal.
At times, the DAO should justify taking concentrated bets on teams that have and will deliver. This is 100% one of those times in our opinions. The team is stellar and the ability to lock up their services for this many months is worth it.
A few points and interesting thing we should consider however, is we think with Entropy taking this "stewarding" role, the DAO should wait before considering other teams for a few months, if not year until this relationship ends. And then almost host some sort of race to renew or pick the next one. Additionally, some of the budget concerns make a lot of sense, and are glad to see the budgets and buffers being reduced.
This is a good proposal, but it would have been better to have some more detailed data and KPIs.
I voted "FOR" the proposal.
Entropy adjusted it reflecting the feedback received and provided a solid reasoning to justify not changing some items (or doing it later on the Tally vote). I support the initiative, and I believe that an enhanced version will come up from further discussions.
You brought up some comparables. Looking at the MakerDAO GovAlpha core unit, for example, it seems that our salary budget matches quite closely with the facilitator pay matrix provided by them, where a full-time experienced contributor is priced at 189K DAI.
You brought up some comparables. Looking at the MakerDAO GovAlpha core unit, for example, it seems that our salary budget matches quite closely with the facilitator pay matrix provided by them, where a full-time experienced contributor is priced at 189K DAI.
Well, the facilitator is the manager. As we said, your per-person compensation budget is about right, for the most senior contributors. Like a facilitator.
his doesn’t seem to include expenses such as benefits, taxes, and other assorted costs, meaning that our salary budget is actually lower than the comparable
Taxes, benefits, and other assorted costs were the responsibility of the contributors. So the amount you see is the "all in cost" and not just take-home salaries.
We do realize that not everyone within the community sees value in having exclusivity
It's not that exclusivity has zero value. It's that removing this is an easy way to bring down costs substantially.
Total Budget: $2.47M
This amount strikes us as high, and not in line with comparables, especially when including a possible 1.5m ARB bonus.
This amount strikes us as high, and not in line with comparables, especially when including a possible 1.5m ARB bonus.
For instance, the MakerDAO GovAlpha core unit, which is recognized as best-in-class, ran on a budget of less than 1m DAI until its dissolution in the current MakerDAO restructuring. You can find their final budget proposal here.
Their replacements - two facilitators and their support staff - likewise cost just over 1m DAI + 288 MKR annually. You can find this here.
The cost of governance administration and support staff at Optimism is not publicly disclosed because it is paid for by the Foundation, but is likely much less than at Maker, since it includes a smaller headcount.
We’re not aware of many other comparable positions at DAOs the size and scale of Arbitrum. The Uniswap Foundation has an operating budget of comparable size to this request, but also covers other duties like like administration of a significant and ongoing grants program.
It’s not intuitive what would occupy so many full time personnel as are budgeted under this proposal, even with its open-ended nature. The average pay per person is not necessarily off-market if they are attracting super-senior professionals with experience in governance or supporting expertise like law or software development, but that assumes all hires will be at the top end of experience and have enough productive work to occupy them.
To conjure some counter factual comparisons, would this budget be too much to hire the L2Beat team, who (along with others) seem to already do at least some of the work envisioned?
What about StableLab?
Or GFX Labs?
Or Immutable Axis?
Or TreasureDAO?
Or GMX’s team?
Or SeedLatam?
Or Plurality Labs?
Or any other contributor that has shepherded initiatives, opined on strategy, engaged developers and financial institutions, or otherwise promoted Arbitrum. Even if the answer is “Yes, we would pay one of them that,” then there could be an open RFP to ensure the DAO has as many choices and competitive pricing as possible.
We recommend scaling back this proposal to fewer positions, and forgoing exclusivity in exchange for a lower cost, since it’s not clear exclusivity is particularly valuable to either side of the proposed relationship, and shortening the engagement to less than a year to provide an opportunity to understand if the budget was correctly sized and if more concrete KPIs could be identified
First of all, we would like to thank the @Entropy team for this proposal.
We will be voting FOR in the Snapshot temperature check instance for the reasons detailed below:
First of all, we would like to thank the @Entropy team for this proposal.
We will be voting FOR in the Snapshot temperature check instance for the reasons detailed below:
We appreciate the team's willingness to receive feedback and take the time to meet with different stakeholders in the Arbitrum ecosystem. This shows that they have an excellent sense of leadership and that this together with the proposals they are taking forward are strong reasons to believe that they are the right people to provide a direction for the DAO, at least in this transition to a more complex management structure.
We are aware that today Arbitrum, despite being a market-leading L2, has serious organizational problems that have led to overlapping functions and inefficient spending of treasury funds. A straightforward example is what happened with the various multi-sigs created for each proposal. This ‘lack of control’ responds to an obvious cause: there is a lack of a ‘common thread’, something/someone that can somehow organize into a whole the different proposals that exist and will exist, favoring the coordination of efforts and avoiding the waste of resources, both human and economic.
We believe that this proposal goes in that direction, the DAO requires enforcement that allows us to implement even more ambitious solutions such as OpCo. I think most of us here agree that a broad and diverse structure like OpCo is ideal, but in the meantime, someone needs to take the lead and guide us somewhat toward the goal.
We welcome the fact that @Entropy has as one of its priorities the establishment of better mechanisms for the oversight of ongoing initiatives. Today the great diversity of current initiatives complicates the proper monitoring and accountability. In this sense, it seems reasonable to have some sort of general committee to monitor the implementation of initiatives.
As for the budget requested, although it's somewhat above market value, we have to consider the members' seniority and the exclusivity offered, which is not free of charge, of course. All this leads us to consider that although it could perhaps be revised, it doesn't seem to us to impede going ahead with the proposal. Where we agree with @pedrob is that the bonus doesn't sound so optional if it's a mandatory condition for renewing the agreement. Despite the latter, we appreciate the modifications made to the bonus, giving the DAO options to pay a lower amount without revoking the possibility of renewal for a further period. We also agree with @JoJo on this point, given @Entropy's recent contributions it is likely to be much more costly for us to have no one in that leadership role than the cost of the deal itself.
On balance, we strongly support this proposal, with the caveat that we expect to see Entropy be part of something bigger, a structure that can bring together all Arbitrum DAO verticals and professionalize operations so that Arbitrum not only leads the L2 ecosystem but also sets an example in self-management, efficient spending, and decision making. In this way, we will send a message to all stakeholders: we not only care about growing, but we want to do it in a decentralized, efficient, and orderly manner.
Thanks for the detailed comment!
You brought up some comparables. Looking at the MakerDAO GovAlpha core unit, for example, it seems that our salary budget matches quite closely with the facilitator pay matrix provided by them, where a full-time experienced contributor is priced at 189K DAI. This doesn’t seem to include expenses such as benefits, taxes, and other assorted costs, meaning that our salary budget is actually lower than the comparable. The difference in total budget is also mostly driven by the core unit’s smaller size and employment of part-time employees (the proposal mentions a historical 3.75-4.25 FTEs, which would maybe increase with the ~900K budget). Our contingency is exactly in line with the core unit’s. It’s also worth noting that the DAO can decide to distribute no bonus at all at the end of our 1-year term, so this is in no way baked into the expense structure.
Thanks for the detailed comment!
You brought up some comparables. Looking at the MakerDAO GovAlpha core unit, for example, it seems that our salary budget matches quite closely with the facilitator pay matrix provided by them, where a full-time experienced contributor is priced at 189K DAI. This doesn’t seem to include expenses such as benefits, taxes, and other assorted costs, meaning that our salary budget is actually lower than the comparable. The difference in total budget is also mostly driven by the core unit’s smaller size and employment of part-time employees (the proposal mentions a historical 3.75-4.25 FTEs, which would maybe increase with the ~900K budget). Our contingency is exactly in line with the core unit’s. It’s also worth noting that the DAO can decide to distribute no bonus at all at the end of our 1-year term, so this is in no way baked into the expense structure.
The idea behind our budgeting for up to ten employees is to allow us to scale into the DAO’s needs, maintaining the ability to add more capacity where needed. As mentioned in our earlier comment, with three full-time employees and more recently four, we’ve constantly been in a situation where we’re seeing more demand than we currently have the capacity to service. Hiring for the sake of hiring wouldn’t benefit us in any way since if we aren’t producing value relative to our costs, we would either not be able to renew our contract with Arbitrum or our contract would be outright terminated, meaning that we would then have to scale our team down immediately and our reputation would also be damaged.
The size of the budget also derives from the fact that we would be working exclusively with Arbitrum and we need to be able to attract talent. While our growth upside is consequently limited, this puts us in a unique position that not many other service providers want to/can be in, and ensures that our number one priority is always the Arbiturm ecosystem. We do realize that not everyone within the community sees value in having exclusivity. At the end of the day, this is also a subjective question that doesn’t have one correct answer, depending on the extent to which the community prioritizes enhancing efficiency and the commitment they want from service providers. The feedback we’ve gotten from many delegates is that an exclusive structure is preferred, which is why this proposal was created in the first place. We see a ton of value in us already having bootstrapped full-time and Arbitrum-exclusive employees and began facilitating some of the deliverables mentioned in our proposal while lacking conflicts and being able to credibly act in the DAO’s best interest. Despite the high-quality nature of all the companies you listed, our understanding is that none would be willing to accommodate this feature and benefit.
For the reasons above, and all the reasons i posted previously, I am voting "for" on this proposal.
I can see why some, like @GFXlabs, can really focus on the overall cost, and tries to cut it through a shorter mandate + wave of exclusivity. It can make sense, from their point of view, and I am glad we also have in the debate voices that can bring a different opinion on the table.
For the reasons above, and all the reasons i posted previously, I am voting "for" on this proposal.
I can see why some, like @GFXlabs, can really focus on the overall cost, and tries to cut it through a shorter mandate + wave of exclusivity. It can make sense, from their point of view, and I am glad we also have in the debate voices that can bring a different opinion on the table.
But personally, in this vote, I am focusing on the cost we will face as a DAO of not having a leadership role, even if temporary, in a pivotal moment for our ecosystem in which we are moving toward even more important initiative. In the last few months, and at EthCC, entropy has shown how they can effectively cover that leadership role. It doesn't mean that they will have to do it always and in perpetuity; I actually hope they will be the enabled who gives us the tool to have other entities able to lead (some) initiatives.
But again, not having them, here and now, not having them help in the next few months, will likely cost us way more than the amount they are asking here to give a 1y exclusivity deal to our DAO.
I second Bobbay. My personal reserve is still not on the 10 employee (i prefer to have a budget that is a bit higher compared to what is effectively reached, we don't want to hinder growth), but on the bonus. This is not due to the number per se but cause of the good ol kpis. BUT...
I voted FOR this proposal at the temp check stage for the reasons outlined here.
Based on feedback sent to us in private, we have made two updates to our proposal. First, we have further defined our short-term goals and current initiatives:
Hello!
First of all, like many who have contributed to the discussion, I want to acknowledge the great team at @Entropy and express my alignment with the direction of the proposal. I think some interesting viewpoints have been shared, although one aspect that I haven't seen many questions or discussions about is the concept of exclusivity that the proposal suggests.
