The Arbitrum Foundation, an Ethereum layer-2 solutions provider, has released new improvement proposals for the governance of its network. The move comes after its first governance proposal faced opposition from the community, leading to a fracas. The new proposals, AIP-1.1 and AIP-1.2, aim to address the community’s concerns by covering issues such as transparency, budget, smart contract lockup schedules, and lowering the proposal threshold to make governance more accessible.
Arbitrum’s Initial Governance Proposal and Community Response
The Foundation’s first proposal, AIP-1, faced backlash from token holders who opposed the proposal’s ratification vote, which gave control over approximately $1 billion worth of ARB tokens to the Foundation. Community members also objected to the proposal’s scope, which covered too many topics. Consequently, the Foundation confirmed that AIP-1 “likely will not pass.” In response to the backlash, the Foundation announced that it would not take control of the tokens, and it issued a transparency report describing actions taken to get the DAO up and running.
New Proposals Aimed at Addressing Community Concerns
The Foundation’s new proposals, AIP-1.1 and AIP-1.2, are posted on the Arbitrum community forum and open for feedback for at least 72 hours before a planned week-long snapshot vote. AIP-1.1 covers smart contract lockup schedules, spending, budget, and transparency, while AIP-1.2 tackles amendments to current founding documents and lowers the proposal threshold from 5 million ARB tokens to 1 million ARB to make governance more accessible. The Foundation hopes that these new proposals will address community concerns and help restore faith in the network’s governance.
Arbitrum’s Efforts to Represent and Serve the Community’s Best Interests
The Foundation has made efforts to address the community’s feedback, stating in a tweet that it has “worked diligently to address it and make sure the Foundation can represent and serve the DAO’s best interests with their support.” The Foundation’s willingness to listen to the community and take action is a positive step towards restoring confidence in the network’s governance.
Industry Observers Criticize Arbitrum’s Centralized Governance Model
Arbitrum faced criticism from industry observers who accused it of being centralized after its initial proposal to use 750 million tokens to vote on its own proposal. This move sparked concerns about the network’s decentralization and whether it could remain true to its vision of being an Ethereum layer-2 solution provider. However, the Foundation’s decision to backtrack on its initial proposal and propose new governance models demonstrates its willingness to listen to the community and address concerns about centralization.
ARB Prices Drop Amidst the Fracas
ARB prices dropped by 4% over the past 24 hours, falling to $1.22. The layer-2 token faced a significant sell-off after its airdrop on March 23, and it is down 86% from its peak price of over $8.50 on that day. The drop in ARB prices is likely due to the community’s concerns about the network’s governance and its ability to remain decentralized. However, the Foundation’s new proposals and transparency report may help restore faith in the network and its governance.
The Arbitrum Foundation’s decision to propose new governance models following the community’s backlash is a positive step towards restoring faith in the network’s governance.
The new proposals, AIP-1.1 and AIP-1.2, aim to address community concerns about transparency, budget, smart contract lockup schedules, and accessibility to governance.
