The Arbitrum Foundation announced that it was only ratifying an
existing decision when it proposed a 750 million ARB tokens budget.
A proposal to fund the Arbitrum Foundation with 750 million ARB
tokens — nearly $1 billion — raised controversy in the ARB community
over the weekend, as the Foundation announced that it was only ratifying
a decision that had already been made.
The conflict comes after a few days the layer-2 protocol airdropped its governance token.
According
to the AIP-1 proposal on Arbitrum's DAO, the 750 million tokens would
be used to cover "Special Grants, reimbursing applicable service
providers [...] and covering ongoing administrative and operational
costs of The Arbitrum Foundation."
Among tokens holders, over 70% are against the move at the time of writing.
After facing backlash from community members, the Foundation said in a forum post
on April 2 that AIP-1 was a ratification, not a proposal. It also noted
that part of the tokens were already sold for stablecoins. In other
words, its billionaire budget and allocations would not be subject to an
on-chain governance process.
The Arbitrum Foundation claims the
symbolic first governance attempt failed due to communication problems
and decisions that were "clearly not articulated correctly":
"One
of the mistakes in the drafting of AIP-1 was a failure to note at the
outset that this proposal was intended to act as a ratification of the
initial setup of both the Arbitrum DAO and the Foundation that has been
created to serve the DAO. [...] the point of AIP-1 was to inform the
community of all of the decisions that were made in advance."
Commenting on the governance forum, members of the community pointed out
that Arbitrum's team "has been dumping tokens that were initially
informed to the community as locked tokens," claiming that "all
tokenomics page shows only User airdrop + DAO airdrop tokens as
unlocked" with remaining "tokens to unlock in March 2024."
Others highlighted
that under the United States securities laws, the anticipated sale
would be considered fraud, and that U.S. citizens who have bought ARB
tokens or claimed the airdrop "are eligible for legal remedies."
"I
will be pursuing this with my lawyers and expect to file a securities
fraud lawsuit in the next few days. [...] Immediately, the Arbitrum
Foundation is advised to halt all illegal sales of the token that are
being done without any authorization and against the provisions of the
law," said a community member.
Arbitrum's blockchain holds 65%
of the Ethereum layer 2 market share, shows data from the layer-2
analytics site L2Beat. The highly anticipated launch and airdrop of its
native governance token took place on March 23, with hundreds of
thousands of eligible users and DAOs claiming ARBs. Overwhelming user
demand led the airdrop claim page to crash shortly after its launch, Cointelegraph reported.
source link : https://cointelegraph.com/news/arbitrum-s-first-governance-proposal-sparks-controversy-with-1b-at-stake
