Arbitrum DAO Shake-Up: Where Will 700 Million ARB Go?

On March 28th, a crucial vote (AIP-1) was created to determine the distribution of leadership positions and security council seats, as well as to provide the Arbitrum Foundation with power to decide the fate of grants. But most importantly, it concerned the transfer of 750 million ARB tokens to an administrative budget wallet.

At first, everything seemed to be going "according to plan" for the Arbitrum Foundation team, as the majority voted "For." Most likely, the community made this choice with the thought of another potential retroactive airdrop for this action, without even delving into the proposal's text. Similar practices have also been employed in another Ethereum L2 solution project, Optimism.

Crypto enthusiasts and influencers, however, raised alarm about the situation. Delegates felt the proposal did not give them any real choice because of its wording. Additionally, the text lacked details on how the 750 million ARB tokens would be distributed.

As the "Against" votes dominated, developers claimed everything had already been decided and the process was merely formal in nature. It also turned out that 50 million ARB had already been sent to a certain wallet for "operational expenses", and part of that amount had been given to a market maker.

The situation gained significant attention and the Arbitrum team had to adjust their position. A new process (AIP-1.05) was initiated to return 700 million ARB to the Arbitrum DAO treasury. However, even this voting happened in a strange way. Again, at first, there were more "For" votes, but then the majority was "Against" again. Some delegates believed that those funds should no longer be shuffled back and forth, and the focus should be on future management.

A new round of voting (AIP-1.05) is now underway, with two fresh proposals from blockworksres.eth (AIP-1.1, AIP-1.2) added to the mix. In these proposals, solutions are offered and adjustments are made on how to handle the portion of ARB tokens in question.

Perhaps there was nothing inherently wrong with the Arbitrum Foundation's decisions. In general, they could have implemented everything proposed in AIP-1 before the DAO was created. Then the community could have made suggestions and amendments afterwards. They wanted to do everything "right," but it turned out the opposite. There's no need to worry about Arbitrum. Further voting should establish clear DAO operations, and the network's ecosystem has every chance of further development.