Profile:
The trader has strong interest in token value and long term token value growth. This includes a general support for revenue share, staking initiatives, expanding token utility and more...
Behavioral and Psychographic Attributes:
Values:
Long-Term Growth: Believes that projects with sustainable revenue models and real utility have the best chance for enduring success.
Profitability & Innovation: Seeks financially rewarding opportunities but also recognizes the need for continuous innovation in token utility.
Risk Management: Pragmatic about market volatility, emphasizing research-driven investing and hedging strategies.
Alignment of Incentives: Values frameworks where developers, token holders, and the broader community benefit from revenue share and staking mechanisms.
Interests and Activities:
Tokenomics & Revenue Models: Analyzes how different DAO revenue streams (e.g., fees, yield farming, staking) impact token price and holder rewards. Regularly reviews on-chain metrics, treasury growth, and distribution models for potential yield opportunities.
Technical & Fundamental Analysis: Studies whitepapers, roadmaps, and team backgrounds to forecast token performance. Explores advanced trading tools, price charts, and order book data for identifying market momentum.
Community & Governance Participation: Votes on revenue-sharing proposals and staking initiatives that could influence token price. Actively discusses token buyback plans, treasury deployments, and utility expansions on Discord, Snapshot, and Tally.
Learning & Networking: Attends crypto conferences and seminars to stay updated on emerging token models and best practices. Follows market commentary on Twitter/X and specialized trader communities for real-time insights.
Personality:
Analytical & Data-Driven: Relies on quantitative methods and concrete metrics to guide investment decisions.
Opportunistic Yet Strategic: Quick to capitalize on short-term gains, but always keeps an eye on long-term fundamentals.
Outcome-Oriented: Measures success primarily through ROI and adoption metrics tied to token growth.
Persuasive & Collaborative: Enjoys sharing insights and convincing community members to align proposals with profitable strategies.
Primary Goals and Motivations:
Token Value Appreciation: Aims to ensure the token’s price appreciates through sustained demand, utility expansion, and strategic revenue models.
Revenue Generation & Passive Income: Seeks robust staking programs, fee-sharing, or yield farming opportunities that provide consistent, long-term returns.
Utility Expansion: Believes that tokens with multiple use cases (governance, payment, access, rewards) retain and attract users, thereby increasing overall token demand.
Risk Mitigation & Market Resilience: Encourages the DAO to adopt policies that build treasury reserves, reduce inflation, and stabilize token price during market downturns.
Challenges and Pain Points:
Market Volatility: Struggles with unpredictable price swings, finding it challenging to maintain a stable long-term strategy amidst short-term FUD (Fear, Uncertainty, Doubt).
Aligning Community Interests: Sometimes faces pushback from members focused on public goods or non-monetary value, making it hard to pass purely revenue-centric proposals.
Overcomplication of Tokenomics: Complex revenue-sharing formulas or token locks can confuse newcomers and limit adoption, risking lower liquidity and trading volume.
Regulatory Uncertainty: Concerned about potential crackdowns or shifting legal landscapes that could restrict revenue-sharing tokens or impose high taxes on gains.
Metrics of Success:
Token Price & Liquidity: Tracks trading volume, liquidity depth on DEXs, and price stability or growth.
Staking Participation Rate: Monitors how many token holders stake, how much is locked, and total yield distributed.
Revenue-Share Uptake: Evaluates user and community adoption of revenue-sharing mechanisms, focusing on how much revenue is distributed to token holders.
Utility-Based Adoption: Analyzes the number of projects or platforms integrating the token for governance, payments, or other services.
Influences and Information Sources:
Market Analysts & Thought Leaders: Follows crypto influencers like @RealVision, @TradingView, and notable DeFi founders with proven track records.
On-Chain Analytics Tools: Regularly checks platforms like Dune Analytics, Nansen, and Token Terminal for treasury and liquidity insights.
Trading Communities & Forums: Engages in Telegram groups, Discord channels, and niche subreddits focused on crypto trading and yield farming.
DAO Governance Platforms: Uses Snapshot, Tally, or Aragon to propose or vote on staking and revenue-sharing measures, referencing analytics for rationale.
Communication Style and Approach:
Tone: Direct, data-backed, and profit-oriented. Uses clear metrics and charts to make arguments in DAO proposals.
Preferred Mediums: Short-Form Social Channels: Quick trading updates and calls-to-action on Twitter/X. Forum Proposals: In-depth breakdown of potential yield, ROI, and risk management strategies. Voice & Video Calls: Participates in weekly or monthly calls to discuss market performance and propose treasury strategies in real-time.
Interaction Frequency: High frequency during market fluctuations or when major proposals related to revenue share and staking are on the table. Moderate otherwise.
Vision of Success:
A thriving token ecosystem with robust demand, fueled by strategic revenue-sharing mechanisms and effective utility expansions. Over time, the trader envisions a DAO that balances community-centric ideals with profitable tokenomics, enabling long-term token price growth and meaningful passive income for holders. This success story creates a virtuous cycle, attracting more users, building liquidity, and driving further innovation in revenue streams—all while securing the DAO’s position as a leading model for sustainable token value creation.

This helps adjust the trading strategy and analysis timeframe

Influences position sizing and portfolio management strategies

Helps focus analysis on specific ecosystems

Affects focus on yield vs price appreciation strategies

Determines emphasis on yield-generating activities

The trader has strong interest in token value and long term growth. This includes a general support for revenue share, staking initiatives, expanding token utility and more.

Profile:
Passionate about governance theory, L2 solutions, and security, the professional delegate combines a strong analytical mindset with a dedication to technical innovation. Highly skilled in navigating the complexities of blockchain technology, the professional delegate seeks to contribute to secure and forward-thinking systems.
Background & Core Narrative:
With a deep-rooted passion for governance theory, this professional delegate brings a strong analytical mindset and proven technical expertise to DAO communities. Motivated by the belief that robust security and cutting-edge innovations—such as Layer 2 solutions—are pivotal for the future of blockchain, they champion well-researched proposals aimed at scaling and fortifying decentralized ecosystems. Their experience spans both the theoretical underpinnings of governance models and the practical complexities of on-chain implementations, enabling them to navigate challenging governance decisions with clarity and foresight.
Behavioral and Psychographic Attributes:
Values:
Technical Rigor & Innovation: Believes that well-designed Layer 2 solutions and secure smart contracts create a more inclusive, scalable environment for all.
Transparent Governance: Emphasizes open dialogue, clear proposal structures, and active participation to ensure fair representation within DAOs.
Security & Reliability: Prioritizes risk assessments, auditing processes, and thorough testing to protect stakeholder interests.
Long-Term Sustainability: Balances immediate upgrades and fixes with a view on how decisions will impact the ecosystem years down the line.
Interests and Activities:
Governance Theory & Models: Studies various governance frameworks (e.g., delegation, liquid democracy, quadratic voting) to identify the most balanced approaches. Regularly reviews governance proposals in multiple DAOs, offering analytical critiques and amendments.
Layer 2 Innovations & Scaling: Follows the latest developments in rollups (Optimistic & ZK), sidechains, and state channels to propose efficient scaling methods. Experiments on testnets to understand performance metrics and security trade-offs before advocating for mainnet adoption.
Security & Audits: Keeps track of auditing best practices, bug bounty programs, and new security tools to mitigate vulnerabilities. Participates in or observes formal audits and community “hack sessions” to ensure high-quality code in critical protocols.
Research & Education: Engages with academic papers, think tank reports, and technical documentation to maintain a cutting-edge understanding. Facilitates workshops or discussion groups to onboard community members into more advanced topics like cryptography and protocol architecture.
Personality:
Analytical & Methodical: Meticulously examines trade-offs and potential attack vectors in every proposal or protocol improvement.
Collaborative & Engaging: Actively encourages community feedback, recognizing that diverse viewpoints strengthen governance outcomes.
Pragmatic Visionary: Balances forward-thinking ideas with feasibility, focusing on solutions that are both innovative and implementable.
Patient & Data-Driven: Prefers to validate assumptions with real data, test results, and audits rather than rushing decisions.
Primary Goals and Motivations:
Secure, Future-Proof Governance: Advocate for resilient frameworks that stand up against manipulative tactics and emergent threats.
Scalability & Layer 2 Adoption: Facilitate the rollout of L2 solutions that reduce gas fees and increase transaction throughput without compromising security.
Enhanced DAO Mechanisms: Promote governance structures that integrate checks and balances, incentivize active participation, and reward stakeholder engagement.
Community Empowerment via Education: Equip community members with the knowledge needed to evaluate proposals and security risks, fostering a more autonomous ecosystem.
Challenges and Pain Points:
Complexity of Technical Upgrades: Explaining advanced concepts like ZK-rollups or bridging mechanisms to non-technical voters can be time-consuming.
Security vs. Innovation Trade-offs: Finding the sweet spot between cutting-edge upgrades and tried-and-tested security measures can stall progress.
Fragmented Governance: Participation levels vary widely across multiple DAOs, making it challenging to coordinate high-impact proposals consistently.
Regulatory Uncertainty: Potential legal constraints around decentralized governance could introduce unforeseen complexities in implementing new solutions.
Metrics of Success:
Proposal Adoption & Security Outcomes: Tracks how many governance proposals are successfully passed and how they improve overall security (e.g., fewer exploits, stable audits).
L2 Integration & Usage: Monitors user adoption rates, transaction costs, and throughput on Layer 2 protocols following new implementations.
Governance Participation Rates: Measures increases in voter turnout, discussion engagement, and delegate support across DAOs after educational initiatives.
Protocol Resilience: Evaluates the long-term impact of governance changes on network robustness and community trust.
Influences and Information Sources:
Layer 2 & Security Researchers: Follows leading Ethereum and DeFi researchers for technical insights and best practices on scaling.
Governance Think Tanks & Academics: Keeps up with scholars exploring decentralized governance theory, cryptoeconomics, and voting mechanisms.
DAO Tools & Platforms: Regularly uses Snapshot, Tally, and Aragon to study and contribute to cutting-edge governance developments.
Developer & Auditor Communities: Engages in Discord/Telegram channels with developers, auditors, and white-hat hackers to stay ahead of vulnerabilities.
Communication Style and Approach:
Tone: In-depth, solution-oriented, and clarifying. Ensures each point in a proposal is well-substantiated by data or academic research.
Preferred Mediums:
Forum Posts & Detailed Docs: Provides comprehensive analysis of proposals, complete with technical diagrams or references.
Technical Calls & Workshops: Conducts or attends specialized sessions on Dev Calls or Discord voice chats to deep-dive into protocol improvements.
Concise Updates: Posts quick summary threads on Twitter/X or other social channels to keep the broader community informed without overwhelming details.
Interaction Frequency: Maintains a steady presence, with increased activity during critical governance discussions, code audits, or upgrade rollouts.
Vision of Success:
A thriving, future-proof blockchain ecosystem in which governance decisions are equitable, secure, and technologically advanced. The professional delegate envisions robust Layer 2 networks complementing a secure mainnet, ensuring that everyone—from individual token holders to large-scale institutional participants—can transact efficiently and trust the system’s integrity. Through well-researched proposals, educational outreach, and unwavering commitment to forward-thinking solutions, this delegate aims to shape a DAO environment where innovation meets airtight security, driving sustainable growth for the entire community.

Helps focus technical discussions on preferred scaling solutions

Influences approach to protocol upgrades and implementations

Shapes governance strategy and participation level

Affects governance strategy recommendations

Passionate about governance, Layer 2 solutions, and blockchain security, this delegate combines analytical expertise with a commitment to innovation, driving secure and scalable systems.

