Arbitrum, an Ethereum layer-two scaling solution, received community approval to allocate 35 million ARB tokens to invest in real-world asset (RWA) products. The Stable Treasury Endowment Program (STEP) Committee has selected six projects for investment out of an initial shortlist of 17, aiming to diversify the treasury’s portfolio and avoid spreading funds too thinly. These projects include investments in BlackRock’s Ethereum-based tokenized fund BUIDL, Ondo Finance’s USDY, Superstate’s USTB, Mountain Protocol’s USDM, OpenEden’s U.S. Treasury Bills (T-Bills), and Backed Finance’s bIB01.
The investment amount in each product was determined based on the assets under management of each RWA product, with BlackRock’s BUIDL securing the largest allocation due to its AUM of $523 million. Data from RWA.xyz shows BUIDL’s AUM increased by 13.28% in the last 30 days, with 8 monthly active addresses and 18 holders. CoinMarketCap data reveals that the ARB token’s price is currently $0.6872, down almost 4% in the past 24 hours and 26.72% in the last 30 days. A previous report indicated that 97% of all ARB holders are currently underwater on their investment.
If successful, these proposals could represent a significant opportunity for value capture for the ARB token, a first for L2 tokens. The allocation of 35 million ARB tokens, valued at $24 million at current prices, could provide a much-needed boost to the project. Additionally, Arbitrum has proposed a staking mechanism that would reward stakers with 50% of future fees, further incentivizing participation in the platform. It remains to be seen how much value this initiative could capture, but it signifies a positive development for the project.
In conclusion, Arbitrum’s decision to allocate 35 million ARB tokens towards investments in real-world asset products demonstrates a commitment to diversifying their treasury’s portfolio and potentially capturing value for token holders. The selection of six projects, based on their assets under management, aims to maximize returns while minimizing risk. With initiatives like the Stable Treasury Endowment Program and proposed staking mechanisms, Arbitrum is actively working towards enhancing the value proposition of the ARB token and fostering community engagement. As the project continues to evolve, it will be interesting to see how these investments and strategies impact the overall growth and success of Arbitrum in the decentralized finance ecosystem.
