Arbitrum Foundation Holds Onto 700 Million Tokens 

Arbitrum Foundation rolled out two new proposals incorporating significant changes after receiving negative feedback over its original governance proposal.

The Foundation confirmed the Arbitrum DAO in an April 5 tweet that it had rejected its first proposal, AIP-1.

The two new proposals are AIP-1.1 and AIP-1.2. As part of AIP-1.1, the Foundation will be subject to significant limitations on spending, such as a lockup schedule enforced by smart contracts, which release funds linearly over a four-year period.

On the contrary, the AIP-1.2 proposal seeks to lower the proposal threshold from 5,000,000 to 1,000,000 tokens, improving the fundamental rules governing the DAO and democratizing governance. In addition, the proposals eliminate all references to AIP-1 from the Arbitrum Foundation's bylaws. 

On April 2, the Arbitrum Foundation stated AIP-1 was "likely to fail" due to community opposition. ARB token holders objected to the proposal, arguing that it covered too many topics, and criticized the foundation's acquisition of around $1 billion in tokens.

The original proposal, AIP-1, aimed at approving multiple decisions made by Arbitrum DAO. Specifically, it included the establishment of voting thresholds for governance proposals, as well as the distribution of ARB tokens. However, only 12% of voters supported the idea, while 76% opposed it.

In the new proposal, the foundation affirmed that there would be no movement of the remaining 700M tokens until the DAO approves an acceptable budget and smart contract lockup schedule. 

“The remaining 7% of ARB tokens in the “Administrative Budget Wallet” will be subject to a four-year lockup schedule, unlocking on a continuous linear time basis commencing from the date of the Snapshot approval of AIP-1.1 by the DAO,” Arbitrum Foundation stated in AIP-1.1.

Further, in the AIP-1.2, the Foundation proposed to use the DAO's ability to modify parameters. Thus, instead of asking the DAO to vote on already made decisions, it will consider community input.

In addition, the foundation published a transparency report detailing the actions taken to launch the DAO. 

Arbitrum($ARB) is trading at $1.21, down 1.55% in 24 hours. The token has a current market cap of $1.545 billion.

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What is Arbitrum:

Arbitrum is an Ethereum layer-2 network that allows developers to build and deploy highly scalable smart contracts for a low cost. Arbitrum chain will enable developers to use Web3 apps, deploy smart contracts, etc., but transactions will be cheaper and faster. The flagship product for the team, Arbitrum Rollup, is an Optimistic roll-up protocol that inherits Ethereum-level security.

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