We have updated the proposal with the following changes to align with community feedback:
We are hopeful to move to Snapshot on Thursday.
Thank you @Arb4Ever for the thoughtful comments, many of which concern tightly breaking down future deliverables and developments. These are most certainly valid when it comes to scaling a traditional, early-stage company that works towards objectives defined by its leadership team. These objectives are naturally well-defined and don’t change in a short time frame. We have avoided a tight breakdown because our main goal is to serve the DAO’s needs, which are volatile and non-predictable even in the near term. By hammering down the exact outputs and the associated KPIs etc. at this stage on, e.g., a quarter-by-quarter basis, we are more than likely to create a structure that incentivizes us to work on deliverables that aren’t relevant to what the DAO requires in the future. The core idea of Entropy is that we are agile and work in the open, meaning that at the end of the day, our exact deliverables and associated success should be decided by the DAO.
When it comes to the core fee structure and salary sizes, we have been actively analyzing the labor market, and to say things are competitive is an understatement. Good talent has options across VCs, research shops, leading CEXs, etc., all of which pay, at minimum, $100-150K and generous equity packages/carried interest. Considering we are and would be exclusive with Arbitrum, this does limit our upside in terms of equity valuation/growth. In addition, we are starting a business in a public setting for the whole world to view our finances. An example scenario for a potential hire: take $125K and an equity allocation at a top-tier research shop, or join Entropy for $125K + equity, exclusively working with one customer in the open at a company with a runway of 1 year and the possibility for the DAO to clawback funds at any moment. This example should put things into perspective, and we expect that we will have to pay accordingly in order to have a chance at these hires. Additionally, as mentioned in our proposal, it costs employers much more to pay people after health benefits, etc., and if you add in office and related expenses employees with extensive experience should be assumed to require at minimum, the amount of capital needed to scale a team expands extremely fast. We do, however, feel that talent is more likely to join us and contribute to Arbitrum full-time because we can offer these benefits and steady fiat-denominated salaries versus purely getting paid in ARB on a contract basis.
The below is an opinion, which is likely severely biased by the fact that I've at times found trying to contribute to Arbitrum DAO challenging. In the occasions when I've managed to secure their attention, Matt and Sam have been among the people who have really helped to move things forward. I selfishly want more of that capacity.
The concerns and questions raised by @Pepperoni_Jo3, @DisruptionJoe, @JoJo, @Arb4Ever, feel quite relevant. I would need a bit more time to reflect on the details to form a full opinion.
The below is an opinion, which is likely severely biased by the fact that I've at times found trying to contribute to Arbitrum DAO challenging. In the occasions when I've managed to secure their attention, Matt and Sam have been among the people who have really helped to move things forward. I selfishly want more of that capacity.
The concerns and questions raised by @Pepperoni_Jo3, @DisruptionJoe, @JoJo, @Arb4Ever, feel quite relevant. I would need a bit more time to reflect on the details to form a full opinion.
Regardless the below statements are probably the most important thing to focus on here:
Today, virtually no money is spent on operations, while the DAO has spent almost 435M ARB in total with ~95% going towards investments, incentives, and grants (Source: Delphi & R3gen).
The delegates and service providers are trying their best. However, they are fighting a losing battle against a tidal wave of things to do. We need change urgently.
It’s important to consider not just the direct cost, but also the opportunity cost of a team like Entropy committing full-time to Arbitrum.
Given that many of us here have only positive things to say about the team behind Entropy and they've clearly produced based on the Foundation grant, it feels that some version of this proposal is safe enough to push forward on a very short timeline, as followup to that. I also particularly like the focus on thoroughly understanding stakeholder needs in phase 1 that has been put, before making the DAO proposal.
In other circumstances it would have made sense to scrutinise such a plan a lot more in terms of defining specific outcomes, roles, plans and so on. But given the above arguments it feels that there are enough low hanging fruit in too many directions, while at the same time the environment is quite volatile, that it might be best to allow for a looser more responsive to the circumstances mandate. With all the risks and opportunities that go with that. Given appropriate management practices put in place incl. addressing the points raised also by @cp0x, @0xTALVO.ETH_MTY.
On the previous GovHack @DisruptionJoe had a couple of great talks (this being one) that made such key points as:
There's an aspect of this proposal, which seems clearly tackles that problem, which feels urgent. And it also applies to both expecting A-player capability, commitment and accountability, but also making sure we treat such A-players accordingly.
I think this point is also important:
I’d much rather see smaller teams which allocate funds to community applicants to do jobs rather than larger teams growing to do the work themselves.
@Englandzz_Curia raised a legitimate point about KPIs and what success looks like. While it wasn't in the original post the below I think is a good start to the this conversation:
We will be full-time Arbitrum DAO and our work may be dynamic based on the DAO’s changing goals. That said, we appreciate this call out, and think it is important to paint a picture of what Entropy’s success will look like: ...
The concern I share is, as @JoJo put it, out of fear of success, where it might lead to unhelpful centralisation, or setting bad precedents, or supporting suboptimal organisational design and introducing complexity for future developments, or limiting access to resources to other service providers. As long as these are reasonably considered, to which the team has seemingly put thought in terms incentives, and checks and balances, and there are already good suggestions by delegates to address them, I feel passing this proposal quickly can be really beneficial for Arbitrum.
[quote=“Meera, post:16, topic:25246, full:true”] Thanks for the detailed proposal. IMO, the action points listed in here have an overlap with the ARDC and ADPC. Can you detail a plan to avoid conflicts or inefficiencies? Also it would be great to see the KPI for success indicators to understand the structure, goals and quantitative and qualitative KPI [/quote] You can find the answers to these questions in our first comment above. Please let us know if any further clarification would be helpful. We further expand on the KPI point in our response to @pedrob below.
I am in favor of this proposal.
The work the Entropy team has done to-date on sequencer fee settings, DAO budget, DAO ops and more is highly valuable. There is no one else taking ownership of and moving forward on these key strategic issues.
I am in favor of this proposal.
The work the Entropy team has done to-date on sequencer fee settings, DAO budget, DAO ops and more is highly valuable. There is no one else taking ownership of and moving forward on these key strategic issues.
It's important to consider not just the direct cost, but also the opportunity cost of a team like Entropy committing full-time to Arbitrum. Matt, Sam, Pruitt and team are strong operators. The incentive in this case is to spread out across many ecosystems to maximize negotiating power and funding opportunities. I think having a small (yes, 10 is small in the real world) team of top-tier folks focused exclusively on the success of the Arbitrum DAO is worth it.
I will hesitantly vote yes on this proposal.
The DAO needs them, and we want a future where Entropy is embedded and able to drive meaningful change within Arbitrum.
I couldn't agree more.
I LOVE the Entropy team, they are doing GREAT work and I would love to see them well paid. I love working with them, and I fully trust them to do what is best for our DAO.
I especially love the vesting component for this proposal.
However, I hope they scale slowly... bringing on an admin person and maybe one or max two more leaders would make sense, because, just like my fears around the ARDC, we have to be careful not to create some sort of shadow government.
I think the 100k a month for their services is well worth it, even at the size they are now!
I hope they don't prioritize hiring too hard and stay small as long as they can, I don't think they need to be bigger than 6 people to be an incredible force for good inside our DAO.
After consideration, Treasure’s Arbitrum Representative Council (ARC) would like to share the following feedback on the proposal.
Vote: FOR
The ARC is firmly in support of Entropy Advisors, believing them to be a top-tier team that has a vital role to play in the DAOs future success. This is aligned with my personal perspective shared previously:
Despite the calibre of the Entropy Team, we have some reservations about the commercial structure and incentive alignment.
Our recommendation is to adjust the commercials as follows:
Despite these reservations, we acknowledge Entropy's crucial leadership role within this DAO and support advancing this proposal beyond Snapshot; and we hope the Entropy team considers these recommendations before the Tally vote.
The DAO needs them, and we want a future where Entropy is embedded and able to drive meaningful change within Arbitrum.
gm, I am voting AGAINST this proposal.
I think the size of the proposed team and the suggested tasks are inappropriate for our state as a DAO, and the proposed budget is not justified. I'll elaborate.
gm, I am voting AGAINST this proposal.
I think the size of the proposed team and the suggested tasks are inappropriate for our state as a DAO, and the proposed budget is not justified. I'll elaborate.
First, I believe an operational function within the DAO is absolutely needed for all the reasons mentioned above by others: lack of proactiveness and overall coordination, and information overload for DAO members.
However, I second the comments from @GFXlabs and @DisruptionJoe - It's not hard to see how many of the proposed tasks can be executed by other teams and create a more cooperative environment.
New proposals: I think this area should heavily lean on the Arbitrum Research & Development Collective [ARDC]. Identifying new initiatives need to come from people that are immersed into the DAO (where Entropy can shine) and then elaborated, analyzed by an entity we already fund
Attracting high-quality companies and individuals within the ecosystem: I believe this should be an independent entity that works mostly on bonuses, like a proper BD team. Not sure why we envision this function to be mixed with an operational arm.
Improving the ability of the DAO to spend money effectively: again, once specific needs are identified, we can leverage the ARDC and ARPC (which we already funded!).
We recommend scaling back this proposal to fewer positions, and forgoing exclusivity in exchange for a lower cost, since it’s not clear exclusivity is particularly valuable to either side of the proposed relationship, and shortening the engagement to less than a year to provide an opportunity to understand if the budget was correctly sized and if more concrete KPIs could be identified
I agree. I have not been in touch with the Entropy team, and I trust the judgement of others who did and have positive reviews.
What we need is a lean, small team able to proactively identify where improvements are and delegate the tasks to other sub teams. A $5m yearly budget is way too excessive for that - we only risk losing focus and operational efficiency.
Below are the opinions of the UADP:
We are voting For this proposal due to the need for DAOs, especially those behind an entire ecosystem of applications, to invest more time and capital in operations. Entropy’s leading team has a strong track record in working with DAOs and conducting intimate due diligence on various protocols. At the end of the day, if Entropy can help minimize net costs, including the costs paid out to Entropy, then this partnership is a net positive. Full-time contributions to a DAO are not very common, and there will likely be a need for more immersed individuals contributing to DAOs–especially if the DAO would like to over time become less reliant on a singular Foundation. We’re curious to see if this proposal prompts similar teams to apply for such partnerships. Exclusivity to a particular DAO is also uncommon. Many paid contributors aren’t able to run their businesses if they don't have diversity across numerous ecosystems–which could create incentive misalignment.
Below are the opinions of the UADP:
We are voting For this proposal due to the need for DAOs, especially those behind an entire ecosystem of applications, to invest more time and capital in operations. Entropy’s leading team has a strong track record in working with DAOs and conducting intimate due diligence on various protocols. At the end of the day, if Entropy can help minimize net costs, including the costs paid out to Entropy, then this partnership is a net positive. Full-time contributions to a DAO are not very common, and there will likely be a need for more immersed individuals contributing to DAOs–especially if the DAO would like to over time become less reliant on a singular Foundation. We’re curious to see if this proposal prompts similar teams to apply for such partnerships. Exclusivity to a particular DAO is also uncommon. Many paid contributors aren’t able to run their businesses if they don't have diversity across numerous ecosystems–which could create incentive misalignment.
