Against. It’s time to stop this farce.
1 Like
I think there are understandable reasons to be outspoken about the lack of communication and transparency that the Foundation provided to the DAO but this proposal seems to take an unnecessarily extremist approach.
There were undoubtedly many occasions where Arbitrum (both OffChain Labs and Arbitrum Foundation) could have taken a more public-oriented standpoint to explain how decentralization actually occurred, however, the past is the past. Reverting to tedious demands prior to conferring with the community does not solve anything beyond drawing attention.
I believe there are other areas of their proposals/frameworks that could receive more clarification but if the first response by the community is to compile buybacks/refunds into one proposal, this falls into the same mistakes that AIP-1 had.
Observation
This doesn’t actually relate to who is or isn’t wronged by the initial proposal, in my opinion, the delegate structure is in place to create a subsequent voice for the otherwise “silent population”. Both parties and their future place within the DAO have their appointments due to their own choosing.
People buying with fiat are no better than people receiving delegated tokens and vice versa. In reality, each person has the ability to choose who deserves their voting rights and that ability is what should be appreciated here.
Suggestion
Correct me if I’m wrong but the outlook here seems to be that there are blurred lines between the Foundation, OffChain Labs, and other entities, as well as confusion on what capabilities the DAO actually has as part of this ecosystem.
If the current goal is to prove whether Arbitrum as a whole is truly decentralized, there are better methods to take as a DAO. For instance, putting into practice the powers entitled to the tokenholders, such as adding/removing Directors or Security Council members, would be a more relevant approach for placing trust in leaders that the DAO can rely on.
What I would rather see happen in this case would be for a voting or polling system to be created for replacing unknown Directors/Councilors, therefore clarifying that relative parties are established for the overall management of the ecosystem.
1 Like
Blockworks Research is voting Against AIP-1.05
Delaying the foundation’s funding would put the L2 at a disadvantage for a minimum of 30-60 days while the governance process is carried out. During this time, operations for the DAO and Foundation would be at a stand-still.
Under AIP-1.1, the DAO already has the ability to stop the foundation’s stream of funds (vesting) at any time, the ability to force certain actions, and the ability to change directors of the Foundation. This is an adequate Foundation structure and in our opinion should not be further delayed.
Thus, despite AIP-1.05 sounding like a win for decentralization, it achieves no strategic benefit for Arbitrum.
12 Likes
Id say I m inclined to agree with returning surplus ARB to treasury. if this proposal laid out a groundwork for how they would be able to access those funds to do FDN stuff it would be better. Id might also vote FOR if that was the extent of this proposal.
but askign them to buyback from Wintermule is where i disagree.
but i do agree that discloser should be standard, if the current agreement is legally able to do so. But future agreements, and any “special grants” IMO should be transparent…
3 Likes
Blockchain at Michigan is voting Against AIP-1.05
We maintain our focus on decentralization and the long-term growth and sustainability of the Arbitrum Ecosystem and DAO. While we understand the stance of decentralization and integrity of the DAO that this proposal establishes, we believe the transparency and communication provided by the Arbitrum team via the Transparency Report and the work they have done with the community to address concerns and produce improved AIP-1.1 and AIP-1.2 are sufficient to get us to move forward in the establishment of the ArbitrumDAO and governance process. The Foundation has been clear in ensuring the usage of the 700 million $ARB will be fully transparent and AIP-1.1 enables the DAO to stop the foundation’s funding and remove/appoint Foundation directors. We do not see further delaying governance progress as necessary and do not see the benefit of approving AIP-1.05.
12 Likes
Hello everyone,
olimpio.eth voted against AIP-1.05.
Reasons below:
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Please read the Transparency Report published by Arbitrum regarding questions about the token allocation. I also believe the Foundation should have funding available to deploy to grants and to continue to advance the ecosystem. We have seen a huge success in Optimism thanks to similar initiatives.
