The developers of Arbitrum, one of Ethereum's popular layer 2 scaling solutions, received backlash from the community for their proposal to allocate the bulk of their ARB tokens to the Arbitrum Foundation, a Cayman Islands-registered organization that oversees Arbitrum's development.
The proposal, known as AIP-1, was submitted to the Arbitrum DAO on March 8 at the end of March.
The proposal involved the transfer of 750 million ARB tokens (approximately more than $1 billion) to the Arbitrum Foundation.
Afterwards, it was stated that this proposal was only a validation proposal and that the ARBs in question were transferred to the Arbitrum Foundation.
Upon the backlash, the developers took a step back and revised their proposals, saying that the ARB tokens in question would not be moved until they were voted on by the DAO.
The ARB community then voted on the AIP 1.05 proposal, which suggested that the Foundation return 700 million ARBs to the DAO.
Voting will end on April 15 and at the time of writing, 113 million Arbitrum governance tokens have voted against the proposal, representing more than 83% of the total votes.
In other words, the proposal is not expected to pass in the face of these results. Major wallets that voted against believe that the proposal is aimed at short-term rise in ARB price, but DAO needs a more sustainable and long-term token distribution system.
Taking advantage of the general cryptocurrency rise, ARB has recorded a 17% increase in the last 24 hours and is trading at $1.56 at the time of writing.
*Not investment advice.