On April 15, a controversial proposal seeking to return 700 million ARB governance tokens to Arbitrum’s DAO vault was voted down by a massive vote. The improvement proposal, called AIP-1.05, was introduced after the Arbitrum Foundation moved funds without community approval in March.
The proposal was rejected by 118 million votes, or 84% of the total, while 21 million ARB tokens voted in favor of the proposal, or nearly 14.5% of the total. Approximately 2 million ARB tokens are forfeited. The proposal calls for the foundation to return the tokens as “a symbolic gesture that the governance holders ultimately control the DAO, not the Arbitrum service provider or the foundation.”
Speaking on a governance forum, the whale, which owns 4.8 million ARB tokens, said the proposal “appears to be nothing more than a power play” that would add “unnecessary steps” and delay the foundation’s ability to “support the development of the Arbitrum ecosystem.” Another whale, holding 18 million ARB tokens, voted against the proposal, stating that balance is necessary to foster decentralization and progress in the ecosystem:
“We need to strike a balance between promoting decentralization and preventing the progress of the ecosystem. I believe that the ideal form of decentralization is not yet seen in this industry.”
Arbitrum’s community and its foundation have disputed the foundation’s governance proposal, AIP-1, which calls for investing nearly $1 billion worth of ARB tokens to fund its operations. After facing backlash from the community, the foundation later said AIP-1 was an approval, not a proposal. Some tokens have already been sold as stablecoins, it added.
The AIP-1 proposal is Arbitrum's first attempt at governance after the token airdrop in early March. The foundation has released a new set of improvement proposals to rebuild the dialogue with the community.
