In a recent development in the world of cryptocurrency, the Arbitrum DAO has called for the return of $700 million worth of $ARB tokens that were allegedly unjustly allocated to the Foundation without the approval of the governance token holders.
The DAO’s assertion of its authority over the treasury resources is a symbolic gesture aimed at demonstrating that the governance holders ultimately control the DAO, not the service provider nor the Foundation.
Background
The decentralization of the Arbitrum networks (Arbitrum One and Arbitrum Nova) on March 16, 2023, resulted in the formation of the Arbitrum DAO. The DAO assumed full responsibility for the chain’s technology, future, and fee revenue. It also assumed the responsibility to fund the ongoing operations of the chains and the costs of running critical chain infrastructure.
However, the Foundation was allocated $750 million tokens from the DAO that were not approved by the governance token holders, which has caused controversy and concerns regarding the authority and power of the DAO.
Proposal
The DAO has urged the Foundation to return the $700 million worth of $ARB tokens to the DAO as a symbolic gesture that the governance token holders hold ultimate power and authority over the resources that were granted to the DAO.
Additionally, any remaining fiat from the $10 million OTC sale should be used to buyback $ARB tokens via Wintermute, and the terms of the market-making deal with Wintermute should be disclosed to ensure transparency.
It is also recommended that AIP 1.1 and 1.2 be paused until full faith and trust are restored in the governance process. Restoring trust in the governance process is crucial for the success and growth of the ecosystem.