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The Arbitrum Foundation has faced backlash from the community after it held a "ratification" vote on decisions it had already implemented, including selling $ARB tokens for stablecoins even before its governance community of tokenholders had "ratified" the organization's nearly $1 billion budget.
The Foundation said it sold an additional 10 million tokens for “fiat” to cover operations.
The omnibus governance package, known as AIP-1, covered everything from governance and emergency powers to funding and grants, which community members felt was too large and covered too many topics. As the vote was barrelling towards failure on Snapshot, the Foundation acknowledged it "will likely not pass" and pledged to hold redos over each section of its omnibus bill "early this week.
The controversy also centered around the Foundation's 750 million $ARB token allotment. The Foundation has pledged to provide more accountability and transparency, and the token allotment will now be subject to a standalone vote, with no near-term $ARB sales from the Foundation. The Foundation has also stated that it will not use Foundation tokens in votes and will provide context on how the funds will be used.
The backtracking from the Arbitrum Foundation comes after a day of rage in the Arbitrum community over how the Foundation, a centralized company charged with promoting Arbitrum's claimed decentralized ecosystem, held the vote on decisions already implemented. While the Foundation had thought of AIP-1 as a "ratification" of decisions it had already made, token holders felt they had no say in the matter.
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