The Arbitrum Foundation has sparked a controversy over the implementation of the DAO due to poor communication. We take stock of this event, where the project did not take into account the opinion of the community
Arbitrum Foundation sparks controversy
While the first Arbitrum Improvment Proposal (AIP-1) is meeting with an unfavorable vote from the community, the Arbitrum Foundation has triggered a controversy by going against this opinion.
This AIP aims to establish the functioning of the decentralized autonomous organization (DAO) that ensures the development of the network, including the fact that the Arbitrum Foundation is the entity representing ArbitrumDAO in the real world.
Among the many elements detailed in this proposal, one of them is a matter of debate: the allocation of 750 million ARB tokens to the foundation for various operational and administrative expenses, or 7.5% of the total offer.
While the vote is not yet complete, it is currently receiving a negative reception of 82.9%.
Despite this, the Arbitrum Foundation has indicated that AIP-1 was really a ratification rather than a proposal, and was only intended to outline what would happen. Thus, miscommunication would have suggested that the implementation of the various elements outlined required community input.
Thus, the Arbitrum teams use the famous chicken-and-egg paradox as an example, explaining that before a centralized entity can enable decentralized decisions, it must first define a framework.
Poor communication
What is curious, however, is that from its very first sentence, AIP-1 presents itself as a proposal:
“This document (“AIP-1”) proposes the structure of a decentralized autonomous organization called ArbitrumDAO that would be governed by the WRA holders […]. “
But the Arbitrum Foundation later cleared itself of this miscommunication:
Nothing here is meant to minimize that there was clearly a lack of communication. One of the mistakes in the drafting of AIP-1 was not noting from the beginning that this proposal was intended to ratify the initial configuration of the Arbitrum DAO and the Foundation that was created to serve the DAO, this was made clear at the end of AIP-1 in the “Implementation Steps” section, but it should have been made clear earlier. “
So, while the vote is not over, that’s 10 million ARB tokens sold, or about $12 million at this point. As explained in a thread on Arbitrum’s Twitter, this is to cover various operating costs, including $3.5 million to cover the creation of ArbitrumDAO:
The Foundation is a separate entity to Offchain Labs and it was established with no funds. The 10m ARB tokens were sold to fiat to fund pre-existing contracts and to pay for near-term operating costs. For example, the $3.5 million setup costs outlined in AIP-1.
– Arbitrum (,) (@arbitrum) April 2, 2023
Moreover, the foundation returns to the 7.5% attributed to the treasury, indicating for example that this value is lower than in other competing networks. According to the data provided, it would be more than 10% at Polygon (MATIC), and 50.1% on the side of Starknet.
If it is true that a share of centralization is necessary to launch a project, this error of communication risks to affect the confidence of the community for the future.