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With the new AIP-1.1 being proposed into Snapshot soon, there is a lockup schedule for the 700M ARB transferred to the foundation. There is also control over this vesting by the Arbitrum DAO, which can modify or pause any allocations in the future if it deems it necessary.
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Buyback: I see no point on conducting a buyback. The 10,000,000 USD of ARB that was already sold was used to cover past expenses (3,500,000 USD used to setup the foundation). There is also an estimated budget needed for the next 12 months of 36,000,000 USD (as per reported by the Foundation buget estimate), which will probably require more selling, so brace yourselves.
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There is a balance that we need to try to accomplish between advocating for decentralization and preventing progress in the ecosystem. I believe that decentralization on its ideal form is nowhere to be seen in this industry yet. There are still [many] aspects that are centralized, for better or for worse, in almost all protocols and blockchains. This could be due to regulatory reasons, to maturity of the DAO, to single multi-sigs points of failure… and many others. Arbitrum took a big step when they announced that on-chain votes have a direct effect and they do not have to be executed by a third party. One of my main values when analyzing proposals in all protocols and chains I am a part of is decentralization. I will strive to help all teams accomplish this. In this case, I believe the proposal is counter-productive for the ecosystem in general and in the long term.
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There was a 100% consensus in community members who delegated to myself and reached out. All of them suggested an “Against” vote. Although not statistically significant, I still listen to all suggestions.
The Arbitrum Team had setbacks in their communications surrounding AIP-1. They have taken steps to address the community feedback received with AIP-1.1 and AIP-1.2, including adding vesting for the Foundation tokens, recurring transparecy reports, and DAO control over future vesting. I agree with these steps and believe that AIP-1.05 proposition does not add value long term.
9 Likes
At L2BEAT, we haven’t made our decision yet about how we are going to vote on AIP-1.05. We are leaning towards voting AGAINST, but we’d like to have more discussion around it. We’ll be having a community call on Wednesday, 12.04 at 12 PM ET, 16:00 UTC. We encourage all interested parties, especially those who have delegated their tokens to L2BEAT, to join the discussion; we’ll go through each AIP currently being discussed and will explain how we are going to vote and the reasoning behind our decisions.
We will post the link to the discussion later in this thread (we’re still considering which platform to use), and we will also post a short summary of the discussion here afterwards.
As for this proposal, although we understand and respect the sentiment expressed by the proposer regarding the mistakes made during the Foundation’s inception, we are not certain if the approach presented in this proposal is the best one for Arbitrum’s future. We share some of the concerns already expressed by previous commenters, especially @gauntlet and @ChainLinkGod. We don’t think that both the buyback and disclosing the terms of the already signed market-making deal should be enforced by the DAO; it won’t fix anything and will only add fuel to the fire.
Furthermore, in terms of fixing the governance process and setting it up the right way, a direct reversal of the mistakes made is not required. It doesn’t necessarily require sending the funds back to the treasury and requesting them back through a proper vote. Proceeding with the approach presented in AIP-1.1—sending the funds to the vesting vault controlled by the DAO—seems like a better and more efficient way to move forward. This serves two purposes:
- It provides the Foundation with a significant budget, positioning it well in the blockchain landscape against similar organizations behind other chains.
- It grants the DAO authority over these funds, allowing the DAO to clawback them if necessary.
That being said, we’re still open to discussing all of these issues. We encourage all of you to join us for the community call if you think we’re missing something.
5 Likes
Great comment. We are with you. This looks without sense. And as i understand, the process of a DAO it’s slow and complicated, because there are decision that needs quorum and consensus. In other case sound Arbitrary…
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Although we acknowledge the worries expressed by @thiccythot , we are not in favour of the proposal. The suggested plan involves sending back 700M ARB tokens to the DAO treasury and using the remainder of the money from the 10M sold for a buyback of $ARB.
