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Arbitrum Foundation to Keep 700M ARB Tokens, Introduces New Proposals After Backlash

2 mins
Updated by Kyle Baird
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In Brief

  • The Arbitrum Foundation unveiled 2 new governance proposals following community backlash.
  • Only 12% of voters favored AIP-1, while a staggering 76% opposed it.
  • The Ethereum layer-2 network said that it has revised the Foundation's bylaws to eliminate any mention of AIP-1.
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Arbitrum Foundation unveiled two new proposals with significant changes following backlash from the community that voted against its initial governance proposal.

The Foundation promises to hold onto the 700 million ARB tokens left in the Administrative Budget Wallet until the DAO authorizes an appropriate spending plan.

What Do Arbitrum’s New Proposals Entail?

The Arbitrum Foundation said it plans to hold the remaining 700 million ARB tokens until the DAO approves an acceptable budget. A smart contract lockup schedule is one crucial aspect of the new proposals.

Fund allocation was contentious in the previous proposal because 750 million ARB tokens were designated as grants to the Foundation.

That said, community feedback and spending limits are now suggested under AIP-1.1 and 1.2. In addition, the transparency report outlines all actions taken to set up the DAO. 

AIP-1.1 suggests limiting the Foundation’s spending by implementing a lockup period, creating a budget, and providing transparency reports for the 7.5% of $ARB tokens in the Foundation’s “Administrative Budget Wallet.” It also lays out specified budgetary categories and principles.

AIP-1.2 proposes modifying the DAO’s primary governing documents by reducing the proposal threshold from 5,000,000 to 1,000,000 tokens to increase governance accessibility.

In addition, the Ethereum layer-2 network stated that it revised the Foundation’s bylaws to eliminate any mention of AIP-1.

Community Outcry and 76% Against Votes

While the allocated grants were controversial, AIP-1 also proposed that $ARB token holders would govern ArbitrumDAO. This allowed the native token to function as the ‘primary means of fostering, developing, authorizing, and governing ArbitrumDAO-approved chains.’

The original proposal aimed to approve multiple decisions made by Arbitrum DAO. It included the establishment of voting thresholds for specific governance proposals and the distribution of ARB tokens.

Only 12% of voters favored the idea, while a staggering 76% opposed it.

Arbitrum AIP-1’s final voting tally

New AIP-1.2 suggests using the DAO’s ability to modify parameters. It will consider community input rather than asking the DAO to vote on already-made decisions.

Meanwhile, the native token to the rollup chain has lost 5% in value in the last 24 hours. ARB is hovering at the price level of $1.20 at press time, a 2.8% decline from the previous week.


In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.

Shraddha Sharma
Shraddha is an India-based journalist who worked in business and financial news before diving into the crypto space. As an investment enthusiast, she has also has a keen interest...