Arbitrum Foundation Expands RWA Investment with $15.5 Million Treasury Allocation
Arbitrum DAO has approved the second phase of its Stable Treasury Endowment Program (STEP 2.0), allocating 35 million ARB tokens for investment in real-world assets. The program builds on the success of STEP 1.0 and introduces new guidelines for asset selection and management.
The RWA sector has shown remarkable growth on Arbitrum, expanding from $100,000 in early 2024 to approximately $70 million. The initial STEP program, launched in mid-2024, reviewed 55 applications from RWA issuers, with 16 shortlisted and 6 finally selected for allocations, including BlackRock's BUIDL, Ondo's USDY, and Superstate's USTB.
A specialized committee will oversee the selection process, featuring members from GFX Labs, Entropy Advisors, Karpatkey, NorthernGrid, and North Labs Labs. The Arbitrum Treasury & Sustainability Working Group will serve as a non-voting member, except in cases of ties. Committee members must recuse themselves from applications where they have direct or indirect monetary interests.
STEP 2.0 introduces strict eligibility criteria for applicants. Projects that should not apply include those with:
- High proportions of non-stable assets or crypto
- Products without live trading history
- No clear risk management procedures
- Insufficient separation between fund manager and investment manager roles
- Complex redemption processes exceeding USDC SWIFT or DM transfer timeframes
The program timeline spans from February to May 2025:
- February 20: Applications open
- March 20: Submission deadline
- April 20: Finalist announcements
- May: ARB holder vote on proposed allocations
The foundation has established detailed application requirements, including documentation of risk management protocols, bankruptcy protection measures, and performance reporting standards. Successful applicants must maintain transparent communication about any changes in their products compared to STEP 1.0 submissions.
The combined RWA investments from STEP 1.0 (35 million ARB), treasury management (15 million ARB), and STEP 2.0 (35 million ARB) total 85 million ARB, valued at approximately $38.25 million based on current prices. The program has already generated $450,000 in interest returns for the DAO.
Applicants must submit comprehensive details about their products, including expected yield, maturity periods, transaction sizes, and current Assets Under Management. The committee will evaluate proposals based on their potential to add trading volume and depth to Arbitrum's ecosystem while maintaining stable value and generating income independent of crypto market volatility.
The selection process prioritizes products that contribute to Arbitrum's RWA ecosystem development while ensuring proper risk management and operational transparency. All service providers must clearly communicate any changes to their products since STEP 1.0 and provide updated documentation through the official forum channels.
Implementation will proceed through a structured process, beginning with a snapshot vote and RFP publication, followed by application reviews and final DAO approval. The program maintains the same ARB allocation amount as STEP 1.0 despite lower token prices, demonstrating continued commitment to ecosystem development.
