A contentious plan to return 700 million ARB governance tokens to Arbitrum’s DAO treasury was overwhelmingly voted down on April 15. The proposal, known as AIP-1.05, emerged after the Arbitrum Foundation moved funds in March without obtaining community consent.
The proposal was rejected by 84% of the total votes, with 118 million votes against it, while approximately 14.5% of the total, or 21 million ARB tokens, supported the proposal. About 2 million ARB tokens did not participate. The plan aimed to have the foundation return the tokens as a symbolic act to emphasize that the DAO’s governance holders, rather than the Arbitrum service provider or the Foundation, have ultimate control.
On the governance forum, a participant with 4.8 million ARB tokens argued that the proposal was merely a power play that would hinder the foundation’s ability to foster Arbitrum ecosystem growth by adding an unnecessary step. Another participant with 18 million ARB tokens opposed the proposal, emphasizing the need for balance between promoting decentralization and fostering progress in the ecosystem.
The Arbitrum community and its foundation are currently at odds over the foundation’s AIP-1 governance proposal, which requested nearly $1 billion worth of ARB tokens to finance its operations. Following community backlash, the foundation later clarified that AIP-1 was a ratification, not a proposal, and that some tokens had already been exchanged for stablecoins.
AIP-1 marked Arbitrum’s initial foray into governance after its token airdrop in early March. The foundation has since introduced a new series of improvement proposals to reengage in conversation with the community.