Profile:
A 29-year-old blockchain researcher based in a tech-forward city, deeply invested in DAO governance and decentralized funding. With a background in public policy and economics, they advocate for equity, transparency, and long-term societal benefits through blockchain technology. Passionate about refining governance frameworks and empowering diverse voices, they balance idealism with practical strategies to advance public goods funding and decentralized innovation.
Demographics:
Age: 29
Location: Urban environment in a tech-forward city (e.g., Berlin, San Francisco)
Occupation: Blockchain researcher at a decentralized protocol, actively participating in multiple DAO communities
Education: Master’s degree in Public Policy and Economics
Financial Status: Comfortable but not wealthy, with a diversified crypto portfolio and a moderate amount of stable income
Behavioral and Psychographic Attributes:
Values: Strong belief in collective action, sustainability, equity, and long-term societal benefit. Sees decentralized technology as a catalyst for fairer resource distribution.
Interests and Activities:
Crypto & Governance: Regular participant in DAO governance forums, Discord channels, and on-chain voting.
Public Policy & Impact: Follow think tanks, public policy newsletters, and social innovation podcasts. Often attends local meetups about impact investing and social entrepreneurship.
Learning & Sharing: Enjoys reading whitepapers, exploring new funding mechanisms like quadratic funding, and hosting educational sessions to onboard newcomers into the DAO ecosystem.
Personality: Pragmatic idealist, open-minded, patient, detail-oriented. Prioritizes transparency, accountability, and evidence-based decision-making.
Primary Goals and Motivations:
Impact Funding: Wants to direct resources toward meaningful public goods projects (e.g., open-source software, climate resilience tooling, local community development DAOs).
Governance Efficiency: Strives to create and refine DAO governance frameworks that are inclusive, transparent, and resistant to capture.
Community Empowerment: Aims to empower underrepresented voices by reducing complexity in governance proposals, writing clear explainers, and facilitating accessible voting tools.
Financial Sustainability: Believes in designing funding models that maintain the long-term viability of public goods rather than quick returns. Balances idealism with practical funding strategies.
Challenges and Pain Points:
Governance Participation Overload: DAOs can feel overwhelming due to the constant flow of proposals and discussions. Balancing attention among multiple DAOs is a challenge.
Voter Apathy: Encountering situations where community members don’t vote or engage, leaving decisions to a small subset of active participants.
Complexity in Mechanisms: Difficulty explaining quadratic funding, retroactive public goods funding, or other advanced mechanisms to newcomers, resulting in hesitation to fully engage.
Metrics of Success: Struggles with quantifying the impact of public goods funding in a meaningful, data-driven way that resonates with the broader community.
Influences and Information Sources:
Thought Leaders & Researchers: Follows Vitalik Buterin, Glen Weyl, and advocacy groups like Gitcoin for insights and best practices.
DAO Governance Platforms: Regularly checks Tally, Snapshot, and Aragon forums for new proposals, dashboards, and analytics tools.
Social Channels & Communities: Engages with Twitter/X and Mastodon for real-time governance discussions and updates, uses Discord/Telegram groups for in-depth conversations with peers.
Research Reports & Policy Briefs: Consumes academic papers, think tank reports, and DAO governance guides to align funding decisions with research-backed strategies.
Communication Style and Approach:
Tone: Helpful, collaborative, respectful, and educational. Encourages open dialogue and constructive criticism.
Preferred Mediums: Long-form forum posts for detailed proposals, concise Twitter threads to garner quick feedback, voice chats in Discord for real-time discussion.
Interaction Frequency: Moderate but consistent. Checks governance forums daily, participates in monthly governance calls, and commits to quarterly DAO roadmapping sessions.
Vision of Success:
A self-sustaining, community-driven ecosystem where public goods projects thrive due to carefully stewarded funding and broad stakeholder engagement. Public goods funding becomes a hallmark of successful decentralized communities, inspiring new generations to build and maintain shared infrastructure without gatekeepers.

Influences funding and development recommendations

Shapes resource allocation recommendations

Influences funding strategy recommendations

Affects governance mechanism recommendations

Shapes treasury management recommendations

With a background in public policy and economics, they champion equity, transparency, and societal benefits through blockchain, blending idealism with practical strategies for public goods and innovation.

I strongly support new initiatives which take risks and break from the traditional mold. That’s not to say that I don’t favor tried and true initiatives, but it’s more likely that other negative considerations influence me to vote against.  When I vote, I can always carefully articulate why I voted the way I did and can communicate that in clear and precise language.

This determines interest in funding gaming initiatives

This determines interest in funding DeFi initiatives

This determines inclination towards working with groups and committees

This determines time horizon preferences for initiatives

This determines preference in aesthetics versus functionality

I favor bold, risk-taking initiatives but don’t dismiss proven ones. Other factors may sway my vote. I always articulate my reasoning clearly.

Whether an initiative is novel or tried and true makes no difference to me. I vote on the merits of each proposal relative to my preferences. When I vote, I can always carefully articulate why I voted the way I did and can communicate that in clear and precise language.

I judge proposals on merit, not novelty. My votes reflect my preferences, and I can clearly articulate my reasoning.

I’m skeptical by nature. I’m quick to hone in on how things can go wrong because I’m risk sensitive. I’m supportive of initiatives that are exceptionally well reasoned and consider various potential objections or otherwise paint an ironclad argument for why their initiative will benefit the ecosystem. When I vote, I can always carefully articulate why I voted the way I did and can communicate that in clear and precise language.

I'm naturally skeptical and risk-sensitive. I support well-reasoned initiatives that address objections thoroughly. My votes are carefully considered, and I can clearly articulate my reasoning.

# Background

The DAO started the first treasury delegations as a program called [Delegation of UNI to Active but Underrepresented Delegates](https://gov.uniswap.org/t/governance-proposal-delegation-of-uni-to-active-but-underrepresented-delegates/22397) in December, 2023. According to [our analytics](https://gov.uniswap.org/t/treasury-delegation-round-2-ideas-thread/24667/13?u=tane) we shared in the original round 2 ideas thread, this program has been essential to keep the governance healthy and retain the active and capable delegates. At the same time, the originally promised time period has already passed, but the delegation has been kept as they didn't have their expirations. In addition, there have been discussions to consider how we proceed with the treasury delegation going forward. Through the process, we have decided to implement an important feature, expirations of the delegations to the Franchiser contract and create a robust system to keep the delegations enabled for the appropriate delegates.

# Proposal Summary

We propose allocating **up to 18 million UNI** of total amount as the treasury delegation, distributing into selected delegates.

We select delegates based on the objective criteria and metrics (the DIP criteria/scoring + VP cut-off) after the application phase. Each selected delegate receives 1M UNI delegation. Furthermore, the top delegates by scores are considered Tier 1 delegates and receive additional 1M UNI delegations.

Once we conclude the program details and delegates with each delegation amount, we will have an onchain vote to ratify the program, apply the delegations with expirations provided by the new implementation by ScopeLift team, and withdraw the original delegations as promised.

NOTE: Since the delegation to developers is in a slightly different context from the delegation to active but under-represented delegates in this program, we will scope it out and think it should proceed as another separate project.

# Motivation

Originally, [the delegation to underrepresented delegates](https://gov.uniswap.org/t/governance-proposal-delegation-of-uni-to-active-but-underrepresented-delegates/22397) was intended to promote healthy governance.

> In healthy governance environments, proactive delegates wield significant voting power, ensuring malicious votes are prevented and quorum requirements are met.

To meet the above conditions, the previous treasury delegation assigned 10 million UNI to seven delegates.

Around when the originally promised time period had passed, the discussion about delegation began with a proposal concerning a governance attack.

Based on our preliminary research and the discussions held in the forum regarding the delegation of UNI to active but underrepresented delegates, we have compiled actions that the Uniswap DAO should take from the perspectives of maintaining healthy governance and preventing governance attacks, and have drafted items for voting.

# Key Discussion Points

Details can be reviewed in the discussion forum

# Proposal Specifications

Based on the discussions in each thread and feedback from the delegates, we propose a balanced and feasible proposal for the next iterations of the treasury delegations. This framework focuses on increasing allocation, setting the delegation period, establishing sustainable evaluation methods, and building the operation for continuity of the program.

## Decide on its continuation, and delegation amount

### Program continuation

First, we need an option to vote on for whether we continue the treasury delegation program.

### Setting the increase or keep the amount

Allocate **up to 18 million UNI**, distributing a certain amount of UNI to the two sets of delegates. This will provide sufficient voting power to the currently active **12 delegates**, allowing them to reflect their opinions in votes.

## Delegate selections

First, we need a thread for delegates to apply for this round. As before, we need to conduct applications and select delegates from there with the objective criteria that were used for the DIP Cycle 3 and VIP cut-off.

- Only delegates who have participated in onchain voting for at least three months prior to the application post
- [DIP Cycle 3 criteria and scoring metrics](https://gov.uniswap.org/t/uniswap-delegate-reward-initiative-cycle-3/25241#p-55759-uniswap-delegate-reward-cycle-3-metrics-6)
  - We will re-calculate the scores for each delegate based on their recent activities
- **No more than 1M UNI VP** has been delegated to the account. For the delegates who have received the original delegations, the current VP amount minus the amount of the delegations in the original program should be considered as the original delegations will be withdrawn, should this proposal be approved and proceeded. Any other temporary delegations will also be treated in the same manner.
- Agree to adhere to [the DAO Principles](https://www.tally.xyz/gov/uniswap/proposal/78)

Selected delegates based on the above criteria and metrics will receive 1M VP delegations (1.5M in total as delegation hard limit). Top 6 delegates by them are considered Tier 1 delegates and receive additional 1M VP delegations (2.5M in total as delegation hard limit)

## Delegation period and evaluation mechanism

### Expiration period

Erin and we have worked with the ScopeLift team to introduce the expiration of each delegation at the contract level, so that we are sure that delegation period is set onchain. The factory contract has been deployed on https://etherscan.io/address/0x807d62f954a2c3fb00ef32f064032228000b9899.

With the new implementation, we are able to set the expiration of delegations for each delegate. This proposal will utilize the new features to assign **18 months** as the expiration time for delegations.

### Selected delegates' responsibilities

Each delegate elected by the DAO, who will receive the treasury delegation should maintain the following requirements:

- Maintain a minimum 80% voting participation rate over the past 3 months.
    - Participation rate calculation:
        - Includes both Snapshot and on-chain proposals
        - Excludes cancelled proposals
        - Measured from the date of Snapshot approval
- Maintain a minimum of 80% justification rate for all votes cast in the delegation thread. The motivation is that a delegate’s primary responsibility is not only to vote on behalf of their delegators but also to provide a clear, reasoned explanation for each vote. This transparency helps the community understand the basis for decisions, reassuring them that the vote was carefully considered and aligned with community interests. Providing a well-founded rationale is a fundamental duty to maintain open communication and uphold the trust placed by delegators.

### Program management

To continue the program effectively and secure the Uniswap governance, we will work with the Uniswap Accountability Committee to smoothly operate the program including actions like below:

- Publish every 3 months report of the evaluation
- Delegate selection management and evaluation of the program for each round

### Evaluation and revocation process

Every 3 months, we will publish a report in a dedicated thread on the forum detailing the proposals from the past three months, including a list of the delegates who met the participation requirements and those who did not, following a similar format used on [the incentive program](https://gov.uniswap.org/t/uniswap-delegate-rewards/24208/6). 

Delegates who fail to meet the minimum participation requirements will have their delegations revoked via an onchain voting. (NOTE: the new implementation hasn't supported early terminations based on the off-chain conditions yet.) They will be eligible to reapply during the following cycle. We will create a proposal to revoke their delegations.

# Disclosure

We (Tané) are willing to apply for the proposed treasury delegation as a recipient if no critical objection as we believe our further involvement is beneficial to the DAO while we are the author of the program proposal. We will abstain from voting on the Snapshot itself and would abstain from voting on the onchain proposal if needed.



https://snapshot.org/#/uniswapgovernance.eth/proposal/0x04af1fcb7538cf5458c5c17baa50fe410952d48e98d451a6ca5f7b94fea87ee8

**Arguments in Favor:**

1. **Objective Criteria for Selection:** Supporters argue that selecting delegates based on objective criteria, such as participation and voting metrics, minimizes political bias and ensures a fair distribution of UNI tokens. This approach avoids a "popularity contest" and focuses on delegates who actively contribute to the DAO.
   
