Banning projects identified in the high-severity Watchdog Program cases

[OpCo]

Abstract

The following cases from the Watchdog Program have been deemed to constitute high-severity misuse. Accordingly, the Watchdog Committee is proposing to ban three projects identified from these high-severity cases from the ArbitrumDAO:

• Good Entry
• Limitless
• APX Finance (formerly ApolloX)

Rationale

To strengthen oversight of grant allocations by the DAO and reduce misuse, the ArbitrumDAO approved the Watchdog Program to reward verifiable reports of misused funds. As of September 2, 2026; 90 reports have been submitted to the program, ~532K ARB has been recovered, and ~268K ARB ARB have been distributed for reporter bounties.

What constitutes a high-severity misuse?

As per the original Watchdog Proposal, high-severity misuse involves large-scale, deliberate misuse of DAO-allocated funds, including but not limited to fabrication of deliverables and theft.

As mentioned in the Watchdog Retrospective Report, the Watchdog Committee (comprising @Entropy Advisors, @MinistroDolar, the Arbitrum Foundation, and the @OpCo) has deemed the following cases to constitute high-severity misuse:

1. Good Entry

Rationale: Ineligible Users + Suspected Self-Sybil during STIP

On-chain analysis confirms that 142,839 ARB was distributed to 1,032 ineligible users during and after the STIP period. There was also evidence of self-farming of incentives by wallets connected to the team’s addresses. When Good Entry was contacted to provide clarifications, they refused to cooperate.

Since STIP, this project has ceased operations.

2. Limitless

Rationale: Suspected Theft during LTIPP

The team swapped 75,000 ARB to USDC and transferred it to Base, removing grant funds from the Arbitrum ecosystem entirely. The deliberate conversion to stablecoins and bridging to another chain demonstrated intentional misuse.

Since LTIPP, the project appears to have ceased operations. The committee was unable to reach any team members for clarification or recovery.

3. APX Finance (formerly ApolloX)

Rationale: Unreturned Funds + Late Distribution + Suspected Self-Sybil during LTIPP

On-chain analysis uncovered multiple overlapping forms of misuse totaling 239,714 ARB. A substantial portion of LTIPP funds remained unutilized in the team’s treasury addresses compared to distributor contracts as well as late distributions to said distributor contracts. Lastly, there was on-chain evidence linking a sybil cluster to team addresses.

The committee was unable to reach any team members for clarification or recovery.

Steps to Implement

Before raising this proposal to an offchain vote, these projects will have 1 week to present their case to the ArbitrumDAO as a reply on this thread.

If any of the projects’ explanations are not to the Watchdog Committee’s satisfaction, and if the respective funds are not returned within the same week, the Watchdog Committee will seek a vote from the ArbitrumDAO on the following:

• Should [project name(s)] (including all founders, current team members, and affiliated contributors) be permanently banned from all future ArbitrumDAO programs?

For the projects that are no longer operational, this ban will only apply to the founders of these projects.

For each of the aforementioned projects, the ArbitrumDAO will have the following voting options to choose from:

• FOR - Ban [PROJECT] from the ArbitrumDAO
• AGAINST - Do not ban [PROJECT] from the ArbitrumDAO
• ABSTAIN

A separate offchain vote will be created for each project, so a total of 3 votes will be posted.

This proposal will not require an on-chain vote because there are no on-chain actions to be taken. Accordingly, each respective Snapshot vote aims to get social consensus from the DAO, and will serve as the final decision.

Timeline

The following dates are tentative and subject to change.

1. September 3rd: Publish proposal to the forum.
2. September 10th: Deadline for projects to respond.
3. September 10th: Publish off-chain vote to Snapshot.

If the DAO votes to ban any or all of these projects, then the respective project(s) will be ineligible to apply for any ArbitrumDAO programs going forward.

[Entropy]

Given that the response window outlined in the proposal has closed, and none of the three teams responded in this thread or returned the funds, Entropy has posted the three offchain votes to ban these projects on behalf of the Watchdog Committee.

To reiterate Entropy’s position, based on the onchain evidence we reviewed alongside the other Watchdog Committee members, we believe the actions of these teams constituted high-severity grant misuse. When combined with either an unwillingness to cooperate when reached or a lack of responsive communication, a ban is unfortunately the outcome required here.

Offchain votes:

• Good Entry
• Limitless
• APX Finance

[Zeptimus]

Voting FOR. Sad to read proposals like this one. I’ll be voting to ban all three, the worst one being Limitless. I don’t think a ban is what stops the next scam though, the money was already gone before someone looked. What would stop it is enforcing the proposal, which we can argue the DAO is doing better, before the funds go out.

Appreciate the Watchdog Committee for doing the digging.

[dzack23]

While I haven’t reviewed the Watchdog report myself, I believe the lack of public response from Good Entry, Limitless, and APX Finance (as of posting this we’re three days past the deadline) is sufficient reason to vote FOR the ban on all three.

[Flook]

Merlyn Labs is voting FOR to ban all three offending projects, Good Entry, Limitless, and APX Finance.

Silence here is an admission of guilt and banning should stand as a warning to future projects attempting further misuse.

[Griff]

Voting to ban everyone… obviously…

I’m surprised we have to vote on this honestly… for 2 reasons… #1 the committee is there, i would lean towards optimistic approval instead of paying delegates to weigh in on this.

#2 A ban is more symbolic… i think its pretty hard to enforce this across the Arbitrum Ecosystem

Re: the process…

Normally I’m a fan of graduated sanctions, but nobody answered the committee or returned anything, so there isnt much left to graduate to. If any of them ever show up and give the ARB back I’d happily revisit… until then easy yes.

