Arbitrum's first governance proposal sparks controversy with $1B at stake

cointelegraph.com:

A proposal to fund the Arbitrum Foundation with 750 million ARB tokens — nearly $1 billion — raised controversy in the ARB community over the weekend, as the Foundation announced that it was only ratifying a decision that had already been made. 

The conflict comes after a few days the layer-2 protocol airdropped its governance token.

According to the AIP-1 proposal on Arbitrum's DAO, the 750 million tokens would be used to cover "Special Grants, reimbursing applicable service providers [...] and covering ongoing administrative and operational costs of The Arbitrum Foundation."

Among tokens holders, over 70% are against the move at the time of writing.

After facing backlash from community members, the Foundation said in a forumpost on April 2 that AIP-1 was a ratification, not a proposal. It also noted that part of the tokens were already sold for stablecoins. In other words, its billionaire budget and allocations would not be subject to an on-chain governance process.

The Arbitrum Foundation claims the symbolic first governance attempt failed due to communication problems and decisions that were "clearly not articulated correctly":

Commenting on the governance forum, members of the community pointed out that Arbitrum's team "has been dumping tokens that were initially informed to the community as locked tokens," claiming that "all tokenomics page shows only User airdrop + DAO airdrop tokens as unlocked" with remaining "tokens to unlock in March 2024."

Arbitrum foundation made a proposal (AIP-1) to allocate 750M ARB tokens for admin and op costs, but $ARB holders voted against itNow they said the vote was just a formality, and they have already spent 50.5M (6.7%) of the proposed 750M $ARBYour vote is not vote