Arbitrum DAO Approves $24M Investment in Real-World Assets: Full Breakdown

Arbitrum, an Ethereum layer-two (L2) scaling solution, is proceeding with a proposal to allocate 35 million ARB tokens to invest in real-world asset (RWA) products after receiving community approval from the DAO.

Notably, on June 23, Arbitrum‘s Stable Treasury Endowment Program (STEP) Committee unveiled six projects for investment to diversify the treasury’s portfolio. The initial shortlist included 17 products, but only six were selected to avoid spreading funds “too thinly” or exposing the principal to “operational or default risk.”

These six products include, 11 million ARB for asset management firm BlackRock‘s Ethereum-based tokenized fund BUIDL; 6 million ARB for Ondo Finance’s USDY; 6 million ARB for Superstate‘s USTB; 4 million ARB for Mountain Protocol’s USDM; 4 million ARB for OpenEden‘s U.S. Treasury Bills (T-Bills); and 4 million ARB for Backed Finance’s bIB01.

The Committee determined the investment amount in each product based on the assets under management of each RWA product. As a result, BlackRock‘s BUIDL, with an AUM of $523 million, secured the largest allocation. Data from RWA.xyz shows BUIDL’s AUM increased 13.28% in the last 30 days and has 8 monthly active addresses with 18 holders.

According to CoinMarketCap data, the ARB token‘s price is currently $0.6872, down almost 4% in the past 24 hours. The digital asset’s price has declined 26.72% in the last 30 days. A previous Coin Edition report noted that 97% of all ARB holders are currently underwater on their investment.

If these proposals are successful, it opens up the door for $ARB to have value capture, a first for L2 tokens.

While it's yet to be seen how much value this could capture, the main takeaway is that a portion of the value created by Arbitrum will now be directed towards the…

— Average Joes Crypto (@AvgJoesCrypto) June 28, 2024

The allocation of 35 million ARB tokens, worth $24 million at current prices, could provide a much-needed boost to the project. Moreover, Arbitrum has proposed a staking mechanism that would reward stakers with 50% of future fees.

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