Arbitrum’s Governance Proposal Sparks Debate Over $1B ARB Tokens


The Arbitrum blockchain’s first attempt at governance has caused a stir with $1B ARB tokens at stake. More information has been revealed about an initiative to grant the Arbitrum Foundation control over 750 million ARB tokens. This could be used to finance the “special grants” program, which is designed to foster growth.

ARB holders are unable to decide who or how this should be done, however, as the centralized Arbitrum Foundation will make all grant allocations. This stands in stark contrast to other aspects of AIP-1, which highlighted the importance of token holders in the governance process.

The vote is currently in its preliminary phase, and the Arbitrum Foundation has outlined details of how it will manage the grants program. The proposal suggests that $1 billion should be allocated for this purpose, causing some members of the community to express concern.

“Having seen other governance examples where large treasuries got basically drained for community pet projects, this is pretty concerning,” said one community member who requested anonymity. The proposal was submitted by Lemma Ltd, but they were not available for comment.

The “special grants” program is designed to streamline the grant proposal process and reduce “voter fatigue.” However, some members of the community are not convinced by this argument. “News flash: governance is hard,” said one. “That doesn’t mean you should bypass due process. Elections may be annoying but at least democratic nations pretend to do them for a reason.”

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