• A proposal demanding the return of 700 million ARB tokens to the Arbitrum DAO Treasury failed after a seven-day voting period, with 84% of ARB token holders rejecting it.
• The dispute started after the Arbitrum Foundation transferred 700 million ARB tokens without community approval in March.
• The proposal was seen by some as a “power play” that would delay the Foundation’s ability to support the growth of the Arbitrum ecosystem.
Arbitrum’s Return of 700 Million ARB Tokens Proposal Fails
The bulk majority of ARB token holders have voted against a proposal demanding the return of 700 million ARB tokens to the Arbitrum DAO Treasury. The final results, which come after a seven-day voting period that started on April 8, show that more than 84% of ARB token holders rejected the Arbitrum Improvement Proposal AIP-1.05. In total, 141 million ARB tokens were cast during voting, 118 million voted against and 21 million voted ‘for.’ Another 2 million ARB holders abstained from voting.
Background on Dispute
The dispute between the Arbitrum Foundation and its community started at the end of March after the organization revealed their AIP-1, which called for funding its operations with 750 million ARB tokens – worth nearly $1 billion. Following backlash from community members, the foundation said in a forum post that AIP-1 was a ratification rather than a proposal and some tokens were already sold for stablecoins.
Whale’s View on Proposal
On the governance forum, a whale with 4.8 million ARB tokens said that this proposal “seems to only serve as a power play” that would add an “unnecessary step” and delay the Foundation’s ability “to support the growth of he Arbitrum ecosystem.” Another whale voting against it with 18 million ARB votes stated balance is necessary to promote decentralization and progress in this ecosystem: “There is a balance that we need to try to accomplish between advocating for decentralization and preventing progress in he ecosystem.”
ARB Token Disputed Over Airdrop
Arbitrum, one of Ethereum’s most popular scaling solutions launched its much-anticipated AIR drop earlier this year which stirred up controversy among some community members over how it should be managed and distributed among investors. There were concerns over how transparently information about AIR drop distribution was being shared by founders leading some investors to make false claims about their investments or profits related to it.
The failed proposal has highlighted tensions between developers/founders controlling funds within projects versus those who want more control over decisions related to their investments through decentralized governance systems like Decentralized Autonomous Organizations (DAOs). It remains unclear if future negotiations can bring both sides together but it appears likely that disputes such as these will continue until there are better safeguards put into place regarding how project funds are managed while still allowing projects enough flexibility to grow and innovate without having every decision made subject to public vote or arbitration process.