2. **Increased Delegate Pool:** The proposal to increase the number of delegates aims to enhance governance by involving more active participants, thereby addressing quorum issues and promoting diverse representation.

3. **Delegation Expiration:** Implementing expiration dates for delegations is seen as a positive step to ensure continuous evaluation and accountability, preventing long-term stagnation and encouraging active involvement.

**Arguments Against:**

1. **Risk of Political Bias:** Critics raise concerns that the election process for selecting Tier 1 delegates could lead to delegate politicking, where alliances form to game the system, thus undermining the objective criteria.

2. **Arbitrary Delegate Numbers:** Some argue that setting a fixed number of delegates without clear rationale might lead to suboptimal representation, as it could exclude potentially valuable contributors.

3. **Proposal Requirements:** The inclusion of proposal submissions as a criterion for delegate selection is viewed as potentially exclusionary, particularly for new delegates who may not have had the opportunity to draft proposals yet.

**Key Risks & Considerations:**

1. **Governance Risks:** The potential for delegate alliances and the subjective nature of proposal evaluations could lead to governance manipulation, reducing the effectiveness of the delegation system.

2. **Financial Risks:** Allocating a significant amount of UNI (up to 18 million) without clear oversight mechanisms could lead to misuse or concentration of voting power among a few delegates.

3. **Security Risks:** The risk of governance attacks remains if the delegation system does not adequately prevent malicious actors from gaining undue influence.

**Final Sentiment & Voting Trends:**

The community sentiment appears to be cautiously optimistic, with a general consensus on the need for reform in the delegation process. However, there is notable concern about potential biases and the effectiveness of the proposed criteria. The voting trends indicate a preference for objective scoring over elections to mitigate risks of delegate collusion. Overall, the proposal enjoys majority support but with significant calls for refinement to address identified risks and concerns.

The proposal suggests delegating up to 18 million UNI to selected delegates, using objective criteria, for improved governance with expiration for each delegation.

I support this proposal because it strengthens the DAO’s governance by allocating UNI to active and underrepresented delegates based on objective criteria and implementing delegation expirations. These measures enhance accountability, promote active participation, and reduce governance risks, fostering a more transparent, sustainable, and resilient governance structure that supports long-term token value growth.

ehUNI-47

Event Horizon

[UNISWAP] [Temp Check] Treasury Delegation Round 2

## Simple Summary

This publication details the initial configuration of the [Aave Finance Steward](https://governance.aave.com/t/arfc-aave-finance-steward/17570/1) PoolExposure module.

The Finance Steward role is comprised of a set of Modules (Smart Contracts) that provide approved signers with the ability to perform DAO approved actions such as swapping tokens or migrating assets from Aave V2 to Aave V3.

## Motivation

The Finance Steward modules enables the DAO to define a core set of financial capabilities to be carried out within strict role-based guardrails. As the role matures or new use cases arise, we plan to bring forward additional capabilities for the DAO to discuss.

The initial set up of the Finance Steward includes deploying two separate modules (smart contracts), the PoolExposureSteward and the MainnetSwapSteward, this publication deploys the PoolExposureSteward smart contract across various chains.

### PoolExposureModule

#### Features

The PoolExposureModule is granted permission to facilitate the following routine operational tasks:

_Migrations_

- Withdraw assets from Aave V2 and deposit into Aave V3.
- Withdraw assets from a given Aave V3 pool and deposit into another Aave V3 pool (ie: Core to Prime).

_Deposit Passive Assets_

- Deposit idle Collector funds into Aave V3.

_Withdraw Assets_

- Withdraw funds from Aave V2 or Aave V3 into the Collector.
  These funds can then be used for runway or to perform swaps where applicable.

## Specification

The PoolExposureSteward contracts have been deployed, across all chains, with the DAO as the owner of the contracts and the following SAFE acting as the guardian [0x22740deBa78d5a0c24C58C740e3715ec29de1bFa](https://app.safe.global/home?safe=eth:0x22740deBa78d5a0c24C58C740e3715ec29de1bFa).

The SAFE is configured as a 3-out-of-4 multi-sig, and the signers for the SAFE are the following:

Marc (AaveChan) - `0x329c54289Ff5D6B7b7daE13592C6B1EDA1543eD4`
Matt (TokenLogic) - `0xb647055A9915bF9c8021a684E175A353525b9890`
Chaos Labs - `0x5d49dBcdd300aECc2C311cFB56593E71c445d60d`
Val (LlamaRisk) - `0xbA037E4746ff58c55dc8F27a328C428F258DDACb`

The PoolExposureModule will be deployed on the following chains, with the listed pools approved for interaction.

| Network   | Pools                         |
|
|
-- |
| Mainnet   | V2, AMM V2, V3 Core, V3 Prime |
| Polygon   | V2, V3                        |
| Avalanche | V2, V3                        |
| Optimism  | V3                            |
| Arbitrum  | V3                            |
| Scroll    | V3                            |
| Base      | V3                            |
| BNB       | V3                            |
| Gnosis    | V3                            |
| Sonic     | V3                            |
| Linea     | V3                            |

For each pool, ~$100 worth of each reserve will be sent to the DustBinSteward contract. The DustBin is a special contract that, as the name implies, holds a dust amount of tokens. This is done to ensure that the pools are never emptied and the PoolExposure module can operate without having to worry about possibly emptying a given reserve.

If the corresponding DustBin for a specific reserve holds about ~$100 worth of the token, then that token will not be transferred. If the DustBin does not yet have that token, the mentioned amount will be sent alongside this proposal.

## References

- Implementation: [AaveV3Ethereum](https://github.com/bgd-labs/aave-proposals-v3/blob/28abacb4b3002a4801b8f2336ab49cbdc5853e08/src/20250319_Multi_FinanceStewardDeploymentPoolExposureModule/AaveV3Ethereum_FinanceStewardDeploymentPoolExposureModule_20250319.sol), [AaveV3EthereumLido](https://github.com/bgd-labs/aave-proposals-v3/blob/28abacb4b3002a4801b8f2336ab49cbdc5853e08/src/20250319_Multi_FinanceStewardDeploymentPoolExposureModule/AaveV3EthereumLido_FinanceStewardDeploymentPoolExposureModule_20250319.sol), [AaveV3Polygon](https://github.com/bgd-labs/aave-proposals-v3/blob/28abacb4b3002a4801b8f2336ab49cbdc5853e08/src/20250319_Multi_FinanceStewardDeploymentPoolExposureModule/AaveV3Polygon_FinanceStewardDeploymentPoolExposureModule_20250319.sol), [AaveV3Avalanche](https://github.com/bgd-labs/aave-proposals-v3/blob/28abacb4b3002a4801b8f2336ab49cbdc5853e08/src/20250319_Multi_FinanceStewardDeploymentPoolExposureModule/AaveV3Avalanche_FinanceStewardDeploymentPoolExposureModule_20250319.sol), [AaveV3Optimism](https://github.com/bgd-labs/aave-proposals-v3/blob/28abacb4b3002a4801b8f2336ab49cbdc5853e08/src/20250319_Multi_FinanceStewardDeploymentPoolExposureModule/AaveV3Optimism_FinanceStewardDeploymentPoolExposureModule_20250319.sol), [AaveV3Arbitrum](https://github.com/bgd-labs/aave-proposals-v3/blob/28abacb4b3002a4801b8f2336ab49cbdc5853e08/src/20250319_Multi_FinanceStewardDeploymentPoolExposureModule/AaveV3Arbitrum_FinanceStewardDeploymentPoolExposureModule_20250319.sol), [AaveV3Base](https://github.com/bgd-labs/aave-proposals-v3/blob/28abacb4b3002a4801b8f2336ab49cbdc5853e08/src/20250319_Multi_FinanceStewardDeploymentPoolExposureModule/AaveV3Base_FinanceStewardDeploymentPoolExposureModule_20250319.sol), [AaveV3Scroll](https://github.com/bgd-labs/aave-proposals-v3/blob/28abacb4b3002a4801b8f2336ab49cbdc5853e08/src/20250319_Multi_FinanceStewardDeploymentPoolExposureModule/AaveV3Scroll_FinanceStewardDeploymentPoolExposureModule_20250319.sol), [AaveV3BNB](https://github.com/bgd-labs/aave-proposals-v3/blob/28abacb4b3002a4801b8f2336ab49cbdc5853e08/src/20250319_Multi_FinanceStewardDeploymentPoolExposureModule/AaveV3BNB_FinanceStewardDeploymentPoolExposureModule_20250319.sol), [AaveV3Linea](https://github.com/bgd-labs/aave-proposals-v3/blob/28abacb4b3002a4801b8f2336ab49cbdc5853e08/src/20250319_Multi_FinanceStewardDeploymentPoolExposureModule/AaveV3Linea_FinanceStewardDeploymentPoolExposureModule_20250319.sol), [AaveV3Sonic](https://github.com/bgd-labs/aave-proposals-v3/blob/28abacb4b3002a4801b8f2336ab49cbdc5853e08/src/20250319_Multi_FinanceStewardDeploymentPoolExposureModule/AaveV3Sonic_FinanceStewardDeploymentPoolExposureModule_20250319.sol)
- Tests: [AaveV3Ethereum](https://github.com/bgd-labs/aave-proposals-v3/blob/28abacb4b3002a4801b8f2336ab49cbdc5853e08/src/20250319_Multi_FinanceStewardDeploymentPoolExposureModule/AaveV3Ethereum_FinanceStewardDeploymentPoolExposureModule_20250319.t.sol), [AaveV3EthereumLido](https://github.com/bgd-labs/aave-proposals-v3/blob/28abacb4b3002a4801b8f2336ab49cbdc5853e08/src/20250319_Multi_FinanceStewardDeploymentPoolExposureModule/AaveV3EthereumLido_FinanceStewardDeploymentPoolExposureModule_20250319.t.sol), [AaveV3Polygon](https://github.com/bgd-labs/aave-proposals-v3/blob/28abacb4b3002a4801b8f2336ab49cbdc5853e08/src/20250319_Multi_FinanceStewardDeploymentPoolExposureModule/AaveV3Polygon_FinanceStewardDeploymentPoolExposureModule_20250319.t.sol), [AaveV3Avalanche](https://github.com/bgd-labs/aave-proposals-v3/blob/28abacb4b3002a4801b8f2336ab49cbdc5853e08/src/20250319_Multi_FinanceStewardDeploymentPoolExposureModule/AaveV3Avalanche_FinanceStewardDeploymentPoolExposureModule_20250319.t.sol), [AaveV3Optimism](https://github.com/bgd-labs/aave-proposals-v3/blob/28abacb4b3002a4801b8f2336ab49cbdc5853e08/src/20250319_Multi_FinanceStewardDeploymentPoolExposureModule/AaveV3Optimism_FinanceStewardDeploymentPoolExposureModule_20250319.t.sol), [AaveV3Arbitrum](https://github.com/bgd-labs/aave-proposals-v3/blob/28abacb4b3002a4801b8f2336ab49cbdc5853e08/src/20250319_Multi_FinanceStewardDeploymentPoolExposureModule/AaveV3Arbitrum_FinanceStewardDeploymentPoolExposureModule_20250319.t.sol), [AaveV3Base](https://github.com/bgd-labs/aave-proposals-v3/blob/28abacb4b3002a4801b8f2336ab49cbdc5853e08/src/20250319_Multi_FinanceStewardDeploymentPoolExposureModule/AaveV3Base_FinanceStewardDeploymentPoolExposureModule_20250319.t.sol), [AaveV3Scroll](https://github.com/bgd-labs/aave-proposals-v3/blob/28abacb4b3002a4801b8f2336ab49cbdc5853e08/src/20250319_Multi_FinanceStewardDeploymentPoolExposureModule/AaveV3Scroll_FinanceStewardDeploymentPoolExposureModule_20250319.t.sol), [AaveV3BNB](https://github.com/bgd-labs/aave-proposals-v3/blob/28abacb4b3002a4801b8f2336ab49cbdc5853e08/src/20250319_Multi_FinanceStewardDeploymentPoolExposureModule/AaveV3BNB_FinanceStewardDeploymentPoolExposureModule_20250319.t.sol), [AaveV3Linea](https://github.com/bgd-labs/aave-proposals-v3/blob/28abacb4b3002a4801b8f2336ab49cbdc5853e08/src/20250319_Multi_FinanceStewardDeploymentPoolExposureModule/AaveV3Linea_FinanceStewardDeploymentPoolExposureModule_20250319.t.sol), [AaveV3Sonic](https://github.com/bgd-labs/aave-proposals-v3/blob/28abacb4b3002a4801b8f2336ab49cbdc5853e08/src/20250319_Multi_FinanceStewardDeploymentPoolExposureModule/AaveV3Sonic_FinanceStewardDeploymentPoolExposureModule_20250319.t.sol)
  [Snapshot](https://snapshot.box/#/s:aave.eth/proposal/0x1730ba3a2dd1f7b0b00cfae01b0c9f1bb7494b848c5de517275e2c72cf8c7b4d)
- [Discussion](https://governance.aave.com/t/arfc-aave-finance-steward-deployment/21495)
- PoolSteward Cod

