Arbitrum: directing DRIP, ATMC and AEP fees toward growing USDG adoption

Entropy Advisors posted a proposal on the ArbitrumDAO forum on 6 October 2026, developed jointly with Offchain Labs, the Arbitrum Foundation and OpCo, asking the DAO to adopt USDG, the Paxos-issued stablecoin, as a core strategic initiative; Arbitrum backs it by joining Paxos's Global Dollar Network (GDN). A Snapshot vote on the proposal ran 15 to 22 October 2026 and closed with most voting power For, though cp0x voted Against and L2BEAT abstained. The onchain vote runs 29 October to 12 November 2026. The GDN terms behind it are confidential: the proposal says the Oversight and Transparency Committee (OAT) and the Arbitrum Aligned Entities are read in on parameters it cannot publish, and several delegates who voted For asked to see the economics before the onchain vote.

What it changes

• Adds 100M ARB to the DRIP incentive budget, raising its remaining, unspent budget from about 65M ARB to about 165M ARB, and combines DRIP's remaining Seasons 2 through 4 into a single season focused on USDG
• Broadens DRIP's permitted activities to include protocol-owned-liquidity seeding, liquidity arrangements and incentive deals with USDG-integrating teams, and extends the DRIP mandate for one year after this proposal passes its onchain vote, which the proposal estimates at 12 November 2026
• Lists how the Arbitrum Treasury Management Committee (ATMC) will use treasury assets for USDG growth under authority it already holds through its Investment Policy Statement: minting USDG from its stablecoin allocation (it holds about $66M in tokenized money market funds and stablecoins), seeding protocol-owned liquidity for USDG pairs, and striking co-incentive deals
• Routes all Arbitrum Expansion Program (AEP) fees, net of the 20% already allocated to the Arbitrum Developer Guild, to the Treasury Management (TM) portfolio, and authorizes the ATMC to convert incoming and already-accrued AEP fees to USDG, executed by the Arbitrum Foundation
• During the growth phase, the majority of GDN rewards earned on USDG are reinvested into builder incentives and integrations rather than paid out, with net proceeds flowing to the TM portfolio
• Makes USDG a Special Project under Entropy Advisors' existing Year 2-3 mandate, with the OAT to set KPIs for the initiative; Entropy asks for no additional compensation

The case for it

The proposal frames USDG as a way to diversify the DAO's revenue away from ETH-denominated, market-correlated income: "it introduces a dollar-denominated, demand-driven revenue line that is largely uncorrelated with the rest of the DAO's income." It asks the DAO to back a joint effort across the Arbitrum Aligned Entities so that "incentives, grants, and partnerships compound in one direction: toward builders first, and back to the DAO over the long term."

The objections

cp0x voted Against in the Snapshot vote, and, in its post, raises the most detailed objection in the thread. It argues the proposal asks for too much on too little information: "the key economics are not disclosed," since "delegates are asked to vote without knowing the terms of Arbitrum's GDN agreement, which entity receives the rewards, or what revenue to expect." It also objected to bundling the DRIP budget increase, the ATMC authority, the AEP routing and Entropy's role into one vote, and noted that DRIP Season 1 retention data shared earlier in the thread was uneven across protocols.

Entropy replied on 21 October that USDG reserves earn an estimated 3.5% to 3.75%, that Arbitrum's share of the rewards is set by terms that are confidential under the GDN membership agreement, that the ATMC activities the proposal lists do not expand its existing authority, and that it would not publish AEP conversion thresholds in advance, to avoid leaking information to counterparties.

L2BEAT's governance team voted Abstain rather than against, saying in its post that "we would have liked a more complete picture before being asked to support the full allocation," while adding it saw no clearly better alternative to put forward. Several delegates who voted For, including Zeptimus, Griff, Jean_MUX and maxlomu, asked for KPIs, retention targets or a deadline for the OAT to set them before the onchain vote, and for the 100M ARB to be released in milestones rather than all at once.

Where it stands

The Snapshot vote ran 15 October 2026 to 22 October 2026 on the arbitrumfoundation.eth space and closed with about 199.5 million ARB of voting power For, about 246,000 ARB Against and about 10.9 million ARB Abstain, out of 1,035 votes. Entropy disclosed a conflict of interest, given its roles in DRIP, the ATMC and the proposed USDG initiative, before voting For. The latest reply, on 27 October 2026, came from Reverie, which voted For while asking for more visibility into the GDN deal's economics before the onchain proposal. The proposal was submitted onchain to the Treasury Governor on 26 October (transaction), and voting runs 29 October to 12 November 2026.