There are aspects of the proposal that we have reservations regarding, however. The list of previous proposals that the team has proposed assumedly took three people maximum to conduct. A team of 10 people does sound a bit overkill. Employees are expensive to manage. Perhaps it's better to hire 2-3 new people, perhaps focused more on the technical and data analytics side. That would round out the team pretty well, while prioritizing quality over quantity. Specialized expertise can be consulted on an ad-hoc basis, and the Entropy team can always leverage the Arb community for attaining opinions and perspectives on certain proposals. This lean setup would potentially cut some of the overhead. The whole legal, tax, etc side of this proposal is currently one of the justifications for the large budget. It’s questionable if the DAO should be subsidizing these entity formation and overhead costs.
I have voted FOR the proposal as the team can help pluck several low hanging fruits that requires putting their shoulder to the wheel to get done. The consolidation of all the multi-sigs is one example, and I am keen to see others that the team comes up with. Specifically, matt's expertise in sequencers leads to some hope that over the year we will make progress on either staking the revenue earned or doing something productive. The base fee increase is a step in the right direction.
What I am not seeing in the proposal but would like included, is a plan for eventual offramping. We assume Entropy will not and should not be exclusive to Arbitrum forever. So at the end of the year, some assessment on whether the majority of low hanging fruits are realized in the DAO, or opening up the process to be more competitive, would be preferred. I am content with kicking this can down the road for now, so i have not stopped it from letting me support the proposal.
At times, the DAO should justify taking concentrated bets on teams that have and will deliver. This is 100% one of those times in our opinions. The team is stellar and the ability to lock up their services for this many months is worth it.
A few points and interesting thing we should consider however, is we think with Entropy taking this "stewarding" role, the DAO should wait before considering other teams for a few months, if not year until this relationship ends. And then almost host some sort of race to renew or pick the next one. Additionally, some of the budget concerns make a lot of sense, and are glad to see the budgets and buffers being reduced.
This is a good proposal, but it would have been better to have some more detailed data and KPIs.
I voted "FOR" the proposal.
Entropy adjusted it reflecting the feedback received and provided a solid reasoning to justify not changing some items (or doing it later on the Tally vote). I support the initiative, and I believe that an enhanced version will come up from further discussions.
You brought up some comparables. Looking at the MakerDAO GovAlpha core unit, for example, it seems that our salary budget matches quite closely with the facilitator pay matrix provided by them, where a full-time experienced contributor is priced at 189K DAI.
You brought up some comparables. Looking at the MakerDAO GovAlpha core unit, for example, it seems that our salary budget matches quite closely with the facilitator pay matrix provided by them, where a full-time experienced contributor is priced at 189K DAI.
Well, the facilitator is the manager. As we said, your per-person compensation budget is about right, for the most senior contributors. Like a facilitator.
his doesn’t seem to include expenses such as benefits, taxes, and other assorted costs, meaning that our salary budget is actually lower than the comparable
Taxes, benefits, and other assorted costs were the responsibility of the contributors. So the amount you see is the "all in cost" and not just take-home salaries.
We do realize that not everyone within the community sees value in having exclusivity
It's not that exclusivity has zero value. It's that removing this is an easy way to bring down costs substantially.
Total Budget: $2.47M
This amount strikes us as high, and not in line with comparables, especially when including a possible 1.5m ARB bonus.
This amount strikes us as high, and not in line with comparables, especially when including a possible 1.5m ARB bonus.
For instance, the MakerDAO GovAlpha core unit, which is recognized as best-in-class, ran on a budget of less than 1m DAI until its dissolution in the current MakerDAO restructuring. You can find their final budget proposal here.
Their replacements - two facilitators and their support staff - likewise cost just over 1m DAI + 288 MKR annually. You can find this here.
The cost of governance administration and support staff at Optimism is not publicly disclosed because it is paid for by the Foundation, but is likely much less than at Maker, since it includes a smaller headcount.
We’re not aware of many other comparable positions at DAOs the size and scale of Arbitrum. The Uniswap Foundation has an operating budget of comparable size to this request, but also covers other duties like like administration of a significant and ongoing grants program.
It’s not intuitive what would occupy so many full time personnel as are budgeted under this proposal, even with its open-ended nature. The average pay per person is not necessarily off-market if they are attracting super-senior professionals with experience in governance or supporting expertise like law or software development, but that assumes all hires will be at the top end of experience and have enough productive work to occupy them.
To conjure some counter factual comparisons, would this budget be too much to hire the L2Beat team, who (along with others) seem to already do at least some of the work envisioned?
What about StableLab?
Or GFX Labs?
Or Immutable Axis?
Or TreasureDAO?
Or GMX’s team?
Or SeedLatam?
Or Plurality Labs?
Or any other contributor that has shepherded initiatives, opined on strategy, engaged developers and financial institutions, or otherwise promoted Arbitrum. Even if the answer is “Yes, we would pay one of them that,” then there could be an open RFP to ensure the DAO has as many choices and competitive pricing as possible.
We recommend scaling back this proposal to fewer positions, and forgoing exclusivity in exchange for a lower cost, since it’s not clear exclusivity is particularly valuable to either side of the proposed relationship, and shortening the engagement to less than a year to provide an opportunity to understand if the budget was correctly sized and if more concrete KPIs could be identified
First of all, we would like to thank the @Entropy team for this proposal.
We will be voting FOR in the Snapshot temperature check instance for the reasons detailed below:
First of all, we would like to thank the @Entropy team for this proposal.
We will be voting FOR in the Snapshot temperature check instance for the reasons detailed below:
We appreciate the team's willingness to receive feedback and take the time to meet with different stakeholders in the Arbitrum ecosystem. This shows that they have an excellent sense of leadership and that this together with the proposals they are taking forward are strong reasons to believe that they are the right people to provide a direction for the DAO, at least in this transition to a more complex management structure.
We are aware that today Arbitrum, despite being a market-leading L2, has serious organizational problems that have led to overlapping functions and inefficient spending of treasury funds. A straightforward example is what happened with the various multi-sigs created for each proposal. This ‘lack of control’ responds to an obvious cause: there is a lack of a ‘common thread’, something/someone that can somehow organize into a whole the different proposals that exist and will exist, favoring the coordination of efforts and avoiding the waste of resources, both human and economic.
We believe that this proposal goes in that direction, the DAO requires enforcement that allows us to implement even more ambitious solutions such as OpCo. I think most of us here agree that a broad and diverse structure like OpCo is ideal, but in the meantime, someone needs to take the lead and guide us somewhat toward the goal.
We welcome the fact that @Entropy has as one of its priorities the establishment of better mechanisms for the oversight of ongoing initiatives. Today the great diversity of current initiatives complicates the proper monitoring and accountability. In this sense, it seems reasonable to have some sort of general committee to monitor the implementation of initiatives.
As for the budget requested, although it's somewhat above market value, we have to consider the members' seniority and the exclusivity offered, which is not free of charge, of course. All this leads us to consider that although it could perhaps be revised, it doesn't seem to us to impede going ahead with the proposal. Where we agree with @pedrob is that the bonus doesn't sound so optional if it's a mandatory condition for renewing the agreement. Despite the latter, we appreciate the modifications made to the bonus, giving the DAO options to pay a lower amount without revoking the possibility of renewal for a further period. We also agree with @JoJo on this point, given @Entropy's recent contributions it is likely to be much more costly for us to have no one in that leadership role than the cost of the deal itself.
On balance, we strongly support this proposal, with the caveat that we expect to see Entropy be part of something bigger, a structure that can bring together all Arbitrum DAO verticals and professionalize operations so that Arbitrum not only leads the L2 ecosystem but also sets an example in self-management, efficient spending, and decision making. In this way, we will send a message to all stakeholders: we not only care about growing, but we want to do it in a decentralized, efficient, and orderly manner.
Thanks for the detailed comment!
You brought up some comparables. Looking at the MakerDAO GovAlpha core unit, for example, it seems that our salary budget matches quite closely with the facilitator pay matrix provided by them, where a full-time experienced contributor is priced at 189K DAI. This doesn’t seem to include expenses such as benefits, taxes, and other assorted costs, meaning that our salary budget is actually lower than the comparable. The difference in total budget is also mostly driven by the core unit’s smaller size and employment of part-time employees (the proposal mentions a historical 3.75-4.25 FTEs, which would maybe increase with the ~900K budget). Our contingency is exactly in line with the core unit’s. It’s also worth noting that the DAO can decide to distribute no bonus at all at the end of our 1-year term, so this is in no way baked into the expense structure.
Thanks for the detailed comment!
You brought up some comparables. Looking at the MakerDAO GovAlpha core unit, for example, it seems that our salary budget matches quite closely with the facilitator pay matrix provided by them, where a full-time experienced contributor is priced at 189K DAI. This doesn’t seem to include expenses such as benefits, taxes, and other assorted costs, meaning that our salary budget is actually lower than the comparable. The difference in total budget is also mostly driven by the core unit’s smaller size and employment of part-time employees (the proposal mentions a historical 3.75-4.25 FTEs, which would maybe increase with the ~900K budget). Our contingency is exactly in line with the core unit’s. It’s also worth noting that the DAO can decide to distribute no bonus at all at the end of our 1-year term, so this is in no way baked into the expense structure.
The idea behind our budgeting for up to ten employees is to allow us to scale into the DAO’s needs, maintaining the ability to add more capacity where needed. As mentioned in our earlier comment, with three full-time employees and more recently four, we’ve constantly been in a situation where we’re seeing more demand than we currently have the capacity to service. Hiring for the sake of hiring wouldn’t benefit us in any way since if we aren’t producing value relative to our costs, we would either not be able to renew our contract with Arbitrum or our contract would be outright terminated, meaning that we would then have to scale our team down immediately and our reputation would also be damaged.
The size of the budget also derives from the fact that we would be working exclusively with Arbitrum and we need to be able to attract talent. While our growth upside is consequently limited, this puts us in a unique position that not many other service providers want to/can be in, and ensures that our number one priority is always the Arbiturm ecosystem. We do realize that not everyone within the community sees value in having exclusivity. At the end of the day, this is also a subjective question that doesn’t have one correct answer, depending on the extent to which the community prioritizes enhancing efficiency and the commitment they want from service providers. The feedback we’ve gotten from many delegates is that an exclusive structure is preferred, which is why this proposal was created in the first place. We see a ton of value in us already having bootstrapped full-time and Arbitrum-exclusive employees and began facilitating some of the deliverables mentioned in our proposal while lacking conflicts and being able to credibly act in the DAO’s best interest. Despite the high-quality nature of all the companies you listed, our understanding is that none would be willing to accommodate this feature and benefit.
For the reasons above, and all the reasons i posted previously, I am voting "for" on this proposal.