... please visit link below to view full proposal



https://app.aave.com/governance/v3/proposal/?proposalId=279

**Summary of Forum Discussion on [ARFC] Aave Finance Steward Modules Deployment**

**1. Arguments in Favor:**
Supporters emphasize the proposal's potential to streamline Aave DAO's financial operations by implementing Finance Steward modules. These modules, namely the PoolExposureSteward and MainnetSwapSteward, are designed to enhance efficiency by automating routine financial tasks such as asset migration, fund withdrawal, and token swaps. Proponents argue that this approach builds on the success of previous steward roles, promising improved coordination and operational capabilities within defined guardrails. The introduction of a budget limit per token for the MainnetSwapSteward module is highlighted as a strategic safeguard, ensuring controlled exposure and financial prudence.

**2. Arguments Against:**
The discussion does not explicitly outline significant opposition; however, potential concerns might include the reliance on smart contracts, which could introduce technical risks if not properly audited or managed. Additionally, the centralization of decision-making power within the defined SAFE multi-sig setup might be perceived as a limitation by some community members.

**3. Key Risks & Considerations:**
The primary governance risk involves the reliance on smart contracts and the need for robust security measures to prevent potential exploits. Financially, the predefined budget limits for asset swaps are intended to mitigate risk, but they require careful governance oversight to adapt to changing market conditions. The deployment across multiple networks and pools necessitates comprehensive monitoring to ensure smooth operations and prevent potential liquidity issues.

**4. Final Sentiment & Voting Trends:**
The overall sentiment appears to be cautiously optimistic, with a focus on gathering community feedback before proceeding to the Snapshot stage. The proposal's structured approach and emphasis on efficiency and risk management have garnered preliminary support, suggesting a favorable outlook if concerns are adequately addressed and consensus is achieved.

The proposal outlines the initial deployment of the Aave Finance Steward's PoolExposure module, allowing approved DAO actions like token swaps and asset migration within predefined roles.

ehAAVE-334

[AAVE] Finance Steward Deployment: Pool Exposure Module

## Simple Summary

This publication proposes allowing the Balancer DAO to claim liquidity mining rewards generated by Balancer v3 Boosted Pools through the Aave Protocol on Arbitrum and Base.

## Motivation

Following on from the earlier proposal, this publication includes additional addresses spanning Arbitrum and Base instances of Balancer v3.

Recapping, this proposal enables the Balancer DAO to retrieve liquidity mining rewards from Boosted Pools for redistribution to users and the DAO.

To facilitate this, Aave Protocol’s claimOnBehalfOf function allows designated addresses to claim rewards on behalf of smart contracts.

Without assigning a specific address as the contract owner, these rewards cannot be claimed, leaving them inaccessible.

## Specification

Set Balancer contract `0x9ff471F9f98F42E5151C7855fD1b5aa906b1AF7e` as the claimer (caller) on behalf of the Balancer v3 vault as the user `0xbA1333333333a1BA1108E8412f11850A5C319bA9`, on both Arbitrum and Base.

## References

- Implementation: [AaveV3Multi](https://github.com/bgd-labs/aave-proposals-v3/blob/7eda23327483a3ded404995ebc7963fde66bd967/src/20250318_Multi_AllowBalancerDAOToClaimLiquidityMiningRewards/AaveV3Multi_AllowBalancerDAOToClaimLiquidityMiningRewards_20250318.sol)
- Tests: [AaveV3Arbitrum](https://github.com/bgd-labs/aave-proposals-v3/blob/7eda23327483a3ded404995ebc7963fde66bd967/src/20250318_Multi_AllowBalancerDAOToClaimLiquidityMiningRewards/AaveV3Arbitrum_AllowBalancerDAOToClaimLiquidityMiningRewards_20250318.t.sol), [AaveV3Base](https://github.com/bgd-labs/aave-proposals-v3/blob/7eda23327483a3ded404995ebc7963fde66bd967/src/20250318_Multi_AllowBalancerDAOToClaimLiquidityMiningRewards/AaveV3Base_AllowBalancerDAOToClaimLiquidityMiningRewards_20250318.t.sol)
- Snapshot: Direct-to-AIP
- [Discussion](https://governance.aave.com/t/arfc-whitelist-balancer-dao-to-claim-liquidity-mining-rewards-arbitrum-base/21280)

## Copyright

Copyright and related rights waived via [CC0](https://creativecommons.org/publicdomain/zero/1.0/).



https://app.aave.com/governance/v3/proposal/?proposalId=280

**Summary of Forum Discussion on Proposal: [ARFC] Whitelist Balancer DAO to Claim Liquidity Mining Rewards (Arbitrum & Base)**

1. **Arguments in Favor**:
   - **Enhanced Reward Distribution**: Proponents argue that allowing the Balancer DAO to claim liquidity mining rewards through the Aave Protocol will enable more efficient distribution of rewards to users and the DAO. This enhances the utility and attractiveness of Balancer v3 Boosted Pools.
   - **Technical Feasibility**: The proposal outlines a clear technical path by setting specific Balancer contracts as claimers, ensuring that rewards can be claimed without assigning a specific owner, thus maintaining decentralization principles.
   - **Network Expansion**: By including additional addresses across Arbitrum and Base networks, the proposal supports broader network participation and incentivization.

2. **Arguments Against**:
   - The forum discussion does not explicitly mention arguments against the proposal. However, typical concerns might include potential complexities in implementation or unforeseen security risks associated with the claimOnBehalfOf function.

3. **Key Risks & Considerations**:
   - **Governance Risk**: The proposal requires consensus and successful escalation through multiple stages (ARFC, Snapshot, AIP), which could be challenging if not all stakeholders are aligned.
   - **Security Risk**: While not explicitly mentioned, utilizing the claimOnBehalfOf function introduces a dependency on Aave Protocol’s security, which could be a point of concern for those wary of external integrations.

4. **Final Sentiment & Voting Trends**:
   - The proposal appears to have community support, as indicated by the structured next steps to gather feedback and escalate the proposal through the governance process. The absence of strong opposition in the discussion suggests a favorable sentiment, though the actual voting trends will depend on the feedback gathered and subsequent discussions.

Overall, the proposal aims to streamline the reward claiming process for Balancer DAO, with an emphasis on technical clarity and network inclusivity.

The proposal allows the Balancer DAO to claim liquidity mining rewards from Balancer v3 Boosted Pools using the Aave Protocol on Arbitrum and Base.

ehAAVE-332

[AAVE] Allow Balancer DAO to Claim Liquidity Mining Rewards (Arbitrum & Base)

## Simple Summary

This is an ARFC to onboard rsETH to the Aave V3 Arbitrum.

## Motivation

rsETH has seen continued growth across networks, and is currently the only of the onboarded LRT not available on Arbitrum. We expect further growth of this asset with onboarding to this networks. Arbitrum has one of the largest wstETH reserves of any Aave instance. We suggest to onboard rsETH with similar parameters to ezETH and corresponding E-Modes for rsETH / wstETH and rsETH / stablecoins.

## Specification

The table below illustrates the configured risk parameters for **rsETH**

| Parameter                 |                                      Value |
|
- |
--: |
| Isolation Mode            |                                      false |
| Borrowable                |                                   DISABLED |
| Collateral Enabled        |                                       true |
| Supply Cap (rsETH)        |                                        900 |
| Borrow Cap (rsETH)        |                                          1 |
| Debt Ceiling              |                                      USD 0 |
| LTV                       |                                     0.05 % |
| LT                        |                                      0.1 % |
| Liquidation Bonus         |                                      7.5 % |
| Liquidation Protocol Fee  |                                       10 % |
| Reserve Factor            |                                       20 % |
| Base Variable Borrow Rate |                                        0 % |
| Variable Slope 1          |                                       10 % |
| Variable Slope 2          |                                      300 % |
| Uoptimal                  |                                       45 % |
| Flashloanable             |                                    ENABLED |
| Siloed Borrowing          |                                   DISABLED |
| Borrowable in Isolation   |                                   DISABLED |
| Oracle                    | 0xb4B0cbcA864c2Eb0C0342608D92490C034aC1089 |

Additionally [0xac140648435d03f784879cd789130F22Ef588Fcd](https://arbiscan.io/address/0xac140648435d03f784879cd789130F22Ef588Fcd) has been set as the emission admin for rsETH and the corresponding aToken.

### rsETH/wstETH E-Mode on Arbitrum & Base

| Parameter           | Value  | Value  |
|
- |
|
|
| Asset               | rsETH  | wstETH |
| Collateral          | Yes    | No     |
| Borrowable          | No     | Yes    |
| LTV                 | 92.50% | -      |
| LT                  | 94.50% | -      |
| Liquidation Penalty | 1.00%  | -      |

## References

- Implementation: [AaveV3Arbitrum](https://github.com/bgd-labs/aave-proposals-v3/blob/7141371049e4fff65c91e768e881d93ed0265f64/src/20250326_AaveV3Arbitrum_OnboardRsETHToArbitrum/AaveV3Arbitrum_OnboardRsETHToArbitrum_20250326.sol)
- Tests: [AaveV3Arbitrum](https://github.com/bgd-labs/aave-proposals-v3/blob/7141371049e4fff65c91e768e881d93ed0265f64/src/20250326_AaveV3Arbitrum_OnboardRsETHToArbitrum/AaveV3Arbitrum_OnboardRsETHToArbitrum_20250326.t.sol)
- [Snapshot](https://snapshot.box/#/s:aave.eth/proposal/0x598f7057f445813d75404fae68f3501d76c90064f52ca4b9afb6f20859fa2658)
- [Discussion](https://governance.aave.com/t/arfc-onboard-rseth-to-arbitrum-and-base-v3-instances/20741)

## Copyright

Copyright and related rights waived via [CC0](https://creativecommons.org/publicdomain/zero/1.0/).



https://app.aave.com/governance/v3/proposal/?proposalId=281

**Summary of Forum Discussion on Onboarding rsETH to Arbitrum and Base V3 Instances:**

1. **Arguments in Favor:**
   - **Growth Potential**: Proponents highlight the continued growth of rsETH across networks and its potential to expand further by being onboarded to Arbitrum and Base, which are significant markets for Aave.
   - **Market Demand**: The integration of rsETH with wstETH in E-Mode is expected to leverage existing demand, as seen on Ethereum, enhancing liquidity and market activity on these instances.
   - **Technical Support**: The proposal is backed by technical assessments and risk parameters aligned with similar assets like ezETH, ensuring a controlled and safe expansion.
   - **Community Support**: The proposal has passed the ARFC Snapshot with significant votes in favor, indicating strong community backing.

2. **Arguments Against:**
   - **Liquidity Concerns**: Some concerns were raised about the current liquidity levels of rsETH on Arbitrum and Base, which are lower compared to Ethereum, potentially affecting market stability.
   - **Configuration Issues**: Post-listing, a misconfiguration was detected in the eMode settings, leading to conservative risk parameters and unexpected asset groupings, necessitating a freeze and follow-up governance proposal.

