On Friday, Blockworks Research released a Twitter thread and accompanying forum post highlighting our concerns with Arbitrum's first governance proposal, AIP-1. We voted against the proposal, the first delegate to do so, and it stirred up quite a bit of controversy. One might even say we broke Crypto Twitter, Kim Kardashian style.
Here's the TLDR:
The Arbitrum airdrop distribution was supposed to allocate 42.78% of the ARB supply to the DAO treasury. In reality, 35.28% of the supply was distributed to the DAO-controlled treasury wallet, and the remaining 7.5% (worth over $1B) to a multi-sig wallet controlled by the Arbitrum Foundation with unknown wallet signers. AIP-1 asks that 750M ARB, 7.5% of the supply, be allocated to the Foundation (among other initiatives), the same allocation that was executed before the DAO voting started. Not only was this already allotted, but a small portion of these tokens (10M ARB) was already sold or loaned to Wintermute (40M ARB) for market making. This was without any DAO participation despite the fact that the funds should have still been under their control.
A large number of ARB followed our vote, and "against" is now substantially in the lead (83%). The controversy on CT spans from those in support of the Arbitrum team to many feeling immense anger. Some believe that the US-based Arbitrum team (Offchain Labs) may have had to take these actions for legal US regulatory reasons.
We at Blockworks Research believe a substantial mistake was made. Still, instead of choosing a path of anger and resignation, we are looking forward to improving the proposal and moving forward. We hope soon this will be a small road bump in the rearview mirror, and we still believe in the future of the Layer-2.
- Matt Fiebach
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