I can see why some, like @GFXlabs, can really focus on the overall cost, and tries to cut it through a shorter mandate + wave of exclusivity. It can make sense, from their point of view, and I am glad we also have in the debate voices that can bring a different opinion on the table.
For the reasons above, and all the reasons i posted previously, I am voting "for" on this proposal.
I can see why some, like @GFXlabs, can really focus on the overall cost, and tries to cut it through a shorter mandate + wave of exclusivity. It can make sense, from their point of view, and I am glad we also have in the debate voices that can bring a different opinion on the table.
But personally, in this vote, I am focusing on the cost we will face as a DAO of not having a leadership role, even if temporary, in a pivotal moment for our ecosystem in which we are moving toward even more important initiative. In the last few months, and at EthCC, entropy has shown how they can effectively cover that leadership role. It doesn't mean that they will have to do it always and in perpetuity; I actually hope they will be the enabled who gives us the tool to have other entities able to lead (some) initiatives.
But again, not having them, here and now, not having them help in the next few months, will likely cost us way more than the amount they are asking here to give a 1y exclusivity deal to our DAO.
I second Bobbay. My personal reserve is still not on the 10 employee (i prefer to have a budget that is a bit higher compared to what is effectively reached, we don't want to hinder growth), but on the bonus. This is not due to the number per se but cause of the good ol kpis. BUT...
I voted FOR this proposal at the temp check stage for the reasons outlined here.
Based on feedback sent to us in private, we have made two updates to our proposal. First, we have further defined our short-term goals and current initiatives:
Hello!
First of all, like many who have contributed to the discussion, I want to acknowledge the great team at @Entropy and express my alignment with the direction of the proposal. I think some interesting viewpoints have been shared, although one aspect that I haven't seen many questions or discussions about is the concept of exclusivity that the proposal suggests.
We have updated the proposal with the following changes to align with community feedback:
We are hopeful to move to Snapshot on Thursday.
Thank you @Arb4Ever for the thoughtful comments, many of which concern tightly breaking down future deliverables and developments. These are most certainly valid when it comes to scaling a traditional, early-stage company that works towards objectives defined by its leadership team. These objectives are naturally well-defined and don’t change in a short time frame. We have avoided a tight breakdown because our main goal is to serve the DAO’s needs, which are volatile and non-predictable even in the near term. By hammering down the exact outputs and the associated KPIs etc. at this stage on, e.g., a quarter-by-quarter basis, we are more than likely to create a structure that incentivizes us to work on deliverables that aren’t relevant to what the DAO requires in the future. The core idea of Entropy is that we are agile and work in the open, meaning that at the end of the day, our exact deliverables and associated success should be decided by the DAO.
When it comes to the core fee structure and salary sizes, we have been actively analyzing the labor market, and to say things are competitive is an understatement. Good talent has options across VCs, research shops, leading CEXs, etc., all of which pay, at minimum, $100-150K and generous equity packages/carried interest. Considering we are and would be exclusive with Arbitrum, this does limit our upside in terms of equity valuation/growth. In addition, we are starting a business in a public setting for the whole world to view our finances. An example scenario for a potential hire: take $125K and an equity allocation at a top-tier research shop, or join Entropy for $125K + equity, exclusively working with one customer in the open at a company with a runway of 1 year and the possibility for the DAO to clawback funds at any moment. This example should put things into perspective, and we expect that we will have to pay accordingly in order to have a chance at these hires. Additionally, as mentioned in our proposal, it costs employers much more to pay people after health benefits, etc., and if you add in office and related expenses employees with extensive experience should be assumed to require at minimum, the amount of capital needed to scale a team expands extremely fast. We do, however, feel that talent is more likely to join us and contribute to Arbitrum full-time because we can offer these benefits and steady fiat-denominated salaries versus purely getting paid in ARB on a contract basis.
The below is an opinion, which is likely severely biased by the fact that I've at times found trying to contribute to Arbitrum DAO challenging. In the occasions when I've managed to secure their attention, Matt and Sam have been among the people who have really helped to move things forward. I selfishly want more of that capacity.
The concerns and questions raised by @Pepperoni_Jo3, @DisruptionJoe, @JoJo, @Arb4Ever, feel quite relevant. I would need a bit more time to reflect on the details to form a full opinion.
The below is an opinion, which is likely severely biased by the fact that I've at times found trying to contribute to Arbitrum DAO challenging. In the occasions when I've managed to secure their attention, Matt and Sam have been among the people who have really helped to move things forward. I selfishly want more of that capacity.
The concerns and questions raised by @Pepperoni_Jo3, @DisruptionJoe, @JoJo, @Arb4Ever, feel quite relevant. I would need a bit more time to reflect on the details to form a full opinion.
Regardless the below statements are probably the most important thing to focus on here:
Today, virtually no money is spent on operations, while the DAO has spent almost 435M ARB in total with ~95% going towards investments, incentives, and grants (Source: Delphi & R3gen).
The delegates and service providers are trying their best. However, they are fighting a losing battle against a tidal wave of things to do. We need change urgently.
It’s important to consider not just the direct cost, but also the opportunity cost of a team like Entropy committing full-time to Arbitrum.
Given that many of us here have only positive things to say about the team behind Entropy and they've clearly produced based on the Foundation grant, it feels that some version of this proposal is safe enough to push forward on a very short timeline, as followup to that. I also particularly like the focus on thoroughly understanding stakeholder needs in phase 1 that has been put, before making the DAO proposal.
In other circumstances it would have made sense to scrutinise such a plan a lot more in terms of defining specific outcomes, roles, plans and so on. But given the above arguments it feels that there are enough low hanging fruit in too many directions, while at the same time the environment is quite volatile, that it might be best to allow for a looser more responsive to the circumstances mandate. With all the risks and opportunities that go with that. Given appropriate management practices put in place incl. addressing the points raised also by @cp0x, @0xTALVO.ETH_MTY.
On the previous GovHack @DisruptionJoe had a couple of great talks (this being one) that made such key points as:
There's an aspect of this proposal, which seems clearly tackles that problem, which feels urgent. And it also applies to both expecting A-player capability, commitment and accountability, but also making sure we treat such A-players accordingly.
I think this point is also important:
I’d much rather see smaller teams which allocate funds to community applicants to do jobs rather than larger teams growing to do the work themselves.
@Englandzz_Curia raised a legitimate point about KPIs and what success looks like. While it wasn't in the original post the below I think is a good start to the this conversation:
We will be full-time Arbitrum DAO and our work may be dynamic based on the DAO’s changing goals. That said, we appreciate this call out, and think it is important to paint a picture of what Entropy’s success will look like: ...
The concern I share is, as @JoJo put it, out of fear of success, where it might lead to unhelpful centralisation, or setting bad precedents, or supporting suboptimal organisational design and introducing complexity for future developments, or limiting access to resources to other service providers. As long as these are reasonably considered, to which the team has seemingly put thought in terms incentives, and checks and balances, and there are already good suggestions by delegates to address them, I feel passing this proposal quickly can be really beneficial for Arbitrum.
[quote=“Meera, post:16, topic:25246, full:true”] Thanks for the detailed proposal. IMO, the action points listed in here have an overlap with the ARDC and ADPC. Can you detail a plan to avoid conflicts or inefficiencies? Also it would be great to see the KPI for success indicators to understand the structure, goals and quantitative and qualitative KPI [/quote] You can find the answers to these questions in our first comment above. Please let us know if any further clarification would be helpful. We further expand on the KPI point in our response to @pedrob below.
I am in favor of this proposal.
The work the Entropy team has done to-date on sequencer fee settings, DAO budget, DAO ops and more is highly valuable. There is no one else taking ownership of and moving forward on these key strategic issues.
I am in favor of this proposal.
The work the Entropy team has done to-date on sequencer fee settings, DAO budget, DAO ops and more is highly valuable. There is no one else taking ownership of and moving forward on these key strategic issues.
It's important to consider not just the direct cost, but also the opportunity cost of a team like Entropy committing full-time to Arbitrum. Matt, Sam, Pruitt and team are strong operators. The incentive in this case is to spread out across many ecosystems to maximize negotiating power and funding opportunities. I think having a small (yes, 10 is small in the real world) team of top-tier folks focused exclusively on the success of the Arbitrum DAO is worth it.
I second Bobbay. My personal reserve is still not on the 10 employee (i prefer to have a budget that is a bit higher compared to what is effectively reached, we don't want to hinder growth), but on the bonus. This is not due to the number per se but cause of the good ol kpis. BUT...
I want to also add: after meeting them at ETHcc, i definitely think they are currently filling a leadership gap that we objectively have in our DAO. This would already be a reason to be in general in favour; if we add to this the quality of the work they have so far provided, I can just say that they have my full support.
And, for people questioning about salary, please take in account that whoever works in entropy works in an environment that is crypto (so, quite risky in term of stability), with a service provider working exclusively on a single customer which is our dao (so concentration risk), with a mandate for just 1 year (quite of a short time horizon), with the ability of funds being clawed back by the dao (imagine that the day before you get your salary, treasury is gone). So, yes, whoever will work in entropy will ask for a premium compared to market rate, and rightfully so. I would for example.
Bullish on Matt, Sam, Pruitt, Brick, and whoever is gonna join this team.
Based on feedback sent to us in private, we have made two updates to our proposal. First, we have further defined our short-term goals and current initiatives:
We are committed to defining clear goals for the coming weeks and months, while also encouraging collaboration with other contributors. Our proposed initiatives include, but are not limited to:
Additionally before going to Tally, we are committed to creating a structured format to enable the DAO to directly and openly provide input into the work we are facilitating. This will allow the DAO to practically help drive our direction and objectives through timely feedback.
Hello!
First of all, like many who have contributed to the discussion, I want to acknowledge the great team at @Entropy and express my alignment with the direction of the proposal. I think some interesting viewpoints have been shared, although one aspect that I haven't seen many questions or discussions about is the concept of exclusivity that the proposal suggests.
Clearly, the way the proposal is presented, exclusivity is a key element and part of what is priced into the values being requested.
Initially, with loosely defined KPIs as in this proposal (not something bad, I think it’s good to have a team available to meet the DAO's needs, rather than someone committing to X when the need is Y), exclusivity makes sense as the DAO would be paying for exclusive working hours rather than for specific projects that wouldn't require an exclusivity agreement to execute.
However, looking ahead, I believe this model, especially for attracting more interest in working "exclusively" for the DAO in the future, requires clarity in its terms and conditions.
Here are some questions that arise for me:
Does Entropy's commitment to exclusivity extend to its members? In other words, could any of the current 3 members (or any future members) freelance for other DAOs?
In this regard, how is the issue of resignations from your current team handled regarding exclusivity? Given the project's youth, current confidence in Entropy comes from its members rather than the other way around.
How do you envision the DAO managing a "full-time" commitment without defined objectives or KPIs? How could control or oversight of the progress be exercised?
I hope these questions contribute to the discussion on clarifying the terms around exclusivity in the proposal (and for future ones).
Our proposal includes an agreement with the Arbitrum Foundation so that if the OpCo is stood up in the next year, we can easily port our agreement to fall under its purview instead of the Foundation.
