Arbitrum Community Vote on AIP1.05: Proposal to Return 700 Million ARBs to DAO Vault

04/14/2023 08:30 • Blockchain Briefs • 100 views

According to reports, the Arbitrum community initiated a vote on the AIP1.05 proposal on snapshot, proposing that the Arbitrum Foundation return 700 million ARBs to the DAO vault. The voting will end on April 15th, and currently 83.35% of the votes are against.

The proposal initiated by the Arbitrum community to “return 700 million ARBs to DAO treasury” has been voted against by 83.35%

Introduction

Recently, the Arbitrum community has sparked discussions around a significant proposal made on snapshot. The proposal calls for the Arbitrum Foundation to return 700 million ARBs to the DAO vault, which has led to a community-led voting process that will end on April 15th. Currently, 83.35% of the votes are against the proposal. In this article, we will dive deeper into the reasons for and against the proposal and what it could mean for the Arbitrum community and the broader decentralized finance (DeFi) space.

Understanding Arbitrum and ARBs

Before we dive into the details of the proposal, it’s important to have a basic understanding of Arbitrum and ARBs. Arbitrum is a Layer 2 scaling solution for Ethereum, designed to increase transaction throughput while maintaining the full security guarantees of Ethereum. It is used to help solve the problem of slow transaction times and expensive gas fees on the Ethereum network. The Arbitrum team achieved this by implementing an Optimistic Rollup mechanism, which is a type of sidechain that aggregates transactions off-chain and relays a single batch of transactions to the Ethereum main chain.
ARBs, on the other hand, are the native tokens of Arbitrum. ARBs are ERC-20 tokens that are used as a medium of exchange, staking, and for paying transaction fees on the network. They are essential to the functioning of the Arbitrum network and are listed on multiple exchanges.

The AIP1.05 Proposal

The AIP1.05 proposal is a community-led initiative to return 700 million ARBs to the DAO vault. The DAO vault is a decentralized autonomous organization that holds the native tokens of the Arbitrum network. The proposal suggests that these tokens will be used to fund community-led initiatives that will help improve the growth and adoption of the Arbitrum network.
The reasoning behind the proposal is that the ARBs were allocated to the Arbitrum Foundation during the launch of the network. However, the foundation has already raised sufficient funds through the sale of ARBs during the launch, and the community believes that the 700 million ARBs are no longer necessary for the foundation’s operations.

Implications of the Proposal

The success or failure of the AIP1.05 proposal will have significant implications for the Arbitrum community and the broader DeFi space. If the proposal is accepted, it would mean a substantial reduction in the circulating supply of ARBs, which could increase the value of the remaining tokens in circulation. Additionally, the returned tokens could be used to fund community-led initiatives that would help grow and improve the network.
However, there are arguments against the AIP1.05 proposal. Some members of the community believe that returning the tokens to the DAO vault is unnecessary, as the tokens were allocated to the foundation during the launch of the network. Additionally, some members argue that the proposal could create instability in the market, as the returned tokens would flood the market, leading to a drop in the value of ARBs.

Conclusion

The community-driven voting process on the AIP1.05 proposal to return 700 million ARBs to the DAO vault is a significant development for Arbitrum and the DeFi space. The proposal could have significant implications on the value and circulation of ARBs, as well as the growth and development of the Arbitrum network itself. As of now, the voting shows that the majority of the community, 83.35%, is against the proposal. However, we’ll have to wait and watch whether the community pushes through with the proposal.

FAQs

Q: What is Arbitrum?
A: Arbitrum is a Layer 2 scaling solution for Ethereum, designed to increase transaction throughput while maintaining the full security guarantees of Ethereum.
Q: What are ARBs?
A: ARBs are the native tokens of the Arbitrum network and are used as a medium of exchange, staking, and for paying transaction fees on the network.
Q: What is the AIP1.05 proposal?
A: The AIP1.05 proposal is a community-led initiative to return 700 million ARBs to the DAO vault, which has sparked a community-led voting process on snapshot.
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