We believe this is a largely meaningless gesture - the symbolic move has already been made by the Foundation in their subsequent posts updating the community of their intent with the funds (AIP 1.1 and 1.2.). Telegraphed buys and sells are always open to be frontrun by individual traders, we believe that exposing the Foundation to unnecessary financial losses is simply not worth the “symbolic gesture”. There is little to prevent mercenary capital from taking advantage of the forced buying/selling of $ARB by the Foundation. To be frank, the less of this there is, the better.
In our opinion, the value of the DAO does not entirely depend upon the debasement of all centralised governance. Of course, progressive decentralisation towards community governance is an ideal - but practicality and effectiveness are stepping stones to achieving these ideals. We do not believe that a 7.5% token allocation to the stewardship of the Foundation is in any way unreasonable, and it is well within the accepted standards of existing L2 frameworks.
The community should seek to work with the Foundation going forward to produce value-add proposals for the Arbitrum DAO, rather than attempting to push home a community diktat out of what appears to be spite over miscommunication. We do not downplay the initial mistakes that have been made; but the subsequent good-faith posts of the Foundation should be seen for what they are. We would find it more productive not to engage our time combatively with the Foundation.It is important to remember that the DAO requires the Arbitrum Foundation’s support, technical and professional experience to grow, build partnerships, and gain adoption. This should not be understated.
As a result, CBS will be voting AGAINST AIP-1.05.
5 Likes
My vote on this proposal is → Against
But before I give my reasons, Huge shout out to @thiccythot for this proposal and trying to foster greater accountability and pushing for decentralized decision making with integrity and legitimacy at the core.
Here are my reasons⬇️
Precedent for future governance - potentially good or bad
Accepting this proposal could create a dangerous precedent for future governance decisions. If the DAO begins reversing decisions made by the foundation or service providers, it may erode trust in the governance process and discourage participation from key stakeholders. Maintaining a balance of power and cooperative decision-making is essential for the long-term success and stability of the Arbitrum ecosystem.
Symbolic gestures vs. practicality:
although the proposal aims to demonstrate the ultimate power and authority of governance token holders, it may not be the most practical course of action.there are a lot of roadblocks that can occur such as legal implications, operational overheads etc etc Instead, the focus should be on fostering trust and collaboration between the DAO, the Foundation, and other stakeholders. By working together, we can make better decisions and allocate resources more efficiently for the benefit of the entire ecosystem.
Forward Looking
The foundation responded pretty fast and looked to rectify a lot of the confusion. Evaluating the steps taken by the foundation is key to understanding their commitment to work together with the DAO for a better future for the ecosystem. The DAOs vote is a clear precedent of where it stands and how it intends to hold various stakeholders accountable. I am of the opinion that we move forward from this and focus on immediate priorities instead of trying to restart the whole thing again
2 Likes
We believe that since in the initial distribution these 700M $ARB belonged to the DAO and there were no approved votes after that, it is really logical to return them to the addresses that are controlled by the DAO (and wait for decisions from the DAO).
We also believe that in order to comply with the declared principles of transparency, the terms of such large deal (40M $ARB) should be disclosed.
But we believe that the deal was really in the interests of the Arbitrum ecosystem, and was really necessary for the initial airdrop, which means asking for an $ARB buyback or the return of the remaining fiats is wrong.
Conclusion: we vote against, because we do not agree with one of the points of the proposal.
1 Like
Hey all, we will be doing our community call today at 12PM ET, 16:00 UTC on Google Meetup:
We will be going through the AIPs under discussion right now (including AIP-1.05) , we encourage all community members and other delegates to join the discussion and share your views!
2 Likes
Castle Capital have debated this proposal extensively with the key goal of supporting Arbitrum on its path to continued success and ecosystem growth. Ultimately, this requires the Foundation to be fully empowered to act in the service of the DAO.
Some of our views on AIP-1.05:
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Return 700M ARB → Although we agree with this in its initial concept, it is, as AIP-1.05 quotes, ‘a symbolic gesture’ and as such, a bit of a show - plus when you get down to the bare bones of it, you cannot ask for 700M ARB back without asking for every action to be reversed.
