Arbitrum DAO Treasury Strategy: $100M Portfolio Earning $2M Interest via Aave Morpho and BlackRock

In the volatile arena of decentralized finance, few DAOs exemplify strategic treasury management like Arbitrum. With its native token ARB trading at $0.1825 – a resilient hold amid a 24-hour dip of $0.002220 – the DAO has deployed a $100 million portfolio generating roughly $2 million in annual interest. This isn’t passive holding; it’s a calculated fusion of tokenized real-world assets and DeFi lending powerhouses like Aave and Morpho, all under the Stable Treasury Endowment Program (STEP).

Arbitrum’s approach transforms what was once a treasury heavy in native ARB tokens – 92% as of late 2025 – into a diversified engine of sustainability. Entropy Advisors, the stewards of this program, deliver monthly transparency via dashboards on Dune Analytics and governance forums, tracking every yield accrual and allocation shift. The result? A portfolio that climbed to $87.9 million by August 2025, up $8.3 million in a single month, proving resilience even as ARB hovers at $0.1825.

Tokenized Treasuries: BlackRock, Franklin, and WisdomTree Lead the RWA Charge

Arbitrum DAO’s RWA pivot marks a maturation point for DAO treasury management. Allocating 11 million ARB – valued around $11.6 million at deployment – into BlackRock’s BUIDL fund was a masterstroke. This USD Institutional Digital Liquidity Fund, launched in March 2024 with Securitize, ballooned to over $650 million in assets, commanding nearly 30% of the tokenized U. S. Treasury market. It’s not just size; BUIDL offers low-risk yields tied to short-term government securities, perfectly suiting a DAO planning for volatility.

Franklin Templeton’s FOBXX, absorbing 35% of the STEP allocation, adds another layer. Known as BENJI on-chain, this OnChain U. S. Government Money Market Fund hit $420 million market cap since 2021, ranking third among Treasury-linked products. Complementing it, WisdomTree’s WTGXX took 30%, rounding out a trio that blends institutional credibility with on-chain efficiency. These moves earmark $11 million-plus for RWAs, shielding the treasury from crypto downturns while earning ~5% APY.

I view this as prescient: as traditional finance giants like BlackRock tokenize assets, DAOs like Arbitrum position themselves at the convergence, capturing yields that outpace idle stablecoins without excessive risk.

DeFi Lending: Aave and Morpho Supercharge On-Chain Yields

While RWAs provide stability, DeFi protocols inject alpha. Arbitrum’s engagement with Aave and Morpho turns stablecoins into yield machines. Morpho, the open-source lending network backed by a16z and Coinbase Ventures, operates seamlessly on Arbitrum’s EVM chain. With over $70 million in funding and Forbes 30 Under 30 recognition, Morpho optimizes lending markets for superior rates – every dollar deployed works harder.

Aave, the DeFi lending stalwart, pairs with Morpho to offer collateralized lending at competitive APYs. The DAO’s $100 million slice – 11% of total holdings – isn’t idle; it’s actively lent, borrowing against, and earning. By May 2025, STEP had amassed $30.5 million with $178,000 in interest. Fast-forward, and projections hit $2 million annually, underscoring on-chain treasury yield mastery.

This dual strategy – RWAs for ballast, DeFi for growth – reflects Entropy Advisors’ playbook: diversify beyond native tokens, which started at 35% of Arbitrum’s 3.5 billion ARB endowment.

Entropy Advisors’ Oversight: Metrics That Matter for DAO Operators

Transparency defines Arbitrum’s edge. Entropy Advisors’ monthly ATMC reports dissect asset allocation, interest rates, and portfolio value. Dune Analytics dashboards visualize it all: from weETH integrations (3,117 ETH deposited, third-largest holding) to the $750 million in total allocations since inception. As treasury managers, we applaud this rigor; it mitigates governance risks and builds voter confidence.

Current stats paint optimism: total treasury at $1.78 billion in November 2025, with STEP targeting stablecoin vaults and Ondo T-Bill vaults alongside core holdings. At ARB’s $0.1825 price, these strategies buffer against 24-hour lows of $0.1798, investing for resilience amid volatility. For other DAOs eyeing similar paths, Arbitrum offers a blueprint: blend BlackRock’s institutional polish with Morpho’s DeFi innovation.

Yet, the true measure lies in execution. Arbitrum’s DAO treasury management isn’t theoretical; it’s battle-tested. The STEP program’s evolution from $30.5 million in May 2025 to a $100 million powerhouse by early 2026 showcases compounding yields. Native ARB at $0.1825 forms the backbone, but stablecoin vaults DAO-style – via Ondo T-Bill and OpenEden integrations – lock in ~5% APY, outpacing traditional savings while staying liquid on Arbitrum’s chain.

Performance Metrics: Yield Generation and Risk-Adjusted Returns

Let’s dissect the numbers. Entropy Advisors’ dashboards reveal a portfolio not just growing, but optimized for resilience. Cumulative interest hit $178,000 early on, scaling to $2 million annually across the $100 million deployment. This equates to a blended yield hovering at 4-6%, blending RWA stability with DeFi upside. At ARB’s current $0.1825 – down 0.0120% in 24 hours from a high of $0.1899 – such strategies prevent erosion, turning volatility into an ally.

This table simplifies the RWA core, but DeFi layers via Morpho Aave treasury deployments add dynamism. Morpho’s peer-to-peer matching squeezes extra basis points from lending pools, while Aave’s battle-hardened liquidity ensures redemptions stay seamless. Risk? Minimal, with collateral ratios north of 150% and oracles feeding real-time prices like ARB’s $0.1825 low of $0.1798.

DAO operators take note: Arbitrum’s playbook sidesteps common pitfalls. No over-reliance on native tokens, which dipped alongside ARB’s 24-hour slide. Instead, BlackRock DAO allocation brings TradFi guardrails – BUIDL’s $650 million AUM dwarfs most DeFi vaults – fused with Entropy’s on-chain oversight. weETH deposits bolster ETH exposure without direct custody risks, ranking third in holdings.

Lessons for On-Chain Treasuries: Beyond Arbitrum, a Blueprint Emerges

Arbitrum Entropy Advisors set the standard. Their ATMC reports – dissecting $750 million in historical spends – empower voters with data, not dogma. For treasuries starting native-heavy, like Arbitrum’s initial 3.5 billion ARB stash, diversification via STEP 2 proposals accelerates maturity. I’ve managed funds through cycles; this model echoes hedge fund tactics: 60% ballast in RWAs, 40% yield-chasing in DeFi.

Projections? With ARB at $0.1825, sustained yields could swell the endowment 20% yearly, funding grants without token sales. Competitors like Optimism or Uniswap watch closely; emulating stablecoin vaults DAO-wide could unlock billions in idle capital. Volatility tests resolve: ARB’s dip proves the treasury’s mettle, yielding through lows.

Arbitrum doesn’t just manage a treasury; it engineers endurance. In a market where DAOs burn through endowments, this $100 million machine – churning $2 million interest via BlackRock, Aave, and Morpho – redefines sustainability. Treasury managers, study it: plan for the storm, harvest the calm.

About the Author

Blu

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Blu is a technical chartist specializing in momentum trading and swing strategies within the Solana ecosystem. With six years of experience and a background in applied mathematics, he excels at breaking down price action for actionable trades. Caleb is a strong advocate for disciplined risk management. His tagline: 'Charts never lie.'

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