The Arbitrum community has launched a new proposal for the Arbitrum Foundation to return 700 million ARB tokens to its DAO treasury. The move comes after the Arbitrum Foundation moved funds without community approval in March.
According to the proposal, the foundation can only proceed with its budgetary program after the tokens are returned. “This is a symbolic gesture that the governance holders ultimately control the DAO, not the Arbitrum service provider or the foundation,” said a community member.
Voting will close on April 14. At the time of writing, 55% of voters supported the proposal, 42% opposed it, and 2% abstained. The dispute between the Arbitrum Foundation and its community began at the end of March, when the foundation presented its first governance proposal (AIP-1), which called for funding its operations with 750 million ARB tokens nearly $1 billion. Following backlash from community members, the foundation said in a forum post on April 2 that AIP-1 was an approval, not a proposal. Some tokens have already been sold as stablecoins, it added. At the time, the foundation noted that its symbolic first attempt at governance had failed due to communication problems and decisions that were "obviously not properly expressed."
A few days later, the Arbitrum Foundation published a series of new improvement proposals aimed at reviving the community conversation. New proposals include AIP-1.1, which covers smart contract lock-in schedules, spending, budgeting, and transparency. Another AIP-1.2 addresses revisions to the current founding document and lowers the proposal threshold from 5 million ARB tokens to 1 million ARB “to make governance more accessible.”
However, these efforts have not resolved the issues with ARB holders. “The Foundation unilaterally distributed $750 million in tokens from The DAO, but these tokens were not approved by governance token holders. Any funds must be returned until it is properly distributed by the DAO, and only the DAO,” the proposal explain.
