The Foundation wants $16M in stablecoins, 1,740 ETH and 230M ARB for another year of operations. As a first vote opens, delegates and analysts say the request outpaces what the network earns and lacks performance milestones.
A request from the Arbitrum Foundation for a funding package worth about $45 million at current prices is heading to its first vote this week, drawing pushback from delegates and analysts who say the ask outpaces the revenue the network generates for token holders.
The Foundation, the legal wrapper and main spending arm of Arbitrum, one of the largest Ethereum Layer 2 networks by total value locked, opened a weeklong temperature check vote on May 28 to gauge support for another year of operations. An onchain vote would follow, tentatively set for June 8. The Foundation published the underlying proposal on its governance forum on May 22, and most of the delegate response has landed since.
The Funding Ask
The proposal seeks $16 million in stablecoins and real-world assets, 1,740 ETH worth about $3.5 million, and 230 million ARB worth roughly $26 million, the Foundation said in the post. The ARB portion alone equals about 2.3% of the token’s 10 billion total supply, or close to 3.7% of the roughly 6.3 billion ARB in circulation.
The Foundation said Arbitrum generated $23.49 million in chain-level gross profit in 2025 from transaction fees, its Timeboost auction and the Arbitrum Expansion Program, with all of it flowing to the DAO treasury. The annual funding ask runs well above that figure.
The Foundation argues it operates as a cost center that absorbs the expense of growth so the DAO can capture the upside. It projects 2027 expenses of $27.6 million plus 244.9 million ARB, with technical costs to keep Arbitrum One and Arbitrum Nova running making up about 54% of the total. The request is smaller than those projected expenses. The Foundation said its stablecoin ask is about $11.6 million below estimated operating costs and that it would cover the gap from its existing balance sheet.
Spending Outpaces Revenue
The gap between what the Foundation plans to spend and what the DAO earns has become the central objection.
A widely followed DeFi analyst who posts as DefiIgnas, wrote on X on Thursday that the Foundation is “operating at 2.3x DAO revenue.” His figure compares the projected 2027 spend, which he valued near $53 million including the ARB component, against the $23.49 million the DAO earned last year.
That tension sits at the core of the delegate debate: ARB holders keep funding expansion, but the proposal offers no direct mechanism for them to capture the resulting growth. Arbit1, a forum delegate, summed up the concern by writing that “ecosystem growth alone should not automatically be treated as tokenholder value.”
Delegates Want Milestones
Several delegates said they support continued funding but want the structure tightened before any vote.
The most common request is for milestone-based releases rather than a single upfront transfer on passage. The delegate crypfuto argued the funding should be “milestone-based rather than released entirely upfront,” proposing a three-to-six-month runway followed by quarterly releases tied to public reporting. Crypfuto also asked for a detailed breakdown of the 230 million ARB allocation, including how much may be sold for operating expenses and whether unused tokens would be returned to the DAO.
Delegates also pressed for clarity on costs across Arbitrum’s related entities. Griff, a forum participant, said reviewing one entity at a time obscures the full picture and that “it feels weird to do one AAE at a time.” The point carries weight because the Foundation said its payments to Offchain Labs, the company behind most of Arbitrum’s core development, run only through January 2027, after which Offchain Labs may approach the DAO separately for funding.
The delegate cp0x questioned the $10.4 million general and administrative line, estimating it implies about $236,000 per employee across the Foundation’s staff, and called for a closer look at the largest technical cost items.
Possitive Feedback
Not all feedback was critical. The delegate Abel189 backed the proposal, calling the Foundation a critical operational layer and pointing to growth in transactions, stablecoins and institutional adoption since launch. Pedrob, writing on behalf of members of the OpCo Administration and Transparency committee, also voiced support and noted the funding draws from revenue the DAO has already generated.
The Foundation leaned on long-run growth data to make its case. It said daily transactions rose to more than 4.7 million by February 2026 from 1.28 million at its March 2023 launch, a 270% increase, and that Arbitrum now ranks first globally by total real-world assets issued. It listed Pendle, Cow Swap and Instadapp among teams it backed early, and Robinhood, BlackRock and Circle among institutional partners.
Market and Onchain Reaction
ARB has not rallied on the proposal. The token traded around $0.11, down about 16% over the past week and roughly 95% below its January 2024 record, according to CoinGecko. Ether fell about 4% over the same week.
The data the Foundation highlights also sits against a steep retreat in onchain activity. Arbitrum’s DeFi total value locked, which the proposal notes peaked near $21 billion, has since fallen to about $1.5 billion, according to DefiLlama. The Foundation’s own Dune dashboards track transaction volume, stablecoin supply and real-world assets on the network.
What’s Next
A passing temperature check would move the proposal to the binding onchain vote in June. The Foundation said it would fold delegate feedback into the proposal as the process runs, leaving room for the structure, and the dates, to shift before the final vote. It also said it expects to return to the DAO for funding again in 2027.