Proposal 1.05’s Struggle for Votes
With only one day left for the voting period, AIP-1.05 is struggling to gain support. Over 83% of the total vote, represented by 113 million Arbitrum governance tokens, is against the proposal. In contrast, 20 million tokens support it, and 2.2 million abstain.
What is AIP-1.05?
AIP-1.05 calls for the return of 700 million ARB tokens, valued at over $1 billion, to the DAO Treasury. The proposal argues that the initial allocation, done without DAO approval, represents a clear overreach of power concerning treasury resources.
The Origin of the Controversy
In early April, the Arbitrum Foundation backpedaled on a contentious governance proposal (AIP-1), which aimed to send 750 million ARB tokens to the foundation. Despite the majority of token holders voting against the proposal, it proceeded without their approval, sparking outrage.
Why AIP-1.05 is Likely to Fail
Several high-profile token holders, including 0x0eB5, olimpio.eth, and 0xBbE9, have voted against AIP-1.05. Reasons for opposing the proposal range from concerns about short-term price maximization to the belief that AIP-1.1 already addresses the issue by sending tokens to a smart contract with vesting that the DAO can modify.
because aip-1.1 already addresses this issue, the foundation is going to send the tokens to a smart contract with vesting (which the DAO can modify) – 1.05 simply adds extra bureaucracy + would have to wait for another proposal to transfer those tokens back to the foundation…
— cattin (@Cattin0x) April 14, 2023
Implications for DAO Governance
Regardless of the outcome, the ongoing debate highlights the significance of DAO governance in the future. Arbitrum, being the largest Optimistic Rollup in terms of total value locked and valuation, will likely set a precedent for other rollup communities.
What is AIP-1.05?
AIP-1.05 is a proposal that aims to return 700 million ARB tokens to the DAO Treasury, which were initially allocated to the Arbitrum Foundation without DAO approval.
Why is AIP-1.05 likely to fail?
Prominent token holders have voted against the proposal, citing concerns about short-term price maximization and the belief that AIP-1.1 already addresses the issue.
What are the implications for DAO governance?
The ongoing debate surrounding AIP-1.05 highlights the importance of DAO governance in the future. It also demonstrates the potential consequences of unsolicited actions on blockchain communities and sets a precedent for other rollup communities to follow.
What is the current price of Arbitrum’s governance token?
The price of Arbitrum’s governance token has increased 15% in the past 24 hours, and it is currently trading at over $1.54 per token.