Outcry Over Arbitrum's First Vote
Due to the uproar over a vote on the popular Layer 2 scaling solution Arbitrum, ARB's price fell quickly over the weekend.
Amid the uproar over a vote on the popular Layer 2 scaling solution Arbitrum, ARB's price dropped quickly over the weekend.
The launch of the ARB token a few weeks ago was supposed to enable a decentralized governance for Arbitrum. However, right at the first community vote, there were massive complaints and accusations of corruption.
The AIP-1 proposal from the management team included, among other things, paying themselves 750 million ARB tokens. According to their statements, this was to fund projects and cover "administrative costs".
Although 78% of the community rejected it, the Foundation pushed the proposal through. As a leadership member stated, the vote was meant to be "just a formality." The decisions were already made in advance.
The move inevitably sparked protests from Arbitrum supporters. Some members accused the Foundation of corruption and called the project’s decentralized governance a failure already.
Arbitrum later confirmed that 10 million ARB tokens had already been sold for the stated purposes. In the same tweet, the Foundation justified its decision. Investors then voted with their tokens. As a result of the unrest, ARB’s price fell by more than 10%.
In response, the Arbitrum Foundation said yesterday that a new election would be held. The sprawling AIP-1 proposal would be split into several smaller elections.
Additionally, the sale of ten million tokens would continue, but there were no further sales planned, the foundation said in a tweet. With the announcement of the new election, ARB’s price also recovered somewhat for now.
