Already water in the gas for the blockchain Arbitrum and its DAO, just a few days after the massive airdrop of ARB tokens with a sale of ARB tokens by the foundation without the agreement of the governance, which even makes you wonder if it really has its place.

A massive token sale without the approval of the Arbitrum DAO

It all started on Sunday 2 April, when some indiscreet questions were asked about Arbitrum's governance and more specifically, after its centralised and self-proclaimed foundation sold ARB tokens before the conclusion of a key governance vote. Indeed, the "special grants" programme allows the Arbitrum Foundation to receive 750 million ARB governance tokens, or nearly $1 billion that they can spend without DAO approval.

The news had a direct impact on investors, with the value of ARB falling by almost 8% as debate and criticism raged on social networks.

For its part, the Arbitrum Foundation simply describes the problem as a "chicken and egg problem" and that some adjustments are still needed for governance to really achieve its objective. It also points out that massive "special grants" will help combat "voter fatigue" and deal with the adversity that rages in blockchain projects.

This first improvement proposal (AIP-1) is considered a mere "ratification" and the Arbitrum Foundation claims that it has already sold its governance tokens for fiat currency. Many users are calling this a rug pull and have lost confidence in the project.

Although the Foundation claims that decentralised governance is working as intended, many in the crypto community are sceptical of this claim and are concerned about the impact on the ARB price.

Arbitrum finally backs down after community challenge

Following a challenge from the token-holding community, the foundation decided to back down. In a since-deleted tweet, it says: "AIP-1 is too broad and covers too many topics. We will follow the advice of the DAO and split the AIP into several parts. This will allow the community to discuss and vote on the different subsections."

A decision that has been met with unanimous approval due to the takeover of 750 million Arbitrum tokens (ARB) worth around $1 billion.

In the face of this criticism, the foundation announced that the 750 million tokens would be put to a vote in its own governance proposal. It also said it was working on options to strengthen accountability, such as a four-year vesting period for the tokens and that they could not be used for voting.

In addition, the foundation is committed to being transparent about the use of the funds by providing full information on how they will be used to benefit the Arbitrum ecosystem. Between the phishing alerts and the foundation's dirty tricks, Arbitrum is not exactly on the up and up anymore.