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Massive Rejection of Controversial AIP-1.05 Proposal to Return 700 million ARB Tokens to Arbitrum's DAO Treasury

CJ - Cryptocurrency Enthusiast

AIP-1.05, a contentious proposal that sought to return 700 million ARB governance tokens to Arbitrum's DAO Treasury, was soundly defeated on April 15. Once the Arbitrum Foundation transferred money in March without getting community permission, the Improvement Plan was put forth.

The proposal was defeated by 118 million votes, representing 84% of the total votes received, while 21 million ARB tokens voted for the proposal, nearly 14.5% of the total. Around 2 million ARB tokens abstained. The proposal aimed to ask the Foundation to return the tokens as a "symbolic gesture to demonstrate that the governance holders ultimately control the DAO, not the Arbitrum service provider nor the Foundation."

One of the main objections to the idea was that it would delay the Foundation's capacity to "support the expansion of the Arbitrum ecosystem" and add an extra stage. Another worry was that the ecosystem needs balance to advance decentralisation and advancement.

Arbitrum's community and its Foundation are currently in a dispute over the Foundation's governance proposal AIP-1, which called for the crypto market investment of nearly $1 billion worth of ARB tokens to fund its operations. The Foundation later clarified that AIP-1 was a ratification, not a proposal, in response to criticism from the community and revealed that some of the tokens had already been exchanged for stablecoins.

AIP-1.05 was Arbitrum's first attempt at governance after its tokens airdrop in early March. Despite the defeat, the Foundation has already released a new set of improvement proposals aimed at re-establishing dialogue with the community. It remains to be seen how these proposals will be received by the community and if they will be successful in resolving the ongoing dispute.

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