Ethereum Layer 2 governance platform Arbitrum Foundation has spoken out following community FUD from its controversial ARB sale.
Mediation The Foundation is taking heat for offloading 50 million ARB tokens on-chain without community consent. The value of ARB fell 11% following the sale, with the foundation explaining that it used the proceeds to favor The DAO. The foundation also revealed that it loaned 40 million ARB to a financial market player from total on-chain transfers. In addition, Arbitrum converted the remaining 10 million ARB tokens into fiat and put it toward operating costs. Ethereum Layer 2 Scaling Solutions started selling ARB tokens for the stablecoin before gaining acceptance from its community. Following the backlash from these actions, the Arbitrum Foundation proceeded to address the resulting fear, uncertainty and doubt (FUD).
one in twitter threadArbitrum also recently touched on the controversial 750 million ($1 billion) ARB token offering. The governance platform revealed that it sold 50 million ARB tokens out of the 750 million tokens it allocated to itself to fund current operating expenses. The foundation further stated that it has no near-term plans to launch more tokens going forward.
Arbitrum Foundation addresses FUD including AIP-1 effectiveness in long Twitter thread
The Foundation addresses some of the central points raised by The DAO during the launch of its decentralized governance plan. On concerns that the Arbitration Reform Proposal (AIP-1) is too broad, Arbitrum wishes to heed the advice of the DAO. According to the governance platform of the protocol, it will split the AIP into smaller parts. Completing the split will allow the community to discuss and vote on the various subdivisions. In further efforts to reduce FUD, the Arbitrum Foundation also clarified that AIP-1 failed to properly articulate its governance plan. As the Foundation put it:
“One of the mistakes in drafting AIP-1 was the failure to note at the outset that the proposal was intended to serve as a ratification of the initial setup of both the Arbitrum DAO and the Foundation that was created to serve the DAO. Is.”
Arbitrum also stated that AIP-1 was planned to communicate community decisions that had already been made.
Although the Arbitrum Foundation’s ratification ends today, the outcome of the token decision-making process already appears to be set in stone. As it stands, 70% of the community has voted against the proposal.
On the lessons learned and concerted efforts towards further improvement, Arbitrum said:
“We believe that having a strong foundation working in service of The DAO is critical to the success of Arbitrum. We could have better communicated this clearly, and took this opportunity to position Arbitrum as the most community-focused Will continue to develop as L2.
Other central points addressed include the 7.5% total ARB token supply being sent to the Foundation becoming more accountable. According to Arbitrum, these staked tokens will have a vesting period of 4 years and cannot be used for voting.
Arbitrage (ARB)
The ARB token changed hands at $1.22 as of press time after sliding nearly 11% over the past 24 hours. On March 23, the protocol’s Native Governance Token airdrop took place, allowing a large number of users and DAOs to claim ARB.
Arbitrum’s network constitutes 65% EthereumLayer 2 market share.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to strip crypto stories down to the basics so that anyone anywhere can understand without a lot of background knowledge. When he is not delving deep into crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
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