Arbitrum DAO’s Big Tech Powerplay: Exploring M&A in DeFi

Arbitrum DAO, a digital cooperative with over $3 billion in crypto assets, is making waves in the decentralized finance (DeFi) space by considering a bold move: entering the world of mergers and acquisitions (M&A). By approving an eight-week pilot program proposed by Bernard Schmid of Areta, the DAO is exploring the possibility of expanding its reach and influence in the crypto market.

The proposal aims to conduct a thorough strategy study on the potential value of M&A opportunities and facilitate data-driven discussions among members. If successful, the DAO could establish an M&A unit with a substantial budget and a mandate to identify and acquire promising targets in the crypto space.

While M&A deals are common in traditional tech industries, they have been relatively rare in the crypto world. In 2023, there were only seven M&A deals in the crypto sector, compared to over a thousand in the broader technology sector. Acquiring other companies in the decentralized finance space presents unique challenges, as most major players are decentralized autonomous organizations (DAOs) rather than traditional companies with boards of directors.

Despite the potential benefits of expanding through M&A, some members of the Arbitrum DAO have expressed reservations about the scale and feasibility of the proposed initiative. However, they have approved the pilot program to explore the potential and assess the landscape of M&A opportunities in the crypto market.

Past acquisitions in the crypto space, such as Polygon’s acquisitions of Mir and Hermez, have demonstrated the potential for strategic growth through M&A. However, there have also been cautionary tales, such as the short-lived merger between Fei and Rari Capital, which ended in controversy and a bitter dispute over compensation for victims of a hack.

As Arbitrum DAO embarks on this new venture, the crypto community will be watching closely to see how this Big Tech-inspired powerplay unfolds in the rapidly evolving world of decentralized finance. Stay tuned for updates on this groundbreaking development in the crypto world.