Arbitrum Foundation Pledges New Votes, No 'Near-Term' ARB Sales Amid Community Revolt
Arbitrum will hold a standalone vote on its 750 million token allocation.
The Arbitrum Foundation said late Sunday it will break up a controversial governance package into a series of separate votes, bending to community pressure after holders of its ARB token staged a loud revolt.
"AIP-1 is too large and covers too many topics. We will follow the DAO’s advice and split the AIP into parts," said the Community Lead with the handle Eli_Defi in Arbitrum's Discord server.
The backtracking comes after a day of rage in the Arbitrum community over how the Foundation – a centralized company charged with promoting Arbitrum's claimed decentralized ecosystem – held a "ratification" vote over decisions it had already implemented, including sending nearly $1 billion in tokens to itself.
With that vote barreling toward overwhelming failure on Snapshot, Arbutrim acknowledged it "will likely not pass" and pledged to hold redos over each section of its omnibus bill "early this week."
That was enough to win over some influential voices. The pseudonymous ChainLinkGod, a well-known crypto personality and one of the Arbitrum decentralized autonomous organization's biggest delegates, told CoinDesk in a Telegram message the Foundation was "listening to the community and incorporating our feedback."
"It's a good move in the right direction in my opinion," ChainLinkGod said.
In the Discord post, Eli_DeFi said the 750 million ARB token allotment will now be subject to a standalone vote. "We’re working on options to add more accountability," he said, noting Foundation tokens will not be used in votes. (The current vote treats the Foundation's power over that sum as a foregone conclusion; it started spending and sending tokens even before passage.)
The Arbitrum Foundation's "special grants" program – at the heart of the controversy – will be rebranded the "Ecosystem Development Fund." Arbitrum pledged to "provide context on how the funds will be used," as well as a "transparency report" on the Foundation's budget.
"The objective in setting up the Arbitrum DAO was to lead by example to create the most decentralized rollup, and despite this blunder of communication, we will continue to aggressively pursue this goal," the post said.
The Arbitrum Foundation further pledged it "has no near-term plans to sell more tokens," a nod to the blowback over millions of dollars in ARB it sold for "operational purposes" without community consent.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.