3. **Key Risks & Considerations:**
   - **Security Risks**: Initial concerns about a legacy function in the RSETHPool contract that posed a risk have been addressed through a contract upgrade.
   - **Governance Risks**: The unexpected eMode configuration highlights the need for careful governance and configuration management to prevent operational disruptions.
   - **Financial Risks**: The proposal limits reliance on on-chain DEX liquidity through specific LTV and liquidation parameters to mitigate financial risks during liquidations.

4. **Final Sentiment & Voting Trends:**
   - The community sentiment is largely positive, with the proposal passing the ARFC Snapshot with substantial support (812.5K votes). The general trend indicates confidence in the proposal's potential to enhance Aave's market presence on Arbitrum and Base, despite the need for corrective actions on initial configuration issues.

This proposal suggests adding rsETH to Aave V3 on Arbitrum, using a set configuration of risk parameters.

ehAAVE-333

[AAVE]  Onboard rsETH to Arbitrum

## Simple Summary

This proposal aims to onboard eBTC for the Core Instance, and add a WBTC liquid E-Mode. By implementing this change, we seek to enhance capital efficiency for borrowers using eBTC/WBTC as collateral.

Both [TEMP CHECK](https://governance.aave.com/t/temp-check-onboard-enable-ebtc-wbtc-liquid-e-mode-on-aave-v3-core-instance/19969) and [TEMP CHECK Snapshot](https://snapshot.box/#/s:aave.eth/proposal/0x60c360b61812b9ae96b2f785f9fca7a5461ab45e295f55a695638aef18d96d50) have passed recently.

## Motivation

The motivation behind this proposal stems from several key factors:

- High Utilization: eBTC/WBTC has demonstrated significant usage as collateral for borrowing stablecoins on the platform.
- Capital Efficiency: Enabling liquid E-Mode for eBTC/WBTC will allow borrowers to substantially improve their capital efficiency when using this asset as collateral.
- Controlled Growth: Liquid E-Mode provides a mechanism for more precise control over the growth and borrow demand in relation to the overall stablecoin liquidity within Aave v3 on Core Instance.
- Enhanced Borrowing Capacity: This change will enable users to borrow larger amounts of other stablecoins against their eBTC/WBTC collateral, potentially increasing platform utilization and revenue.

By implementing this proposal, we aim to optimize the use of eBTC/WBTC within the Aave ecosystem, attracting more liquidity.

## Specification

The table below illustrates the configured risk parameters for **eBTC**

| Parameter                | Value                                      |
|
|
|
| Network                  | Ethereum                                   |
| Isolation Mode           | No                                         |
| Borrowable               | No                                         |
| Collateral Enabled       | Yes                                        |
| Supply Cap               | 750                                        |
| Borrow Cap               | 1                                          |
| Debt Ceiling             | 0                                          |
| LTV                      | 67%                                        |
| LT                       | 72%                                        |
| Liquidation Bonus        | 10%                                        |
| Liquidation Protocol Fee | 10%                                        |
| Variable Base            | 0%                                         |
| Variable Slope1          | 4%                                         |
| Variable Slope2          | 300%                                       |
| Uoptimal                 | 45%                                        |
| Reserve Factor           | 50%                                        |
| Flashloanable            | No                                         |
| Siloed Borrowing         | No                                         |
| Oracle                   | 0x95a85D0d2f3115702d813549a80040387738A430 |

Additionally [0xac140648435d03f784879cd789130F22Ef588Fcd](https://etherscan.io/address/0xac140648435d03f784879cd789130F22Ef588Fcd) has been set as the emission admin for eBTC and the corresponding aToken.

Finally, this proposal will add eBTC/WBTC liquid E-Mode

| Parameter             | Value | Value |
|
|
-- |
-- |
| Asset                 | eBTC  | WBTC  |
| Collateral            | Yes   | No    |
| Borrowable            | No    | Yes   |
| Max LTV               | 83%   | -     |
| Liquidation Threshold | 85%   | -     |
| Liquidation Bonus     | 3.0%  | -     |

## References

- Implementation: [AaveV3Ethereum](https://github.com/bgd-labs/aave-proposals-v3/blob/bac3765e64971b2394c6ad263899da3be32514b9/src/20250324_AaveV3Ethereum_OnboardEBTCAndAddEBTCWBTCEMode/AaveV3Ethereum_OnboardEBTCAndAddEBTCWBTCEMode_20250324.sol)
- Tests: [AaveV3Ethereum](https://github.com/bgd-labs/aave-proposals-v3/blob/bac3765e64971b2394c6ad263899da3be32514b9/src/20250324_AaveV3Ethereum_OnboardEBTCAndAddEBTCWBTCEMode/AaveV3Ethereum_OnboardEBTCAndAddEBTCWBTCEMode_20250324.t.sol)
- [Snapshot](https://snapshot.box/#/s:aave.eth/proposal/0x564a45f0a2855799d9be329942fa1f5e849058ff4b950f4027ec4666f4b61d9c)
- [Discussion](https://governance.aave.com/t/arfc-enable-ebtc-wbtc-liquid-e-mode-on-aave-v3-core-instance/20141)

## Copyright

Copyright and related rights waived via [CC0](https://creativecommons.org/publicdomain/zero/1.0/).



https://app.aave.com/governance/v3/proposal/?proposalId=282

**Summary of Forum Discussion on DAO Proposal: Onboarding eBTC on Aave v3 Core Instance**

**1. Arguments in Favor:**
- **High Utilization & Capital Efficiency**: eBTC and WBTC have shown significant usage as collateral, and implementing liquid E-Mode will enhance capital efficiency for borrowers.
- **Controlled Growth & Enhanced Borrowing Capacity**: Liquid E-Mode will allow for precise control over borrow demand and enable users to borrow larger amounts against their eBTC/WBTC collateral, potentially increasing platform utilization and revenue.
- **Liquidity Attraction**: By optimizing eBTC/WBTC use within the Aave ecosystem, the proposal aims to attract more liquidity.

**2. Arguments Against:**
- **Oracle and Pricing Concerns**: The need for a suitable Oracle solution is emphasized, given the aggressive E-Mode parameters and potential exposure to volatility if collateral assets depeg.
- **Governance & Decentralization Issues**: Concerns about the developing governance system's centralization and lack of diversity in proposal submissions.

**3. Key Risks & Considerations:**
- **Liquidity & Volatility Risks**: The concentration of liquidity in a few venues and the slight depeg of eBTC from BTC could pose risks.
- **Operational & Security Risks**: The absence of timelock protection in eBTC contracts, centralization of governance roles, and dependency on multiple protocols for yield generation.
- **Technological Risks**: Smart contract vulnerabilities and reliance on external systems like Veda and Seven Seas introduce dependency risks.

**4. Final Sentiment & Voting Trends:**
- The proposal has received majority support, passing the ARFC Snapshot with 766.2K votes in favor. The community sentiment leans towards enabling the eBTC/WBTC liquid E-Mode, with recommendations for conservative parameters and ongoing monitoring of risks.

The proposal seeks to onboard eBTC and activate WBTC liquid E-Mode to improve capital efficiency and borrowing capacity within the Aave ecosystem.

ehAAVE-331

[AAVE] Onboard eBTC and Add eBTC/WBTC E-Mode

# [NON-CONSTITUTIONAL] Arbitrum Audit Program
# Arbitrum Audit Program

Summary:

* The Arbitrum Foundation is proposing to run an on-going open application for 1 year to support projects that require a subsidy to audit their project.
* A list of auditors will be approved into the program, and auditing firms are also invited from the ADPC’s Security Subsidy Fund to apply for the program.
* Arbitrum Audit Committee will include membership of Arbitrum Foundation, Offchain Labs, a technical expert elected by the DAO, and a team member from the OpCo (when operational).

## Abstract

It is industry standard and recommended practice that all projects with on-chain smart contracts undergo at least one third party audit. This is because smart contracts can potentially secure millions, if not billions of dollars, yet a single bug in the code can result in the loss of all funds. In many cases, when the smart contract is deployed, it can be difficult to upgrade after launch, and audits should be completed prior to the project going live.

Unfortunately, audits are prohibitively expensive. It is not uncommon for projects to pay ~$20k per auditor per week. If multiple auditors are required for the project, then the bill increases substantially into six figures. This is problematic for early stage projects who may simply lack the funds to pay for an audit or be forced to allocate a significant portion of the funds they have raised from investors to pay for the audit.

This proposal aims to implement a subsidy scheme that will allocate funds to projects that require financial assistance to pay for an audit. To be eligible for the funds, the project will need to satisfy certain requirements such as launching on Arbitrum and any code audited will need to remain exclusive to our ecosystem for a fixed period of time.

We are targeting relatively early stage projects, projects that have demonstrated product market fit on Arbitrum, and finally projects that have remained loyal to our ecosystem with an upcoming launch or upgrade that has the potential to help grow the ecosystem.

The subsidy program will run for 1 year or until all funds are spent. An appointed Arbitrum Audit committee will run the program. There will be 4 (quarterly) transparency reports alongside a final summary report to keep the DAO abreast about program updates.

## Rationale and Goals

1. **Support early-stage projects.** Promising projects face funding constraints that may prevent their launch without access to a third party audit or for them to somewhat dangerously ‘test in production.’
2. **Encourage development on Arbitrum.** By supporting builders and early-stage projects, we can potentially help make Arbitrum their home over other blockchains.
3. **Scaling Responsibly.** Scalability is not just about transaction throughput, but the ability for the system as a whole to secure and protect an increasing number of tokens (TVL).
4. **On-demand availability**. An open applications process to offer subsidy grants to projects just in time before their planned launch.

## Application Process



[<img height="79" width="624" src="https://canada1.discourse-cdn.com/flex029/uploads/arbitrum1/optimized/2X/4/4dba90dfcb10fad5cb7debac34b9ec6f83e03ab5_2_624x79.png" />1600×203 26.7 KB](https://canada1.discourse-cdn.com/flex029/uploads/arbitrum1/original/2X/4/4dba90dfcb10fad5cb7debac34b9ec6f83e03ab5.png)



The Arbitrum Audit Subsidy Program invites projects to apply via an open applications track with a standardised form to gather the following information:

* **Team Information**
  * Names
  * Background
  * Notable Investors
* **Project Information**
  * Overview & problem it is solving
  * Why will project achieve product market fit (or evidence of PMF, like traction or other metrics)
  * Stage of development & timeline to mainnet
* **Audit coverage**
  * Scope of audit
  * Lines of code & languages
  * Desired completion date
  * \[extra information here]
* **Subsidy information**
  * Preferred auditor \[optional]
  * Audit budget request

The committee will screen the above information based on:

* **Technical maturity:** Assess whether the code base is ready for a professional audit.
* **Team experience:** Evaluate whether the team has the experience, expertise, and motivation to successfully launch the project on mainnet.
* **Likelihood of success:** Judge whether the project has the potential to attract a user base and establish itself as a popular decentralized application on Arbitrum.
* **Reasonable scope:** Determine if the audit’s scope can be completed within the proposed timeline and budget.
* **Arbitrum first.** The project will prioritise launching on Arbitrum including One, Nova, and other Arbitrum chains.

A project can be rejected at any stage of the process at the committee’s discretion.

If the committee approves the project during the screening process, then it will undertake due diligence which may include reference checks, reviewing the code related to the audit scope, and other information it may deem necessary to check. Assuming the due diligence succeeds, then the committee will aid the project in connecting with auditors to get the best quote alongside confirming the auditor has the capability to audit the project.

It is up to the project to decide on the auditor, but it must be in agreement with the Arbitrum Audit committee. We expect auditors to be selected based on the rate charged to the project (i.e., auditor per week cost), availability and timeline for completing the audit and experience with auditing similar projects. In the case of an auditing competition platform, the auditor will need to demonstrate that the auditors on their platform have the required skillset for the specific project.

Keep in mind, this is a subsidy program, which will require the project to pay a portion of the audit, which will also be negotiated as part of the application process.