I don't understand this. What agreements are currently in place with the foundation that impact the proposed obligations ? And why is that agreement with the foundation necessary if ultimately the OpCo depends on the DAO?
The DAO will be able to retain a second year of Entropy’s services under the same terms stipulated in this proposal, if it desires to do so. For this second-year engagement clause to be executed in the future, the DAO will also need to vote in favor of the future bonus proposal discussed below.
If I understand correctly, what you are proposing here as a condition for considering renewal after 1 year of work is that the DAO approves the performance bonus of 1.5M ARB?
Without delving into the exact numbers, it seems you are asking for high salaries in exchange for exclusivity (which seems reasonable), but you do not offer straightforward conditions for the DAO to retain you. Or at least a competitive option (such as being able to match another offer from another DAO).
I believe it is fair that if the DAO is paying for exclusivity, it should have assurances of renewal beyond the final decision on actual performance or the discrepancy between results and expected outcomes. In other words, it should have assurances of continuity regarding a significant investment that will grow a governance and relations team. Therefore, I think that the obligation of paying the bonus as an exclusive condition for renewal should be removed, and there should be a guaranteed minimum option for renewal by the DAO under the same terms that are ultimately approved.
I apologize if I misunderstood this point.
While the Entropy team scales, they will draw a reduced $100,000 per month and after crossing the threshold of 7 employees dedicated to Arbitrum, will start receiving regular monthly payments ($2,791,000/12 = $232583) for the remainder of the 12 month term.
A total of 6 million ARB will be sent to the Foundation, for them to monetize at their discretion to secure at least $2,791,000. 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.
Out of curiosity, why this system instead of the multisig that you promoted?
What deficiencies do you find in the multisig model that led you not to choose it for this proposal?
Thank you very much for everything you have done so far for the DAO, and hopefully you will continue contributing because you are an excellent team
Thank you @Arb4Ever for the thoughtful comments, many of which concern tightly breaking down future deliverables and developments. These are most certainly valid when it comes to scaling a traditional, early-stage company that works towards objectives defined by its leadership team. These objectives are naturally well-defined and don’t change in a short time frame. We have avoided a tight breakdown because our main goal is to serve the DAO’s needs, which are volatile and non-predictable even in the near term. By hammering down the exact outputs and the associated KPIs etc. at this stage on, e.g., a quarter-by-quarter basis, we are more than likely to create a structure that incentivizes us to work on deliverables that aren’t relevant to what the DAO requires in the future. The core idea of Entropy is that we are agile and work in the open, meaning that at the end of the day, our exact deliverables and associated success should be decided by the DAO.
When it comes to the core fee structure and salary sizes, we have been actively analyzing the labor market, and to say things are competitive is an understatement. Good talent has options across VCs, research shops, leading CEXs, etc., all of which pay, at minimum, $100-150K and generous equity packages/carried interest. Considering we are and would be exclusive with Arbitrum, this does limit our upside in terms of equity valuation/growth. In addition, we are starting a business in a public setting for the whole world to view our finances. An example scenario for a potential hire: take $125K and an equity allocation at a top-tier research shop, or join Entropy for $125K + equity, exclusively working with one customer in the open at a company with a runway of 1 year and the possibility for the DAO to clawback funds at any moment. This example should put things into perspective, and we expect that we will have to pay accordingly in order to have a chance at these hires. Additionally, as mentioned in our proposal, it costs employers much more to pay people after health benefits, etc., and if you add in office and related expenses employees with extensive experience should be assumed to require at minimum, the amount of capital needed to scale a team expands extremely fast. We do, however, feel that talent is more likely to join us and contribute to Arbitrum full-time because we can offer these benefits and steady fiat-denominated salaries versus purely getting paid in ARB on a contract basis.
We have been contributing to Arbitrum full-time under the Entropy Advisors brand since late April, and we’ve constantly been in a situation where there is more demand than we currently have the capacity to service. As such, we have hiring needs that we would need to begin fulfilling today to fully meet that demand. However, based on our experience in recruiting personnel, we know that this will take time since finding the right fit, especially for the positions we are recruiting for, is a time-intensive process. We are putting our reputation on the line here, and hiring for the sake of hiring is not an option. The cost structure of $100K per month until we scale to 7 FTEs is based on delegate feedback, and the idea is to create a clear ceiling on our costs while we continue showcasing our value and gradually increase FTEs. We’ve also added quarterly transparency reports to the proposal through which it will be easy to infer if we are utilizing funds with bad intent.
One of Entropy’s strengths is that our team has vast experience in operations and scaling teams, both in a DAO setting as well as connected to more traditional companies. Blockworks Research has become a leading research brand in the crypto space, with Sam as the first employee and Matt as his first hire. Sam hired/scaled the team to over 10 people, managed day-to-day operations, and worked with the engineering team for the MVP SaaS-based product launch back in 2022. (Here are multiple testaments from the Blockworks co-founders, Mike and Jason). Matt, on the other hand, took the initiative to launch and lead the governance services arm at Blockworks Research, which actually led to the establishment of the ARDC that the DAO leverages on a daily basis. Pruitt, Entropy’s first hire, co-founded 404 DAO while in college, which displays ambition much higher than even an above-average college grad. Brick, Entropy’s most recent hire, in addition to having worked as a research/governance analyst leading Blockwork Research’s governance efforts within Arbitrum as well as the ARDC engagement, has several years of experience in TradFi within investment banking and venture capital, having specialized in corporate and financial structures.
As shown by our work within the Arbitrum ecosystem, we are acting as a mesh layer that operates in the open, which is something we will continue to do moving forward—functioning as an extension of the DAO. In no way are we forcing ourselves into a central position that creates dependencies that would prevent the DAO from functioning as it has until now if we were removed. To be clear, we are not striving to implement ourselves in, e.g., any roles comparable to back-office functions in TradFi. At any point in the future, the DAO has the ability to terminate our contract and clawback funds. Although we recognize that this isn’t a frictionless process, Entropy is always working in the open and under the direct supervision of another party, be that the DAO or possibly the OpCo in the future, meaning that it’ll be clear if our services aren’t providing value. Naturally, if we are doing a good job there will be some dependency as is the case with any service provider that is performing well. In a hypothetical scenario where Entropy’s contract is terminated even while being a value-add to the DAO, operational efficiency would decrease. You also brought up transition/unwind terms. To our knowledge, these haven’t been utilized in any prior engagements between a service provider and the DAO. We actually think it might make sense to begin incorporating these across all relevant engagements and are happy to amend our proposal accordingly if delegates find it sensible.
For the rest of the points you brought up, we feel as though these are covered by the changes we recently made to the proposal:
We are hopeful to move to Snapshot on Thursday.
[quote=“Meera, post:16, topic:25246, full:true”] Thanks for the detailed proposal. IMO, the action points listed in here have an overlap with the ARDC and ADPC. Can you detail a plan to avoid conflicts or inefficiencies? Also it would be great to see the KPI for success indicators to understand the structure, goals and quantitative and qualitative KPI [/quote] You can find the answers to these questions in our first comment above. Please let us know if any further clarification would be helpful. We further expand on the KPI point in our response to @pedrob below.
In this regard, how is the issue of resignations from your current team handled regarding exclusivity? Given the project’s youth, current confidence in Entropy comes from its members rather than the other way around.
How do you envision the DAO managing a “full-time” commitment without defined objectives or KPIs? How could control or oversight of the progress be exercised?
All of Entropy’s employees will be required to contribute full-time to our company and thus by extension to the Arbitrum DAO. For the 3 current members, no outside freelance work will be allowed. That said, it is possible we onboard an employee in the future who has an existing part-time commitment to another DAO. As long as it does not conflict or decrease the employee’s ability to serve the Arbitrum DAO, we view that as ok. For example, if someone sits on the Uniswap accountability committee or a small commitment of that nature before joining the team, as long as they are able to dedicate full-time to Entropy’s workload without conflicts, we would still be ok with considering them for a role. Please do let us know if you disagree with this view.
We would be happy to add a “key man clause” in our agreement with the foundation. This would stipulate that if either Matthew Fiebach or Sam Martin left the team, the Foundation can renegotiate the deal as it sees fit or consider the whole agreement null and void. We’ve defined some high-level metrics that we think paint a picture of what success after a one-year engagement might look like. These metrics can be found in our earlier comment here. Having said that, we anticipate our work to be highly reactive, and implementing strict KPIs on ourselves at this point might lead to a situation in the future where we are incentivized to prioritize work that helps us meet our KPIs but isn’t extremely relevant to the DAO’s needs.
The reason we opted for the foundation as our counterparty is for legal reasons related to exclusivity. With the foundation paying us, they have given us due consideration, which allows them to enforce exclusivity more easily than if we had utilized another structure. This is the only mechanism we can enact to make it legally binding. Regarding OpCo, this statement was added so that if and when OpCo is stood up, we can fall under its purview and oversight. The point here is that when it is stood up, we will fall in line with the DAO’s org structure wishes, and not consider ourselves outside of OpCo’s influence.
We have changed the bonus structure and believe it should now be in-line with your comment.
The high budget of $2.791M and additional potential bonuses raise concerns about cost-effectiveness and necessity. The lack of clear metrics for success and detailed accountability mechanisms makes it challenging to fully endorse the significant financial commitment required. :man_shrugging:
I agree with most of what @Pepperoni_Jo3 has written. I'm also concerned that the plan is to hire 10 people. I'd much rather see smaller teams which allocate funds to community applicants to do jobs rather than larger teams growing to do the work themselves. I believe that is the intention here, but jumping to a 10 person team immediately is quite aggressive.
One other suggestion is that the bonus should use a different mechanism. We have no clue how much ARB will be at decision time.
I agree with most of what @Pepperoni_Jo3 has written. I'm also concerned that the plan is to hire 10 people. I'd much rather see smaller teams which allocate funds to community applicants to do jobs rather than larger teams growing to do the work themselves. I believe that is the intention here, but jumping to a 10 person team immediately is quite aggressive.
One other suggestion is that the bonus should use a different mechanism. We have no clue how much ARB will be at decision time.
I am supportive of this directionally. Looking forward to seeing the process make this proposal a key advancement for Arbitrum overall.
Thanks for the proposal!
While I agree with several points, I have a few questions regarding the whole scope:
Why do not go for an extension/renewal of the current grant and focus on delivering the current discussions you guys are involved with?
Thanks for the proposal!
While I agree with several points, I have a few questions regarding the whole scope:
Why do not go for an extension/renewal of the current grant and focus on delivering the current discussions you guys are involved with?
You guys mentioned hiring other contributors to tackle different areas and named a few (marketing, governance, etc). Can you be more specific on what do you plan to achieve?
IMO, the action points listed in here have an overlap with the ARDC and ADPC. Can you detail a plan to avoid conflicts or inefficiencies?
Thanks!
With the updates and clarifications made, I am in support of this proposal. Although the budget is quite high and I'm not entirely sold on the 10 employees, Arbitrum DAO has scaled a lot in the past few months so I wouldn't be surprised to see the team scale that fast.
