HomeNewsArbitrum Foundation Proposes Governance Changes After Community Uproar over Token Transfer

Arbitrum Foundation Proposes Governance Changes After Community Uproar over Token Transfer

- Advertisement -
  • The Arbitrum Foundation proposes to expand ARB token holders’ governance powers after a community protest over its decision to transfer 750 million ARB tokens to its wallet.
  • The proposals include a smart contract-controlled lockup of the foundation’s 700 million remaining ARB tokens and a lower threshold for posting an Arbitrum Improvement Proposal on the chain.

The Arbitrum Foundation, responsible for the development of Arbitrum, has proposed two new measures aimed at increasing the power of community members in governing the ARB token. This comes after community-wide protests erupted following the foundation’s quiet transfer of 750 million ARB tokens to one of its own wallets last weekend. The new proposals, if approved, would curb the foundation’s powers and increase those of community members.

Arbitrum Foundation proposes to expand ARB token holders’ governance powers and budget oversight.

The first proposal, AIP-1.1, suggests placing the foundation’s 700 million remaining ARB tokens in a “smart contract-controlled lockup” that will unlock over four years. According to the proposal, the foundation will not be able to use the tokens until community members approve a budget for the tokens’ allocation. A portion of the tokens will fund the Arbitrum Foundation’s operational budget for its first year.

The second proposal, AIP-1.2, aims to amend several governance documents for the Arbitrum ecosystem. One of the proposed amendments is to lower the threshold of the number of ARB tokens needed to post an Arbitrum Improvement Proposal on chain from five million ARB to 1 million ARB. These proposals have been welcomed by community members who were previously angry over being asked to “ratify” decisions the foundation had already made.

The community backlash and the foundation’s response are part of a larger trend in the cryptocurrency world of increased emphasis on decentralization and community governance. As blockchain technology and decentralized finance (DeFi) continue to grow, community-driven governance is seen as a way to ensure that projects remain true to their original vision and are not solely controlled by a small group of developers or investors.

Proposals aim to regain trust after last weekend’s crypto governance meltdown

Arbitrum is an Ethereum scaling solution that has rapidly gained popularity and has become the fourth largest blockchain with $2.24 billion in total locked value, according to Defi Llama. The ARB token is a key component of the Arbitrum ecosystem, used for staking and participating in governance decisions.

The Arbitrum Foundation’s proposals come as other projects in the cryptocurrency world have faced similar challenges with governance and community engagement. The recent controversy surrounding the Uniswap Protocol’s decision to restrict access to certain tokens on its interface sparked widespread debate and ultimately led to the creation of a new, decentralized version of the platform.

As the cryptocurrency ecosystem continues to evolve, it is becoming increasingly clear that community engagement and governance will be essential to the success and sustainability of blockchain projects. The Arbitrum Foundation’s response to community concerns is a positive step in this direction and may set a precedent for other projects facing similar challenges.

In conclusion, the Arbitrum Foundation’s proposal to increase community governance of the ARB token is a welcome move in the cryptocurrency world’s broader trend towards decentralization and community-driven decision-making. As blockchain technology continues to evolve, it is essential that community members have a greater say in the governance of these projects, ensuring their continued success and sustainability.

Disclaimer: ETHNews does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. Readers should do their own research before taking any actions related to cryptocurrencies. ETHNews is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned.
Godfrey Benjamin
Godfrey Benjamin
Godfrey Benjamin is an experienced crypto journalist whose primary goal is to educate everyone about the prospects of Web 3.0. His love for crypto was sparked during his time as a former banker when he recognized the clear advantages of decentralized money over traditional payments. Business Email: info@ethnews.com Phone: +49 160 92211628