Reasonable demands from the Arbitrum Team, and arguments for why the 750m funding for Foundation is not unreasonable

General
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While more transparency and better communication is a MUST NEED from the team, this present occasion is being used by competitors and those against Arbitrum to attack an opponent.

Regarding the 750m tokens for Arbitrum Foundation, its not an unreasonable proposal. As the team have said in their clarification, many token foundations have big allocations. Polygon is able to partner with big web2 companies like Starbucks and Nike and pay to get projects like DeGods to Polygon chain. These cant be done without ample funds at their disposal. Polygon controls a huge % of their token supply and there is no DAO, none of the decisions are subject to oversight. All the decisions are made by the team in centralized manner. The same can be said about any other sizeable project in the Defi/web3 space. Its the norm, and not the exception in today’s web3 state.

Another L2 chain, ImmutableX has also been making big payments to companies like GameStop. ImmutableX gave GameStop $100m IMX tokens to further the adoption of ImmutableX.

Immutable granted 56,209,850 IMX tokens, just to one web2 company GameStop to make a partnership.

https://gamestop.gcs-web.com/static-files/713417ad-e18f-4f2c-bc1c-312f536d8b36

As soon as GameStop received the tokens, they dumped a third of it.

These are business decisions that are required if any web3 project has to grow today by creating fruitful partnerships with web2 companies.

Similarly, even Optimism Foundation is well funded and they are able to get partners like Coinbase.

Do we wish to see Arbitrum not have any future growth? No.

Crypto especially L2 space is fast heating up with heavy competition. Many projects are in the space trying to tie up web2 companies to move to web3, launch NFTs, tokens, use dapps etc.

Arbitrum is already in partnership with big companies like Reddit.

These things cost a lot of funds to nurture and grow. One cannot immediately put a fixed cost on nurturing such partnerships over the long term. Usually, they are the result of several weeks or months of work, backed by a team that does not have financial constraints.

Presently, Arbitrum is the 4th largest DeFi project in terms of TVL, only behind Ethereum, BSC and Tron. If we have to grow this even further, the Foundation must be able to bring in the kind of partnerships and adoption that other teams like Polygon, Immutable, Avalanche etc are able to get.

Considering these and the need to bring about adoption of Arbitrum chains, so that the Arbitrum DAO can eventually benefit, the 750m token grant to Arbitrum Foundation is not unreasonable. Arbitrum DAO at present controls 42% of the total token supply in its treasury. Making the 750m token grant to seed Arbitrum Foundation will bring Arbitrum DAO Treasury’s holdings down to ~34% while Arbitrum Foundation will be in a strong position for few years to grow the network, onboard well known partners to the Arbitrum ecosystem and bring about wide adoption of the network, which will benefit the Arbitrum DAO immensely.

The opposition towards the 750m funding to seed Arbitrum Foundation seems to be misplaced. At the moment, many competitors are using this occasion to attack Arbitrum, while they themselves have a big centralized treasury that they control and use to onboard partners. If Arbitrum Foundation is not well funded, the Arbitrum chains and networks will be left behind completely and Arbitrum DAO as a whole will suffer.

However, the main things needed from the team are transparency around actual unlocked token at present, future unlocks and transparency on how they intend to use the 750m tokens. They cannot just claim the tokens are locked, then the community finds out that its not actually locked but has been sold. That is a bad situation that must be completely avoided.

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They literally subverted the DAO by moving tokens before there was even a vote offered. This is a fact and not FUD. Being complacent is dangerous and every one who voted against this had the same exact concerns.

I love the concept of DAOs, but the people who voted for this and people who say this is FUD are simply not mature enough to have a say in regards to just handing over a billion dollars to complete strangers.

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handing over a billion dollars to complete strangers.

They are not complete strangers. This is fraudulent and dangerous narrative being pushed here.
The team built the project from scratch and grew the TVL to $2-3 billion, and then airdropped $1.5 bn worth tokens to the community. How are they complete strangers to the very project they created? Just ridiculous.

Thats how every other project did too. When you claimed Optimism airdrop, you simply accepted that the Optimism Foundation gets billion dollars worth tokens. There was no vote for that.

People who are spreading FUD are the ones who are simply not mature enough to understand how DAOs work and the requirements of web3 at present. This is the problem with DAOs - random people try to dictate terms, subverting those who actually built the project, who know whats required to take it to the next level. Here, the Arbitrum team is “strangers” while airdrop bag holders are dictating the terms lol.

When you say you love DAO, thats the problem - people want responsibility without offering anything in return. When the team itself proposes a Foundation allocation to further grow the project, everyone is up in arms and preventing the project from growing. This is one of the reasons airdrops are a failed model - way too many people with entitlement and nothing else try to dictate terms.

Projects that never had an airdrop like Polygon, Avalanche, Solana all have foundations with a ton of tokens, and all these Foundations spend their tokens in whatever way they see fit, without any community vote and no DAO that tries to sandbag any reasonable proposal.

Arbitrum’s fault is they literally put it to a community vote, instead of taking the Foundation tokens right at the start like Optimism did.

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They are not complete strangers. This is fraudulent and dangerous narrative being pushed here.

There’s a nothing “fraudulent” or “dangerous” about that statement. I suggest you actually read everyone’s concerns before wildly accusing people of FUD. It’s incredibly immature and just further proves my point.

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I do agree, 1 billions to 10 billions funding is more reasonable for the team
for current market condition. The arbitrum ecosystem is not priced in at fair value.

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Let’s also appreciate that the ARB token is a utility and the question is not how much it is worth in the moment (it has no such task), but how much value it carries regardless of the market “price”, which is determined by none other than the parties to the transaction. Based on tokenomics, grading into funds looks reasonable and changing the initial approaches is long since mauvais ton, so it’s better to think about optimisation at this stage.