I support that the 700 million ARB be returned, it was clearly an overreach of power, at least from the treasury we can further vote on a proposal
I appreciate your well thought out responses @chainlinkgod and @hiringdevs.eth
I understand your respective perspectives on the tradeoff between the time/effort spent in returning the funds to its rightful place versus having the Foundation up and running to compete on BD versus other chains. It’s valid, rational, and practical, but at the same time… depressing…
It makes me sad that we have to take shortcuts in the governance process in the name of competition.
Its really beginning to feel like the true purpose of decentralizing was not actually to decentralize or allow the token holders to govern, but to use retail fiat to fund the foundation for growth
This would be fine if they were upfront about their communications in the initial prospectus but the whole thing was carried out so… unfairly to those who bought tokens on the open market in the actual amount of governance their tokens had and an accurate view of how many tokens would be circulating in the secondary market on day 1.
And I could be very wrong in saying this but it seems like most of the large voters voting “against” on this proposal have a majority of their tokens delegated to them rather than purchasing their tokens with fiat
I get that many of you have already made up your mind, but for those with large amounts of voting power that haven’t…
Please consider the silent population of retail holders who bought the token on the market (vs received vs airdrop), how critical they are to the long term success of the ecosystem, and how they perceive this entire situation.
In my heart of hearts, I believe the delay will be worth setting up the governance process in the right way, rectifying the actions that were wrongfully taken, and being transparent about all financial dealings involved.
But hey, maybe I’m wrong, retail will forget, and will buy the token again in a few months when a few partnerships are announced.
1 Like
I agree with everything you’ve stated here. I will be voting Against this proposal.
Additionally, there is no way to enforce this onchain and indeed is just for show. There are 0 benefits to doing this. This proposal seems to me to be lacking of an understanding that the powers of the DAO are being granted to the tokenholders as set up in the DAO governor smart contract.
I’d be open to snapshot voting as a signalling device, but this completely unenforcable proposal can only do harm. If it were to pass on Snapshot, there is no way to enforce it on Tally. Sure, the foundation could send the tokens back to the governor treasury, but then we would lose the foundation and break all the deals made which were necessary to make this drop possible.
The foundation made so much space for the DAO to actually have power that is enforceable. This is a bad idea for the future of Arbitrum and a potentially unrealistic proposal. We need the governance of the DAO to pass before any other proposals anyway. imho
6 Likes
Cornell Blockchain will vote against AIP 1.05.
This proposal doesn’t follow the governance standard and would only result in unnecessary time delays and conflicts. It is essential to recognize that AIP 1.1 and 1.2 have already addressed the major issues with AIP 1, and we should be focusing on moving forward along this path. Our common goal here is to support the long-term growth of the Arbitrum ecosystem, and we believe that the Arbitrum Foundation and the “Administrative Budget Wallet” are critical to fostering this growth in a manner that maximizes speed and efficiency, while maintaining the decentralized aspect that ArbitrumDAO brings.
As a community, we should be working together with a shared vision of long-term growth, rather than engaging in short-term maneuvers that only serve to feed egos. We agree with @ChainLinkGod view that, as long as the 700 million ARB remains untouched until a consensus is reached, there is no practical reason to transfer the funds to different locations, and the placement of the funds should not be a matter of concern. Let us focus on the larger picture and work collaboratively to achieve our common objectives.
4 Likes
I’m confused, why wouldn’t this fall under a non-constitutional AIP?
First because the proposed action “Disclose terms of the market making deal with Wintermute” does not fall under “funding” or “informational” and is out of scope. Second because it fails to meet the basic formatting and timing requirements.
It falls under funding, because it is proposing how to spend or allocate funds from the DAO treasury held by the Arbitrum Foundation.
The proposal on the whole does not. If you dropped the “Disclose terms of the market making deal with Wintermute”, then arguably it does as the other two prongs relate to treasury usage.
Also does anyone else see the irony in rejecting this proposal solely on the grounds of a technicality on standards of governance after what happened with AIP-1?
Two wrongs don’t make a right. It’s not solely technical grounds… the biggest issue is that it’s proposing a vote on something the token has no control over.
These funds should have been returned to the DAO immediately after AIP-1 failed.
The funds should not have been transferred prior to voting in the first place. I agree with you on that. Returning them would be ideal in principal but could trigger many complications. It seems far more prudent to first vote on the amended plan, if the vote fails, then send back and deal with all the complications that will be incurred by that action.
If this vote was more cleanly just about transferring tokens back, I think you’d find a lot more support. The buy backs coupled with the out of scope attempt to force disclosures muddy it and also simply put it out of scope of a vote.
Comparing “make vitalik buy arb tokens” to “disclose the terms of the wintermute deal” is a straw man, the foundation has a clear ability to disclose the deal.
Vitalik has a clear ability to buy Arb tokens. It’s not about the ability to do something, it’s whether the token has any control to effect it. In both cases, it does not.
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It’s good that @thiccythot has put this proposal and is making others aware of their rights, encouraging its practice. At the same time as Gauntlet and @ChainLinkGod have expressed above, I think the disclosure of Wintermute deal is a bad idea and would hinder relationships with other prospective vendors which might not be the best for the DAO. Same goes for the $ARB buyback point, it’s definitely not a good idea and in my opinion it’s a no-go for this proposal.
Although I know the proposal can no more be edited, a better one would be to return perhaps 350M $ARM and not the total amount. It’d still elevate the faith in the DAO and would not affect the long term health of the DAO.
This is true, AIP-1.1 was an overreach of power, but the same is reflected in this proposal by dragging Wintermute into it and proposing the buyback.
Both proposals seem to be in bad faith, while relatively AIP-1.2 seems fairer.
There could definitely be better ways to exercise the powers, and those could be reflected by supporting strong and underrated projects in the ecosystem. Like how ENS DAO funds continuous development and small grants for apps built around ENS or those integrating Sign-In-With-ETH (SIWE)
edit: AIP1.1
2 Likes
Second this, this imo is a poorly thought-out ask to bend the knee. There are too many unknowns not addressed to vote for in good faith, thus we will be voting against. The solution is more transparency, not dictation on how the foundation should operate. This needs to be an iterative constructive process, and more discussion is needed before trying to mandate an action.
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This proposal feels unnecessary and, as others mentioned, very risky - especially considering AIP-1.1 and 1.2, which already addressed the main issues with AIP-1. Clearly, they screwed up with their comms. If they were transparent since Day 1, then we wouldn’t have this discussion going on, but moving forwards with locking the funds in a smart contract with vesting is reasonable, as stated on AIP-1.1. There doesn’t seem to be a reason to transfer those funds back to the DAO, it would only add extra bureaucracy to this whole process.
About this, I think we have to understand that Arbitrum doesn’t exist in a vacuum, the market is competitive, and delaying the whole setup of the DAO simply for a “symbolic gesture” seems a bit silly - we have the responsibility to help Arbitrum’s ecosystem thrive.
There are no shortcuts, the Foundation exists because the DAO needs a centralized structure for quick and efficient decision-making, if we keep this beef between DAO and the Foundation going on and expect them to kneel (when they already did) seems counterproductive. In the end, the Foundation is accountable to the DAO - yes, they messed up by not being transparent about the initial allocation to the Foundation + MM deals, but the die is cast, and AIP-1.1 and AIP-1.2 are the proper way to remedy these mishaps and move forwards with the DAO.
I appreciate the effort, but I find it pointless at this stage, we already have the proper checks and balances to prevent this from ever happening again, and we’re already on the right track to remedy what they did pre-DAO.
This is only my opinion, not SEED Latam’s or the rest of our delegation’s
6 Likes
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