The entropy team has provided a lot of value in the short amount of time and I am excited to see what they do next
I have many many questions about your proposal, despite the fact that it is quite detailed
Totally agree with you @cp0x
Note: this answer encompasses only my personal opinion, and does not represent the opinions of any protocol or entity that I might be part of, partner with or contribute in any form. Remember, I’m just a cow.
This proposal is interesting, bold, and strategically well placed timing wise. I won't go in the specificity of numbers, I still need to reflect on them. What I want to discuss is the overall idea.
Note: this answer encompasses only my personal opinion, and does not represent the opinions of any protocol or entity that I might be part of, partner with or contribute in any form. Remember, I’m just a cow.
This proposal is interesting, bold, and strategically well placed timing wise. I won't go in the specificity of numbers, I still need to reflect on them. What I want to discuss is the overall idea.
We have a group of people (@MattOnChain, @swmartin and @Pruitt) that want to create a Service Provide, exclusive for the Arbitrum DAO. This group, so far, has lead meaningful initiatives and discussions such as the multisig for the dao, the base fee of the chain and others. It is, so far, composed by highly skilled people (blockworks, 404dao) and we can expect to maintain the same quality of new hire over time. Above all, they are all hungry as fudge.
I did find myself discussing this evening the proposal with a dear friend, with very polarized and different opinions. The discussion has helped me clear my mind on the value of the proposal from a qualitative standpoint.
The above are just general considerations. The bulk of the discussion with my friend was about: is this a good idea? Is this a timely idea? Is this idea a costly one?
Taking for a bit off my delegate's hat, and putting on the one of one of the thousands arbitrum builders, I think is an imperfect and nonetheless potentially good idea, with a very good timing.
The dao is now more or less 15 months old. Some say we are a few months away to the peak of this cycle, some say we will respect the cyclicaltiy and we have further 15 months for the peak. Whatever the reality is, I don't think we have, as a DAO, too much time to plant the needed seeds to sustain properly what happens next. We need to start acting now on specific initiatives. Don't get me wrong, I think that as a collective we were able to spin up also something good over time; and some of what was done will show fruits in the years to come. But we also need a new force
This is how I currently see Entropy. A potential solution, probably a non perfect one, to some of the gaps we have as a DAO, but for sure a different solution to what we have so far iterated upon, and hopefully, totally personal opinion here, a good one. A solution that comes at the right time, a time in which we need to consolidate as a DAO and a time in which we need to be able to both properly discuss and address topics that, so far, have been put on the table (revenue, nature of our incentive programs, staking, spending), with either not enonugh followups or not enough reach in the DAO. Top of my mind, the complex, politically dangerous topics, that only a few folks like L2beat for example have so far discussed in a more robust way.
This is what I would expect from entropy: if approved, take the lead, and the heat, of the controversial topics on top of which we need to find an informed consensus and decide upon as a community.
While I am not sure if they will be able to make it cause i have no crystal ball, I think they have the ability to pull it off.
(and sorry if part of this rant is incoherent with the proposal above, will take the time to re-read it when I have a bit more time).
Could you please specify what the KPIs will be for this proposal?
Could you please specify what the KPIs will be for this proposal?
Could you please specify what the KPIs will be for this proposal?
We will be full-time Arbitrum DAO and our work may be dynamic based on the DAO’s changing goals. That said, we appreciate this call out, and think it is important to paint a picture of what Entropy’s success will look like:
We will remain flexible in where our work is directed to ensure that it is going toward the most value-added initiatives aligned with Arbitrum DAO’s goals, regardless of what those might be over the next year.
This proposal is interesting, bold, and strategically well placed timing wise. I won’t go in the specificity of numbers, I still need to reflect on them. What I want to discuss is the overall idea.
Why do you think that you need 10 employees, although at the first stage you were content with your team of 3 people?
Why do you think your employees will all be venture analysts? Judging by the past work with proposals, they concerned far from spectacular investments.
Despite justifying the employees’ salaries, you still did not indicate the exact salary.
You say that we are in the midst of a bull market. Firstly, this is a controversial statement given the fall of most alttokens. In addition, you are planning your campaign for a year when there will definitely not be a bull market.
Unforeseen expenses for office work are too much, especially at this rate of $465k.
Judging by your portfolio, only one of your proposals has now been accepted, which could potentially save DAO up to $400k. And for your services you want to receive almost $2.8 million. It turns out that DAO will be at a disadvantage from such a proposal.
At the end of the year, the DAO will not be able to understand whether you have done enough for the Arbitrum or not. No clear KPIs
Although we were bootstrapped with a grant from the foundation, we did not have the ability to hire beyond 3 employees to maintain runway given the size of the grant. Notably, we likely have another employee starting soon. We believe that we would have been able to linearly scale our initiatives and success with more talent on our team. Arbitrum DAO is exploring 10s of verticals and has already spent ~435M ARB. That is all to say there is an extremely large surface area of initiatives to cover and areas to explore that drive value to the DAO and protocol. In the initial grant proposal for the foundation, we outlined our plan to use the first few months to operate with a bare minimum team, nail down our place within the ecosystem, prove ourselves, and then go to the DAO for further funding and expansion.
We will need to offer top talent competitive salaries that enable them to choose full-time Arbitrum DAO work through Entropy in place of offers from places like VCs, protocols, research firms, and other governance firms. The Delphi report was presented simply as a comparison and is also supported by other compensation surveys. For example, Pantera’s 2023 compensation report found the following median salaries for mid-career hires: marketing (120k), finance & accounting (142k), BD (149k), and operations (101k).
We can't define the role : salary exactly given the negotiation power we'd then lose. For example, if we define marketing: $150k, but are able to acquire an exceptional individual for $75K, now we can hire an additional employee. Defining it here makes us beholden to it as potential employees could use that in negotiations. Additionally, salaries for the same role can vary greatly depending on the quality of the candidate.
When scaling a company, it is impossible to fully predict every expense. While it may seem large, this is a margin that allows our team to remain flexible and appropriately respond to not only unforeseen expenditures but also any potential changes to the DAO’s priorities.
While we await Chaos Lab’s research on our proposed minimum fee increase, we are confident that if passed this proposal alone would bring the DAO an additional $5-15m per year. This is in addition to other efforts that drive value to Arbitrum such as onboarding partners, assisting treasury managers to get their proposals to a place they feel comfortable posting them to begin earning yield on the treasury ASAP, and research reports that help provide the DAO insight into problems. It is worth noting we have only been operating for ~3 months, and for the majority of that time only having 2 employees. Without extrapolating, we are confident that the total value driven to the DAO will far exceed $3m with a larger team and 12 months.
Please see our response to @Englandzz_Curia above for detailed KPIs.
You guys mentioned hiring other contributors to tackle different areas and named a few (marketing, governance, etc). Can you be more specific on what do you plan to achieve?
IMO, the action points listed in here have an overlap with the ARDC and ADPC. Can you detail a plan to avoid conflicts or inefficiencies?
Thank you so much for the extremely thoughtful comment @Pepperoni_Jo3. Thanks for the thoughts as well @DisruptionJoe. We really appreciate the overall support and are happy to iterate this proposal to make it stronger. We will adjust and respond accordingly over the next 24 hours.
I have worked closely with Entropy Advisors both in my capacity as Treasure Delegate and on the MSS Proposal's design. Additionally, I was invited to review this proposal before its publication. The recommendations echo some of my positions and add further reflections based on a second review of the proposal review. Please note that these comments represent my personal perspective and do not necessarily reflect the views of Treasure’s ARC.
I have worked closely with Entropy Advisors both in my capacity as Treasure Delegate and on the MSS Proposal's design. Additionally, I was invited to review this proposal before its publication. The recommendations echo some of my positions and add further reflections based on a second review of the proposal review. Please note that these comments represent my personal perspective and do not necessarily reflect the views of Treasure’s ARC.
Right now, I believe the DAO is floundering. An organisation with ~$2.5 billion in its Treasury is kept afloat largely by a group of part-time individuals. These are typically either:
The delegates and service providers are trying their best. However, they are fighting a losing battle against a tidal wave of things to do. We need change urgently.
The DAO lacks the organisational infrastructure needed to stay ahead of the competition and ensure this world-class technology stack gets the success it deserves. We have Delegates and Programs, but we lack the full-time senior leaders and established teams required to turn the DAO into an engine that can MOVE.
Our current model has led to:
Arbitrum needs to take a breath and consider the long-term organisational structure it wants to adopt, or it risks being left behind.
This should be a holistic process, and I would urge caution in resisting the temptation to make incremental quick fixes. For example, the introduction of oversight committees may provide a partial fix. However, it does not address the fundamental problem of a lack of unified vision for the structure of the organisation we want this DAO to be.
Sam and Matt are among the most intelligent, diligent, and knowledgeable individuals I have ever worked with. More than that, they truly care about making Arbitrum a success.
I see Entropy as the tip of the Spear for Arbitrum—a team dedicated to driving progress forward and turning the DAO into an organization that can execute.
They have the capability, respect and network needed to progress important conversations and make our vision for a future DAO structure a reality. They want to do this work, and the six core focus areas highlighted (effectively: Project Management, Governance, Change management, Communication, Procurement and People) represent the essential ingredients needed to conduct the large-scale change program I believe this DAO needs.
Directionally, I am 100% in support of the Entropy team.
However, it is worth recognising some inherent challenges with a proposal of this nature.
However, details matter. For this reason, I would recommend the following commercial adjustments:
Despite some commercial reservations, this proposal's transformative potential for the DAO is undeniable. I trust the Entropy team and am eager to see them continue their relentless efforts to help Arbitrum win.
I second Bobbay. My personal reserve is still not on the 10 employee (i prefer to have a budget that is a bit higher compared to what is effectively reached, we don't want to hinder growth), but on the bonus. This is not due to the number per se but cause of the good ol kpis. BUT...
I want to also add: after meeting them at ETHcc, i definitely think they are currently filling a leadership gap that we objectively have in our DAO. This would already be a reason to be in general in favour; if we add to this the quality of the work they have so far provided, I can just say that they have my full support.
And, for people questioning about salary, please take in account that whoever works in entropy works in an environment that is crypto (so, quite risky in term of stability), with a service provider working exclusively on a single customer which is our dao (so concentration risk), with a mandate for just 1 year (quite of a short time horizon), with the ability of funds being clawed back by the dao (imagine that the day before you get your salary, treasury is gone). So, yes, whoever will work in entropy will ask for a premium compared to market rate, and rightfully so. I would for example.
Bullish on Matt, Sam, Pruitt, Brick, and whoever is gonna join this team.
Based on feedback sent to us in private, we have made two updates to our proposal. First, we have further defined our short-term goals and current initiatives:
We are committed to defining clear goals for the coming weeks and months, while also encouraging collaboration with other contributors. Our proposed initiatives include, but are not limited to:
Additionally before going to Tally, we are committed to creating a structured format to enable the DAO to directly and openly provide input into the work we are facilitating. This will allow the DAO to practically help drive our direction and objectives through timely feedback.
Hello!
