A proposal to vest $770 million in ARB tokens was approved by the Arbitrum DAO as an enhancement.
The $770 million in ARB tokens have been locked up in a vesting contract by Arbitrum’s decentralized autonomous organisation. As a key step for the DAO towards transparency and transparent governance, the monies will be distributed progressively to the Foundation over a four-year period.
This action followed the contentious period of governance inside the Arbitrum ecosystem, during which the AIP 1.1 proposal was approved. There was a lot of criticism levelled at the project earlier this year because of a “special grants” program that proposed giving over 700 million ARB tokens to the Arbitrum Foundation. According to the Foundation’s announcement, the money will be used to bolster projects that use Arbitrum’s technology.
However, concerns regarding openness in a project meant to make group choices were raised due to the huge size of the allocation, which was worth more than $1 billion at the time. A further request to transfer the Foundation’s money back to the DAO was subsequently shot down.
Offchain Labs’ Arbitrum is a Layer 2 scalability solution for Ethereum with the goal of providing affordable, scalable smart contract functionality. Arbitrum Improvement Proposals are put out and voted on by the ruling DAO in order to make decisions.
Concerns were voiced by the community, and a proposal known as AIP-1.1 aimed to establish strict control mechanisms on the distribution of the DAO’s currency to appease them. As the Arbitrum group pointed out, this gives the DAO the ability to prolong, reduce, or even terminate the vesting period.
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