Today, a piece of news about the star project Arbitrum triggered a controversy in the community, which is still brewing.

The Arbitrum Foundation began selling ARB tokens in the form of stablecoins before its governance community of token holders “approved” the organization’s nearly $1 billion budget, according to a blog post by an employee early Sunday.

This behavior triggered condemnation from the community, and the price of the ARB token also fell to a minimum of around US$1.15. The daily decline once exceeded 10%, and has now rebounded to around US$1.18.

The ARB team transferred 750 million tokens on March 16, and began transferring funds to Binance on the 23rd. This is a bad situation that should have been noticed long ago. After all, the transfer on the day of listing was thought to be needed for governance, but it turned out to be just a sale of coins.

ARB was held back by some heavy selling, and now 500 million tokens have likely been sold off without any clear vote. So far, the proposal to sell coins has received 70% of the votes against it. Official actions violated the community's trust in them.

Moreover, there are also bugs in the current proposal. Currently, only 4 addresses are eligible to create proposals, which in itself can easily lead to various problems. Who would have thought that something like this could happen to such a "good" target...

A comprehensive review of Arbitrum’s proposal controversy: ARB

1/ Arbitrum is a second-layer scaling solution designed to improve the scalability and performance of Ethereum. It airdropped its native token ARB in August 2022, but sparked controversy and dissatisfaction in the community in its first governance proposal, AIP-1.

2/ The AIP-1 proposal plans to introduce a decentralized autonomous organizational structure called ArbitrumDAO. Lemma, the entity behind the proposal, will also apply for a funding grant of 750 million ARB tokens (worth approximately US$1 billion) for the Arbitrum Foundation. Administrative budget.

3/ The community questioned the rationality and transparency of this proposal, believing that the Arbitrum Foundation began selling ARB tokens in exchange for stablecoins without first consulting the community before launching a proposal to ask the community to approve its budget.

4/ The community also pointed out that this proposal represents a step back from the current state of community governance, as it hands a large amount of token control to the Arbitrum Foundation, rather than involving community members in decision-making. Some community members even launched a countervote, asking Arbitrum to buy back those ARB tokens that had been sold.

5/ Arbitrum explained this proposal, saying that its purpose is to establish a more decentralized and democratic governance structure while ensuring that the Arbitrum Foundation has sufficient funds to support the development and operation of the project.

6/ Arbitrum also stated that its foundation administrative budget of 7.5% of the total is not large and is reasonable compared with other second-tier projects. It also admitted that selling some $ARB tokens ahead of the proposal was a communication misstep and that its budget plans should have been made public before the airdrop.

7/ Arbitrum has promised to rework and split the AIP-1 proposal this week, allowing the community to vote on each part individually and adding more detail and transparency. It also calls on community members to remain rational and patient as they work together to advance Arbitrum’s development.

8/ I believe that the Arbitrum proposal controversy reflects the governance challenges and dilemmas faced by second-tier projects. On the one hand, the project party needs to have sufficient resources and autonomy to ensure the technological progress and market competitiveness of the project; on the other hand, community members need to have sufficient voice and supervision rights to ensure the fairness and transparency of the project.

9/ I hope Arbitrum can take this opportunity to improve its governance mechanism and communication methods to allow community members to be more involved in the decision-making and construction of the project. I also hope that community members can give Arbitrum more trust and support instead of questioning and attacking easily.

ARB violates DAO governance expectations, which is an excessively bad record in DAO governance.

Two waves of coins were sold in advance: In the first wave, 50 million arb was transferred to the exchange, which was said to be market making. The liquidity of arb is so good that the project team needs to sell it to make the market. And why is it not just making the market on the exchange, but listing it on the exchange? So a week later... and fil were the same operation at that time

In another wave, 22.56 million of the 2.694 billion arb that should have been locked were transferred to the exchange. This locked position is in name only and can be sold at any time. As before, I remind everyone that there are too few arb and OP in circulation, and they are seriously puffy. , there are a lot of acquisition opportunities. The total TVL of L2 is only $8.8 billion, and the circulation of arb alone is $15.1 billion. What about other L2s?

In addition, L2 heroes are vying for success, and the world is uncertain. Assuming that 3 L2 projects can survive, then other L2 projects will be cannon fodder. Think about how you were thinking when the public chain was in a mess. Isn’t it a bit like who is the king? Don't settle too early

Arbitrum DAO administrator clarifies: Some ARBs are transferred to Coinbase custody accounts, and the lock-up period is 4 years

So can ARB still play?

Arb's currency selling incident is a good opportunity to build a position in $arb. The focus of everyone's attention is the price drop caused by this incident. As long as an announcement is made and some remedial measures are issued, and then the market is lifted, after a period of time, this incident will No one remembers.

reason:

1. It takes several washes for arb to rise. The more FUD, the more thorough the washing, the more potential it will have to rise.

2. The greatest value of a public chain lies in its ecology. GMX currently has a circulation market value of 650 million U.S. dollars, magic has a circulation market value of 300 million U.S. dollars, and RDNT has a circulation market value of 0.68 billion U.S. dollars... The total circulation market value of these three exceeds 1 billion U.S. dollars. There are also a steady stream of projects coming in.

This Arb incident once again reminds everyone not to blindly believe in projects other than Ethereum, but to maintain a cautious attitude, including RDNT. Many people are too involved in research projects and end up marrying the project party, forgetting why the project party To do this project.

Today’s article ends here. If you think it’s well written, you can click to follow and read~