Arbitrum proposal to return 700M ARB fails, whale calls it a “power play”


A controversial proposal in search of the return of 700 million ARB governance tokens to Arbitrum’s DAO Treasury was rejected by a large variety of votes on April 15. The Enchancment Proposal AIP-1.05 was launched after the Arbitrum Basis transferred funds without community approval in March. 

The AIP-1.05 was defeated by 118 million votes, representing 84% of the overall votes obtained, whereas 21 million ARB tokens voted for the proposal, almost 14.5% of the overall. Round 2 million ARB tokens abstained. The proposal requested the Basis to return the tokens as a “symbolic gesture to display that the governance holders in the end management the DAO, not the Arbitrum service supplier nor the Basis.”

Screenshot – AIP-1.05: Arbitrum Enchancment Proposal Framework. Supply: Arbitrum DAO. 

On the governance discussion board, a whale with 4.8 million ARB tokens said the proposal “appears to solely function an influence play” that may add an “pointless step” and delay the Basis’s potential “to help the expansion of the Arbitrum ecosystem.”

One other whale voting towards the proposal with 18 million ARB tokens stated that steadiness is critical to advertise decentralization and progress within the ecosystem: 

“There’s a steadiness that we have to attempt to accomplish between advocating for decentralization and stopping progress within the ecosystem. I imagine that decentralization on its excellent type is nowhere to be seen on this trade but.”

Arbitrum’s group and its Basis are engaged in a dispute over the Basis’s governance proposal AIP-1 — which called for investment of nearly $1 billion value of ARB tokens to fund its operations. After dealing with group backlash, the Basis later said that AIP-1 was a ratification, not a proposal. It added that a number of the tokens have been already offered for stablecoins.

The AIP-1 proposal was Arbitrum’s first try at governance after its tokens airdrop in early March. The Basis has already released a new set of improvement proposals geared toward reestablishing dialogue with the group.

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