Reallocate Redeemed USDM Funds to STEP 2 Budget

Non-Constitutional

This proposal has been worked on in collaboration with the entire STEP 2 Committee where consensus was reached on this proposed path forward.

Abstract

The Arbitrum DAO held approximately $3.5 million in USDM, a yield-bearing stablecoin from Mountain Protocol. This treasury asset purchase was a part of the STEP 1 program. Following Anchorage Digital Acquiring Mountain and the announced wind-down of USDM, the Arbitrum Foundation has already redeemed the entirety of the DAO’s USDM position, which is now in USDC. This proposal reallocates the fully redeemed funds (~$3.5M USDC) to the STEP 2 budget.

Motivation and Rationale:

This is a straightforward administrative action to ensure the assets allocated to STEP remain yield bearing. At an estimated 4.5% on $3.5M, the DAO is missing out on ~$13k per month while these funds sit in USDC. Given the extremely recent review of RWAs and acceptance of the STEP 2 allocation, this is a simple path forward that the committee believes should enable these assets to get to work in high-quality yield-bearing assets.

For further context, the STEP 2 budget has been partially liquidated, but some of the allocated ARB is still awaiting swapping. Additionally, none of the STEP 2 funds have been allocated yet (in progress).

Specifications

This proposal, if passed via Snapshot with more votes For than Against, will enable the Arbitrum Foundation to move all funds redeemed from USDM into the previously approved STEP 2 allocation:

• WisdomTree WTGXX: 30%
• Spiko USTBL: 35%
• Franklin Templeton FOBXX (BENJI): 35%

Budget

This proposal requires no additional funds from the DAO and will proceed to Snapshot Thursday June 5th.

Disclaimer The information provided in this proposal is for educational and informational purposes only and does not constitute financial, legal, or tax advice. Nothing in this proposal should be interpreted as an endorsement, recommendation, or advice to engage in any specific transaction, strategy, or investment. The information is presented "as is" without any warranties of accuracy or completeness. Delegates should consult with professional advisors for specific guidance before making any financial, legal, or tax-related decisions. Use of this committee recommendation is entirely at your own risk.