Arbitrum Foundation commits to hold 700 million ARB until community approves budget

On Wednesday, the Arbitrum Foundation proposed expanding powers to manage and oversee ARB holders’ budgets in an attempt to emerge from last weekend’s crypto governance crisis.

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In a Discord post, the Arbitrum Foundation stated that it “will not move” the 700 million ARB tokens left in the “administrative budget wallet” until the community approves the funding budget. They also propose measures to make governance “more accessible”.

These actions represent huge concessions to token holders, who are outraged at being asked to “approve” decisions made by the Arbitrum Foundation — including the fate of nearly $1 billion worth of tokens. Speaking of the buzz surrounding the matter, the Arbitrum Foundation has also released a “transparency report” on how the group was formed.

The new proposal comes after the entire community protested late last week that the Arbitrum Foundation had quietly transferred 750 million ARB to one of its own wallets. Arbitrum, an ethereum scaling solution, is the fourth-largest blockchain with a total value locked of $2.24 billion, according to Defi Llama, a data analytics firm focused on decentralized finance.

In response to a wave of public outcry, the Arbitrum Foundation, the centralized organization responsible for Arbitrum’s development, submitted two new proposals on Wednesday that would limit its own power and increase that of community members.

The first proposal, AIP-1.1, proposes to lock the fund’s remaining 700 million ARB into a “smart contract” that will be unlocked after four years. According to the proposal, the platform will not be able to use tokens until community members approve the token allocation budget. A portion of the tokens will be used to fund the Arbitrum Foundation’s operating budget for the first year.

The second proposal, AIP-1.2, aims to amend some of the governance documents of the Arbitrum ecosystem. One of the proposed amendments is to lower the threshold for the number of ARBs required to publish an arbitration improvement proposal from 5 million ARBs to 1 million ARBs.

DAO members will have three days to provide feedback on these proposals. The two proposals will then undergo a week-long fast-track vote, according to the Arbitrum Foundation community lead.

Although the Arbitrum Foundation agreed to grant token holders more control over the remaining 700 million ARB tokens, the organization sold 10 million ARB tokens and lent 40 million to Wintermute.

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According to Coindesk

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