As Arbitrum backs down on problematic proposal, the Foundation cites a ‘communication blunder’
The Arbitrum team offered a clarification in which it was stated that the proposal was a ratification and not a request.
The Arbitrum Foundation received a significant amount of criticism for its governance voting system. The drama revolves around the Ethereum layer 2 solutions provider selling 10 million ARB tokens for fiat before the community had formally ratified its budget.
Following the outpouring of community outrage, the Arbitrum Foundation admitted that the first governance proposal, AIP-1, “will most likely not pass.”
Arbitrum Drama
The team stated that 10 million ARBs were sold to fiat in order to fund existing contracts and cover short-term running expenses, rejecting the earlier assertion that 50 million ARB tokens had been sold.
Arbitrum stated that the Foundation “does not exist to sell tokens,” and that the sale decision was made solely to fund the Foundation’s current operating expenses. It has no plans to issue additional tokens in the near future.
AIP-1, on the other hand, will be divided into smaller sections to allow the community to discuss and vote on the various subsections.
Many prominent members of the community pointed out that the proposal was necessary because it would have given the Arbitrum Foundation, a centralized entity, control over 750 million ARB tokens worth approximately $1 billion.
Arbitrum acknowledged that the contentious governance package lacks openness over how the cash will be used. The team behind the protocol will propose transparency reports as part of the budgeting AIP to inform the community on the same.
The Arbitrum Foundation’s “special grants” program, which it described as “vague” and “lacking DAO involvement,” will also be renamed “Ecosystem Development Fund.” Its primary goal will be to provide “context” for how the funds will benefit the ecosystem. Separately, the DAO will be able to launch new grant programs at any time from its treasury.
“Despite this communication failure, we will continue to actively pursue this aim,” the Arbitrum DAO stated in its mission statement.”The goal of establishing the Arbitrum DAO was to set an example of the most decentralized rollup.”
What about arbitrum whales?
The days leading up to ARB’s highly anticipated launch boosted the on-chain activity of the popular layer-2 solution to new highs. However, the recent proposal drama caused the token’s price to fall over the weekend.
The whales, on the other hand, remained mostly free. According to the most recent data, two of the top six whales purchased $811,199 and $1.69 million in tokens in the last 24 hours. Two whales, on the other hand, offloaded over $1 million in tokens at the same time.
The remaining two whales have made no noticeable movements.
Visit Bitdenex Exchange to Buy and Sell crypto in minutes with low trading fees.