A cryptocurrency falters and there are $1 billion at stake

The cryptocurrency Arbitrum entered into a crisis after knowing the financing proposal of the Arbitrum Foundation in more than 750 million tokens ARB. After a rejection by the holders, they announced that they were only ratifying the decision.

The debacle began when the community denounced a “special grants” programwhich would allow the applicable service providers to be reimbursed and cover the ongoing administrative and operational costs of the Arbitrum Foundation.”

In this context, ArbitrumDAO launched its first voting proposal, the AIP-1, that is, proposals for cryptocurrency improvements. Among the points to be defined was the utilization of 750 million tokensa figure equivalent to US$1,000 million.

Voting began on March 27 and ARB token holders could choose between three options: in favor (for), against (against) or abstain (abstain). The vote, which had an end date for Monday, April 3, showed a trend from the beginning: more than 80% positioned themselves for the “against” option.

The rejection, they say from the community, arose when it was learned that the Arbitrum Foundation had already used 40 million tokens belonging to the 750 million. It is a movement that had not yet been approved.

Arbitrum backtracks on voting

After the final results of the AIP-1 vote were revealed (83% against and only 13.9% in favor), ArbitrumDAO, the official decentralized autonomous organization (DAO) launched in early March by the cryptocurrency, clarified the destination of the funds and ensured that the vote was officiated as a “ratification” of a decision already made.

In this way, Arbitrum rejected the on-chain governance process, that is, a set of well-defined rules that are organized by a broad social structure and by which This governance sets the general guidelines for the development of the project. In addition, they announced the sale of a part of the tokens for stablecoins.

The Arbitrum Foundation apologized and pointed out a communication problem: “One of the errors in the drafting of AIP-1 was not to notice from the beginning that this proposal was intended to act as a ratification of the initial configuration both from Arbitrum DAO and from the foundation that has been created to serve the DAO. The goal of AIP-1 was to inform the community of all the decisions that had been made beforehand.”

The blockchain, which functions as an Ethereum sidenet, “rectified” its decision and the community is not happy with the actions of ArbitrumDAO. Some users pointed out that the foundation believes that “everyone (users) is stupid.”