First of all, like many who have contributed to the discussion, I want to acknowledge the great team at @Entropy and express my alignment with the direction of the proposal. I think some interesting viewpoints have been shared, although one aspect that I haven't seen many questions or discussions about is the concept of exclusivity that the proposal suggests.
Clearly, the way the proposal is presented, exclusivity is a key element and part of what is priced into the values being requested.
Initially, with loosely defined KPIs as in this proposal (not something bad, I think it’s good to have a team available to meet the DAO's needs, rather than someone committing to X when the need is Y), exclusivity makes sense as the DAO would be paying for exclusive working hours rather than for specific projects that wouldn't require an exclusivity agreement to execute.
However, looking ahead, I believe this model, especially for attracting more interest in working "exclusively" for the DAO in the future, requires clarity in its terms and conditions.
Here are some questions that arise for me:
Does Entropy's commitment to exclusivity extend to its members? In other words, could any of the current 3 members (or any future members) freelance for other DAOs?
In this regard, how is the issue of resignations from your current team handled regarding exclusivity? Given the project's youth, current confidence in Entropy comes from its members rather than the other way around.
How do you envision the DAO managing a "full-time" commitment without defined objectives or KPIs? How could control or oversight of the progress be exercised?
I hope these questions contribute to the discussion on clarifying the terms around exclusivity in the proposal (and for future ones).
Our proposal includes an agreement with the Arbitrum Foundation so that if the OpCo is stood up in the next year, we can easily port our agreement to fall under its purview instead of the Foundation.
I don't understand this. What agreements are currently in place with the foundation that impact the proposed obligations ? And why is that agreement with the foundation necessary if ultimately the OpCo depends on the DAO?
The DAO will be able to retain a second year of Entropy’s services under the same terms stipulated in this proposal, if it desires to do so. For this second-year engagement clause to be executed in the future, the DAO will also need to vote in favor of the future bonus proposal discussed below.
If I understand correctly, what you are proposing here as a condition for considering renewal after 1 year of work is that the DAO approves the performance bonus of 1.5M ARB?
Without delving into the exact numbers, it seems you are asking for high salaries in exchange for exclusivity (which seems reasonable), but you do not offer straightforward conditions for the DAO to retain you. Or at least a competitive option (such as being able to match another offer from another DAO).
I believe it is fair that if the DAO is paying for exclusivity, it should have assurances of renewal beyond the final decision on actual performance or the discrepancy between results and expected outcomes. In other words, it should have assurances of continuity regarding a significant investment that will grow a governance and relations team. Therefore, I think that the obligation of paying the bonus as an exclusive condition for renewal should be removed, and there should be a guaranteed minimum option for renewal by the DAO under the same terms that are ultimately approved.
I apologize if I misunderstood this point.
While the Entropy team scales, they will draw a reduced $100,000 per month and after crossing the threshold of 7 employees dedicated to Arbitrum, will start receiving regular monthly payments ($2,791,000/12 = $232583) for the remainder of the 12 month term.
A total of 6 million ARB will be sent to the Foundation, for them to monetize at their discretion to secure at least $2,791,000. 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.
Out of curiosity, why this system instead of the multisig that you promoted?
What deficiencies do you find in the multisig model that led you not to choose it for this proposal?
Thank you very much for everything you have done so far for the DAO, and hopefully you will continue contributing because you are an excellent team
Thank you @Arb4Ever for the thoughtful comments, many of which concern tightly breaking down future deliverables and developments. These are most certainly valid when it comes to scaling a traditional, early-stage company that works towards objectives defined by its leadership team. These objectives are naturally well-defined and don’t change in a short time frame. We have avoided a tight breakdown because our main goal is to serve the DAO’s needs, which are volatile and non-predictable even in the near term. By hammering down the exact outputs and the associated KPIs etc. at this stage on, e.g., a quarter-by-quarter basis, we are more than likely to create a structure that incentivizes us to work on deliverables that aren’t relevant to what the DAO requires in the future. The core idea of Entropy is that we are agile and work in the open, meaning that at the end of the day, our exact deliverables and associated success should be decided by the DAO.
When it comes to the core fee structure and salary sizes, we have been actively analyzing the labor market, and to say things are competitive is an understatement. Good talent has options across VCs, research shops, leading CEXs, etc., all of which pay, at minimum, $100-150K and generous equity packages/carried interest. Considering we are and would be exclusive with Arbitrum, this does limit our upside in terms of equity valuation/growth. In addition, we are starting a business in a public setting for the whole world to view our finances. An example scenario for a potential hire: take $125K and an equity allocation at a top-tier research shop, or join Entropy for $125K + equity, exclusively working with one customer in the open at a company with a runway of 1 year and the possibility for the DAO to clawback funds at any moment. This example should put things into perspective, and we expect that we will have to pay accordingly in order to have a chance at these hires. Additionally, as mentioned in our proposal, it costs employers much more to pay people after health benefits, etc., and if you add in office and related expenses employees with extensive experience should be assumed to require at minimum, the amount of capital needed to scale a team expands extremely fast. We do, however, feel that talent is more likely to join us and contribute to Arbitrum full-time because we can offer these benefits and steady fiat-denominated salaries versus purely getting paid in ARB on a contract basis.
We have been contributing to Arbitrum full-time under the Entropy Advisors brand since late April, and we’ve constantly been in a situation where there is more demand than we currently have the capacity to service. As such, we have hiring needs that we would need to begin fulfilling today to fully meet that demand. However, based on our experience in recruiting personnel, we know that this will take time since finding the right fit, especially for the positions we are recruiting for, is a time-intensive process. We are putting our reputation on the line here, and hiring for the sake of hiring is not an option. The cost structure of $100K per month until we scale to 7 FTEs is based on delegate feedback, and the idea is to create a clear ceiling on our costs while we continue showcasing our value and gradually increase FTEs. We’ve also added quarterly transparency reports to the proposal through which it will be easy to infer if we are utilizing funds with bad intent.
One of Entropy’s strengths is that our team has vast experience in operations and scaling teams, both in a DAO setting as well as connected to more traditional companies. Blockworks Research has become a leading research brand in the crypto space, with Sam as the first employee and Matt as his first hire. Sam hired/scaled the team to over 10 people, managed day-to-day operations, and worked with the engineering team for the MVP SaaS-based product launch back in 2022. (Here are multiple testaments from the Blockworks co-founders, Mike and Jason). Matt, on the other hand, took the initiative to launch and lead the governance services arm at Blockworks Research, which actually led to the establishment of the ARDC that the DAO leverages on a daily basis. Pruitt, Entropy’s first hire, co-founded 404 DAO while in college, which displays ambition much higher than even an above-average college grad. Brick, Entropy’s most recent hire, in addition to having worked as a research/governance analyst leading Blockwork Research’s governance efforts within Arbitrum as well as the ARDC engagement, has several years of experience in TradFi within investment banking and venture capital, having specialized in corporate and financial structures.
As shown by our work within the Arbitrum ecosystem, we are acting as a mesh layer that operates in the open, which is something we will continue to do moving forward—functioning as an extension of the DAO. In no way are we forcing ourselves into a central position that creates dependencies that would prevent the DAO from functioning as it has until now if we were removed. To be clear, we are not striving to implement ourselves in, e.g., any roles comparable to back-office functions in TradFi. At any point in the future, the DAO has the ability to terminate our contract and clawback funds. Although we recognize that this isn’t a frictionless process, Entropy is always working in the open and under the direct supervision of another party, be that the DAO or possibly the OpCo in the future, meaning that it’ll be clear if our services aren’t providing value. Naturally, if we are doing a good job there will be some dependency as is the case with any service provider that is performing well. In a hypothetical scenario where Entropy’s contract is terminated even while being a value-add to the DAO, operational efficiency would decrease. You also brought up transition/unwind terms. To our knowledge, these haven’t been utilized in any prior engagements between a service provider and the DAO. We actually think it might make sense to begin incorporating these across all relevant engagements and are happy to amend our proposal accordingly if delegates find it sensible.
For the rest of the points you brought up, we feel as though these are covered by the changes we recently made to the proposal:
We are hopeful to move to Snapshot on Thursday.
[quote=“Meera, post:16, topic:25246, full:true”] Thanks for the detailed proposal. IMO, the action points listed in here have an overlap with the ARDC and ADPC. Can you detail a plan to avoid conflicts or inefficiencies? Also it would be great to see the KPI for success indicators to understand the structure, goals and quantitative and qualitative KPI [/quote] You can find the answers to these questions in our first comment above. Please let us know if any further clarification would be helpful. We further expand on the KPI point in our response to @pedrob below.
In this regard, how is the issue of resignations from your current team handled regarding exclusivity? Given the project’s youth, current confidence in Entropy comes from its members rather than the other way around.
How do you envision the DAO managing a “full-time” commitment without defined objectives or KPIs? How could control or oversight of the progress be exercised?
All of Entropy’s employees will be required to contribute full-time to our company and thus by extension to the Arbitrum DAO. For the 3 current members, no outside freelance work will be allowed. That said, it is possible we onboard an employee in the future who has an existing part-time commitment to another DAO. As long as it does not conflict or decrease the employee’s ability to serve the Arbitrum DAO, we view that as ok. For example, if someone sits on the Uniswap accountability committee or a small commitment of that nature before joining the team, as long as they are able to dedicate full-time to Entropy’s workload without conflicts, we would still be ok with considering them for a role. Please do let us know if you disagree with this view.
We would be happy to add a “key man clause” in our agreement with the foundation. This would stipulate that if either Matthew Fiebach or Sam Martin left the team, the Foundation can renegotiate the deal as it sees fit or consider the whole agreement null and void. We’ve defined some high-level metrics that we think paint a picture of what success after a one-year engagement might look like. These metrics can be found in our earlier comment here. Having said that, we anticipate our work to be highly reactive, and implementing strict KPIs on ourselves at this point might lead to a situation in the future where we are incentivized to prioritize work that helps us meet our KPIs but isn’t extremely relevant to the DAO’s needs.
The reason we opted for the foundation as our counterparty is for legal reasons related to exclusivity. With the foundation paying us, they have given us due consideration, which allows them to enforce exclusivity more easily than if we had utilized another structure. This is the only mechanism we can enact to make it legally binding. Regarding OpCo, this statement was added so that if and when OpCo is stood up, we can fall under its purview and oversight. The point here is that when it is stood up, we will fall in line with the DAO’s org structure wishes, and not consider ourselves outside of OpCo’s influence.
We have changed the bonus structure and believe it should now be in-line with your comment.
The high budget of $2.791M and additional potential bonuses raise concerns about cost-effectiveness and necessity. The lack of clear metrics for success and detailed accountability mechanisms makes it challenging to fully endorse the significant financial commitment required. :man_shrugging:
I agree with most of what @Pepperoni_Jo3 has written. I'm also concerned that the plan is to hire 10 people. I'd much rather see smaller teams which allocate funds to community applicants to do jobs rather than larger teams growing to do the work themselves. I believe that is the intention here, but jumping to a 10 person team immediately is quite aggressive.
