Entropy Advisors: Exclusively Working With Arbitrum DAO

Changes made on Aug 2nd (after Snapshot) Added language about how we will facilitate the ability for the DAO to directly input into our workload.

In order to address our promise to give the DAO the ability to directly and openly provide input into the work we are facilitating, we will be posting monthly Short Term Deliverables similar to the ones included above in an “Entropy” category in the forum. We will call for feedback on our workload and goals, and ask for suggestions as to how to either add new initiatives or remove existing ones from our workload. We will additionally host an Entropy office hour biweekly open to all.

Non-material change clarifying that Entropy has the ability to claim/bill its monthly payments instead of the foundation transferring funds at a monthly cadence. The only alteration is in the verbiage from “draw” to “eligible to claim” with the addition that "Payments that have accrued can be claimed at any time.”

While the Entropy team scales, they will be eligible to claim a reduced $100,000 per month and after crossing the threshold of 7 employees dedicated to Arbitrum, will be eligible to claim regular monthly payments ($2,470,000/12 = $205,834) for the remainder of the 12 month term. Payments that have accrued can be claimed at any time.

Before:

While the Entropy team scales, they will draw a reduced $100,000 per month and after crossing the threshold of 7 employees dedicated to Arbitrum, will start receiving regular monthly payments ($2,470,000/12 = $205,834) for the remainder of the 12 month term.

Entropy Advisors: Exclusively Working With Arbitrum DAO

Non-Constitutional

Abstract

This proposal aims to secure funding for Entropy Advisors to continue its work exclusively with the Arbitrum DAO for one year. During this period, we will deliver strategic proposals, guide key partners through the DAO processes, and align the priorities of essential stakeholders for the betterment of Arbitrum. We will also expand our efforts to include a small set of additional verticals by hiring skilled contributors in areas where the DAO needs support, such as data analytics, technical proposal creation, marketing, or any other needs that may arise.

With a budget of $2.47M for the year paid in monthly installments and stored with the Foundation for DAO-clawback capabilities, along with an optional up to 1.5 million ARB for performance-based bonuses voted on by the DAO near the end of the term and put in a 3-year vesting contact to ensure long-term alignment, we will continue to build a dedicated team focused solely on enhancing the Arbitrum DAO’s success. The primary goal of our work is to help Arbitrum DAO continue its path toward efficient and effective operations and execute its long-term vision of becoming a sustainable entity with diversified revenue streams. We believe that over the coming years, Arbitrum DAO has the potential to generate hundreds of millions of dollars per year while maintaining its status as the leading Ethereum scaling solution with an ever-growing base of users and developers. All of Entropy Advisors’ employees will work full-time towards achieving this goal.

Motivation and Rationale

Arbitrum DAO is set up to prosper with its cutting-edge technology stack that will soon support numerous coding languages, a vibrant community of users and developers, abundant resources in the DAO treasury, and the ecosystem’s commitment to scaling the most decentralized and secure L2 on Ethereum. Despite our belief that Arbitrum holds a strong position in the market today, there is a lot of work to be done over the next 3-5 years to ensure Arbitrum maintains and advances its position. We have diagnosed some key areas in need of improvement that we feel well suited to take on:

1. Designing, drafting and executing proposals that benefit Arbitrum.
2. Strengthening overall governance processes and providing feedback to other DAO contributors, unlocking efficiencies and ensuring redundant work is avoided.
3. Acting as a mesh layer between key stakeholders, e.g., active delegates, development teams such as Offchain Labs, and the Arbitrum Foundation.
4. Helping potential 3rd party strategic partners navigate the DAO to attract high-quality companies and individuals within the ecosystem and RFP applicant pools.
5. Attracting/retaining top talent working full-time, professionally on behalf of Arbitrum DAO.
6. Improving the ability of the DAO to spend money effectively and support a long term sustainable future for Arbitrum.

Today the Arbitrum DAO faces friction executing across all of the aforementioned tasks. Many times those creating proposals have known or unknown ulterior motives and incentives at play. It is difficult for aspiring contributors and partners to navigate the DAO. No one is incentivized to bolster RFP applicant pools. Communication is fragmented with no entity in place to tie perspectives together, and operations/goals often overlap across initiatives. There are numerous proposals that are consensus to move forward but do not progress because there is no financial incentive to do so. There is inadequate accountability over and transparency into DAO funded programs. The problems are ever-evolving and growing, and the Arbitrum DAO needs an entity that only has the DAO’s best interests in mind to fill the gaps.

Our team (@swmartin19, @mattonchain, and @pruitt) brings an extensive network as well as experience in research, governance, brand building, and project management to the Arbitrum DAO, having led well-known brands in the space such as Blockworks Research and 404 DAO. We have all been involved in the DAO since the beginning, starting with Blockworks Research’s entry into the DAO by highlighting flaws in the DAO’s very first proposal, AIP-1. We are not afraid to push against the status quo if we believe it helps Arbitrum achieve its goals.

Entropy Advisors was extremely fortunate to receive a grant from the Arbitrum Foundation. As such, we have been able to use the past few months contributing full-time to Arbitrum DAO to further showcase our value in the community. We have hosted bi-weekly 1-on-1 calls with a cohort of large delegates, with the foundation, and with OCL, and feel that we have a strong hold on various stakeholder’s interests, strategic goals for Arbitrum, working initiatives, etc. When paired with our experience and networks within the industry, we believe that we are uniquely positioned to help Arbitrum achieve its long-term goals with all stakeholder perspectives in mind. With exclusivity meaning no official or unofficial engagements with any other client, Entropy Advisors can serve Arbitrum DAO with no ulterior motives or conflicts of interest.

Today, virtually no money is spent on operations, while the DAO has spent almost 435M ARB in total with ~95% going towards investments, incentives, and grants (Source: Delphi & R3gen). We believe it is absolutely imperative for the DAO to make an investment in operations, simultaneously ensuring different initiatives across the ecosystem can be set in motion swiftly, fit together seamlessly, and can reach the best talent, while the DAO’s expenditures can be managed in a way that enables long-term sustainability. It is evident that this is becoming a wider-reaching theme within the DAO, but requires a heavy lift (see OpCo 2 proposal from @dkpremia that asks for 25M ARB). We are NOT looking to replace OpCo, but rather drastically reduce the scope and funding request by helping formulate operational procedures until the OpCo is formally stood up. At that point, the DAO can decide what role Entropy Advisors plays as a service provider to the OpCo.

With the budget as outlined, Entropy will be able to hire up to 10 employees with a diverse range of skill sets including governance, data analytics, marketing, and development/engineering. We will be able to hire top talent in our industry who will dedicate their full-time bandwidth to Arbitrum DAO. Regardless of Arbitrum’s current strategic priorities, whether cutting costs or scaling strategies, our team will work to execute the goals of the DAO. Given Arbitrum’s dominance, size, and number of initiatives it is important that we build a well-rounded team at Entropy that can

... please visit link below to view full proposal

https://tally.xyz/gov/arbitrum/proposal/22562217031893796518849144396978331510254494883851105730012486117405397295942