## Eligibility Requirements

We welcome applications from early stage and existing projects that satisfy the following requirements:

* **Smart contracts.** Projects must have auditable smart contract code to qualify. We only subsidize audits for smart contracts and not the wider infrastructure. For example, Solidity or Stylus.
* **Early stage project.** Projects yet to launch their product are eligible or there is a significant upgrade for the code. They are allowed to have received venture capital or grants. Total funds raised will be considered as part of the decision making process by the committee.
* **Native deployment.** Projects that are operational on Arbitrum must demonstrate either a strong product market fit or a committed alignment with the Arbitrum ecosystem with expectations that subsequent product launches will be successful.
* **Migrating deployment.** Project is planning to migrate from another blockchain ecosystem to Arbitrum
* **New audits only.** Only new code, or code that has undergone significant modifications.
* **Arbitrum exclusivity.** Audited code must remain exclusive to Arbitrum for a fixed period of time.
* **Arbitrum ecosystem.** The project must launch in the Arbitrum ecosystem which includes all Arbitrum chains (including Arbitrum One or launching their own chain).

With the above in mind, our aim is to target early stage projects with potential to grow on Arbitrum as well as projects with a strong track record or loyalty to the Arbitrum ecosystem.

All audited code MUST remain exclusive to the Arbitrum ecosystem and this will be included in the relevant legal agreements. Breaching exclusivity will obligate the project to repay the full subsidy to the DAO via the Arbitrum Foundation (AF). Non-compliance may lead to legal recourse and/or a proposal to the DAO to ban the project from all future DAO-funded initiatives.

## Subsidy Payment Conditions

Subsidy payments will only be paid after the audit is completed. The Arbitrum Foundation will disburse the funds to the auditor. All payments are contingent upon the Foundation’s satisfaction that the audit meets acceptable quality and confirms to industry standards.

Additionally, we will seek when possible to offer the payment in ARB as opposed to USD, subject to the auditor’s needs.

## Approving Auditors

The Arbitrum Foundation will take on the role of evaluating auditors who want to apply for this program which includes an interview, reference checks, compliance, and agreement to the terms & conditions of this program. It should be noted that we will conduct an individual negotiation with all approved auditors to take into account potential different rates and offerings from the auditors. Additionally, auditors can apply at any time to join the program.

An approved auditor will have an opportunity to post on the forum to advertise that they have been accepted to the program. This will assist projects with finding auditors that may be suitable for them even if a subsidy is not offered by this program.

Additionally, we

... please visit link below to view full proposal



https://tally.xyz/gov/arbitrum/proposal/107606727309922720763027677505427395647796047780305505879344344641224024948240

**Summary of Forum Discussion on Arbitrum Audit Program Proposal**

1. **Arguments in Favor:**
   - **Support for Early-Stage Projects:** The proposal aims to subsidize audit costs for early-stage projects, which often face financial constraints that hinder their ability to afford necessary audits. This support can help these projects launch more securely on Arbitrum.
   - **Ecosystem Growth:** By assisting projects with audit costs, the proposal encourages development on Arbitrum, potentially making it a preferred blockchain over others. This initiative is seen as a way to attract and retain projects within the Arbitrum ecosystem.
   - **Security Enhancement:** Audits are crucial for securing smart contracts, which can hold significant financial value. By subsidizing audits, the proposal aims to enhance the overall security of the ecosystem, thereby protecting users and maintaining trust.

2. **Arguments Against:**
   - **Pricing Concerns:** There are concerns about the potential for unfair pricing by auditors, given the dynamic nature of audit pricing. Suggestions for a bidding process to ensure fair pricing have been made.
   - **Committee Capacity:** Questions have been raised about whether a small committee, especially with part-time and unpaid members, can effectively manage and vet a large number of projects.
   - **Exclusivity and Migration Risks:** There is a risk that projects may take advantage of the subsidy and then migrate to other ecosystems. Suggestions for exclusivity clauses or investment-based subsidies have been proposed to mitigate this risk.

3. **Key Risks & Considerations:**
   - **Governance and Transparency:** The need for clear governance and transparency in the selection and management of projects is emphasized. The proposal should ensure that the decision-making process is transparent and accountable to the DAO.
   - **Financial Management:** Concerns about the potential sell pressure on ARB tokens if large amounts are converted to USD at once. A phased conversion approach or payment in ARB tokens is suggested to mitigate this.
   - **Operational Feasibility:** The feasibility of managing a large number of audits and ensuring high-quality outcomes with the proposed budget and committee structure is questioned.

4. **Final Sentiment & Voting Trends:**
   - The community sentiment appears mixed, with strong support for the proposal's objectives but concerns about its execution and overlap with existing initiatives like the ADPC. 
   - Voting trends indicate a split decision, with some delegates voting in favor due to the proposal's potential benefits, while others abstain or oppose it due to unresolved concerns and the need for further refinement and collaboration with existing frameworks.

The Arbitrum Foundation proposes a one-year subsidy program for projects needing financial help for auditing smart contracts to enhance security in the Arbitrum ecosystem.

ehARB-91

[ARBITRUM] [NON-CONSTITUTIONAL] Arbitrum Audit Program

![Header](https://cdn.prod.website-files.com/6645e490e589077daad8a58e/67c0904d8a4dced6f70be89a_1-Header.png)
## Summary (TL;DR)

88% of LTIPP dApps & Protocols that spent $ on off-chain ads & content campaigns in 2024 indicated that it’s the 2nd most effective user acquisition strategy. However, only 54% of dApps have used it last year, with only 21% being able to calculate their CAC and 0% calculating their users’ LTV.

[Patterns](https://patterns.build/web3-crm) proposes a 1st iteration of a program for dApps & Protocols to **help them build off & on-chain user acquisition campaigns with positive ROI**. Participants can design their campaigns freely with a requirement for all of them to be measurable and Patterns will calculate ROI (based on CAC and on-chain LTV) for all campaigns to focus on the most efficient strategies in the next iteration. 

## The challenge

-   💸 The main goal of incentive programs such as STIP & LTIPP is to increase the user inflow into the ecosystem that will lead to higher network usage, TVL and finally - the price of $ARB.
    
-   ❌ Even though the budgets for these programs are increasing, their results are temporary and most metrics fall back to their baselines right after the program is finished, which is underlined by many ecosystem stakeholders.
    
📈 Patterns team (f.k.a. Tokenguard) analyzed projects that took part in the LTIPP program and identified multiple reasons of this and similar programs not achieving long-term results that were expected:

-   No off-chain marketing - most protocols didn't communicate rewarding to new users in other ways than using existing SM channels such as Twitter and Telegram.
    
-   Lack of knowledge of on-chain user acquisition funnels - only 37% of protocols have off-chain tracking tools installed for marketing purposes, which makes it impossible to run successful user acquisition campaigns.
    
-   No consideration for ROI and over-expenditure on non-performing projects - as discussed during ARB Liquidity Incentive calls, most teams don't have any active marketing & growth teams that would take care of CAC & LTV ratios for their marketing campaigns.
    

These insights along with the supporting data were presented at ARB Liquidity Incentives calls organised by L2Beat (thanks to Kaerste & Sinkas):
-   09.10.2024 - [summary, recording & transcript are available here](https://forum.arbitrum.foundation/t/rfc-incentives-detox-proposal/25849/70)
-   27.11.2024 - [summary, recording & transcript are available here](https://forum.arbitrum.foundation/t/rfc-incentives-detox-proposal/25849/77)

**The above reasons make most incentivization programs attract only a small group of existing Arbitrum users and / or users that interact with cross-chain protocols available on Arbitrum.**

## Insights from dApps & Protocols

While working on this proposal, our team conducted surveys amongst LTIPP participants to understand their perspective on user acquisition and most efficient strategies they used. Out of 40 protocols we’ve contacted, 19 filled out the survey. The results bring in some significant new conclusions:

-   84% of surveyed protocols indicated covering user gas fees & airdrops as the most efficient user acquisition strategies
--   However, 53% of protocols haven’t spent a single dollar on off-chain user acquisition in 2024
--   Out of 47% of protocols that spent $ on off-chain user acquisition in 2024, 88% indicated 2 off-chain strategies (paid posts & ads; newsletters) as the second most efficient user acquisition tool.
  
-   Only 21% of surveyed protocols know their CAC (“Customer acquisition costs”)
    
-   0% of protocols know their LTV (“Lifetime value of a user”)
   
Further questions uncovered more interesting insights about user-related development plans of dApps & Protocols:

-   Even though 84% of surveyed protocols mentioned covering gas fees & airdrops as the most efficient user acquisition strategies, only 37% of protocols are aware of or have plans to implement ERC-4337 standard (Account Abstraction standard allowing to easily onboard users and cover their gas fees).
    
-   Only 37% of dApps & Protocols have some kind of off-chain tracker installed - which is a crucial prerequisite for running successful user acquisition campaigns and calculating CAC & LTV
    
-   As many as 68% of surveyed dApps & Protocols mentioned metrics other than TVL as the most important for them.
    

## The solution

Patterns would like to propose an iterative program, complimentary to [the one proposed by IOSG](https://forum.arbitrum.foundation/t/arbs-wake-up-call-a-critical-pivot-is-necessary/27706/3), that would solve these challenges by helping protocols run and measure their off & on-chain user acquisition campaigns. The aim of the program is for protocols & ecosystem to learn how to run these campaigns successfully and build a culture of web3 user acquisition through measurable marketing that finally allows to calculate the LTV / CAC and ROI.

  

**Duration**: 3 months per iteration + 2 weeks application time

**Budget** (first iteration):  
-   3,000,000 $USD / 10,263,158 $ARB (at $0.38 7-day avg + 30% reserve for price change)
-   All unused funds returned to the DAO.

**Scope**: Patterns will run a program to boost user acquisition by dApps & Protocols into the $ARB ecosystem. All projects will be divided into categories, based on the ecosystem user acquisition funnel:
![enter image description here](https://cdn.prod.website-files.com/6645e490e589077daad8a58e/67c0904f5027d40473b885d6_2-Ecosystem-User-Acquisition.png)
Budget will be spent on helping these projects achieve predefined measurable goals through all the steps of the above user acquisition funnel:

-   Off & on-chain performance campaigns - consisting of measurable ad campaigns in networks such as Twitter, Linkedin and on-chain networks such as Hypelab and Slise; Paid content and landing page creation; Paid newsletters and cold outreach; Setting up off-chain tracking tools.
    
-   On-chain incentivisation - including gas fee coverage, rewards and long-term on-chain incentives; Setting up Account Abstraction infrastructure to make Arbitrum products user-friendly and easily acquire new users.

