Brrr

Time for a self-indulging bull post. If we were to sum up what we are most proud of accomplishing in Arbtirum over the past ~2 years, it can be boiled down into one chart: From a trailing 12-month Net Income of -$131M, to (+)$4M in less than 2 years. Short thread👇

This was one of the most cost-effective ecosystem incentive programs ever run in crypto. DRIP or drown

@ImperiumPaper @EntropyAdvisors Ahh you're right

@0x___Brick @EntropyAdvisors Yeah. Think I mentioned not fully deployed and wait for Q1 numbers

The Q4 2025 report for Arbitrum by @entropyadvisors is out. TLDR; OK quarter, not a lot to remark upon. Net income $3.6m (up 29% QoQ) Expenses $5.5m (up 40% QoQ) Treasury excluding ARB $199m (down marginally) First, it’s important to remember that Arbitrum, like many DAOs, has several off-balance-sheet affiliates that, while covered in the report, may make a given quarter look better than if they were all consolidated. In the case of Arbitrum, the Arbitrum Foundation, Arbitrum OpCo, and Arbitrum Gaming Ventures are all entities funded by governance but who receive funds in large, lumpy sums (usually annually). Likewise, their expenses are not included directly, although Entropy discusses them extensively in the section about runway. Income was higher mainly on the back of increased gas fees (up 46% QoQ) and Timeboost (up 22% QoQ). RWA yield was also marginally higher. Stablecoin yield was up significantly, but is not a material amount in absolute terms. ETH yield was down, but also not material. A new line item for options yield appears in December. This is where governance entities are selling covered calls against treasury ARB tokens. The annualized yield was ~14%, but the program is new and a small pilot for now. I personally have doubts this can be scaled much - either due to depth of ARB options market or just for the political overhang of knowing governance is short their own token. But it’s a creative way to gain some income at the margins, and certainly worked well in a down-only market for ARB. RWAs continue to comprise the portfolio approved under the first two years of the STEP diversification program (disclosure: I saw as the GFX Labs representative on the committee for both years). Current yield from these tbill/money market tokens is ~3.75%, with BUIDL being the clear underperformer. @BackedFi bIB01 and @SuperstateInc USTB both considerably above the weighted average. This probably warrants a rebalancing. ETH strategies provided a de minimus annualized yield of ~0.2% - essentially zero. Some of this is strategic in nature, like liquidity provision, and some of these positions were not fully deployed until middle of December. Obviously these need to perform considerably better to meet benchmarks of alternatives like idle stETH or the RWA assets, but we won’t have real information to evaluate until Q1 2026. Stablecoin strategies outperformed their benchmark of Aave USDC deposit rates. Entropy includes an extensive discussion about the DAO’s runway based on various levels of accounting consolidation between affiliated entities and price assumptions about the ARB token. I encourage you to look at it, because it’s a thoughtful exercise. I think an even more useful exercise is how to get Arbitrum to grow to justify an $800m market cap. (Yes, I know FDV is higher, but ceteris paribus that won’t change the market cap, just the token price) Even with a pretty generous 20x PE multiple, Arbitrum would need to be earning $40m/year in net income. I just don’t see how it gets there without aggressive entry into new business lines. It might seem as though it’s not too far off, with an annualized net income of $14.4m just looking at Q4. But remember that things like Arbitrum Foundation and OpCo don’t typically get funded on a quarterly basis, and there are a lot of expenses being fielded by those entities (and Offchain Labs!) that aren’t captured in the DAO’s direct expenses. There also has to be enough meat on the bone for Offchain Labs to give a healthy return to its investors ($1.2b valuation at 2021 Series B). Arbitrum does seem to be better positioned than Optimism both financially and strategically. This seems to be reflected in the token valuation, because ARB market cap it double that of OP. (Continued in next tweet)

Gotcha. Would flag that ~50% (~8.5K ETH) of BoM value comprised unallocated ETH received from the treasury, so doesn't really give a realistic image of strategy returns. Do think it's fair to say that that was roughly the return on the total ETH holdings in the portfolio in Dec tho, but would add that ~5K ETH was deployed in mid December, 1.75K in mid Jan, and the rest has been approved for allocation but not deployed yet, so that metric will also materially increase in Jan/Feb

@0x___Brick @EntropyAdvisors Actually a typo and I cannot seem to edit since I did a second tweet. But still small: 40k yield for Dec * 12 months)/$48.5m assets ≈ .9%

Another 200 IQ addition to the Entropy team! Super stoked to have @mobenseddik on board - he's going to be a real game changer.

The new Arbitrum Analytics hotspot is here!

@EffortCapital @MattFiebach @tumilet @bread_ 😢

@MattFiebach @tumilet @bread_ @0x___Brick We don’t listen to IB unc

Blockworks homepage is now pure-data, and notably has projects default-sorted by 24hr REV. People can fight it, but token value capture (and valuations derived from it) is not a trend that will slow down. If chain's are not generating quantifiable and direct value to their native assets they'll be seen as an old-world design (and will whither and die on the valuation vine).

👀👀👀

🚨DRIP Incentive Program Recap with Pendle, USDai, and Theo Network. DRIP has been live on Arbitrum for 3 months. Top assets like @USDai_Official and @Theo_Network have grown drastically with the help of DRIP and @pendle_fi. Tune in tomorrow for DRIP & Protocol Alpha.