One other suggestion is that the bonus should use a different mechanism. We have no clue how much ARB will be at decision time.
I agree with most of what @Pepperoni_Jo3 has written. I'm also concerned that the plan is to hire 10 people. I'd much rather see smaller teams which allocate funds to community applicants to do jobs rather than larger teams growing to do the work themselves. I believe that is the intention here, but jumping to a 10 person team immediately is quite aggressive.
One other suggestion is that the bonus should use a different mechanism. We have no clue how much ARB will be at decision time.
I am supportive of this directionally. Looking forward to seeing the process make this proposal a key advancement for Arbitrum overall.
Thanks for the proposal!
While I agree with several points, I have a few questions regarding the whole scope:
Why do not go for an extension/renewal of the current grant and focus on delivering the current discussions you guys are involved with?
Thanks for the proposal!
While I agree with several points, I have a few questions regarding the whole scope:
Why do not go for an extension/renewal of the current grant and focus on delivering the current discussions you guys are involved with?
You guys mentioned hiring other contributors to tackle different areas and named a few (marketing, governance, etc). Can you be more specific on what do you plan to achieve?
IMO, the action points listed in here have an overlap with the ARDC and ADPC. Can you detail a plan to avoid conflicts or inefficiencies?
Thanks!
With the updates and clarifications made, I am in support of this proposal. Although the budget is quite high and I'm not entirely sold on the 10 employees, Arbitrum DAO has scaled a lot in the past few months so I wouldn't be surprised to see the team scale that fast.
The entropy team has provided a lot of value in the short amount of time and I am excited to see what they do next
I have many many questions about your proposal, despite the fact that it is quite detailed
Totally agree with you @cp0x
Note: this answer encompasses only my personal opinion, and does not represent the opinions of any protocol or entity that I might be part of, partner with or contribute in any form. Remember, I’m just a cow.
This proposal is interesting, bold, and strategically well placed timing wise. I won't go in the specificity of numbers, I still need to reflect on them. What I want to discuss is the overall idea.
Note: this answer encompasses only my personal opinion, and does not represent the opinions of any protocol or entity that I might be part of, partner with or contribute in any form. Remember, I’m just a cow.
This proposal is interesting, bold, and strategically well placed timing wise. I won't go in the specificity of numbers, I still need to reflect on them. What I want to discuss is the overall idea.
We have a group of people (@MattOnChain, @swmartin and @Pruitt) that want to create a Service Provide, exclusive for the Arbitrum DAO. This group, so far, has lead meaningful initiatives and discussions such as the multisig for the dao, the base fee of the chain and others. It is, so far, composed by highly skilled people (blockworks, 404dao) and we can expect to maintain the same quality of new hire over time. Above all, they are all hungry as fudge.
I did find myself discussing this evening the proposal with a dear friend, with very polarized and different opinions. The discussion has helped me clear my mind on the value of the proposal from a qualitative standpoint.
The above are just general considerations. The bulk of the discussion with my friend was about: is this a good idea? Is this a timely idea? Is this idea a costly one?
Taking for a bit off my delegate's hat, and putting on the one of one of the thousands arbitrum builders, I think is an imperfect and nonetheless potentially good idea, with a very good timing.
The dao is now more or less 15 months old. Some say we are a few months away to the peak of this cycle, some say we will respect the cyclicaltiy and we have further 15 months for the peak. Whatever the reality is, I don't think we have, as a DAO, too much time to plant the needed seeds to sustain properly what happens next. We need to start acting now on specific initiatives. Don't get me wrong, I think that as a collective we were able to spin up also something good over time; and some of what was done will show fruits in the years to come. But we also need a new force
This is how I currently see Entropy. A potential solution, probably a non perfect one, to some of the gaps we have as a DAO, but for sure a different solution to what we have so far iterated upon, and hopefully, totally personal opinion here, a good one. A solution that comes at the right time, a time in which we need to consolidate as a DAO and a time in which we need to be able to both properly discuss and address topics that, so far, have been put on the table (revenue, nature of our incentive programs, staking, spending), with either not enonugh followups or not enough reach in the DAO. Top of my mind, the complex, politically dangerous topics, that only a few folks like L2beat for example have so far discussed in a more robust way.
This is what I would expect from entropy: if approved, take the lead, and the heat, of the controversial topics on top of which we need to find an informed consensus and decide upon as a community.
While I am not sure if they will be able to make it cause i have no crystal ball, I think they have the ability to pull it off.
(and sorry if part of this rant is incoherent with the proposal above, will take the time to re-read it when I have a bit more time).
Could you please specify what the KPIs will be for this proposal?
Could you please specify what the KPIs will be for this proposal?
Could you please specify what the KPIs will be for this proposal?
We will be full-time Arbitrum DAO and our work may be dynamic based on the DAO’s changing goals. That said, we appreciate this call out, and think it is important to paint a picture of what Entropy’s success will look like:
We will remain flexible in where our work is directed to ensure that it is going toward the most value-added initiatives aligned with Arbitrum DAO’s goals, regardless of what those might be over the next year.
This proposal is interesting, bold, and strategically well placed timing wise. I won’t go in the specificity of numbers, I still need to reflect on them. What I want to discuss is the overall idea.
Why do you think that you need 10 employees, although at the first stage you were content with your team of 3 people?
Why do you think your employees will all be venture analysts? Judging by the past work with proposals, they concerned far from spectacular investments.
Despite justifying the employees’ salaries, you still did not indicate the exact salary.
You say that we are in the midst of a bull market. Firstly, this is a controversial statement given the fall of most alttokens. In addition, you are planning your campaign for a year when there will definitely not be a bull market.
Unforeseen expenses for office work are too much, especially at this rate of $465k.
Judging by your portfolio, only one of your proposals has now been accepted, which could potentially save DAO up to $400k. And for your services you want to receive almost $2.8 million. It turns out that DAO will be at a disadvantage from such a proposal.
At the end of the year, the DAO will not be able to understand whether you have done enough for the Arbitrum or not. No clear KPIs
Although we were bootstrapped with a grant from the foundation, we did not have the ability to hire beyond 3 employees to maintain runway given the size of the grant. Notably, we likely have another employee starting soon. We believe that we would have been able to linearly scale our initiatives and success with more talent on our team. Arbitrum DAO is exploring 10s of verticals and has already spent ~435M ARB. That is all to say there is an extremely large surface area of initiatives to cover and areas to explore that drive value to the DAO and protocol. In the initial grant proposal for the foundation, we outlined our plan to use the first few months to operate with a bare minimum team, nail down our place within the ecosystem, prove ourselves, and then go to the DAO for further funding and expansion.
We will need to offer top talent competitive salaries that enable them to choose full-time Arbitrum DAO work through Entropy in place of offers from places like VCs, protocols, research firms, and other governance firms. The Delphi report was presented simply as a comparison and is also supported by other compensation surveys. For example, Pantera’s 2023 compensation report found the following median salaries for mid-career hires: marketing (120k), finance & accounting (142k), BD (149k), and operations (101k).
We can't define the role : salary exactly given the negotiation power we'd then lose. For example, if we define marketing: $150k, but are able to acquire an exceptional individual for $75K, now we can hire an additional employee. Defining it here makes us beholden to it as potential employees could use that in negotiations. Additionally, salaries for the same role can vary greatly depending on the quality of the candidate.
When scaling a company, it is impossible to fully predict every expense. While it may seem large, this is a margin that allows our team to remain flexible and appropriately respond to not only unforeseen expenditures but also any potential changes to the DAO’s priorities.
While we await Chaos Lab’s research on our proposed minimum fee increase, we are confident that if passed this proposal alone would bring the DAO an additional $5-15m per year. This is in addition to other efforts that drive value to Arbitrum such as onboarding partners, assisting treasury managers to get their proposals to a place they feel comfortable posting them to begin earning yield on the treasury ASAP, and research reports that help provide the DAO insight into problems. It is worth noting we have only been operating for ~3 months, and for the majority of that time only having 2 employees. Without extrapolating, we are confident that the total value driven to the DAO will far exceed $3m with a larger team and 12 months.
Please see our response to @Englandzz_Curia above for detailed KPIs.
You guys mentioned hiring other contributors to tackle different areas and named a few (marketing, governance, etc). Can you be more specific on what do you plan to achieve?
IMO, the action points listed in here have an overlap with the ARDC and ADPC. Can you detail a plan to avoid conflicts or inefficiencies?
Thank you so much for the extremely thoughtful comment @Pepperoni_Jo3. Thanks for the thoughts as well @DisruptionJoe. We really appreciate the overall support and are happy to iterate this proposal to make it stronger. We will adjust and respond accordingly over the next 24 hours.
I have worked closely with Entropy Advisors both in my capacity as Treasure Delegate and on the MSS Proposal's design. Additionally, I was invited to review this proposal before its publication. The recommendations echo some of my positions and add further reflections based on a second review of the proposal review. Please note that these comments represent my personal perspective and do not necessarily reflect the views of Treasure’s ARC.
I have worked closely with Entropy Advisors both in my capacity as Treasure Delegate and on the MSS Proposal's design. Additionally, I was invited to review this proposal before its publication. The recommendations echo some of my positions and add further reflections based on a second review of the proposal review. Please note that these comments represent my personal perspective and do not necessarily reflect the views of Treasure’s ARC.
Right now, I believe the DAO is floundering. An organisation with ~$2.5 billion in its Treasury is kept afloat largely by a group of part-time individuals. These are typically either:
The delegates and service providers are trying their best. However, they are fighting a losing battle against a tidal wave of things to do. We need change urgently.
The DAO lacks the organisational infrastructure needed to stay ahead of the competition and ensure this world-class technology stack gets the success it deserves. We have Delegates and Programs, but we lack the full-time senior leaders and established teams required to turn the DAO into an engine that can MOVE.
Our current model has led to:
Arbitrum needs to take a breath and consider the long-term organisational structure it wants to adopt, or it risks being left behind.
This should be a holistic process, and I would urge caution in resisting the temptation to make incremental quick fixes. For example, the introduction of oversight committees may provide a partial fix. However, it does not address the fundamental problem of a lack of unified vision for the structure of the organisation we want this DAO to be.
Sam and Matt are among the most intelligent, diligent, and knowledgeable individuals I have ever worked with. More than that, they truly care about making Arbitrum a success.
I see Entropy as the tip of the Spear for Arbitrum—a team dedicated to driving progress forward and turning the DAO into an organization that can execute.
They have the capability, respect and network needed to progress important conversations and make our vision for a future DAO structure a reality. They want to do this work, and the six core focus areas highlighted (effectively: Project Management, Governance, Change management, Communication, Procurement and People) represent the essential ingredients needed to conduct the large-scale change program I believe this DAO needs.
Directionally, I am 100% in support of the Entropy team.
However, it is worth recognising some inherent challenges with a proposal of this nature.
However, details matter. For this reason, I would recommend the following commercial adjustments:
Despite some commercial reservations, this proposal's transformative potential for the DAO is undeniable. I trust the Entropy team and am eager to see them continue their relentless efforts to help Arbitrum win.
