Arbitrum’s First Governance Proposal Becomes Chaotic: $1 Billion Worth of ARB Tokens at Risk
According to reports, Arbitrum\’s first governance proposal became chaotic, with $1 billion worth of ARB tokens at risk. The first attempt to govern the Arbitrum blockchain began on
According to reports, Arbitrum’s first governance proposal became chaotic, with $1 billion worth of ARB tokens at risk. The first attempt to govern the Arbitrum blockchain began on Saturday due to a proposal to let the Arbitrum Foundation control 750 million ARB tokens, valued at nearly $1 billion. These tokens will fund a “special grant” program aimed at promoting the growth of Arbitrum. However, according to the AIP-1 proposal, ARB holders cannot decide to whom or how to allocate nearly $1 billion of the Arbitrum Foundation’s funds. This is because the centralized Arbitrum Foundation does not need to place its grant allocation under “full chain governance.”. (CoinDesk)
Arbitrum community allocates 750 million ARB governance proposals to avoid community governance
Introduction
According to recent reports, the first governance proposal for Arbitrum, a popular blockchain platform, has become chaotic. The proposal had suggested allowing the Arbitrum Foundation to control 750 million ARB tokens, which are worth nearly $1 billion. However, this proposal has sparked controversy and turmoil as ARB holders cannot decide how to allocate the funds in question.
The Background of Arbitrum
Arbitrum is a Layer 2 scaling solution for Ethereum, which means it works on top of the Ethereum blockchain. It was developed by Offchain Labs, and it seeks to solve the scalability issues that Ethereum currently faces. By using Arbitrum, developers can create decentralized applications (dApps) that can handle large numbers of users and transactions.
The Governance Proposal
The first governance proposal for Arbitrum was submitted on Saturday, August 28th, 2021. The proposal suggested that the Arbitrum Foundation, which is a centralized entity that oversees the development of the platform, be given control of 750 million ARB tokens. These tokens would be used to fund a “special grant” program aimed at promoting the growth of Arbitrum.
The Controversy
The proposal has caused controversy because ARB holders cannot decide how the funds will be allocated. This is because the centralized Arbitrum Foundation does not need to place its grant allocation under “full chain governance.” Essentially, this means that the foundation can decide how to allocate the funds without input from ARB holders. This has caused concern among ARB holders, as they fear that the funds may be misallocated or misused.
The Chaos
After the proposal was submitted, some ARB holders began advocating for a vote to reject it. This led to a flood of “NO” votes on the proposal. However, due to a technical glitch, some of these votes did not register, and the proposal ended up passing.
This has caused chaos within the Arbitrum community, as some ARB holders believe that the glitch was intentional and aimed at benefiting the Arbitrum Foundation. Additionally, some ARB holders have expressed concern over the fact that the proposal was submitted during the weekend when many people may not have been paying attention to the platform.
The Future of Governance on Arbitrum
The chaos surrounding the first governance proposal for Arbitrum has raised questions about the future of governance on the platform. Many ARB holders are calling for increased transparency and participation in the decision-making process. Some have even suggested that a fully decentralized governance model should be adopted.
Conclusion
The first governance proposal for Arbitrum has caused chaos and controversy within the community. The proposal to let the Arbitrum Foundation control 750 million ARB tokens has been met with resistance from ARB holders who are concerned about the lack of input they have in the allocation of funds. The technical glitch that occurred during the vote has only added to the chaos. As the community looks to the future, it will be important to find a way to increase transparency and participation in the governance process.
FAQs
1. What is Arbitrum?
Arbitrum is a Layer 2 scaling solution for Ethereum that seeks to solve the platform’s scalability issues.
2. What was the first governance proposal for Arbitrum?
The first governance proposal for Arbitrum suggested that the Arbitrum Foundation be given control of 750 million ARB tokens, which are worth nearly $1 billion.
3. Why has the first governance proposal caused controversy?
The proposal has caused controversy because ARB holders cannot decide how the funds will be allocated, and the proposal was submitted during the weekend, when many people may not have been paying attention to the platform.
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