Tomorrow, we publish a new @edge_pod with @RobinhoodApp GM of Crypto, @JohannKerbrat. This clip might be the clearest articulation I’ve ever heard on why @ethereum's roadmap is working, and why Robinhood chose to build its own L2 using @arbitrum. + Ethereum offers security, with proven decentralization + New L1s = centralized databases + EVM liquidity is essential for tokenized stocks & RWAs + Arbitrum’s tech stack wins on engineering merit No edits. No spin. Just a major U.S. fintech explaining why they’re building the future of finance on Ethereum. Real validation for those of us who are long term Ethereum/ETH investors. Here is the clip and transcript for Johann answering why Robinhood chose to build its own Ethereum L2: "You see a lot of companies right now building their own L1. And for us, we felt excited about this idea where we can control anything that we want to build and we don't have to deal with any other chain to talk to or anything like that. But at the same time, creating the security of a real proper decentralized chain is extremely difficult, as you know. And we basically get that for free with Ethereum. The network has been going on for a very long time now and the security is stable and it's decentralized. And I think that's really the key two points that we wanted to have. When you look at some of these new L1s that are being created, it's not really decentralized and it's not really secure. So at the end of the day, you're basically having like a... fancy database that is probably a bit slower to use than an actual database. And so we didn't really see the value in that. With Ethereum, we get the security by default. The second thing that we get by having an L2 is that you get all this liquidity that is already part of all the EVM compatible chains. And that was also a very important decision factor for us. If we really want to bring the stock market onto the chain, we need to have this liquidity. It's not going to be possible if it's in a closed loop or in a closed chain that nobody can access and you need to have like 20 different hoops before you can bridge to that chain. So for us, that was kind of the two elements that we really wanted to focus on and that's why we decided on building on Ethereum. And then we decided on Arbitrum mostly because we love the technology. There's a few things that we are excited about. For example, Stylus. It's a way that we can basically use different language into the chain and we can build on top of that. We also like the way that they prioritize transactions that is, we think, a better way than some of the competition. And so basically we'll use the Arbitrum stack and we'll create our own L2, which will make us also compatible with all the Arbitrum chains. And so we think it's kind of the best of all the worlds. But for us, the idea is like we will start with public stock, and then we think that we can tokenize anything really, not just stocks. It can be private stock, it can be art, it can be real estate, whatever you want to think of. And so we really wanted to have a platform that is kind of easy to build on and we can keep adding on it. At the same time, we know that regulation are going to be hard on some of these products, especially when it comes to financial products. You always have different regulators. You have different rules depending on the region. If you're in the EU versus the US versus LATAM. And so we felt like we wanted to have our own layer that we could customize for these needs. And then anyone that is building on the chain will also be able to benefit from what we are building, versus just putting everything in a contract that will be just good for the people that are using the Robinhood contracts. But so at this point, we announced the chain in June. We are in private test right now, and then we'll do more announcements in the future." Subscribe for the full episode tomorrow! ► Newsletter: the-edge.xyz ► Spotify: tinyurl.com/edgepodspotify ► Apple: tinyurl.com/edgepod ► Youtube: @defidad" target="_blank" rel="nofollow noopener">youtube.com/@defidad ► Pods: pods.media/edge

The Fusaka (Fulu + Osaka) upgrade is here with a host of new EIPs, aiding @ethereum's progress toward better scalability. We've built the "Ethereum: Fusaka Upgrade" dashboard on @Dune to track how these EIPs are affecting network activity in real-time. Let's dive in 🧵👇

Entropy is cooking over in Arbitrum.

DAOs are dead because they were never alive. What we called DAOs were mostly an attempt at regulatory arbitrage over the "Common Enterprise" aspect of the Howey test. The industry swung the pendulum too hard and created something shitty. When they were created with this goal in mind, tokens never had a chance to become what they should have been all along: a mechanism for decentralized security, programmatic control of a treasury, and a place where every revenue lever ultimately flows. DAOs are not: countries, cities, governments, communes, coops, or any of this other inefficient crap that polysci larps try to tell you they are. DAOs are businesses. It is fine if centralized actors sit between the DAO and certain protocol parameters. It is fine if operators run the day to day. It is fine if there is a core team. What matters is simple: token holders must have programatic rights to replace those actors. They must have programatic rights over the valuable assets on hand that pay those actors bills. And they must have programatic rights over the upgradeability/security of the protocol. Tokens create perpetual, programmatic ownership of revenue in a way no historic corporate structure ever has. DAOs are not dead. The name is. The function is only now beginning to come alive.

@AliTslm @arbitrum Smashed it!

The story of @arbitrum that I shared at #DuneCon25 👇

The Fusaka upgrade starts addressing many of the concerns related to Ethereum's 2 biggest challenges 1) High Gas Fees 2) Revenue And it is coming in 2 days! Here are the most important EIPs you need to know (✍️/5)

Happy thanksgiving!! Feeling grateful for the killer team at @EntropyAdvisors I have the pleasure to spend every day working with. @tomwanhh: no one else can turn raw data into the exact most valuable insight like he can. He’s a leader and relentless builder. @AliTslm: Nonstop tinkerer constantly sharpening his abilities with new tools and skills to make data more actionable. @0xpibs: true eye for dashboard design and as an Aussie is of course a generally cool guy. @0x___Brick: No one matches Bricks grind. Ex IB with the best eye for fundamentals in the industry. @tETHtosterone: beyond plugged in and can dissect yield and narrative opportunities into the best risk adjusted bets in the market. @0xPruitt: literally a Swiss Army knife who makes sure nothing falls through the cracks + gives off young JFK vibes. Level headed is an understatement. @swmartin19: keeps the ship running in the right direction. Never gets lost in the noise and always knows where puck is headed.

@MattFiebach @EntropyAdvisors @tomwanhh @AliTslm Team SO cracked Entropy Everywhere🤠

@Dune con is live, we hope everyone has a great time! Our data wizard @AliTslm will be breaking down how @arbitrum DAO is a data-driven autonomous organization. You do not want to miss it 👇