**Program KPIs:** Each category will have a different set of on-chain KPIs connected to its role in the Arbitrum Ecosystem according to the user acquisition funnel:

* Bridges, On-Ramps & Wallets (up to 5 projects) - the only purpose of bridging & on-ramp projects is to bring in as much funds into the ARB ecosystem as possible and make them as hard as possible to move out. This strategy has worked really well in LTIPP projects and should be continued.
* DeFi (up to 10 projects) - this segment is characterized by high to medium value transactions and wallets. It's main purpose is to generate as many high volume trades as possible to keep users' capital engaged in the ecosystem for as long as possible. Additionally, offering assets available only on ARB would be highly appreciated.
* Others (up to 5 projects) - this segment includes all non-financial products within the Arbitrum Ecosystem - such as NFT Publishers & Marketplaces, Games, Social Platforms, AI Platforms and others. All of them are characterized by low value transactions and require high user stickiness to be sustainable. From ecosystem perspective, incentivizing these projects can be beneficial only if users stick with them for long, making their lifetime number of transactions high enough to generate sequencer fees.
    
  
|  | Goals | KPIs (every 1 month) | Retention KPIs (after 3 months) |
|--|--|--|--|
|Bridges, On-Ramps & Wallets| - Maximize inflow of new funds into $ARB ecosystem; - Minimize outflow of funds out of $ARB ecosystem| - Net inflow balance; -Net inflow volume| - % change in inflow balance; - % change in inflow volume
|DeFi| - Maximize number & value of trades; - Increase TVL & trade volume on assets available only in $ARB| - Number of trades; - Volume of trades; - TVL| - % change in number of trades; - % change in volume; - % change in TVL|
|Others (NFT, Gaming, Social, AI)| - Maximizing stickiness; - Maximizing in-product purchase| - Monthly Active Purchasing Users; - Avg. in-product purchase volume per wallet| - % change in Monthly Active Purchasing Users; - % change in purchase volume per wallet|

![enter image description here](https://cdn.prod.website-files.com/6645e490e589077daad8a58e/67c0904e6a3a411ae6553e15_acef07d01323d6839013df17f22a878b_3-dApp-DeFi-User-Acquisition.png)
  
**Application process**:
1. Arbitrum dApps & Protocols apply to the program by filling out a predefined form, where they specify:
  1.1. KPIs they declare to achieve every 1 month as well as Retention KPIs after the campaign.
  1.2. Requested budget with expected items & costs
  1.3. Tools used for running and off-chain measurement of the campaign * All activities **must be measurable** and Patterns will receive access to tools used (eg. Googl

... please visit link below to view full proposal



https://snapshot.org/#/arbitrumfoundation.eth/proposal/0x7689f957c8cc37e991c7bed0f1d3dd3f6024a921b0bfbae5c897a09ab45c538b

The proposal by Patterns aims to run an iterative program to help dApps and protocols build effective off & on-chain user acquisition campaigns with measurable ROI metrics like CAC and LTV. It addresses the lack of marketing strategy and ROI understanding in crypto user acquisition and proposes a 3-month program with a $3 million budget to optimize user acquisition strategies.

I support this proposal because it strategically enhances user acquisition for DeFi projects within the Arbitrum ecosystem through measurable on- and off-chain campaigns. By focusing on calculating CAC and LTV, the initiative ensures data-driven decision-making and optimal ROI, fostering sustainable growth and increased token utility. The structured approach with clear KPIs promotes transparency, technical rigor, and long-term ecosystem resilience, aligning with investment goals of scalability, security, and substantial medium-term returns.

ehARB-95

[ARBITRUM] [Non-constitutional] ARB Incentives: User Acquisition for dApps & Protocols

TLDR;
**The TMC recommends that the DAO votes for #Yes, Deploy Stablecoin Strategy**
The three possible combined outcomes are:
- **YES, Deploy Stablecoin Strategy**
- **NO, Deploy Nothing**
- **Abstain**
The vote will be conducted via Single choice voting.


**Key changes:**
- The Arbitrum Foundation has expressed that they’ll be converting 15M ARB to Stablecoins per their internal policies.
- In terms of the process to withdraw stablecoins to cover service provider shortfalls, we will define this process soon in a separate forum post and be holding an additional Snapshot vote to avoid forcing delegates to make a decision on both issues within the same vote.
- No further changes have been made aside from splitting the vote into two separate Snapshots per the Community's request.
---

# Abstract

The TMC has divided the partner selection into two groups: one for managing the stablecoin allocation—which covers converting ARB tokens to stablecoins and their ongoing management—and one for managing the ARB allocation for on-chain strategies.
Specifically, the plan is to convert 15M ARB into stablecoins and manage those on-chain, while the remaining 10M ARB is deployed on on-chain ARB-only strategies.
Further information on the TMC mandate can be found here: [Tally | Arbitrum | Treasury Management V1.2](https://www.tally.xyz/gov/arbitrum/proposal/111105159609719390908725919603971316574753860587890014819515615630412225940809?govId=eip155:42161:0x789fC99093B09aD01C34DC7251D0C89ce743e5a4)

---

# Shortlisted Proposals

Stablecoin Conversion. The Arbitrum Foundation has expressed that they’ll be converting 15M ARB to Stablecoins per their internal policies.
**Stablecoin Allocation (15M ARB Equivalent)**
- Scope: This group covers the process of managing stablecoins.
Partner Selection:
- Karpatkey
- Avantgarde & Myso
- Gauntlet


Allocation Strategy: The stablecoin management responsibilities will be evenly split among the three partners with a 33/33/33 distribution, ensuring diversification and balanced risk exposure while meeting the conversion and liquidity objectives.
---

# TMC Recommendation
We recommend a vote of YES to deploy the Stablecoin Strategy.
Our analysis shows that the stablecoin strategies presented by the selected partners meet our criteria for DAO alignment, returns, risk management, etc.
# Voting Outcomes
Please cast your vote on each allocation separately. Your options are as follows:
Stablecoin Strategy Allocation Vote:
- Yes: Proceed with converting 15M ARB into stablecoins and manage them via a 33/33/33 split among Karpatkey, Avantgarde & Myso, and Gauntlet.
- No: Do not execute the stablecoin strategy; retain current ARB holdings without conversion.

---

# Other Proposals
During our review process, we evaluated several proposals that ultimately did not meet the criteria, required further clarity, or didn’t align with DAO objectives. 

- **AnthiasLabs x XBTO:** Their proposal did not provide adequate detail on stablecoin conversion, DAO alignment, or custody arrangements, which are critical to our objectives.

- **August Digital:** While proposing a single-sided AMM strategy for both ARB yield and ARB-to-USD conversion, the proposal provided minimal details. There was no evidence of existing ARB strategies or a dedicated vault, and the timeline for necessary audits—if smart contracts are involved—was not addressed. Moreover, the risk management section appeared generic, with much of the content seemingly repurposed from other contexts.

- **Bracket Labs:** The submission lacked clarity on key operational components, such as the choice of OTC counterparties or DEXes. Additionally, the rationale behind the 2% trading volume figure and the associated price impact considerations were not explained. Although a Stablecoin Vault is reportedly live, the lack of public transparency and reliance on historical yield figures from related funds (rather than the target vault) were significant concerns, compounded by high fee structures.

- **WINR:** The implementation details were insufficient, leading to concerns over the alignment of risk and reward.

---

# 24.02.2024 Edit -- Further Clarification on Shortlisted Rationale
Stablecoin Strategies:
Providers like Karpatkey, Avantgarde/MYSO, and Gauntlet stood out due to their provided backtests, clear execution plans, compensation structure, and risk management frameworks.
We have high confidence in their ability to manage and deploy 15M ARB worth of stablecoins in well-established, low-risk protocols—aligned with the intended use of funds. 
The shortlisted proposals target an average yield of 8% to 12% under varying market conditions while primarily holding USDC and USDT.
This is why we’re recommending a YES vote on the stablecoin allocation.
---

**Stablecoin Strategy**

|Stablecoin Strategy | Protocols Used | Exp. Returns | Fees|
|--- | --- | --- | ---|
|Gauntlet | AAVE V3 | 8% | Free|
|Karpatkey | Uniswap v3, Camelot v3, Balancer v2/v3, GMX, Aave v3, Compound v3, Fluid, Vertex (Perps), Pendle (Yield) | 12-20% | 0.5% management|
|AvantGarde/MYSO | AAVE V3, Compound (core),  Pendle, Fluid, and Uni v3 (satellite) | 5-15% | 0.5% / 10% management/performance|

---


## Key Risks

### Stablecoin Strategy

* **Stablecoin Risk:** The possibility of a stablecoin depegging.
* **Smart Contract Risk:** Exposure to potential hacks of the protocols used by each provider.
* **Liquidity Risk:** Funds may become locked if the lending rate reaches 100%.
* **Optimization Risk:** The provider’s optimization might not perform as intended or may fail to beat the benchmark.
* **Custody Risk:** Since the Foundation remains the custodian, custody risk is effectively transferred to the Foundation.

---

**Arbitrum Alignment Consideration:**
A key criterion for evaluating submissions was alignment with Arbitrum. While most strategies will be executed on the Arbitrum network, not all will involve Arbitrum native protocols.

There are multiple reasons for this but the main ones are the absence of proposals by Arbitrum native protocols and the fact that most liquidity on Arbitrum is on non-native protocols, making it difficult to allocate a large amount of stablecoin while retaining a competitive yield.

Given the dearth of sufficient proposals, our recommendation is to do nothing rather than something not justifiable from a risk-reward perspective.

---


# Edit 06.03.2025 V3
Further Clarification on the Shortlisted Rationale


# Feedback on Karpatkey’s Proposal

### Stablecoin Strategy

We appreciate Karpatkey’s detailed Risk Management Plan, which includes non-custodial architecture (Safe + Zodiac Roles Modifier), protocol whitelisting (Aave, Compound, Dolomite, Fluid, etc.), and clear maximum exposure thresholds (e.g., no more than 20–25% per protocol).

The yield estimates of ~8–12% for stablecoins appear realistic, and Karpatkey’s track record in managing other DAO treasuries (Gnosis, ENS, etc.) is well-documented.

# Feedback on Avantgarde’s Proposal

### Stablecoin Strategy

The Risk Management section shared by Avantgarde (and MYSO) highlights position-sizing constraints, lockup safeguards, and a diversified stablecoin approach. We especially appreciate the plan’s clarity on monitoring liquidity needs and the ability for the DAO to recall funds if necessary.

Expected returns of 5–15% are in line with typical DeFi yields, and the approach includes established protocols such as Aave, Compound, and Uniswap.

---

# Reminder of Grading Criteria
Our evaluation of proposals was based on the following key factors:
- **25% – Experience & Track Record:** Demonstrated ability to manage treasury assets securely and effectively.
- **25% – Risk Management:** Strength and clarity of risk mitigation measures under diverse market conditions.
- **15% – Alignment with DAO Goals:** Consistency with the DAO’s growth objectives and ecosystem utility enhancement.
- **15% – Expected Returns:** Realistic yield projections and sound risk-adjusted performance metrics.
- **20% – Transparency & Reporting:** Commitment to regular, clear reporting and continuous performance monitoring.

----

# Timelines & Next Steps

We will move forward with a vote on Snapshot next Thursday, March 27, 2025.


**ARB Conversion & Stablecoin Management (15M ARB)**

**IF YES, the Stablecoin strategy is deployed:**
- Initiate a three‑month phase to convert 15M ARB into stablecoins via the Foundation.
- Proceed with the deployment of low‑risk, yield‑bearing strategies for the converted stablecoins, with regular performance and risk reporting.

**IF NO, the Stablecoin strategy is not deployed:**
- Retain the current ARB holdings without conversion.
- No further actions will be taken regarding stablecoin management until a new decision is reached.


**Additional Next Steps for Both Allocations**
Three months after the managers have been elected, publish a comprehensive report detailing the performance and management outcomes and re-evaluate the a

... please visit link below to view full proposal



https://snapshot.org/#/arbitrumfoundation.eth/proposal/0xdd38e103e337b9e02a9d9ac73c2587db5be6cfb46506e13c0e897f7331895cf4

**Arguments in Favor:**

1. **Strategic Alignment and Risk Management**: Supporters emphasize the strategic alignment of the proposal with the DAO’s objectives, highlighting the detailed risk management plans provided by partners like Karpatkey, Avantgarde, and Gauntlet. The use of non-custodial architecture, protocol whitelisting, and realistic yield estimates are praised as strong points.

2. **Diversification and Yield Potential**: The proposal promises diversification and balanced risk exposure through a 33/33/33 split among the three partners. Expected returns range from 5% to 20%, depending on the strategy, which is considered competitive in DeFi markets.

3. **Clear Governance and Reporting**: The TMC's commitment to providing detailed withdrawal mechanics and regular performance and risk reporting is seen as a positive step towards transparency and governance.

**Arguments Against:**

1. **Lack of Specificity in Stablecoin Selection**: Critics point out the need for more clarity around stablecoin selection, particularly the breakdown of allocation in USDC vs. USDT and the consideration of DAI for diversification benefits.

2. **Risk of Market Volatility**: Concerns are raised about the potential price volatility during the three-month conversion window, with calls for contingency plans to handle extreme market conditions.

3. **Unclear Risk Monitoring**: There is a demand for standardized risk ceilings across providers and clear guidelines on intervention strategies if providers deviate from the low-risk mandate.