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Buyback $ARB via Wintermute with whatever fiat is left from the $10M OTC sale → We disagree with this, what’s done is done and the foundation should not undergo additional slippage/market moving bids etc.
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Disclose terms of the market making deal with Wintermute → We disagree, such an action would discourage future private entities from doing business with Arbitrum. Whether this sort of activity should be the status quo is a debate to have elsewhere. Arbitrum and its governance are not to be used as a tool in this conversation.
We acknowledge the mistakes Arbitrum has made around the setting up of the DAO and the withdrawal of Treasury funds to the Foundation. Although this was ultimately not performed with the approval of the DAO, it is a vital action that needs to be taken. In our opinion, this allocation should have been separate from the DAO Treasury from the start, but alas, this is not the case we find ourselves in.
As a result of these actions, external actors have every right to question the authority of the DAO and whether it has been undermined from the start. That is what these forums are for. However, as Arbitrum-natives and long-term supporters of the ecosystem, Arbitrum, and Offchain Labs, we believe its acceleration takes precedence over an impeccable governance process.
Therefore, Castle Capital will be voting against AIP-1.05.
5 Likes
[Snapshot] AIP-1.05: Return 700m ARB to DAO Treasury
Summary: This proposal seeks to do several things:
- Return 700 million tokens.
- Conduct a buyback with proceeds from the unauthorized token sale.
- Disclose terms to a nonpublic agreement with Wintermute.
- Pause AIP-1.1 and AIP-1.2.
Recommendation: Vote Abstain.
GFX strongly supports the first goal. 700m+ is a needlessly large budget for the newly created Foundation. We fully favor the 700m being returned to the DAO, which still leaves the Foundation with significant funds to utilize, given the Foundation can always request additional funds at a future date.
We’re voting to abstain because we generally agree with the proposal’s intention. However, a buyback at this stage is unnecessary. Additionally, the market-making agreement between Wintermute and the Foundation isn’t significant to the proposal’s objective.
1 Like
I have voted “Against” on AIP 1.05. Reasoning below:
- Return 700M ARB I see the merit to the idea, however it largely feels pointlessly symbolic to do it at this stage. I think there will be more harm then good to do something like this. While the events up to this point are unfortunate, it feels better to just acknowledge the mistake and move forward… versus trying to spin wheels over the span of a few months. I will add that I think if AIP 1.1 fails this is something worth looking into at that point, and would suggest Returning the 700M ARB to be AIP 1.3 in that scenario.
- Buyback $ARB via Wintermute with whatever fiat is left from the $10M OTC sale I disagree with doing this. I’m not even sure if this is possible at this point, but even if it were… this type of transaction carries too much market risk and could sour the business relationship.
- Disclose terms of the market making deal with Wintermute This is beyond the scope of the DAO as it currently stands in my opinion.
- Pause AIP 1.1 and AIP 1.2 Answered somewhat in item 1 - I believe the best course of action is to see how AIP 1.1 and AIP 1.2 playout before addressing the 700M ARB situation.
1 Like
We consider AIP-1.05 as a suggestion made in response to misunderstandings caused by communication issues in AIP-1.
We are aware that the Arbitrum Foundation is actively working on the development of Arbitrum. Naturally, we are aware that these operations will have a cost, which must be paid with ARB tokens.
We find it wrong to extract money from the Arbitrum DAO’s treasury before the AIP-1 voting ends. However, for this reason, we do not find it appropriate to prevent the transmission of the funds detailed in AIP-1.1 and AIP-1.2.
Although the mistakes made in AIP-1 are against decentralization, we believe that the process to be carried out from now on will be provided in a more decentralized and transparent manner with the transparency reports specified in AIP-1.1.
For all these reasons, we vote “Against” to AIP-1.05.
We’ll publish our rationale on Twitter also.
5 Likes
Of course the Foundation needs funding. However, it should happen in a systematic, transparent and sensible manner. Crypto projects have suffered enough because of the questionable actions of their founders.
Why are we voting on this twice?
1 Like
Good project
I’d vote on twitter
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