With two resolutions aimed at turning the page on last weekend’s crypto governance disaster, the Arbitrum Foundation proposed on Wednesday to increase ARB token holders’ budget control and governance abilities.
The Arbitrum Foundation stated in a Discord post that it “will not move” the 700 million ARB tokens that remain in its “Administrative Budget Wallet” until the community approves “an acceptable budget” for the quantity. It also advocated measures to make governance “more accessible.”
The two moves marked a significant compromise to token holders who were upset at being forced to “ratify” choices taken by the Arbitrum Foundation, including the destiny of roughly $1 billion in tokens. In response to the controversy, Arbitrum Foundation produced a “transparency report” detailing how the organization came to be.
The latest recommendations follow a community-wide outcry last weekend over the Arbitrum Foundation’s decision to surreptitiously transfer 750 million ARB tokens to one of its own wallets. Arbitrum is an Ethereum scaling solution and the fourth largest blockchain, according to decentralized finance-focused data analytics firm Defi Llama, with $2.24 billion in total locked value.
In response to the reaction, the Arbitrum Foundation, a centralized entity in charge of creating Arbitrum, filed two new proposals on Wednesday that would limit its own capabilities while increasing those of community members.
The first option, AIP-1.1, involves putting the foundation’s remaining 700 million ARB in a “smart contract-controlled lockup” that will be unlocked over the course of four years. According to the plan, the foundation will be unable to utilize the tokens unless community members accept an allocation budget for the tokens. A part of the tokens will be used to support the Arbitrum Foundation’s first-year operational budget.
The second proposal, AIP-1.2, seeks to update numerous Arbitrum ecosystem governance agreements. One of the suggested changes is to reduce the amount of ARB tokens required to publish an Arbitrum Improvement Proposal on chain from five million to one million.
Members of the DAO will have three days to give comment on the ideas. According to Arbitrum Foundation community lead eli_defi on Discord, the two suggestions will then be placed up for a week-long snapshot vote. While the Arbitrum Foundation has agreed to give token holders additional power over the organization’s remaining 700 million ARB tokens, the group has already sold 10 million ARB tokens and borrowed another 40 million to Wintermute.
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