The Arbitrum Endowment Committee has put forth a recommendation to diversify Arbitrum’s treasury by investing in six real-world asset products. This initiative underscores the growing convergence between traditional finance and decentralized finance (DeFi).

Proposed Investments

The committee has suggested allocating 35 million ARB tokens, valued at approximately $27 million, from the DAO’s treasury into the following six products:

1. BlackRock’s BUIDL Fund with Securitize:

   • Proposed Allocation: 11 million ARB
   • Details: This fund, managed by BlackRock and Securitize, has quickly amassed a total value of $481 million since its inception in March, making it the largest tokenized real-world asset (RWA) fund to date.

2. Ondo Finance’s US Dollar Yield Token:

   • Proposed Allocation: 6 million ARB
   • Details: This product offers stable and liquid yield opportunities denominated in US dollars, providing a hedge against crypto market volatility.

3. Superstate’s USTB Fund:

   • Proposed Allocation: 6 million ARB
   • Details: Superstate aims to enhance Arbitrum’s treasury management and contribute to the growth of its RWA ecosystem.

4. Mountain Protocol’s USDM:

   • Proposed Allocation: 4 million ARB
   • Details: USDM offers a stable asset option, helping to diversify and stabilize the treasury.

5. OpenEden’s TBILL Fund:

   • Proposed Allocation: 4 million ARB
   • Details: This fund focuses on tokenized US treasuries, providing secure and reliable yield opportunities.

6. Backed Finance’s bIB01 Asset:

   • Proposed Allocation: 4 million ARB
   • Details: This asset further diversifies the portfolio with a unique investment strategy focused on blockchain-integrated financial products.

Strategic Goals

The investments are part of Arbitrum’s Stable Treasury Endowment Program (STEP), designed to:

• Support the network’s real-world asset ecosystem.
• Invest in stable and liquid products generating yield independent of crypto market volatility.
• Ensure a diversified treasury with minimal operational or default risk.

Selection Process

Out of over 30 initial applications, the committee shortlisted 17 products before recommending the final six. The allocations were determined based on the existing assets under management (AUM) of each provider, ensuring a balance between risk and return.

Market Impact

The introduction of these investments highlights Arbitrum’s commitment to integrating traditional financial products with DeFi. At presstime, the total value of all tokenized treasury product tokens in circulation stands at $1.72 billion, a significant increase from $778 million at the start of the year.

Community Response and Governance

The Arbitrum community will vote on the proposal on July 1, 2024. If approved, this move will further solidify Arbitrum’s position as a leading Layer 2 blockchain network with a robust and diversified treasury.

Arbitrum’s STEP program represents a strategic initiative to bridge traditional finance and DeFi, ensuring the stability and growth of the network’s treasury through diversified investments in real-world asset products.