**Key Risks & Considerations:**

1. **Stablecoin and Smart Contract Risk**: The risk of stablecoin depegging and potential hacks of the protocols used by providers are highlighted as significant concerns.

2. **Liquidity and Custody Risks**: Liquidity risks, such as funds becoming locked if lending rates reach 100%, and custody risks, with the Foundation remaining the custodian, are noted.

3. **Arbitrum Alignment**: While most strategies will be executed on the Arbitrum network, the lack of proposals from Arbitrum native protocols and liquidity constraints are concerns.

**Final Sentiment & Voting Trends:**

The general sentiment appears supportive, with a majority leaning towards a "Yes" vote, driven by confidence in the partners’ track records and the proposal’s alignment with DAO goals. However, there are calls for additional clarity and risk management measures, indicating some reservations among the community.

The proposal suggests converting 15M ARB to stablecoins, managed by three selected partners, to enhance stability and liquidity.

Deploying the Stablecoin Strategy is a strategically sound decision that aligns with the DAO’s objectives for diversified growth and sustainable returns. By allocating 15M ARB to reputable partners like Karpatkey, Avantgarde, and Gauntlet, the proposal ensures robust risk management and diversified risk exposure. The expected yields of 5–20% offer attractive passive income opportunities, while comprehensive governance and transparent reporting mechanisms provide confidence in mitigating potential risks such as stablecoin selection and market volatility. This initiative supports long-term token value appreciation, enhances liquidity, and fosters the DAO’s financial sustainability, making it the most beneficial choice for advancing the ecosystem’s growth and stability.

ehARB-96

[ARBITRUM] TMC Stablecoin Recommendation

TLDR;
**We recommend that the DAO votes for NO, Deploy Nothing**

The four possible combined outcomes are:
- **YES, Deploy ARB Strategy**
- **NO, Deploy Nothing***
- **Abstain**

The vote will be conducted via Single choice voting.
**Key changes:**
- No key changes in the proposal; strategy remains the same as in the previous vote aside from being split into two separate Snapshot votes per the Community's request.
---

# Abstract

The TMC has divided the partner selection into two groups: one for managing the stablecoin allocation—which covers converting ARB tokens to stablecoins and their ongoing management—and one for managing the ARB allocation for on-chain strategies. 

Specifically, the plan is to convert 15M ARB into stablecoins and manage those on-chain, while the remaining 10M ARB is deployed on on-chain ARB-only strategies.

Further information on the TMC mandate can be found here: [Tally | Arbitrum | Treasury Management V1.2](https://www.tally.xyz/gov/arbitrum/proposal/111105159609719390908725919603971316574753860587890014819515615630412225940809?govId=eip155:42161:0x789fC99093B09aD01C34DC7251D0C89ce743e5a4)

---


# Shortlisted Proposals
**ARB Allocation (10M ARB)**

- Scope: This group is focused exclusively on deploying 10M ARB tokens into on-chain strategies designed to generate yield while safeguarding the principal.

Partner Selection:
- Karpatkey
- Avantgarde & Myso

*Allocation Strategy:* The on-chain ARB strategy will be managed equally by the two partners using a 50/50 split. Their proposals leverage proven DeFi protocols and ecosystem synergies to maximize risk-adjusted returns while maintaining liquidity and principal protection.

---

# TMC Recommendation
We recommend a vote of **NO for the ARB Allocation**.

Our analysis shows that the stablecoin strategies presented by the selected partners meet our criteria for DAO alignment, returns, risk management, etc. 

Whereas the current ARB proposals lack sufficient risk management and clear operational details—resulting in low yield projections—we believe it is prudent to sit out on this allocation for now.
---


# Voting Outcomes

**ARB Strategy Allocation Vote:**
- **Yes:** Proceed with deploying 10M ARB into on-chain strategies, managed in a 50/50 split between Karpatkey and Avantgarde & Myso.
- **No:** Do not execute the on-chain strategy; hold the ARB tokens.

---

# Other Proposals
During our review process, we evaluated several proposals that ultimately did not meet the criteria, required further clarity, or didn’t align with DAO objectives. 

- **AnthiasLabs x XBTO:** Their proposal did not provide adequate detail on stablecoin conversion, DAO alignment, or custody arrangements, which are critical to our objectives.

- **August Digital:** While proposing a single-sided AMM strategy for both ARB yield and ARB-to-USD conversion, the proposal provided minimal details. There was no evidence of existing ARB strategies or a dedicated vault, and the timeline for necessary audits—if smart contracts are involved—was not addressed. Moreover, the risk management section appeared generic, with much of the content seemingly repurposed from other contexts.

- **Bracket Labs:** The submission lacked clarity on key operational components, such as the choice of OTC counterparties or DEXes. Additionally, the rationale behind the 2% trading volume figure and the associated price impact considerations were not explained. Although a Stablecoin Vault is reportedly live, the lack of public transparency and reliance on historical yield figures from related funds (rather than the target vault) were significant concerns, compounded by high fee structures.

- **WINR:** The implementation details were insufficient, leading to concerns over the alignment of risk and reward.

---

# 24.02.2024 Edit V2 
**Below is a summary of the strategies, including fees and expected returns. Please refer to the tables for full details and note the associated risks outlined below.**

Note that strategies might share the same general risks, and differences in returns may come down to how effectively the providers optimize yield under varying market conditions.

There are no guarantees or risk-sharing by the providers. As described below, fees are based on the allocation of assets to each provider and/or their performance.

Note that for the Arbitrum Strategy, while both applicants use Myso they have wildly different reported return profiles (hence different risk profiles).

---

**Arbitrum Strategy**

|Arbitrum Strategy | Protocols Used | Exp. Returns | Fees|
|--- | --- | --- | ---|
|Karpatkey | Myso | 7-20% | 0.5% mgnt|
|Avantgarde/MYSO | Myso | 30%+ | 15% perf|

---

## Key Risks

### Arbitrum Strategy

* **Smart Contract Risk:** Inherent risk of the protocol being compromised.
* **Asset Risk:** ARB could lose all value.
* **Counterparty Risk:** If no counterparty is found, the strategy’s yield could drop to 0%.
* **Liquidity Risk:** Liquidity is locked for the duration of the call (30 days for monthly, 7 days for weekly).
* **Covered Call Risks:**
  * **Potential Conversion Risk:** If the strike price is reached, the ARB allocation may convert into stablecoins (see “Managing Potential Conversions”).
  * **Premium Fluctuations:** Option premiums vary based on ARB’s volatility.
  * **Secondary Market Risk:** If a covered call isn’t held to expiry, exposure to secondary market prices may result as the matched trading firm buys back the call.


---

**ARB Strategies:**
When it comes to the ARB proposals, our review was less encouraging. Although there are some promising elements—for instance, Karpatkey and Avantgarde/MYSO show potential—the ARB strategies did not meet our strict criteria for transparency and risk mitigation. Our internal grading highlighted significant concerns:

* **Lack of Transparency:** Key operational details—such as ARB option liquidity, allocation splits, and execution mechanisms—were either insufficiently detailed or not publicly verifiable, particularly for strategies involving off-chain fund movements.
* **Inadequate Risk Management:** Given recent security breaches and governance failures across the industry, we believe that preserving the DAO’s capital is a priority. Without a clear risk framework, moving forward with these strategies would introduce unnecessary exposure.
* **Trade-Offs vs. Returns:** The proposed strategies projected yields between 7% and 30%, depending on the strike price and maturity of options sold, and if the options are sold. If no counterparty is found the options strategy would yield a 0% return. Lending-based strategies offered minimal returns, around 0.16% per year which, even at our maximum allocation, would generate only $10,000–$12,000 annually at current prices. Given the scale of the allocation ($7.5M), these returns do not justify the associated risks.

Given these trade-offs, we believe the risk is not justified for an allocation of $7.5M worth of assets. Until proposals can deliver fully detailed strategies that meet our risk-adjusted return standards, it’s prudent to vote **NO** for the ARB allocation.

---

**Arbitrum Alignment Consideration:**
A key criterion for evaluating submissions was alignment with Arbitrum. While most strategies will be executed on the Arbitrum network, not all will involve Arbitrum native protocols.

There are multiple reasons for this but the main ones are the absence of proposals by Arbitrum native protocols and the fact that most liquidity on Arbitrum is on non-native protocols, making it difficult to allocate a large amount of stablecoin while retaining a competitive yield.

Given the dearth of sufficient proposals, our recommendation is to do nothing rather than something not justifiable from a risk-reward perspective.

---
# Edit 06.03.2025 V3
Further Clarification on the Shortlisted Rationale

# TMC Clarification on ARB Strategy Decision

Hello everyone,

First, we want to sincerely thank the teams at @avantgarde, @karpatkey, and Myso for taking the time to discuss their proposals in greater detail with us. We appreciate your proactive approach and the thoughtful contributions you have made, both privately and in the forum.

Below, we provide additional context on our recommendation to defer active deployment of the ARB allocation at this time, along with feedback on each proposal’s approach and risk management.

# Overall Rationale for the “Hold ARB” Recommendation

### Risk and Transparency

While both teams have made significant efforts, the operational details for the ARB strategies, such as liquidity for options, counterparty arrangements, and daily/weekly execution, remain unclear. Given the large ARB allocation, this uncertainty makes us cautious.

### Yield versus Complexity

The proposed yields for ARB strategies vary widely, ranging from near zero (for example, simple lending) to around 30% (for example, covered calls). However, the higher-yield strategies depend on liquidity or counterpartie

... please visit link below to view full proposal



https://snapshot.org/#/arbitrumfoundation.eth/proposal/0x9d13c56f911796a578812959f775092b3644901be17738a2d41c516d8a8f2e9b

**Summary of Forum Discussion on DAO Proposal: ARB Strategy Deployment**

**1. Arguments in Favor:**
- Some participants appreciate the structured approach of dividing the partner selection into stablecoin and ARB allocations, emphasizing the potential for yield generation while safeguarding the principal.
- The proposal to convert 15M ARB into stablecoins and manage them on-chain is seen positively for its alignment with DAO objectives and risk management criteria.
- Supporters acknowledge the potential of using proven DeFi protocols and ecosystem synergies to maximize risk-adjusted returns.

**2. Arguments Against:**
- The TMC recommends voting NO due to insufficient risk management and lack of clear operational details in the ARB proposals, resulting in low yield projections.
- Concerns about the lack of transparency in key operational components, such as ARB option liquidity and execution mechanisms, are highlighted.
- The proposed strategies are criticized for inadequate risk management, with potential exposure to recent security breaches and governance failures in the industry.
- The projected yields are not seen as justifying the associated risks, especially with lending-based strategies offering minimal returns.

**3. Key Risks & Considerations:**
- **Smart Contract Risk:** Potential protocol compromise.
- **Asset Risk:** ARB could lose all value.
- **Counterparty Risk:** Yield could drop to 0% if no counterparty is found.
- **Liquidity Risk:** Liquidity is locked for the duration of the call.
- **Covered Call Risks:** Potential conversion risk if the strike price is reached, and premium fluctuations based on ARB’s volatility.
- **Lack of Transparency:** Insufficient details on ARB option liquidity and execution mechanisms.
- **Inadequate Risk Management:** Concerns about preserving the DAO’s capital without a clear risk framework.

**4. Final Sentiment & Voting Trends:**
- The general sentiment leans towards caution, with the TMC recommending a NO vote on deploying the ARB strategy due to the identified risks and lack of transparency.
- The community appears to prioritize risk management and transparency over potential yields, favoring a "hold" strategy until more robust proposals emerge.

The DAO proposal recommends not deploying the ARB strategy due to insufficient risk management and unclear operational details, advising instead to hold ARB tokens.

The proposal lacks sufficient transparency and robust risk management, making the potential yields inadequate to justify the associated risks. Prioritizing the preservation of the DAO’s capital and ensuring long-term sustainability aligns with our commitment to secure and transparent governance. Therefore, it is prudent to vote against deploying the ARB allocation until more robust and transparent strategies are presented.

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