In the blockchain ecosystem, community involvement in the governance of a project is an essential part of its long-term success. The Arbitrum Foundation had a scathing reminder of this with the debates surrounding the AIP-1.05 proposal.
As a reminder, a DAO (Decentralized Autonomous Organization) is a decentralized autonomous organization whose governance rules are automated and registered immutably and transparently on the blockchain. Therefore, all the decisions of a CAD necessarily do the subject of a vote from its members.
Recently, Arbitrum, a layer 2 based on Ethereum, has received all the attention by launching its native token: ARB. Although the distribution of the token has generated particularly high enthusiasm, there governance around the development of Arbitrum seems to have more difficulty in implementing.
Proof, the recent Arbitrum AIP-1.05 improvement proposal had the effect of unleashing passions while being accompanied by a strong rejection of significance on the part of the Arbitrum community.
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What is the Arbitrum 1.05 proposal?
While the DAO Arbitrum has only existed for a few weeks, the Arbitrum Foundation is at the heart of a controversy after transferring 750 million ARB tokens in its treasury without the agreement of the members of the DAO. According to the foundation, this transfer was intended to give the foundation enough capital to then invest in projects developed on Arbitrum.
Very quickly, the controversy swelled with the main argument being the lack of consideration for decentralization on the part of the Arbitrum foundation. Nevertheless, the foundation was quick to react indicating that the initial transfer was a ratification and not a proposal.
In response, some DAO members made a new proposal (AIP-1.05) addressing the transfer of these 750 million ARB tokens, worth approximately $1 billionto the DAO treasury.
According to the authors of the AIP-1.05 proposal, “this is with a symbolic gesture to demonstrate that they are the holders of the governance who ultimately control the DAO, not the Arbitrum service provider or the foundation.”
Proposal 1.05 strongly rejected during the vote
The proposal was therefore voted on and strong community participation could be observed. Concretely, the proposal was rejected by 118 million votes, or 84% of the total votes received. Thus, only 14.5% of voters were in favor of the proposal while 1.42% abstained.
At the heart of this controversy, the issue of decentralization is central. Although still imperfect in the industry of blockchain and crypto currenciesdecentralization still remains one of the founding principles of the industry.
Besides, an Arbitrum whale who voted against this proposal explained that “there is a balance that we must strive to achieve between defending decentralization and preventing progress in the ecosystem”. She adds that “decentralization in its ideal form does not yet exist in this industry”.
A lesson for the future?
The response from the community has been very vocal and Arbitrum has already prepared a series of proposals for restore dialogue with members of the DAO and calm the situation.
Nevertheless, according to Arnold Toh, research analyst at The Block, “the fact that there is still a hot debate shows that the ramifications of actions unsolicited Arbitrum will continue to permeate their governance in the future”.
Since then, the current situation will have a huge impact on the industry, he says.. Indeed, Arbitrum being one of the leaders of layers 2 Ethereum, “the way its governance is going will probably be an example for many other communities in the future”.
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