A controversial proposal that sought to return 700 million ARB governance tokens to Arbitrum’s DAO Treasury was rejected by a large number of votes on April 15. Improvement Proposal AIP-1.05 was submitted after the Arbitrum Foundation transferred funds without community approval in March.
AIP-1.05 was defeated by 118 million votes, representing 84% of the total votes received, while 21 million ARB tokens voted in favor of the proposal, almost 14.5% of the total. Around 2 million ARB tokens abstained. The proposal called for the Foundation to return the tokens as a “symbolic gesture to demonstrate that the governance holders ultimately control the DAO, not the Arbitrum service provider or the Foundation.”
Screenshot: AIP-1.05: Arbitrum Improvement Proposal Framework. Source: Arbitrum DAO.
At the governance forum, a whale with 4.8 million ARB tokens said the proposal “seems to serve only as a power play” that would add an “unnecessary step” and delay the Foundation’s ability “to support the growth of the Arbitrum ecosystem”.
Another whale who voted against the proposal with 18 million ARB tokens stated that the balance is necessary to promote decentralization and progress in the ecosystem:
“There is a balance we need to try to strike between advocating decentralization and avoiding progress in the ecosystem. I think decentralization in its ideal form is not yet seen in this industry.”
The Arbitrum community and its Foundation are involved in a dispute over the Foundation’s AIP-1 governance proposal, which required an investment of nearly $1 billion in ARB tokens to fund its operations. After facing backlash from the community, the Foundation later said that AIP-1 was ratification, not a proposal. He added that some of the tokens have already been sold for stablecoins.
The AIP-1 proposal was Arbitrum’s first governance attempt after its token airdrop in early March. The Foundation has already launched a new set of improvement proposals aimed at reestablishing dialogue with the community.
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This post Arbitrum proposal to return 700M ARB fails, whale calls it a ‘power play’
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