Arbitrum DAO earmarks $11M for tokenized US Treasurys investment

The Arbitrum Foundation took to X, formerly Twitter, earlier today to announce that the DAO is moving on to the next phase of its Stable Treasury Endowment Program (STEP), after an on-chain vote.

As part of the new phase of the DAO’s initiative to diversify its treasury with investments in real-world assets (RWAs), it will allocate 35 million ARB, worth around $11.6 million at current prices, to tokenized U.S. Treasurys through leading institutional issuers Franklin Templeton, Spiko, and WisdomTree.

It’s a massive day for RWAs!

The ArbitrumDAO just approved 35M ARB via STEP 2 to accelerate RWA institutional adoption with @FTI_US @Spiko_finance and @WisdomTreeFunds

Only on Arbitrum, here’s what this means 👇 pic.twitter.com/AtnYof4qsH

— Arbitrum (@arbitrum) May 8, 2025

The funds will be distributed among three issuers

According to the DAO’s post, after a proposal process that evaluated over 50 submissions, the STEP committee recommended an allocation of 35% to Franklin Templeton’s FOBXX (tokenized as BENJI), 35% to Spiko’s USTBL, and 30% to WisdomTree’s WTGXX.

The committee, which is made up of community-elected members, made their pick with a desire to strike the right balance between fees, existing TVL, risk-adjusted setups, and community involvement.

Almost 89% of the participants voted in favor of the allocations, with many expressing satisfaction with the decision as they believe it reflects the right balance of costs, risks and returns without compromising on the broader goal of supporting RWA growth on Arbitrum.

Only 0.01% voted against, and around 11% chose to abstain. Voting lasted several days, starting on May 1 before concluding at 9 a.m. ET on Thursday. Applicants who were not selected will get to reapply in the next round, according to the proposal submitted by Arbitrum DAO strategic consultants Entropy Advisors, on behalf of the committee.

“We are thrilled to be selected as a manager for the STEP 2 program, deepening our already strong connection with the Arbitrum user base,” Roger Bayston, Head of Digital Assets at Franklin Templeton, has said. “By leveraging Arbitrum’s leading Layer 2 technology, we are able to deliver faster, more scalable, and cost-efficient solutions to our clients. This collaboration not only strengthens our commitment to innovation but also positions us at the forefront of the next generation of financial services infrastructure.”

The STEP initiative is crucial for the DAO

The STEP initiative is a strategic move to foster more institutional involvement in the Arbitrum ecosystem and expand its influence in the broader blockchain and financial sectors.

Matthew Fiebach, co-founder of Entropy Advisors, shared his thoughts on the development in a recent interview. According to him, the fact that organizations like Blackrock, Franklin Templeton, Spiko, and Wisdom Tree are publicly interacting with a DAO in a forum is “an unbelievable accomplishment for the whole crypto space.”

“Since day one, Arbitrum has been strategically positioned at the heart of crypto’s convergence with TradFi, and STEP is a great example of the DAO’s steadfast push to continue bringing institutions onchain,” he added.

All three organizations involved in the Arbitrum initiative have decades of experience in managing assets, and their involvement with STEP 2 can signal to other institutions that the network is a reliable and secure platform for tokenizing and managing RWAs.

Its partnership with these established TradFi firms can help Arbitrum demonstrate that it has a mature ecosystem that is secure and capable of handling institutional-grade financial operations.

According to the post from Arbitrum, since its launch over 6 months ago, over $650K in interest has been generated for the DAO.

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