Arbitrum Reverses $1B Token Plan Following Backlash from Community
• Arbitrum, a layer-2 solution provider, backtracked on its proposed governance voting system after a huge backlash from the community and token holders.
• The Arbitrum Foundation released new Arbitrum Improvement Proposals (AIPs) to address the feedback received from the community.
• The AIPs include proposals for spending, budgeting, transparency, and a smart contract lockup schedule.
Arbitrum U-Turns on Proposed Governance Voting System
Arbitrum, an Ethereum Layer-2 solution provider, has decided to backtrack on its proposed governance voting system. This comes in response to negative feedback from the community and token holders.
In order to address the concerns raised by the community regarding its proposals, the Arbitrum Foundation has released new Arbitrum Improvement Proposals (AIPs). The AIPs suggest splitting up the governance package into smaller segments. Furthermore, it proposes placing 700 million ARB tokens held by the foundation into a smart contract-controlled lockup with an unlocking schedule spread over four years. The foundation would not be able to use these tokens until they are approved by community members through a budget allocation process. Additionally, several documents related to governance of the ecosystem will be amended as part of AIP 1.2 .
The original proposal had sparked outrage among critics such as DeFi and decentralization advocate Chris Blec who stated that it was „decentralized theatre“. He further added that due to centralization of power within Arbitrium or Optimism networks any transaction could be frozen or wallets stolen at any time without permission of users..
In response to this criticism, The Arbitrium Foundation is looking into bringing more accountability measures by proposing transparency reports which will help make users aware of how funds withing protocol are used. To ensure this happens they have said they will propose smaller subsections with their AIPs rather than having one large package being put forward for approval at once.
In conclusion ,the new proposals issued by Arbirtum aim to improve user trust in their project by introducing more transparency and accountability measures for their decision making processes as well as allowing for greater control over where funds are allocated within their network .