[Update] Arbitrum Foundation Announces 2 New Proposals to Address Community Concerns

The Arbitrum Foundation has committed to not moving the 700 million ARB until the DAO approves the proposals.

Update as of April 18:

Proposals AIP-1.1 and AIP-1.2, aimed at increasing the governance power of the Arbitrum DAO community, have been officially approved, with nearly 100% in favor.

Voting Results for Proposals AIP-1.1 and AIP-1.2 on Arbitrum DAO

Original Article:

In the early hours of April 6, the Arbitrum Foundation unveiled two new proposals designed to expand the oversight and governance of the DAO—a collective of ARB token holders—to address last week's public relations crisis and enhance community authority.

The project assured that it will not move the 700 million ARB held in the governance treasury wallet until it receives approval from the community. The proposals are detailed as follows:

• AIP-1.1: Retains the remaining 700 million ARB in the treasury wallet, with a planned gradual release over 4 years. This means the project cannot access these tokens until they are allocated by the community. The DAO will allocate $36 million—50% in cash and 50% in ARB—to fund the Arbitrum Foundation's operations in the first year.

• AIP-1.2: Amends certain governance terms within the Arbitrum ecosystem, including reducing the required threshold for on-chain proposal approvals from 5 million ARB to 1 million ARB.

The DAO will have 3 days to respond, followed by a week-long voting period for the proposals, as noted by @edi-defi, the project's Discord community manager.

Interested in Arbitrum (ARB)?

As Coin68 previously reported, the Arbitrum Foundation initially faced controversy with Proposal AIP-1, which aimed to allocate control of 750 million ARB (7.5% of the total supply) to the foundation to support development grants and network operational costs. There were even allegations that the project had "pulled a fast one" on the community by moving and selling the tokens in question.

The proposal, which was presented as a mere "notification," drew widespread criticism and outrage from the community. To mitigate the backlash and the resulting ARB sell-off, Arbitrum decided to break the proposal into smaller voting components and hold a re-vote.

Despite the significant FUD, most ARB whale wallets have “held through the storm.” As of now, Arbitrum remains a highly regarded layer-2 solution with a total value locked (TVL) of $2.24 billion, according to DefiLlama.

TVL Fluctuations of Arbitrum as of June 4, 2023. Source: DeFiLlama