Earlier this week there was a lot of hectic in the Arbitrum (ARB) community after a controversial action by the Arbitrum Foundation. The result of a ballot on a budget proposal was completely ignored and the community was furious. The Arbitrum Foundation has now responded to the criticism and has come up with two new proposals.
Controversial choice of Arbitrum
What exactly happened earlier this week? Arbitrum’s team made a proposal to spend more than 700 million ARB tokens worth about $1 billion on administration and operations costs. A vote was taken and 70 percent of the voters were against this plan.
However, the outcome of the ballot was ignored by the Arbitrum Foundation. According to a statement the round of voting was not intended to be binding, only as a confirmation of a previously made choice.
Now the foundation has promised not to move the 700 million tokens. New rounds of voting will take place where the community will determine “an acceptable amount”. In addition, the Arbitrum Foundation has published a ‘transparency report’ to provide more clarity.
Two separate proposals
The solution that Arbitrum offers comes in the form of two official proposals: AIP-1.1 and AIP-1.2. The first proposal will secure the much-discussed 700 million ARB tokens in a smart contract for four years. The Foundation will only be allowed to use the tokens with community approval.
The second proposal will include some governance changes. For example, the minimum number of ARB tokens required to submit a proposal will be reduced from 5 million to 1 million tokens. In this way, more entities will influence the governance of Arbitrum.
The community has three days to provide feedback on the Foundation’s two proposals. There will then be a week of voting on the proposals.
Arbitrum is a layer-2 solution on Ethereum (ETH). It processes transactions faster and cheaper than the Ethereum network itself. According to the analysis platform DefiLlama, there is no less than $2.24 billion fixed in the protocol.