Really glad to see the Watchdog working and actually keeping people honest. Its important systemically. But i am skeptical the ban will do too much.

[TodayInDeFi]

Voting FOR banning all three projects:

1. GoodEntry - an options like derivatives platform that ceased public comms in may of 2024 and seems to have ceased operations. Lack of comms and support for the project along with onchain evidence of self farming violating the terms of LTIPP makes this a clear FOR banning.

2. Limitless Finance - website down, no public comms since August 2024. Along with the swapping and transferring off of Arbitrum, makes this a clear FOR Banning. We’ve independently verified the onchain transfers and swaps.

3. APX Finance pivoted to Aster Dex, which is native/focused on BSC and closely tied to Binance. The pivot to a different project brand and chain focus makes this a clear FOR banning.

One sad point here about all three projects is the projects themselves were in some cases genuinely innovative or interesting but ended up rugging or pivoting over time. The watchdog programs results may also be useful for designing future incentive programs as it seems these programs work, but need strong guardrails against self farming, pivoting, and time-rugging.

[dzack23]

+1 On optimistic approval; at minimum, for cases like this in which no response is provided, I think ban by default (without vote) would make more sense.

[Manugotsuka]

The following reflects the views of L2BEAT’s governance team, composed of @krst and @Manugotsuka, and is based on their combined research, fact-checking, and discussion.

We voted FOR in all 3 banning cases.

We support these bans because high-severity misuse of DAO funds should have clear consequences. The Watchdog Committee identified serious misuse, gave the projects an opportunity to respond, and did not receive a satisfactory response or recovery of funds.

In our view, this is not only about the specific project names involved. DAO programs are ultimately operated by people, teams, signers, and affiliated contributors. If a project misuses funds, shuts down, or stops cooperating, the DAO should also consider the individuals and entities responsible for managing those funds. Otherwise, the same actors could return under a new project and create the same risk again.

For that reason, we support the bans applying beyond the project brands themselves, where the responsible founders, current team members, and affiliated contributors can be reasonably identified. At the same time, this should be applied carefully, so that peripheral contributors who had no control over the funds are not unfairly treated as responsible.

So, we support this because the DAO needs credible enforcement when grant funds are misused. Clear consequences help protect future programs, preserve trust in DAO-funded initiatives, and make it harder for the same patterns to repeat under a different name.

[cornellbc.eth]

Cornell Blockchain is voting FOR banning all three programs. As others noted, the lack of response is concerning, and a precedent needs to be set to deter future misuse of funds.

[Jean_MUX]

MUX vote For banning all three.

We support these bans because serious misuse of DAO funds should have clear and meaningful consequences.

[OpCo]

The ArbitrumDAO has officially voted to ban Good Entry, Limitless and APX Finance from all future ArbitrumDAO programs.

Accordingly, the founders, multi-sig addresses and multi-sig signers associated with each project will be banned:

Good Entry Founders and Associated Addresses

• Jun
• Tobiko
• 0x4827C7057B2e95aF587D738e9d49Df9886d047D2
• 0x30EE4705baf6a9753CBEb24762801e2745BA90Ea
• 0xC0D7223db9850C87268c178E8b46cea10DbA90E1
• 0xD14Aa4F01239D96114F6fbc37faF742158a276D1
• 0xB36FAa35034dd0E6307258cfe38793D3A5254dD3
• 0xb284aD83e1BD07A655a98A5F378E35cf8d47872E

Limitless Founders and Associated Addresses

• Jeong Park
• 0x25D2345FcE7F992877B308170551A5977cD22F54
• 0xD0A0584Ca19068CdCc08b7834d8f8DF969D67bd5
• 0x6799e4fb8bEc9eaB7496c98B4668DDef146Ef6E0
• 0x64dA461ECbAa3FEC3625F21b74a8c74394d501c9
• 0x710930527598407A59c81c2168Fc18A6E1f965a8

APX Finance Founders and Associated Addresses

• MZ
• Captain
• 0x84D4ADb766b6EEcE4b97626B5a2Fbf6a7A996291
• 0xc632C36bcD8230bf13AE6c94Dce031f36a0ceba2
• 0x46226016937d4dB390CB2349F7aEED5998eefFfa
• 0x6F9358574a6D92e9B356E087E3E8b2d901a9e37e
• 0x60EdE4402a34762D608AD9bA7bD3797f5bFE544c
• 0x64d8E3dcFFEC9C5491B1Fd02AEbcEb100947b485
• 0xB480A9326ca6360515b6aBB2BBaC3bD7C9a5a0D4
• 0x1b466657B7593D7634791287E1C20d7494eCffD1
• 0x0577f72f62dd23e1B308268FF4eE039B78B9844C
• 0x440d97b0D6FEB928202680414F62786d0098025B
• 0x42034290baF66264c2FA99Ff873C9089dB0071fb
• 0x215B77352815C722d32d61889Cb4b68d1b29E3EF

How will this ban be effectuated?

• If any of the founders or associated addresses apply for an ArbitrumDAO-related program, the DAO should proactively reject any such application.

• In case the DAO did not proactively reject any such application, the OpCo or the Arbitrum Foundation, as stewards of the ArbitrumDAO, reserve the right to flag it and reject the application.

List of Banned Projects and Stakeholders

The Arbitrum Foundation and OpCo will continue to maintain a list of projects and people banned from the DAO.