Author: Anna Riabokon, Rari Foundation Reviewer: Stable Labs, Campbell Law, Autonomous

Abstract

RARI DAO was initially established to foster decentralization and community-driven governance for the Rarible ecosystem. However, the current treasury management model under the DAO has limited our ability to swiftly respond to volatile market conditions, causing missed opportunities to effectively support and enhance the RARI token and ecosystem.

Specifically, our treasury structure has resulted in:

• Delayed financial decision-making: Due to the inherent procedural delays in DAO governance, critical market-driven decisions have often been missed or delayed.
• Limited agility in reacting to price movements: The inability to quickly deploy strategies in response to rapid market shifts has impacted token support and overall liquidity.
• Suboptimal capital utilization: The cumbersome nature of the existing governance setup hinders efficient financial management and proactive treasury deployment.

We believe the framework outlined in this proposal offers a stronger foundation for Rari to operate with greater efficiency and effectiveness. By transitioning treasury management to the Foundation while maintaining DAO oversight, we can improve financial agility, strengthen the ecosystem, and position the project for long-term, sustainable growth. This framework will help Rari adapt to changing market conditions and continuously enhance its value to the community.

This proposal is intended to supersede and replace RRC-22 DAO Treasury Diversification Plan. Any remaining balance from that mandate will also be transitioned into the new Treasury Management Empowerment Program, ensuring continuity of strategy and avoiding fragmentation across multiple frameworks.

Motivation

• Enhance Agility: Enable rapid and effective financial decision-making to proactively respond to market volatility.
• Strengthen Token Support: Execute strategies that support a resilient and robust market environment for RARI.
• Accountability and Transparency: Improved governance through clearly defined roles, responsibilities, and accountability metrics.

Rationale & Benefits

The market for tokens like RARI is highly volatile, and proactive treasury management is critical to optimizing financial outcomes. By transitioning the treasury to the Foundation, we ensure:

• Proactive Market Response: Quick, flexible actions to take advantage of market conditions and opportunities.
• Increased Token Stability: Strategic initiatives aimed at fostering a healthy market environment for the token.
• Enhanced Community Benefit: Direct financial management improvements translate into tangible benefits for the entire RARI community through sustained token demand and increased buying activity.
• Partnerships with Ecosystem Partners to Support Treasury Management: Foundation has the ability to effectively represent token holders interests in connection with contractual and legal processes.

Benchmark Examples

Arbitrum DAO Treasury Transition (2025):

In early 2025, Arbitrum DAO approved transferring 35 million ARB (~$11.6M) to the Arbitrum Foundation under its Stable Treasury Endowment Program (STEP 2.0). The goal was to diversify the treasury into yield-generating real-world assets (e.g., tokenized U.S. Treasuries) through institutional partners like Franklin Templeton and WisdomTree.

Why they did it:

• To professionalize treasury execution
• To reduce reliance on ARB token volatility
• To generate stable yield
• To enable faster, off-chain financial operations

Results:

• ~$11.6M deployed successfully
• Over $450K in interest earned within months
• Full transparency via public reporting
• DAO retained oversight, approving the strategy with ~89% support

This model demonstrates how treasury custody can shift to a Foundation without sacrificing community trust or governance transparency—making it a strong precedent for Rari.

The Sandbox DAO (SIP-1, May 28 2024): Allocated treasury assets to the Sandbox Foundation with a clear vesting and governance schedule. Following their May 2024 vote to transition treasury management, The Sandbox experienced price stability and significant growth, achieving a 139% increase year-to-date in 2025, demonstrating renewed investor confidence and strengthened liquidity dynamics.

These examples demonstrate tangible benefits, particularly in terms of token price stabilization and improved market responsiveness.

Note: The examples above are used to illustrate design patterns (scoped governance, execution agility, and reporting). They are not endorsements of any single model.

Proposed Structure for RARI DAO

We propose adopting a hybrid approach:

Transfer Treasury Control to RARI Foundation:

• The Foundation will manage day-to-day operational budgets and treasury functions, ensuring agile capital deployment.
• Foundation governance will be clearly defined, transparent, and reported to the DAO.

Scoped DAO Governance:

• DAO retains strategic oversight, setting clear, high-level objectives and governance rules.
• DAO votes on major protocol initiatives, community-driven initiatives, and governance frameworks.

Accountability:

• Transparent financial reporting and milestone-based performance reviews shared regularly with DAO members.
• Monthly updates and quarterly reports
• Annual on‑chain renewal vote; if the mandate is not renewed,

Milestone‑Based Reviews for RARI

Benefits to the Rari Community

• Efficiency: Faster response times on market conditions and reduced operational friction.
• Clarity: Well-defined governance and strategic alignment.
• Impact: Improved financial performance and accountability through milestone-based tracking.
• Security: Enhanced treasury security and resilience.

Risk Assessment & Mitigation

Commitment to Transparency

Transparency is at the core of this transition. The RARI Foundation will publish quarterly reports —all data publicly accessible on‑chain and in the Rari DAO governance forum. Additionally, the Foundation will host open Q&A sessions after each report. These measures ensure the community can validate every decision, hold the Foundation accountable, and participate in strategy adjustments whenever needed.

Next Steps

Upon approval, the transition will follow these milestones:

1. Mainnet Treasury funds moved from DAO to Foundation multi‑sig & Audit completed.
2. Treasury resource allocation strategy published (initial vendor/partner onboarding e.g., custodians, ecosystem partners, analytics tools).
3. Regular quarterly reviews and performance reports shared on Rari DAO Forum.

By adopting this proposal, Rari DAO positions itself for strategic clarity, operational efficiency, and sustainable long-term success.