Arbitrum's 700 Million ARB Return Proposal Fails, Deemed a "Power Play" by Whale – Here's What Happened
The bulk majority of ARB token holders have voted against a proposal demanding the return of 700 million ARB tokens to the Arbitrum DAO Treasury.
The final results, which come after a seven-day voting period that started on April 8, show that more than 84% of ARB token holders rejected the Arbitrum Improvement Proposal AIP-1.05.
In total, 141 million ARB tokens were cast during voting. Of those votes, 118 million voted against, while 21 million voted 'for.' Another 2 million ARB holders abstained from voting.
The proposal was introduced after the Arbitrum Foundation transferred 700 million ARB tokens without community approval in March, stirring up concern among some community members.
According to the proposal, the foundation should only proceed with its budget plan after returning the tokens. The proposal read:
“This is a symbolic gesture to demonstrate that the governance holders ultimately control the DAO, not the Arbitrum service provider nor the Foundation."
On the governance forum, a whale with 4.8 million ARB tokens said the proposal "seems to only serve 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 voting against the proposal with 18 million ARB tokens stated that balance is necessary to promote decentralization and progress in the ecosystem.
"There is a balance that we need to try to accomplish between advocating for decentralization and preventing progress in the ecosystem. I believe that decentralization on its ideal form is nowhere to be seen in this industry yet."
The dispute between the Arbitrum Foundation and its community started at the end of March after the organization revealed the AIP-1, which called for funding its operations with 750 million ARB tokens – worth nearly $1 billion.
Following backlash from community members, the foundation said in a forum post on April 2 that AIP-1 was a ratification, not a proposal. It added that some of the tokens were already sold for stablecoins.
At that time, the foundation noted that its symbolic first governance attempt failed due to communication problems and decisions that were “clearly not articulated correctly.”
Arbitrum at the Center of Controversies Following its ARB Airdrop
Arbitrum, one of the most popular Ethereum scaling solutions, launched its much-anticipated ARB airdrop in late March.
The network airdropped just over one billion ARB tokens to more than 600000 wallet addresses.
However, amid the hype surrounding the ARB, on-chain activity showed that some airdrop hunters consolidated tokens worth around $3.3 million collectively from 1,496 wallets into two wallets.
According to the blockchain analysis platform Lookonchain, one wallet received 1.4 million ARB from 866 addresses.
As reported, a hacker also has made off with $1.2 million worth of ARB tokens through a relatively new type of cyber-attack that uses modified wallet addresses to steal funds.
Meanwhile, ARB is currently trading at $1.60, almost flat over the past day, data by CoinMarketCap shows. However, the coin is down by more than 86% compared to its all-time high of around $11.80.